US airlines win DOT approval to deepen network cuts
The US Department of Transportation (DOT) will grant 15 carriers exemptions from their air service commitments in exchange for federal assistance, following a revision to its initial requirement that airlines had to maintain service to all destinations in their networks prior to 1 March.
The DOT notice published on 3 June follows a public comment period, including complaints from numerous airports criticising its tentative decision announced in May, that proposed deepening service exemptions for carriers was appropriate if access to certain destinations was still open.
The new order will help airlines rationalise their networks where load factors are low and allow them to reduce cash burn where they can.
The DOT received exemption requests from Alaska Airlines; Allegiant Air; American Airlines; Delta Air Lines; Elite Airways; Frontier Airlines; Cape Air; JetBlue Airways; Ravn Alaska; Seaborne Virgin Islands; Silver Airways; Southern Airways Express; Spirit Airlines; Sun Country Airlines; and United Airlines.
The department granted nearly all except for a few locations at risk of losing all air bridge access, including Worcester, Massachusetts; Destin, Florida; and Aguadilla, Culebra and Vieques in Puerto Rico.
Delta and United will drop service to 11 cities each, while American will cut flights to only four cities. Many smaller carriers including Frontier, JetBlue and Spirit were allowed to drop five locations each from their networks. Low-cost and regional carriers have been granted more service exemptions per capita since March compared with mainline carriers, because the DOT relies on their large fleets and networks to keep the USA connected.
The CARES Act gave DOT discretion to establish conditions for federal aid, and the department initially mandated that airline recipients had to maintain service to all destinations that were on their networks prior to 1 March.
Those requirements have loosened following months of concerns expressed by airline trade associations about the near-zero revenue environment for air travel demand. The DOT in its 3 June order requires that US destinations keep access to at least one carrier.