Old May 22, 08, 1:00 pm
  #11  
rploehn
 
Join Date: Dec 2004
Location: MIA/FLL
Programs: AA-EXP 2MM; Priority Club-Platinum
Posts: 270
Originally Posted by cparekh View Post
The other thing to remember is that capacity cuts are not necessarily about cutting out unprofitable routes as they are about reducing the number of unprofitable fares. The only reason an entire route would be cut out is if it only sells cheap fares and AA determines that all those people paying cheap fares would not fly on more expensive fares.
Yes, so in those cities where there is severe downward price pressure and hubs are not involved, the routes will be cut completely. The cuts for fall announced earlier give us an indication of where future cuts will be. For example, the FLL-LAX nonstops were eliminated. This is a point-to-point (non-hub) flight which cannot make money when 100% full with current costs (including obsolete aircraft). Gone. American will not compete with NK to LGB and B6 to LAX.

PS, I take too long to write these posts....LOL

Last edited by rploehn; May 22, 08 at 1:01 pm Reason: beaten to the punch!
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