American has announced that it will drop the legacy US Airways flight to Tel Aviv early next year. The reason? The airline says it has lost a ton of money. Do you buy it or do you prefer one of the conspiracy theories? There’s the absurd new one that American’s Arab partners put pressure on the airline to drop flying there. Or there’s the old one that the TWA’s liabilities in Israel are causing problems. (American says that’s been settled.)
Now’s your chance to go wild with speculation.
Because they’re losing money. So much hear say on this one yikes!
Well, I guess I need to be more careful trusting my favorite Palestinian (intended) paper as printing the Gospel (also intended) truth on weightier matters in the future.
Nearly 24 hours of R/T block time plus 8 hours of ground time in TLV = >1 aircraft needed to serve the route daily. Would have been a profitability and aircraft allocation decision. Pure and simple. Also, AA codeshares with EL AL, which has got to be just as much a sin as flying to TLV in the first place (if the Arab conspiracy is to be believed).
AA does not codeshare with El Al anymore.
It is hard to imagine give the a/c requirements that Doug Parker would have flown the route daily, year round if it was not profitable and even harder to imagine that with new AA network and FF that they couldn’t get more of a fare premium. Israel is historically a strong travel market with good yields and many business connections to the US. There may be better places to deploy the assets, however as it is a long rotation. The arab pressure is unlikely, but who knows.
My guess is with OneWorld, there is ample opportunity to route higher value customers on BA and other partners, and concede the lower fare market to JetBlue – El Al, United at Newark, or Delta among the variety of other international connection options.
Noah, you are mistaken.
AA does indeed codeshare with LY. LHR-TLV, CDG-TLV, BRU-TLV, AMS-TLV, MUC-TLV, FRA-TLV, MXP-TLV, FCO-TLV, BCN-TLV, and MAD-TLV all carry the AA* code. I would expect AA to expand their current codeshares to include transatlantic routes with the demise of PHL-TLV.
The TWA issue was the first thing that popped in my head.
One operating certificate means the TWA/AA lawsuit could be fired up again.
Or Trump says even though Israel has no better fan than him they won’t let him build a golf course along the Western Wall so he’s yanking Americans visiting
Well, this has been circulating around the internet for several days now, and so far all the references I’ve seen to the Arab pressure theory can be traced back to Haaretz’s unnamed “source”. I think it’s safe to say that’s nonsense. I’m actually surprised that this item appeared since Zohar Blumenkrantz is usually fairly reliable, but here they appear to be really off the mark.
Also, Philly is at a clear geographic disadvantage compared to New York, so it’s not surprising that the flight isn’t doing as well as the competitors’ NY flights. But then why did US Airways keep it for that long? Did they not have a better use for the aircraft?
I saw a quote by Philly’s mayor that the flight has been a major driver of Israeli business into Philly. This raises a whole other question, of how cities should invest in air transport (and transport in general) as a driver of growth. One also wonders whether this flight is the canary in the coal mine regarding the viability of American’s transatlantic operation in Philly.
This is weird. Let El Al take over the route or United. I’ve never liked flying internationally on AA or US Air anyways–even their first class is a complete joke. Interesting to think it’s more about Philly than Tel Aviv. Living in Philly, I can believe the city is losing status. The city is betting a lot on the visit from the pope and the DNC 2016.
On the flipside, will American increase its flights to Tehran (and Havana) instead? That would be totally strange, but in line with the executive branch’s new foreign policy to favor enemies over allies. Afterall, Tehran has oil. Israel does not. If we see a new AA Tehran flight pop up (or more), then maybe there is something to the conspiracy theories.
I don’t mind getting on the train to Newark to catch a flight on United. The only reason I ever fly AA is because PHL is a USAir/AA hub airport.
Last time I checked, that ally shot up the USS Liberty and has spied on the U.S. for a long time (Pollard and recent nuke talks). I’m not a fan of any government so am not saying Iran’s is better than Israel’s. Just wondering if the above facts change your view of what an ally is. Jefferson said peaceful commerce with all and entangling alliances with none.
No change in view. I am well aware of the Liberty, even met a guy who was there, and allied spying (which every country does do). Israel stopped Iraq from building nukes and all the “enemies” silently applauded. Same with Syria recently.
Jefferson was a great guy, but he probably did not envision nuclear arms races, especially in the Middle East. We have to stand by our allies and air travel routes, like having an embassy, is a symbolic message. Plus, it seems the current administration is creating more chaos (less commerce) by turning away from steadfast allies and towards outwardly hostile enemies. Another example is Cuba. Now that tourism to Cuba is increasing, Puerto Rico, where the same travelers go, is in serious trouble. And the PR is actually part of the US.
At least you make the decision fully informed. Considering they are not a formal ally, the other definition is one of friendship. I don’t spy on my friends and family, and if they started spying on me I’d no longer be friends. Of course, the U.S. Government spies on me, partly why I don’t consider it my friend.
As for opening up Cuba, probably should help PR get better at attracting tourists through the competition. That is the American way, at least ideally.
Nonsense. Puerto Rico’s troubles didn’t start this year. And which country in the Middle East had the first nuclear weapons and refuses inspections?
I’m going the politician route and saying all of the above haha.
* flight time + ground time to the ME vs. Western Europe adds 8+ hrs of mission time.
* intense competition just up I95
* it was successful under L-US”s cost structure but not combined AA. (I think this is the biggie)
* non premium traffic can be handled on BA/IB
Outliers: political considerations with possible future ME partners, & the TWA case was settled in court but there are questions about AAs compliance with the order.
Back in the day TWA also served Cairo and Saudi Arabia Haven’t heard either of them complaining about the loss of service. Between them and Pan American they had most of the Middle East as well as India and Pakistan pretty well covered. Haven’t seen much effort by an of the US big three even coming close to matching there service.About all they do is complain that they can’t make money on these flights
I know someone who would lable AA as anti Israel based on this decision.
It seems to me that the answer to this question can be found by applying Occam’s razor.
This flight has never been profitable? So US Airways operated a flight at a loss for 6 years? Yeah right.
AA admitted that those new international flights they have started up lose money. They said they considered it an investment.
This flight has never been profitable? So US Airways operated a flight at a loss for 6 years? Yeah right.
I’m guessing that now that the combined airline has larger hubs in JFK and other cities, it makes sense to put the aircraft elsewhere. US Airways used to fly from second-tier hubs to secondary foreign markets, and kept its costs lower than the other airlines, but that model isn’t going to work anymore.
Several months to a year from now a lot of AA international flights will probably disappear from Philly. It’s just the hub integration thing. Remember what happened to United’s hub at Cleveland?
My wife took the flight and was impressed with the service and how full it was. She noticed a lot of cargo being loaded in TA, some of which was Teva pharmaceuticals. She thought it was a smart move to capture that business and assumed it was highly profitable. It came as a surprise to hear it lost money for six years. I’m a bit skeptical they would operate so long at a loss, but in general the company has done a good job of manageing routes. I have to ask how much do fares have to go up to make the flight pay? Is the demand really price sensitive?
You know what they say about those who assume :)
Lots of claims have been made on FT about flights essentially being profitable due to the cargo in the belly. I’d bet few people would really know, and they won’t talk about it on FT or here.
As a frequent flyer on the Tel-Aviv-US route, I find it hard to believe that US Air couldn’t make money on the route, but for some (including me) the issue is that PHL wasn’t an end destination or the transfer airport of choice. I think the nail in the coffin was when Delta came onto the route into JFK, US Air found it more difficult yield wise. I doubt the 8 hour on the ground matters, as they could have changed the schedule to come in the morning, leaving in the afternoon like UA.
I certainly do NOT know why AA has chosen to pull out of Israel. In specifics, I doubt that most of AA does, either. Yes, well aware, of the old disputes concerning displaced TWA workers; they got screwed, but to by their own government, not TWA/AA.
In 2015, it continues to amaze me that any truly international company is still willing to deal with Israel! The business and airline communities continue to complain about a few South American countries and multiple Mid-Eastern governments that will not remit earned funds, yet everyone fears mentioning Israel in that class – though they are probably the world’s worst offender! Given a nearly free hand for decades, their lobbying power has become potent enough that they apparently feel no obligation to pay even routine foreign exchange bills. In the most simple of terms, they do NOT pay their bills and they do NOT honor their contracts. If I ran American Airlines, (Or pre-merger U.S. Airways), I would have pulled out a long time ago. No, I do not buy conspiracy theories. If US Air/AA had been paid the normal foreign exchange due and taken their money home, they would continue servicing those routes. They were not, they cannot obtain payment so what is the possible business reason to consider the service? If you sold doo-hickies, a customer walked in, filled his cart and left without payment, saying, “… we don’t owe you anything this week…” what would you do? Would you admit them to your doo-hicky store next week? I darn sure would not! While the scale is far grander that a cart of doo-hickies, the truth is that Israel won’t pay its legitimate bills and apparently does not intend to do so. Why many other nations continue doing business with them, let alone granting them significant aid, typically without obligation for much of anything, is wholly beyond my understanding. This is NOT 1948, boys and girls, this 2015. Playing Nice with Others, in 2015, includes honoring contracts and paying one’s obligations, whether for a cart of doo-hickies, or hundreds of millions for air transportation or other services, private companies or governments. To hell with those who can, but will not pay their bills. American Airlines has made a good choice, if a few years later than they should have. To hell with Israel! Any presumed right to Special Treatment expired decades ago!
I thought it was because Obama hates America, which also means he hates Israel. He then “made” AA hate America and Israel. At least that is what the comment section at Brietbart taught me.