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.
Among U.S. carriers, United Airlines has been the most daring with its route network in recent years, adding flights to far-flung destinations.
Now American Airlines may want to join it. American is poised to expand its international network after it receives a second batch of Boeing 787s beginning next year, an executive told me last week.
“That’s the airplane that is going to take us eventually to India and into Africa, and into markets which are very different from the ones that we have been in historically, but ones we believe will be very profitable,” said Vasu Raja, the airline’s vice president for planning.
This is a strategy shift. Since its merger with US Airways in 2013, American has taken a more cautious approach than United, bulking up its Los Angeles hub with transpacific flights to major cities and adding new routes to Europe and South America, where it is already strong.
A year ago, I asked Raja why American didn’t take as many chances with its network as United or Delta Air Lines. He told me the airline was focused on profits, rather than exciting new routes. He said American could make more money flying a widebody to Europe in the summer and Hawaii in the winter, than flying to a new country or region such as India or Africa.
“It’s all about the returns you get on the airplane,” Raja said in February 2018. “If you go and fly one Pacific route, on balance, that’s two airplanes. Are those two airplanes better in the Pacific or are they better flying in the Atlantic for six months of the year and flying to Hawaii for six months of the year?”
What do you make of this strategy change? Do you think American will go through with it? And where do you think American will fly?
Best of Skift
American Airlines Is Considering Flying to Africa and India With New Dreamliners: American is the world’s largest airline, but its route network doesn’t reflect it. That could change, though. American has ordered 89 Boeing 787s, and it is looking for destinations. India and Africa are possible, an executive told Skift.
AirAsia Looks to Be an Unlikely Online Travel Agency Competitor: AirAsia.com is becoming a richer online travel platform and is key to CEO Tony Fernandes’ plan to ramp up e-commerce and ancillary revenues this year, Raini Hamdi reports from Singapore. The platform generated more than $4 billion (RM16 billion) in AirAsia’s online flight ticket sales last year, Fernandes said recently.
American and Delta Settle Claims Over Long Tarmac Delays: The U.S. Department of Transportation has fined two carriers for violating newish guidelines about how long airlines can delay flights on the ground without giving passengers a chance to get off. The fines are tiny, but at least it shows the government is paying attention. Both airlines said they have changed their policies and procedures to ensure this happens less often.
Star Alliance Explores a Broader Loyalty Proposition Beyond Airlines: Star Alliance wants to make it easier for customers to use their miles, but not necessarily on airfare. “Let’s say you have a million miles and you see the bottle of whiskey that you can buy for your father-in-law on [Singapore Air’s] in-flight shopping,” the alliance’s CEO told Skift’s Raini Hamdi in an interview in Singapore. “Can you use your United or Lufthansa miles to buy it?”
AirAsia Targets Startups With New Venture Capital Fund: The fund, called RedBeat Capital, will invest mostly in consumer-facing companies primarily based in southeast Asia. It has already invested in a voice-technology specialist, though it didn’t share details. Skift Travel Tech Editor Sean O’Neill has more.
Southwest and American Fire Back at Maintenance Workers’ Public Disputes: Both airlines need to reach new agreements with maintenance technicians as quickly as possible. But the unions know they gain leverage by making their grievances public, and they want the best deals possible.
Best of the Rest
Southwest Reveals Details of California-Hawaii Flights: How about this media rollout? Southwest has earned a remarkable amount of media attention for its plans to fly to Hawaii. This week it began selling tickets, with some flights as low as $49. Over time, though, I expect Southwest will sell tickets at the same prices as the competition.
Is a Dutch Investment in Air France-KLM a Step Too Far? Many governments are trying to get out of the airline business. But not the Netherlands. It recently took an $848 million (€744 million) stake in Air France-KLM Group. The government now owns 14 percent of it — roughly the same as France. But not everyone is sure this is a good idea. “Even for people studying the Dutch state’s subtle meddling in business, the Air France-KLM purchase might be a step too far,” Bloomberg wrote.
British Airways Parent Chooses Boeing’s New Widebody to Replace Aging Jets: British Airways is going big with its Boeing 747 replacement. Its parent company, International Airlines Group, placed an order for 42 Boeing 777X aircraft. Eighteen of them will be the 777-9, the largest version of the aircraft. Bloomberg has details.
Qatar Airways Offers Double Beds, Endless Noshing on DFW Flights: The Dallas Morning News published a 1,200-word feature on Qatar Airways’ new business class and never mentioned the airline’s ongoing feud with the airline based nearby, American Airlines.
Welcome to Our New Skift Airline Weekly Editor
You may know that late last year, Skift acquired Airline Weekly, a paid newsletter crammed with important information about the world’s airlines. While editor Seth Kaplan is moving on, I’m thrilled to share that Madhu Unnikrishnan has joined to take his place.
Unnikrishnan and I worked together at Aviation Week. I can report he is a fine editor who knows more about the airline industry than almost anyone I know. You’ll get to know Unnikrishnan in the coming months as he re-launches the Skift Airline Weekly Lounge podcast, joins us on stage at Skift Forum Asia, and works on an overhaul of Skift Airline Weekly’s newsletter product and digital offering.
Unnikrishnan and I also will represent Skift at the IATA Annual General Meeting in Seoul in June. If you’re there, please say hello. Better yet, contact us in advance, and we’ll set a time to meet.
Skift Senior Aviation Business Editor Brian Sumers [email@example.com] 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 him an email or tweet him.