American Airlines' announcement this week that it will add flights next spring to Budapest, Prague, and Zurich from Philadelphia comes against the backdrop of trimmed seat capacity by the carrier in the current third quarter at six of its hub or focus cities, including Philadelphia.
American has cut capacity — seats in the air — by 4 percent at Philadelphia International Airport compared with this time last year, according to an Airline Weekly analysis of Diio Mi flight-schedule data for the three months that will end Sept. 30.
As an airline, American is growing 1 percent in the period that includes the traditional post-Labor Day slowdown, when kids go back to school and vacations wind down.
"It starts at the highest level: 'OK, what are we going to do with the airline? We're going to grow 1 percent. Where do we have to be real aggressive?' " said Seth Kaplan, managing partner at Airline Weekly, who analyzed the Diio Mi data. "They clearly decided that they needed to grow in Chicago to remain competitive with United. Chicago is the most directly competitive hub for any airline in the country."
American has increased its third-quarter seats year-over-year to Dallas-Fort Worth and Charlotte, N.C., both up 3 percent; to Chicago, up 4 percent; and to Miami, up 2 percent.
Seats were trimmed 2 percent in Phoenix, 3 percent at Los Angeles International and Washington Reagan airports, 3 percent at New York LaGuardia, and 8 percent at N.Y.'s John F. Kennedy airport.
"I see eight markets that they were flying in the third quarter last year that they are no longer flying this year" from Philadelphia, Kaplan said. They are Zurich; Brussels, Belgium; Elmira and Binghamton, N.Y.; Fort Wayne, Ind.; Newark, N.J.; Halifax, Nova Scotia; and White Plains, N.Y.
At the same time, American has added seats to other places from Philadelphia, including Ithaca and Rochester, N.Y., and Roanoke, Va., either by flying the routes more often or operating larger aircraft. American has added seats from Philadelphia to Chicago, Pittsburgh, Charlotte, Phoenix, Austin, Atlanta, and London Heathrow, where a second daily flight was added in the spring.
"Philly is a place they feel they can take out a little capacity and still meet the needs of travelers and, in fact, perhaps be a little more profitable because it's supply-and-demand economics," Kaplan said.
In Philadelphia, American dominates, with 70 percent of the passengers on 390 daily flights. By contrast, Delta Air Lines operates 6.9 percent of the flights here, and Southwest Airlines has 8.1 percent.
"American is doing well in Philadelphia, and they are probably doing well partly due to the capacity cuts. It is supply-and-demand economics," Kaplan said. "When you are the dominant airline in a hub city, you can go from seven flights a day between Philadelphia and Miami to six flights a day and still be, by far, the most useful airline in that market."
American ended a seasonal flight from PHL to Zurich last year, leaving a year-round Zurich flight in New York. Now, the airline plans to shift the year-round Zurich flight to Philadelphia starting March 25. In time for tourists next summer, flights will begin May 4 to Oct. 27 from PHL to Budapest and to Prague, both of which are, like Philadelphia, World Heritage Cities.
In his "weekly capacity tracker" report, airline analyst Hunter Keay, of Wolfe Research, noted that for the period after Labor Day, "aggregate system seat capacity" by airlines has moved down, for both domestic and international trips. The biggest market American trimmed in the current period were flights between Seattle and Dallas Forth Worth, Keay wrote.
Frontier Airlines, which expanded rapidly in Philadelphia last year, has cut 11.6 percent of its Philadelphia seats this quarter compared with a year ago, trimmed 25 percent at Chicago O'Hare, 29 percent in Atlanta, and 12 percent in Phoenix, while adding airline seats in Los Angeles, Las Vegas, Cleveland, and Cincinnati, Ohio.
In Philadelphia, Delta trimmed 7 percent of seats in the current quarter. "Delta still flies to their same hubs, Atlanta, Detroit, Minneapolis, Salt Lake City, but with the exception of JFK, they trimmed the frequencies," Kaplan said.
Southwest added 4 percent more seats in Philadelphia, and so did United, according to the Airline Weekly analysis. Spirit Airlines' seats are up 13 percent here.
"Overall seat capacity in Philly is down 3 percent from all airlines for the quarter," Kaplan said.