American Airlines has had to pivot its network planning massively, with limited historical data to help guide those changes. With most long-haul international markets closed, American’s team has spent the last year refocusing and refining its plans. This summer, only 3% of the airline’s system seat capacity will be deployed in the transatlantic and transpacific network, according to the airline’s executives.
Low long-haul international capacity
Speaking on American’s first-quarter earnings call, Robert Isom, President of American, stated the following:
“Our operation has been much more challenged in the Atlantic and Pacific as those markets have yet to fully reopen. And, as a result, in our peak schedule, seat capacity in those parts of our network will only be 40% of what it was during the same period in 2019. Our Atlantic and Pacific networks will constitute just 3% of our system seat capacity in the summer peak. We expect to bring these markets back slowly and only when demand conditions warrant.”
This is an astonishing display of how impaired capacity is. Traditionally, American flew heavy schedules to London-Heathrow, where its partner British Airways has a massive hub, including multiple daily flights from hubs like Dallas and New York. To the Pacific, American has flown to Tokyo and Hong Kong with multiple daily flights. This summer, Hong Kong will not see any service from American Airlines, and cities like London will see far reduced service.
Redeploying capacity in other markets
Mr. Isom stated the following on its international plans:
“We expect to operate 80% of our international seat capacity compared to 2019 in our peak. Our organic network in the Americas creates more unique choices for customers and more profitability for the airline. As such, in our summer peak, our Latin American network is expected to be the same size as it was in 2019. Our short long-haul Latin America network will constitute approximately 12% of our system seat capacity in the summer peak.”
Vasu Raja, Chief Revenue Officer, added the following:
“Of note, the way we get to 80% is that we are envisioning a long-haul business which will be, come our peak summer schedule in July, 40% of its 2019 size. But a short-haul international business, which will be north of that, something like 20% larger than what it was in 2019”
Near-field flights to cities in Mexico, Central America, the Caribbean, and northern South America have done very well for American. The carrier is adding new flights and capacity in markets like Colombia. It continues to plan for widebody short-haul flying from its hub in Miami to cater to higher demand in those markets. Many of these countries were also some of the first to open up for American tourists. With much of Europe and long-haul South America closed for leisure travel, customers are willing to fly a little closer to home.
Domestic is getting a boost
Roughly 85% of American’s summer network will be deployed on domestic routes. This is a significant amount of capacity and a large part of its pointing widebody aircraft that are now free on domestic routes. Miami is getting a significant amount of widebody love this summer, with all flights to Los Angeles and New York, among others, operating entirely on Boeing 777s.
During its peak, American expects to fly robust domestic networks, as Mr. Isom stated:
“When compared to 2019, we expect to find 90% of our domestic seat capacity during the summer peak and 100% in DFW and Charlotte.”
Dallas and Charlotte have received new domestic widebody routes, such as a new Charlotte to Honolulu link. In contrast, Dallas has seen increased widebody service to hubs like Los Angeles and Miami.
Long-haul international capacity will come back. American plans to bring it back slowly and, until it comes back, operating as much domestically and on short-haul international capacity as it can to make up for that loss in revenue. Higher margins and greater opportunities to hit profitability will come when American can bring back more of its long-haul flying back. Contingent on border reopenings, American is looking forward to the day when it can turn again toward more long-haul international peak summertime flying.
Are you surprised to see how much American has cut its international long-haul flying? Let us know in the comments!