American Airlines expects its domestic and international seat capacity during the summer travel season to be within 10% and 20% of levels seen in the same period of 2019, the airline said in a statement on April 14, mirroring bullish sentiment seen in the jet fuel derivatives market.
The Fort Worth-based airline expects domestic seat capacity to amount to over 90% of the 2019 summer travel season and is even introducing 17 new routes within the US.RELATED: Global air travel on multi-track recovery as vaccines hang over jet demand outlook
According to data from the Bureau of Transportation Statistics, American operated approximately 710,000 domestic flights between May and August of 2019, accounting for 25.6% of the domestic market share. In 2019 the American's market share edged up to 26.8% though operated domestic flights were halved on the year to total 316,000.
As for international travel, American expects capacity to be down 20% from summer 2019 levels. BTS' breakdown of international traffic by airline has yet to be released.
While the airline is due to launch new services to Colombia effective May 6, other international destinations such as Hong Kong and Edinburgh will not operate due to "the effects of the pandemic and the resulting weak demand."
The forward curve for Gulf Coast jet fuel shows the differentials stronger through the summer, with a 25-point contango between the June and July swap. S&P Global Platts last assessed the May and June swaps at minus 19.25 cents/gal while July and August were at minus 19 cents/gal. Open interest on the swaps ranges from 2.68-3.62 million barrels, according to data from the CME Group.
Platts last assessed the cash differential at NYMEX May ULSD futures minus 19.75 cents/gal on April 14, marking a 1 cent/gal decline on the day.
