American shocks industry with international cuts, ‘B word’ whispers
American Airlines has announced the first capacity cuts to its system and surprised the industry with reductions to its international route structure, Chicago to Buenos Aires. The news shocked American Airlines employees working international routes who thought they were insulated from possible layoffs.
But the bad news for the international pilots and flight attendants was better news for the domestic side of the company — they are now expecting to see fewer furloughs. However, the workforce is holding its collective breath.
Here’s the meat of the AA press release:
The initial changes to the flight schedule include, but are not limited to:
* Discontinuing its Chicago – Buenos Aires service effective Sept. 3.
* Discontinuing its Chicago – Honolulu service Jan. 5, 2009. Between September 3, 2008, and Jan. 5, 2009, American will operate Chicago – Honolulu service only on peak demand days.
* Discontinuing its Boston – San Diego service effective Sept. 3.
* Restructuring American and American Eagle operations at San Juan, Puerto Rico beginning in September. This round of reductions will affect American and American Eagle flights originating from San Juan to the United States and various islands in the Caribbean.
Friends within American are telling me that they are now hearing the “B word” being mentioned by senior employees and executives. Whether bankruptcy is being held as a threat by the management or a serious consideration because of out-of-control jet fuel prices, who knows. But, this is the first time I have heard these kinds of murmurs from within American since their bankruptcy scare five years ago.
On a positive note: I just heard, again, that oil prices are projected by some on CNBC to dip back below $100/barrel by the end of the year. I noted another think tank report that made the same prediction in an earlier post.
If that happens, the airlines will be fine.
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2 Responses to “American shocks industry with international cuts, ‘B word’ whispers”
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I understand the need put ads in your RSS feed. But when I see that the 3 new items in my reader are all ads…I’m quick to unsubscribe.
Yes, but once the oil dips, will the airlines really remove or reduce their fuel surcharges? My vote is no - where’s the think tank on that?