Since American reports success selling premium tickets Dallas – Hong Kong and since Dallas is getting a first class lounge one might imagine that in addition to Hong Kong, Beijing, Shanghai, Tokyo and Seoul it could be that Dallas would see another Asia route in the future. One could imagine a third Chinese city.
However in yesterday’s earnings call it was made clear this wasn’t on the table.
Answering a question about whether Boeing 787s and Airbus A350s would ever mean a Philadelphia – Asia flight,
I don’t know what the long term answer is, but for the foreseeable future Asia growth will be growing our Los Angeles Gateway to Asia.
This was re-emphasized,
For the foreseeable future the Asia growth will if be focused on growing our Los Angeles Gateway. That is a question that we will readdress and evaluate at some point in the future.
And that makes sense.
First, Los Angeles – though highly competitive – is also more of local market (rather than connecting market) for Asia traffic.
Second, of the largest cities in Asia unserved by American are:
- Karachi. No US flag carrier will serve that market directly for the foreseeable future.
- Mumbai and Delhi. Amply served by American’s partners Qatar and Etihad (though it’s possible to imagine American service to Abu Dhabi from Dallas), American only recently eliminated direct Delhi service. It would be an interesting move for American to return to India, though not obviously from Dallas.
- Jakarta. This would be 20% longer than the current longest flight in the world.
- Manila. The route is too thin, it will be left to one-stop connections.
- Osaka. American’s codeshare partner JAL serves it from Los Angeles and United from San Francisco, these routes only support Boeing 787’s from cities with substantial connections to Osaka. Outside of the local market a Dallas connection isn’t going to be superior for most compared to a Los Angeles one-stop connection.
While the third Chinese city notion is plausible at some point in the future, the Chinese economy is unstable and existing expansion – new Shanghai and Beijing flights – could look questionable for some time.
And while American’s Asia route network is limited compared to those of United and Delta, their opportunities for growth there are also somewhat limited, most likely to added connectivity with their Pacific partners.
That said, the stated focus on Los Angeles is a big shift in strategy for American’s leadership.
When Doug Parker and Scott Kirby were driving US Airways, they ran from competition. They flew very few, and fewer and fewer, non-hub routes. They focused on cities without competition rather than going head-to-head in saturated markets.
They’ve brought that strategy to American with their JFK hub. They aren’t trying to serve the New York business market as much as being the airline that brings passengers from other cities to New York. They don’t serve Detroit, Minneapolis, Atlanta, Denver, or Houston from JFK, for instance (although they do serve Atlanta and Detroit from LaGuardia). And their JFK hub had the most improved performance during the second quarter.
And yet they’re increasingly going head-to-head with low cost carriers at DFW and also against Southwest’s expansion at Love Field, filling planes at lower prices. And by talking up transpacific expansion at LAX they’re going head to head against United and Delta and also Asian carriers as well.