The United States is one of the largest airline markets in the world. The four largest airlines by mainline fleet in the world are based in the United States. The Bureau of Transportation Statistics reported that U.S. airlines served a total of over 888 million passengers in 2018. That number is only expected to grow in 2019. With strong passenger demand, what will American aviation look like in the future?
Four of the largest airlines in the world by mainline fleet size are based in the United States. These four are American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines. The statistics for American, Delta, and United do not include their regional carriers. These regional carriers rival the fleet size of many international airlines and serve both high-demand and low-demand cities.
Let’s take a look at the growth possibilities for each airline.
American Airlines has over 950 aircraft ranging from Airbus A320 family aircraft, Boeing 737NG and 737 MAX aircraft, and widebody A330s, 767s, 777s, and 787s. In addition, American Airlines still has a few MD-80s kicking around.
American Airlines is refreshing their fleet. E190s, MD-80s, 757s, 767s, and older 777s, will be phased out in favor of new, fuel-efficient A321neos, 737 MAX, and 787s. Just last year, American Airlines announced an order for an additional 47 787 aircraft. This widebody expansion is a large order and represents a partial fleet simplification as A330s and 767s will be replaced with 787s.
Undoubtedly, some of the large numbers of aircraft American Airlines has on order will be used for expansion. American Airlines has hubs in Charlotte, Chicago, Dallas, Los Angeles, Miami, New York, Philadelphia, Phoenix, and Washington D.C.’s smaller Reagan National. In recent years, American has grown out of Miami, Philadelphia, Phoenix, Charlotte, and Chicago.
At the same time, American has cut back in New York and Chicago. Most notably, American ended service to Orlando from New York and reducing frequencies to major destinations in East Asia from Chicago. With this strategy, American Airlines is cementing their hubs while maintaining growth in proven markets.
Looking ahead, American Airlines will have to focus on a few different factors in order to maintain their status as the largest airline in the United States. First, American Airlines will have to continue winning over passengers. American has focused on removing IFE screens from aircraft, shrinking legroom, and refitting their aircraft with slimmer seats.
In addition, American will have to focus on improving their operational reliability. The carrier already lags compared to United and Delta when it comes to operational reliability. Reportedly, American Airlines sacrificed short-haul flight cleaning to reduce ground time and get planes in the air more quickly. With new maintenance contract issues, however, American’s intent to improve operational reliability may be at stake.
When it comes to expansion, American Airlines has a few options. The carrier has shown a knack for growth on short and medium-haul routes. When it comes to long-haul routes, American has preferred hubs for preferred routes. However, with more passengers seeking more connections, it is likely American will return and start growing from hubs like Los Angeles, Chicago, and New York. But, in all three cities, American will face intense competition.
Delta Air Lines
Delta Air Lines operates around 900 aircraft. Previously an all-Boeing airline, Delta has found a recent appreciation for Airbus. Delta flies A220 aircraft, A320 aircraft, A330 aircraft, A350 aircraft, 717s, 737s, 757s, 767s, 777s, and an impressive number of MD-80s and MD-90s. Moving forward, Delta will be streamlining some of the fleet with a focus on Airbus aircraft. MD-80s, MD-90s, and likely some older 757s, will be replaced with A321s and 737-900s.
For a large airline, Delta does a few things remarkably well. First, Delta is known for running an excellent operation. They were awarded the most on-time airline by FlightGlobal and routinely boast their large number of cancellation-free days. In addition, Delta has a knack for technology in the cabin. They have maintained seatback screens on aircraft while also offering free in-flight messaging and, soon, free inflight wifi.
Where Delta needs to improve is their long-haul route network. Delta’s long-haul network is a bit dismal and they have instead preferred to open additional long-haul routes to hubs in places like Amsterdam, Paris, and Seoul. Looking ahead, Delta has announced a new route from New York to Mumbai and London-Gatwick. However, service to East Asia and Oceania remains a little slim.
While Delta is smart in offering more connections with its partners, many travelers may prefer nonstops instead of connections. For example, Delta Air Lines no longer flies to Hong Kong and axed the route in favor of offering passengers connections on Korean Air to Hong Kong.
Delta, however, does have room to grow. Only a few years ago, Delta announced a new hub in Seattle. Seattle is home to Alaska Airlines, however, Alaska Airlines itself does not offer many international or any long-haul flights from Seattle. Delta sees an opening here and definitely can continue to expand from Seattle. In addition, Delta has invested heavily in passenger experience and is renovating in anticipation of growing passenger numbers at Minneapolis, Salt Lake City, New York, and Los Angeles.
In addition, you can expect increased consistency in the future with onboard Delta One products. Right now, the mix of reverse herringbone, herringbone, front-facing, and Delta One Suites can be confusing. However, Delta is in the process of retrofitting widebody aircraft. More aircraft will be outfitted with Delta One suites as Delta retrofits 777s and takes delivery of A330neos and A350s.
United flies just shy of 800 aircraft consisting of A320s, 737s, 757s, 767s, 777s, and all three variants of the 787. These aircraft are relatively new and comparatively fewer will be phased out in favor of A350s and new 787s.
United has a knack for premium passengers. They consistently offer large business class cabins, although they need (and are) working on a more consistent business class product. Thanks to the relatively large number of Polaris seats on their planes, United offers elites better chances at an upgrade. Furthermore, on the ground, United has one of the best lounge offerings for international premium passengers.
Another thing United does extremely well is offer a truly global route network. United flies some ultra long-haul routes such as from Houston to Sydney and San Francisco to Singapore. In addition, United, until December, is the sole American carrier offering service to India, and even that they will expand!
United does, however, have a few things to work on. Until the retrofits are completed, United has a fair number of old aircraft flying outdated products. Given the large number of widebody aircraft United flies, it could be a while before the product is standardized across the fleet.
On the other hand, United Airlines doesn’t have the best publicity. From some of the most restrictive basic economy standards to issues with customer service, United needs to improve their public image. In addition, while United offers a pretty solid experience in Polaris, they lack a vision when it comes to improving the experience at the back of the plane.
Southwest Airlines carries the most domestic passengers of any airline in the United States. With lower costs, a generous bag allowance, and a solid domestic and short-haul international route network, it is no secret why Southwest is loved by many passengers. With their fleet of 737s, Southwest achieves an enviable amount of time for an aircraft to be in the air.
However, if you’re looking for long-haul, low-cost travel, Southwest isn’t your carrier. You’ll have to look at airlines like LEVEL and Norwegian for that experience. But in future this could be an area where Southwest can expand.
With new aircraft technology, narrowbody planes are flying farther than before. Once the 737 MAX is back in service, Southwest could sense an opportunity to fly them across the pond. Or, should Southwest become disenchanted with the MAX, the A220 could fly some transatlantic routes also.
Looking forward, Southwest Airlines has a healthy reputation that will keep passengers flying with them. Should they offer long-haul, low-cost flying, chances are they could shake up the market as they’ve done in Hawaii. Who knows, maybe Southwest could order widebody aircraft one day? Although it seems highly unlikely.
The United States is awaiting a low-cost carrier boom. Spirit and Frontier, two established players in the ultra-low-cost market, see incredible opportunity that enables them to keep flying.
Spirit Airlines sees more passengers per year than Frontier. However, both play to similar markets. Frontier and Spirit focus on ultra-low-cost leisure markets. In terms of competition, Frontier and Spirit only compete with full-service carriers in terms of offering low fares.
In addition to the aforementioned carriers, it is likely that the United States will see growth from new entrants like “Moxy Airways” and a new Ryanair-like startup. These new entrants will target markets that are underserved by current players. Furthermore, there are plenty of markets where new competition will benefit consumers with lower prices and additional capacity.
“Moxy Airways” will take a new approach by offering point-to-point flights in medium-markets that are underserved by current full-service carriers. Utilizing A220 aircraft, Moxy will provide short-, medium-, and long-haul flights to destinations across the Atlantic and in South America. Moxy expects the A220 to offer a high-quality experience in the cabin while also offering low operating costs. Thus, Moxy hopes to offer reduced fares compared to full-service carriers while still maintaining an enjoyable flying experience.
A new Ryanair-like carrier may also enter the market. Currently, known as XTRA Airways, this charter airline could become a new low-cost carrier in the United States. With backing from experienced airline executive, Andrew Levy, this airline will need to grow wisely in order to survive against the likes of Allegiant, Spirit, and Frontier.
Will there be more consolidation?
Among full-service carriers, it is incredibly unlikely that any of them will merge. The logistics of coordinating a merger with two 700+ aircraft airlines and their massive operations would be a challenge the industry has never seen before. In addition, the costs of a merger would spook many shareholders.
If there were to be a merger, it is likely that it would be between smaller players in the market. A merger between ultra-low-cost carriers could be beneficial if the market becomes too crowded for airlines to turn a profit.
On the other hand, the likes of Alaska Airlines, JetBlue, and Hawaiian could see a merger. Hawaiian will see increased pressure now that Southwest has entered their market. Such a merger would almost certainly give these airlines access to additional coastal presence – one of the most important domestic markets in the United States. However, each airline has their own niche and integrating across niches could prove to be disappointing for loyal passengers.
In addition, a new regional jet could take to the skies over the United States soon. The MRJ90 is an under-development aircraft, with deliveries coming in 2020.
Regional carriers have ordered Mitsubishi Aircraft Corporation’s new regional jet. Regional carriers fly smaller aircraft on behalf of full-service carriers like Delta and American. The number of routes, planes, and kinds of planes are dictated as part of contracts airlines have with mainline pilots. Mainline pilots don’t want to see their jobs replaced by lower-paid regional pilots, so they instituted these scope clauses.
Currently, it seems that the MRJ90 can seat up to 80-90 passengers, which wouldn’t be allowed to operate under regional carriers. This could set up a debate as to the future of regional carriers and negotiations of scope clauses. Perhaps, we could see larger regional jets as airports and flight paths get more crowded.
In addition, as CRJs age, there could be a new CRJ to compete against the MRJ line and Embraer E-2 jet line. Regional jets undergo plenty of wear and tear on short-haul routes. As a result, they’ll need to be replaced relatively quickly compared to widebodies. Airlines will definitely appreciate a regional jet that improves fuel efficiency and, perhaps, could also offer an extended range that allows airlines to open thinner and longer routes.
United Express, United Airline’s regional arm, will soon see 50-seat aircraft operating with a premium-heavy cabin when the CRJ550 debuts. Time will tell if other regional carriers will take delivery of CRJ550s to operate on behalf of the likes of Delta or American.
In addition, the heavily awaited 797 could be the perfect replacement for aging 757 aircraft. Once it enters service, the 797 could open up new options for airlines to add additional routes and frequencies. Secondary cities in Europe and South America could see service from full-service carriers on 797 aircraft.
In 2050, the United States will still be one of the most important aviation markets in the world. With plenty of market demand, full-service carriers have their work cut out for them. On the other end, low-cost carriers are still growing and by 2050, the United States could have a market similar to the European Union. That is, profitable low-cost and full-service carriers existing side-by-side. Each would cater to their own niche of passengers while remaining true to their brand identity.
But, markets change and situations arise. 9/11 impacted American aviation unlike any other event in aviation history. Since we can’t predict the future, we can only look at trajectories and examine trends in the industry.
We hope that the American aviation market remains robust for many years to come!
What do you think the future of American aviation looks like? Let us know in the comments.