Michael Linenberg, an airlines analyst at Deutsche Bank, pointed out in a recent research note that one of the factors weighing on American’s bottom line is how many of its routes are competing with low-cost carriers in an era where larger, more expensive airlines are trying to get a bigger slice of that pie.
“American has historically had the most exposure to low fare carriers given its larger domestic network than its peers,” he wrote. “However, more recently we have observed low fare carriers make numerous route changes, many of which are targeting American’s hubs. For example, for the September quarter, American’s capacity overlap with Frontier [Airlines] and Spirit [Airlines] will be approximately 22% and 19%, respectively, on an available seat mile basis, whereas for Delta and United, the overlap will be roughly 10 percentage points lower.”
Fighting with cheaper airlines for passengers surely won’t be good for…
