Wednesday, October 15, 2008

AA Cuts More Capacity for 2009

AMR, the American Airlines parent company, announced a $360 million loss for the third quarter and said that its mainline capacity will be 14 percent lower next year than in 2007 (after a 9 percent reduction this year).

(By the way, ignore the absurd headline about a quarterly profit that AA put on its announcement. That figure includes a big asset sale. The bottom line is the net loss.)

American did not break out domestic vs. international capacity cuts for next year, but the trend has been that domestic routes are being cut far more than the more-profitable international ones.

American's regional-airlines capacity (almost all domestic) will be 14.5 percent less in 2009 than in 2007, following a 9.5 percent cut this year.

As I've said, the domestic airline system is shrinking substantially. Watch as the other major carriers -- happy with the current drop in oil prices and determined to operate as smaller entities in the future -- announce new 2009 capacity cuts soon.


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