American Airlines plans to retire up to 11 Boeing 757s from its fleet during 2012.
The carrier revealed those fleet adjustments in a announcement detailing a 3% capacity cut year-over-year for the fourth quarter of this year.
"While our advance bookings are generally in line with last year, we are taking these additional steps in light of the uncertain economic environment, ongoing high fuel costs and to ensure we run a reliable schedule for our customers given additional pilot retirements we anticipate throughout the fourth quarter," said Virasb Vahidi, American's Chief Commercial Officer.
The carrier is experiencing a higher than normal level of pilot retirements due to a pension provision in the pilot collective bargaining agreement that allows a 60-day look back period of the carrier's stock to secure a pension unit value in place at the beginning of that window. That particular contract element covers pilots 60 and over. American's stock has been on a steady decline the last couple of months, and fell more than 30% on 3 October.
Factoring in the latest reductions American stated its full year 2011 capacity should grow by 0.4%, with mainline consolidated capacity increasing 1.2%.
"This represents an approximate 3 percent reduction in the company's capacity expectations versus American's initial guidance provided in January 2011," said the carrier.
The latest capacity cuts will modestly increase American's 2011 unit costs compared with guidance provided by the carrier on 21 September.
American also stated high jet fuel prices will result in a $29 million non-cash fuel hedging charge recorded in its fuel expenses for the third quarter, and a strengthening in the US dollar will drive a $22 million incremental charge resulting from foreign exchange volatility.
Dallas-based American recently moved to quell concerns that a Chapter 11 filing by the carrier was imminent, stating it was not the carrier's goal or preference.
Source: Air Transport Intelligence news
