American to cut service to 17 cities from Reagan, 3 from LaGuardia

01/15/2014 9:53 AM

01/15/2014 4:38 PM

American Airlines will cut non-stop service to 17 cities out of Washington, D.C.’s Reagan National Airport as part of network changes prompted by the carrier’s merger settlement with the U.S. Department of Justice, the Fort Worth-based airline said Wednesday.

No date has been set for the schedule changes yet as the company is still working with the DOJ to divest the slots. Both JetBlue and Southwest Airlines have expressed interested in acquiring them.

“In an effort to minimize any impact that our DOJ-required slot divestitures would have on small- and medium-size communities, we felt it was important to make this announcement now,” said American’s chief marketing officer Andrew Nocella in a statement.

To gain approval for the merger, American and US Airways agreed to give up 52 takeoff and landing slots at Reagan and another 17 slots at New York’s LaGuardia Airport. The reduced service at the airports is a result of that agreement.

American will no longer provide daily service from Reagan National to Augusta, Ga., Detroit, Fayetteville, N.C., Fort Walton Beach, Fla., Islip, N.Y., Jacksonville, N.C., Little Rock, Ark., Minneapolis, Minn., Montreal, Myrtle Beach, S.C., Nassau, Bahamas, Omaha, Neb., Pensacola, Fla., San Diego, Savannah, Ga., Tallahassee and Wilmington, N.C. Flights to Fort Myers, Fla. will also be adjusted to a seasonal schedule.

At LaGuardia, the carrier end nonstop service to Atlanta, Cleveland and Minneapolis. However, it will add flights to 10 new cities out of LaGuardia including Charlottesville, Va., Dayton, Ohio, Greensboro, N.C., Knoxville, Tenn., Little Rock, Ark., Louisville, Ky., Norfolk, Va., Richmond, Va., Roanoke, Va., and Wilmington, N.C. Customers can begin buying tickets on these routes starting on Jan. 26 for travel beginning April 1.

Last month, the FAA approved the divestiture of American’s LaGuardia slots to Southwest Airlines and Virgin America. Southwest will receive 11 slots while Virgin America will get 6 slots at the New York airport. Of the 11 slots given to Southwest, the Dallas-based carrier already uses 5 slots that it currently leases from American.

“These service changes are not expected to impact our employees, whose efforts and support enabled us to create the world’s greatest airline,” said American president Scott Kirby.

Separately, American Airlines told investors on Wednesday that it ended 2013 with $10.3 billion in cash and investments.

The carrier provided financial information to Wall Street in a government filing in advance of its first earnings report since completing its merger last month. American expects to report its fourth-quarter earnings later this month.

American said its cash balance includes $1 billion in restricted cash.

“It is clear that (American Airlines) will begin tackling integration from a more robust base of profitability than in other prior mergers,” J.P. Morgan analyst Jamie Baker write in a research note to investors after viewing the information.

Shares of American [ticker: AAL] closed down 3 cents at $28.84. The stock has risen almost 18 percent since the companies merged on Dec. 9.

The mainline operations at American expect to pay an average of $3.06 and $3.11 per gallon of jet fuel while its operations at US Airways expect to pay between $3 and $3.05 per gallon of jet fuel.

Capacity at American’s mainline operations rose 2.13 percent in the fourth quarter and jumped 6.8 percent at US Airways.

The company also provided a fleet update. American received 20 new Airbus aircraft and 39 new Boeing aircraft in 2013 while retiring 45 planes. US Airways took delivery of 21 new Airbus planes and retired 20 aircraft last year.

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