SW is not AA. We fly internationally, they do not. Their business plan will not work for AA.
If the revenue is not there, the employees cannot get more money.
Kinda like this huh?
bizjournals.com
American says Love Field service won't make money
Tuesday February 21, 1:36 pm ET
American Airlines Inc. will compete aggressively with low-cost Southwest Airlines Co. at Dallas Love Field, said an airline executive Monday, adding it's doubtful the legacy carrier will make money flying from its newest airport.
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American on Monday unveiled to the media the three gates from which the airline will operate at Love Field.
Southwest has more than 90 percent of the flights at Love Field, where the carrier has operated for more than 30 years. American plans to steal some of those customers, according to David Cush, an American vice president and general sales manager.
American starts its new service from Love on March 2, with 16 flights a day to Austin, San Antonio, Houston, Kansas City, Mo., and St. Louis.
The carrier was driven to expand from its fortress hub at Dallas/Fort Worth International Airport to serve Love Field by a recent relaxation of the federal Wright Amendment, which uniquely restricts Love to short-distance flights in jets with more than 56 seats.
With the recent relaxing of Wright to include Missouri, American is now on the defensive to stem any losses of its customer-base in the North Dallas area. American has a huge customer base in the area, said Cush.
But chances are American -- which has seen a near steady run of losses since Sept. 11, 2001 -- won't make money doing it, he indicated.
"It's tough to forecast a profit anywhere in the airline business," said Cush. "My guess is it will be tough to make a profit here. ...It will be tough sledding."
American has vigorously opposed any relaxing or elimination of the Wright Amendment. But Cush said American will do whatever it takes to compete hard against Southwest out of Love.
"As silly as it sounds, we're not here to make a profit off this operation, we're trying to serve our customers," he said, adding later, "We're going after Southwest customers."
Tim Smith, a spokesman for American, added however that "It would cost us lots more in lost business to not compete."
According to Beth Harbin, a spokesperson for Southwest Airlines, "American's interest in Love Field is to make a point, not a profit."
Even so, she said in an e-mail response to American's comments, American will no doubt benefit from the well-known "Southwest effect" that has found passenger volumes increase at airports where Southwest and other airlines compete.
However, she added, Southwest believes American's strength and best product offering locally has always been from its hub at D/FW "and not stringing itself out at Love Field."
"It's their choice, however, to locate where they see fit and we will work alongside them at Love Field as we do in many of our other cities," said Harbin.
In an aggressive marketing push, American is already offering triple bonus miles through May to frequent fliers who choose Love Field. That gives AAdvantage Miles customers the opportunity to earn 60,000 miles -- enough to fly to Hawaii, Europe or Japan in off-peak season, said Linda Johnson, American's general manager at Love.
"That's one of the richest offers in the history of our program," said Johnson. "Thousands have already signed up to qualify for this program."
American's first flight out of Love is an early morning departure on March 2 to Kansas City, Mo., said Cush.
The airline will have 1,000 seats a day out of Love Field, but Cush declined to say how many passengers might actually board the planes. A typical "load factor" for the airline is 70% to 80% full. Planes moving through Love Field won't be that full, though he declined to specify a number.
"Because we'll be carrying only local traffic we'll expect to see load factors significant lower than at D/FW," said Cush.
Published February 20, 2006 by the Dallas Business Journal