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Mixed news from air carriers

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
While American Airlines works at full capacity, the European airlines are still recovering.

Even though the lockdown measures eased almost all over the world, and borders started to reopen, some industries are still facing problems. 

One of the most significant American air carriers, American Airlines, made predictions about this year's long-haul. According to it, the long-distance international capacity will decline by 25% next year compared to 2019. The company will discontinue the routes that once were popular due to close-to-nonexistent demand. Despite its forecast and decision, the company came under scrutiny as it won't block the middle seats when flying to prevent COVID-19 transmission. Starting Wednesday, it resumed its booking to full capacity, although it previously stated that it would limit the capacity to 85%.  

While in the States, things seem to follow the ordinary course, the same cannot be said about what's happening in Europe. Airbus plans to cut 15,000 jobs as it still battles with the pandemic's effects. The most critical cuts will be made in the UK – 1,700, while thousands are expected in Spain, Germany, and other countries. The UK cuts will be in the commercial division in Flintshire and Bristol. By this, the UK workforce will contract by 15%. 

Moreover, the production dropped by 40% due to the pandemic. Unlike American Airlines, Airbus' predictions are grimmer as it expects the air-traffic to be at pre-pandemic levels starting 2023. 

Other important European air carriers are planning job cuts: EasyJet will dismiss around 2,000 people as it will close three UK hubs. Air France-KLM will get rid of more than 6,500 jobs in the next two years.

American Airlines closed the session lower by 2.42%. Airbus is currently trading at more than -1.20%, while Air France-KLM dropped by more than 0.60%. 

Sources: reuters.com, marketwatch.com, bbc.com

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.