We’ve been talking about American’s strategy in New York for a very, very long time. The airline is undersized, and there is no clear solution. It briefly hoped it solved its problem in New York with the innovative Northeast Alliance (NEA) with JetBlue, but the court’s ruling shutting down that plan forced American to figure out yet another new path forward. Now, with no hope of a partnership to improve its fortunes in the near future, it appears the airline is shifting again.
Recently, American announced it would not be able to come to an agreement with JetBlue for a new partnership that would pass federal antitrust scrutiny. This means that in the foreseeable future, American has decided that it will just accept its position as a distant fourth place airline in the region behind Delta, United, and JetBlue. Maybe that changes with a merger or acquisition in the mid- to long-term future, but barring that, it is always going to be a laggard in the market.
So what do you do if you’re American? There have been a variety of strategies used over the years. The plan before the NEA seemed to be focused on serving smaller cities where American could provide more value to people in those places who were flying to New York. It was not about New York origin, for the most part. But that hasn’t worked very well.
In recent months, it looked like American was focusing its New York growth in leisure markets that would appeal to the local traveler. This year saw the start (or restart) of Fort Myers, Myrtle Beach, New Orleans, Orlando, Tampa, and West Palm Beach, all big sun markets. We also saw additional northeast leisure flying primarily in summer, including Burlington, Hyannis, Martha’s Vineyard, Nantucket, and Portland (ME).
The idea here was to effectively focus on the leisure traveler instead of the business traveler, with some notable exceptions like LA, San Francisco, and of course, London. It could use small airplanes to serve those high-dollar markets in the northeast while it used bigger airplanes to go on the sun runs where fares were lower but demand was plentiful.
Either I didn’t quite understand the plan at the time, or it has now shifted once again. Now, American seems most interested in big markets that actually do appeal to the business traveler but also leisure. Anyone else getting whiplash?
Here’s a look at top domestic markets for all airlines based on 2024 passenger numbers with whether American served the market or not in 2023, 2025, and in the new future plan. One note here: I assumed that all summer markets served in 2025 will still be in the future plan.
Purple is newly-entered, red is exited, data via Cirium
To be fair, New Orleans, Orlando, Tampa, and West Palm Beach are all top 20 markets, so those could have been part of this new strategy to go big. But American will now also go back into Atlanta — a market it ditched during the NEA — and Fort Lauderdale. That means in the top 10 markets that can be served nonstop from LaGuardia, it will only not serve the United hubs in Denver and Houston.
American isn’t only focused on huge markets, also filling in a little below that level with Charleston (SC) on the list. But it is also going deeper into smaller markets that might have business demand. For example, Madison will now have service, and Burlington will go year-round.
With all of these adds, it means something has to go away thanks to the slot controls in place. And American will be walking away from several smaller markets:
- Cincinnati
- Dayton
- Knoxville
- Louisville
- Minneapolis/St Paul
- Omaha
- Sarasota
Of these, Minneapolis/St Paul is most surprising since it is a big market, but it is also a Delta market, and that says a great deal. In every single one of these markets, Delta is the only competitor to American. It also has a frequency advantage in all but Dayton where they each have been flying 6x weekly. Most of these are not huge markets, and American is giving up, completely ceding them to Delta. Congrats on that victory, Widget.
Instead, American will mostly push its slots into service in those bigger markets, hoping it can appeal to enough of the local corporates to possibly snag some more business travel. It think it’s better to be a small fish in a big pond than a big fish in a small pond these days.
This still feels like a spill carrier strategy to me. American doesn’t have an advantage in any of these markets over other airlines, but if it has enough breadth, it figures it can probably come in and negotiate aggressive deals to steal some traffic. These spill carrier strategies don’t tend to work out well, but then again, in a highly-constrained market like New York, it does make it a little more palatable. But still…
I can’t say I love this plan, but then again, I also can’t say I have another one short of getting a JetBlue deal done at any cost. Ultimately, none of these strategies will make American a top competitor in the region. It is just hoping to create a plan that will get it to stop losing enormous sums of money.
30 comments on “American’s LaGuardia Strategy Takes Another Turn”
Time’ll tell if this is a good pivot or not, but it’s better than DL’s obsession with AUS. For MSN specifically, AA has gone from almost an afterthought to the market leader.
At least Austin is a growing metro area. NYC is fairly stagnant.
United as IAH and AA has DFW. Delta had DFW as a smaller hub until the mid aughts. I guess they figured Austin is the best way to get more business in that hell forsaken state.
NYC maybe stagnant, but there are over 20,000,000 people within the CSA & that is something Austin will never match.
American’s solution to its NY problem is to merge with or acquire JetBlue. The UA/B6 news of late is all smoke and mirrors. UA has a big problem at EWR for sure, but it can’t acquire B6, even with a tainted DOJ, which would not respond favorably to UA having so much control at two NY airports (#1 at EWR, #2 at JFK). Further, the costs of overlap in NYC would be very expensive for UA to run efficiently.
American will acquire B6 in the foreseeable future, trim the routes B6 has that don’t make sense, and ditch the A220s and sell them to DL or UA.
That will fix AA’s NY problem as without it, AA has no solution in NY. It is too large to leave and too small to compete.
American will eventually ditch AS, which will tie up with UA. AS is not going to last in OW.
Uh, if the NEA is blocked on antitrust grounds, how is an actual merger possibly going to pass?
American’s future in NYC will be determined by its acquisition of JetBlue, which will happen, eventually. UA will not be able to get its hands on JetBlue no matter the recent news cycle. Too much NY control and a lot of cost to run two hubs in the same region. AA will eventually ditch AS which itself will move to *A and AA will have the only solution viable for its perpetually failing NYC strategies.
I really like this analysis of the top domestic markets, including the visual (though, as an aside, I think CVG should be labeled as red for 2025, based on the the logic & comments). I’d be curious to see something similar for AA/DL/B6 out of BOS, or AA and a few other airlines out of LAX.
Not sure who AA has corporate contracts with, but from the perspective of big company business travel, I’m a little surprised that AA isn’t doing even nominal service (e.g., 1 flight/day) to MSP, given the CPG industry connection there with Target. I’d make the same argument for CVG (for P&G and Kroger), especially as DAY (which is often more convenient with traffic to P&G/Kroger offices in the northern Cincy suburbs) is also being exited. To your point, maybe AA is continuing to try to cater more to companies outside the Fortune 500 that are traveling to NYC instead of from it.
It’s also interesting to note the absence of service to Rochester & Syracuse… Even if that isn’t high-yielding traffic, I wouldn’t have been surprised to see AA serve those markets from LGA as a way to curry favor with politicians upstate.
I don’t think service to ROC and/or SYR would get them that much credit with upstate politicians – both cities have plenty of other alternatives for connections to other parts of the US, and even for travel to NYC have DL to LGA, both DL and B6 to JFK, and UA to EWR.
And not that many people worry about currying favor with Schumer anymore, even within the Democratic Party – he has the minority leader’s title in the Senate, but he’s pretty much a spent force these days. He’s likely to draw a primary challenger if he tries to run again in 2028.
American is now channeling Spirit at LGA, hoping for spillover from the airlines that people would actually prefer to use. Can’t wait to read about their next NY strategy which should be announced in another 9-12 months.
Question – how much overlap does AA have between LGA and JFK? I know that JFK service exists primarily for international feed but it would be interesting to see how much of their service is duplicative and how that compares with Delta, the airline that has actually figured out how to run a successful operation at each airport.
Anecdata (meant to include above) – CLE to NY area. United and *A loyalists fly the mostly mainline 4x service to EWR. That leaves 10 flights per weekday to LGA (5x DL, 4x AA, 1x F9) and 5 to JFK (3x DL and 2x AA).
The LGA and JFK flights are a bloodbath. Fares are always low, even at the last minute. People joke it’s cheaper to fly to NY than drive there considering tolls and gas and that was BEFORE Frontier jumped in with a daily. So what is American trying to do here and in other markets like this?
Bill – Routes served from both JFK and LGA are Boston, Cleveland, Charlotte, Chicago/O’Hare, Columbus, Dallas/Fort Worth, Indianapolis, Miami, Nashville, Norfolk, Pittsburgh, Raleigh/Durham, Toronto, Washington/National.
AA’s problem in NYC just as it is in Chicago and LA is that they can’t hold onto high value passengers because of the level of service they deliver. Another site detailed a horrific travel day on AA.
All of the schedule parity – even if existed – doesn’t matter if an airline cannot deliver a competitively reliable level of service and reliability.
1000%
American has a serious IRROP problem. Additionally, they seem obsessed with closing the door 10 min before time even when it is easy for agents to see close connects. United’s ConnectionSaver is wonderful.
American needs to fix the service issues first.
If they are a distant 4th now in NYC, then they will stay a distant 4th and keep on losing money unless something significant changes. They need to eithe go big (donate lots of money to the Republican party, change corporate policies to match exactly what Trump says, do a lots of ass-kissing to Sean Duffy and then buy JetBlue a year later) or go home (exit JFK except for the most intensely profitable routes like London). I just cannot see how (for example) JFK – Nashville has a future
How on earth would donating to the Republican party help anyone in the NYC metro area?
I swear the TDS by some commenters on this site is over the top.
American got themselves in this fix. Up to them to change their position, if they even want to.
David C – It seems that you are just wanting to find something in that comment to support your assertion even though it’s completely missing the point. Anon is saying that this requires kissing federal government butt in order to get a merger through the antitrust review. That is certainly true and it’s tactic many airlines are considering these days.
This won’t massively change market dynamics, but maybe a low cost way to help on the margins? Since AA is running “Bus Flights” out of PHL now, I’d be curious to see them try LGA-JFK behind security “Bus Flights.” Could open up a lot of connectivity between these domestic feeder markets they’re adding to LGA and the international network they (or at least their partners) have at JFK. They already ticket itineraries with an airport change but that’s a non starter for most folks because they’d be on their own for the cross-NYC trek.
I know they’d rather just send everyone to PHL for that, but the PHL network still just isn’t very strong for both frequencies and OneWorld partner options.
I’m not sure a bus would be competitive against Delta and JetBlue. Sitting on a bus on the GCP and Van Wyck would be a nightmare. That would be sold as a double connection which already moves it to the bottom of the GDS, and you’d need ~3 hours between arriving in LGA and departing from JFK. I’m also not sure that either airport is setup to allow for post-security bus operations.
I see AA’s JFK-SNA flight fitting the strategy you defined. It has a small lounge at SNA , it is a wealthy catchment area, and Delta and JetBlue don’t fly the route so it can offer a service other airlines can not provide. Surprised their aren’t other CA markets similar to SNA that AA can exploit.
NYC based here and I find it frustrating how AA doesn’t serve the major business markets of DEN or IAH or regional markets like SYR or ROC. I want to take AA but it doesn’t get me where I need to go! Guess I’ll just fly Delta which has a great schedule to basically anywhere in America plus will provide me great service especially in Economy Plus (with wifi AND more than just Biscoff cookies as a snack).
The America West mentality running AA into the ground doesn’t know what they’re doing.
At every turn they are Sideshow Bob stepping on a rake and getting the handle to the face. Vasu almost cost them their BA partnership, why do you think he was basically ‘disappeared’?
Americans current management still seems to think they’re a plucky upstart duking it out with Southwest in PHX. They don’t compete. They retreat.
They don’t know what to do in New York and it shows. Cram 900 flights into CLT? A thousand into DFW? Who in the EU wants to fly to PHL and find themselves with zero connectivity to NYC?
American management is focused on price sensitive leisure travelers, and it’s killing the place.
Sideline – This false narrative is getting quite old. Vasu was a legacy American person, he had nothing to do with America West.
It’s so old that it’s eligible for social security
Predictable. Not the post, which is fair and informative, but the responses all with hate for AA.
What the heck are they supposed to do in NYC? They had a great plan…and it was blown up by the courts.
They don’t have enough gates or runway capacity to run a hub.
It’s a fools errand to crank a bunch of flights to the fortress hubs of other majors. You don’t see United running flights between LAX and DFW or Atlanta.
If you can’t run a hub, you maximize what you do have. You can’t be all things to all people. So you do what you do.
With great amusement, I read the comments regarding AA somehow buying B6. Seriously? That ship has sailed. Can UA buy B6? I don’t see why not. Any overlap in any particular single market can be addressed via divestiture, as it usually is. Don’t forget that UA isn’t strong in BOS and has almost nothing at FLL (or anywhere in South Florida for that matter). They’re also a dominant airline in the midwest and western US, places where B6 is irrelevant.
While I’m not saying that such a merger will happen, it COULD happen. And it’s a lot more likely to go that way than any fever dream of AA snatching them up.
I agree with this 1000%. UA has a much greater chance of passing muster since they have minimal overlap compared to the other major carriers with JetBlue. They may divest a huge chunk at a Newark in order to get the merger to go through and that would bring United back into JFK With a sizable presence and they leverage Newark as spill over for New York City hub. American already has quite a presence in New York JFK even though it’s a distant third behind Delta and JetBlue on but bring united has zero jfk market share it’s more palatable, top of that AA is huge in Florida especially south Florida so how is that gonna pass muster with the feds with American? And American is also sizable in Boston? So all your points are correct United Airlines is a much easier and better measure/acquisition partner for JetBlue and easier to pass the feds.
There’s no way United jeopardizes their position at Newark to still trail Delta at JFK.
Hubs do not “spill over”. It doesn’t work that way. If you are connecting, you can’t have your connecting flight at a different airport 40 miles away.
The whole point of a hub is economy of scale. The more departures you can cram together, the more places you can offer connections to. It would be like a Super Target having their general merchandise in one location, and their groceries at a different store a couple of miles away.
Delta has virtually no presence in Chicago, a major business center, but manages to do quite well when it comes to overall profitability. Which begs this question: Is it absolutely necessary for every major airline to have a significant presence in every major metropolitan area?
The New York area is over twice the size of Chicagoland and is considerably wealthier. It may not be “absolutely necessary” but expecting an institution like AA to make the most of their resources in a market like NY is very reasonable.