American Airlines: Why We Won’t Fly to India Any Time Soon

A couple of months ago I laid out an argument that American Airlines wouldn’t fly to India or Dubai.

American dropped its codeshares with Etihad and Qatar, which provided connections through to India and Pakistan that American cannot match with service from British Airways. They lost their partnership with India’s Jet Airways to Delta. But now that the dispute with Emirates, Etihad, and Qatar is over there’s been speculation that American could serve India itself or even the UAE.


Gateway of India, Mumbai

My argument was that the lack of a partner providing connecting traffic made this hard, and that the need to use expensive aircraft (versus, for instance, a Boeing 767 due to distance) made this an expensive experiment to try especially when American has shown little appetite for expanded long haul flying.

At a ‘Crew News’ meeting of employees with American’s senior management, the airline laid out why they aren’t likely to serve India any time soon. An employee asked Vasu Raja, American’s Vice President Network Planning, since Gulf carriers are cutting back their US flying and Delta plans to fly to India, whether American would consider it.

Raja explained the reasons India does not make sense for American Airlines.

  • Fares are too low. “Even with the changes with the Middle East carriers, the reality is the fare environment to India has not changed at all. It’s a really really bleak fare environment. Often times fares are half the price of bargain fares to Europe.”

  • Eventually Southern India could make sense with future aircraft. “There is growing demand in places in South India, especially and interestingly enough from markets in the North Texas area… in the future where we have more long range 787-9 airplanes it could become something that’s more in the decision set.”

  • Actually, no one is really adding flights there. “For as much press as was made on flying to India there still hasn’t been an announcement about anybody starting new service from the US to India either, and I imagine high fuel prices are probably a headwind for that as well. Who knows.”

    Doug Parker asks, “So they said they’re gonna fly to India but they haven’t loaded a flight?”

    Raja points out that not only haven’t they loaded a flight into the schedule, they haven’t even announced what the flight will be. Parker then declares, “well you can do that!”

    And so Raja announces “At some point we’re going to fly to India too.”

  • Delta has a local partner in India, while American does not. (Never mind that Delta outmaneuvered American to gain Jet Airways as a partner exclusively.) “They have a big partnership with Jet Airways, they have a carrier in India with which they can drive connections. So who knows how they’re doing the math on it. But it’s still a little difficult for us. It’s made easier in a world where we have more 789s but it’s still by no means the most profitable thing on the list.”

Don’t expect American Airlines to fly to India any time soon.

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. Yet it has still worked for United all these years. AA forgot to mention that they simply can’t be bothered and don’t have any lucrative corporate deals to fly to India or UAE.

  2. @WilliamC I go often to Bombay!
    Not surprising a South Indian manager is saying they need flights to South India instead of DEL/BOM. South India has good connections from Gulf carriers and has limited premium traffic.

  3. I hope they bring back ORD to DEL, I like getting a row to myself. It will just be like AA Ord to DME, DUS, ZHR, BRU.

  4. Ain’t no big loss in my book. The visa requirements are onerous and the C & I agents, at least in Bangalore anyway, are snotty, officious bureaucrats.

  5. The biggest problem with india is getting business travelers to consistently take your flight in both directions. You can probably get one way, but ME3 and Asian carriers providing 2 time slots to/from the US give people options that they won’t get on UA or DL with 1 flight per day. People may take DL one direction and somebody else the other which doesn’t help your flight very much. Packing the back full of garbage fares also won’t pay for the russian airspace fees,

  6. Why is it a shocker? Even from DFW, most of the international network is in the Americas. After that, major hubs in Western Europe and a few major cities in East Asia. Their strategy isn’t looking for it, and forgetting that, what hub has the appetite for it which isn’t being served already? DFW/IAH perhaps but the expense of that non-stop will make it prohibitive for a long time, unlike let’s say a route such as SYD which is a guaranteed money maker.

  7. It is very true that considering the competitive pricing in India, it would take a long time to breakthrough. But then in this segment it is also about a feel-good factor for the flyer which depends a lot on the services and the sense of personal touch provided by the airline. If a flyer is happy and spreads the word, it will go on to multiply and bring more flyers to the airline.

  8. For today, tomorrow and next year, that’s a sensible decision. But what is their long-term growth strategy? If they don’t want India, which new market are they pushing into? Because mature aviation markets will just get tougher and tougher.

  9. Just do not forget that in addition to consumer market there is also a competition for corporate contracts. The classic example is RDU-LHR which AA operates for a very long time due to corporate contracts (with CLT just 170 miles away by cat and 129 miles as bird flies). In addition, take a look at the size of the federal government and consider implications of the Fly America act. Many of these agencies are required to purchase refundable fares and fly US Flag carriers when available. (As an example, I was told that ORD-YQB (Québec City) advance purchase refundable airfare was about $1,500-$1,600 last year in summer from gvmt contracted UA;). Then the plane could fly half full and still make money…
    My guess is that Doug P. never brings up the Fly America Act when complaining of unfair competition from the Gulf carriers.

  10. @Gary While I can certainly understand your need for content, I can’t say I understand you not only using, but directly quoting the conversations that are had in these Crew News meetings. I guess as a blogger you don’t necessarily have to follow traditional journalistic standards, but it is very clearly stated at the onset of each session that everything is off the record. For this particular Crew News, it is even mentioned that AA knows “certain” blogs will still use what is said, but considers it worth the risk in order to have open dialogue with the employees.

    By no means am I on a high horse, but I do feel as though there needs to be a certain level of professionalism when passing along information to a large audience. Have a great day.

  11. @hotintx – This is off the record *to employees*. If American gave these comments to me off the record it would be inappropriate for me to publish them. But that’s not this situation at all. In fact these sessions are shared not just on blogs, but in traditional media as well (see for instance lewis lazare of chicago business journal).

    This isn’t about ‘need for content’ it’s INTERESTING INSIGHT into the airline’s strategy. And since there’s both speculation about the carrier’s future post-dispute with the Gulf carriers, and plans that seem to clearly diverge with Delta’s, it’s worth diving into for readers. Anyway that’s how I think about it.

    And American knows full well that anything they share with 100,000+ people is anything but ‘private’

  12. @hotintx

    Gary is right, there’s nothing terribly sensitive in these types of communications.

    Back when I worked for an airline, management told us that they *could not* tell us anything truly “hush hush” in these forums. The biggest problem? Insider trading allegations. Anything that was so sensitive or so insightful that it would likely move the stock price wasn’t going to be discussed in that forum, no ifs ands or butts. So when they say “we know this will end up on the blogs” they mean that they won’t tell you anything that absolutely cannot be published on the blogs.

  13. Interesting Chartered Financial Analyst (CFA) type of ethics question. Suppose a CFA stock analyst following American Airlines was given material non-public information. That CFA has a conflict in his duty to the American Airlines not to disclose and his duty to his clients to disseminate that information either in writing or through his recommendations. That CFA’s best practice would be to obtain permission from the company to disseminate. Once permission is obtained and the CFA disseminates (perhaps though a press brief), the information in now public, and can be traded upon. However, the CFA probably has to allow a reasonable amount of time before trading directly on his own or is clients’ accounts, otherwise it would be considered a form of front running.

    Now there are several reasons this would not apply to Gary anyway:
    (1) The information he is reporting has already been reported upon elsewhere, and it is public information. I think Gary made that point.
    (2) I am guessing that Gary does not have fiduciary responsibility to American Airlines. Therefore, there are no restrictions on him disseminating the information.
    (3) I really doubt American Airlines plans for putting in a flight to India would be considered material information to anyone.

  14. @Other Just Saying – indeed, my only relationship with American Airlines is as a customer. I have never cashed a check (or received an electronic funds transfer for that matter) from American Airlines.

  15. Amercan missing huge oppert unity by discontinuing partnership with jet airways or air india to serve rapidly increasing traffic to south india,via abudabi/Dubai.
    Sad.

  16. @ Michael Johnson. My experience on AA ORD-DEL flight was you might get an empty seat next to you in economy (I usually flew J). However, DEL-ORD . . . NO WAY! There is more one way traffice west bound than east bound.

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