Why Should an Airline Cancel Routes That Lose Money?

Scott Kirby says an airline should cancel any route that loses money, including a route people defend as strategic. The route network is the foundation. If that is broken, the rest of the operation cannot save the airline. When someone calls the losses strategic flying, that word is the whole answer. There is no need to learn the hub or the route.

New chief executives call him for advice, and he does not think anyone is taking it yet. He tells them to start with the route network, because a broken network sinks everything else. A look through the route P&L shows a bunch of negative flying. Ask about the losses and the reply is that the flying is strategic. The excuses sound convincing, and the people offering them still call the flying strategic.

Strategic flying is how a losing route gets defended. Hear the phrase and the route is one of the money losers, whatever hub it uses and whatever city pair it serves.