American Airlines Los Angeles Atlanta Service… Why in the World Would They Do That?

American starts Los Angeles – Atlanta service March 5 (it becomes bookable this Sunday).

They’ll offer three flights daily —

  • Los Angeles Departures at 12:15am, 10:30am, and 3:20pm
  • Atlanta departures at 7am, 12:50pm, and 6:55pm

But.. why?

This could help feed American’s Tokyo and Shanghai flights, and oneworld Pacific partners Qantas, JAL, and Cathay Pacific — although Qantas has a Dallas flight and JAL and Cathay Pacific have Chicago flights that might be more logical connections for Atlanta-based flyers.

American Isn’t Competing for Atlanta Passengers With 3 Daily Flights

What it isn’t is a play for Atlanta-based flyers generally. American’s New York strategy seems to be becoming the airline that brings passengers to New York rather than the airline for New Yorkers. They don’t compete strongly to United and Delta hub markets. They don’t try to have service everywhere from New York, but they try to build schedules that make it possible for passengers from other cities to come to New York for business and go home.

Atlanta flyers already have Delta. And post-Airtran acquisition they certainly also have Southwest.

Southwest generally has 5 daily Atlanta – Los Angeles flights. And Delta has about twice that many. (Interestingly, United – with a hub at Los Angeles – doesnt’ fly the route.)

American won’t compete on frequency, and doesn’t have the large installed customer base in Atlanta though they have respectable service to all of their hubs except New York JFK (though they do have LaGuardia service).

This Runs Counter to Their Standard Strategy

Atlanta runs counter to the usual US Airways strategy of flying to or from your hubs where there isn’t much competition. They just announced new Miami services, for instance, following the Wee Willie Keeler strategy of “hit ’em where they ain’t.”

This is a High Cost Move That Must Have a Reason, So…

LAX is hugely capacity constrained, they clearly have to make a choice to operate Atlanta flights or something else. Which means they think this is the best opportunity.

American is running headlong into competition, and the only reason I can think why is they must have picked up a big enough corporate contract for this to make sense.

Why Atlanta? Why now?


About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Maybe the start of something more to lure the hub captive Delta flyers who have finally had enough of being taken for granted by Delta?

  2. Not having looked at the schedules myself, how strong is AA on ATL-MIA? If they feed ATL folks to MIA for Europe and SA, and to LAX for Asia, I can see them maybe starting to erode DL a little, or at least give ATL flyers a bit of a choice.

  3. I’m a Delta Gold Medallion based in Atlanta who is leaving the airline at the end of this year. My new job means about 25k fewer miles per year, so I won’t hit Gold again before the year is out. I’ve been banking my Delta flying miles to Alaska (while that lasts) so I can eventually redeem them on American in the future.

    I’m making the move because despite being Gold, I rarely ever get to enjoy perks beyond priority boarding or extra miles accumulated. And frankly, when you’re in ATL, “priority boarding” is almost half the plane anyway. Unless I’m flying to a small city, upgrades are virtually non-existent for me in this market.

    I do fly to LAX a couple of times a year, but I don’t fly a lot of places that make Southwest an option for me. We’re a niche group, but count me as one of those people who is excited to see LAX on the list.

  4. This is especially quirky because US Air already has 9 (NINE!) daily flights each way between ATL and their current hub in CLT. It’s only a 1:15 long flight that shouldn’t discourage too many people from using AA/US to get between LAX and ATL.

    Of course, this is a moot point if The New American plans to eliminate CLT as a hub…

  5. @Pat

    1) It’s over an hour *in the wrong direction*… business flyers don’t want that, if they’re going to stop at all. If they’re going to connect on AA/US, DFW (or PHX) makes much more sense than CLT.

    2) Assuming you’re connecting to Asia and your choices are:
    ATL-CLT-LAX-PVG
    ATL-NRT-PVG

    What are you going to choose?

  6. Doesn’t Samsung have some operations in Atlanta? And didn’t AA just land a substantial Samsung contract (that supposedly contains an LAX-ICN flight)?

  7. American absolutely dominates corporate travel contracts in New York City, so I definitley would never call them the airline that brings people “to New York.” They are the airline that many major New York companies – AT&T, Goldman Sachs, Credit Suisse, NBC Universal, Pepsi – use as their preferred carrier.

    I think the answer is easy: LA is a growing AA hub, AA is the largest carrier at LAX and the largest carrier with LA-originating traffic, and Atlanta is a logical addition to its LA network for its LA customers. Despite limited gate space right now, AA is sitting on the rights to 34 gates at LAX that it will have by 2019 (compared to 20 for United and 16 for Delta). That’s a 300+ daily operation, and it will have plenty of growing to do over the last half of the decade. LAX today is bigger for AA than MIA was in 2001.

  8. AA must be finding something lucrative about Atlanta because they also just added their LGA-ATL flights back that they dropped about six months ago. With Southwest reducing operations at Atlanta and ULCC’s coming in there pretty big in the last 3-4 months, maybe AA saw an opportunity?

  9. Gary – I really enjoyed this, and your other similar articles. I love the miles and points stuff, but there’s a cacophony of it out there.

    Digging into the how and why of the business of airlines and routes is pretty fascinating and informative. Thanks for the analysis!

  10. @Justin

    1) I’m aware that LAX-CLT-ATL involves some backtracking, but any indirect flight is naturally less efficient than a direct flight. Using your logic, there should be nothing but direct flights between all major cities (hub or not). Regardless of geography, creating a new transcon route to serve a city that’s an hour away from an existing hub makes little sense, and I take it as evidence that CLT will no longer be a hub (we already know that one east-coast hub has to go).

    I travel a decent amount for business and I actually prefer roundabout routings to tack on some extra PQM’s; especially when it involves a short leg for a quick 500PQM and I have lounge access for the layover. I may be in the minority though.

    2) No direct flights exist between ATL and NRT. I presume you meant ATL-LAX-NRT-PVG was the other option. In which case, the extra hour duration (and the same number of layovers) is negligible and I would opt for the cheaper option or the airline I have more loyalty towards.

  11. This is an interesting move because, in general, the 3 remaining USA legacy carriers try to stay out of each other’s way. But there are exceptions.

    When you look at the new schedule, you can see this is a SERIOUS business move: those are some very convenient and practical flight times. It’s certainly not utilization flying.

    Atlanta is obviously a very big market to simply leave to your competitors. I think the move shows that AA is very serious about competing at LAX, and thinks they can make money operating a hub there. I’m also betting there are some very specific reasons why they think they can attract market share on that route but to gain that understanding, somebody is probably going to have to ask AA President Scott Kirby.

  12. LAX-ATL is there obviously to try for a win at LAX, the same way AA serves LAX-RDU/BDL/PIT/PBI/IND/CMH/TPA/SAT. 3x frequency as decent times for business travel, seems pretty logical to me.

    Of course, this is a moot point if The New American plans to eliminate CLT as a hub…

    Given that UA is making noises about de-emphasizing IAD, I think handing DL everything between MIA, DFW and DCA (and maybe WN or some LCCs to mop up the leftovers) might not be the greatest idea I’ve ever heard. The SE USA is not exactly a small region of the country. Having a connecting hub that serves it pretty well isn’t dumb.

  13. AA certainly has no hub at LAX, but it has significant service there, including flights to non-hub IAD and quasi hub DCA. Perhaps they just find some advantage to transcon offerings to every major east coast city?

  14. Delta and Southwest aren’t loved by all ATL travelers. AirTran leaving continues to be a huge blow for domestic options.

    BTW, when are you going to acknowledge that Hartsfield doesn’t belong on your Worst Airports list?

  15. AA certainly has no hub at LAX, but it has significant service there, including flights to non-hub IAD and quasi hub DCA.

    Yes, obviously an airline that serves RDU, BDL, PIT, PBI, IND, CMH, TPA, SAT, ATL, NRT, PVG, LHR, EUG, LAS, SFO, SJC, RDM, ABQ, DEN and YVR in addition to their hubs clearly does not consider that city a hub. I mean, really, 20+ non-hub cities? Pffft. Pathetic. Obviously LAX is just a spoke for AA…

    😉

  16. Given that LA has 2 to 4 times the population of PHX (depending on how one counts) it would seem sensible to continue slowly and carefully dehubbing PHX in favor of LAX.

  17. @mark – i told you in the comments yesterday this post was coming, but i think it’s sufficiently humble. i’m not saying it doesn’t make sense, just that it’s surprising and i don’t know WHY it would make sense..

  18. Here’s another reason it makes sense: Atlanta is a hotbed for TV/film production right now. AA is the preferred/exclusive carrier of just about everybody in show business (NBC, Viacom, CAA, Hearst, etc., etc.), but loses the Atlanta traffic to Delta because Delta has non-stops. Literally overnight, that traffic is switching to American, including Turner.

  19. @ Eponymous Coward,

    How many of those cities did AA serve from LAX five years ago? And how much of the traffic is connnecting traffic? I posit that AA has developed LAX over the past few years because it is a fantastic market which has no dominant carrier that they cannot ignore, but a hub like DFW, MIA, or ORD, not so much.

  20. color me thrilled. Delta has had we Atlantans by the short hairs for way too long. I am happy to see AA moving in. I hope they add more flights.

  21. @jfhscott – it was one of the cities that was part of AA’s “cornerstone strategy” co-equal with JFK, DFW, ORD, MIA in this regard. In general they don’t expand LAX (on net) because there’s no room to do so.

  22. When airlines announce new routes, additional service on an existing route, route cancellationcancellations, etc., I assume they do it to increase profits and otherwise do well. Not only are their jobs at stake but they probably also have bonuses tied to performance, etc. What I also know is they have more granular data at their disposal than I have.

    So, I don’t waste too much time thinking about these issues. I assume AA has their reasons.

  23. @mark except that historically that hasn’t really been the cases which is why the airline industry hasn’t earned a normal rate of return on its capital over time

  24. I’ve taken LAX-ATL and return once or twice a month since it started in March. Every flight I take is 100% full and the 8 first class seats are always sold to paying customers rather than upgrades. It is a small A319.

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