American and Alaska Detail Plans to Shrink

A month ago, Horizon Air revealed its plans to focus on the Q400, drop the Q200 and CRJ-700 aircraft, and shrink its operation by a fair amount. Then last week, American announced its decision to cut 11 to 12% of itself for the fall schedule. Yesterday, both airlines decided to throw out some details, and there are some interesting moves.

Let’s start with American. The airline will drop Chicago to Buenos Aires and Boston to San Diego on September 3. Meanwhile, Chicago to Honolulu will fly on peak days only from September 3 through January 5 and then it disappears altogether. In a separate press release today, American said it will cancel its flying from New York/JFK to London/Stansted on July 2 as well.

None of this should be terribly surprising. We’re looking at long haul (read: gas-guzzling) flights with a high percentage of leisure demand. American Shrinky DinkStill, I’m a little surprised that Honolulu is losing a flight considering how much capacity has already dropped to the Islands with the disappearance of Aloha and ATA. And I’m also surprised about Stansted . . . mostly that it wasn’t dropped sooner. It was clearly a thinly veiled attempt to drive Eos and MAXjet out. They’re gone, so why stay? Again, not a big surprise.

Where it does get interesting, however, is in the American Eagle moves. The press release doesn’t say much, but an internal memo sent out to American Eagle employees says that American will slash San Juan departures from 55 to 33 this winter, the peak season down there. It will be mostly frequency reductions, though flights will cease altogether from San Juan to both Aruba and Samana (in the Dominican Republic, they say, though I’ve never even heard of it). That means they’ll free up some of their ATR 72 turboprops which will transfer over to Dallas where they will take over the flying currently done by Saab 340 turboprops.

There are currently 29 Saab 340s in the active fleet, and they will all be retired. Some of those are in Dallas, but the rest fly out of LAX. From LA, they currently fly to San Diego, Santa Barbara, San Luis Obispo, Fresno, and Monterey. According to the memo, these aircraft will be replaced with regional jets, though there will be some flight reductions. Schedules, however have yet to be finalized.

I’ll be amazed to see how long they can keep this flying up out of LA. I mean, RJs are not cheap to fly, and those short routes don’t see too many local passengers. It’s mostly for connections and I think they’ll be hard-pressed to justify keeping these flights around.

Now on to Horizon. These guys had much more comprehensive changes announced today. Only Butte to Seattle and Billings to Portland will go away completely. A slew of others will see reduced frequency, and you can see those in the above link. There are a couple of new routes coming out of this as well and they’re, well, weird.

Billings to Helena? San Jose to Sacramento? Yeah, that’s just odd. Basically they’re creating round-robin trips where you fly from point A to point B to point C and then back to point A. These have never really worked well for airlines in the past, so I’m not sure what makes them think this will be a winner this time.

These announcements are just going to be the beginning for Horizon and American. The Horizon schedules still include ample Q200 and CRJ-700 flying, and we know both those aircraft will be leaving the fleet. American, meanwhile, is nowhere near reaching the 11 to 12% cut they’ve announced was coming. Hold on tight. There’s more to come.


11 Responses to American and Alaska Detail Plans to Shrink

  1. Pingback: View from the Wing » Blog Archive » Weird New Route of the Day

  2. James says:

    Qantas is also cutting capacity: http://www.qantas.com.au/regions/dyn/au/publicaffairs/details?ArticleID=2008/may08/Q3768

    “Despite our fuel hedging strategy, fuel surcharges, two separate across-the-board fare increases and a recruitment freeze, we are not bridging the widening gap between the actual increase in the cost of fuel and the amount we offset.”

    * retiring one B737 aircraft;
    * grounding two B767 aircraft and one Jetstar A320 aircraft;
    * cancelling the delivery of one Jetstar A321 aircraft;
    * accelerating the retirement of its four B747-300 aircraft, currently operating trans-continental services to Perth, by December; and
    * adjusting the flying patterns of other aircraft, including reducing the utilisation of the B747-400 fleet.

    I flew on a B747-300 twice last week to and from Perth, the entertainment system is still geared for international flights. I wonder what they’ll replace them with since they were ~3/4 full.

    * Qantas would exit its Gold Coast-Sydney and Ayers Rock-Melbourne routes and reduce Ayers Rock-Sydney services from August;
    * Jetstar would exit its Sydney-Whitsunday Coast, Adelaide-Sunshine Coast, and Brisbane-Hobart routes from July; and
    * Jetstar would reduce services on some Adelaide, Avalon and Cairns routes by August.

  3. Million Miler says:

    Interesting decision to move aircraft with operating limitations in icing conditions to Dallas in the middle of the winter. I assume the decision makers live in the Dallas area and realize that despite being a “sun belt” city, Dallas has at least the potential for icing every 5-7 days in the winter months as cold fronts blow thru the region pretty much on a regular schedule.

    I assume that they also understand that icing is a big part of how the ATRs got shipped to San Juan to begin with.

  4. required_name says:

    I can see why nobody flies AA directly from LAX to monterey (I assume you mean the CA city, not the mexican): a quick travelocity search for mid-week flights first week next month resulted in the cheapest return flight offer being $819. that’s a two-hour drive, folks!

    I have a feeling they are already actively discouraging people from taking this flight.

  5. CF says:

    Not quite, “required_name” – it’s actually a good 325 mile drive to Monterey, but yes, your point is taken. That is REALLY pricey.

  6. Million Miler says:

    But if you check the price from Monterey to JFK you will find that seats are still available mid-week of next week for about the same or less than the price of Monterey to LAX alone. You can depart MRY at 2:00 pm and arrive JFK just after midnight for only $179 with about an hour layover in LAX. There are several options with two connections via LAX and DFW at similar prices.

    I find this is common for AA. Sometimes it feels as if they don’t seem to really want to carry local traffic, they would rather have the connecting business. You will frequently find the same situations in other short haul markets DFW-OKC, DFW-TUL, even DFW-HOU.

  7. Million Miler, they’ve probably protecting the short hauls for the connecting traffic. If someone wants to go from MRY to JFK they’re probably not open to driving to LAX. If someone just wants to go from MRY to LAX it is much more likely that driving it would be an option, if it is not American wants you to pay for the privilege of kicking out a possibly lucrative connecting passenger.

  8. CW says:

    The last time I was in Stansted, a large expansion was being built just for American. I bet the BAA is not happy at all about this.

  9. Million Miler says:

    Nicholas
    I actually think you and I are on the same page here. I understand the desire to accommodate the connecting passenger.

    My question is what are they protecting? The pricing is so messed up that they actually need someone to ante up the $800 to cover the loss on the long haul.

    Business people aren’t going to drive from the LA basin to Monterey. That drive is for the tourists. But they will fly Alaska or Southwest into San Jose, rent a car and drive over to Monterey. Maybe next time the business person needs to go to Monterey he/she doesn’t even bother to check the Monterey flight and just books the flight into San Jose.

    A potential consequence of this is they end up with no point to point passengers and have to increasingly discount the connections to fill the empty seats. Next they abandon the market because they can’t make a profit.

    At the end of the day wouldn’t they do much better to price the LAX-MRY closer to the going rate for LA Basin/Nor Cal? They can justify a modest premium to reflect the fact that the drive from San Jose is a pain in the neck.

    Cranky is the yield management expert here. But from where I sit, the market is shaking out and the winners will likely be the folks with a history of pricing their product fairly – and not antagonizing their best customers with unrealistically high fares that scream “we don’t want you”!

  10. CF says:

    Well, if the local route truly is just a business traveler route, then fares should be kept relatively high. $800? No, that’s not going to get much traffic at all, but $400 might. I haven’t looked at the makeup of these flights personally, but they may just be such a small piece of the puzzle that they kind of fall under the radar and nobody pays attention. With new jets coming into the market, that may have to change.

  11. Gordon Werner says:

    A lot of the changes that Horizon is making also reflects the pull-down of the Q200 fleet, replacing more flights with fewer Q400s.

    In some cases total seats available goes up others it remains more or less constant.

    Horizon (and Alaska) already operates multi-stop flights and it has worked well for many of the communities involved

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