I write about new airline routes quite regularly. But I recently got an email from a reader pointing out that we don’t give the same attention when an airline pulls out of markets shortly after arriving.
“I would also love to see an article about all of the new routes that they already discontinued such as a majority of their flights to Nashville,” Kirsten Petterson’s email said. “I feel like they’re continuing to get all of this press surrounding their expansion but they’ve been retreating in other markets and it’s gotten no press.”
It was a reasonable question: how do airlines decide where to fly? And how common is it for flights to get chopped – even after fanfare around new routes?
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Bijan Vasigh is a professor in the Department of Accounting, Economics, Finance, and Information Sciences at Embry-Riddle Aeronautical University’s David B. O’Maley College of Business, and he said it’s quite common for carriers – especially newer airlines – to add and cut routes regularly as part of their growth plans.
“They need to test the markets,” he said. “If a route turns out not to be profitable, They will pull out of that market and use their assets in more profitable markets.”
How do airlines decide where to fly?
According to Vasigh, most airlines have whole teams tasked with analyzing potential routes for demand and profitability, and with high upfront costs to start flights to a new city, carriers are typically careful to make sure that sufficient demand for a new flight seems to exist.
Sometimes, he added, cities or airports will put financial incentives or other perks in place to lure in new air service, but the carriers typically won’t stay if the demand is not self-sustaining.
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“About four or five years ago, Daytona Beach gave some incentive to JetBlue to inaugurate service from Daytona Beach to New York City,” he said. “JetBlue came to this market, after two years they recognized that this market does not generate the amount of revenue as they can generate from other destinations,” so the airline cut the route and reallocated the planes.
When Avelo Airlines started service out of Wilmington, Delaware, on Feb. 1, even the airline’s CEO admitted there was some trial and error involved in inaugurating new routes.
“It’s too early to know if this is going to work,” Avelo CEO Andrew Levy told USA TODAY. But he added that early indications gave him a reason for optimism.
“I feel even better now as we see three months of sales data,” he said.
How common is it for airlines to cut routes?
Vasigh said that it’s very common for airlines to tweak their networks, and while there is some cost to pull out of a city, it’s relatively easy to do if a place just isn’t profitable.
“If that market does not generate enough revenue for them, they can take their assets, which are highly mobile, their assets are aircraft, they can use that in another market,” he said.
These kinds of changes were especially common during the height of the pandemic. When travel demand plummeted and borders closed, airlines were forced to redeploy their planes to places where they could still fly, and in many cases wound up temporarily grounding aircraft.
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Now that demand for flights has largely returned, carriers are poised to grow and test new markets.
Established carriers, Vasigh said, already tend to have high aircraft utilization, but newer airlines often need to grow rapidly, both to make the best use of their planes and also to achieve the economies of scale necessary to make the numbers work in the aviation business.
“New airlines need to have aggressive growth to reach a size that is the optimum size to reduce costs,” he said.
A big part of that growth can often be trial and error, because newer airlines don’t always have as much market data available as established carriers do, although even more established carriers sometimes start new flights only to find that the demand never quite materializes as expected.
Zach Wichter is a travel reporter based in New York. You can reach him at [email protected]
