“You’re always sure of a seat on the AIR-SHUTTLE,” an Eastern Air Lines ad said about its Boston-New York-Washington shuttle service in 1967. Travelers could “just show and go” — no reservations needed — for as little as $13 one-way between Boston and New York.
But by 2021, travel has changed a lot. Not only do travelers need reservations, walk-up fares start at $109 for the Boston-New York LaGuardia route — though that is remarkably close to the $107 that $13 fare would be when adjusted for inflation.
American Airlines, which acquired the legacy assets of the Eastern Air Shuttle when it merged with US Airways in 2013, will end service between Boston and New York LaGuardia by summer 2022, the Fort Worth, Texas-based carrier told staff in an internal communiqué on November 9. Northeast Alliance partner JetBlue Airways will operate the route for both carriers. The change was first reported by the blog View from the Wing.
“We are revamping the high-frequency travel experience to meet the needs of today’s business customers,” American Chief Revenue Officer Vasu Raja told staff. That includes dropping American-operated Boston-LaGuardia flights — Boston to New York JFK and Washington Reagan National service continues — and the American Shuttle brand entirely, as well as launching a new fare product dubbed “Main Select” that targets business travelers.
The shuttle changes, although symbolically important in the Northeast, come amid broader structural changes for the two airlines as they implement their Northeast Alliance. American is transferring slots and runway timings to JetBlue for domestic flights where American claims it cannot economically compete, and is adding new long-haul services, including New York JFK to Athens and Tel Aviv. And JetBlue is beefing up its presence at the Boston and New York airports with new flights and routes. American and JetBlue argue that the changes are needed to create a more formidable competitor to Delta Air Lines and United Airlines, which together dominate the New York market.
However, the alliance has raised competitive concerns, with some calling it a “pseudo-merger.” The complaints culminated in September with the U.S. Department of Justice suing the carriers in the federal district court for the District of Massachusetts to break up the pact. The regulator argued that the alliance allows the airlines too “effectively merge their operations” and eliminate options for consumers.
“The reality is blocking the alliance would ultimately prove anti-competitive,” wrote MKM Partners Analyst Conor Cunningham on the suit in September. “To us, this alliance has little to do with consolidation and everything to do with relevancy in the Northeast, where scale matters.”
But the Boston-New York LaGuardia changes raise questions over scale. While American did not detail JetBlue’s planned schedule once the larger carrier exits the route, their combined schedules of up to 16 daily flights today is a 20 percent reduction over November 2019, according to Cirium data. It is unclear how much of that is due to the alliance versus the slow return of business travelers during the pandemic. However, competitor Delta’s Boston-LaGuardia schedule is also down almost 30 percent from 2019.
“There will be something like 30 cities where we’ll have a frequency advantage” over our competitors, Raja said in defense of the Northeast Alliance at the Baird Global Industrial Conference on Wednesday. The updated schedules for Boston and New York will load over the weekend of November 13, he added. Raja did not comment on the airlines’ Boston-New York schedule.
One thing is clear: JetBlue is the lower-cost option for American in the Boston-New York market. In the third quarter, American’s unit costs excluding fuel and special items were 12.24 cents compared to JetBlue’s 9.39 cents.
The Eastern Air Shuttle, which launched in 1961, took a winding path to American. It was sold to Donald Trump to operate as the Trump Shuttle in 1989, and acquired by then-USAir — later US Airways — in 1992 before becoming the American Shuttle eight years ago.