American Airlines CEO Insists Growth Plans Won’t Start a Fare War
Photo Credit: American Airlines will add domestic routes in 2018, but said the market can absorb the extra flights. Pictured is an American Boeing 737. American Airlines
Skift Take
In a lengthy soliloquy on American's first quarter earnings call, CEO Doug Parker indirectly told investors to relax. Yes, U.S. airlines are increasing capacity this year. But they're being prudent by solidifying their hubs, he said, and not repeating past mistakes.
American Airlines will engage in "smart efficient growth" mostly in markets where it maintains a competitive advantage, CEO Doug Parker said Thursday, responding to investors who fear U.S. airlines will add too much capacity to an already mature market.
American is among the more prudent carriers, planning to increase capacity 2.5 percent this year, roughly matching expected U.S. gross domestic product growth. But United Airlines spooked investors on Tuesday, announcing plans to grow 4-6 percent in 2018, 2019 and 2020.
United expects many new flights will come in Chicago, Denver, and Houston, connecting the three hubs with smaller U.S. cities where fares remain relatively high. United President Scott Kirby, who had the same job at American until August 2016, said United shrunk domestic operations too much under its previous management.
After its announcement, United's share price fell from almost $78 per share to about $66 at Thursday's close. Other airlines, incl
