Topic of the Week: American Walks Away From San Juan

It shouldn’t be a surprise to anyone that American finally put a dagger in the sorry remains of its old San Juan Caribbean hub. But do you think it was a good idea? Should American have pulled out or was there opportunity for the airline?


34 Responses to Topic of the Week: American Walks Away From San Juan

  1. A says:

    I’ve always thought SJU was redundant with the AA hub in Miami. Are there really that many people in the Caribbean traveling amongst the islands? Most people go down there for leisure from up north so what’s the difference from a connection at MIA or DFW vs. SJU? This makes perfect sense to me.

  2. They did it for years using smaller aircraft to fly to just about every where in the caribbean so it made sense. But once so many airlines started flying from major and secondary cities in the U.S. nonstop to a lot of the other islands, then a SJU hub just wasn’t going to cut it anymore.

    People still need to fly around the caribbean for business, etc, but SJU is not in a physical location to be a hub for that.

  3. Given jetBlue’s presence in San Juan, it was a matter of when, not if, American was going to pull the plug on its former hub.

  4. EricInChi says:

    SJU made sense in the mid 1980s when MIA was under EAL lockdown. Fast forward 25 years and AA holds the keys to the MIA kingdom and SJU becomes redundant. DesertGhost is right…its about the bottom line, not market share and that is a good thing. The industry has been a Black Hole of capital for two generations and it cant fix problems using the same thinking that got them into that position (sic Einstein).

    Poor SJU was a death of a thousand cuts but once the crew base closed the handwriting was on the wall. Here is a really good article from AviationDaily posted last spring:

    http://aviationdaily.wordpress.com/2012/04/09/april-9-2012-spotlight-on-american-airlines-in-san-juan-puerto-rico/

    • Sanjeev M says:

      So if I understand correctly, the AA SJU hub was built up before the MIA hub. In that case it would make sense. At the time I think RDU and BNA were also somewhat important for Southeast connections.

      Inter island flying can be a profitable market but at the right cost base. DL could never run Hawaiian’s interisland operation as profitably as HA. In the same way, it seems JetBlue is the carrier that can do it and AA can’t.

      Which is fine, so AA can focus on more profitable things like MIA.

      • and B6 will do it with bigger a/c less frequency, and likely fewer island destinations. Though given b6 prices, services, baggage, etc. it will be better for many pax. It’s sad to see AA go, but without that feed, the SJU operation wouldn’t remain profitable or worthwhile, and redundant hubs dont lead to more profit.

      • The AA hub operation at both MIA and SJU popped up around the same time in the late-’80s as they picked up both from Eastern. Eastern was the dominant carrier in SJU for a couple of decades and once they went under AA picked up what was left. Now B6 will likely build up SJU although likely not to the same scope that AA did. It’s like the circle of airline life. :-)

  5. Seth says:

    Given that JetBlue already flies many of those routes, it isn’t that surprising. This seems like a good chance for a small airline to come in and scoop up those routes. Trying doing what Redjet couldn’t, hopefully this time with smaller more efficient planes.

  6. Trent880 says:

    There’s no business in SJU any more, so the lowest cost provider is going to win the traffic and right now that is B6. Expect further AA trunk routes to be reduced (ORD/DFW/MIA/JFK) now that some of these high yield beyond SJU markets are being canned. It’s an interesting philosophical discussion as to whether SJU is better off–they’ve lost plenty of network connectivity, destinations, and perhaps higher yield customers, but replaced it with high volume, low fare traffic. Are they better off?

  7. Ed Kelty says:

    The heyday of San Juan travel was –could it be 50 years ago — when Eastern flew people to New York City for $49 one way. This led to an influx of Puerto Ricans who repopulated the Bronx. Eastern is gone and there no longer is that demand. So, it makes sense for the financially troubled AA to drop the hub.

    • AvGeek says:

      The Puerto Rican diaspora in NYC has much more to do with economic conditions on the island than with cheap fares on Eastern. In fact, many of the islanders who relocated in the 50s and 60s came by boat. Can we please stick to aviation on this site and not socio-demographic speculation?

  8. Kevin says:

    I sense that there isn’t much love lost on either side. For many years, many of the Caribbean islands complained bitterly about AA’s “stranglehold” on traffic there, even though AA and Eagle were providing good service and connectivity. Revenue guarantees to other carriers for non SJU (US Airways., etc) started the decline of AA’s dominance there & lessened the need for some of the connections. B6’s massively successful foray helped to finish AA off. NK, DL, and FL helped too. So, AA walks away from money-Losing /limited long-term potential routes and the Caribbean islands that complained about AA for so long will no longer have them to complain about. Maybe Cape Air and LIAT can pick up or expand on the former Eagle routes.

    • Trent880 says:

      True, but now they have much less capacity, first class, and connectivity–are they better off?

      • Kevin says:

        I agree. SJU isn’t better off in terms of premium cabin access or connectivity, but Cranky’s question was “should American have pulled out or was there opportunity for the airline?” I think AA exploited the opportunity while it was there, and probably stayed longer than it should, and now it’s time to move on. I sensed the end was near when it didn’t take hardly any time for AA to announce it was exiting BDL-SJU once B6 announced they were starting it. AA could probably see what’s happened to all of the routes once B6 started.

  9. ArubaMan says:

    Two letters: WN! Watch what happens next!

    • Don says:

      I agree WN will do good in SJU. But I also keep in mind that these are the converted Airtran routes. They are going head to head with b6. Although they will steal some of their customers it will still be an uphill battle. I also believe that AA just gave up on SJU because they wanted to exit bankruptcy by themselves and merge with b6 (gaining back what they gave up) and make a good profit doing so. Now that US Airways is sounding the merger horn with them; that’s messing up their post bankruptcy plans. My prediction is that AA and US merge focusing a little bit on the SJU and surrounding markets going after bigger fish. WN expands more into SJU and surrounding markets (basically doing what b6 is currently doing). And b6 expands even bigger into SJU and surrounding markets co-existing with WN. If AA and US don’t merge; I predict a hostile take over of b6 post AA bankruptcy. And that would spell trouble for WN if that happens.

      • Don says:

        How crazy of me to forget. I also think DL will increase their presence a little bit but will be busy defending other turfs against what ever AA US and United throw at them.

    • Trent880 says:

      Why would WN do any better than the current LCCs in the market? They’re too little too late and B6/NKs costs are lower, with hubs in the right places (ie NYC/Florida)

  10. Stephen says:

    I am sure that we will be adding for connections to SJU this year and over the next few years. I would not be surprised if SJU becomes a jumping point to a few South American destinations either. The E-190 seems to be doing well for us there also.

  11. There’s more to the SJU AA hub that would be common knowledge. The main reason AA is walking out on SJU is their constant disagreements with the local government. AA felt they could dictate the rules on SJU operations. They felt their stronghold would make the local government buckle under pressure. Well, they were wrong. Other airlines are serving SJU better than AA ever did at lower fares. The other aspect is the fact that they put a MIA manager to oversee SJU and he made every effort to move most SJU passengers through their MIA hub. Thus slowly destroying SJU as a heavily AA traveled location. AA is missing the point on SJU. SJU is a lot more than a connecting point to the islands. There are a lot of business travelers, politicians, cruise ship passengers and local/stateside residents that visit relatives and vacation in SJU. These passengers don’t connect to the islands.

  12. Must continue>>>>>> Jet Blue is doing quite well with non-stops to BOS-DCA-Dominican Republic, several Florida locations and the US Virgin Islands. Routes that were all AA but they couldn’t or wouldn’t compete on. Other airlines are doing quite well in SJU as they grow their daily flights in and out of SJU.
    It’s sad that AA can’t serve SJU better since they could do well financially in spite of their bad attitude flight crews on board.

  13. Ken says:

    Seabourne Airlines is picking up the slack for Beef Island, St Thomas and St Croix. They recently purchased 3 Saab 340’s. http://www.seaborneairlines.com. Just flew out of SJU this evening and the AA terminal is really a ghost town. The ATR 72’s are looking pretty tired as AA is going to return them. Gate agent was pretty rude too, probably knowing she is unemployed in a few months. My hotel in SJU overlooked the airport and watched the planes come and go and Jet Blue has certainly taken over there.

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