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 said it would phase out its service between the two cities, beginning 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.”

A fare war 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 some 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 that compete 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.

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 those routes because they were unprofitable.

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, also because of the pilots sickout. The airline said it would complete the elimination of its Los Angeles-San Francisco service by March 31.

Alton Becker Jr., an American spokesman, said the carrier would not consider restoring any 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 denied that it is staging a sickout, contending that some of its members were victims of a flu epidemic.