Can someone shed some light on what is AA business plan? What's the targeted market?
When I'm looking at Delta it's obvious what is the short and long-term plan with branding them as a premium product ("pay more for experience and quality)
United set pretty much on the same market with more focus on international and reaching out to audiences outside of the US.
What's AA going for? With the Oasis project they gave the impression of moving toward a LCC model, but then building high-end business class contradicts it. Utilizing the WB for domestic over international was a great way to make more profit and also gave an impression that the airline preferred to focus more and more on domestic but then set an order for more 787 (and even showed interest in the boom sonic project which is international operation only).
It's not a question of what's going on (the airline is doing very well, unlike a lot of the unjustified comments here...) but whats the actual business model is.

 

the business model is to chase easy money. Courting business travelers outside any of our fortress hubs is off the table. International is heavily dependent on One World partners. We are competing with ULCCs domestically and doing pretty good, just with worse margins.

 

I think it's a fair question. Some negative people on here will surely tell you there isn't a strategy, but that's not entirely true. The truth is the plan just isn't as flashy DL's or UA's plan.

AA has decided to focus largely on its fortress hubs. While Delta and United are pumping significant investments into competing in highly competitive markets like NYC and LA, AA has decided to focus on absolutely dominating its largest hubs. DFW, CLT and MIA are huge money makers with no competition except minimal presence from LCC's and AA has decided to focus on where the money is.

These hubs are much bigger markets for domestic flying than international flying, which is part of why AA has backed off on it. The other part of this equation is AA retired 757/767 and A330's all during covid. This reduced international capacity greatly, but it should be restored to some extent as these 787's continue to come in over the next few years.

AA's number one overarching strategy is paying down large portions of its debt. There will be no large-scale growth until the debt is taken care of. The company has been successful and is ahead of schedule. Once AA's debt reduction goals are met, I think there will be room for expansion.

AA is doing the right things and is taking important steps to secure a bright future. While the other legacies are taking on debt ordering hundreds of new airplanes (largely as replacements) and putting tv screens in 25 year old airplanes, AA is paying theirs down while maintaining a young fleet. AA has some ground to make up, but it has a chance to be an industry leader in profitability in 5-10 years if management plays its cards right.

 

Short answer: Run a reliable operation, make money, pay down debt. That’s it’s.

The oasis configuration aligned us with industry peers, not LCCs. In fact our non-neo a321s still seat less than Delta’s. PTVs, no comment. I’ll leave that for internet Av geek bloggers to discuss.

Long Hual intl network will be rebuilt when the next 30 787s and the 50 XLRs show up. But making money is priory #1. There’s no secret sauce.

 

Highest fixed costs and most debt in the industry. They’ve found a great sweet spot in Dfw and Clt. They’ll expand and double down there while costs at those 2 hubs are low. It’s not a sexy product, but it is efficient right now, and geographically those are 2 good spots for the population shift in the country.

 

why don't you take a look at AA investors site and read up on it

 

Thank you. Make sense and overall smart plan for the long term.

With the NEA now being canceled, are there any hints in the company on what will happen to LGA and BOS?
Looking the AA history, they don't make the effort to compete in airports that they are not number 1.
They will have to rebuild NY as it's a huge market, but what will happen to Boston? Provided that BOS only got 200 pilots, it looks very similar to what happened to St.Louis base

 

Increase their NB market, churn and burn, use their pilots to the max allowed, totally take advantage of the pilot's union by negotiating a contract that is heavy in managements favor, basically become more like a Regional or SWA then UL or DL.

 

That’s a good question that I don’t think we know the answer to yet. However, the Boston base was not a result of the NEA, so I think it should be relatively unaffected.

Short term, it could go either way for NYC. I could see some reduction for international flying because there won’t be the domestic network to support it. Long term, I think the NYC base will grow on the domestic side to reabsorb some of what AA gave up to B6 and then the international WB would be relatively similar to what it is now.

These are just guesses, but NYC is too important to give up on, so I think there will eventually be a renewed effort in that market.

 

The truth is nobody knows how this will play out.

STL had 400 flights a day at its peak. It was a nice hub airport, central located. But too close to DFW and ORD to keep around with the combined carrier. Think of it like a PIT. Probably similar economically speaking as well (stagnant populations, slowly dying economies).

About JFK
On our widebody flights, on average, 40% of our total load is from connections with the overwhelming majority being those who fly on AA exclusively (33%). JetBlue contributes about another 6%, which amounts to about 250 people per day that the NEA contributes to.

Only two wide body transatlantic flights average over 80% load factor - Doha and Tel Aviv. Everything else is under 80% (LHR 60%!) which means we need more feed (or more local business). 80% load factor on wide bodies? Doesn't sound like we are making money there. I don't have that info though.

I'm optimistic for the future of AA in general, but personally do not think NYC nor BOS will be anything more than outstations with limited transatlantic point to point flights. Like you said, we just don't have that much room to grow in either market and it costs too much to use JFK as a hub as far as connection fees go. BOS isn't a great hub geographically speaking.

I don't know Delta's BOS statistics but it wasn't even until 2017 or 2018 where Delta was break even in NYC. It's just not a place where carriers can make money - the operational costs are too high. The port authority makes far more money than the airlines do there.

It's possible they will down gauge and run narrowbodies on transatlantic routes if they can be done at a profit (Vasu is on record stating it's very tough to make money doing so).

The 2023 AA is nothing like the 2019 AA. We are better in so many ways. Streamlined fleet, operationally sound with true effort being made to be reliable. Our top management aren't bean counters, they have an operational background. Effort beyond lip service to align the carrier financially with peers. Our mega hubs are being expanded with focus on efficiently down to the ATC level. This is something the AA and US of the past never did.