American Airlines sees their hubs in three tiers:
- Most profitable: Dallas Fort-Worth, Charlotte, Washington National
- Middle tier: Chicago O’Hare, Phoenix, Philadelphia
- Least profitable: Los Angeles, New York, Miami
Dallas and Charlotte are fortress hubs where they have tremendous scale. Add a flight there and they can bring passengers from myriad locations in to connect, so it’s hard to offer a flight that won’t work.
Washington’s National airport is slot and gate constrained. American is the largest operator there, and it’s protected from competition.
Phoenix is heavily seasonal as an origin/destination airport but provides good connecting flow. It’s not a place that will grow significantly except for markets that surge (or are offered) during just parts of the year.
Chicago O’Hare, meanwhile, is growth-constrained (but adding gates). It’s a strong market. But it’s also competitive with United somewhat larger. They haven’t been able to make their international operation — outside of Heathrow — work well here.
Miami is a high cost airport, which limits competition (which often retreats to Fort Lauderdale), but the route network is heavily focused on Latin America which has recently been a big money loser. American loses money on transpacific and South America routes (and flying overall).
Los Angeles is both heavily gate-constrained and construction-constrained as well as competitive. No single airline dominates Los Angeles, the heaviest origin/destination vs. connecting major airport in the country.
Current management, running US Airways, walked away from their crown jewel position at New York LaGuardia in exchange for some pieces of silver from Delta. And they’re backing away from competing at New York JFK focusing largely on hub flying (including international partner hubs) and a handful of ‘beyond perimeter’ cities which they cannot serve from New York LaGuardia and where they have an already strong presence, like Austin (which has added a second flight) and San Antonio.
American Airlines Terminal 8 New York JFK
So with fewer aircraft as a result of the Boeing 737 MAX ground (24 planes) and with some of their retrofitted 737-800s still out of service due to defective workmanship, they’re having to cut flights. And where do they go to cut capacity?
Unsurprisingly they go to places like New York. We’re seeing April reductions in New York JFK – Las Vegas, Orlando, Chicago O’Hare, San Diego, San Antonio, and Seattle. We’re seeing New York LaGuardia reductions in Miami, Montreal, Toronto. Los Angeles – Raleigh frequencies are reduced. Miami sees cuts and of course that’s the primary airport that the American Airlines MAXs has had as a base. In other words they pull capacity from the hubs they view as being least valuable at the moment.
Oddly, when American announced the end of New York JFK – Orlando service (New Yorkers apparently don’t travel to South Florida for the weekend, except in American’s telling at 6:45 a.m. on Saturday mornings — they still offer an oddly-timed LaGuardia flight) they explained it was to make room for New York JFK – San Antonio.
American seems predetermined to lose in New York, so they retrench to minimal service rather than competing for the business of New Yorkers. So when it comes time to scale back, they do it in New York, and it becomes a self-fulfilling prophecy.