business
Airline giants reel from instability.
Airline giants, American and Southwest, face an uncertain future as the industry evolves. Adaptability to rapid change separates winners from failures in Texas skies.
Published August 5, 2024 at 7:02am by Beck Andrew Salgado
Texas Airlines Adapt to Industry Flux
American & Southwest: Texan Titans Troubling
Two of the biggest US airlines, American and Southwest, are making major changes to their business models as the industry navigates turbulence.
American Airlines: Cutting Routes, Adding Seats
- 5 flights cut from Austin-Bergstrom: Las Vegas, New Orleans, Orlando, Palm Springs, and Reno.
- 21 routes already cut since last year.
- Despite these cuts, American posted its highest quarterly revenue ($14.3bn) and reduced debt ($850m) in Q2.
- Net income: $717m, operating cash flow: $1.1bn, but still recovering with $40bn debt as of March.
Statement: "American will continue...global network of more than 350 destinations... We're proactively reaching out...and apologize for any inconvenience."
Southwest: Seating Shakeup
- Southwest ditches open seating, introducing assigned seating and revamping boarding.
- Research: 80% of current, 86% of potential customers prefer assigned seating.
- Rolling out premium seating options and red-eye flights, no switch date given.
Industry-Wide Changes
- Delta's IT issues cause mass delays/cancellations, costing $500m and a 9% stock drop.
- JetBlue, blocked from merging with Spirit, cuts 20 routes and exits 5 cities.
- Spirit offers premium seating, signaling the end of classic budget airlines.
Read more: The airline industry is in flux; what does that mean for American and Southwest?