American Airlines cuts routes at Austin airport

Why it matters: Through the last decade, the airport was booming right along with the city, and the service cutbacks reinforce a new era of uncertainty in an Austin with vast office vacancies downtown and widespread tech layoffs.

Zoom out: Locally and nationwide, bookings are softening compared to last year, per Austin-Bergstrom spokesperson Sam Haynes.

• "This [is] likely due to multiple factors at play (recession worries, inflation, business travel has not rebounded from the pandemic, etc.)," Haynes tells Axios. "Locally, we think a lot of the pent-up demand for travel fueled by lockdowns and pandemic isolation is starting to taper off."
• Many of the routes being cut at ABIA are Saturday flights, per Haynes — the airport's slowest days.
• Plus, most of the flights American Airlines is cutting are already serviced by other carriers.

What they're saying: "We've adored flying our customers to Austin and experiencing this wonderful city of music and culture, but demand in the tech sector is not set to improve in the near term," Virgin Atlantic's chief commercial officer, Juha Järvinen, said in late October.

Zoom in: American will still offer 19 more daily departures out of Austin than in 2019, per the airline, including service to all eight of its nonstop hubs.

• "Austin remains an important market for American as we continuously evaluate our network," American spokesperson Frankie McLister tells Axios. McLister declined to say exactly why the airline is cutting its Austin service.

"Clearly American was banking on continued growth in Austin and wanted to get out ahead of the other major carriers," Ben Schlappig wrote on the travel news site One Mile at a Time, "but that just hasn't materialized the way the airline hoped."

The big picture: The airport remains bustling, with record-breaking travel during F1 weekend in October, and Austin continues to rank as a top destination for everything from conferences like SXSW to bachelorette parties.

• New service out of Austin-Bergstrom, handled by multiple airlines, includes: Monterrey, Mexico (starting in March), Montreal (May) and San Juan, Puerto Rico (March), as well as just-launched service to Las Vegas, Omaha and Orlando.

The intrigue: The pullouts by Virgin and American come as the airport has committed to an expansion that could cost $6.5 billion.

• The service cuts do "not have any impacts to our expansion program, which we are full steam ahead on," Haynes said.

By the numbers: The airport receives roughly 48% of its operating revenue from partnering airlines, including landing fees and terminal rents.

Between the lines: The airline announcements are the latest turbulence for the airport, which earlier this year settled a legal battle over control of its South Terminal for $88 million and has seen changes at the top of its organizational chart.

• Plus, the airport was the scene of at least one near-collision between two aircraft earlier this year and of two work-related deaths, including of an American Airlines employee operating a ground-service vehicle.

Of note: The airport is city-owned and operated, but doesn't take any Austin taxpayer money. All expenses are covered through airport revenue, federal grants and airport revenue bonds.

What we're watching: Whether other carriers change their service to Austin.

Editor's note: This story has been corrected to say that service to Kansas City, Missouri, is being canceled (not Kansas City, Kansas).