American Cancels All Flights Between L.A. and Bay Area

Becoming the first apparent casualty of the heated battle for air passengers in the busy San Francisco-Los Angeles corridor, American Airlines on Thursday dropped its service between the two cities, effective Jan. 19.

Though observers and analysts maintain that American is pulling out because it is losing money on the route--where a fare war dropped one-way tickets to $20 starting Thursday--the airline vehemently denied that it was bowing to competitive pressures.

Instead, American blamed the cutback on what it has called a “sickout” by its pilots union. American had said Wednesday that it planned to cut its schedule by 4% and lay off workers because of the alleged job action. The union has denied engaging in a sickout.

Dubious observers Thursday said American was simply using its labor problems as an excuse to pull out of the Los Angeles-San Francisco market. One analyst, who insisted on anonymity, said: “It’s a good excuse for them to take action with respect to a market on which they have been less than successful.”

In November, American dropped its five daily flights from Orange County’s John Wayne Airport to San Francisco. At the time, the airline said it was abandoning the routes because they were unprofitable.

But America West Airlines quickly moved to fill the void, saying it would begin eight daily trips to San Francisco from John Wayne. It also began offering promotional, unrestricted one-way fares of $79 and restricted one-way fares of $29 on the route. The Phoenix-based airline lowered the unrestricted fare to $49 Thursday.

Those discount prices are part of a fare war that erupted in December in the hotly contested California corridor, one of the most heavily traveled markets in the nation, when airlines announced that they would cut their fares about 30%, effective Thursday.

Though seats available at the low rates are limited and purchases must be made 21 days in advance, sources have estimated that the promotion will cost each major carrier in the state at least $200,000 before it expires Feb. 28.

Those deficits will come on top of the estimated $1 million that carriers are losing throughout the corridor monthly--cutthroat competition that has earned California flight paths the nickname “suicide alley.”

None of the other carriers competing with American in the corridor could be reached for comment late Thursday.

United Airlines, with service between Los Angeles and San Francisco every half-hour through the business day, has the most active operation in the corridor. USAir and Delta Air Lines--like American--operate service roughly every hour. Pan American World Airways and Trans World Airlines also fly the route.

USAir also has announced plans to reduce operations in the state, but not by eliminating service on any single route. The airline has said it will drop 16 corridor round trips--12% of its total--this month.

American said it would announce further reductions elsewhere in the nation today, blaming those pending cuts too on the Allied Pilots Union. However, the airline said it planned no further cutbacks in the California corridor.

Alton Becker Jr., an American spokesman, said the carrier would not consider restoring any of the service cuts until it settles its bitter, 14-month contract dispute with the union. “At that time, we will reassess the various cancellations and decide what to do about the future,” Becker said.

In announcing the service reduction in California, Michael W. Gunn, American’s senior vice president-marketing, acknowledged that American’s Los Angeles-San Francisco runs were the airline’s least profitable. But he insisted that the alleged labor action was the sole reason for American’s withdrawal from the market.

“The sickout has cost us dearly,” he said, adding, “Until our pilots decide to come to work, we simply must operate fewer flights.”

The pilots union has been steadfast in denying that it is staging a sickout, contending that some of its members were victims of a flu epidemic. No union spokesman could be reached Thursday night.

American said that last weekend, about 60,000 travelers were inconvenienced and 800 flights canceled because hundreds more pilots than normal called in sick.

Edward Starkman, airline analyst with PaineWebber, a New York brokerage house, said that if American ever decides to re-enter the Los Angeles-San Francisco market, it will have a difficult time.

“Passengers depend on hourly service,” he said. “They will go elsewhere, and it may take quite a while (for American) to build its market back up.”

American has been operating between the Bay Area and Greater Los Angeles since 1986, when--during the airline merger frenzy of the 1980s--it acquired AirCal for $225 million.

Times staff writer John O’Dell contributed to this story.