American Airlines announced this past week that they are dropping the ‘Northeast Shuttle’ branding that has a 60 year history. American Airlines is not going to be flying New York LaGuardia – Boston anymore, with those flights instead flown by Northeast Alliance partner JetBlue, and they’ll no longer have a separate brand for their New York – DC – Boston triangle.
The American Airlines Shuttle was the descendent of the Eastern Shuttle, which was sold to Donald Trump in 1989 (“Trump Shuttle”). The product was often known for hourly flights with flexible ticketing policies and open seating – and at one point a guarantee of transportation where Eastern would even bring out a new aircraft to accommodate overflow passengers. The Trump Shuttle failed and banks sold it to US Airways, and it became part of American Airlines when those two carriers merged.
At an employee town hall event at New York LaGuardia on Tuesday, held as this change was being announced, Chief Revenue Officer Vasu Raja explained the decision. He offered that the things that made the Shuttle different were outdated, like newspapers (Covid and the internet), free drinks (changing norms), and rear-door deplaning (changes to airports).
When the shuttle was created, there were a few things we would differentiate. Rear door deplaning, free alcohol on board, newspapers at the gate. Many of those things don’t simply apply anymore.
The reality is business customers stopped day drinking about 25 or 30 years ago. People don’t really take newspapers anymore. And in the pandemic we’ve more or less gotten away from it because most people get that on their phone.
…[New fare type] Main Cabin Select is a lot less about how we go and differentiate the airport, or figure out how we rear door deplane in markets like Boston or LaGuardia, where in the new construction idea we won’t be able to do that in the same way. As our customers evolve we’ve got to evolve too.
I think that Raja misrepresents the core elements of the Shuttle, perhaps because those are mostly long gone – hourly schedules ‘show up and go’ with shorter check-in times and guaranteed availability.
One remnant American had retained was closer-in bag check-in cutoffs for shuttle flights. And free alcohol? Still a nice perk on 5 p.m. – 7 p.m. flights, but a pale reflection of what New York Air brought to the market 40 years ago (‘nosh bags’) with bagels in the morning and sandwiches in the afternoon.
Shuttle flights were no longer really separate from the rest of the operation. They no longer had dedicated fleets. When US Airways added first class to shuttle flights, rather than all coach and open seating, it was about using the same narrowbody aircraft for shuttle as for the rest of their network. Shuttle was already mostly gone, now they’re just making it official.
“Show up and go” was important — really it was “unlimited” seat inventory (with extra sections) in a productive environment — particularly around the holidays. These days the product would be a subfleet with extra seat pitch and gate-to-gate wifi to maintain productivity. Honestly, JetBlue is likely in a better position to offer that as its core product comes very close, including the ability to follow the news and markets on DirectTV.
This seems to be a classic AA thinking. They rightfully point out that free drinks may not be attracting the same crowd as decades prior so instead of thinking what could attract that crowd they just throw in the towel.
Perhaps they could have promised free gate-to-gate wifi, dedicated short TSA lines, gates not miles from the curb, you name it. There is still plenty out there that could have differentiated a product that would command a premium price point.
When I worked for Delta in the late 90’s, DL Shuttle yield was something crazy like 50 cents per mile compared to a system average of 12 cents. My memory on the exact numbers is fuzzy, but the magnitude of the differential is directionally accurate.
You’re right they missed the key differentiator – rigid frequent schedule with no / little uncertainty you won’t be able to make a time if you decide to change plans during your day, and shorter checkin cutoff
TIME is the product
The latest example of Vasu Raja’s short-sighted and misguided thinking. If he thinks “business customers stopped day drinking,” he’s never been on an LGA-DFW weekday afternoon flight.
As a resident of BOS who frequently travels to both New York and DC, there is only so many “free drinks” you can consume on these up-and-down flights. Removing time allocated for the climb out and arrival prep, you have like 30 minutes in the air to DC and barely 45-50 to DC.
I think Joe Branatelli’s piece at JoeSentMe.com this week nailed what made the Eastern Shuttle special: ease of use and ubiquity. I used it whenever I felt flush and could fly home to New York from school from Boston. Then it was a regular part of my life living in Washington and jumping back to New York to care for parent, dates whatever.
Note to Vasu Raja: 25-30 years ago, AA was a world class airline. The current AA Boardroom has pillaged that once-proud airline to the point that there are few reasons that anyone would choose AA flights over any of it’s competitors.
I flew the Delta shuttle for years. The best thing about it was unlimited availability. Walk up to a kiosk in the airport, purchase a ticket on the spot and head to the plane. There was never a need to make a reservation or worry about traffic jams causing a missed flight.
Nothing here about the glory days of the Pan Am shuttle? Remember the Pan Am heli from Manhattan?
AA management once again shows they have zero leadership when it comes to creating and evolving a product over time.
I’m sure delta executives are giggling again over this decision. This will only cause AA to further crater in the NY market.
When the shuttle ran with essentially open seating and you walked up to any flight and could go there was value and predecessor companies charged for it. I often paid $500-700 for flight and the extra time saved made it worth it. I am hard pressed to pay $150 these days. I think Gary is wrong on nearly everything. But his point on AA not understanding how to deliver a product that can deliver a revenue premium was never more clear than failure of the shuttle model. How do you screw up a model where customers will happily pay $500 for a 35 minute flight?
@miami – I pointed out these shortcomings above as well, but will say the Acela and post 9/11 security made a big dent in changing habits in the LGA-DCA market – more reliable, frequent, and faster than the old Metroliner. Also no need to go ‘offline’ for any meaningful length of time.
The time and productivity advantage got eroded so even with replicating the frequency./ capacity they wouldn’t command the same yield
But Vasu glooses over all those time saving rationales and loses credibility
Vasu Raja should be deported.
should just rename this blog “hate on AA” because thats all you do.
Seems like another excuse to use the Jetblue partnership to coordinate schedules / pull back service out of NYC.
The various shuttles have all lost a bit of impact as they became less differentiated (the loss of Marine Air Terminal for Delta was a big one). However LGA to DCA/BOS can also be useful for leisure trips too. AA not offering service to a major city (BOS) from NY shows how weak it sees itself in the NY market
@Greg nailed it. The biggest threat to the “shuttle” operation was non-airline related:
Early 2000s:
– New Competition: Introduction of Acela
– Friction: Post 9/11 security
Mid 2010:
– Acela Wifi
– Continuous Acela Wifi improvements
– Continuous cell phone coverage improvements
– Delays resulting from rising airport congestion — especially in the evening.
All of a sudden, Acela has become a far more viable way to travel.
AA could address this by working with airports on a next-gen experience that could command the premium pricing:
– Airport: Streamlined security for shuttle, gates near security, WeWork like booths with doors, desk, wifi, power (maybe co-branded)
– In the air: free wifi – maybe single wifi from airport to plane “AAShuttleWifi”
Of course, it could all be a flop. But, that requires vision, and taking a risk to command a premium. AA doesn’t seem to be willing to take risks for premium passengers anymore.
JetBlue is better positioned to serve the market with their Airbus A220 planes anyways.
@Lee mulcahy – the Pan Am helicopter incident was a different company entirely, and the Pan Am Shuttle was a takeover of the gates/slots of New York Air to appease government anti-trust concerns when Frank Lorenzo acquired Eastern.
Have used shuttle service from BOS to LGA with varying success in the last 10 years; even Delta’s and JetBlue’s products have suffered. Acela isn’t perfect either. Flew JetBlue last night and the “nice” part was flying out of the small La Guardia Marine Terminal (A) that is only used by JetBlue for Boston service and Spirit for Ft. Lauderdale. Unfortunately with weather delays and lack of functional WiFi the end door-to-door time from our friends’ place in Queens (15 minutes from La Guardia) was 4h15m which is roughly the same as Acela, although I’ve been on Acela that had delays and arrived AFTER the cheaper Northeast Regional train, and the last time we were on Amtrak last week the Wifi speeds were roughly 2-3Mbps so in my mind neither option is great. The Delta shuttle used to be better with streamlined boarding (you could show up around 20 minutes before departure similar to the train) and giving you a bag with a water bottle and newspaper but yes that seems outdated these days. What would be great is if ANY airline trying to operate a shuttle service would understand that CONSISTENCY is what is needed, e.g. with on the hour service and set pricing, e.g. fares of $39-49 one way if booked 14 days in advance, $59-69 if booked 7 days in advance, and $79-89 one way if booked even up to minutes beforehand. THAT would be an actual shuttle service. Not going to feel badly for AA though, because they have turned themselves into the worst domestic airline by far and unless there were NO other option I have gone out of my way to NOT fly them for at least the last 2 years.
@Bob – “AA could address this by working with airports on a next-gen experience that could command the premium pricing:”
I don’t think AA could address this at all at certain places. LGA isn’t transit-connected, while the Acela is. Being connected to Penn Station gets you everywhere you want to be in NYC. It’s as simple as that. No one wants to deal with NYC traffic and eternal road construction.
@ChrisCan. Really? You racist twat.