- Dec 21, 2002
- 5,998
- 347
American making rest of announced cuts
By TERRY MAXON [email protected]
American Airlines Inc. will implement the remainder of its capacity reductions Sunday as it cuts flights throughout its system, leaving the carrier about 8 percent smaller than a year ago.
With cuts made in September, American will have reduced its domestic system by about 12 percent and its entire system, including international flights, by about 8 percent.
American spokesman Tim Smith said Friday that the primary reason for American's capacity cuts has changed since they were announced last spring. But the need for them has not, he said.
"At the time we made that announcement, a lot of it was driven by rapidly rising fuel prices," he said. "But there were also elements of the beginnings of a slowing economy."
Now, "by all measurements, the softening economy has become soft," Mr. Smith said. "That also makes it look like a good decision, even as fuel prices have moderated."
Although the price of crude oil is less than half its July high above $147 a barrel, airlines are going forward with capacity reductions to boost fares and eliminate unprofitable flights.
In a report Friday, Barclays Capital airline analyst Gary Chase estimated that the nation's 10 largest carriers plus Frontier Airlines Inc. will fly 11.9 percent less capacity on domestic routes in December than a year earlier, and overall capacity will be down 8.5 percent.
Tom Horton, chief financial officer of American parent AMR Corp., told analysts on a conference call Oct. 15 that the airline now expects its capacity this quarter to be down 8.3 percent compared with the fourth quarter of 2007, including a 12.5 percent slash in domestic flying.
About half the American and American Eagle flight cuts in September and November are coming at a handful of major airports, including Dallas/Fort Worth International Airport; Chicago O'Hare; St. Louis; San Juan, Puerto Rico; Los Angeles; and New York LaGuardia.
Hardest hit has been the Puerto Rican hub, where the carrier has eliminated 51 of its 103 flights.
On a percentage basis, D/FW Airport has been affected less, with 19 American and 23 American Eagle flights being canceled in the two reductions – just over 5 percent of the 784 flights offered a year earlier.
By TERRY MAXON [email protected]
American Airlines Inc. will implement the remainder of its capacity reductions Sunday as it cuts flights throughout its system, leaving the carrier about 8 percent smaller than a year ago.
With cuts made in September, American will have reduced its domestic system by about 12 percent and its entire system, including international flights, by about 8 percent.
American spokesman Tim Smith said Friday that the primary reason for American's capacity cuts has changed since they were announced last spring. But the need for them has not, he said.
"At the time we made that announcement, a lot of it was driven by rapidly rising fuel prices," he said. "But there were also elements of the beginnings of a slowing economy."
Now, "by all measurements, the softening economy has become soft," Mr. Smith said. "That also makes it look like a good decision, even as fuel prices have moderated."
Although the price of crude oil is less than half its July high above $147 a barrel, airlines are going forward with capacity reductions to boost fares and eliminate unprofitable flights.
In a report Friday, Barclays Capital airline analyst Gary Chase estimated that the nation's 10 largest carriers plus Frontier Airlines Inc. will fly 11.9 percent less capacity on domestic routes in December than a year earlier, and overall capacity will be down 8.5 percent.
Tom Horton, chief financial officer of American parent AMR Corp., told analysts on a conference call Oct. 15 that the airline now expects its capacity this quarter to be down 8.3 percent compared with the fourth quarter of 2007, including a 12.5 percent slash in domestic flying.
About half the American and American Eagle flight cuts in September and November are coming at a handful of major airports, including Dallas/Fort Worth International Airport; Chicago O'Hare; St. Louis; San Juan, Puerto Rico; Los Angeles; and New York LaGuardia.
Hardest hit has been the Puerto Rican hub, where the carrier has eliminated 51 of its 103 flights.
On a percentage basis, D/FW Airport has been affected less, with 19 American and 23 American Eagle flights being canceled in the two reductions – just over 5 percent of the 784 flights offered a year earlier.
