American Airlines has seemed to focus more on trying to government to shut down competitors than on improving its own business. They haven’t gotten their operation working well. They’ve been making their domestic product worse – in all cabins.
Unsurprisingly while other airlines make money flying American loses money flying and earns profits only by selling frequent flyer miles.
They’ve been playing into Delta’s hands politically, too. They shut down their codesharing relationships with Qatar and Etihad, because they were lobbying the federal government to push those airlines out of US markets and wanted to appear consistent. But that meant giving up traffic feed from India, Pakistan, and North Africa while Delta improved its own feed from India stealing away Jet Airways as a partner.
And they keep going after Qatar by proxy, arguing that Air Italy – which is 49% owned by Qatar Airways – shouldn’t be allowed to enter US markets which for the most part aren’t even served by US airlines. That too plays into Delta’s hands because of Delta’s partnership with – and possibly future ownership stake in – Air Italy’s major competitor Alitalia.
The story that United, Delta, and American have been peddling about the great Air Italy threat is, of course, silly. Sure, Qatar took an ownership stake in the carrier. And they’re funding an attempted expansion of the airline, seeing Alitalia’s weakness. But it’s still an Italian airline, which means potential for success is severely limited.
Indeed Air Italy has already pulled out of Bangkok, pulled out of India, and reduced Miami frequencies. Contra the claims of US airlines that Qatar’s investment means they don’t have to ‘behave like a business’ Air Italy appears incredibly sensitive to market conditions.
Now Routes Online reports that Air Italy has dropped its planned Chicago – Milan route which was announced in December to start in May. (They now say they’re delaying it to 2020, we’ll see.)
This is the great threat that American CEO Doug Parker spends time talking about instead of focusing on improving his own product?
Meanwhile American copied Delta’s investment in China Eastern with a smaller stake of its own in China Southern, a stake trumped by Qatar Airways with a larger equity investment in the carrier. Now ironically Emirates is going to partner with China Southern — despite the ownership stakes of both American and Qatar.
Airline executives have been playing geopolitical games since the time of Juan Trippe and Pan Am. American’s Doug Parker has been telling anyone who would listen for years that ‘this time is different in the industry’. As the world economy faces risk of slowdown, it’s time to act like it — and stop playing political (and geopolitical) games and instead focus on providing a good quality product to customers.