Which Routes Will AA Cut Now? (as of late May 2008)

 
Old May 21, 08, 9:33 pm
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Which Routes Will AA Cut Now? (as of late May 2008)

Any idea where the unprofitable routes that will be cut are?
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Old May 21, 08, 9:42 pm
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80% ( or more) of domestic routes are unprofitable. It is not localized with fuel at this level and reduced demand.

What your're probably going to see if reduction in frequency in many markets. I don't expect to see many stations shut.
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Old May 22, 08, 4:43 am
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This is somewhere that "alliances" along the lines of the discussion with CO could really help. You could build a much more focused hub and spoke model without the costs associated with the number of hubs.
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Old May 22, 08, 10:57 am
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Do the math...

Elsewhere it was posted that an MD80 burns 935 gal/hr.

Oil at $130 + $30/bbl refining is a effective price of $160/bbl.

Based on other posting, 1 bbl = 40gal of Jet fuel.

So that $130 bbl = $4/gal

My flight DFW-SAN is 3hrs including taxi time.

3*935 = 2805 gallons, divided by 142pax on a full flight is just under 20gallons per pax or $80 in fuel.

If fuel is 30% of their costs as AMR has said, then it costs $267 to fly me.

If occupancy is 85%, it's $310.

Double that and anything less R/T means it's a flight losing money.

-----Burton
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Old May 22, 08, 11:31 am
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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.
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Old May 22, 08, 12:24 pm
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where?

I heard OAK from DFW to be eliminated (ok, if you must ask, I heard it from somebody down the street from me ..I'm on Trinity Blvd, FW - near Amon Carter Blvd
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Old May 22, 08, 12:33 pm
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You are well situated for that information, though OAK's elimination as an AA city has been discussed previously in this Forum.

Originally Posted by mlgagne View Post
I heard OAK from DFW to be eliminated (ok, if you must ask, I heard it from somebody down the street from me ..I'm on Trinity Blvd, FW - near Amon Carter Blvd
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Old May 22, 08, 12:36 pm
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LIT-NRT is definately getting the axe.
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Old May 22, 08, 12:44 pm
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Originally Posted by DataPlumber View Post
LIT-NRT is definately getting the axe.
NOOOOOOOO! Not FT's favorite route...
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Old May 22, 08, 12:48 pm
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Look for FLL where there is extensive competition and really low fares from Spirit, JetBlue and Southwest to take a Major hit.

AA cannot survive in this market where much of the business is AAward customers joining cruises plus the higher revenue Latin American Passenger drives the 15 miles to MIA.
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Old May 22, 08, 1:00 pm
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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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Old May 22, 08, 1:03 pm
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Originally Posted by UncleDude View Post
Look for FLL where there is extensive competition and really low fares from Spirit, JetBlue and Southwest to take a Major hit.

AA cannot survive in this market where much of the business is AAward customers joining cruises plus the higher revenue Latin American Passenger drives the 15 miles to MIA.
Most of the time AA 961/964 is empty, and AA can eliminate AA 955/956

Have all of it combine on AA 909/943-900/908 and connect to NYC or ORD
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Old May 22, 08, 1:17 pm
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I would exepct to see a lot of reduction in LAS routes - those fares are always low. Talk about the ultimate leisure destination...
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Old May 22, 08, 1:59 pm
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Originally Posted by SJCFlyerLG View Post
I would exepct to see a lot of reduction in LAS routes - those fares are always low. Talk about the ultimate leisure destination...
I agree. US Airways has already announced that they will be cutting their LAS hub by Labor Day.
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Old May 22, 08, 2:04 pm
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Originally Posted by SJCFlyerLG View Post
I would exepct to see a lot of reduction in LAS routes - those fares are always low. Talk about the ultimate leisure destination...
I disagree. There is a substiantial amount of convention traffic and paid F.
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