American Airlines Group (AAL) said earlier this week that it would cut roughly 1% of its July flights in order to serve a surprisingly strong rebound in air travel demand at a time when the company faces challenges such as unprecedented weather and labor shortages.
“(We) feel these schedule adjustments will help ensure we can take good care of our customers and team members and minimize surprises at the airport,” the air carrier said in a statement, cited by Reuters.
The company also said that flight cancellations aimed to affect the smallest number of customers “by adjusting flights in markets where we have multiple options for re-accommodation.”
The company struggled with bad weather that led to multi-hour delays over the past few weeks and disrupted flight and crew work hours.
Additionally, some of American Airlines’ vendors were facing labor shortages, the company said.
Data from the US Transportation Security Administration showed that almost 50 million airport passengers had been registered in May, or 19% more compared to April.
American Airlines shares closed lower for the sixth time in the past ten trading sessions on NASDAQ on Tuesday. The stock went down 1.51% ($0.34) to $22.11, after touching an intraday low at $21.85. The latter has been a price level not seen since June 17th ($21.84).
Shares of American Airlines Group have risen 40.20% so far in 2021 compared with a 13.06% gain for the benchmark index, S&P 500 (SPX).
In 2020, American Airlines’ stock went down 45.01%, thus, it underperformed the S&P 500, which registered a 16.26% gain.
Analyst stock price forecast and recommendation
According to TipRanks, at least 5 out of 10 surveyed investment analysts had rated American Airlines’ stock as “Sell”, while 3 – as “Hold”. The median price target on the stock stands at $21.72.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
