The Skift Airline Innovation Report is our weekly newsletter on the business of airline innovation. We look closely at the technological, financial, and design trends at airlines and airports.
Brian Sumers writes and curates the newsletter, and we send it on Wednesdays. You can find previous issues of the newsletter here.
You have to credit Vasu Raja, American’s vice president for planning, for declining to engage with a competitor.
His counterpart at United, a former American executive, has publicly chided his former employer for not taking as many chances as United on ultra-long-haul flights. United is bullish on them, flying Boeing 787-9s on routes like Los Angeles-Singapore and Houston-Sydney.
American has the same aircraft, so it could probably fly similar routes. But the two airlines have different philosophies, with American content to fly shorter stage lengths, except on a few must-fly routes, such as Dallas/Fort Worth to Hong Kong.
“Whenever you fly a really long haul, whether that’s across the U.S. or across the globe, you’re tying up an airplane for a really long time,” Raja said. “For us, the debate is really more about opportunity costs.”
I spent about an hour with Raja earlier this month in his office at American Airlines headquarters in Fort Worth, Texas, learning about network planning, including how the airline chooses flights, and how it sees the New York market. Not everything made the story, so be sure to read the end of this newsletter for bonus information.
— Brian Sumers, Airline Business Reporter, email@example.com, @briansumers
Stories of the Week
American Airlines Is Not Prioritizing Launching Very Long Flights: There’s serious stuff here about American’s strategy in New York and elsewhere, but there’s also fun trivia. Did you know humans no longer number American’s flights? It’s done by machine, and it’s mostly random. “It takes what people did in a week, and it does it in like an hour,” Raja said. Of course, some flight numbers remain from the prior, human-led era, by tradition. That’s why Flight 1 is New York to L.A.
Gogo Wants U.S. Airlines to Know Satellite Wi-Fi Isn’t the Only Answer: Gogo’s air-to-ground system in North America has almost become a punchline. It was the company’s first effort at connecting airplanes with Wi-Fi, and while it was OK in 2008, and improved a few years later when Gogo updated it, today it doesn’t get the job done. But Gogo is ready to introduce a much faster version of the system. So far, though, no airline has committed.
United Airlines May Change Its Boarding Procedures: Human nature is funny, right? United’s current boarding procedure, introduced a few years ago, might not be perfect, but it should work as well as any. The problem is the chutes. United has five at most gates, one for each group. Almost since the program began, customers have been lining up super early for no real purpose. United is considering asking customers in groups 3 to 5 to remain seated until they’re called.
WestJet Wants to Fly Dreamliners to China and Japan: Three years ago, when I visited WestJet headquarters, CEO Gregg Saretsky told me he wanted to acquire new wide-body airplanes, and possibly fly them to Asia. At the time, it sounded nuts. It’s one thing to think about flying to London from Eastern Canada using old 767s. It’s another to fly true long-haul routes with modern jets. But since then, WestJet has ordered Boeing 787s, and it looks like it will try Asia. Let’s hope it works. Otherwise it could be a very expensive flop.
Airlines Want Bigger Planes for Shorter Routes: In recent years, Airbus and Boeing have introduced completely new airplanes for long-haul routes. Now, it’s time for them to do the same for short-haul and regional flying. Boeing may move first, with its proposed 797. It will be interesting to see how this plays out. Related: Delta Air Lines told employees it might want to be the launch customer for the 797, Bloomberg reported.
A New Shuttle Service, Minus the 1980s Frills: When American Airlines announced it planned to fly a shuttle between Chicago and New York LaGuardia last month, I didn’t expect it to get much coverage. American has effectively had a shuttle for decades, with 15 or more departures most weekdays. Now, American is adding free alcohol, reducing check-in times, and using dedicated gates, so even The New York Times is writing about it. This is a lesson in marketing, folks.
Guess Who the Government Wants to Help? The Airlines: Mitch Albom, the Detroit Free-Press columnist who wrote the book Tuesdays with Morrie, was not pleased to learn that U.S. airlines want to roll back consumer protections. “What a shame,” he wrote. “This isn’t the donut business. Flying is essential to the economy, medical care, uniting families. There’s a reason many countries nationalize their airlines.”
More from American Airlines
Here are some tidbits from my chat with American’s Vasu Raja that did not make the story we published:
American usually relies on seat count to decide which plane to fly. But not always: Using the right plane is a focus for planners, and generally they choose aircraft based on overall seat count. But on some international routes, American uses the Boeing 777-300ER, even though it can’t fill every seat.
“We fly to a couple of really flagship business centers like Heathrow, and Hong Kong, Sydney, Sao Paulo, and there we are much more cognizant about deploying our largest airplanes with the greatest amount of premium capacity,” Raja said. “We’ll send our 777-300, which is a 300-plus seat airplane with 60 first and business class seats, to some of those markets, even though there isn’t always the coach demand for it.”
American may also use the “wrong” airplane if it needs better performance characteristics. The Airbus A319 and Boeing 757 have more power than the rest of the fleet, and they can take off at hot and high airports with full payloads. You might see American fly an A319 to some Rocky Mountain destinations, even if the smaller Embraer 175 is a better fit by seat count.
American can grow without new planes. I asked Raja if American has to cut a route every time it adds a new one. He said it does not, likening network planning to a puzzle. If American rejiggers some pieces, it can create more flying without adding new planes. This summer, American will fly 2 percent more departures than last year, but with fewer aircraft.
“That’s entirely through utilizing the airplane better, and that’s as simple as if you cut one minute out of every flight per day in our system, that can produce so much as 10 or 15 incremental airplanes,” he said.
American’s schedule is mostly locked 120 days before departure. If you buy an American ticket within 120 days of departure, your flight probably won’t change at all. It will depart at the same time, and on the same plane, as American promised when you bought your ticket.
But beyond 120 days, all bets are off. If you buy a ticket for seven or 10 months from now, you’re buying an estimate — a flight American intends to fly, but isn’t locked into, Raja said.
“From the 331 to about 120 days what we have there is effectively a mocked-up schedule,” Raja said. “We’ll sell our peak schedule.”
In February, the flight schedule for the following December is about 94.5 percent certain, Raja said. “As we get closer into 120 days, we can see booking levels, and then we’ll taper it down to whatever we think capacity should be.”
Sometimes flights remain but other stuff changes. American might look at higher-than-expected advanced bookings, and switch from a smaller A319 to a larger A321. Or it might change the departure time by a few minutes. It might just change the flight number.
Skift Airline Business Reporter Brian Sumers [firstname.lastname@example.org] curates the Skift Airline Innovation Report. Skift emails the newsletter every Wednesday. Have a story idea? Or a juicy news tip? Want to share a memo? Send me an email or tweet me.