American cutting flights from NY, DC after merger
American Airlines and US Airways will drop year-round, daily nonstop flights from Washington's Reagan National Airport to Detroit, San Diego and 15 other cities because of the deal they made to win government approval of their merger.
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Since: May 08
#1 Jan 16, 2014
Because the DOJ said they had to.... The merger isn't the cause
#2 Jan 16, 2014
American and USAirways agreed to sell a certain number of slots at DCA and LGA as part of an agreement with the US Justice Department as well as several states.
They don't have to drop particular routes, but with fewer slots, the airlines will figure out what are the best routes to fly, from both an operational and a financial standpoint, with what's left.
What will happen is that the airlines that buy the slots will undoubttedly use them to fly busy routes in compettion with American.
So cities and passengers on busy routes will win and lesser ones will lose.
Since: May 08
#3 Jan 17, 2014
Yes, that is common business sense. The merger isn't the cause of the dropped routes. The dropped routes allowed the merger. For the airline to purchase those slots not to use them for the best possible load factor and profit margin would be stupid. Then may not do it to compete with AA, but with a still dominant presence in DCA it's safe to say the new airline will overlap one of the many routes AA will still have there.
#4 Jan 18, 2014
Usairways wasted some of those slots on small cities and small planes, 37-50 seater's. Both DCA and LGA have only 2 runways and a limited number slots and to waste them on small passenger loads per flight is not using the slots to move the most people. A flight with 125 passengers is better utilizing a slot than one with 35 passengers. Those small cities can still connect through many hub airports to reach DCA and LGA.
When Delta received a number of slots for LGA from Usairways a few years ago, they used those slots with larger aircraft moving a greater number of people.
As far as AA losing slots at both airports, they can up-gauge the aircraft so each flight will carry more passengers and their total number of passengers moved can remain the same or actually grow.
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