Originally Posted by
formeraa
FWAAA,
It was certainly true in the 90's. I was working in AA Revenue Management at the time. If it weren't for the elite AAdvantage members demanding Hawaii service, it would have been gone in a heartbeat. It was money-losing at the time -- that was back in the DC-10 days.
Perhaps with a mix of more fuel-efficient 763's from DFW and 757's from LAX, it's now at least breakeven.
I don't doubt that it was true in the past. For much of the 1990s, fuel was about $0.60/gal, so a daily DC-10 full of mileage awards didn't cost the airline all that much money and made frequent flyers happy.
Labor rates had not yet peaked and AA was printing money - as you remember, in the late 1990s, AA was posting billion dollar-plus profits each year on less than $17 billion of revenue. Last year, DL and UA had similar profits on about twice as much revenue after slashing wages and other costs in Ch 11.
I'm a lot more skeptical that the 763s have been maintained on the DFW/ORD routes to HI in recent years to please the frequent flyers even though that may have been a driving force in the past. With fuel at $3.01/gal in 2011, I'd bet that the DFW 763s had to show sufficient revenue to survive.