Speculation on AA Route Cuts
 

With Norse and Edelweiss announcing cuts to the U.S. due to the cost of fuel, it is not hard to imagine U.S. carriers following suit on some of their overseas routes. Which overseas routes do you think are likely to get the axe on AA if we get to that point? My top guesses are DFW-BNE (insane amount of capacity from DFW-South Pacific) and one of the recently added Athens flights (probably JFK; the season is much shorter this year).

Dfw-BNE is seasonal and ended a few weeks ago. I guess they’ll have to see what things look like later in the year when it would resume. We aren’t privy to any individual route profitability numbers, but they did announce a preliminary Q1 guidance a few weeks ago highlighting 10% year over year revenue increase in Q1 with heavy premium demand. If some of that came on a route like BNE, then it could bode well. The official Q1 numbers come next week.

as for others scheduled the coming peak European season, I guess they’d look at routes with weak bookings where they can funnel them to another flight.

BNE is probably not the best example since it is a subsidized route. DL and AA got 3 year subsidies from Queensland government for the routes starting in 2024. I'm not sure of exact details, but I believe there are certain minimum flying requirements and they can potentially just fly the bare minimum to qualify for the subsidies.

Well to AA’s advantage there is not much international exposure lol. And LHR and TYO are as short as you can generally get across the Atlantic and Pacific

The fact that AA trimmed some winter long haul last month due to the 77W retrofits may turn out to be a blessing in disguise if demand drops or fuel prices go up.

AA long-haul flying is more limited by capacity than by fuel costs. Its stinginess with the orderbook in the 2010s left it unable to replace the 763s, 757 lie flats, and A332s it parked in COVID, to say the least of serve new demand. It doesn’t have the JFK slots or airside LGA-JFK shuttle that would enable it to service high-margin ex-NYC destinations that have no OneWorld partner - Seoul, Beijing, Frankfurt, Amsterdam. Zurich.

Yes, AA has a smaller wide body network than DL/UA due to the fleet situation, but the high fuel costs due to the conflict in the Middle East could still cause some routes to get trimmed or cut.

Not to derail this thread, but JFK-FRA/AMS/ZRH could be great XLR routes. AA doesn't even serve Beijing on their own metal. They'll probably re-add it from DFW or LAX. ICN will probably see a 2nd DFW flight or LAX well before it gets JFK service.

Folks, oil is already on its way back down. It's not going to be $100 six months from now. I cannot understand why all of y'all are such short-sighted. In 2008, oil was much higher and for a much longer period of time. We are 6 weeks into this and things are already calming down. Patience everyone. Not everything has to be so dramatic and act like it's the end of the world. Relax.

There's a big difference between now and 2008. Social media,.podcasts and less trust in the traditional media. They have to be dramatic and hyperbolic to generate attention. It translates to the general public.

"My hair's on fire! Again!"

David

Do the airlines have any protection in place against short-term spikes in fuel costs? According to the information I have seen online, the major US carriers all stopped their fuel hedging programs. Do they have any protections in place vis-a-vis their fuel suppliers?

I was surprised at how empty my recent ORD to LHR flight was on AA. There is only so high airfaires can go before people cut back on travel and airlines like American cut routes.

I hope AA doesnt plan to cut capacity to EZE.......

With an employer exposed to commodities including petrochemical derivatives I found this article sobering. Apologies if a paywall.

https://wapo.st/4chi6ZQ

And it’s about to be on its way back up again. Which, in a roundabout manner, proves your point about predicting being a mugs game. The same six-week to two month lag in shortages (except places with lower reserves, looking at you, Australia) due to stored reserve levels is the problem with refreshing those reserves while providing for normal demand. That means the longer this seesaw continues, the more difficult things might be…but just how much might vary wildly depending on what occurs/gets out during the downswings in “excitement”.