American, Qantas, Horizon announce route cuts

American, following up on its recent pledge to trim capacity, announced a series of cuts Wednesday. Citing “skyrocketing fuel prices and a softening economy,” the airline made the first of what should be several rounds of service reductions. The following routes will be eliminated:

• Chicago to Buenos Aires, effective September 3
• Boston to San Diego, effective September 3
• Chicago to Honolulu, effective January 5, 2009 (American will continue to operate this route on peak days only between September 3, 2008 and January 4, 2009)

The airline will also be “restructuring” American and American Eagle service to and from San Juan, Puerto Rico, affecting routes between the U.S. and the Caribbean. It’s unclear at this time what specific itineraries will change.

Horizon Air will be cutting its Butte/Seattle and Billings/Portland, Oregon, routes and trimming service elsewhere, mainly on connections between major cities such as Seattle and Portland and smaller locations such as Redmond, Oregon; and Pasco, Washington. According to the airline’s press release, Horizon “is aiming to improve its financial performance by cutting weaker routes and by adjusting flight frequencies and capacity to better match demand.” However, many of these smaller towns are likely losing their primary air connection to nearby cities and the national route map.

Lastly, Qantas is also looking to trim costs, because as CEO Geoff Dixon explains, “We are not bridging the widening gap between the actual increase in the cost of fuel and the amount we offset.” The airline will ground two planes, retire one, delay the delivery of another, and adjust the flying patterns of some of its less efficient aircraft. Mostly inter-Australia travel will be affected.

American’s cuts are the most distressing, not only because they affect major population centers, but because they are a harbinger of more reductions to come. Horizon and Qantas’ cuts illustrate that capacity reduction will be an industry-wide tactic as airlines continue to grapple with fuel costs. Horizon’s move is also a warning to small town America, because more airlines may be consider unprofitable, lower-demand routes between major hubs and minor airports to be dead weight.

Either way, let’s hope leaner route networks will give airlines the breathing room they need to balance their bottom lines—and not be just another bump in the road to higher fares.