AA will drop ORD-DEL (effective 1 March 2012)
Jan 9, 2012, 1:11 pm
#47
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I was on the flight yesterday and it was a full flight. If the news is true it is sad news
Jan 9, 2012, 1:15 pm
#48
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If the route really is profitable, I can see AA canceling the route, laying off the employees, re-announcing the route in May/June, hiring lower cost employees to fill the route.
Jan 9, 2012, 1:15 pm
#49
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http://online.wsj.com/article/SB1000...342824918.html
Jan 9, 2012, 1:17 pm
#50
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From an email to company employees:
AA Operational Changes
Today, January 9, American Airlines announced two schedule adjustments and previously announced operational changes.
ORD-DEL
The historical financial performance of the route and its future outlook given the global economic climate and high oil prices has resulted in a decision by American to cancel its New Delhi (DEL) - Chicago (ORD) service.
The last flight to leave for India from Chicago will be on February 28, 2012, while the last return flight from India to Chicago will operate on March 1, 2012.
AA will continue to offer travel choices between the US and India in conjunction with oneworld partners British Airways, Kingfisher Airlines and Finnair, via either London Heathrow or Helsinki (summer only), and through its codeshare partner Jet Airways via Brussels.
DFW-BUR
The cancellation of the DFW-BUR flights will result in AA exiting the Burbank market and closing operations at the BUR station. Customers can continue to reach Burbank as a destination by flying into Los Angeles, one of American’s cornerstone markets. American does not maintain employees in Burbank, as ground handling operations are provided by a third party.
Airport Services Reductions
Several factors in 2011 have unfortunately made a reduction in force necessary for the Airport Services workgroup. These factors – which are not related to the Chapter 11 filing – include:
We will make every effort to minimize the number of involuntary reductions for the Airport Services workgroup by offering voluntary programs.
Our objective is to make our company competitive and more efficient in an increasingly challenging industry. We will continue to respond to operational and market changes – as we always have – and to make adjustments to ensure we are competitive.
Today, January 9, American Airlines announced two schedule adjustments and previously announced operational changes.
- We will cancel the Chicago-New Delhi service effective March 1, 2012
- We will also stop flying between DFW and Burbank, Calif., effective Feb. 9
- Some operational and business changes that occurred prior to the company filing for reorganization will result in a reduction of approximately 150 airport-related (Airport Services workgroup) employees
ORD-DEL
The historical financial performance of the route and its future outlook given the global economic climate and high oil prices has resulted in a decision by American to cancel its New Delhi (DEL) - Chicago (ORD) service.
The last flight to leave for India from Chicago will be on February 28, 2012, while the last return flight from India to Chicago will operate on March 1, 2012.
AA will continue to offer travel choices between the US and India in conjunction with oneworld partners British Airways, Kingfisher Airlines and Finnair, via either London Heathrow or Helsinki (summer only), and through its codeshare partner Jet Airways via Brussels.
DFW-BUR
The cancellation of the DFW-BUR flights will result in AA exiting the Burbank market and closing operations at the BUR station. Customers can continue to reach Burbank as a destination by flying into Los Angeles, one of American’s cornerstone markets. American does not maintain employees in Burbank, as ground handling operations are provided by a third party.
Airport Services Reductions
Several factors in 2011 have unfortunately made a reduction in force necessary for the Airport Services workgroup. These factors – which are not related to the Chapter 11 filing – include:
- Loss of the United States Postal Service domestic mail contract,
- Closing of the Ground Service Equipment Refurbishment shop in STL, and
- Employee headcount changes related to the October 2011 winter schedule reductions
Our objective is to make our company competitive and more efficient in an increasingly challenging industry. We will continue to respond to operational and market changes – as we always have – and to make adjustments to ensure we are competitive.
Jan 9, 2012, 1:17 pm
#51
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I think all of those things were factors as well. But one thing that is always needed on ULH routes to sustain the astronomical operating costs is a lot of premium traffic and good fares down the back. A VFR-heavy flight tends to produce the opposite. While there are certainly times of the year/days of the week with high premium loads on ORD-DEL, it was also a route where Golds were op-up'ed at a frequency not befitting a 15 hour flight.
About Golds getting op-up'ed on ORD-DEL, I'm not sure what to make of that as that seems to speak to AA's ability to overfill the back of the flying bus even when the competition from various other carriers tended to have lower fares than AA's plummer pickings.
I'm still waiting to see if CO/UA is going to sustain EWR-DEL and EWR-BOM better than AA's ORD-DEL.
Jan 9, 2012, 1:19 pm
#52
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All AA employees are set to become "lower cost employees" in the next several months due to AA's bankruptcy, so if AA were to resume the route in May or June, I don't think AA would cancel the route now, only to resume it 2-3 months later.
Jan 9, 2012, 1:26 pm
#53
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It is not the route (ORD-DEL), it is AA. There is something wrong if AA has consistently higher prices and still cant operate it successfully.
However its connecting fares to DEL via ORD are generally the lowest. Often I get the lowest fare from IAH or DFW to DEL or other Indian cities on AA and even also on J. Their J class pricing is comparable to AI for connecting flights. It is only on fares originating in ORD that they are not comptetive.
Also this route could not sustain itself in the long run either. Having only one free check baggage allowance in discount economy (vs 2 in BA, AI or EY) and no free alcohol (complimentary on BA, AI or EY), it is not going to work out, unless the fares are deeply discounted.
However its connecting fares to DEL via ORD are generally the lowest. Often I get the lowest fare from IAH or DFW to DEL or other Indian cities on AA and even also on J. Their J class pricing is comparable to AI for connecting flights. It is only on fares originating in ORD that they are not comptetive.
Also this route could not sustain itself in the long run either. Having only one free check baggage allowance in discount economy (vs 2 in BA, AI or EY) and no free alcohol (complimentary on BA, AI or EY), it is not going to work out, unless the fares are deeply discounted.
Jan 9, 2012, 1:26 pm
#54
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.... and AA's economy class in-flight product (no less so the in-flight entertainment, a major element on such long-haul flights) on AA's ORD-DEL/DEL-ORD service is far from great compared to the competition.
The Indian government is very concerned right now about a sharper economic downturn in India. That in conjunction with a lot of other factors seems to be good enough reason for AA to ditch the service now. But that just begs questions about if/how UA/CO end up sustaining (if at all) EWR-BOM and EWR-DEL.
A temporary termination of ORD-DEL service for "employment" cost reasons also makes no sense to me.
The Indian government is very concerned right now about a sharper economic downturn in India. That in conjunction with a lot of other factors seems to be good enough reason for AA to ditch the service now. But that just begs questions about if/how UA/CO end up sustaining (if at all) EWR-BOM and EWR-DEL.
A temporary termination of ORD-DEL service for "employment" cost reasons also makes no sense to me.
Jan 9, 2012, 1:29 pm
#55
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Can't say I am shocked. India is a tough market to crack especially with the Middle East Carriers especially EK, AI who receives a lot of Government aid and a VFR market which in turn leads to low fares.
Jan 9, 2012, 1:30 pm
#56
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Slowing Indian economy, lower-cost competition and very high fuel prices. 2011 saw the highest full-year jet fuel prices in history (even higher than 2008); I expect to see other very long-haul routes get the axe unless they are consistently full of premium fare passengers.
Jan 9, 2012, 1:33 pm
#57
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The VFR traffic from the US to India is sourced from one of the highest income large demographic groups amongst passengers anywhere when it comes to VFR traffic, and yet AA couldn't get "good fares down the back"? AA's generally more expensive fares than the bulk of the competition apparently didn't work for it well enough to offset its higher operating costs and the customer-perceived operational/service disadvantages AA had/has relative to the competition serving India.
I see EY "winning" here as I know a number of people who are starting to fly EY (myself included) to AUH--->Asia.
I also see BA "winning" to a certain extent. I dont' see AI nor the other carriers such as 9W, CX, etc. gaining too much here.
As I mentioned, hard to compete with a carrier which is getting huge govt. bailouts.
http://timesofindia.indiatimes.com/b...w/10822889.cms
Jan 9, 2012, 1:34 pm
#58
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Slowing Indian economy, lower-cost competition and very high fuel prices. 2011 saw the highest full-year jet fuel prices in history (even higher than 2008); I expect to see other very long-haul routes get the axe unless they are consistently full of premium fare passengers.
Jan 9, 2012, 1:41 pm
#59
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Emirates will continue to cause difficulty to US-based airlines for traffic to India. If its financials are accurate, its wage structure makes jetBlue and Virgin America high-wage airlines. Apparently its pilots are paid competitively, but the remainder of its workforce earns slave-wages compared to other airlines.
Jan 9, 2012, 1:48 pm
#60
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EK, EY, QR at that.
[While it's beside the point, I have some doubt that EK's cabin crews are in the main paid "slave wages". They've been able to recruit cabin crew from some of the higher income/high quality of standard countries even as most of the cabin crew is recruited from low income (and/or lower standard/quality of life) countries and they pay more than most all other non-OECD countries' carriers.]
While I agree that AI isn't going to gain as much as a variety of Asian carriers (which factors in that the majority of the "Middle Eastern" carriers are "Asian" geographically), AI has already gained a sort of revamp in customer perception in the US. For example AI's JFK-DEL makes AA's ORD-DEL look like AA is bordering on being some kind of third world carrier.
About getting huge government bailouts and other assistance, US bankruptcy protection is considered by some to be huge government bailout of sorts too, and that's not the only form of government assistance that helps AA.
[While it's beside the point, I have some doubt that EK's cabin crews are in the main paid "slave wages". They've been able to recruit cabin crew from some of the higher income/high quality of standard countries even as most of the cabin crew is recruited from low income (and/or lower standard/quality of life) countries and they pay more than most all other non-OECD countries' carriers.]
While I agree that "Desis" are a high income group of people, at the end of the day, fares (and basically yields) aren't too good on this route.
I see EY "winning" here as I know a number of people who are starting to fly EY (myself included) to AUH--->Asia.
I also see BA "winning" to a certain extent. I dont' see AI nor the other carriers such as 9W, CX, etc. gaining too much here.
As I mentioned, hard to compete with a carrier which is getting huge govt. bailouts.
http://timesofindia.indiatimes.com/b...w/10822889.cms
I see EY "winning" here as I know a number of people who are starting to fly EY (myself included) to AUH--->Asia.
I also see BA "winning" to a certain extent. I dont' see AI nor the other carriers such as 9W, CX, etc. gaining too much here.
As I mentioned, hard to compete with a carrier which is getting huge govt. bailouts.
http://timesofindia.indiatimes.com/b...w/10822889.cms
About getting huge government bailouts and other assistance, US bankruptcy protection is considered by some to be huge government bailout of sorts too, and that's not the only form of government assistance that helps AA.
Last edited by GUWonder; Jan 9, 2012 at 1:55 pm