With American recently announcing its European-focus for the deployment of its A321XLR, I couldn’t help but wonder if this is the best use of these airplanes. I know Europe is sexy, but I couldn’t stop thinking that for American, Latin America would be a better place to start. And then I started going down the data rabbit hole.
We know that American’s initial plan for the XLR was to put it on the New York/JFK to LAX and San Francisco transcon routes to replace the 102-seat A321T that is dedicated to those routes today. This isn’t the highest and best use of the XLR by any stretch since it doesn’t require the range, but it’s how American decided it could avoid a dedicated fleet and use something with broader utility in the network.
If that’s an immutable requirement — which we could also debate, but I won’t for sake of brevity — then you can almost forgive the decision to put these on European routes from New York. It’s easiest to flow aircraft that way. So, JFK to Edinburgh and now Nice, well, those can come off the transcon flights. (I still think Amsterdam is a different animal that is going to face real challenges, but I get the strategy.)
Even if we accept that assumption, we have to keep in mind that these airplanes are now being run out of Philly to Porto and Vienna next summer. The transcon flights don’t touch Philly on this airplane, so this is a decision to focus on Europe and Philly as opposed to something else.
That “something else” that keeps bugging me is Latin America. Ever since American bought Eastern’s (previously Braniff’s) Latin routes in 1990, that has been American’s strongest international region. If you get a new airplane with new capability, you would think the best option would be to put that airplane to work reinforcing your strengths so nobody else can make inroads. In Latin America, that means having the ability to go deeper into the continent on thinner routes. And it’s in that region that American has seen its presence look wobbly.
Naturally, I asked American about this, and a spokesperson gave me a statement that ended with this:
We will continue to harness the power of [the XLR] by extending it to our Latin America network in the coming years as we take delivery of more aircraft. This will primarily be centered around Miami (MIA), where the aircraft can do much of what it does in Europe: add new routes and destinations, grow frequencies, and extend the season of operations. There is one added benefit of this deployment, and that is many of the markets in Latin America are counter-cyclical, so we could deploy XLRs to Europe in the Summer months, and redirect them southbound in winter months.
Ok, and yes, I imagine you would want more in winter than in summer, but there is still robust demand year-round, especially for the Latin origins. And competition is coming for American’s already smaller network. To break this down, I pulled the data to Deep Latin America.
I defined “Deep Latin America” as being Peru, Bolivia, Brazil, Paraguay, Uruguay, Chile, and Argentina. In other words this is every country that is fully below the equator plus Brazil which has no substantive population or possible destination in the sliver just north of the equator. Let’s start with a look at departure share by airline over the years, thanks to Cirium schedule data.
United States to Deep Latin America Departure Share
Data via Cirium
American had historically been in the 40 percent range, even as recently as 2014. But then it started to go downhill. By 2018, it was closer to 30 percent. More recently it’s been at 30 percent in northern winter, but northern summer sits down below 25 percent. And let’s not forget that it lost LATAM as a partner in 2019 when that airline joined up with Delta instead, so the impact is greater.
Between LATAM and Delta, their combined share hasn’t changed all that much. Sure, it has climbed up in the last few years a bit to over 40 percent, but the bigger changes are at the other end of this graph.
Azul and Gol are the ones who have really grown their share. Gol in particular started out using narrowbodies, but it has grown up into widebodies this year. Still, it’s those narrowbodies that American would target with its XLR and make real inroads. But it has chosen not to do that yet.
American’s strategy in Deep Latin America has changed fairly dramatically over the years. Take a look:
American Airlines Deep Latin America Departures and Destinations
Data via Cirium
Even during northern winter peak, American’s current levels of flying are below where they were 10 years ago. The off-season is below where it was 20 years ago. But what we do see is a rallying around only the biggest markets in Deep Latin. American serves only five destinations there year-round now, six if you include Montevideo which is northern winter only.
That alone might not seem like a big deal, but I think this map might change your mind.
Data via Cirium
That’s a lot of red dots. At one point in the last couple decades, American has served all of these destinations with its own metal. Not all of these were major destinations, to be clear — Porto Alegre (POA) was only briefly served in Feb/Mar 2016, for example — but they were served. And many of them were served by the mighty B757 which was so capable, it could handle hot-and-high spots like La Paz and more distant destinations like Asunción.
These are the routes that Gol and Azul are currently flying. From the US, Gol serves Brasilia and Manaus while Azul serves Belo Horizonte along with Recife and Viracopos. Oh, and Boliviana serves Santa Cruz de la Sierra, but that’s nothing new. But competition is about to heat up, I’m guessing.
Let’s not forget here that LATAM has 13 XLRs of its own on order, and SKY has 10. You have to think they will both fly some of those to the US. And at some point, Delta and LATAM will actually pay more attention to their joint venture and do more with it as well.
In other words, American should not be sleeping on this.
This doesn’t even have to start as adding new dots to the map, though I agree with AA that is the best place to start. It could also be about doing a better job connecting existing dots to other hubs in the US.
American Airlines Deep Latin Departures By US Gateway
Data via Cirium
Of course most of these flights go from Miami, but even Dallas/Fort Worth has lost some ground since pre-pandemic. And New York had a brief build-up post-pandemic, but now it has been reduced to its usual operation. Both JFK and LAX could hit Lima with the XLR, for example. They could also do anything in northern South America.
That not only makes it easy to flow aircraft into the transcon network, but it helps American to build its presence further both in the region and in its hubs.
To me, this is the best and highest use of an XLR to start. You undoubtedly want more capacity in Latin America in northern winter, so that does still leave opportunity for some Europe flying during northern summer, but it should start with protecting and growing Latin with everything else filling in the gaps.
