FlyerTalk Forums - View Single Post - TWA TLV Why is AMR dropping it?
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Old Mar 6, 2001 | 12:47 pm
  #7  
2 Many Miles
 
Join Date: Jan 2001
Location: NYC
Programs: UA/1K, DL/PM, AA/PLT, NW/SLV; SW/PLT, HH/DIA
Posts: 1,732
I think the number of employees is probably the main reason the route isn't doing so well. While a profit of 8.5M or 10.0M / year might sound like a lot of money, it really isn't. $10M US comes out to about $27,000/day, or $13,500/flight. Now consider the overhead -- 100 *very* senior employees, flight crews, lease payments, gate space, fuel and everything else. It's got to be a VERY low ROI route.

If AA were to start a new route to TLV, they could probably do it quite well with under 20 people in all of Israel. The burdened cost of those 80 employees is probably at least $4M, which would represent an immediate 40% increase in ROI -- not a bad deal.

Keeping 100 senior employees in place for a single flight a day is, at least to me, a great example of why TWA was doing so poorly.

That said, I hope AA does have service -- I'd love to be able to fly AA nonstop to TLV, and use my miles to send other people there...
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