American Airlines sees its strong flight network to Mexico, the Caribbean, and South America as key to the first stage of its recovery. These primarily leisure routes are rebounding more quickly than routes to Europe and Asia, American’s executives said during the company’s third-quarter 2020 earnings call.
Compared with rivals Delta Air Lines and United Airlines, American historically has had the strongest network to Latin America of the three. It now sees this strength as a differentiator, as fewer countries in the region have imposed quarantines than in Europe and Asia and their tourism-reliant economies are more eager to re-open. American expects flights to Latin America and the Caribbean to reach 70 percent of 2019’s levels soon, President Robert Isom told analysts during the call.
American isn’t alone in touting its strengths in a particular market. Delta last week pointed to its strong network in the U.S. Southeast and in the Mountain States as key to its rebound. United said its network centers around the largest business-travel markets in the country and therefore it is best poised to recover faster.
But two things all three of the large U.S. network carriers have in common are their renewed focus on the leisure traveler and shifting flights away from coastal hubs and toward what the industry calls mid-continent hubs: Denver and Houston for United; Atlanta and Salt Lake City for Delta; and Dallas/Ft. Worth and Charlotte, N.C., for American. The carrier plans to refocus it fourth-quarter flights on Dallas/Ft. Worth, Charlotte, the Sunbelt and Latin America and the Caribbean, and to mid-continent hubs that allow easy access to ski destinations, Isom added. It also is leaning on its partnerships with Alaska Airlines and JetBlue to provide more domestic routes. “We have a route network that will allow us to compete in leisure markets,” CEO Doug Parker said. “We have a big domestic network that other carriers can’t compete with.”
Despite the bold talk, American, like its peers, if facing a vastly diminished near-term future. It expects to offer only about half the number of its 2019 flights in the fourth quarter. Demand for international routes is expected to be more than 70 percent lower than last year. Bookings were down by 50 percent, an improvement over July’s 80 percent lower year-over-year comparison, but still sobering.
American said it is actively engaged with the U.K. government and its partner International Airlines Group to create a “travel corridor” between the U.S. and the U.K. It offered no timeline for when that may occur. The carrier also is expanding its Covid-19 testing program for flights to Hawaii, Costa Rica, and other Caribbean destinations.