Squeezed airlines clip wings
Citing fuel prices, carriers cut back on flights - and entire routes in some cases
Several US airlines, roiled by unrelenting fuel costs, disclosed this week that they are winnowing daily flights to certain destinations, eliminating entire routes, and in some cases withdrawing from airports - and this is just the beginning.
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"We expect carriers to explore any and all options - capital raises, foreign capital infusions, strategic transitions, asset sales, alliances - in an attempt to bolster their positions financially and strategically in this quickly deteriorating environment," wrote analyst Christopher Cuomo. "But in a world of sustained $100-plus oil, we are not convinced these actions can provide enough relief to offset the challenges that lie ahead."
Record-high fuel prices this week prompted US Airways to cut 10 routes from its Las Vegas hub effective Aug. 19 and American Airlines Inc. to say it would cease serving Oakland International Airport in California, where it only operated three daily flights, on Sept. 3. In Boston, American will reduce the frequency of flights to Dallas/Fort Worth International Airport from 10 a day to nine a day, and to San Juan from three a day to two a day, on Sept. 3 as part of the 5 percent cut in domestic capacity already slated for this year's fourth quarter.
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Because the low-cost carrier doesn't serve LAX, it costs more to introduce a flight there than add one where it already operates.
JetBlue said the surging price of fuel disproportionately hurts long-haul flights, which Boston has a lot of due to its location in a corner of the country.
That's one reason JetBlue said yesterday it is add ing three more weekly trips on the seasonal New York-Nantucket route to the seven it already runs between May 22 and Sept. 2 - despite fuel prices that are now $3.50 per gallon, 29 percent higher than when the carrier announced the LAX service three months ago.
A JFK-Nantucket flight would burn about $2,600 worth of fuel one-way, while a Boston-Los Angeles flight would burn $16,500, White said.
JetBlue also needs to find a place to profitably fly its new 100-seat planes - and it can charge $279 one-way for the nonstop flight to this popular island resort. By contrast, the airline thinks it can only charge passengers departing from John F. Kennedy $10 to $40 more to fly to Long Beach, Calif., on 150-seat planes because there's so much competition on the route.
JetBlue flier Bernard Gaor, who flies the low-fare carrier from Boston to Long Beach and Las Vegas, thinks airlines should just raise fares 20 percent or however much is needed to cover their costs, ensure their survival, and continue offering customers an array of destinations.
"Our gas stations do it every day, and sometimes twice in the same day," said Gaor, a retired recruiter from Middleborough. "Go raise the prices. I won't complain. It's justifiable."
Even though JetBlue and several other carriers concerned about fuel costs are retreating from some longer domestic flights in favor of shorter ones, Logan officials don't expect the airport to be hit hard by service curtailments if fuel prices continue to climb.
Forty percent of the airport's domestic flights last three hours or less, said Logan spokesman Matt Brelis. And the airport remains super-competitive.
"Because no single airline has 20 percent of the market and we have a very good mix of low-cost carriers and legacy airlines, we believe Logan is in a position to continue to offer New England travelers a wide array of destinations, both domestically and internationally, even if an airline reduces service on a route," Brelis said.
Nicole C. Wong can be reached at nwong@globe.com.
