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If a given flight is unprofitable for an airline (occupancy ratio or – more precisely – revenue from ticket fares and cargo below the break even point) and if operating this flight incurred a bigger loss than cancelling it ...

  • May the airline cancel the flight ? (If no, why not?)
  • Will they ? (If they may but won't, why not?)
  • May/will they state the true reason or seize a pretext (e.g. technical defect) ?

Please distinguish between scheduled flights and charter flights.

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    $\begingroup$ It was common for American Airlines to cancel commuter flights from San Juan, PR to Mayaguez when there were only a couple of seats sold on the flight. I questioned the practice but never got a straight answer from the ticket sales people in San Juan or Mayaguez. $\endgroup$ – niels nielsen Jan 6 '19 at 7:23
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    $\begingroup$ This may be a better fit on travel.SE, because it seems (to me) that the question is mainly about passengers and business practices, not aviation per se. $\endgroup$ – Pondlife Jan 6 '19 at 20:09
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    $\begingroup$ @Pondlife: What is the rationale for closing this question as off-topic but allowing Q16692 which asks about a different aspect of the exact same topic?? Honestly, the closing tendencies here appear frustratingly arbitrary to me and frankly seem to get out of hand. $\endgroup$ – summerrain Jan 7 '19 at 5:23
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    $\begingroup$ Personally I think that question is off-topic too but in the end it's the community that decides by voting. This is really a topic for the meta site but we don't have have strict rules here, only guidelines, and the community decides how closely to follow them in each case. Sometimes that means things are inconsistent but that's perfectly fine, it's part of how StackExchange works. If you feel strongly that our on-topic guidelines should be clarified or even changed, you're always welcome to bring that up in meta. $\endgroup$ – Pondlife Jan 7 '19 at 5:35
  • $\begingroup$ Please read the Montreal Convention and then decide if you accepted a correct answer! $\endgroup$ – Peter Kämpf Jan 7 '19 at 5:55
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Yes, airlines may cancel any flight. There is no obligation to execute a specific flight.

Their obligations towards the passengers depend on the local legislation. For instance:

  • International Flights: Airlines may cancel international flights, but passengers on flights between countries that honor the Montreal Convention are entitled to damage compensation if a cancellation cannot be justified.
  • European Union: According to Flight Compensation Regulation 261/2004, airlines are obliged to transport their passengers within a certain time frame. They will have to compensate passengers after a certain amount of delay is exceeded.
  • USA: There are no federal laws requiring airlines to provide passengers with money or other compensation when their flights are delayed. Airlines may book passengers on a flight of a later day. (Source)

Yes, airlines will cancel a flight if it is not profitable, but they will take into account all operational and commercial implications, and not just the profit on this particular flight. For instance the plane and/or the crew might be needed at the destination, or the plane has to park in a different place.

It depends on the airline if they will use a pretext. It is fraud if they use a pretext and avoid paying compensations to their customers.

I am convinced that most airlines are honest, but many are not.

In a charter flight all seats are booked through a travel company. The legal obligations of the airline should be the same.

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    $\begingroup$ I'd like to place some additional emphasis on 'the plane (or crew) is not needed at the destination', as there is a difference between what airlines sell (flights from A to B) and where there cost comes from (flight legs from A to A', from A'' to A''', and from A''' to C, for example). In isolation, a flight leg might be unprofitable, but as part of the larger network, cancelling that leg might bring more cost/trouble. $\endgroup$ – Bram Jan 6 '19 at 10:32
  • $\begingroup$ Ryanair apparently does this rather aggressively. Their reputation is for being cheap, and only for being cheap, so they don't have a reputation to lose when they cancel a flight purely for economic reasons. And, in fact, they can be so cheap, precisely because they try so aggressively to be profitable. It's really that simple: if the flight costs are higher than the compensation payout, cancel the flight. (Assuming the plane and crew are not required at the destination.) If the plane is required at the destination, calculate what it would cost to compensate those affected passengers, too. $\endgroup$ – Jörg W Mittag Jan 6 '19 at 20:21
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    $\begingroup$ Please read the Montreal Convention if you ever find the time to do so. This might motivate you to correct your answer. $\endgroup$ – Peter Kämpf Jan 7 '19 at 5:53
  • $\begingroup$ Further to @Bram's point about "network effects": the only time I've ever had an underbooked flight cancelled was a shuttle flight where a single plane & crew made a few flights back & forth between a hub and a small airport 3–4 times a day. The airline just cancelled one of the out & back excursions, and rebooked all the passengers onto later flights that day. $\endgroup$ – Michael Seifert Jan 8 '19 at 15:42

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