This morning, American is announcing that it is going to begin codesharing with Gol down in Brazil. On top of that, it’s adding more flights in Miami to bulk up. If this news surprises you, you should really get out more often. The Gol deal was an obvious partnering that was just a matter of time, and American has needed to build up Miami for awhile now. Though many will paint this as the coupling of two spurned lovers, it’s actually not a bad plan. And the growth in Miami… well that’s just overdue.
When Delta swooped in and took LATAM away from American as a partner, that left two jilted lovers. American was left without its long-time Latin American partner. Gol, meanwhile, now had to find a buyer for the stake that Delta owned in the airline. With Delta and LATAM firmly locked together, Gol and American had to evaluate their options.
American was already the strongest US airline to South America by far, but losing LATAM had the potential to prevent American from getting to important secondary destinations. It also hurt American’s ability to attract origin traffic in South America that was loyal to LATAM. This Gol agreement will help in both ways.
At first, American will slap its code on 53 flights going to 20 new destinations mostly in Brazil. I dove into the ARC/BSP settlement data from Diio by Cirium to figure out what this would actually add.
First, I looked at the top destinations in Brazil from the US by number of passengers (though I’m not showing those numbers, just trying to show scale). I eliminated the ones that American already serves and the ones with fewer than 5 passenger day. Then I highlighted the ones that American will be able to serve via the Gol codeshare. Here’s that map:
When American and LATAM broke up, that left American with 13 partner destinations in Brazil plus one in Argentina that it could no longer serve. Now it’s adding those back and more. On top of that, American will get Asuncion in Paraguay.
While the total passenger numbers may not end up being huge — I don’t know much about what connectivity will look like, but this isn’t an equity relationship and I doubt there will be any kind of schedule coordination — this is still important for American to have these dots on the map.
The next step is to enter into a frequent flier partnership, and that comes soon. When that happens, it will help with the other issue. Those who are Gol loyalists will have more incentive to fly on American when they go to the US. I don’t know how much traffic that will generate, but again it’s something. All of these little drips can turn into something significant on the aggregate. And it’ll help sustain more service between the US and Brazil on American aircraft.
That’s why the bigger news to note here, if not as flashy, is American’s decision to wake up and start building up Miami. To be fair, this is entirely reactive and that’s frustrating. But it’s better to be reactive than not do anything at all. That may not be an inspiring slogan, but well, we’ll take what we can get.
Right after LATAM defected to Delta, American announced it would add more flying from Miami to Lima, Santiago, and Sao Paulo. Now, American says it will add a second flight from Miami to Rio. Presumably this was a flight that might have been marginal before, but now with the Gol codeshare — Gol has more than 70 flights a day in Rio — it may be worth a shot. There is also, however, some feed coming from the other end.
The other part of this reactive behavior is American building up Miami domestically. Considering Delta’s announcement that it would bulk up flights from Miami, you won’t be surprised to hear that American is doing the same. Here’s what coming:
- Boston goes from 7x to 8x daily
- Houston/Intercontinental goes from 5x to 6x daily
- Nashville goes from 3x to 4x daily
- Orlando goes from 7x to 12x daily
- Raleigh/Durham goes from 3x to 5x daily
- Tampa goes from 6x to 8x daily
Shocker, right? Those last three markets are the ones that Delta is entering. (American left Salt Lake off its list.) Look at Orlando. That goes from 7 to TWELVE flights daily. That is a big market worth fighting for that’s very clearly going to be a battleground. Let the brawl begin.
But the first three… those are clearly where American thinks Delta may want to go next. Boston and Nashville are both focus cities to differing extents for Delta. And Houston is just a city with strong demand to Brazil. Even if it is a United hub, American knows that it can take a lot of Latin American traffic that Delta might have an eye on. This does look like a shot across the bow warning Delta to tread carefully.
With any luck this is just the beginning of a real Miami growth strategy. American spent years arguing Miami and Ft Lauderdale weren’t the same while JetBlue and Spirit built up with impunity. Now that Miami itself is being threatened on both domestic and international fronts, the giant may have finally woken itself up.
