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American Airlines to Reduce New York Flights

Bankrupt American Airlines has announced that they will reduce their service to New York City, which is the busiest market in the world of commercial aviation.  These reductions in service come at the peak of the busy travel season in the US, but they have been done to give the airline time to reorganize.  At the same time, their rivals are expanding their service.  June flights to the three major airports in the region will reduce their seating capacity by 4.7% from last year, according to Jim Faulkner, a spokesperson for the airline.  This drop in seating will increase to 6.9% in July.

In contrast, Delta Airlines and United Airlines are both growing in the New York City area and have become bigger than American in the region.  As for American, CEO Tom Horton said on February 1st to expect moderate growth for the airline across its network.  George Hamlin, president of Hamlin Transportation Consulting in Fairfax, Virginia, said that American is wise to focus on the markets that will give them the largest return.  New York is no longer one of those markets.

The financial situation of the airline is the result of four straight years of losses, annual losses of more than $6 billion.  These losses brought American from being the world’s top airline to being number three in the US, behind Delta and United Continental.  Hunter Keay, a Wolfe Trahan & Co. Analyst based in NYC, said that the reduction in seating for American is a reasonable strategy.  They have to focus on stopping their losses first.  Their long-term plans include adding flights to five cities, including New York, by 2017.

American will remain focused on business destinations that connect to New York.  Its busiest routes are from the John F. Kennedy International Airport to London’s Heathrow.  The airline has structured the cuts in capacity to ensure that there is no impact on their business clientele.  The airline will take advantage of international opportunities rather than domestic as they are more rewarding financially.  The airline opened a new terminal at JFK International Airport in 2007 and will now focus on $30 million in terminal upgrades in New York, mostly to be done at LaGuardia.

 

See the original Google News article for more details.

 

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