By Rajesh Kumar Singh and David Shepardson
(Reuters) -American Airlines Group Inc plans to scrap, reduce or delay the introduction of flights to several international routes next summer because of a lack of widebody aircraft, according to a company memo seen by Reuters.
American, which is the world's largest carrier, said Boeing (NYSE:BA) Co's delay in delivering 787 jets, including 13 aircraft that were expected to arrive by this winter, has crimped its ability to ramp up capacity.
"Without these widebodies, we simply won't be able to fly as much internationally as we had planned next summer, or as we did in summer 2019," Chief Revenue Officer Vasu Raja said in a staff memo.
The move also comes at a time when the airline industry is grappling with new uncertainty caused by the Omicron coronavirus variant. A flurry of new testing rules and border closings following the discovery of the variant late last month has set back the nascent recovery in international traffic.
Raja said American will not fly to Edinburgh, Shannon in Ireland and Hong Kong next summer. Frequency of flights to Shanghai, Beijing and Sydney will also be "significantly" reduced.
American's incoming Chief Executive Robert Isom told Reuters this week that the new travel restrictions had dampened demand in some international markets.
The company currently does not have direct flights to Edinburgh, Shannon and Hong Kong. It had expected to resume services to both Edinburgh and Shannon at the end of March and had been selling tickets for those flights.
A company spokesperson said the airline will cancel those flights and is contacting affected customers with offers for alternate travel arrangements.
The direct flights on the Los Angeles-Hong Kong route remain suspended since February 2020. The spokesperson said since the company has not been selling those flights, no ticketholders would be affected by the decision.
The spokesperson attributed the reduction in services to Asia to soft demand.
DREAMLINER DELIVERIES
Deliveries of the 787 Dreamliner, which has faced manufacturing delays, are expected to resume by April 1 at the earliest, according to the Wall Street Journal, which first reported American's decision to cut flights.
"We deeply regret the impact to our customers as we work through the process to resume deliveries of new 787s," Boeing said in an emailed statement.
The 787 Dreamliner is important for Boeing's rebound from the pandemic as well as from a safety scandal caused by two fatal crashes.
United Airlines Holdings (NASDAQ:UAL) Inc, another Boeing customer, said it is "working closely" with Boeing to understand how the delivery delays might affect its schedule.
Shares of American were down about 1% on Thursday, while those of Boeing dropped 2%.