Which Routes Will AA Cut Now? (as of late May 2008)
May 21, 2008, 8:33 pm
#1
Original Poster
Join Date: Mar 2008
Programs: AA Platinum 2MM , HH Diamond, Marriott Platinum
Posts: 79
Which Routes Will AA Cut Now? (as of late May 2008)
Any idea where the unprofitable routes that will be cut are?
May 21, 2008, 8:42 pm
#2
Join Date: Dec 2006
Location: ORD
Programs: AA EXP,2MM, DL Gold,Starwood PLT
Posts: 3,876
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.
What your're probably going to see if reduction in frequency in many markets. I don't expect to see many stations shut.
May 22, 2008, 3:43 am
#3
Join Date: Apr 2005
Location: HKG/LHR/JFK
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Posts: 3,253
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.
May 22, 2008, 9:57 am
#4
Join Date: Jul 2006
Location: DFW, SEA and AA in between
Programs: AA-3MM-ExPLT
Posts: 1,146
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
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
May 22, 2008, 10:31 am
#5
Join Date: Oct 2006
Location: ORD
Programs: AA Platinum, HHonors Diamond
Posts: 1,177
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.
May 22, 2008, 11:24 am
#6
Join Date: Jul 2007
Location: BOS
Programs: AA L/T Gold
Posts: 174
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
May 22, 2008, 11:33 am
#7
Moderator: American AAdvantage
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Location: NorCal - SMF area
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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.
May 22, 2008, 11:36 am
#8
Join Date: Oct 2002
Location: Rolling Lakes Yacht Club
Posts: 4,985
LIT-NRT is definately getting the axe.
May 22, 2008, 11:44 am
#9
Join Date: Sep 1999
Location: Los Angeles
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May 22, 2008, 11:48 am
#10
Join Date: Sep 2003
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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.
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.
May 22, 2008, 12:00 pm
#11
Join Date: Dec 2004
Location: MIA/FLL
Programs: AA-EXP 2MM; Priority Club-Platinum
Posts: 270
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.
PS, I take too long to write these posts....LOL
Last edited by rploehn; May 22, 2008 at 12:01 pm Reason: beaten to the punch!
May 22, 2008, 12:03 pm
#12
Join Date: Nov 2002
Location: NY USA-Buenos Aires Argentina.
Programs: AA,US,AR,Hyatt, Hilton, holidayinn/AR Plus, DiscoPlus& JumboMas
Posts: 407
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.
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.
Have all of it combine on AA 909/943-900/908 and connect to NYC or ORD
May 22, 2008, 12:17 pm
#13
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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...
May 22, 2008, 12:59 pm
#14
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