American Airlines Group Inc. is dropping a major U.S.-China route for the second time this year, part of a plan to pare unprofitable flights amid pressure from higher fuel prices.
Direct service between Chicago and Shanghai will end in October, American said Tuesday in a statement. The company is already planning to halt flights between the U.S. city and Beijing the same month. American will retain routes connecting the Chinese destinations with Dallas and Los Angeles.
“We remain strongly committed to Asia and will continue to serve the region through our hubs in Dallas/Fort Worth and Los Angeles,” said Vasu Raja, American’s vice president of network and schedule planning. “Our Chicago–Shanghai service is unprofitable and simply not sustainable in this high fuel-cost environment and when we have opportunities to be successful in other markets.”
The shares advanced less than 1 percent to $40.24 after rallying a day earlier. Through Monday, American fell 23 percent this year, the largest drop by far on a Standard & Poor’s index of the five biggest U.S. airlines.
Route Changes
American is canceling 11 total overseas routes while adding nine. The changes include starting new service between Philadelphia and Berlin; Bologna, Italy; and Dubrovnik, Croatia. It’s also opening a flight between Phoenix and London.
Discontinued routes include Philadelphia-Munich, Los Angeles-Toronto and flights connecting New York’s John F. Kennedy International with Dublin and Edinburgh. American is also reducing flights between Chicago and Tokyo’s Narita airport to three days a week from the current daily service.
The price of jet fuel has climbed more than 30 percent in the last year.
As with the Beijing flight, American will seek approval from the U.S. Transportation Department to stop flying the Chicago-Shanghai route for now without having to surrender government approval to operate it. Because service between the U.S. and China is limited, carriers must fly routes they are awarded or lose them.