Airline blames cuts on restructuring
American Airlines’ latest plan to slash more of its flights will further erode shrinking nonstop opportunities for St. Louis travelers.
The carrier, which in June rolled out cuts to take effect by the end of November, went back to the well Thursday with plans to cut deeper into it flights out of Lambert-St. Louis International Airport.
American’s parent company, AMR Corp., blamed the cuts on restructuring. It announced it has borrowed and raised $2.9 billion and will focus service on its primary hub airports, including Chicago’s O’Hare International Airport and Dallas/Fort Worth International.
The restructuring will leave St. Louis with 36 daily flights to nine cities on American jets and American Eagle regional jets by April.
"Today’s announcement positions our company well to face today’s industry challenges and allows us to remain focused on the future and on returning to profitability," said Gerard Arpey, AMR chairman and chief executive.
American’s St. Louis officials were briefed on the upcoming round of flight reductions late Wednesday. Since 2003, American has made a series of deep service cuts at Lambert — once a thriving midcontinental hub for Trans World Airlines, which was acquired by American in 2001.
By the end of November, American already will be down to 82 daily flights to 20 destinations, reflecting cuts in 18 flights.
The lost American flights will leave Lambert with roughly 220 daily departures to just under 60 cities if no new flights are added by next summer. By contrast, Kansas City International has 211 peak-day departures to 48 nonstop destinations.
Indianapolis International Airport has 155 daily departures to 37 nonstop destinations, according to its website.
St. Louis leaders expressed disappointment that American’s cuts will go even deeper.
St. Louis Mayor Francis Slay called it a "bad business decision."
"By eliminating what was left of the St. Louis hub it took over from TWA, American will be walking away from more than 620,000 passengers a year," Slay said in his blog. "And they will walk away from approximately $108 million in system revenue."
Lambert Director Richard Hrabko said the cuts will essentially wipe out nonstop service from Lambert to a dozen U.S. cities by any airline. St. Louis travelers looking for nonstop service already had seen their choices shrink to 70 cities from more than 100 less than a decade ago.
"If you look at this history since 2003, it has been a steady downturn," Hrabko said. "They have continued to cut consistently down to this ultimate cut, which I consider to be the ultimate cut."
Michael Boyd, an airline analyst in Evergreen, Colo., said St. Louis and Lambert leaders had no control over the circumstances that led to the latest cutbacks.
"This has everything to do with airline economics and nothing to do with the failure of the city or the airport," Boyd said.
In addition, passenger loads were too light on some of the flights that will be dropped in April, Boyd said, including flights to midsize Midwestern cities of Madison, Wis., and Des Moines, Iowa.
By contrast, American will add 57 flights a day at O’Hare, bringing the total to 487 departures a day, and 19 daily departures at Dallas/Fort Worth, bringing the total to 780. The airline will add 23 flights out of Miami and beef up service from New York’s Kennedy and LaGuardia airports.
American Eagle will add first-class cabins to its 25 regional jets and signed a letter of intent to purchase 22 Bombardier regional jets, American said.
American officials said they expect the effects on employees to be minimal, and there are no plans to close the American crew base in St. Louis.
Richard Fleming, president of the St. Louis Regional Chamber and Growth Association, agreed that American’s changes to its St. Louis schedule have more to do with "survival of a major legacy carrier" than the viability of the St. Louis travel market.
Despite the lost flights, Fleming said, St. Louis retains an equal footing with other metropolitan markets it considers competitors from an economic development point of view.
"The fact is, we still have a strong base of service," Fleming said. "It’s going to be St. Louis’ challenge and opportunity to backfill those routes with other carriers."
It is unclear whether another carrier will seize the opportunity to provide flights on the routes abandoned by American.
Southwest Airlines spokesman Brad Hawkins said the discount carrier has no plans to expand St. Louis service beyond the flights it recently announced to Minneapolis-St. Paul and Boston.
U.S. Sen. Christopher "Kit" Bond, R-Mo., said the lost flights will leave the St. Louis region with fewer options — and fewer jobs — in a difficult economic climate.
"At a time when the city is working its way through difficult economic times, these cuts are a giant step in the wrong direction," Bond said.
Business travelers predicted that American’s next wave of St. Louis cuts will make flying difficult.
"This will be a big inconvenience," said Shannon Coleman of Dodge City, Kan., an accountant who flies from Wichita to Lambert monthly for her job. "American is now the only connection straight to St. Louis. I’ll have to find out what’s available, but flying through a connection certainly will make it harder."
Jeff Carden of Chesterfield, a regional sales manager for an electric supply company, said he travels the Midwest regularly and will likely try to fly Southwest Airlines to get where he needs to go.
"I may have to go places the night before," Carden said. "It just makes for more inconvenience, although I can’t say I’m shocked because we have been through this before with American."
American spokeswoman Mary Frances Fagan said the new daily St. Louis flight schedule will include two American Eagle flights to Boston’s Logan International and two to Kennedy International Airport in New York. American mainline jets will still fly nine times a day from St. Louis to both Dallas/Fort Worth and O’Hare, four times a day to both New York’s LaGuardia and Reagan National Airport in Washington. There will be three flights a day to Los Angeles International, two to Miami and one to Seattle, providing a link between two Boeing Co. headquarters.
Tim O’Neil of the Post-Dispatch contributed to this report.
Filed under: money by Specialist