American’s San Juan 50% capacity slash removes just two destinations

Image: Lead Image
Bye, bye. American’s halving of capacity is not as bad as it sounds – existing and new competitors (like JetBlue) will grab the business on all but two services.

Image: San Juan HeadlineWith over 60% of passenger traffic at San Juan airport in 2007, American Airlines and its subsidiary American Eagle is the dominant airline serving the Puerto Rican market. As part of its planned major capacity reductions this autumn the airline is cutting back significantly at the airport.

San Juan is the region’s busiest airport and passenger numbers have between nine and 11 million for the last decade. Traffic has been reasonably stable during the last four years at around 10.5 million passengers.

Map: Puerto Rico
Puerto Rico: An unincorporated territory of the United States.
Chart: San Juan Airport Traffic
Source: BTS (RITA)

Other airports in San Juan include Aguadilla (around 390,000 passengers in 2007) and Ponce (around 240,000 passengers last year). The reason why American is cutting capacity at the beginning of September becomes clear when the seasonality profile of the airport is examined.

Chart: San Juan Airport Seaonality
Source: BTS (RITA)

Demand falls away significantly in September and October (which is associated with hurricane season) before picking up again in November. In fact, two of American’s route cancellations are only during these two off-peak months reflecting a new trend already adopted by Ryanair at seven airports in Europe for the November/December period.

Date American
w/c 21 July 2008 38 661 81,747
w/c 8 September 2008 31 357 40,656
w/c 11 November 2008 33 393 44,824

Source: OAG Max Online

From the beginning of September a total of just eight destinations will be dropped with a seasonal route to Canouan Island re-starting make a net loss of just seven routes. However, flights will be reduced by 46% and capacity will be reduced by just over 50%.

Action Routes
Dropped permanently Aruba, Fort Lauderdale, Newark, Orlando, Samana, Washington Dulles
Dropped September
Re-instated November
Baltimore/Washington, Los Angeles

Orlando and Fort Lauderdale are currently American’s third and fourth biggest routes in terms of capacity. Of the eight ‘dropped’ destinations, two (Baltimore/Washington and Los Angeles) will be re-instated in early November. Of the remaining six destinations Fort Lauderdale will continue to be served by Spirit Airlines, Orlando is served by AirTran, JetBlue and Spirit, while United serves Washington Dulles and Continental serves Newark. So the only two really lost routes are to Aruba and Samana, both of which American only started operating last December.

The major change has been that frequencies have been cut dramatically on many routes as well as some being transferred from American to American Eagle resulting in a decrease in aircraft size. However, on the two biggest routes to Miami and New York JFK capacity will be reduced by only 20% and frequencies to the major hub at Miami will remain unchanged with 49 weekly departures.

AirTran will start third new route this year in December

As continually re-asserts – such capacity reductions are healthy news for an airline’s rivals, especially in this case where it has many.

While American and its affiliates accounted for 62% of traffic at San Juan in 2007 Continental, Delta, JetBlue, Spirit and US Airways each carried between 5% and 7%. This year AirTran has also entered the market. It started connections from Atlanta and Orlando on 5 March and will add twice-weekly flights to Baltimore/Washington on 20 December. JetBlue also adds a new route at the end of December when it launches seasonal services from Washington Dulles.

From San Juan the only scheduled flights to Europe are with Iberia to Madrid which are operated four times weekly.


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