American Airlines hopes to save several million dollars annually by giving up nearly half its gates at Lambert-St. Louis Airport when it renegotiates its leases this year.
American largely abandoned the gates in question when the Fort Worth-based airline downsized its hub in St. Louis in 2003. According to airport officials, American will likely shed nearly half of the 56 gates it currently leases. Those leases expire at the close of 2005.
"When we changed the size of St. Louis, we had more gate space than we needed," said Mary Frances Fagan, an American spokeswoman.
But officials with Lambert said they were pleased that the airline was committing to maintaining a sizable number of gates at the airport. After cutting its operation from about 400 flights to 207 in 2003, the airline has slowly added service and currently has about 228 daily flights at the airport.
"From our standpoint, this is very good news, because American is demonstrating their commitment to this market in the long term," said Brian Kinsey, the airport's director of business and marketing. "If anything, I think we'll see gradual growth here from American."
American has worked to transform its St. Louis operation from a money-loser to a profit center. The airline obtained the hub in 2001 when it bought TWA. Initially, about 70 percent of the passengers flying from St. Louis hub were connecting, Fagan said. Today, about 70 percent are local passengers, and American has focused on boosting revenue in the market while keeping costs low.
Dumping its unneeded leases is part of a larger strategy at American to reduce airport costs, which have been growing in recent years as many facilities have expanded. Lambert, for example, recently finished building a new runway, which is being paid for by the airlines that fly there.
Fagan declined to disclose how much American might save at Lambert. But based on its current leases, the savings could total several million dollars annually.
American's moves in St. Louis come as another airline, Delta Air Lines, announced plans to cut back some of its domestic flights in its Cincinnati hub while it focuses on lucrative international service. Like American and the rest of the major hub carriers, Delta has been struggling with high fuel prices that have cost the industry billions of dollars.
"From our standpoint, this is very good news, because American is demonstrating their commitment to this market in the long term."