150 American Airlines Staff to Lose Jobs

American Airlines says that it will be cutting 150 staff from its workforce. This is the result of the carrier ending direct flights to New Delhi, India from Chicago O’Hare International Airport as of February 28. Instead, the 15-hour flights will be offered through its partner airlines. The move comes not long after the carrier’s parent company, AMR Corp., filed for bankruptcy on November 29, 2011.

The daily Chicago O’Hare-New Delhi service was launched by American Airlines in November 2005 after the signing of an Open Skies Agreement between the US and India. However, now the airline says that it will be cancelling the service because of the route’s poor historical financial performance and its future outlook considering high oil prices and global economic climate.

American Airlines spokeswoman Mary Frances Fagan said that the cancellation of this route is in response to declining demand and the high price of fuel. The changes were planned before AMR Corp. even filed for bankruptcy, she added. Due to the daily service being terminated, United Continental and Air India are the only remaining carriers to offer direct services between the US and India. According to Innovata, Air India offers 2,394 seats a week on the Delhi-Chicago O’Hare route, which is more than American did.

The CAPA, which is an adviser in the aviation industry, says that the withdrawal by American Airlines underscores the yield pressures that direct India-US operators are facing from airlines with hubs in the Middle East and Europe. The poor financial performance of the route, which was the longest for the carrier at 7,484 miles, is related to the impact on yields of competitive costs, as the airline was able to report consistently high load factors during the last year.

CAPA added that there has been a trend against nonstop services between the US and India. Now Jet Airways connects its US-India service through Brussels. Meanwhile, the airline’s service to San Francisco via Shanghai has also been ended. The organisation points out that Delta Air Lines also tried to serve Mumbai three times before withdrawing in 2009.

However, US airlines aren’t the only ones struggling on the routes. Air India is also losing money on its New Delhi-Chicago route, despite all of its international routes being loss-making. The specific route had a reported loss of $62.9 million in the 2009-10 year. Additionally, a recent report from the Comptroller and Auditor-General noted that the route is the single largest factor affecting operations at the carrier, as it accounts for 41% of total losses.

Furthermore, budget carrier Air AsiaX has recently announced the cancellation of its services to Mumbai and Delhi. The airline said that this was due to soaring airport and handling charges, aside from the rising cost of fuel.