US carriers cutting long haul overseas flights on costs

For the last two decades, American Airlines aggressively pursued nonstop service to China, which for a long time was considered to be one of the most profitable of all long-haul destinations for U.S.-based airlines.

After finally receiving approval by the U.S. government to operate a route from Chicago to Beijing, the U.S. Department of Transportation has now said that it will delay the launch of the service for a year. Other carriers are also postponing the launch of China services, or reducing the number of new flights – including Continental Airlines, Delta Air Lines, and Northwest Airlines – after conducting lengthy campaigns to gain access to the country’s burgeoning economy.

China isn’t alone in losing favor among U.S. air carriers, however. Flights are being dropped to destinations such as Frankfurt, Hong Kong, Moscow – and even Mexico City – as airlines trim schedules to cope with financial pressures stemming from high fuel costs and softened demand.

“At current fuel prices, the economics of many routes right now just don’t make sense,” said John Tague, United Airline’s chief operating officer, on a recent conference call. United is reducing its international capacity by seven percent in the fourth quarter of this year, and he also said that it is planning to ground six of its 747s used on long-haul international services, in 2009.

“We are aggressively responding to market conditions,” Tague added.

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