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American Airlines to Pull the Plug on Chicago-Beijing Service

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American Airlines Group Inc. (AAL - Free Report) announced that it will discontinue flights connecting Chicago’s O’Hare International Airport and Beijing, from October this year.  In fact, the route has been in operation for long but has not been able to rake in profits. In spite of this, the carrier maintained its services to the city, keeping the convenience of its fliers in mind.

However, continued lack of profitability made the Fort Worth, TX- based carrier decide against continuing its service on the route, thereby trimming its Chinese exposure. After American Airlines’ exit, United Continental Holdings, Inc. (UAL - Free Report) and the China-based Hainan Airlines, are reportedly the only ones to offer non-stop flights on the Chicago-Beijing route.

However, we note that American Airlines has not completely turned its back on China. The carrier will continue to operate flights connecting Beijing with Dallas as well as Los Angeles. In fact, American Airlines intends to utilize the new international airport at China’s capital, slated to be operational from 2019.

New Routes Introduced

While announcing its decision to terminate the Chicago-Beijing service, American Airlines introduced several other routes. In a customer-friendly move, it announced the launch of multiple new flights (seasonal as well as year-round) to the Caribbean and Hawaii.

For example, the carrier intends to start seasonal service from Chicago to Honolulu, that will run through the annual spring break season. The flights are scheduled to start from Dec 19. The carrier also intends to offer services during the winter season from Chicago to several Caribbean cities.

Zacks Rank & Stocks to Consider

American Airlines carries a Zacks Rank #3 (Hold). Better-ranked airline stocks include SkyWest, Inc. (SKYW - Free Report) and  Gol Linhas Aereas Inteligentes S.A. . While SkyWest sports a Zacks Rank #1 (Strong Buy), Gol Linhas holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of SkyWest and Gol Linhas have rallied more than 59% and 60%, respectively, in a year.

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