American Airlines Chief Commercial Officer Vasu Raja complained that the airline didn’t have enough business class seats back in 2018, when the airline was taking business class seats out of planes. He’s more influential now, and post-pandemic there’s been tremendous premium demand.
American is planning to put more business class seats into planes as it retrofits its Boeing 777-300ER aircraft and takes delivery of new Boeing 787-9s, as it unveiled a year ago.
Credit: American Airlines
At an employee ‘Crew News’ question and answer session last week, a recording of which was reviewed by View From The Wing, Senior Vice President of Network Planning Brian Znotins was asked about additional international announcements beyond new routes just announced.
- Znotins described a plan for 2025 and 2026 as Boeing 787-9s get delivered with more premium seats and allow the airline to focus on more premium markets than the airline can serve today.
- He also notes that with more business class seats, the planes aren’t as dense – fewer passengers, fewer seats, not as heavy – and can therefore fly further than the ones currently in the airline’s fleet.
Separately, Znotins noted that delivery of Airbus A321XLRs beginning in “late 2024” will mean that a few arrive in time for summer 2025 growth to Europe – serving “small thin markets,” Western Europe from New York JFK and Philadphia, and to a lesser extent from Charlotte and from Chicago O’Hare.
So what new long haul destinations are on the horizon?
- In the spring airline executives were teasing possible service to Singapore in employee chats, though I was skeptical that this would happen.
- American’s Pacific hub at LAX has been dismantled, and plans for a Pacific hub in Seattle largely aborted. Which would they reboot?
- And the airline has been unwilling to take on highly competitive routes dating to US Airways days. That’s also the mantra of Senior Vice President of Network Planning Brian Znotins. Los Angeles and to a lesser extent Seattle have substantial long haul Pacific service from Asian carriers already, often providing both a better product and connectivity in Asia that American lacks.
So where would American go? Africa is largely a trap for premium-heavy aircraft. They’re already strong, flying anywhere they think makes sense, in deep South America. Europe is highly seasonal (summer). If anything they need counter-seasonal flying that isn’t just to Mexico. South Pacific – Australia and New Zealand – should offer some of that.
Personally, I’d love to see American Airlines fly Dallas to Istanbul but the lack of a oneworld or other partner on the other hand makes that less likely. Malaysia Airlines is too weak for Kuala Lumpur to make sense. They own a stake in China Southern but that was substantially written down in value before the pandemic and relations with China have dampened that market, such that Guangzhou hardly makes sense (today). The idea of additional premium long haul flying come 2025 is certainly interesting.
Maybe they’ll start LAX-CDG and a few other premium European routes. Instead of routing everything through LHR and MAD.
They can double the daily flights to Cancun.
That’s the kind of out of the box thinking that will put them back on the path to greatness
LAX to HKG/CAN seems like no-brainer. CZ operates 4 flights per week and CX operates 2-3 flights per day. They are consistently fully loaded and the fares in FCY remain high. Absolutely no award availability. The connectivity to mainland China and SE Asia via CAN and HKG is just unparalleled. With UA now making SFO as pacific hub, it is just ridiculous that AA would give up on LAX
I’d love to see a DFW to somewhere in Switzerland (Zurich or Geneva) and then a NYC/PHL to Basel (a huge pharmaceutical hub and beautiful city). Also DFW/MIA to Belo Horizonte, Porto Allgre in Brazil. Then DFW to Warsaw or somewhere in Eastern Europe.
American has just begun to deliver profitability that is more than 50% of Delta’s profits and better than United
The last thing American needs is to start flying a bunch of routes because it has aircraft that could potentially “make it”
DFW is AA’s only global hub and it is geographically unsuitable as a major global gateway because it misses most of any market from the US to any foreign country.
The reality is that AA will add a bunch of new routes because they see DL and UA adding new longhaul flights just as Delta adds 3 dozen new A350s and A330-900s to its fleet over the next 2 years, the largest widebody fleet growth among the big 3, and UA adds more of its 787s
For people that like to see new dots and routes, there should be no disappointment from the big 3.
UA has SFO and DEN, DL has SEA, SLC and (LAX). AA should rename itself NotWestern Airlines.
I’d love to see DFW to JNB or CPT. All my colleagues fly United or Delta and have options from EWR or ATL to CPT and JNB. I’m so invested in One World I have to go through LHR on BA and then south.
@Anish Reddi: Paris is not a premium fare destination. It is primarily a tourist destination. There is a reason you don’t see as much premium flights to CDG as you do to FRA and LHR. From the west coast, UA has one flight from SFO and DL has one flight from LAX.
@Superevangelist: DFW-JNB is 9,151 miles. Outside the range of a 787-8 or -9.
Neither of those destinations are going to happen.
Using a general working definition of premium as “where the money will be flowing circa 2025 / 2026” I think we can have some fun discussion, if one looks at the economic and geopolitical landscape. My guesses / conversation starters:
Winners:
-Northern Europe and Scandinavia will likely expand as summer tourism moves further north (for some reason that I can’t quite put a finger on, hmm…)
-Ties with Vietnam and other SEA countries will continue to strengthen as companies move away from China; for that matter, some Eastern European destinations will be in the same boat (e.g. large amounts of FDI into Czech Republic and Poland)
-South / southern Africa will likely still cash in on expanding interest in experiential tourism (aka wine and safaris)
Losers:
-Russia / Ukraine will probably not still be all sorted
-Anyone saying mainland China is in the discussion has not been reading the front pages of any newspapers lately
-Middle East is locked down by carriers with far better products than AA
Just my random thoughts!
DFW to IST would fill that void and eliminate the need for. BA transfer in LHR.
@CW: Tourism is not a major airline draw. They are putting business class heavy aircraft in the system to draw fare heavy business travel, although there is less of it post-Pandemic.
I agree on SEA countries other than China. S’pore is the interesting one. AA should fly there, but the question really is from where? DFW-SIN is too long. At LAX and SFO, they compete with SQ and UA.
That really only leaves Seattle.
After all, we know how much AA hates competition.
1KBrad,
your logic of how many flights US carriers have from the west coast as the basis for determining whether a destination is premium or not is more than a little flawed.
first, DL has hubs in both SEA and LAX – and they have CDG flights from both.
UA, so far as I can tell, only serves FRA – their JV hub – from SFO on the west coast.
And if you add up all of the DL metal US-CDG flights and the UA metal US-FRA flights, I wouldn’t be surprised if DL actually has more but the two are probably pretty close to the same.
CDG IS a leisure destination for AA – and is most of continental Europe – because DL and UA have their primary TATL JV partners on the European continent, which is not true for AA.
AA doesn’t compete well to other carrier hubs or directly against other carriers – which is why it is highly unlikely they will succeed – even if they try – by adding flights on routes from LAX, ORD, or JFK.
If AA does anything, it will be to add flights to some of its other partner hubs besides LHR or to cities which it thinks are up for grabs between the big 3 even if AA will likely underperform if DL or UA are at all interested.
Will barely fly them domestically. Sure not interested in international.
Wow, no mention of the Ex-LATAM DL A359’s that have have the most seats in the history of flight to BCN by Tim Dunn? Such a missed opportunity since it’s so relevant to this article.
@1KBrad the traditional idea of only business travelers flying “fare heavy” business class is not really bearing out in the current environment. Luxury leisure travel demand is high and people are shelling out. Not to mass-market package tourism destinations, but to expensive luxury trip locations (e.g. Viking cruises and safaris – hence the destinations I named). Plus, if these travelers are customers of the airline in their day jobs (business owners, execs) then keeping them in the network has value beyond the single flights.
Roberto,
bitter much?
since you mention the ex-Latam A359s, you do realize they are larger than anything AA flies, AMIRITE?
or that DL’s A359s seat more passengers than AA’s 777Ws and the 359s burn a fraction of the amount of fuel?
now wasn’t that fun?
You brought it up in an article about diarrhea lol. How sad are you?!
Since you bring that up, let’s play a fun game…. 8F/52J/28PE/216E vs. 30J/309E. Which one do you think makes more revenue per flight? BuT tHeRes 339 sEaTs….
Crazy how no one even considers Phoenix as an opportunity for international flights to Asia. TSMC out of Taiwain is building its largest fab outside of Taiwain and all there vendors are following. Intel has major fab and Arizona is refered to as the silicon desert. Arizona is one of the fasted growing states in the US and lots of the business is from Asia. Sky Harbor never shuts down due to weather and delays are minal. PHX-TPE or PHX-DEL. Sky Harbor is a great airport with lots of connections.
The only expansion outside of the U.S. is what the ESG and WEF is allowing! Right now AA is gobbling up former Eagle destination because of lack of Flight Crews…I’m predicting very little expansions… AA will have to give up routes in the near future over “ESG” Co2 Points….
Znotins is an alumnus of United/Continental during the tail end of the Bethune era and all of Larry Kellner and Jeff Smisek’s. His network strategy has always been about reducing gauge, shrinking to profitability and avoiding competition. Not surprising to see the approach AA has taken since he arrived.
Roberto,
I said absolutely nothing about diarrhea on this site. If you want to discuss what I said on other sites, do it there. The web is not an endless and continuous blob.
and I can tell you with pretty high precision that there are very few – precious few, actually – routes where AA makes more money that DL and esp. if a 777 is involved. DL made the right choice to get rid of its 777s during covid and now has not only a much more fuel efficient fleet but also one that is far better suited to deliver profits which is what AA, DL, UA and most of the world’s airlines are supposed to do.
AA’s (and UA’s) 777-200/ERs burn 15% more fuel than DL’s A330-300s (the backbone of DL’s transatlantic fleet currently) while the A330-900s burn comparable amounts to the 787-9. Because of AA’s very low density on its 77Ws, they burn 33% more fuel per seat than DL’s A350-900s even in DL’s standard configuration. The lack of Premium Select is more than offset by the much higher number of coach seats.
For an airline that has touted how new their fleet is, how does AA consistently spend $1.5-2 billion per year more on fuel and more on maintenance that DL?
And as much as UA thinks they will have a corner on new aircraft and growth, DL has more aircraft coming online – not just ordered but actually being put into service, generates more revenue – including if we compare just passenger revenue – and delivers far more profits.
It is precisely because AA cannot match the revenue that DL or UA get per flight and because DL manages to do EVERYTHING at a lower cost and generates more revenue than AA or UA that DL will be able to expand where it wants.
I could be completely wrong but I don’t really think that DL will be using the next 3 dozen new widebodies it is receiving to replace its 767 fleet or just add flights to AMS and CDG .
DFW, CLT and PHL adds might be ok but not even sure that AA will successfully manage to add much from those hubs outside its own partner hubs.
DFW/LAX HKG or at least the token DFW one makes sense given all of the one stop one world options CX can provide. Talking about a premium market
Blah Blah Blah…then they will announce a PHL-BLQ route coming in 2026 and call it part of their premium expansion. AA is clueless and treading water on the International front. They will never recover and would be better restructured to be a domestic and mid haul Intl carrier like WN. Even in South America their dominance is dwindling fast.
Unless you live in Dallas, for AA One World aficionados get used to 2 stop connections for pretty much anywhere in the world.
@rj123456, AA has a “western” hub in PHOENIX. Nice of You to leave that out. They have a presence all over the west. Also, with Alaska being a close AA partner and a member of OneWorld; they have PLENTY of representation out west.
Good point. But international coverage from Phoenix is very poor, and non-existent on Alaska.
Benjamin,
since the article is about premium international markets, it is fair to exclude PHX for AA.
DL has as many premium international routes from PDX as AA has from PHX.
From a financial standpoint AA simply buys seats on AS and vice versa; they are simply codeshare, not joint venture partners. and AS operates NO premium international routes
DL and UA operate west coast hubs on their own metal.
@timdumn
UA has nonstops from SFO to at least LHR and AMS, neither of which are partner hubs.
Sometimes I get the feeling I could do a better job managing AA’s route network than those who currently run it.
I would be interested in PHX-CDG.
IST would be great. No American airline flies there anymore and Turkish airlines has the monopoly. It’s a brand new immense airport, and I would welcome American Delta or United flying there again… Probably from Philadelphia to as that is one city Turkish airlines does not fly to… Yet.
SEA to HKG (conex by CX)
SEA to SIN (conex by MH & QF)
SEA to Bangalore, India
SEA to PVG (if China gets their act together)
and keep SEA to LHR!! (BA conex)
Alaska Airlines feeds AA at SEA.
That looks like a nice way to start!!
Flights from Austin to London and other Euro cities are always full.
Would love to see Austin to Asia direct!
Winter routes: PHL-HNL, PHL-CSL, PHL-LIM
Summer routes: PHL/JFK/CLT/DFW to medium sized European cities
rj
AMS was not one of the cities that Brad noted as premium international markets. He specifically compared FRA, LHR and CDG
The issue that will tear AA in trying to decide how to jump into the same international route expansion that UA has been doing because it didn’t get rid of any aircraft and DL is doing and will do as it receives dozens of new aircraft is that AA is making more money than it has in decades because it isn’t trying to do what DL and UA do and instead does what makes money for AA.
They may well be tempted to engage in another dartboard exercise but it will quickly become apparent they won’t be profitable so they will be right back where they are right now.
The best thing that AA could do is use the 787s it has on order to retire large portions of its 777-200 fleet, convert most of its remaining 787 orders to 787-10s, densify its 777W fleet to levels that make them financially viable, and use the coming performance enhancements of the 787-9 to increase performance on existing India routes using 787s.
They can use the A321XLRs to add some smaller routes but the economics of those aircraft for them and for UA will be inferior to widebodies so they have to be very selectively used in markets that are large enough to get enough premium revenue but not where other airlines use widebodies or can undercut fares via connections.
rj
AMS was not one of the cities that Brad noted as premium international markets. He specifically compared FRA, LHR and CDG
The issue that will tear AA in trying to decide how to jump into the same international route expansion that UA has been doing because it didn’t get rid of any aircraft and DL is doing and will do as it receives dozens of new aircraft is that AA is making more money than it has in decades because it isn’t trying to do what DL and UA do and instead does what makes money for AA.
They may well be tempted to engage in another dartboard exercise but it will quickly become apparent they won’t be profitable so they will be right back where they are right now.
The best thing that AA could do is use the 787s it has on order to retire large portions of its 777-200 fleet, convert most of its remaining 787 orders to 787-10s, densify its 777W fleet to levels that make them financially viable, and use the coming performance enhancements of the 787-9 to increase performance on existing India routes using 787s.
They can use the A321XLRs to add some smaller routes but the economics of those aircraft for them and for UA will be inferior to widebodies so they have to be very selectively used in markets that are large enough to get enough premium revenue but not where other airlines use widebodies or can undercut fares via connections.
AA’s biggest strategic problem is that they are trying to build an international route system where they are no longer the #1 carrier in LA, ORD or JFK which leaves CLT, DFW and PHL as viable domestic hubs but not near as capable of supporting profitable international routes as larger and better positioned hubs for international traffic.
How about JFK-TYO? There is no more premium route, and AA hasn’t flown it for what? A decade or more?
If there is one black spot in AA’s map, it’s Asia. The largest growth area of the world of the past 50 years and AA has been almost totally absent and has taken no part in this business mega-trend. I don’t see much point in competing against CX once they are back at capacity later this year, but why shouldn’t they fly to CAN or JFK-TPE, which don’t have the operational complications of SIN.
AA has also totally failed to leverage its One World partnership with Qatar to get passengers to Asia – AA only believes in connecting to Asia going west – not to mention Etihad through AUD. AA has let it’s partners completely dominate these markets without any real attempt at competing. Instead we’ll get more flights from Philadelphia to secondary markets in Europe where AA can have a monopoly – and when the moment they demonstrate there is substantial enough market to support the route a competitor will come in and eat their lunch.
Such a hopeless case. A credit card marketing company with a big fleet of airplanes.
Mak,
JFK-HND is all that is viable, JL and NH both service it, DL undoubtedly wants to serve it but cannot move any of its existing HND flights. If DL asked, they would get preference over AA given the alliance situation in Japan.
HND is a restricted access airport but it is economically the best alternative; average fares to/from NRT are considerably lower than to HND which is where the majority of business travel goes.
AA had good access to China – more than DL – but gave up on LAX and ORD to China due to Chinese carrier subsidies and fare dumping.
AA will not succeed at ICN. They gave up on HKG because they had no JV and CX had no incentive to share anything w/ AA
SIN is beyond the range of the 787 from AA hubs.
AA simply couldn’t/can’t generate average fares as high as DL to Australia even though AA has QF as a partner so AA has largely deferred to QF to do the heavy lifting.
AA’s best network and profitability solutions are across the Atlantic to its hubs and to Latin America.
@Tim Dunn…
“AA had good access to China – more than DL – but gave up on LAX and ORD to China due to Chinese carrier subsidies and fare dumping.”
Not exactly subsidies, and certainly not subsidies to fly to the U.S. (Many Chinese carriers are majority-owned by state-owned enterprises.)
Chinese policy limited service on a route in most cases to a single Chinese airline, which led Chinese carriers to stake territory before another airline did. This led to overcapacity and lower fares.
“They gave up on HKG because they had no JV and CX had no incentive to share anything w/ AA”
Lack of open skies (government protectionism) stands in the way of a JV. Still, other airlines make HKG work on an O/D basis. LAX underperformed DFW for AA.
“SIN is beyond the range of the 787 from AA hubs.”
Configuration (weight)-depending SIN is not beyond the range of LAX or SEA.
Gary,
the Chinese government specifically said that, pre-covid, they were subsidizing their carriers’ international networks to the tune of $3 billion/year specifically so that Chinese citizens could travel to other countries.
Part of the reason that AA’s LAX-Beijing average fares were so low was because of the higher percentage of traffic that Chinese carriers had in that market.
AA was the only US carrier that flew LAX-Beijing but AA, DL and UA all flew LAX-PVG; AA had the lowest average fares and total onboard revenue, UA got slightly higher average fares than DL but lower volume while DL had the best combination of volume and average fares. It isn’t a surprise that DL is the only US carrier that is proposing restarting LAX to China with PVG flights.
And, yes, HKG cannot have JVs with US carriers because there is not Open Skies and the Chinese are simply against free markets working so HKG and China will not have Open Skies or JVs with US carriers.
SEA is simply not going to be a gateway for AA to Asia as much as some continue to play with the idea.
UA already operates a low density 787 configuration and couldn’t make LAX-SIN work even though they do double daily SFO-SIN at several hundred fewer miles. With 200 seats in the winter, AA could probably make their current 787s work but that is not economically viable. The only plane that can currently fly LAX-SIN is the A350 and SQ has done it in both its very low density premium configuration as well as its 250 seat “standard long haul” configuration. LAX-SIN would seem like it would be at the top of DL’s list for 2024 with its new A350s which are supposed to have about 285 seats – down about 20 – and the highest takeoff weight on the A359.
AA should return to HKG and also add SIN.
Some of the routes you guys are suggestion are just not viable. They are either too long or too costly.
DFW to anywhere in Africa is a stretch. Maybe Philly, Chicago or Charlotte. AA needs another major HUB on the east coast and Philly can be that HUB because JFK is not a connecting HUB. Charlotte is already too packed. LAX would be a great HUB to grow and PHX to compliment both DFW and LAX
I think LAX is already too saturated a market. SEA is a viable option, especially with hometown Alaska Airlines to feed the AA flights!
MIA to JNB or CPT would be a potential route. But unlikely to receive regulatory approval from the government of South Africa.
I remember the times where people said PHX would be de hubbed and become a ghost town. Now PHX is growing well and many people really want more international routes. If only AA would follow suit and prove the haters wrong
Adam,
the problem is that PHX is still just an America West hub w/ the strength of AA’s domestic – but not international system thrown in.
Let’s also keep in mind how incredibly hot PHX gets which would such the viability of out just about any longhaul international route.
South Africa is a market that has enough frequencies to support DL and UA – but no more even though MIA would have been a very viable gateway, functioning very similarly to ATL – a very successful route for DL despite the performance restrictions that have long been part of the route, B777LR or A350.
And people don’t seem to understand that AA and AS are simply codeshare partners from an economic standpoint. Sure, they are alliance partners but that is all about “support economics” rather There is no joint venture, AA and AS cannot jointly price, and AA cannot demand that AS release a certain number of seats to support AA longhaul international flights – it was precisely because DL said AS was not releasing enough seats to fill DL’s international flights that that DL terminated the relationship w/ AS and built its own hub in SEA. There will be no AA longhaul international flights at SEA other than what make sense for AA on a standalone basis – which basically means a partner hub on the other end.
And at LAX, AA blinked and DL jumped in. DL and UA may scrap a bit but DL has more than enough resources to make it clear that DL considers LAX its hub and UA should be content to preserve and build SFO free from interference.
AA J fare Austin to Split is $12k to 21K (even advanced purchase.) Perhaps there is a market to cities beyond Rome, Frankfurt and London.