6 Insights Into The American Airlines Strategy For Recovery, As Told To Airline Employees

American Airlines shared its plans for integrating with JetBlue, building back its Philadelphia hub, and whether or not their new flight to India will actually take off at a meeting with employees last week, a recording of which was reviewed by View From The Wing.

Here are 6 insights into the American Airlines strategy for recovery that came out of this session.

  1. Planes are getting full again. Load factors are high on leisure routes. There’s no business travel, and leisure travelers haven’t had much to do in cities. American expects passengers down 65% compared to 2019 during the first quarter, similar to the fourth quarter. And revenue is worse than passenger traffic because “almost all passengers are leisure travelers paying less than people paid” in 2019, according to Parker.

    American Vice President Brian Znotins shared that load factors were higher up “until Thanksgiving,” but the virus’ resurgence meant January load factors were in the 40s. February was in the 50s, March so far in the 60s, and April is “looking better.”

    Parker thinks that vaccine passports “would certainly help” bring back international travel “if we can have a standard unified health passport..that describes who has vaccines etc. We’re leading on that at American.”

  2. The Biden administration wants to encourage travel Parker reported from his conversations with administration officials that “so much of international travel is based on U.S. travel. so we’re encouraging the administration to be leaders on this, they want to be, but they’re also being very careful at this point as they should be.”

  3. American could drop plans for Seattle – Bangalore. Brian Znotins was asked by a pilot about plans to launch the airline’s planned India service, and replied that the “status of any flight..has a lot of cloud around it.”

    While they “do plan to launch it this fall,” it’s a business travel-dependent route, and is “reliant on a return of business travel.” They also “have to keep an eye on” United’s Bangalore service, when American announced their route they were going to be the only U.S. – Bangalore non-stop in the market and United’s San Francisco flight will have more local traffic. Parker reported that Amazon and Microsoft have to resume travel to India for the flight to work.

  4. JetBlue has technical limitations that constrain their partnership and cannot currently put its code on American Airlines regional flights now.

  5. But they are going to start an airside bus at New York JFK to facilitate connections. The partnership is mostly about appealing together to the New York and Boston markets, and building corporate business in competition with Delta and United, but they’re going to work to feed connections between American international routes and JetBlue domestic flights with an airside connection between their terminals and they’re “very close” according to Znotins.

  6. Philadelphia will be the hub that comes back last. It skews international, as the airline’s primary transatlantic connecting hub. The Airbus A321XLR will mean more European destinations once that plane arrives in the fleet.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. I’m not sure any of the items above actually constitute a “strategy”, but at least they’re better than hoping for a fourth government bailout or mortgaging AA’s frequent flyer program further..

  2. Per recently published stories regarding Amazon corporate travel and everyone flies economy regardless of flight length how in the world are they justifying the SEA-BLR flight? I get people paying with their own money for upgrades but that can’t possibly make a significant difference. I guess Microsoft and the other techs in the Pacific Northwest might make fill up the seats. What plane will be flying that? How many business class seats to fill>?

  3. SEA-BLR was a pipe dream when it was announced. Given that China has limited US carriers to a number of flights well below what was allowed pre-covid (and Chinese carriers are doing the same and it is because China subsidized its international airlines to the tune of billions of dollars per year), SEA-PVG is not likely.
    Those “technical limitations” are B6 pilots not being willing to allow their company to participate in codeshares that could see B6 outsource flights to American regional carriers.
    Given that AA is still offering transcon flights for less than $150 (with taxes) even as they upgrade to 777s, it is no surprise that AA’s revenues will not recover.
    Other carriers will add flights to PHL which will make the economics of that hub even worse. It clearly has limited domestic value for AA or they wouldn’t be tying its recovery so much to international. No other carrier is saying that they won’t return domestic flights in a hub because the international traffic isn’t there.
    and Biden is doing everything BUT encouraging travel.

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