Revisiting our original 2021 forecast from October, the U.S. air traffic rebound has exceeded even our expectations. Our decision tree modeling was used to determine the proceeding 14 months at a time when the pandemic was barely six months old. Still underestimating the actual recovery, the consensus drawn from this forecast has proven to be the closest approximation published.
The numbers largely speak for themselves. What you see is a good story. What you don’t see is that it’s not as good a story as American’s rivals. This brings to light several strong areas, but also some of concern. It is good to see domestic revenues continue to increase, however it is concerning to see the declining trend of Pacific and cargo revenues. This is consistent with the competition, and certainly not limited to American. The story remains: American’s revenues are increasing, however not at a pace to match Delta and United. Meanwhile, costs continue to increase at all airlines. As much as we experiment with different techniques to visualize earnings, sometimes the simple way is the best. The income statement is important, and the best way to show the absolute magnitude is to show the numbers. However, we also believe context is important. Included for each line item […]
Who controls the Chicago O’Hare domestic market? The answer is complicated. Until as recently as Q4 2018, the answer has surprisingly been American… not United. And it hasn’t even been close. In fact, American enjoyed a 7 point advantage over United as early as Q1 2016, in United’s own back yard. Things have changed. When asked how United has changed in the past two years with the new management, I often point to the ORD example. Most don’t realize two things: United was not the airline serving the most of the local Chicago market They are now Looking at capacity share, United has long held the crown at O’Hare. However, it isn’t until recently that United has begun adding smaller markets with regional jets from ORD to boost that point-of-sale presence. The end result is a new old battleground in Chicago. American will continue to compete fiercely, and we may […]
LATAM is leaving American for Delta. Boom. Just like that. On Friday, it was announced that Delta would acquire 20% of LATAM and take assignment of 14 A350s originally destined for LATAM. In exchange, Delta will receive the best Latin American code-share partner U.S. dollars can buy. This week, we focus on LATAM, and how their U.S. network compares to both the incoming, and the out-going partner. LATAM’s network to the U.S. is built around American. With the vast majority of the capacity destined for Miami, the partnership is obvious: Miami dominates Latin America connectivity. American dominates Miami. The question at hand is whether LATAM has such a large presence in Miami because it is their partner’s hub, or if they have the partner because they have such a large presence in Miami. (Spoiler alert: Miami matters). LATAM cannot leave Miami, partner or no partner. It is far too large […]
The end of an era is little more than a month away. The last MD-80 flight is scheduled for September 4th. The once work-horse of the American narrow-body fleet has been slowly reducing flying the past decade in preparation for its inevitable retirement. This week, we’ve built a moving map showing the past 28 years of MD-80 flying in American’s colors. Granted, our available data only went back to 1990, but you can clearly see the growth… and retirement of the venerable “Mad Dog”. The map is interactive, so feel free to pause, zoom, rotate, and explore the historical map of American’s MD-80s.