AMERICAN AIRLINES GIVES ARUBA THE BOOT
ORANJESTAD-The recent expansion announcements of JetBlue and Delta Airlines on the New York City-Aruba route, is bad news for American Airlines (AA). The year 2006 was overall good for AA, but the carrier is particularly concerned about destination Aruba said Ineke Lampe, Country Manager of AA for Aruba.
AA has five daily flights to Aruba. They include two daily flights from Miami, one from San Juan, one from Boston and one from New York JFK. AA will cancel the Boston-Aruba route as of May 1st 2007, due to a very low load factor on the flights. AA has flown Boston to Aruba on a daily basis for the past two years, but the route is not generating any profit, except for the month July said Lampe.
The New York-Aruba route and the San Juan-Aruba route are in jeopardy as well. The number of passengers on board AA fell substantially since JetBlue began service from New York JFK airport to Aruba. JetBlue beat AA as the leading carrier, bringing most tourists from JFK airport to Aruba in December 2006.
(And why is this? Because Jet Blue is pimping themselves out for practically free. It’s like a prostitute giving it up for $5. Pretty sad if you ask me.)
The demand from San Juan has lowered in the past years due to the increase in direct flights from other cities in the U.S. to Aruba. San Juan was an important hub in the past, at a time when Aruba did not had many direct flights from U.S. cities.
Every additional flight on the route is going to be a problem said Lampe. If existing flights on the route are not full and flights are being added, the load factor will fall automatically. Therefore there is a possibility that AA will consider canceling both the San Juan-Aruba route as well as the New York-Aruba route.
5 comments:
They are too stupid to admit fault and move on. Therefore, they will sink like the Titanic...but there will be no lifeboats for the rich Dutch! :)
The corrupt Dutch have a place to go. The Netherlands will welcome them home with open arms and the Hispanic Arubans will be left holding the (empty) bag.
Hmmmm, seems if Aruba's tourism were growing like the rest of the Caribbean they would be filling those AA flights. If you read through the lines there just isn't a demand for flights to Aruba.
Aruba is the one government cosigned the startup loan from the German bank to help launching JetBlue. JetBlue is barely break even, and Aruba goverment is far behind the interest payments. At mean time, the Dutch airport is losing the AA free adverising and its landing and takeoff taxes and fees. Aruba is like a hungry lizard feeding on it's own tail. The Aruban coral desert lizard shed its tail as food for the drought season.
It's so obvious that Aruba is paying JetBlue the difference between the actual cost and the cost charged to passengers to get em to Aruba. It's kinda like Aruba Air without the overall liability. Also remember the Valero plant (also know as the San Nic cancer factor) makes Jet A. So fueling them up and the overall cost of having non union employees is basically like a flying McDonalds.
Aruba was a third class Nation, now they are quickly moving to a penal colony.
JetBlue charges $199 to fly a loser from NY to Aruba.
Actually total cost per passenger - $499.. net lost to JetBlue $300 or Net lost to Aruba $300. Either way its bad business and a disaster waiting to occur.
Wharton School of Business first day business 101.
1. Do not put yourself outta business by under selling your service.
2. Do not under estimate your competition.
3. Make sure someone else holds the majority of the liability.
4. Do not do business on Aruba.
5. If nothing here made sense, do not go into business and your are a moron.
Rob
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