American Airlines warns it will drop service to 15 small cities if it does receive more payroll subsidies from U.S. taxpayers. But the nature of the list strongly suggests this is far more a political move than a financial one.
Which 15 Markets Does American Airlines Plan To Cut?
The planned cuts take effect on October 7, 2020. Here’s the full list:
- Del Rio, Texas (DRT)
- Dubuque, Iowa (DBQ)
- Florence, South Carolina (FLO)
- Greenville, North Carolina (PGV)
- Huntington, West Virginia (HTS)
- Joplin, Missouri (JLN)
- Kalamazoo/Battle Creek, Michigan (AZO)
- Lake Charles, Louisiana (LCH)
- New Haven, Connecticut (HVN)
- New Windsor, New York (SWF)
- Roswell, New Mexico (ROW)
- Sioux City, Iowa (SUX)
- Springfield, Illinois (SPI)
- Stillwater, Oklahoma (SWO)
- Williamsport, Pennsylvania (IPT)
American Airlines adds:
“For now, these changes are only in place for the October schedule period, which runs through Nov. 3. The airline will continue to re-assess plans for these and other markets as an extension of the Payroll Support Program remains under deliberation.”
A few things immediately jumped out at me.
First, the changes are spread out among 14 states, with only Iowa facing more than one reduction. The move therefore impacts 28 U.S. Senators who would have to defend the loss of air service, not to mention vulnerable members of the House.
Second, look at the list. Iowa, North Carolina, Michigan, Pennsylvania? American Airlines is targeting battleground states in an election year. That may catch the President’s attention.
Furthermore, View from the Wing notes that the legality of American’s plan to drop service to Joplin and Sioux City are legally questionable at best and likely illegal.
This is blatantly a political move. Ok, so what?
Now we see who blinks first. Will it be Congress that caves and passes an extension of payroll support or will be American that ultimately “reconsiders” its choice to suspend service to these markets, including nine of which it has a monopoly on?
Congress Should Call On AA’s Bluff
Speaking of subsidies, the U.S. has a program called Essential Air Service (EAS). I’ve written about it here. Since there are persuasive economic and equity arguments for a wide net of air service to smaller cities in the USA, other airlines will fill the void in these cities if AA cuts service via the EAS.
Thus, the issue would become who gets the subsidy going forward. Frankly, I’d rather award it to the airline that does not engage in brazenly political tactics to try to pressure Congress into opening the purse. Then again, while American Airlines may do it more openly, it is hardly unique in pressuring key decision makers.
CONCLUSION
American Airlines is entitled to cut service on routes that it deems unprofitable if it stops accepting government funding. Indeed, there are probably routes that no longer justify service due to tepid demand. But let’s see this announcement for what it is: politics first. That American Airlines would issue a press release about DROPPING service to 15 cities and then mention the CARES Act three times (in a 151-word release) speaks volumes about its true intentions.
image: American Airlines
With air travel down by ~71% year over year, and most likely not even close to reaching 50% by year end. Why shouldn’t these cities lose service if the govt isn’t going to underwrite it. Lets face it, some of these cities are basically on the dole and the whole Essential Air Service program should go away entirely. If you want air service, live where there is a population base or $$ that can support that air service.
While there is pressure politically, you’re being completely disingenuous by cherry picking the sites you did. Of note, 6/15 are in GOP states (DRT, FLO, HTS, JLN, SWO, LCH), 4 in reliably Democratic states (SWF, HVN, SPI, ROW), and the remaining 5 in “battleground” states. There are states with Democratic senators up for reelection (Michigan, Illinois, New Mexico) and Republicans (South Carolina, Texas, Oklahoma, Iowa, Louisiana, West Virginia). Of those, only one on each side (Michigan, Iowa) is reasonably at risk, unless you think Lindsay Graham will actually lose and South Carolina, of all places, will have the first all-African American senatorial delegation.
Such a political move! It’s almost like you can make it fit whatever bullshit narrative you want, instead of noting that it’s either small airports in rural towns, college towns, or close to other major airports!
Do better, Matt.
It is bipartisan politics – challenging both sides of the aisle of Congress to fork out more money and thus to burden my grandkids with more debt. I will not be around alive to pay it but they will.
I do 99% of my flying on American and I live 45 minutes away from Williamsport. It is my closest airport but I would never consider using that airport. The flights are too infrequent and that airport is often closed due to fog. I am not at all surprised American may pull out.
New Haven, CT is losing service to PHL, however my understanding is service to CLT will remain.
no. they were supposed to start New Haven – Charlotte service. Instead, they’re just dropping New Haven entirely. When they say “ending all service” in their press release, it means ending all service.
Oh please, these cities are so tiny and are already Eagle flights to begin with. How much money do you think the airline is flying when 18 people are flying to Lake Charles?
I don’t think the fare is relevant because the service is subsidized by the govt. Sadly the govt is okay subsidizing businesses serving rural America under an equity argument, but not the post office. I think subsidizes for rural air travel should be canceled.
Bail outs for private business while forsaking the working and poor class is just plain wrong. Meanwhile, our spine;less legislators are on holiday until after Labor (???) Day while people are going hungry and can’t pay their bills. In this Great (sic) country. Screw the airlines, let ’em forgo paying their shareholders.
“New Windsor, New York (SWF)”
Some just call it Stewart Airport (like how norwegian confuses you at EDI check-in, without listing the country too), some calls it Newburgh,
and AA might be one of the very few who refer to SWF as New Windsor, a town that only half the airport sits on.
I’m surprised they didn’t also list OOL as part of New South Wales since it’s not entirely within Queensland either.