Originally Posted by
AllYourBaseAreB
not defending management decisions as a whole one iota but…:
high revenue does not equal high profit. We have no idea if JFK-LAX is high profit for any of the carriers. What we do know is the passenger costs out of those 2 airports are extremely high. Especially when compared to CLT and DFW. Like saying a popular pizza place in Times Square MUST be profitable because of the lines and prices, without knowing their rent bill
Nobody’s denying JFK and LAX are expensive. But the idea that high cost kills profitability on high-revenue routes doesn’t hold up. Profit margins aren’t fixed, they scale. Airlines fight for JFK-LAX slots for a reason: because yield is strong, premium demand is high, and unit revenues often offset unit costs.
Delta has major hubs in high-cost markets like JFK and LAX. United centers much of its network around EWR, SFO, and ORD. Clearly, they believe those hubs are profit centers, not liabilities. Would anyone argue that our opposite focus on the Sunbelt has been a more successful strategy over time?
In American’s earnings call, they explicitly cited JFK-LAX and similar coastal hub flying were among their highest-margin operations. Delta and United run widebodies on these routes for a reason, and it’s not charity. (We did too, before scrapping them)
If a pizza joint in Times Square sells $7 slices and has a line out the door all day, odds are it’s doing just fine. High costs don’t erase profit when demand is strong and margins are priced accordingly.