American Airlines Planning International Route Announcement

Speaking to the airline’s pilots last week at an internal question and answer session, American Airlines CEO Doug Parker reported that the airline has “a schedule announcement going out to the whole, to our customers, international in a couple weeks or something right? More to come.” In fact “the pilot group’s seen a good bit of that since you can see what’s actually in the bidding” that pilots list themselves to work. American’s announcement will come “in a couple of weeks” and also talk about “what we plan to fly next summer and what we don’t plan to fly.”

What Are American’s Prospects For International Flying

Senior Vice President Vasu Raja explained in the session that “the forecast for international flying is really quite rough.”

We’re flying somewhere between 10%-25% of our international network.. and there is indeed very limited demand for it. As we see more spikes in coronavirus cases that demand is continuing to plateau at a really really low level.

Beyond that even those customers that are willing to travel to Europe have a lot of uncertainty about what the quarantine protocols are and even what’s open out there. Right now the prognosis for international is not really that good.

Interestingly we are seeing premium has not taken as much of a hit as what coach is, on a given international flight we’re flying 15% – 20% full in premium when historically that cabin would be entirely filled. So that’s certainly not enough to go and sustain the international network, especially because premium can be as much as 50% – 60% of the revenue on an international flight.

What International Flights Will American Add Next?

Raja explained the factors that drive the airline’s decision to add flights,

[T]he international that you do see out there are really a function of two things: one passenger loads that are above break-even load factors, two enough cargo in the belly of the airplane where it’s greater than our break-even cost to fly, or three a mix of the two.

Looking at the possibility for a mix of passenger revenue and cargo, he offers that they’re “looking at actually adding back a couple of sections like in Miami – Sao Paulo or Miami – Chile” in August because “there isn’t a ton of passenger demand, there isn’t a ton of cargo demand, but the two together could maybe produce enough payload that’s greater than our cost to operate the trip.”

He doesn’t believe, however, that there are many markets like that, “there isn’t a ton of demand for international and a lot of uncertainty around international business travel.”

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. Interestingly enough, this could also set the stage for changes to their domestic network. Is there a need for their LAX TPAC gateway any more? AA stated on numerous occasions that their Beijing / Shanghai flights were unprofitable, Australia is closed, and Hong Kong traffic is suffering significantly due to China. Their flight to Tokyo survived on local O&D and a few connections before AA turned LAX into a hub.

  2. AA should move up China resumption in July. People are rushing to snatch up one-way $3500 Y tickets to return to China after Delta/United reopened bookings.

  3. No… it’s “Thanks China.” Let’s not forget who the bad guy is here. (Hint: not states.) Quit blaming the victim.

  4. Well there goes our jobs at the airport. Thanks to all that follow Trump and Facebook instead of educated and knowledgeable medical experts. Dummies wear your masks! No one wants reckless entitled Amercans in their country. If you can’t wear a mask on planes or inside of a restaraunt due to medical reasons stay home!

  5. how come internationals are allowed to fly in to the us.but us flight cant fly into europe.

  6. Does he know the number of cargo from China and Korea are very limited and price have sky rocketed? The cost of PPE are depended on these price and these days the freight cost as much as the products or more.

  7. Unlike UA and DL, AA can be more domestic (fleet better suited) and depend on it’s better OW partner network (BA and JAL especially) to connect. AA and SWA are getting positive comments from the analysts because of their strong NA networks and fleet. DL and UA depended too greatly on feeding international traffic, have too many wide-bodies that won’t make money domestically. Will be interesting to see what AA ends up doing in the Americas as well. LATAM is a basket case and DL won’t be able to feed them traffic to support their network where AA could. This was a bad bad move by LATAM and looks like GOL and some LLCs will start to gain market share.

  8. @Magnifico We are know the bad guy here, and he was busy sucking Xi’s di*k while the virus was spreading.

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