US Airways sold much of their operation at New York LaGuardia to Delta for cash and slots at Washington National. They had to give up some of those slots to get government approval for the deal. And they had to give up more slots to get approval for the American Airlines merger. At the end of the day they got a little bigger at National, but traded their irreplaceable position at New York’s close-in airport.
American today could have been a real player in New York. Instead the world’s largest airline doesn’t seem to know what to do – or if they should do anything at all – with the nation’s most important air city.
When US Airways management took over they seemed to think the best strategy would be to back away from competing for business from New Yorkers and be the airline that brought people from other places to New York. They’d compete for business from small cities by timing flights to bring them to New York during the business morning and take them home at the end of the day.
Over the past five years the strategy has shifted to serving business markets from New York. They want to serve business travelers, as any airline looking for a revenue premium does, but fails to realize that business travelers are< leisure travelers. The customers who fly to Los Angeles and London during the week take their families to Florida and the Caribbean on the weekend and for holidays.
It’s unclear exactly what American’s idea of a business market is, though. They don’t serve New York JFK – Zurich. They don’t serve Frankfurt. Or Munich. Or Amsterdam. Or Tel Aviv. There’s no JFK – Detroit, Minneapolis, or Salt Lake. No San Jose, Houston, or Portland.
Or Denver. This last they offered… briefly. Most of their regional feed consists of Embraer ERJ-140s and 145s, 44- and 50-seat regional jets without amenities.
And they keep cutting markets. The latest to go is New York JFK – Orlando, currently served by two daily Boeing 737s, drops from the schedule May 3. American will be down to just one Orlando flight a day — from LaGuardia. Because who ever heard of New Yorkers flying to Florida?
- What’s more, that leaves Miami as the only New York JFK – Florida flight on American
- The LaGuardia – Orlando flight leaves before 7 a.m., so it takes away the option of sticking to American for ‘Thursday/Friday after work to Florida’
When you cut a flight at a hub, your cutting connecting traffic for your other flights. You aren’t just eliminating Orlando – New York traffic, you’re cutting Orlando passengers connecting onto London, Madrid, and Paris. All of a sudden without as much connecting traffic, other flights start not to make as much sense. So you cut one of those, too. And now there’s less connecting traffic for your other flights. So you cut another one of those. And the hub enters a death spiral.
American wants to operate flights they can make money on with non-stop traffic. They can send connections through Philadelphia.
- Except as they cut flights there are fewer and fewer flights they can do this with. Fewer destinations makes the corporate sales team’s job harder.
- It makes it tougher for elite frequent flyers to stay loyal, too.
Ultimately it seems like spending $300 million and adding bus gates isn’t actually necessary for American’s JFK Terminal 8 to get oneworld under one roof, just wait for a few more flights to get cut.