Friday, June 26, 2009

Revenge of the nerd-bird

American Airlines recently announced the cancellation of the "nerd-bird" that has been flying twice daily between Austin and San Jose. Earlier this year, there were three flights a day.

What is interesting is that American Airlines states that it cannot make a profit on this route. Gee, shortly after announcing the termination of the nerd-bird, Alaska Airlines jumped in to offer a daily flight. Obviously, American's business model must suck compared to Alaska's if the latter believes that it can make a profit on the route.

So, just for the heck of it, I pulled some numbers from American's own website, If I was to book a ticket today for travel to San Jose from Austin and return on July 13 and 17, respectively, the direct flight would cost me $424. If I was to fly through DFW, the cost would be $500. Seems pretty reasonable.

Next, I looked at the same routings but with a July 14 departure and July 16 return. The direct flight is $320, and the one through DFW is $555. Bingo!!!

American Airlines in its letter to me stated that they lose money on the flight because they offer discounted leisure rates when the flights aren't full. This often causes the flights to fill up, but they still lose money.

This is an interested point... this is the "nerd-bird". It's not called that because it is full of vacationers. These are business people. They don't book their travel months in advance. They book flights at the last minute. They don't purchase business class on this route because their companies will not approve it, so if you fill the flight with discounted leisure travelers, then the last minute business travelers will book a different routing.

American Airlines was using the logo "We know why you fly." Hmmm, it appears that they don't. I fly for business. The critical route for me is San Jose to Austin. I stayed with American because they offered it as a direct route, saving time and effort. For that, I rewarded them with all my other domestic and international travel, to the total of over 150,000 miles last year and a lifetime total of almost 2,000,000 miles.

In talking with other "nerds" on the bird this past week, the impression I got is that most feel that American doesn't understand this route and hence cannot make money at it. Everyone business person would gladly pay more for a direct route than going through DFW. Travel for the business person is not a leisure activity, it is a business necessity. American doesn't understand the nerd-bird; therefore, it is probably good they terminate this route so we - the nerds - can go find an airline that does understand why we fly.

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