Where is American Pulling Capacity Without Their 24 Boeing 737 MAXs? It Should Come as No Surprise

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.

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. For MIA – Quito flights, they were 2x daily 737 Max 8 and they cancelled 1 and put a 757 on the other.

  2. I’m also seeing quite a bit of capacity reduction on JFK & EWR to/from PHX. With so many reductions, JFK terminal 8 must really be a ghost town. They should stop Oasis-ifying aircraft until their schedule stabilizes.

  3. Over the last year, the stock price of United (UAL) has trended up and Delta (DAL) has gone sideways. Only American’s (AAL) stock price has trended down, losing almost half its value since the beginning of 2018. One would hope American’s management would notice and evaluate the underlying reasons why. They seem to be like the frog in the slowly warming pot of water.

  4. This is a bizarre post. Are you criticizing AA for cutting less profitable flying to prop up the profitable ones? That’s what a business should do, no?
    NYC is now profitable for AA unlike it has been for many, many years.

  5. I was very surprised to read that the single SAN-JFK had been cut — I’ve taken that nonstop twice in the last two months alone, including last week. But I see it restored temporarily as a redeye on April 8, and we go back to TWO nonstops daily starting April 25, so that’s good news overall.

  6. Your statement that Miami has limited competition is grossly inaccurate. There is significant competition from the airport, which AA is certainly feeling the pinch from. AA was close to 70% share at one point, now they barely hover around 55%.

  7. So the flightaware statistics show virtually no AA cancellations this weekend. I have no idea how this works. If you cancel a flight a week ago, is that a cancellation, or not a cancellation?

    In any event, it seems pretty obvious that AA is dealing with the MAX problem without major disruptions. They are fortunate that it’s little more than 2% of their mainline fleet.

  8. @Simon: Most of what this guy writes, regarding AA at least, is grossly inaccurate. His argument seems to be that AA is dropping less profitable routes in order to maintain more profitable ones and that’s wrong.
    Guessing he was fired from AA cause he writes like a scorened lover.

  9. Just got notice my flight AA2369 from JFK to PHX was switched from direct to 1 stop in CLT. According to flightaware, the direct flight hasn’t flown since the 20th. Possible they pulled the plane to replace a 737 max? What are my rebooking options if I don’t like the one they offered me?

  10. @wyatt it’s crazy how inaccurate his writing is. I think he was fired or something . He wrote about the impact to aa about the max but didn’t write about wn disruptions. Lol they have more in fleet more % of their fleet but shits on aa. I don’t get what his hatred on aa is but there is one from one sided Gary.

  11. AA pilots are the lead dogs in getting the MAX back in the air globally. That says a lot. WN has more MAXs and quiet frankly cancels flights willy nilly to begin with. I would really like to know what AA did for all the hate mail. DL and UA have a similar product and service (DL services is NOT what it was 3 or 4 years ago, it’s slipping). Please report the factual news not your emotions or opinions, let the comments bring that into play.

  12. @Josh – I assume you mean non stop and not direct. Hopefully as someone that reads this blog you know the difference. One of the things that irritates me is people calling a non stop flight “direct” and they have absolutely no idea that they are different

  13. @ Sun Viking — Yup, USA airline pilots are better trained than many foreign airline pilots. But as air travel has become so incredibly safe the past 2 decades, that fact has become meaningless. If your chances of dying from a pilot error is 1 out of 100 million, does it matter if it’s 1 out of 120 million? Only if you want to be irrational about it — which I assume more people now will be (at least for a year or two).

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