When I took a look at how the interisland market has evolved in Hawaiʻi, several of you wanted to see a similar peek at the transcon market. Ask and ye shall receive.
There is no market more important market in the United States than the New York/JFK – Los Angeles route. It’s a huge market connecting two of the country’s most important cities. It is also a remarkably premium market that has the ability to generate incredible revenue. How much? In Q1 of this year, it took in over $101 million. In second place was Newark – San Francisco with shy of $70 million. The top four markets are JFK/Newark to LAX/San Francisco and were worth $280 million. In fifth place was Long Beach – Oakland. Just kidding. It was LaGuardia – Miami with a paltry $36 million. (Long Beach – Oakland, if you were wondering, came in 883rd place with just under $3.5 million.)
But to start this look, I wanted to expand the definition of transcon. First, I decided to include all New York airports plus Boston. On the West Coast I thought it worth including all the LA Basin airports and all the San Francisco Bay Area airports as well. It’s a broad definition, but it’s helpful to see how this has evolved.
So, let’s start off by looking at seats by airline over time thanks to Cirium’s T-100 data.
Seats by Airline on Key Transcon Routes
Data via Cirium, transcon defined as Boston/JFK/LaGuardia/Newark to all LA Basin and SF Bay Area airports
Back in the 1990s, this was a market in flux. There was a lot of capacity from the big domestic players. But at the time, those were American and United, not Delta. Continental had its presence from the old People Express Newark hub as well. But the big international carriers also added a ton of capacity. We had TWA and Pan Am flying big widebodies across the country. For those who wanted a truly premium experience, there was MGM Grand Air which had DC-8s and B727s flying important people in style for big money.
It wasn’t long after the dawn of the decade that we had the Gulf War and a major recession. Pan Am (and MGM) failed which instantly helped the market, but by the mid-1990s, capacity had grown past what had existed in the Pan Am days. As the economy boomed, Tower came into the market with its rickety B747s that somehow never fell out of the sky. It had cheap fares and a lot of capacity, which worked (sort of) until the turn of the century.
The combination of the .com bubble bursting and 9/11 sent the industry into a tailspin and capacity tanked. TWA was absorbed by American, but American still shrunk. And Tower disappeared. On the other side, this was about the time when JetBlue got started, and it would enter the transcon market right away, albeit to secondary airports in California.
There were a handful of quirky, failed attempts to make the market work from a low-cost carrier perspective. In the early 1990s, America West flew JFK to Orange County but that didn’t make it through bankruptcy. The airline tried again from LAX to do transcon in the mid-2000s, but this Scott Kirby idea failed miserably and disappeared just as fast as it started. In 2003/2004, even ATA tried to get in on the act with Newark and Boston flying to San Francisco. That didn’t last.
What did stick was JetBlue and Virgin America, which brought a lower-fare operation with staying power. Then, the Great Recession hit, and capacity sagged. But it rebounded quickly into the era of consolidation.
When Delta and Northwest merged, Northwest had no presence in transcon, but it did spur Delta to build its own presence. The mergers of United and Continental plus Alaska and Virgin America were the ones that had the biggest impact on the number of players in the market.
Southwest briefly tried transcon from Newark but that didn’t last, and then COVID hit. In the current era, United remains a major player — albet to Newark and not JFK, as is well known — along with Delta and JetBlue. American is… not what it once was. Alaska is, well, it’s there still. And Spirit is trying to skim off the top.
But just looking at the airlines doesn’t tell the whole story. Let’s look at the airplanes as well.
Data via Cirium, transcon defined as Boston/JFK/LaGuardia/Newark to all LA Basin and SF Bay Area airports
In those early days, it was three-holers, B747s, and yes, even the DC-8 and some A300s/A310s that flew the majority of operations. But even then, the B767 was a major player. By the end of the decade, the B767s and B757s were almost exclusively operating the route. I had no idea but apparently Continental had some B737-300s flying from Newark. (I really have to think this was a data problem, no?) And JetBlue had its Airbuses. Interestingly, over time, it’s the Airbus narrowbody that has become the primary aircraft to service these markets.
But ever since the end of the 2010s, widebodies have crept back in. That’s almost entirely Delta and United putting their big planes with fancy flat beds on these routes. I would expect we will see that shrink or even disappear when United gets its B737-10 MAX aircraft and Delta gets its A321neos with flat beds. I still wouldn’t be shocked by some hub-to-hub widebodies, but it will be less.
And now, let’s circle back to the JFK – LAX route specifically. The story of this route can be told through one, single line.
JFK – LAX Seats per Departure
Data via Cirium
In the early 1990s on this route, there were few departures, but they had a LOT of seats. These were the widebodies serving the most glamorous route in the US. Reality hit hard during the Gulf War. When Pan Am went away, so did a good chunk of those widebodies. The number of seats per departure dropped as more efficient, smaller airplanes (read: B757s) were used.
Interesting, TWA’s failure didn’t even register. It was just part of a long, downard trend until we reached a mini-cliff in 2004.
That was the year that United replaced its B767-200s with B757s using p.s. service. There were very few seats on this airplane, so the number of seats per departure dipped noticeably.
The market stayed steady for awhile, even climbing a bit when, I think, United started putting more seats on those airplanes. But there was another cliff in 2014. It’s a tale as old as time… American did the same thing as United but 10 years later. It took its B767-200s out of service and put the A321 with few seats onboard into service instead. That brought us to the current steady state.
Oh, that COVID spike? Remember, nobody could fly internationally, so widebodies made their way on to premier domestic routes. That was just a short-lived move that was never going to last.
Transcon today is in a pretty steady place, but that will change again when United’s B737-10 MAX’s arrive along with Delta’s A321neos. Both will have flat beds and fewer seats onboard than the widebodies. The seats per departure may shrink again, but what really matters is how many flat beds they can cram on there to generate the big revenue. Flat beds on JFK – LAX today account for about 15 percent of total seats, and in this market, there seems to be an insatiable appetite for more.
