American and Continental Cut Capacity

American and Continental Cut Capacity

American Airlines announced it expects to reduce domestic capacity this year. In the fourth quarter of 2008, the airline will cut capacity on domestic routes by 11 to 12 percent. Commenting on the cutbacks, USA Today writes “the reductions — almost double what American forecast only a month ago — will likely mean elimination of at least 300 flights a day from the 4,300 that it and its regional affiliates offer. That will also likely lead to elimination of more than 6,000 jobs. The company plans to retire at least 75 mainline and regional aircraft.” Industry analysts say that reductions are needed in order to compensate for higher fuel prices. What this means for AAdvantage members is that there will be fewer domestic award seats available for redemption. Some of the announced routes to be cut are New York JFK to Stansted, Chicago to Honolulu and Buenos Aires and Boston to San Diego.

Due to rising fuel costs, Continental Airlines will also significantly reduce its flight capacity, fleet size and jobs in the fourth quarter this year. The airline will begin reducing its domestic flight capacity by 11 percent, starting in September after the peak summer season. The international schedule will see a slight decrease in fourth-quarter capacity, but that could increase slightly in 2009. Expanding internationally while decreasing flights domestically is a trend in the industry — international routes are more lucrative. Continental will also eliminate 67 aircraft and 3,000 jobs.

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