American Airlines announced this morning that unless the government gives them another round of CARES Act payroll support, they will drop service to 15 cities October 7. This is a huge shot across the bow of Congress, signaling that without more money many districts will lose more air service.

Fourteen of the fifteen cities are in different states, making this a problem for 28 senators. But House members who represent small airports are very much on notice to open up the federal checkbook.

The problem with American’s announcement was they put it out with a political lens on, and not a route planning lens. And they missed that they cannot legally just stop flying to two of the markets on the list. They have to give advance notice to the Department of Transportation to stop serving Joplin, Missouri and Sioux City, Iowa – which they have not done.

American Can’t Leave Essential Air Service Cities Without Notice To The Department Of Transportation

Airlines aren’t permitted to just drop service to airports that were Essential Air Service communities prior to September 2011, and remain so. Both Sioux City, Iowa and Joplin, Missouri are on that list – though American isn’t currently receiving subsidies to serve them.

In order to leave one of these markets (or even drop below 12 times weekly service) an airline has to file with the Department of Transportation and give advance notice. The DOT then issues a Request for Proposal for service and any carrier can put a bid in (for subsidized or unsubsidized service).

• Joplin left subsidy in 2018. American notified DOT that they’d operate subsidy-free, worried that United would come in and undercut them.

• Sioux City left subsidy in 2016. American had been receiving $1.2 million, but United offered to take on the service for $400,000. So American agreed to operate without subsidy, to block United.

  Interestingly Iowa is the only state with two cities on American’s list. So Sioux City may have been a late addition, with United announcing service from Denver last week. If intended to announce one city per state they’d almost certainly make it Dubuque and not Sioux City.

These are still Essential Air Service cities, and American Airlines faces civil penalties for leaving without proper notice. A spokesperson for the airline offers, “We do not receive subsidies for Sioux City or Joplin. We will follow the DOT process with regard to EAS markets.”

American Has To Continue Flying To Joplin And Sioux City Until Another Airline Replaces Them

After a notice of termination, and a DOT request for proposal from airlines, an airline generally still has to continue serving the markets until another airline starts. That process can take 6-9 months.

It appears that despite American’s announcement today that they will drop service to Joplin and Sioux City, they almost certainly will not. Network planning will ‘re-evaluate’ and share the great news that ‘forward bookings look better than previously thought’ so the service will continue.

Perhaps indiscriminately terminating 30% of management staff meant they didn’t have the experts in place anymore to tell them they couldn’t do what they wanted to do.

Ironically, American could file to drop service to these two cities and then propose to continue with subsidies and receive those subsidies retroactively, even. It won’t be material to American’s business, but they could receive more government money out of the process of threatening to leave Sioux City and Joplin, whether they succeed in threatening Congress to get a second bailout or not.

Dropping Roswell, New Mexico Presents Different Challenge For American

A third city on American’s service cut list represents a different sort of problem. They’ve announced they’ll no longer serve Roswell, New Mexico. Local restrictions in New Mexico have killed off air service there. But American is still storing aircraft in Roswell.

American Airlines mechanics go in and out of Roswell all the time to service planes. So American will either still need to fly there – just without passengers – or put their employees on Albuquerque flights and have them rent cars and make the 3 hour, 200 mile drive each way. Expect a brisk rental car business at Albuquerque.