American Airlines is preparing to cut service to 30 small and mid-sized cities when federal aid package expires in October

American Airlines is preparing to cut service to some 30 small and mid-sized cities after minimum-service mandates imposed by Congress expire on September 30, in the latest sign that the airline industry could be headed off a cliff in the fall without further federal aid.

A source familiar with the airline's plans confirmed them to DailyMail.com on Thursday. The reduced service could be reflected in American's fall schedule as soon as next week.

Since March, airlines have pledged to avoid layoffs and maintain minimum levels of service in exchange for a $25 billion federal aid package - but the deal is set to expire at the end of September, and Congress remains deadlocked on passing new assistance. 

American Airlines was granted $5.8 billion in support under the original program, which was part of the CARES Act. 

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American Airlines is preparing to cut service to some 30 small and mid-sized cities. Pictured: American planes are seen at Reagan National Airport last month

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Air travel remains down about 75% from last year, TSA screening data shows

News of American's impending route reductions was first reported by CNBC. It was not immediately clear which routes would be affected, and the airline's plans have yet to be finalized.

The impending expiration of the federal aid package has airlines scrambling to contain costs, with air travel in the U.S. remaining down about 75 percent from last year's level, according to TSA screening data.

American Airlines told employees on Tuesday the company is extending the window to apply for voluntary exit packages or long-term voluntary leave of absences through August 17.

American said it would 'keep the application window open until we have more clarity about how Congress and the administration intend to proceed.'

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American Airlines CEO Doug Parker is seen in a file photo.

Southwest Airlines Co-CEO Gary Kelly said on Wednesday he does not expect the airline will be profitable in 2020 amid the coronavirus pandemic, snapping a 47-year streak of posting consecutive full-year profits.

'As long as the case counts are high, I think that we have to expect that travel will be relatively modest,' Kelly said at a Texas Tribune event. 

'We´re continuing to see traffic and revenues down 75 percent versus a year ago today and to think that would recover to the point we would be profitable I just think is unrealistic.'

The company last month posted a $915 million loss for the second quarter. Kelly said it is still burning through about $20 million a day.

'We're still losing cash every single day,' he said. 'We've got a long way to go before we can feel like we are out of intensive care.'