American Airlines and US Airways are suspending services to several European markets from their Chicago, Philadelphia and New York hubs this winter, while also making adjustments to routes from New York, Miami and Charlotte to São Paulo in anticipation of an Open Skies regime that will come into full effect between the US and Brazil.
American Airlines seasonal suspensions to Europe:
Chicago – Dusseldorf 25OCT14 – 28MAR15
Chicago – Manchester 06JAN15 – 28MAR15
New York JFk – Dublin 25OCT14 – 28MAR15
US Airways seasonal suspensions to Europe:
Philadelphia – Barcelona 05MAR15 – 29MAR15
Philadelphia – Rome 05FEB15 – 05MAR15
Philadelphia – Zurich 25OCT14 – 14APR15
American’s only European market that will see growth this winter is London Heathrow, which will receive an additional 4 weekly frequencies from Dallas/Ft. Worth (21 weekly flights versus 17 in Winter 2013) and an additional 3 from Miami (17 weekly flights versus 14 in Winter 2013.
American will also trim its services between Milan, Italy and Miami and New York JFK, resulting in a split operation between the two gateway hubs and Northern Italy. Currently, American flies daily from both markets to Milan, but will temporarily reduce services to alternate between 3x weekly Miami – Milan and 4x weekly New York JFK – Milan, depending on the day of week. This interim change will take place January 6, 2015 through March 28, 2015.
In South America, American is cancelling its short-lived route from Charlotte to São Paulo on October 1, 2014, while also reducing frequencies from Miami and New York to São Paulo Guarulhos airport. However, the capacity will be redeployed to launch services from both airports to nearby Viracopos International Airport (VCP) in Campinas, Brazil, located approximately 62 miles west of São Paulo.
American Airlines Winter 2014 adjustments to Brazil:
Charlotte – São Paulo cancelled effective 01OCT14
Miami – São Paulo Guarulhos operates 3 daily instead of 4 daily eff 01DEC14
Miami – São Paulo Viracopos NEW daily flight eff 02DEC14
New York JFK – São Paulo Guarulhos operates 7 weekly instead of 12 weekly eff 01DEC14
New York JFK – São Paulo Viracopos NEW 3-weekly flight eff 01DEC14
Seasonal cuts from Europe impact American’s three newest transatlantic routes
New York – Dublin, Chicago – Dusseldorf and Miami – Milan are three of American’s newest routes that the carrier launched in 2013. American commenced service between Milan and Miami in November 2013, New York to Dublin in June 2013, and Chicago to Dusseldorf in April 2013.
American had reported marginal yield growth (+2.8%) and declining PRASM growth (-2.4%) across its transatlantic network in Q1 2014 versus prior years during the same quarter, indicating that weak Q1 numbers would not justify maintaining year-round daily service on these three routes.
In contrast, American’s Chicago to Manchester route has been around for several decades, and New York to Milan has been offered daily year-round since May 2008. The Chicago – Manchester route reduction, along with Dusseldorf, leaves Paris and London Heathrow as the only European markets supported year-round out of American’s O’Hare hub, further enlargening the gulf between it and #1 competitor in Chicago, United. Compared to American, United offers year-round service from its O’Hare base to London, Paris, Frankfurt, Amsterdam and Munich.
Noticeably, US Airways is up-guaging its Philadelphia to Manchester flight from an Airbus A330-200 to a -300 series aircraft, indicating that the combined carrier is opting to route USA-Manchester traffic via its Philly hub. American also flies a daily 757 from New York JFK to Manchester year-round.
Out of Philadelphia, the US Airways transatlantic route reductions are slightly less drastic, with the Rome and Barcelona suspsensions lasting a mere four weeks. The Zurich suspension is a big longer, and likely a casualty of US Airways’ withdrawal from Star Alliance this past March. Zurich is the primary base of Star carrier SWISS. Additionally, American flies from its New York JFK hub to Zurich on a year-round basis.
The takeaway from the European adjustments is that over time, American’s network approach to Europe will gradually become more crystallized over the coming quarters. Even with the pull-down at Chicago, American’s greatest gain, from an international network perspective, was additional transatlantic marketshare thanks to US Airways’ robust Philadelphia hub, and to a lesser extent, Charlotte. Moreover, with the recent surge in transpacific capacity between Dallas/Ft. Worth and Seoul, Hong Kong and Shanghai, which has so far produced generally favorable figures, the eyes are much more focused on the future success of those routes over Europe.
Brazil operations shift back to cornerstone hubs, focus on premium markets and also battling low-cost carrier entrance
Pre-merger US Airways concentrated its Latin American network out of Charlotte, offering daily servicse to Rio de Janeiro and São Paulo, but obviously, the mega prize is Miami in a post-merger scenario. Although a more balanced network approach would be maintaining multiple US gateways to Latin America’s largest city in São Paulo, the new American has opted to maintain South American trunk routes from four of its five “cornerstone” hubs at Dallas/Ft. Worth, Los Angeles, Miami and New York JFK, all of which offer daily, if not more, flights to São Paulo Guarulhos airport. Consequently, Charlotte will lose both of its Brazilian routes entirely this fall.
In its press release regarding the changes to its São Paulo flights, American also announced that all three of its daily Miami – GRU flights, along with the daily service from New York JFK and Dallas/Ft. Worth, would be offered on its new flagship Boeing 777-300ER aircraft by December, its soon-to-be only widebody aircraft in service offering a 3-class cabin configuration with First, Business and Main Cabin seats.
On its routes to Viracopos airport, American will service the secondary São Paulo airport using its older 767-300ER widebody jets, a more appropriate selection given the predominance of Guarulhos airport as the “preferred” airport of São Paulo. Moreover, American is going head-to-head with low-cost Azul Linhas Aereas, owned by former JetBlue CEO David Neeleman, which will commence widebody service from Viracopos airport (its main base) to Fort Lauderdale and New York in late 2014 or early 2015.
Additionally, American will introduce its first reconfigured 777-200ER flight into service between Dallas/Ft. Worth and Santiago de Chile on 04SEP14, initially operating 3 times per week. The re-configured cabin will come with 45 Business Class seats and 215 Main Cabin seats, as part of its plans to remove First class from its 777-200ER series aircraft.
AA945 DFW2115 – 0905+1SCL 763 x146
AA945 DFW2145 – 0905+1SCL 777 146
AA940 SCL2120 – 0610+1DFW 777 257
AA940 SCL2220 – 0635+1DFW 763 x257
The 2-class 777-200ER will operate on daily basis from 01DEC14.
Next up: merger integration timeline, network announcements for S15 and Q3 performance
October 2014 will be a hot month for the new American when it lays out more details pertaining to its merger integration timeline, notably as they pertain to IT, and of course, ongoing developments surrounding labor agreements. In addition, it will be the first full quarter since American launched its high-profile routes from Dallas/Ft. Worth to Hong Kong and Shanghai, and investors will be looking for updates on how these routes have performed.
Additionally, more announcements will be expected pertaining to the deeper coordination between US Airways pre-merger hubs and routes. Charlotte, in particular, saw major transatlantic growth this summer with new nonstops to Manchester, Barcelona, Lisbon and Brussels. It will be interesting to see if these flights return the following year.