American has been pretty clear that its network strategy is to rally around its hubs and avoid competition. By focusing on smaller cities where it can use regional jets to get a competitive advantage, it thinks it can make a decent living.
With this background, it might seem kind of strange that just last week American announced it would go back into one of the busiest markets in the country — New York/LaGuardia – Orlando — twice daily this winter. There are already four airlines in the market: Delta, Frontier, JetBlue, and Spirit. It’s even more if you count other NYC airports.
American will also put 2x daily from LaGuardia to West Palm Beach and 1x daily to New Orleans. This is in addition to the extension of 1x weekly summer service into 1x daily winter to Sarasota. All of these markets have plenty of competition, so what’s the story?
In short, this looks like an AAdvantage/credit card play. If you want people to take advantage of your “very special offer” and get those credit cards, you better be able to get them to Disney.
American continues to try to find the best way to serve New York after the break-up of the Northeast Alliance with JetBlue. As part of that deal, it had moved over a couple dozen daily flights to be operated by JetBlue. With that deal off, American has had to find a new way to use those slots. You can see the history of slot usage by American here.
Average Daily Departures from LaGuardia by Airline
Data via Cirium
Pre-pandemic, American was flying about 150 daily departures from LaGuardia. It had dipped well below that during the pandemic, but even when it built back, it never got back to the high level. At first, it gave up those slots to be operated by JetBlue in winter 2021, as you can see in the chart. But then the FAA also gave airlines a waiver to park 10 percent of slots without losing them. That gave American some added buffer.
JetBlue hadn’t fully given up those slots until this coming winter when it shrinks back to where it was before the whole NEA. American still hadn’t grown back into its portfolio, and there was some speculation that it had been leasing slots out to Spirit and Frontier to keep the slots under American’s control.
But now, in November, it looks like American is planning to fully utilize its slot portfolio. It may see some cuts thanks to the 10 percent waiver, but the airline seems set to actually use what it has to use. The last piece of that puzzle is the addition of these four leisure-heavy routes.
Overall, American has shifted its route focus from LaGuardia. Take a look at this:
American LaGuardia Departures by Destination Type
Data via Cirium
If you compare this coming November (which isn’t finalized) to November 2019, you’ll see where the shifting has happened. Hub departures have dropped from 37 percent down to 32 percent. This includes the 2x daily flights to Philly that didn’t exist in 2019, which are purely for squatting purposes.
Flights to the Top 25 Combined Statistical Areas (CSAs) are also down 5 points, from 20 to 15 percent. These are the markets that are most competitive, and they include both Atlanta and Houston/IAH, markets which American does not serve in 2024.
All of the other markets are up, including mid-size and small city markets where American is trying to build an advantage. If you look at a map, you’d see shifting from close-in markets like the Ohio Valley and the Carolinas to something penetrating further into the west. New markets vs 2019 are Birmingham, Buffalo, Des Moines, Grand Rapids, Greenville/Spartanburg, Little Rock, Oklahoma City, Omaha, and Tulsa.
There is some growth in pure leisure markets — I broke those out specifically, including Orlando, Sarasota, and West Palm Beach — but as you can see, these make up a very small proportion of departures. Still, they are useful for the New Yorkers that still have any American loyalty. It’s also probably the next best option.
Looking at this list, American has run out of new smaller cities it can serve within LaGuardia’s perimeter. With those maxed out, it had to look at pure leisure routes where service patterns won’t matter nearly as much and where AAdvantage members will find utility.
This may seem like a new and exciting move, but really it looks like an airline that has just run out of options to use its slots and isn’t willing to let them go.
