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Airlines are reverting to old strategies, like so-called tag flights, to try to maintain service in an era of depressed demand. It is not a panacea, but it might help them conserve cash for a bit longer.

In typical conditions, U.S. airline planners seek to create the most efficient schedules, so customers can reach their destinations quickly, either with a nonstop flight or a quick connection. But these are no ordinary times.

In creating their schedules for the next couple of months, some U.S airlines have reverted to decades-old strategies, adding circuitous routing, like so-called tag and circle flights, to satisfy conditions of the CARES Act, which requires airlines fly to nearly every airport they served before the Covid-19 crisis. If they don’t meet the standards defined by the U.S. Department of Transportation, or DOT, they will lose their share of $25 billion in grants.

Tags and circle routes typically are not passenger-friendly. Customers who book these flights will spend more time on an aircraft than they might have expected, and probably will fly way out of their way. The airline saves costs and uses fewer aircraft than normal.

In a tag flight, an aircraft makes a stop in the first city and continues to the next, before making the journey in reverse. In a circle route, an airline starts in one city, flies to the first destination, and then to a second. It then returns to the origin.

“Given the limitations the DOT has imposed for now, there is not much option for the airlines,” said Seth Miller, an airline industry analyst and blogger. “It is certainly better than serving each of the airports directly, but will still see cash burn higher than it probably needs to be.”

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As recently as 20 years ago, U.S. airlines flew more tags and circle routes, Miller said. But since, as demand has surged, airlines have dropped them in favor of the nonstop flights preferred by travelers.

Only a handful of unusual routes have remained, mostly in Alaska and the South Pacific, where two airlines fly what the industry calls “Milk Runs.” Alaska Airlines has two famous flights (Nos. 65 and 66), making several stops in sparsely populated cities. United Airlines operates the Island Hopper, with five stops between Honolulu and Guam.

Traditional tags and circle routes have been kept alive by long-haul international airlines that want to serve two smaller cities with one big aircraft. British Airways might use a tag or a circle to fly one jet to two Caribbean islands, while Air France might do the same in Africa. Airlines may also fly tags to serve a city that is too far for an airplane to fly nonstop.

Smaller Airports

For now, U.S. airlines are flying many of the most unusual routings to the smallest markets.

Many carriers didn’t want to continue flying to these airports, making formal requests to the DOT for waivers from CARES Act requirements. The DOT granted some exemptions, mainly to Hawaii and Puerto Rico — places where governments wanted to discourage tourism — but mostly told airlines to comply.

That left Spirit in the uncomfortable position of having to remain in smaller stations, including Asheville and Greensboro, North Carolina, and Plattsburgh and Niagara, New York.

Spirit knew it would lose money, no matter what it tried, so the airline decided to be creative, pairing nearby markets to create circle routes. One airplane will fly Orlando-Ashville-Greensboro-Orlando and another will go from Fort Lauderdale to Plattsburgh to Niagara, then back to Fort Lauderdale.

“Doing it this way allows us to keep our guests connected while also complying with the provisions of the CARES Act more efficiently,” Erik Hofmeyer, a Spirit spokesman, said in an email. “We look forward to adding more flight options when we come out on the other side of the pandemic.”

Jason Rabinowitz, an airline industry analyst and prominent Twitter personality, noted Frontier Airlines is taking a similar approach at some smaller airports. Rabinowitz analyzed Frontier’s schedule and found routes like Denver to Cedar Rapids, Iowa to Sioux Falls, South Dakota, and then back to Denver.

Frontier is selling Sioux Falls-Denver for $29 on many days next month, so this circle route is unlikely to be a money maker. But had Frontier dropped Sioux Falls, the airline would have been ineligible for a government bailout.

“Is it smart?” said Madhu Unnikrishnan, editor of Skift Airline Weekly. “Who knows? But is it necessary? Probably. They’re utilizing their aircraft in the most efficient way to meet federal requirements, given the complete collapse in demand.”

Alaska is operating several tag routes, including at least three that combine some of its smallest markets, spokeswoman Bobbie Egan said in an email. From Seattle, Alaska is joining San Luis Obispo and Santa Barbara in California, Kalispell and Helena in Montana, and Raleigh-Durham and Charleston in the Carolinas.

“For tag flights, our team worked to solve a unique challenge of providing service to as many communities as possible, as efficiently as possible,” she said. “A tag flight is beneficial because it streamlines the use of our resources — aircraft, fuel and crews —to serve more destinations.”

Big Hubs

While tags may be most useful in smaller airports, some airlines are also implementing them at larger hubs, particularly where a competitor holds overwhelming market share.

During the best of times, Alaska has few flights to competitor hubs in Minneapolis, Houston and Dallas/Fort Worth, which are controlled by entrenched legacy carriers. With demand plummeting, Alaska might want to pull out of all three cities, but the CARES Act does not permit it, so the airline has included competitor hubs in some tag flights, such as Seattle-Dallas/Fort Worth-Houston and Seattle-Minneapolis-Columbus.

Spirit is taking a similar approach. At Dallas/Fort Worth, Spirit knows the few remaining travelers will chose American Airlines, because it still offers more schedule breadth than any other carrier.

But Spirit is required to stay, so it created a circle route, flying Orlando-Austin-Dallas/Fort Worth. Spirit is selling Orlando to DFW, with the stop, for $18 on most weekdays next month.

JetBlue has a similar strategy, planning to operate several tag flights that touch competitor hubs in Seattle, San Francisco, Houston, Chicago, Denver, Minneapolis and Portland, Oregon, according to Miller’s analysis. 

What About the Big Four?

The Big Four U.S. airlines are flying fewer unusual routes, with most flying simple out-and-back segments from big hubs or focus cities. But there have been exceptions.

As it awaited a ruling on whether it needed to keep serving Maui and Hilo in Hawaii, United published a schedule suggesting it planned to fly to both cities in a circular pattern. Over the weekend, the DOT granted United a waiver for Hilo and Maui, so it may scrap the plan. (A United spokeswoman said the airline is planning more tags for May, but did not list them.)

The U.S. government has no requirements on international routes, and short-term, most airlines have cut departures to Asia, Europe, Australia and South America. But when demand returns, it is possible carriers might turn to tags.

A tag might allow them to return to more global business cities than passenger traffic numbers otherwise could support.

In some ways, it could be a back-to-the-future moment. As recently as six years ago, United operated flights like Los Angeles-Sydney-Melbourne, and San Francisco-Hong Kong-Singapore and San Francisco-Tokyo-Singapore.

Delta Air Lines also operated one-stop Asia routes until recently. Both carriers mostly have gotten out of that business, calculating they could make more money flying nonstop from the United States. Still, the robust market conditions that allowed long-haul nonstop growth might not return for awhile.

At a recent virtual town hall meeting, a United pilot asked if Asia tags might come back. Bryan Quigley, senior vice president flight operations, said there were no plans to bring back the flying, but didn’t rule it out.

“Network planning is constantly evaluating the scope of our international network including our routes to Asia,” he said.

Update: This story has been updated with new information from United Airlines.

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Tags: alaska airlines, cares act, coronavirus, covid-19, frontier airlines, spirit airlines, united airlines

Photo credit: Spirit Airlines jets on the ground in Fort Lauderdale. Spirit is flying some unusual routes to comply with the CARES Act. JTOcchialini / Flickr

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