American Eagle cutbacks are first step in shrinking AA’s network

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    garyst16 Silver Member

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    By Jim Glab (http://executivetravelmagazine.com/...work?xid=TLCHECKIN122611AmericanEagleCutbacks)


    As industry observers speculate on just how much American Airlines will have to shrink as it works its way through Chapter 11 bankruptcy, its American Eagle affiliate has unveiled plans to cut back its services this winter.

    Eagle plans to eliminate its fleet of 21 ATR72 turboprops operating out of American’s DFW hub, replacing them with regional jets by January 31. But the plan also calls for reduced service in Eagle’s network.

    According to the Ft. Worth Star-Telegram, Eagle routes getting the axe by the end of January include DFW-Augusta, Ga.; Chicago-Tri-Cities Regional Airport (Tenn.); Miami-Savannah, Ga.; Miami-Ft. Myers, Fla.; Los Angeles-Boise, Idaho; Chicago-Calgary, Alberta; and DFW-Fayetteville, N.C. In addition, Eagle will reduce frequencies in a number of markets around its system.

    American Eagle reportedly plans to lay off 119 pilots and 104 flight attendants by mid-February.
    Meanwhile, American CEO Tom Horton said in a letter to employees – acquired by Bloomberg News – that decisions about the mainline carrier’s route structure and fleet size will be made “in the coming weeks,” although he added that it will “most certainly” mean employee job losses. He also noted that American might have to contend with “opportunists who wish to acquire our company while we are in this situation.”

    Bloomberg News said airline industry analysts that it surveyed believe American is likely to shrink its overall capacity by about 10 percent as it trims unprofitable routes and reduces operating costs. Bloomberg noted that Delta cut domestic capacity by 16 percent during its first year in Chapter 11 (2006), while United reduced capacity by 8 percent in the months after it filed for reorganization in late 2002.

    The Wall Street Journal said the analysts it talked to suggested that American has to cut flights from its Los Angeles and Chicago O’Hare hubs. The report said that of AA’s five hubs – New York, Chicago, Dallas/Ft. Worth, Miami and Los Angeles – only Miami and DFW have been successful, with American capturing a 70 percent market share at those two airports.
     

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