American sees itself as having “the best hubs in the business for domestic and international short haul network” in Charlotte, DFW, and Phoenix. They’re working to build New York JFK working with Alaska to build Seattle on the West Coast, according to executives in a recording of comments to employees last week that’s been shared with View From The Wing. However their approach to long haul is different.
International From Charlotte Will Mostly Stay Boeing 777s
Long haul international from Charlotte is likely to remain operated predominantly by Boeing 777-200s, rather than moving to Boeing 787s as the airline takes more aircraft from Boeing.
They’ve added a third London Heathrow departure from Charlotte and it departs the U.S. at 11:25 p.m. during the summer flying season. (They’ve also added a late night third Los Angeles flight.) Vice President of Network Planning Brian Znotins acknowledges the slots they were able to secure from another airline “aren’t at the perfect time” but sees them as good enough to make sense and there are competitive reasons as well,
We don’t want anyone else getting those slots. We want to be the leader at Heathrow and we don’t want to let people catch us in Heathrow. We want to keep that lead and the only way to do it is to take those slots when they become available.
However Chief Commercial Officer Vasu Raja jumped in to correct the anti-competitive narrative, “the increasingly less critical one we need to get ’em so others don’t” and then emphasized the value to the airline of the slots.
Raja suggests that the Charlotte metro area is “smaller than San Antonio” yet the city works so well for the airline that they can fill a third Heathrow trip with customers in “New Bern, North Carolina, Knoxville, Tennessee.”
Philadelphia Is Still Their Transatlantic Hub, It Just May Not Seem That Way
The airline still sees Philadelphia as their primary connecting hub to Europe, with New York JFK as predominantly for local traffic. But without as much local demand in Philadelphia, they haven’t brought back as much domestic capacity. And that means fewer connecting passengers to support transatlantic flying.
This should grow back as the airline receives Airbus A321XLRs, smaller planes that can profitably fly with fewer passengers. (I’d note that they have retired the planes that could have made transatlantic work under this scenario, the Boeing 757s and 767s.)
New Airbus A321XLR Business Class, Credit: American Airlines
Los Angeles Is More For Domestic And Short Haul International Now
Transpacific demand hasn’t recovered even though Covid restrictions have largely been lifted. Fares are back “because there’s a handful of people looking to go back home” but we’re far off the depth of demand that supports more Asia flying by American, according to Raja.
“LA is a really tough market for us” in Brian Znotin’s words. With all of the Asian carriers serving LA, there’s too much capacity for his airline to make money, and they need to generate yield premiums by havin “the only non-stop or the most non-stops.” So Shanghai, Beijing and Hong Kong service lost money prior to the pandemic. Hong Kong “seems to be on the decline” and this is when he noted “what are the ways we can serve Singapore, what’s our opportunity there?”
Znotins says they’re “doing very well in the short haul domestic and regional network there.” If international grows back in the future “it might mean a Singapore, it might mean South Pacific.”
American Has Been Temporarily Using Widebodies Domestically
While they’re adding widebodies and plan expansion, they haven’t been fully utilizing the planes they’ve got on international routes. They’ve temporarily found themselves flying widebodies to Havana and Las Vegas.
Some of that is using aircraft time when it would otherwise just sit on the ground, and moving around aircraft for maintenance, but it isn’t only that – Znotins explained that they hadn’t wanted to do Haneda flying yet but got slot exemptions late for this past winter so they had put 3-4 787s into that airport (to squat on slots), which they the repurposed for short haul (“You can sell some Vegas, you’re going to sell zero Rome”).
Focus On Adding Frequency, Not Destinations For Now
New international flying has been focused on adding second trips to primary European cities, rather than new markets. However they do not currently see the 33 Boeing 787s and 50 Airbus A321 XLRs they have still coming as replacing existing aircraft (e.g. using 787s to retire Boeing 777s) and so should be adding new destinations in the future – however “Boeing hasn’t been great about delivering those airplanes on time” according to Znotins.
The demand is there in philadelphia at least for non business travel. The issue is now people have started going to newark/bwi if its cheaper since American hasn’t brought back much and prices have been sky high ($450 to boston in july), or just flying frontier/spirit as the price disparity is that big.
It’s New Bern, NC, not Newburn.
PHL is so stupid expensive and with the lack of options, it’s easier for me to drive to EWR and fly from there. I live just 30 minutes from PHL and 90 min from EWR and flew from there 5 or 6x last year when traveling on my own dime. It’s that much cheaper for non-stops.
LAX is the worst. PHX is a superior hub for sure. LA is just a destination and AA would be better off leaning on OW partners to handle Asia (especially after China Southern joins). Rumor is PHX’s AC will get remodeled (starting with “high” A which is expected to triple in size) and I see additional growth just as the city grows to more western and mid-west destinations and hopefully Tokyo, now that we are becoming the tech / semi conductor center of North America.
@Les yes of course, i was typing quickly as i transcribed and failed to go back and re-read that quote, thanks for flagging
What is the stated reason for eliminating 767s? Do they use too much fuel or are too costly? Even with 2 cabins I liked them for long haul.
I had no idea CLT population is so small. It seems crazy how much they pulled away from BOS over the past 10+ years, with it being several times larger than CLT.
There was a time when AA/US had over 80% of the total passengers at PHL. That number is down to just 60%. It’s been death by a thousands cuts, ceding traffic to NK and F9. AA need to figure out their plan for the northeastern part of the US if they actually want to be competitive in the region.
@BC I’m in the same boat. Would love to fly AA international out of PHL, but their prices are a good 40-80% more than out of EWR or JFK. Hard to justify that when paying out of my own pocket.
@ SOBE ER DOC A generation ago US had about 80% of the traffic at BWI, too, but Southwest invaded and today AA has about 6-7%. A proud history of ceding market presence…
As others have said, American is seeing death by a thousand cuts at PHL. The prices are exceptionally high on American compared to NK or F9 at Philadelphia to the point where many are choosing F9 or NK instead. in addition, pricing from EWR on JetBlue, American, and United are far less expensive, often fares are almost half the price from EWR as PHL, so many from the PHL region are choosing to go to EWR. I know as an Executive Platinum, for the last 8 years. who used to primarily fly AA from PHL pre pandemic and use EWR for BA flights internationally, I am finding myself using F9 about 30% of the time and flying from EWR about 60% of the time and giving AA about 10% of my total flights from PHL.
I live about 45 minutes from PHL and 75 minutes from EWR so PHL is definitely more convenient but even factoring in slightly higher parking costs at EWR (although they are back to pre pandemic pricing while PHL parking prices have increased 50% to 75%) and are now almost in line with EWR pricing, it is still significantly less expensive to fly from EWR and I can find far more direct flights from EWR than PHL. Also, the new terminal A at Newark, where JetBlue and American fly out of as well as select AA flights is far superior to any terminal at PHL.
@Tim – I have flown out of JFK to LHR my last two trips because I can get coach fares for ~$1000 whereas they are sometimes $3k+ from PHL. And I’ve been able to upgrade using SWUs or miles. And I live ~15 minutes from PHL. I combine my trip to JFK with meeting clients in the NYC metro area.
American Airline’s view of the USA and the World .. . it’s all about Philadelphia and Charlotte rather than the wastelands of Los Angeles and New York, and let’s tap into that rich vein of Nashville-Heathrow and don’t even talk about that little burg Hong Kong and the Pearl River Delta! The sad reality is that American just can’t compete and has ceded its JFK-Europe franchise (including all the great slots it got from TWA) to Delta, is in the process of ceding JFK (and even MIA)-South America to Delta, has ceded LAX-Pacific to Delta, and is even losing share in Philadelphia!
The one thing he said which prompted sympathy is that being a Boeing customer is like running an airline with one hand tied behind your back.
This commentary attributed to AA execs is much more in line w/ what they have said before – rather than talk about flying to Singapore or Africa – which highlights why those things will probably never happen or if AA tries, they probably will not succeed.
AA failed at LAX because it tried to fly too much to China and HKG even as those markets didn’t make economic sense and AA simply chased low fare traffic while DL and UA on LAX-PVG had average fares much higher. DL is building LAX as a global gateway because it is not focused on China/HKG.
AA will simply not succeed at having a presence on the west coast to Asia other than a token Tokyo flight or two.
AA wants to believe that it can put PHL international on hold and get back to it in the future w/ the 321LRs but low cost carriers continue to take share in PHL domestic markets and make it unlikely that AA will be able to build the domestic feed necessary to make much international work.
There is no assurance that the 321 on transatlantic routes for AA or UA will work economically esp. on flights over 8 hours that require 3 pilots. The current pilot contract costs are simply too high to support 3 pilots plus all the other operating costs w/ the fares from less than 170 passengers. There are enough airlines that will fly widebodies that can undercut fares via large European hubs.
As for Charlotte, AA has tried for decades to duplicate what DL has in ATL and CLT is their best alternative after the failures of the RDU and BNA hubs. CLT is a low cost hub but it is also wholly in sufficient for the volume that AA pushes through that hub and AA’s need to use so many RJs makes the economics a lot less favorable than they would have you believe.
AA still has to deal w/ its aging inefficient fleet of 777-200ERs (same as United but w/ an even larger fleet) so it is doubtful that they will ultimately grow their international network unless they continue to sustain losses. Fuel prices will be $3 plus from now into the future. Given that even DL’s A330-300s burn tens of thousands of dollars less per flight of jet fuel and new generation aircraft like AA’s 787s and DL’s 330-900s and 350s save even more, both AA and UA will simply have to spend money on new generation widebodies at the expense of growing – or they will never generate the profits that Delta can.
AA’s international network will follow its fleet planning. Their domestic fleet is in good shape cost-wise which is why their domestic network is and will be much stronger than their international network.
AA simply does not and will not have the fleet to be a significant profitable player in the international arena outside of its core partner hubs.
The problem with AA’s international strategy from my experience as a customer is they are forcing the vast majority of their customers to double connect or do significant backtracking (i.e. DFW). Couple that with poor domestic connectivity to their key hubs. AA had the exact same issue with their TPAC network (LAX is not well connected and heck PHX even has more domestic destinations than their ex-“main” TPAC hub) and to a lesser extent their LATAM/Caribbean destinations (MIA is not well connected to many domestic markets).
United and Delta both offer vastly superior options i.e. one-stop options to many major/secondary international destinations with superior connectivity across North America (including Caribbean/Central America/Canada) to their primary hubs without over relying on their JV partners. All one has to do is look at the list of destinations on Wikipedia and compare. Heck UA at IAD has more domestic destinations with more frequencies than PHL and that is not even their #1 TATL hub then ORD which is UA’s #3 TATL hub has nearly 50% more destinations across the Atlantic than PHL.
If I have to pick one word to describe AA’s international network… Fragmented.
Gary, I like your coverage of AA in general but it is so hard to read this post with all those typos and missing words.
Just one example: They’re working to build New York JFK working with Alaska to build Seattle on the West Coast”
AA really needs to remodel T4 at LAX. The place is disgusting. It is dated, filthy, ad-hoc in every way, and sad, considering AA’s long history at LAX, with our without a big intercontinental network there. The billboards promoting a new look are up, but not very well done or indicative of how to transform the place. As to TPAC flying, AA’s problem in Asia has always been a lack of strong sales and marketing to drive POS originating from there. That, combined with today’s general situation where demand is muted to places that once were stronger, makes it illogical, and unnecessary for AA to use LAX as a springboard into China. For the same reason, it’s unlikely UA will re-start LAX-PVG and it is probable that what DL has out of LAX to Asia is also not printing money either. The future of AA long haul at LAX will be what it is now, LAX, SYD, TYO with the possible return of AKL or a seasonal CHC once more 787s are on property and the 321XLRs can free up some of those doing short missions from PHL.
AA will never do well at LAX and west coast under the current thinking that they pull out of markets that are not super profitable. Instead they just give up entire markets to competitors. No one on west coast wants to fly 3-4 hours to DFW to do the long hauls to Asia.
Golfingboy, do you mean like JFK-DFW-FRA?
Tim Dunn, regarding PHL, reports are that AA has halted construction on its Flagship Lounge. Temporary? Uncertain. But, if the halt is permanent, there’s another data point.
PHL reminds me of CVG and MEM when Delta had a stranglehold and fares were $$$$. There used to be a regular scheduled van shuttle from MEM to LIT, such was the fare difference that people would take the 2 hr ride. DL finally de-hubbed at both airports.
One interesting thing about international flights is the Web Specials awards close in (2-3 weeks prior) to departure that cannot be changed but can be cancelled and then rescheduled without penalty at least for elite flyers. I am about to fly from FAT to PHX and then LHR for 65,000 miles in lie-flat business class. Since most return flights are NOT overnight I am, and probably always will, opt for just MCE seats back from LHR. Dynamic award pricing means that when flights are relatively empty 3 weeks prior to departure (when cash fares start to increase for even somewhat empty flights), the Web Specials start to multiply.
there are not enough frequencies available for US carriers for anyone to re-start LAX-PVG and neither DL or UA is operating it.
AA returned its LAX to PVG and PEK authorities back to the DOT before covid and asked to transfer LAX-PVG to SEA but that will not happen until every US carrier that has rights to China are operating them. All 3 of the big 4 are only operating 4 flights/week from the US to China, far below what is authorized. The chances are very high that it will be years before DL and UA both regain all of their former frequencies; the Chinese government just doesn’t want that much capacity in the market any longer.
DL will be able to restart SEA-PVG in total (they are flying it 2x/week) long before AA is able to request to start it. The notion that AA will succeed at a route that DL has long operated and will restart long before AA can operate it even for the first time is more than a bit fanciful to believe.
DL is only operating LAX-HND in Asia right now and the chances are they are indeed making money. DL is expected to add LAX-ICN as soon as the Korean-Asiana merger is worked out and then it will be whatever else Delta decides to add but the A350s have the ability to fly everything in the Pacific Rim including SIN so the chances are fairly high that DL will add more Asia routes.
Interesting comments . Someone mentioned BWI earlier and that is a good example even without considering US Air legacy hub .
For years AA had service from BWI to both JFK and PHL . JFK was usually an appx 1pm ERJ 145 from BWI and occasionally a second ERJ a little bit earlier . PHL usually had a departure in the morning and one in the evening which connected to the European bank . The PHL flights vacillated between mainline and regional .
Both BWI-PHL and BWI-JFK were cut sometime around the pandemic. BWI-JFK actually came back as AA increased its flying . BWI-JFK actually got up to appx 5 ERJ 170/5 departures a day (slot squatting) then reduced to one a day last summer . Now JFK is gone .
So if you want to use AA for BWI-Europe , the only real choice is to go south to CLT . ORD has been cut to 2 flights – the latest arrives ORD at 12:45 p.m. I don’t go south or west to head east so I go with the competition. DL has 3 CR9 per day on BWI-JFK and has added 3 E75 per day to BOS. Clearly DL sees some network benefit. It’s not always about O&D on such segments .
In the old BWI-JFK days for AA , the plane actually routed – ORD-BWI-JFK -BWI-ORD and connected perfectly both ways at JFK to the Europe schedule .
It’s sad to have such paltry options at BWI . It looks like AA is simply relying on the JV BA flight from BWI-LHR to get folks to Europe .Maybe I am just getting old and cranky 🙂
Charlotte metro area is 2.6M and San Antonio is 2.4M. I know math is hard at AA though.
Maxie, if a person is in Finland, one will fly west and south to get to London. But, the rest of us are with you. Ha.
Not having Sao Paulo at LAX is a nightmare….. we leaving AA to Delta service with Latam
@Nun – Charlotte is the 15th largest city in the US and much larger than Boston.
I think they are pulling the 767 out of the desert along with the super 80! bringin back the classics! thats thinkin big!
@AC – Charlotte is the 22nd largest metro area in the U.S. Boston is the 10th.
OCTinPHL – I understand difference in metro area but in ranking of US Cities Charlotte is 15th.
BTW size isn’t an issue. CLT was hub for Piedmont, US Air and now American with lowest overall cost of any large airport so it isn’t going anywhere.
Boston may be larger metro but not geographically suited to be a hub (even thought Jet Blue is trying). Understand flights to Ireland and the UK since best positioned for that but too difficult to reach to be major connecting hub for international traffic. PHL, CLT and MIA are much better positioned for that.
Delta is handedly carrying far more international traffic from BOS – both locally and on a connecting basis – than JetBlue.
Since Delta uses widebodies and serves a whole lot more of the world from Boston – as far as Tel Aviv and as “near” as Dublin, they can and will outmatch whatever B6 tries to do internationally.
BOS can work as a hub in addition to being a much larger local market. The same principle applies to AA in NYC. CLT is about tons of connections and a small local market. NYC is the opposite.
btw, many DFW longhaul flights have fairly low percentages of local traffic as well. Like CLT, DFW is a cost-effective very large hub but doesn’t necessarily have anywhere near as large of a local market as AA’s JFK and MIA hubs.
AC, Nun’s comment was not about BOS being a hub; rather about AA pulling back there. Other airlines seem to make BOS work and not as a “hub” but as a “focus” city.
American either. Needs to have Crandall come back or get a Crandall clone. That’s the only way this airline’s going to survive.
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” ― Theodore Roosevelt
@Tom I remember those days. The glory days when US was a decent airline and they had great hubs like PIT and BWI. A time when AA was a very good airline offering great service.
Not enough money to get me to ever step foot in Charlotte Airport again.
I pay more to never land in it again.
I have avoided CLT for years due to overcrowded terminal and horrid Admirals Clubs. CLT has no other OneWorld lounges for international passengers with status or seated in J or PE cabins so many or maybe most will choose to route through JFK, MIA, DFW, etc, unless they happen to live in Rock Hill or Gastonia so can relax and dine at home before headed to CLT to catch their flight.
I have had my AA CHS-PHL leg of my trip back to Bangkok with Qatar codeshare cancelled multiple times since booking and end up trying to fix broken connections for hours on end. Just yesterday they changed the flight time by 6 minutes and despite arriving earlier by 2 minutes, they bumped me to a flight that was 8 hours earlier. Senseless. Customer service response has been horrible. Will avoid AA in future.
Charlotte is not only the 15th largest city, it is projected to move up to 10 in the next 5 years due to a lot of growth. Charlotte is the largest banking hub outside of NY.
The real problem with AA is that the place is run by absolutely morons!! This company has more managers sitting around just collecting a check than any other airline! PATHETIC!
@MrNonRever I think we pray the same prayer at night. Bob Crandall might have not cared for flight attendants as a whole, but he loved the airline. I love what I do, and still enjoy providing a great service. But even I am not Houdini, and no matter how matter how much you apologize for an inconvenience, when you consider what people have paid for an experience and you fall short…it still sucks. Because I actually still care.
Panic-retiring the A330 fleet, even though it was small and aging, was a STUPID idea. Those would easily handle most TATL work and free up the 777/8s for TPAC/long-haul. The last one I was on had a gorgeous new J cabin ca. 2015 or so.
AA is the only major airline in U.S. that got rid of 767/757s. DUH! Relying on Boeing for production line promises [787????[ is always a bad idea!