American Airlines Revealed the Real Reason They’re Cancelling Chicago – Beijing

American’s President Robet Isom says the airline has done well with Tokyo, Seoul, and Hong Kong flights but that China has been hard. Chicago – Beijing, which they’re cutting, “is a route that we’ve lost tens of millions of dollars for years and years and years.”

In Beijing today they’ve started a relationship with China Southern, but they don’t have demand on the China side of the equation, and Chicago isn’t where they expect to be able to operate Asia routes effectively — Dallas is a bigger hub with more connections and Los Angeles has local traffic.

American Airlines Boeing 787-8 at Chicago O’Hare

Chicago is gate constrained. Losing money on a flight makes no sense because it’s a flight they cannot send somewhere else to make money.

American’s Vasu Raja said that “Chicago – Barcelona was our best Europe route in the time that it flew last year, our second best for the full year.” They believe Chicago – Honolulu will do very well and Venice is so far doing well. Not only were they losing money on Beijing service the flight kept them from making money elsewhere.

American Airlines Aircraft at Chicago O’Hare

The airline wants ‘dormancy’ — the right to keep the Beijing route authority without actually flying the route in hopes that they can come back to it someday — it’s hard to imagine the Department of Transportation granting that if another airline wants to fly to Beijing instead.

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, 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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  1. AA wanting dormancy…funny, that’s what DL wanted on the Haneda routes and AA cried foul

  2. Obviously the route was killed by Hainan airline due to its extremely low fare. Not sure any chance for AA to do a PHL – PEK route, may be not either.

  3. @Tina: Brussels would seem to be a pretty small market without great connection possibilities, and both it and Frankfurt are strong Star Alliance hubs, not OneWorld.

    It strikes me that China is hard for a lot of airlines, and that’s partially because of the visa situation. It is not an easy country to visit for a number of reasons, and the airports (especially PEK) are terrible to transfer through versus their (geographically) close rivals in Tokyo (HND, NRT), Seoul (ICN), Hong Kong (HKG), and Taipei. I can’t think of a good reason to transfer through mainland China aside from price, and that’s the whole problem right there.

  4. So this means AA is going to raise fares for DFK-PEK?
    What a win for us in DFW.

  5. @EChid, China should not put the effort to focus on transit anyway. It is a country with enough O&D traffic, which also be the primary focus. Only small or city country(like HKG, SIN) has the advantage of doing international transit, as they do not need to have domestic facility. Even the small country as Japan, NRT is a pain to make intl- domestic transfer.

  6. @bsp Well, actually, the whole issue is that there *isn’t* enough O&D traffic for all of the seat capacity. That’s why yields are so low. If there was enough O&D traffic to go around, then they wouldn’t cancel this route. If you look at the operations of Air China, they are very much relying on (in many cases, international) transit traffic through PEK to other destinations. Don’t assume that because it’s a big country and a big city it has strong O&D, especially given the capacity be dumped on most routes.

    NRT is no comparison to the experience at PEK. When I last made the mistake of transferring at PEK, I stood in a transit line for 2.5 hours along with hundreds of others. The minimum transit time at NRT is 60 minutes by comparison, so PEK is pathetic by comparison.

  7. After landing in PEK, there’s an option: high-speed railway, LOL. Just kidding.

  8. Not sure I fully agree that the Chicago market can’t support this route… the OP said “and Chicago isn’t where they expect to be able to operate Asia routes effectively — Dallas is a bigger hub with more connections and Los Angeles has local traffic.”

    Chicago to East Asia with a quick hop to PEK has over 15 flights a day. AA came in too late after United. The Flight Attendants on the Ord Pek route were horrendous in the first few years. (Bad language capabilities for premium customers, old FAs, rude) improved later but was too late.

    Routes from Chicago nonstop
    United – Beijing, HK, and Shanghai (3)
    American – Shanghai (1), Beijing (1)
    Cathay Pacific – HK (1)
    China Eastern – Shanghai (1)
    Hainan Airlines – Beijing (1)
    ANA – Haneda (1) and Narita (1)
    JAL – Narita (1)
    United – Narita (1)
    AA – Narita (1)
    Eva – Taipei (1)
    Korean Air – Seoul (1)
    Asiana – Seoul (1)

  9. Couldn’t agree more with JJ. I live in Ohio for 10 years, every time I go back to Beijing I need to through ORD either on UA or AA. my experience with UA is much better than AA due to FA quality. They mostly offer the same price, same flight time, but AA’s FA on asia route is just terrible. sometimes they dont even have anyone speak Chinese on the route, I saw multiple times FAs is actually yelled at customers due to language barrier, this is sad. First impression is bad for me and other customers. I understand FAs job is safety, but who wanted to be yelled at on a 14 hours flight due to language barrier? After China eastern and Hainan offer direct flight out of ORD, AA and UA flights are less appealing to Chinese. Just my thought, I know this wont kill the route, but as a customer, I will avoid AA for any international flight to Asia.

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