American Airlines: Less International Flying from JFK, More from Philadelphia, and Lounge Closures

Admirals Club Renovations and Closures at LAX and Boston

It looks like the American Airlines LAX terminal 4 Admirals Club may be closed for a couple of months.

Additionally, Boston Admirals clubs will be renovated and consolidated. Word on the street is that the legacy US Airways club near gate B4 will see a refurbishment. It will be closed during this work. Once completed the B30 legacy American Airlines club will be closed.

If they’re able to consolidate operations to be clustered around the location of the renovated club that makes sense but crowding could become an issue.


Old LAX Flagship Lounge

More International Flying From Philadelphia… and Less From New York JFK

I wrote two months ago that Philadelphia would be getting a couple of new European routes.

At the time that American shared with employees that they would be returning legacy US Airways 757s which were flying to Hawaii to lessors, replacing those with 757s flying transatlantic from Philadelphia, and backfilling those Philadelphia transatlantic routes with legacy American aircraft (and sticking it to legacy US Airways flight crews in the process, since the airline hasn’t fully integrated crews from the two airlines yet), they promised “more flying for PHL as a hub.”

I’d expect any shift in capacity away from New York JFK to come from routes that are already serviced by smaller aircraft like Boeing 757s since those routes are more marginal to begin with.

The ultimate challenge for American here isn’t that legacy US Airways crews and legacy American crews are still separate. That will be solved as the merger progresses.

The real issue is:

  1. Operating two international hubs less than 100 miles from each other

  2. That American isn’t competitive in New York


American Airlines Terminal 8 New York JFK

American built their domestic schedule at JFK around bringing people to New York, not serving New Yorkers. Their history is one where they run from competition, legacy US Airways sold Delta much of their New York LaGuardia operation. That allowed them to further build up their strong position at Washington National but then they weren’t allowed to grow at National with the American Airlines merger so they didn’t even wind up ultimately larger there than they’d otherwise have become.. while letting Delta grow in New York.

It’s sort of striking that the largest airline in the world (although Delta is creeping back up on them…) plays small ball with Philadelphia and doesn’t make a go of New York. Incidentally former American President and current United Airlines President Scott Kirby believes it was a mistake for United to have left New York JFK. And the reason he thinks that is because American was able to secure big corporate contracts as a result.


American Airlines New York JFK

Cuts tend to exacerbate the need for more cuts. Get rid of a weak international route at New York JFK, and the people who fly that route switch to another carrier – and become less likely to fly American on the routes that they retain because they’re supposedly profitable.

Accounting for which routes are profitable, allocating business across different flights is messy.

  • United’s 6am flights out of Houston aren’t profitable to all destinations. They’re going to retain 6am flights to business markets even with low load factors because they’re key to retaining business travel on other flights, too.

  • British Airways has always said they lose money on Club Europe, but they offer it because people connecting to long haul business class expect it (and would book another airline if they didn’t have it). But then that means they are wrong about Club Europe losing money. They just aren’t attributing enough revenue from the sale of long haul business class that’s dependent on it to those connecting flights.

American doesn’t have a great position in New York. I don’t know many New Yorkers who say American is their airline. They either defend Newark as being really the closer airport ‘depending on where you are in the city’ or they fly Delta.


American Airlines New York JFK

So American should do something. But drawing down New York isn’t likely to be a great something. There’s not a ton of room to grow. They likely figure they need to grow or shrink. However they’re profitable enough though that they can retain their imperfect presence at JFK rather than walking away, hoping for future increased capacity.

We’ll see what changes ultimately materialize.

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. Keep making PHL great again AA!

    Great to see PHL get some love…now if they can get some more carriers in to go up against AA/UA/Delta/Southwest that would be nice. Would love to try JetBlue but they only fly to BOS and FLL so not really an option…maybe AS can come in and offer some more variety, especially to the west coast?

  2. It’s not a shock to me – when they first merged with US, my feeling was that PHL would eventually be the hub they settle on. The market is large enough in PHL that, while yield may not be as high as it could be in NYC, they can make money being the largest game in town. At JFK they are a distant 3rd domestically, 2nd int’l. LGA they are distant 2nd, by passenger count across all 3 airports they are essentially tied for 4th with JetBlue.

    Add in the connection opportunities with their large domestic feed at PHL (that likely couldn’t be easily replicated at JFK) and it makes sense to keep PHL as their main European gateway.

  3. @GaryLeff : can you point me to any threads with ongoing discussion on this? i’m curious which exact routes are being moved to PHL.

  4. If you don’t live in NYC, it requires a lot of time (and tolls) to drive to JFK. PHL is drivable for a much larger area (from portions of MD/VA, all of DE, a lot of PA, some NJ, and even a bit of NY).

  5. American is stuck with JFK because all their code share and alliance partners want to plant their flag in the New York market. Only BA and Qatar fly to Philly.

    American has a serious issue where many flyers need to take a hub-hub flight, or hub-BOS, because of the fragmentation of oneworld flights between 3 major Northeast markets. They also have very few Asian flights from the east coast, and face stiff domestic competition from Jetblue and Southwest, while they focus on fighting off Spirit and Frontier with basic economy.

  6. ” They also have very few Asian flights from the east coast”

    To be precise, that number is all the way at absolute ZERO on AA metal ever since they cancelled PHL-TLV. Now, if you wanna be go by their corporate spin on how “metal neutral” is also “passenger experience neutral”, then you can count some JAL flights to JFK and BOS.

    Even DL is ramping up on ATL – NRT, ICN, and soon PVG, plus JFK-TLV, and that’s already excluding all the JV flights with KE.

  7. Ben said “At JFK they (AA) are a distant 3rd domestically…” So, AA is behind Delta and which other airline for domestic flight volume at JFK?

  8. In addition to the “customer service center” erected inside Terminal 4 during the Admirals Club closure, American will bring in outhouses and a hot dog stand to compensate passengers who have paid for a lounge that does not exist.

    “Going for great”.

  9. EWR, LGA, and JFK are slot constrained PHL is not. Leaving or reducing flights gives competitors a leg up and AA gains nothing. What about the feed that AA provides BA? I think it best to leave the flights at JFK alone.

  10. “AA Employee says: You have absolutely no idea what you are talking about”

    As AA Plat I can confidently say that is the case with most AA employees I’ve come in contact with over the past years — they have absolutely no idea

  11. Pretty easy – PHL for TATL routes that are primarily driven by connections; JFK on smaller planes (757s) for routes that have a large amount of NYC O/D.

  12. @Bob : that’s exactly where the core issue lies. The ones with sufficient O&D at JFK that warrants AA service most likely are also the most competitive ones, in which case the 757 simply doesn’t cut it (for the same reason UA’s stupid 757 EWR-LHR are merely slot sitting exercises)

    But then again, we’re talking about an airline that doesn’t think JFK-AMS and JFK-FRA has sufficient O&D to even warrant a 757. Go figure.

  13. As a New Yorker and 10+ years EXPLAT I’m devastated.

    Might be the final nail.

    Philly is silly oh why would you go to Philly?

  14. I’m a New Yorker who has been an AA person for 15 years or so, mostly for JFK-LAX/SAN, JFK-NRT, and became extremely loyal when they ramped up Brazilian routes, especially JFK-GIG. Then they cancelled Tokyo, eliminated most nonstops to SAN, started the antitrust joint venture with TAM/LATAM and immediately eliminated flights and raised fares through the roof, and stopped a bunch of routes to many other places. Last month was typical: I had to go to TLV and MEX, each of which has plenty of nonstops from NYC, but not a single nonstop flight on AA (and nothing at all to TLV (while UA and DL manage to fill 4 daily TLV 777 nonstops between them)). Delta met my needs fine in both cases, and when they commence the DL NYC-GIG nonstop in December I imagine that most of my AA flying will be over. I have a surplus of literally hundreds of 500 mile stickers which I have become entirely unable to use in the past few years.

    There is no way I’ll be flying through PHL to fly AA, and I don’t know why any company would cede the largest market in the country to bet on a dying city that is loosing nearly 5% of its population every year.

  15. Anyone think Gary would prefer flying from/to Austin via NY than PHL to experience a better hard product, thus this article? I think so.

    A publicly traded airline should do what they think is best for their shareholders and their customer base. Don’t have enough information to disqualify PHL as a hub for AA, but then again, a bit surprising that AA continues to pull away from NY.

    Sad days ahead on AA…..

  16. @Jon I second ya! Word on the street is that AA will pull out of LAX T4 in favour of PHX due to competition at LAX. /wink

  17. Gary, as a PHL hub captive, I can tell you the the prices that AA charges have been going up ever since HP bought US relative to flying out of EWR or JFK. I was not surprised that AA mentioned PHL as a reason for their good quarter. I now sometimes fly Delta and United out of PHL and take a connection, because the AA price is so much higher on certain routes/times. I am the exception, most PHL based frequent flyers are loyal to AA exclusively, regardless of price, convenience, the devaluation of AA miles, etc. The rest of the traffic is connecting from all over. Philadelphia and AA are commited to expand the airport, so AA definitely has long term plans for more flights out of PHL.

    Given the competition at JFK that leads to lower prices, it is a wonder AA still has as many flights out of JFK as they do, when one considers that domestically AA can funnel traffic to their company town airport PHL to mostly fill the planes and then gouge the remaining local population to top off the flights. This is what it looks like is happening from my hub captive perspective and AA’s actions seem to support this. For international flights, AA can just funnel all the traffic to DFW or ORD and fly to Europe and Asia directly from there.

    Every merger there is talk of abandoning PHL as a hub from the flyertalk community, but the opposite happens. The only brief glimmer of competitive pricing was when Southwest came in strong in 2004 and fought hard for a few years, before they were beaten out of PHL by Dougie and company. I welcome any comments from people who are located in a worse hub captive situation than us here at PHL. I assume Delta must just abuse the Atlanta locals and maybe SFO and United?

  18. AA’s strong (#2) at LGA. But do you realize how many “connecting” international flights on AA go into LGA and out of JFK, with the passenger having to collect their bags and get themselves from one to the other airport. Absolutely ridiculous.

    Being the old US international hub, PHL is much cheaper for AA. and it’s also a Southwest (and Frontier) hub, so even more international feed.

    People like me would prefer almost any hub besides JFK and maybe AA can lure some partners to PHL.

    People like me will also gladly drive the 100 miles from WAS to get easy nonstops to Europe on Advantage awards. But of course their easy availability shows they don’t have much load at PHL.

    If Atlanta and Charlotte can support major international hubs, much larger PHL can.

  19. NYC is so competitive on European routes and fares from PHL are much higher for that reason.

    I’m PHL based. We have no norwegian air, no wow air, no DL (except for LHR and CDG) or UA intl flights. We have no VS, no AL, no KLM, no IB. I could go on but I hope you get the point.

    It’s much less competitive and probably easier to get connecting pax through PHL vs JFK.

  20. American’s JFK transcon offerings are way inconsistent. For example, they fly a 777 to Barcelona, but don’t directly at all to Frankfurt, Amsterdam, they fly a 767 to Milan, etc. Never really made sense to me.

    JFK has a decent position in NYC, but they need to improve the onboard product to reach consistency with Delta. Delta’s strength is its longer haul JFK flights and its nice E-Birds out of LGA. American is just now catching up with better E-Birds.

  21. @Anthony

    I think I know why AA has a 777 to Barcelona. Cruise line contracts. AA provides lift to all the cruise lines and Barcelona is major embarkation port. Rome has 777 as well. That covers 2 of biggest embarkation ports in the Mediterranean. Frequent cruisers, there are many in NY metro area , are probably more likely to book AA, because they used AA to go to Miami, probably many times in the past. Again AA dropping more flights from NY is not going make AA FF very happy.

  22. Since the merger I have felt AA should focus on PHL as their northeast hub and trans-Atlantic gateway. Maybe even dehub JFK, as AA has become irrelevant in JFK (and NYC in general) the past few years. Let UA/DL/B6 deal with the fare wars in NYC while AA enjoys dominance in PHL.

  23. Poor, poor UsAirways crews. They’re getting the shaft. It’s temporary though. The lion’s share of American’s crew will be negatively impacted by this merger and it won’t be temporary it will last for the rest of their carreers and they are the majority of the company

  24. @ Gary. Completely irrelevant jibberish to most of us. Please tell us how to get across the Atlantic Ocean on miles without using BA and their outrageous “fuel surcharge” … especially from non-hub cities like my home … the nation’s capital, Austin.
    BTW, couldn’t take local Austin politics anymore and had to move outside the city limits of PRN, the People’s Republic of Austin. Nice airport but not so nice to try to use AA miles out.

  25. I live in DC, and I refuse to fly AA internationally out of either JFK or PHL because of the difficulty of the connections. Every time I have had a JFK flight, I always end up having to use LGA for at least one of the two connecting flights, and I hate changing airports to make a connection. The connecting flights from DCA to PHL are so far away from the international gates that you have to allow an extra hour or more to ensure that your luggage makes the connection. CLT for AA to Europe is a fairly smooth connection, but CLT seems to have lost many of its AA European flights since the US-AA merger. MIA would be my second choice for a European departure on AA.

  26. Stephen,

    AA does well on a lot good amount of long haul routes out of JFK. They are competitive on to both SFO and LAX with the transcons. They do some high value routes like JFK to Eagle County, CO. Most of their One World partners connect out of JFK. You really can’t be a big US carrier without having a significant NYC presence, so AA can’t really abandon NYC. They just invested in a huge lounge in JFK, and I really like their flights out of Terminal C at LGA.

  27. This isn’t about PHL or even how AA should focus on shareholder value blah blah blah. There’s simply far too much competition in NYC for a New York based traveler to even bother connecting via PHL for TATL purposes other than (1) pricing being much lower and (2) those blindly FF loyal.

    People kept comparing AA JFK to UA LAX or even UA IAD, conveniently ignoring the fact that both UA LAX and UA IAD are still single unified omni-directional hubs (and in UA IAD’s case, actually commanding dominant market share despite recent years shrinkage), while AA’s JFK woes are exacerbated by the split ops with LGA.

    AA’s NYC route network setup is excellent at getting people TO new york, but horrific for a New Yorker to get anywhere.

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