American Pares Service To LaGuardia, 4 Cities
WASHINGTON POST:
American Pares Service To LaGuardia, 4 Cities
by Sholnn Freeman
American Airlines, the largest U.S. airline, announced yesterday a deep round of service cuts that includes shrinking the number of flights from New York's LaGuardia airport and eliminating service to four smaller U.S. cities.
The cuts, which go into effect in October, end service from various airports to Albany, N.Y., Providence, R.I., Harrisburg, Pa., and San Luis Obispo, Calif. American flies to those cities under its American Eagle brand, which generally uses 37- and 50-seat jets. American also said it would cut flights from LaGuardia: 62 to Chicago, 43 to St. Louis and 42 to Dallas-Ft. Worth, on American and American Eagle.
In the Washington area, American will cease flying to Reagan National Airport from LaGuardia in November. However, the airline will add flights between National and John F. Kennedy International airports.
The cuts are in line with an announcement in May that the airline would slash its U.S. flying capacity by as much as 12 percent compared with a year ago. Other big U.S. carriers have announced similar-size cutbacks, and most, including American, have not ruled out more cuts in coming months.
American, in a statement, said the changes are being instituted to reduce costs and create a "more sustainable supply-and-demand balance" in light of high fuel costs.
Analysts have said current flight cuts will make it easier for airlines to raise fares in the future.
American said part of its reason for trimming service at LaGuardia was to reduce air traffic at the chronically overcrowded airport.
Yesterday, an industry analyst said sky-high fuel prices were wreaking havoc on airlines. U.S. air carriers are projected to pay $61 billion for jet fuel this year, up $20 billion from a year ago and double what they paid in 2004. Tumbling share prices have shaved off billions of dollars in the airlines' market capitalization. Mark J. Schulte, managing director of Taurus Corporate Finance Group, said the industry is heading into a critical period that could determine the "winners and losers" in U.S. aviation.
"Over the next 18 months, the prospects look very dismal," Schulte said, speaking in Washington at an International Aviation Club luncheon. "The U.S. industry is facing its biggest challenge since the inception of commercial air travel."
Schulte said executives at squeezed U.S. airlines are scrambling for ways to raise cash to cope with the crisis. He said their options included selling off assets, taking on more debt and selling ownership stakes to foreign rivals.
DALLAS MORNING NEWS AIRLINE BIZ BLOG:
American, American Eagle announce cuts in flights
by Terry Maxon
American Airlines and American Eagle have revealed more details about their flight reductions, and it appears to be a little bit here, a little bit there.
On May 21, American Airlines said it and American Eagle would cut their capacity later in the year. On May 27, we found out a first slice in September would have a major impact on Puerto Rico.
On June 25, we found out its Dallas/Fort Worth, Chicago and St. Louis hubs will take some hits, as will New York LaGuardia.
One thing of note in American's announcement is the focus it put on New York LaGuardia. Nearly half its press release focused only on LaGuardia. I've reprinted it below.
The company also has decided to eliminate five AA flights and 37 American Eagle jet departures at LaGuardia Airport. In addition to the expected cost savings, these changes, coupled with appropriate government action, could allow the airport to operate with less chronic disruption and improve customer experience at one of the nation's most congested airports.
"Today, the dependability and delay issues that exist at LaGuardia have reached a crisis point and have a daily negative impact on the overall customer service and performance for every airline with flights at LaGuardia," said Bob Reding, American's Executive Vice President - Operations.
Historical data from the Bureau of Transportation Statistics on operational performance at LaGuardia highlights the issues. During the last five years, for example, delays at LaGuardia have increased 50 percent and now occur on one out of every four departures, with these delays averaging more than one hour.
In large part, these delays are attributable to Air Traffic Control's inability to handle the scheduled service levels.
Likewise, inbound delays have increased by 55 percent and occur on four out of every 10 arrivals, on average delaying arrivals by 60 minutes. In addition, cancellations at the airport now average over 5 percent, an increase of more than 50 percent.
American has called for the FAA and the Department of Transportation to reduce the number of operations allowed at LaGuardia by 20 percent - or approximately 15 operations per hour until FAA airspace redesign efforts, ATC modernization, and other steps increase the level at which LaGuardia can operate reliably.
"As airport utilization increases, on-time arrival performance at any airport declines," Reding said. "The decline is particularly evident as airport utilization exceeds 80 percent. LaGuardia is scheduled at over 100 percent and has the worst dependability in the nation. With the retirement of American's five operations per hour at LaGuardia, the DOT will be able to achieve more than one-third of the objective, and will be well on its way to providing a real solution to the operational problems plaguing LaGuardia today."
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