It’s a familiar problem at Los Angeles International Airport (LAX): with intense competition, an airline finds profit margins thin, making the carrier more likely to seek routes with higher margins. The latest cutback comes from American Airlines, with a decision to axe its seasonal Auckland route. But it’s about more than one route cut: it represents the enigma of LAX and the particular struggle of AA to find its transpacific niche.
American Airlines Will End Auckland Service From Los Angeles
American Airlines shrunk at LAX duding the pandemic, not just reducing frequencies due to reduced demand, but totally eliminating both domestic and international routes. Its “international reset” included the elimination of five longhaul routes from Los Angeles:
- Beijing (PEK)
- Buenos Aires (EZE)
- Hong Kong (HKG)
- Sao Paulo (GRU)
- Shanghai (PVG)
That left four:
- Auckland (AKL)
- London (LHR)
- Sydney (SYD)
- Tokyo (NRT)
Tokyo remains suspended, but will return, but in its latest route shakeup, American Airlines has announced that Auckland service will not return.
Instead, AA plans to operate a new Dallas (DFW) – Auckland service starting on October 29, 2022 using a Boeing 787-9. As AA explained:
Providing service to DFW allows us to connect more customers to New Zealand with a more convenient schedule.
It’s an interesting move, considering that AA has previously blamed the lack of Boeing Dreamliners for its pullback in service from Los Angeles. Now the culprit is more connections and a more convenient schedule.
AA: discussing AA’s stagnation at LAX pic.twitter.com/6NxqQkIhta
— 🇺🇦 JonNYC 🇺🇦 (@xJonNYC) April 10, 2022
Will Qantas resume its Los Angeles – Auckland service? Unlikely, unless it is able to get its hand on more aircraft or uses an Airbus A330.
AA’s LAX Problems Point To Lack Of International Strategy
I’ve discussed the problems U.S. carriers generally run into at LAX and won’t do so again here – you can check out my prior post for that discussion.
While that no doubt factors into the equation for American Airlines, the issue with Auckland is unlikely to be either demand or high fares. Yes, with competition from Air New Zealand perhaps there is not as high a premium AA could place on nonstop service. At the same time, demand is strong for New Zealand and therefore the move represents an annoying dilemma for local residents who might otherwise be loyal to AA. Fly American or Qantas via Australia and backtrack or fly the competition?
While AA has not provided a breakdown of the percentage of connecting traffic versus local traffic at LAX, particularly on these longhaul routes, its focus away from LAX yet its failure to focus on a single hub is perplexing. What is going on in Seattle? Will Asia travel return at all? The problem, as I see it, is not that AA has picked the wrong transpacific strategy but that it does not seem to have one at all.
We saw that when AA pulled back from New York (JFK) and focused transatlantic operations in Philadelphia (PHL), it did not go over well and we’ve seen a gradual return of service to JFK. Will we see something similar at LAX, the ultimate “can’t live with it, can’t live without it” market? I suspect so. But by then it may be too late and American will find itself further marginalized.
I am hopeful that American will continue to throw LAX enough crumbs to keep it a hub until additional aircraft are delivered and by then, it will be able and willing to restore longhaul routes to LA. I’m just not hopeful that AA has any idea what to do with LAX in the years ahead and would hate to see it cede a market with such potential.
One consolation: we may see an additional daily LA to London flight in the months ahead.
After the latest American Airlines longhaul cutback at LAX, it is reasonable to question what is going on. Delta tried serving London, Amsterdam, and Paris from LAX and has not brought any back this year, but has joint venture partners serving all three routes. Why cede a market when there is no partner that also operates it? Will it return once more Dreamliners are delivered? And more importantly, how does AA view itself as a transpacific carrier in the years to come? Right now it seems to be anyone’s guess.
image: Glenn Beltz