Last week American Airlines held ‘Crew News’ conversations between executives and its pilot and flight attendant groups. They featured both introductory remarks by Chairman and CEO Doug Parker, along with questions by front line employees answered by Parker and members of management brought in as subject matter experts. A recording of these meetings was shared with View From The Wing.
Here are 10 insights from these discussions regarding American Airlines strategy.
- Expect Raleigh – London Heathrow to return. American’s bare bones Heathrow service is surviving on cargo now. Heathrow broadly relies on business traffic up front, of which there’s almost none now. When business travel returns, the flights will return – whether this fall, or summer 2022.
- As they prepare to re-introduce inflight service, in consultation with the flight attendants union, they’re working to “modernize” meals and “make it more flight attendant friendly” according to Vice President of Flight Service Brady Byrnes. The irony here of course is that providing less to customers works against being the preferred carrier of premium business travelers the airline acknowledges they rely on (and needs since they have higher costs and debt than competitors).
- American sees more passenger demand into Buenos Aires than current government restrictions allow. However Los Angeles – Buenos Aires was unprofitable ‘in a good year” even before the pandemic, according to Byrnes, and won’t return. They only started it a year before the pandemic and was viewed as the strongest Buenos Aires service American offered for winter 2018-2019 when it launched.
- American has no plans to offer employee pay in crypto, preferring to pay in local currency and employees can go buy crypto if they want.
- They will focus on domestic routes out of Los Angeles – instead of seeing it as their Pacific hub – and while a full London and Tokyo schedule will return (thanks to joint ventures with British Airways and Japan Airlines) we won’t see China routes come back. However there are a couple of new Los Angeles – Europe routes in their top 10 as an airline that they’d consider in the future.
- After 20 initial cancellations, American managed to cover its entire schedule despite grounding of 17 Boeing 737 MAXs due to electrical issues. Boeing shared with Boeing 737 MAX customers on April 8 that they had identified an issue with electrical grounding pf the standby power control center behind the circuit breaker panel in the aircraft while preparing a MAX delivery. Put another way the issue was with a metal box attached to the frame of the airplane.
This was before the aircraft manufacturer had completed its analysis, but airlines needed to park planes that were affected, delivered after a change in the assembly process for the metal cabinetry where this component is located had been made.
As engineers went through the aircraft though we learned on Friday that additional similar problems were found in two other places – a storage rack where the original control unit is housed, along with the instrument panel – in the cockpit.
- Load factors are going up even as they add flights to the schedule demand is returning faster than American is adding flights back to its schedule, though it’s nearly exclusively still leisure travel.
- When American says they’ll fly 80% of their 2019 international schedule this summer, it doesn’t mean what you think it means. Europe and Pacific traffic is down 80%, and flights aren’t coming back. Instead it’s Latin America and Caribbean where they’re doubling down.
With South American airlines restructuring, American believes it can take advantage of weakness by local carriers. In addition Central America and Mexico are big. American will operate twice as many seats to Colombia in summer 2021 as they did in 2019, driven by visiting friends and relatives travel. They’ll have 25% more seats to Mexico this summer versus 2019 as well.
Close-in international behaves much more like domestic leisure, despite the testing requirements to return to the U.S. since resorts are making testing easy (and partially indemnifying travelers who test positive with discounts on their unexpected extended stay). As a result these destinations experienced only a brief hit when testing requirements to return to the U.S. by air were first imposed.
On Saturdays American will have 27 flights to Cancun from 10 cities. That works for them like Key West (19 peak day departures) and Jackson Hole (9 peak departures) do.
- Dallas and Charlotte will be nearly back to 2019 capacity, while Philadelphia lags Dallas will run 850 departures this summer (versus 900 after surging before the pandemic) and Charlotte 650 departures (versus its 700 surge).
In contrast business-focused hubs New York LaGuardia and Washington National will be slower to return than connecting hubs.
And Philadelphia, which is business-centric for local traffic and Europe-focused for connections, will take longer as well. It doesn’t just lose its transatlantic flights with restrictions on visiting Europe, it loses domestic flights geared towards funneling connections to those European departures.
- Widebodies on short flights like Miami – New York and flights to the Caribbean. There are baggage issues on these flights, and the belly capacity is needed in addition to the seats.