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February 21, 2006

American Airlines: We'll Lose Money at Dallas Love

American Airlines, which has expanded into Dallas Love Field to compete with Southwest, said that it will lose money on these routes.  A sales executive with the airline said:

"As silly as it sounds, we're not here to make a profit off this operation, we're trying to serve our customers...We're going after Southwest customers."

Now, that is just ridiculous on so many levels that I can barely even think about it.  A company (especially a public company) is not in business "to serve our customers" it's in business to make money.  Non-profits are in business to serve their customers.  This industry is obsessed with knocking out competition at any cost, regardless of profitability.  Think of the business you're in.  Then think about how you respond to competition.  Do you make decisions that will lose money, with little long term benefit?  No?  Shocking!

If American were going to unseat Southwest, fine---I can understand a short-term loss to accomplish that.  But American is not going to drive Southwest out of Dallas Love; they're just going to lose money in the process.  If I were a shareholder, I'd be pretty pissed off right now.
 

February 21, 2006 | Permalink: American Airlines: We'll Lose Money at Dallas Love

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