After the American Airlines earnings call they hosted a State of the Airline town hall with employees. CEO Doug Parker updated the airline on earnings, goals, and took questions. Other executives were on hand to lend their expertise.
And employees always ask about possible new routes, making appearances by Vice President – Planning Vasu Raja especially popular.
Now that United has announced the launch of Newark – Capetown, he spoke again to the possibility of flying to South Africa “over the long run maybe…” their order of Boeing 787s is partially “to replace 767, 777s” but you “buy 787-9s to fly far not to Hawaii.” (And you don’t buy Boeing 787-8s, I’d add, to fly to Cancun.)
American Airlines Boeing 787-9
Asked about bringing back Boston – London Heathrow or an additional New York JFK – Heathrow service, Raja opened up about their joint venture with British Airways,
We’re looking at everything with British Airways, including that… When we started a joint venture with British Airways the New York – Heathrow flight was a negative, an unprofitable flight for American Airlines, we really struggled with it. When we first saw British Airways’ results we had an 80% unit revenue deficit to them. It was awful. Today it is a consistently profitable flight, it is one of our best international flights. We very often have the same unit revenue as British Airways… we are very optimistic for those.
Raja shared that while Pittsburgh – Los Angeles won’t return “in the near time…in the long term as we grow LA potentially is on the table.” Meanwhile American has no plans to operate the newest addition to their fleet, the Airbus A321neo, on transatlantic routes.
The 321neo as we have it is a really difficult solution to go push that far.. ensure it lands there, has the range there, any number of things.
However the big news was about American Airlines looking at flying to Israel. In 2014 American dropped their partnership with El Al leading some to speculate that they’d grow their flying to Israel, perhaps adding New York JFK – Tel Aviv and Miami – Tel Aviv to the legacy US Airways Philadelphia – Tel Aviv service. However in 2015 American announced the end of their Israel service.
There were plenty of conspiracy theories around this move, from a claim that Qatar pressured them not to serve Israel (yet Qatar is the largest owner of British Airways and Iberia parent IAG, and those carriers continue to serve Tel Aviv, not to mention oneworld service from Royal Jordanian). Another had American running out of town before finding themselves on the hook for legacy TWA employee costs there.
American always maintained that they were dropping the service because it was a money loser. That made perfect sense, with the airline continuing to lose money on the route as long as it did while it was distracted by the merger.
Doug Parker explained,
We pulled out because we weren’t making money. At US Airways we flew Philadelphia – Tel Aviv. Try as we might we couldn’t make profits on that route. And they were getting worse not better. A different time, that was several years ago. That’s the stop, no other reason.
I’ve heard some of these weird theories but there’s nothing else to it. We made the choice. We love flying there to. I like you made the trip there, it was one of the highlights of my life. .. It was one of our worst days when we decided to pull that flight for all of those reasons, but it was entirely because of that. But Vasu’s now here scheduling a bigger airline. How does Tel Aviv look one day in the future?
American Airlines Boeing 787-8
Normally American responds to questions about possible Tel Aviv service with “we’re always looking” at all our options.
However Vasu Raja offered, “We chose our way out of Tel Aviv. Arguably we did it too prematurely. We’re not going to be out of Tel Aviv forever. We don’t have an imminent plan for it, but we are looking at that and future expansion with the 787 to any number of places.” (Emphasis mine.)
Expect American Airlines to return to Tel Aviv once they start taking delivery of more Boeing 787s, provided facts on the ground don’t shift.