United is expanding at Chicago O’Hare and increasingly American is the number two carrier there. Years ago the city had a sprawling international route network, selling flights to Moscow and Delhi. Now American’s flying from Chicago is mostly domestic.
At an internal meeting earlier in the month led by Chief Commercial Officer Vasu Raja, an employee asked about the draw down in Chicago flying and in particular why American isn’t flying from Chicago to Hawaii. View From The Wing reviewed a recording of this conversation. The gist of the explanation,
- American has “scaled back Europe to just [London] Heathrow in Winter, even more so than usual because of resource constraints” like not enough pilots, and higher value opportunities such as flying to Cancun.
- Chicago – Hawaii flying requires a widebody aircraft and while customers “love flat bed seats” the airline needs “business or high end leisure travelers paying a premium” to make that work. There’s “lots of premium redemption up front.” Chicago – Hawaii didn’t make money for American when they tried it. In the future “if fares creep up” it’s something they’d look at again.
A business seat takes four seats of space, so unless they’re paying four times the coach fare they’re not making money.
American’s Vice President for Network and Schedule Planning Brian Znotins explained American’s “very conservative” approach to long haul flying for the winter, but getting more aggressive for summer 2023 and perhaps even a year from now as well.
This winter we’re taking a very conservative view of where people are traveling. Many travelers held their European and Asian vacations this summer because of the U.S. requirements to get tested to come home.. those restrictions were lifted very late in the game… for next summer we’re very optimistic now that those restrictions are gone, they’re probably not coming back again.
We’ll see all these flights surge back and then the following winter we should be able to [unintelligible]. Also we’ll have more 787s because Boeing is actually delivering them now. We have a handful right now but we should have the full cadre come next winter. We’ll just have more resources to be able to fly more of the winter-type things like Paris – I’m not guaranteeing Paris – but like Paris that we’ll be able to fly across our network in the following winter.
Chicago O’Hare remains one of my favorite American Airlines hubs because the terminal has a Tortas Frontera and a Flagship lounge. I’ll choose to connect there over Philadelphia or Charlotte when possible.
With AA dropping first class, I’m surprised they don’t reconfigure with more premium economy. Folks would pay for that, especially if it included benefits over regular economy beyond just a larger seat.
Elites could get MCE at booking and waitlist for space-available status-only upgrades to PE, or traditional business class upgrades via all methods.
PE would be much easier to monetize/upsell, perhaps with it being MCE (with alcohol and snacks) + the J meal, earlier boarding group, etc. Maybe even include lounge access in the fare.
I was excited when AA announced Dreamliner ORD > KRK flights to start in 2020. Unfortunately the pandemic scuttled those plans. Hopefully they’re considered again.
I’ve had to switch to United & Delta as they don’t fly LAX to San Diego anymore sadly either 🙁
Among other cut backs
This seems like revisionist history to me.
Do they think they’ll retain premium customers as they slowly erode their operations there?
. Sure what they say is probably true but they don’t mention they basically quit and now that they’ve pulled back so many destinations they’re lost their customer base.
Regarding Chicago as a whole, it would seem that it is going the way of the NY market.
Part two is consistent with comments suggesting that AA wants to 1) focus on its domestic network and 2) offload international to its partners. Essentially, get passengers to LHR and hand them off to BA for transport within Europe.
Absolutely nothing new here, at all. AA hasn’t had much of a year-round TATL network out of ORD except for LHR (and CDG, though not entirely year round) for years. AA adds FCO, ATH, BCN, VCE in summer, because those routes make money in summer. They don’t work in Winter. Hawaii, is, exactly as Vasu Raja said, popular, but doesn’t command a premium in the front cabin. It’s a leisure market and a redemption one.
AA’s service to DEL and DME operated in the mid-2000s, on 77Es with First Class cabins, and the routes didn’t work well. A 777 to DME was too much plane for the route but there was some issue with the 767s instruments making DME inoperable for that plane.
It’s becoming obvious that even with a huge base of frequent flyers in the Chicago-land area, two big network carriers with overlapping routes really does not make sense and one will work better than the other. That carrier is UA and with the recent seasonal additions (MXP this year, BCN next year), it would not surprise if AA exits those markets at some point and cedes them to BA/IB.
It’s been years since ORD was a major TATL gateway for AA. Back in the 1990s, AA flew LHR, BHX, MAN, CDG, BRU, ARN, ZRH, MXP, TXL (very briefly), FRA, and MUC. Later, in the 2000s, there was PVG, PEK, NRT, + DEL and Moscow, with at that point, a lot of the TATL stuff drawn down.
Maybe the new operating agreement with Air Wisconsin has something to do with this grand plan.
Flew ORD-FRA in Dec 2008 on AA.
I remember taking them into STN at one point. Was a long time ago, I don’t remember the year.
ORD used to have a good mix of AA international long-haul destinations. But this game the US3 has going on is basically about trading off among the 3 who will be the undisputed king at each of the major “ hubs that used to be “competitive” between at least two of the legacy majors.
AA wants to push more or the traffic via LHR, but LHR has long been an airport that is a pretty poor transit experience.
The comment about Hawaii being a place people want to redeem miles and therefor justification for cutting a route is an informative comment to read.
Airline executives apparently see members redeeming and enjoying their points as something to avoid. That’s shortsighted in my opinion.
Maybe another reason to go for a cash back credit card instead of miles.
First AA’s excuse was they didn’t have the metal. now, they have the metal and it’s not attractive enough.
AA needs to find a pathetic excuse and stick with it. Or, better yet, FIND A SOLUTION and STICK WITH IT. Not promote another clueless manager.
AA loses loyal premium flyers in a long haul markets because they enter and exit the market so quickly and frequently. AA operates routes so sporadically that they don’t have the time or consistency to build a loyal following.
I’m surprised nobody is asking how UAL makes 4 widebody routes ORD-Hawaii work everyday. Flying a 787-10 daily to Kona, a secondary Hawaii destination at that, is because they operate their routes consistently enough that people know they can rely on that service, and therefore they book them over AA.
I’m so sick of the AA route map looking and feeling like a dart board, completely random and completely reset every season.
One additional reason AA flies to Hawaii is that those flights count as international flights in the pilots contract.
Good thing there’s a sweet lounge and an awesome restaurant in ORD because when you spend 12 hours at the airport getting stranded, there’s only so much CNN Airport you can watch…
Me, I’ll take spending as little time as possible in a connction airport because money is time & can think of FAR better restaurants / lounges OUTSIDE the airport at my final destination.
American Airlines is on the skids… They did this completely to themselves. Mismanagement of a large Corporation, nasty flight attendants who pride themselves on being called “Sky Nazis”, a culture of prevaricating about their their daily Operations, and filthy aircraft-all contribute to this problem. As they say down in Texas “It ain’t all that and a bag of chips.”
Steve