American Airlines Is All in On Premium Seats

Good morning from Skift. It’s Friday, October 21. Here’s what you need to know about the business of travel today.

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Episode Notes

American Airlines is banking on the strong demand for premium leisure, and the new blended travel category of leisure and business together, to continue for years to come. American is expanding the number of lucrative premium seats on intercontinental planes by up to 60 percent over the next four years, reports Edward Russell, editor of Airline Weekly, a Skift brand.

American Chief Commercial Officer Vasu Raja said during the carrier’s third quarter earnings call on Thursday that the broader trend of blended leisure and business trips accelerated the shift. Travelers on those trips now account for roughly half of American’s premium revenue. Raja added that increased demand has driven American to add larger premium cabins on long-haul flights to hubs such as London Heathrow and Tokyo. Skift identified the rise of premium leisure travel as a travel megatrend for 2022.

American generated $483 million in net profit during the third quarter, with its revenues increasing 13 percent from the same period in 2019.

Next, Asia’s travel recovery has been boosted by popular destinations such as Singapore, Hong Kong and Japan recently easing restrictions. However, with China still largely barring its citizens from overseas travel, travel’s epicenter has shifted from Asia toward Europe and the Middle East, according to Skift Research’s newly released Travel Health Index.

Senior Research Analyst Wouter Geerts writes that Europe will likely surpass Asia-Pacific as the world’s largest travel region by the end of 2022. In addition, global travel data provider OAG’s list of 2022’s busiest airline routes reveals a shift away from Asia-Pacific since 2019. Geerts adds that Asian destinations are unlikely to see the large-scale return of Chinese travelers soon, with Beijing showing no signs of discarding its zero-Covid policies.

We wrap up today with the ongoing competition between online travel rivals Expedia and Google to attract travelers eager to book cheap flights. Both companies disagree on the best day of the week to book a flight, reports Executive Editor Dennis Schaal.

Expedia, in partnership with the Airlines Reporting Corp., issued a report this week advising travelers to book flights on Sundays. Expedia said flyers booking on Sundays could save, on average, around 5 percent on U.S. domestic flights and up to 15 percent on international flights compared to booking on Fridays. However, Google said in a recent blog post that five years of Google Flights data revealed flights booked midweek are cheaper than those booked on the weekends.

Schaal adds that Google and Expedia also disagreed on when travelers should depart. Expedia recommended that travelers avoid departures on Saturdays through Mondays, which it said are the priciest days. But Google said Monday departures can be relatively cheap.