This morning Edward Russell noted at the Points Guy that Delta earned more revenue than American in the last quarter, and United has more seat capacity than both. The title of his post, “American Airlines Loses World’s Largest Airline Title to Delta and United.”
Lucky at One Mile at a Time picks this up, while noting American has a larger fleet and more employees. He suggests American’s personnel count “is just to say that they aren’t very efficient.”
I’d point out that there’s really nothing new revealed by this past quarter’s earnings. I pointed out when Delta exceeded American’s revenue in the third quarter of 2017 and also second quarter of 2016. The mantle of largest airline by revenue has passed back and forth.
The majority of the revenue gap last quarter between American and Delta is explainable by:
- Fewer flights operated due to the grounding of the Boeing 737 MAX (a plane Delta does not operate)
- Abnormally high level of flight cancellations (eg 4% of mainline flight cancels in June) in part due to a work action by the airline’s mechanics.
United (in recent times under Scott Kirby) and Delta have expanded more aggressively than American, but the takeaway here is that we have three very large airlines in Delta, American, and United as a result of mergers and protection from competition at major airports.
Meanwhile I’d caution that American’s high headcount doesn’t mean ‘it takes more people to operate American’s planes’ it means that American doesn’t outsource work as much as Delta or United. Lucky is likely correct that American is less efficient precisely for this reason (cumbersome work rules, for instance, make the airlines mechanics highly inefficient), which seems different than the reason one might naturally assume.
So are you saying gross revenue shouldn’t determine largest airline? Or just that this has happened before and isn’t a big deal? If not, what metric(s) do you think should be looked at to consider who is “largest”?
Same question as Steve S: How is American still the world’s largest airline? MAX and weather may have been out of their control, but many things impacting an airline’s size are; you can’t easily control for everything.
@Steve S – saying there’s nothing new about a quarter with Delta generating more revenue than American, nothing ‘just’ happened as everyone seems to be saying (just saw it now in the dallas morning news too https://www.dallasnews.com/business/airlines/2019/07/25/american-airlines-title-theworlds-largest-airline-slipping)
A few years back, there was quite a dust-up about the phrase “alternative facts”.
“No, there is only one set of facts. Everything else is made up”.
I always thought the premise is correct. This is a perfect example. The biggest airline?
Fleet size? Passenger count? Revenue? Number of flights? No right or wrong, as any can be correct. Alternative facts.
It’s not just that AA is no longer largest by revenue, but also by available seat miles. That’s the big takeaway.
Sheesh, why is this all about being ‘right’? The data is subjective and, while AA has had problems lately with mechanics and the MAX outage, it can be interpreted a million different ways. No one is wrong in any of this, but in the end who really cares which airline is the largest? I’ll pick based on which one I prefer to fly, and that has NOTHING to do with size. I’ll steer clear of AA completely. I’ll use UA for Chase point transfers for awards. And I’ll pick from DL, WN, and B6 for the majority of my flights, based on the best price and schedule.
Most travelers will pick similarly, with price being the #1. People just don’t care about size.