I spent most of this week at the Boyd Conference (properly known as the International Aviation Forecast Summit). While I have plenty of posts to compile from that, it’s something that wasn’t announced at the conference that grabbed my eye for today’s post. American rolled out a large number of changes to its international network. Though most hubs were touched, there were three in particular that I found most interesting: Chicago, New York, and Philly. First, let’s look at a summary of the changes in this chart from American.
Now let’s get into detail.
Chicago Loses Asia
If you had to pick a loser in this announcement, Chicago would be in the running primarily for what’s happening to American’s Asian operation. American canceled its Chicago – Beijing flight in May of this year. Now Shanghai will follow. The bleeding doesn’t stop there, however. In something of a surprise, Chicago will also see its Tokyo/Narita flight cut from daily to only three weekly flights. Remarkably, those three measly flights per week are the only ones American will still operate to Asia from Chicago. (Do keep in mind, however, that joint venture partner Japan Airlines’s daily flight to Chicago will continue.)
Over to Europe, it was a mixed bag. Manchester is going away. That British Airways joint venture was expected to boost American’s opportunities throughout Britain, but it didn’t work out that way. Manchester just hasn’t worked well even as a summer-only flight, and so it’s out of there. If there’s any good news, it’s that Chicago will get a summer-only flight to Athens.
New York Loses Europe
The other big loser in this shift is New York. JFK is losing its summer-only flights to both Edinburgh (which moves to Philly) and Dublin. This joins the relatively recent decision to move the JFK – Zurich flight over to Philly as well. At this point, the bulk of American’s Europe flights from JFK go to joint venture partner hubs in London, Barcelona, and Madrid. What else does American have to Europe? Believe it or not, it’s just a single daily flight to both Milan and Paris. (Edit: Forgot about the summer-only flight to Rome as well.) Those are business markets to some extent, but you have to wonder how long those will last. American is also cutting JFK to Port-au-Prince in Haiti. (The rare non-hub Ft Lauderdale – Port-au-Prince goes away too.)
For American, JFK is about serving big business markets. It wants to be in LA, San Francisco, London, etc. It has continually reduced its footprint in New York, so this isn’t entirely surprising to see (and it’s not a bad idea), but it’s remarkable to think about how little is left.
Philadelphia Goes Boutique
At first glance, it looks like Philly is gaining a lot. It gets new summer-only service to Berlin, Bologna, Dubronvik, and Edinburgh. But there is a price to be paid here as well. It loses its summer flights to Glasgow and Frankfurt along with its year-round Munich flight.
The Edinburgh flight was moved down from JFK, and with Edinburgh and Glasgow so close to each other, it probably didn’t make sense serve them both. Glasgow lost out. But it’s what’s happening in Germany that’s more interesting.
Notice that Frankfurt and Munich both go away. These are all Star Alliance-stalwarts that made more sense when US Airways was a part of Star, but they are also big markets in Europe that you’d think would still be served. Instead, flying to Frankfurt and Munich will require going via DFW (which gets a new summer seasonal flight) or Charlotte… or through Europe on a joint venture partner. Meanwhile, Berlin joins the Philly network. Berlin has always been a weaker market than the other two from the US, so what gives?
It looks like American is going for a boutique model here, for lack of a better term. It’s pretty easy to get to Munich and Frankfurt from most points in the US thanks to the large Lufthansa/United network. Berlin is much tougher. While we’re at it, throw in Dubrovnik and Bologna as places that can’t be reached at all directly from the US. This summer, American flew to Prague and Budapest, popular tourist markets with extremely limited flights to the US as well. Presumably that scarcity of good options means American has the ability to collect a higher fare. That’s usually what happens with limited competition. It appears the idea is to make Philly the airport for those who need to reach difficult places in Europe.
I suppose this isn’t a risky strategy, but I and many others have a feeling that we’re at the top of the cycle (or starting the slide down) in the economy. These markets don’t seem like markets that could survive well in a downturn.
Random Thoughts on the Rest
There were some interesting changes in other markets as well. Here are my random thoughts on some of those.
- Charlotte – Munich: Lufthansa has flown from Charlotte to Munich for years, probably much to BMW’s delight since it has plants on both ends. But now American is moving its Munich flight down from Philly. Is this just a hub realignment or is this an effort to try to push Lufthansa out of there?
- DFW – Munich and Dublin: American really seems to like this summer seasonal flying. I feel like the airline said “well heck, Reykjavik worked. Let’s see what else might stick.”
- Phoenix – London: It was hugely exciting for people in Phoenix to get their first international American widebody flight with a summer flight to London. But this isn’t as big a deal as it seems. British Airways has had a daily 747 flight for a couple decades. After a successful May/June test of a second flight on certain days in 2017, it trotted it out for the full summer season in 2018 with thrice weekly service. Since BA and American are joint venture partners, I assume this new daily American 777 will replace the second BA 747 flight. That does mean Phoenix will have more flights to Europe (14 per week vs 10), but with a smaller seating capacity than the 747 that BA uses, it’s not as dramatic of a change as you might think.
This is a whole lot of change, and I appreciate American doing it all at once. Some of these are fun risks (Dubrovnik) while others seem to be simply a culling of the worst-performing flights. I think some may work, but depending upon what the economy does, that could change very quickly.
