In 2021 and 2022, American Airlines was focused on turning Austin-Bergstrom Airport (AUS) into a focus city. While the airline previously primarily flew to American hubs from Austin, American’s network out of the city at one point grew to over three dozen destinations, ranging from Cancun, to Orange County, to Tampa.
In early 2024, we saw that growth reversed in a major way, as the airline started cutting flights to Austin. The Forth Worth-based carrier has now revealed additional route cuts from the city. Once implemented, American’s only domestic destinations out of Austin will be hubs.
In this post:
American canceling most Austin routes
Over time, American has massively cut its routes to Austin, and with the latest schedule change, the airline has entirely abandoned the focus city strategy. Specifically, here are the American routes that have already been cut out of Austin, in chronological order:
- Bozeman (BZN) flights ended as of January 2024
- Cincinnati (CVG) flights ended as of January 2024
- Cozumel (CZM) flights ended as of January 2024
- Jacksonville (JAX) flights ended as of January 2024
- Memphis (MEM) flights ended as of January 2024
- Reno (RNO) flights ended as of January 2024
- Albuquerque (ABQ) flights ended as of February 2024
- Eagle-Vail (EGE) flights ended as of February 2024
- El Paso (ELP) flights ended as of February 2024
- Fort Myers (RSW) flights ended as of February 2024
- Kansas City (MCI) flights ended as of February 2024
- Oklahoma City (OKC) flights ended as of February 2024
- Sacramento (SMF) flights ended as of February 2024
- Tampa (TPA) flights ended as of February 2024
- Washington Dulles (IAD) flights ended as of February 2024
- Nassau (NAS) flights ended as of March 2024
- Punta Cana (PUJ) flights ended as of March 2024
- Liberia (LIR) flights ended as of April 2024
- Puerto Vallarta (PVR) flights ended as of April 2024
Now American is basically axing its remaining non-hub flights from Austin, as the following routes will be cut in the coming months, as flagged by @AdrianWaltz:
- Boston (BOS) flights will end as of November 2024
- Las Vegas (LAS) flights will end as of November 2024
- Nashville (BNA) flights will end as of November 2024
- Orlando (MCO) flights will end as of November 2024
- Raleigh (RDU) flights will end as of November 2024
- Orange County (SNA) flights will end as of January 2025
So, what service does that leave for American out of Austin? Once these cuts are implemented, American’s only domestic destinations out of Austin will be Charlotte (CLT), Chicago (ORD), Dallas (DFW), Los Angeles (LAX), Miami (MIA), New York (JFK), Philadelphia (PHL), and Phoenix (PHX). On top of that, American has two leisure routes to Mexico, to Cancun (CUN) and Los Cabos (SJD).
I think it’s safe to say that Austin is in no way a focus city for American anymore, as the airline only serves hubs domestically from there. Meanwhile American has point-to-point Mexico flying from all kinds of non-hub airports, so that’s not even unique to Austin.
Why is American pulling back so sharply from Austin?
I think there are a few things at play here, which are causing American to abandon Austin.
For one, I think American was betting on the future of Austin. For a while, Austin was one of the fastest growing cities in the United States, but that’s no longer the case. It’s still an attractive city to many, and it has a solid economy, but the growth has slowed tremendously. That’s particularly evident with real estate in the city, as Austin saw the biggest drop in home prices of any major city in the United States for the summer of 2022 to the summer of 2023, and the situation hasn’t improved since then.
While real estate has cooled in many markets, Austin seems to be especially hard hit. Now, in fairness, it’s not that demand for air travel in Austin is down massively across the board. For example, while Virgin Atlantic has discontinued Austin flights, British Airways will offer double daily flights to Austin in the summer of 2025.
What do I make of American’s service cuts in Austin?
- Clearly American was banking on continued growth in Austin and wanted to get out ahead of the other major carriers, but that just hasn’t materialized the way the airline hoped
- Even as a focus city, Austin was heavily reliant on O&D traffic rather than connecting traffic, given that American’s Dallas hub is geographically quite close to Austin; so American doesn’t have as much geographic upside by focusing on Austin, unlike Delta, for example
- It’s my understanding that American was losing money on its Austin growth since the start, but then again, American is losing money on a lot of its flying; for that matter, it seems to be a similar story with Delta’s domestic growth in Seattle
- On some level, it seemed like American grew in Austin to try and prevent Delta from growing there, but it’s only worth losing money for so long; in the meantime, Delta has slowly but steadily increased its presence in Austin
- Much of American’s growth was with regional jets, as the airline had a lot of spare regional jets during the early part of the pandemic; when you combine issues with American’s scope clause, plus the need to allocate regional jets to other markets, it made American’s Austin expansion more challenging
- While I doubt this was American’s primary consideration, Austin Airport just isn’t big enough for the amount of traffic it has, making it hard for any airline to grow
- American just lacks any decent strategy, as this is only the carrier’s latest failed strategy; it’s no different than American attempting to turn Seattle into a long haul hub, trying to grow in New York, etc.
Bottom line
American Airlines has basically given up on having Austin as a focus city, as the airline cuts the last of its domestic non-hub routes out of Austin. With the latest schedule changes, American will only fly from Austin to hubs, as well as to two airports in Mexico.
I can’t say I’m surprised. Creating a profitable new focus city can be difficult, and obviously this wasn’t materializing as American had hoped.
What do you make of American’s route cuts in Austin?
As an Austin resident and regular American customer (EP), this is disappointing but not surprising. Regardless what anyone says about local housing costs or the economy, AUS is jammed right now and it feels like its at capacity. The new expansion won't be completed for a few years, and perhaps AA will return with more non-hub flights, or maybe Delta will grow. Until then, Southwest has the most and best non-stop routes.
Austin is very much still growing; the drop in rent prices and plateau of real estate is directly linked to the fact that Austin has *built more housing than almost any other city in the US* in the last couple of years. Recent regulation changes have helped with that but this is exactly what should be happening; housing got expensive, so people built more houses, so now it's getting less expensive. Don't blame Austin for...
Austin is very much still growing; the drop in rent prices and plateau of real estate is directly linked to the fact that Austin has *built more housing than almost any other city in the US* in the last couple of years. Recent regulation changes have helped with that but this is exactly what should be happening; housing got expensive, so people built more houses, so now it's getting less expensive. Don't blame Austin for American failing here, this was mismanagement and bad planning from the people at American from the start
https://www.msn.com/en-us/money/other/austin-round-rock-metro-leads-texas-in-housing-construction-3rd-highest-apartment-construction-nationally/ar-AA1pcA3z?ocid=BingNewsVerp&apiversion=v2&noservercache=1&domshim=1&renderwebcomponents=1&wcseo=1&batchservertelemetry=1&noservertelemetry=1
Yes, I know Austin is far from a cow town, but it is evident the gas pedal on the economic engine there has slowed it down a bit. AA is at least willing to regroup, consolidate and conquer the balance sheet, rather than deplete.
Lucky, does this include American Eagle flights? I still see AUS-ASE on the calendar through ski season.
I also see SNA bookable through at least July 2025.
Is BNA-TPA next on the chopping block?
I kind of doubt it. Demand to FL from BNA is strong and continues to grow rapidly. Plus, connecting at CLT or MIA to get from BNA to TPA isn't quite as convenient of a replacement as DFW connections are for AUS pax. BNA still has double-digit annual traffic growth numbers and no signs of that slowing down soon. BNA also isn't nearly as gate-constrained. It has opened 20 new gates in the last 4...
I kind of doubt it. Demand to FL from BNA is strong and continues to grow rapidly. Plus, connecting at CLT or MIA to get from BNA to TPA isn't quite as convenient of a replacement as DFW connections are for AUS pax. BNA still has double-digit annual traffic growth numbers and no signs of that slowing down soon. BNA also isn't nearly as gate-constrained. It has opened 20 new gates in the last 4 years, has 6 more under construction now, and several more scheduled to begin construction soon.
If AA is going to axe a BNA route soon, though, RDU seems like the more likely candidate to me. That just seems like an odd route to me, as neither city is even a focus city for AA, nor is there exceptionally strong demand for the route. Plus, it already has significant competition, with both Delta and Southwest also operating it. It makes more sense for Delta, though, with RDU being an actual focus city and BNA having been one until recently. And, of course, WN is huge in BNA.
AA was in violate of APA’s Scope clause. A neutral third party arbitrator was dispatched to hear an expedited Scope grievance on behalf of the pilots. AA was willfully disregarding the contractual language that has been in place for over 25 years. The pilots maintain a constant vigilance over their Scope clause and have prevailed for the fourth time in a row over the past 14 years. Oh well, another lesson learned.
Huh, turns out douchebag podcasters and taco truck owners don't fly premium. Who knew?
Austin is a house of cards. The bubble is already deflating but there's going to be a very rude awakening come the next recession.
The Federal Reserve, under Powell's leadership, has seemed to sidestep a recession in the near term. Since the Fed adopted "monetarist" policies in the 1970s, there's only been a recession about every ten years. So, it might be a while. Your characterization of Austin ignores the fact that Austin is a tech hub. That being said, many overestimated that status feeding Austin's growth and there will be consequences.
Disappointed to log into my AA account about a month ago to see they changed my holiday flights (LAS-AUS) from non-stop to a 30-minute connection in PHX...with no email or text notice!
No thanks. I'm EP, but I'll fly Southwest or Delta non-stop vs connecting in PHX or DFW.
I had a very strong "upgrade" record on the AUS-LAS route, so very disappointed to see it go.
The strong upgrade record is probably a sign that the route wasn’t going to last.
Vasu Raja used to describe Austin as "his love language." Vasu is no longer AMERICAN'S love language, but the pullback in Austin began long before his termination.
American's growth was a bet on Austin's growth, a bet that they could squat gates (there won't be real capacity growth at the airport until the 2030s), and a strategy to do this with low cost regional jets which ran into problems, as you allude to, with pilot...
Vasu Raja used to describe Austin as "his love language." Vasu is no longer AMERICAN'S love language, but the pullback in Austin began long before his termination.
American's growth was a bet on Austin's growth, a bet that they could squat gates (there won't be real capacity growth at the airport until the 2030s), and a strategy to do this with low cost regional jets which ran into problems, as you allude to, with pilot scope. An airline that isn't making money can't afford such adventures, which would have become more costly.
Austin's real estate market has dropped significantly because it had also been among the most inflated during the pandemic. Also, Austin has done more than most cities to relax zoning in order to spur new housing development - this is a growing supply story as much as a demand story.
Delta certainly sees Austin as a growing market, hence their strategy to come in behind American's departure and squat gates, trying to make their short regional jet flights work, flying migrants out of border cities. Demand for flying from southern Texas airports to Austin is mostly out of those southern cities, not Austin-originating, and load factors are much stronger leaving those cities than returning.
Austin was a strong performer for American before the pandemic, but a lot of their growth wasn't just performing poorly on its own it was also dragging down the performance of hub routes with Austin service, as passengers simply connected through Austin for lower fares as the airline tried to deal with load factor issues. In other words, Austin was hurting DFW yields.
that is definitely true. the decrease in housing prices is more about greater supply and less about lower demand, and also a certain amount of speculation (just like we had with AA!). doesn't mean Austin is falling by any means
Austin is too close to Houston and Dallas-Fort Worth. If Austin & San Antonio took the regional route (LIKE DFW DID) and came together for the REGION and not themselves: they would have a meaningful chance of being a major hub. But since they both are going on independent expansion schemes (both of which are trying to cut out SouthWest BTW, which WILL be to their own detriment...) we'll see them both lag behind the other metro in the state.
Um...do you look at geography much?
Dallas-Ft Worth: 32 miles apart / approx 30 mins drive...the metro areas are connected/populated
Austin-San Antonio - 79 miles apart / 1.15 hours drive...the metro areas are not connected/just some nice towns
I know both drives extremely well.
I guess next you'll propose an AUS/SAT/DAL/HOU regional hub?
AA is finally raced to the bottom. Not only have they been making bad decisions from a management standpoint, lets hope their new FA contract will change the FAs attitudes towards the customer.
They also need to take a long hard look at their hub at PHL. One of the worst airports and bad location in the NE corridor with many delays.
Perhaps I'm just lucky but my experience with AA flight attendants has been overwhelmingly positive. I fly transcon a few times a year and the FAs are always consummate professionals. If someone has had a bad experience, it's worth noting that AA management's attitude towards flight attendants might have been the root of it. Regarding PHL, absolutely agree. From a customer perspective, maybe Raja/Znotins' biggest nonsensical WTF decision.
I wonder if there is an opportunity for Alaska to take over some of the routes that American is abandoning. Alaska ought to have an advantage in appealing to AA elite members with mileage earning, upgrades and the like. And Alaska has a lower cost structure so they can make some of these routes work.
Pipe dream
Absolutely nothing - except for available gate space in Austin (or lack thereof) would prevent Alaska from entering any of these routes.
Umm... yeah, there are quite a few things that would stand in the way of this. First would be the almost complete lack of any AS route network East of the Rockies and, as a result of that, an almost complete lack of any AS frequent flyers East of the Rockies (well, at least after the end of this year when all of those status matches from DL expire.)
AS would also presumably have the...
Umm... yeah, there are quite a few things that would stand in the way of this. First would be the almost complete lack of any AS route network East of the Rockies and, as a result of that, an almost complete lack of any AS frequent flyers East of the Rockies (well, at least after the end of this year when all of those status matches from DL expire.)
AS would also presumably have the same scope clause issues as AA. They need Horizon on intra-Alaska and PNW routes and wouldn't have near enough pax to have decent load factors on their 737s to anywhere but their hubs from AUS.
Plus, if/when AS actually does decide to do some meaningful route network building East of the Rockies, doing it by building a hub near (but not at) it's partner's largest hub would be a weird move.
Disappointing, but so be it. AA has the FF loyalty base, so most traffic will continue to route via the hubs, especially if they proceed with the new lounge opening that is on the radar. AA probably owns the corporate contracts as well. Combined it will limit DL's capability, but they will no doubt find routes that work...probably O/D from other markets they "own". My wonder is why UA hasn't made a play given their...
Disappointing, but so be it. AA has the FF loyalty base, so most traffic will continue to route via the hubs, especially if they proceed with the new lounge opening that is on the radar. AA probably owns the corporate contracts as well. Combined it will limit DL's capability, but they will no doubt find routes that work...probably O/D from other markets they "own". My wonder is why UA hasn't made a play given their nearby IAH hub? Maybe their FF base is also large enough not to try the same path that AA did...
Finally, I wonder what this means for the airport expansion plan. Last I looked it was in a legal battle with the owner of the South Terminal, a ULCC terminal....I assume it will still happen, but perhaps the timeline will change.
The Austin hub was started by Vasu Raja, who intended to make AA a huge domestic and short-haul international airline, and didn't care about international routes. Austin is not a large city! Especially compared to Dallas and Houston. It's no surprise these routes were unprofitable, and now with Raja gone, the hub is being demphasized.
AA cannibalized its own operation at DFW; there were many cases where AA was selling connections via AUS at low fares in order to fill flights that otherwise would have connected through DFW.
AUS' economy is far larger than many other cities that have been hubs or focus cities.
AUS is highly competitive and AA tried to jump in not just ahead of DL but also in a competition with WN.
Austin IS a large and wealthy city. The problem is several fold: It's not a large MSA (unless you include the southern I-35 corridor which goes to San Antonio, or the far Northern burbs + Waco/Killeen that go naturally to DFW). The wealthy CEOs and companies use Private Jets often. The airport is too small with no amenities. And lastly: the City Council is far left and distracted by shiny things and anything other than...
Austin IS a large and wealthy city. The problem is several fold: It's not a large MSA (unless you include the southern I-35 corridor which goes to San Antonio, or the far Northern burbs + Waco/Killeen that go naturally to DFW). The wealthy CEOs and companies use Private Jets often. The airport is too small with no amenities. And lastly: the City Council is far left and distracted by shiny things and anything other than business or running a solid operation. Look at the South Terminal debacle, no serious investors or developers or operators would ever trust the City of Austin again to keep their word and stand by their own contracts. ATX will suffer until they get serious about regional connectivity.
So Austin is a wealthy city, with wealthy CEOs leading corporations with lots of corporate jets but the city council is far left and doesn’t care about the business community? What a dichotomy! You should warn Elon Musk before he moves more of his corporate headquarters there.
LOL!!!
When AA do, it's call cannibalize.
When DL do, it's call profitable fortress.
DL doesn't have anything in (or even near) Texas to cannibalize. AA has their biggest hub only a short hop away. The nearest DL hub is hours away in a completely different region. DL needs AUS to fill a massive hole in their route network. AA definitely does not.
AA continues to be all in on CLT and DFW with seemingly no other domestic US plan. Gave up on NY and LA and will never claw those markets back. Austin, you've been demoted to a SWA city.
AA has been limited in LaX b/c of the renovations. The terminal renovations will wrap before the Olympics and with the added gate capacity AA will be the largest airline by gate capacity in LAX again by a fair distance. Now how profitable will that be? Fair question, but there will be an opportunity there unless for some reason they bizarrely decide to give up gates.
NY is a different story, but they will try...
AA has been limited in LaX b/c of the renovations. The terminal renovations will wrap before the Olympics and with the added gate capacity AA will be the largest airline by gate capacity in LAX again by a fair distance. Now how profitable will that be? Fair question, but there will be an opportunity there unless for some reason they bizarrely decide to give up gates.
NY is a different story, but they will try a much more transatlantic routes from JFK with the XLR starting in 2026.
sorry but that is just an excuse.
AA, like DL, could have access to the international terminal and use some of those gates for domestic flights or certainly more international flights.
AA pulled down one international route after another because they vastly underperformed every other carrier of remotely comparable distances.
AA hasn't successfully competed in major coastal markets for a quarter century and won't return to any position of leadership at LAX unless...
sorry but that is just an excuse.
AA, like DL, could have access to the international terminal and use some of those gates for domestic flights or certainly more international flights.
AA pulled down one international route after another because they vastly underperformed every other carrier of remotely comparable distances.
AA hasn't successfully competed in major coastal markets for a quarter century and won't return to any position of leadership at LAX unless there are dramatic changes in the way AA is run.
UA, a much smaller domestic carrier, is poised to overtake AA as the 2nd largest carrier even by passenger boardings at LAX.
Another successful route network experiment by ADD patient Brian Znotins.
Wouldn't this be reflective of Network / Route VP (recently departed) Raja ?
It's hard not to come to the conclusion that AA leadership is trying to tank. Rip the bankruptcy bandaid off sooner.
It's the only thing that explains the serial incompetence of the last few years.
I wonder how this news will impact fare prices of other airlines around the time of big events that are held in Austin (such as the annual SXSW conference and University of Texas’ home football games)?
I'd suspect that additional flights from specific cities would continue to happen for special events.
This is not surprising but sad to see. It was cool that AA was ramping up service markets without service (aside form WN, which I'm not Corning) like LAS, MCO, SNA, and winter destinations like ASE, EGE, BZN. I'm Oneworld with Alaska and live in SFO, but am from AUS, so I was excited by this.
I'm not surprised at all since Austin is a complete flop of a city. People who moved there...
This is not surprising but sad to see. It was cool that AA was ramping up service markets without service (aside form WN, which I'm not Corning) like LAS, MCO, SNA, and winter destinations like ASE, EGE, BZN. I'm Oneworld with Alaska and live in SFO, but am from AUS, so I was excited by this.
I'm not surprised at all since Austin is a complete flop of a city. People who moved there are moving out cause the city is subpar, and the airport has always been awful. No good dining or lounge offerings, and the terminal layout is a clusterf*ck.
I'm not sure why you think AUS airport is a "clusterf*ck" Super simple layout, and local eats are featured. Lounges are limited and dull, but investments are happening. I do hate the walk to the taxi/Lyft pickups through the garage, but that's become common at airports, and hugely better than my home airport LAX. Overall your description doesn't have merit IMO. And I commute between LAX-AUS, so I also know the airport well.
It's also...
I'm not sure why you think AUS airport is a "clusterf*ck" Super simple layout, and local eats are featured. Lounges are limited and dull, but investments are happening. I do hate the walk to the taxi/Lyft pickups through the garage, but that's become common at airports, and hugely better than my home airport LAX. Overall your description doesn't have merit IMO. And I commute between LAX-AUS, so I also know the airport well.
It's also not a "flop" of a city...it just got overheated. That's not uncommon. Aside from the headache I-35 traffic, it has the infrastructure and cultural attributes that will sustain continued growth, if at a more reasonable level, especially as housing prices have moderated.
The security lines are always messy. The exit for the airport is in the middle of the airport, when there should be exits down to baggage claim, pick up, garage etc, on either end. The local eats are a nice attempt I guess, but they're not for me. Starbucks wasn't there until 2020. I prefer chains. At LAX, you can get curbside pick up with rideshare, but that's not allowed at AUS. The walk to...
The security lines are always messy. The exit for the airport is in the middle of the airport, when there should be exits down to baggage claim, pick up, garage etc, on either end. The local eats are a nice attempt I guess, but they're not for me. Starbucks wasn't there until 2020. I prefer chains. At LAX, you can get curbside pick up with rideshare, but that's not allowed at AUS. The walk to the garage is awful, especially when it's hot, which it almost always is.
The city is a flop with no culture or livability. There is no infrastructure to support growth, which is fine, since the city is experiencing negative growth and will likely continue to do so for a while. I'm from ATX and visit my family regularly. I will gladly never move back.
You can see why these flights are being withdrawn if you look at the fare statistics posted on Enilria’s blog.
Across the board (sans SNA airport), fares are down 15-20% YoY vs 2023 and are 20-30% lower than DFW or IAH. What this implies is despite the reputation, Austin is primarily low-yielding travelers and has way too much capacity. AA is almost certainly losing $$ (and doubt WN or Delta are doing well there) -...
You can see why these flights are being withdrawn if you look at the fare statistics posted on Enilria’s blog.
Across the board (sans SNA airport), fares are down 15-20% YoY vs 2023 and are 20-30% lower than DFW or IAH. What this implies is despite the reputation, Austin is primarily low-yielding travelers and has way too much capacity. AA is almost certainly losing $$ (and doubt WN or Delta are doing well there) - remember Virgin Atlantic left the market b/c it had 30-40% LFs to London (the largest U.S. - Europe market) which is shockingly terrible. The market is not as big or lucrative as perception, and AA’s buildup was foolish.
Now maybe this changes in 15-20 years, but this will be a gradual, slow increase unless some carrier wants to hemorrhage money. It’s almost certain Austin will never come close to rivaling Dallas or Houston (and it’s a question if it ever passes San Antonio), but it can maybe fill a gap in Delta’s network. It makes sense why Delta is building up with smaller jets to local destinations to limit its losses, b/c I’m sure it smartly realizes this that today there’s not a profitable opening.
the only way to know if these routes were even generating decent revenue for AA is to compare AA's average fare to other carriers for the same markets.
Most of the markets that AA is dropping are competitive which means other carriers either are getting more revenue per seat mile in these markets or have greater staying power.
DL and WN are both going to be the biggest beneficiary in these cuts.
And...
the only way to know if these routes were even generating decent revenue for AA is to compare AA's average fare to other carriers for the same markets.
Most of the markets that AA is dropping are competitive which means other carriers either are getting more revenue per seat mile in these markets or have greater staying power.
DL and WN are both going to be the biggest beneficiary in these cuts.
And AUS, according to the DOT gets a slight (3%) fare premium compared to the nation - so, once again, those that make broad statements about how low fare AUS is aren't reading DOT data.
It is also verifiable that AA and DL get higher average fares than WN in the AUS markets it serves with DL ahead of AA - also true nationwide - so DL is very likely to disproportionately gain from AA's cuts.
DL is using regional jets to add new cities to its network and start to build a "hubette"; it is increasing capacity on a routes to hubs using mainline.
Enilria lists the average across carriers - they’re bad and much lower like for like vs Dallas and Houston. Once again you’re making uninformed comments on the data.
A marginal 3% premium vs the average given it’s one of the top 50 metros is neglible and literally confirms it is not a premium market given all of the low-cost and regional markets that exist in the U.S.
Unless Delta somehow can get a 15-20% premium...
Enilria lists the average across carriers - they’re bad and much lower like for like vs Dallas and Houston. Once again you’re making uninformed comments on the data.
A marginal 3% premium vs the average given it’s one of the top 50 metros is neglible and literally confirms it is not a premium market given all of the low-cost and regional markets that exist in the U.S.
Unless Delta somehow can get a 15-20% premium from those levels (won’t happen), it’s going to face the same problem as AA. Again, if Delta was so confident why would they add two regional Texas cities and not somewhere larger? Outside of British, why is long-haul service negligible? We also have LF data for Delta in Austin for their current routes - it’s not good.
Long term we may talk about a different story, but as of today the opportunity is not encouraging.
regardless of what airport and airline you are talking about, enilria doesn't have access to international data which means that he if sees the domestic connecting leg of an international itinerary, the domestic average fare is low relative to the total itinerary including the international leg. SEA is intended to be an international hub fed by a relatively small domestic operation compared to other hubs. DTW might be the most comparable Delta hub in terms...
regardless of what airport and airline you are talking about, enilria doesn't have access to international data which means that he if sees the domestic connecting leg of an international itinerary, the domestic average fare is low relative to the total itinerary including the international leg. SEA is intended to be an international hub fed by a relatively small domestic operation compared to other hubs. DTW might be the most comparable Delta hub in terms of percentage of international to domestic ASMs.
Feel free to post all of the data regarding DL's performance at AUS but it still comes down to whether we are talking about AUS or SEA, DL is making large enough profits that they can and are developing many more new markets than AA or UA. AA is pulling back in part because their system profitability is so low while UA simply does not have the planes - and isn't going to get them - to do what they need to do to become larger domestically. DL can and is growing its domestic system by growing where it sees opportunity and has the resources - including profits - to do so.
And DL continues to build SEA and likely will announce even more flights as soon as next week as part of their 2025 international expansion. DL simply would not continue to grow SEA if it weren't contributing to its profits.
DL will receive 14 new widebodies this year followed by 11 next year; most of this year's deliveries are in the 2nd half of the year so weren't usable for expansion this summer but will be next summer - after DL uses them this winter to backfill aircraft mods.
AA and UA could only wish they were receiving the international aircraft that DL is receiving.
AUS is simply focused on domestic but DL has proven that it is getting the planes necessary to grow its network including adding smaller cities in Texas via AUS which are new (or returning) to its network.
@Jeremy,
To my chagrin, I'm going to agree with Tim Dunn on several of the points.
I think most critically is that I disagree with your analysis of AUS v DFW/IAH fares/yields. It's apples to oranges given that those markets are fortress hubs and therefore always generate a premium, as with every other fortress hub.
I will, however, disagree with Tim on some analysis left unconsidered. In short, AA/UA own the AUS FF base...
@Jeremy,
To my chagrin, I'm going to agree with Tim Dunn on several of the points.
I think most critically is that I disagree with your analysis of AUS v DFW/IAH fares/yields. It's apples to oranges given that those markets are fortress hubs and therefore always generate a premium, as with every other fortress hub.
I will, however, disagree with Tim on some analysis left unconsidered. In short, AA/UA own the AUS FF base due to their hubs at DFW/IAH, which is the premium traffic you target. DL's opportunity is in markets where they control the originating share of traffic...though I'm sure they are smart enough to do the analysis.
For all 3, the big gorilla in Texas (and many other markets) is of course WN. It will very interesting to see their strategy evolve with their new shareholder engagement. Will be great to see Ben's posts about WN as they evolve...
On VS pulling out, your comment is interesting because BA is adding a second daily flight (13 weekly frequencies). How is BA able to make it work and VS can’t?
Curious what the LFs are for KL and LH that also fly to Austin.
American Eagle also flew AUS-IND earlier this year and last year and was cut earlier this year. Not sure if the article is talking about American Eagle cuts too if so that seems to have been missed
I live in Wilmington NC and AA has totally ignored most regional direct routes that it would benefote from. Instead most flight connect through Charlotte - which in my opinion more closely resembles a third-world country airport. Direct flights from Wilmington, NC to Chicago, Long Island Islip, Phoenix, Florida and many more have never been attempted by AA.
So.... No surprise that their decison to abandon Austin makes sense to only them.
Of all the random things to say lol
ILM has aa service to chicago (seasonal), Miami, dca, Boston, nyc and phl
Your city is barely half a million
You have great service
Austin city council (Dems) constant stupid rules taxes so why live there? Even Californians have dropped moving there. Out of the frying pan into the fire
Californians stopped moving there because the Texas state government makes ridiculous laws affecting people's lives. Also, with WFH an actual thing there was no real good reason to waste time in Texas anymore.
Austin never really made sense regardless of airline; keep in mind the 2023 Census Bureau estimate shows the Austin metro is still smaller than San Antonio's -- this isn't some huge city! yes, there is added tech and some UT and state government traffic, but i wouldn't be surprised to see DL cut a few routes of its own eventually or leave it on unprofitable life support like at SEA.
AUS is a decent-sized city relative to the amount of air transportation it has - and it is wealthier than SAT; population is not a direct correlation to the amount of air service.
Please post the profitability for DL's SEA hub and for any other airline's hubs while you are at it.
You can't because they don't publish that data; anything that is said is pure speculation. Ben mentioned SEA solely to stimulate conversation...
AUS is a decent-sized city relative to the amount of air transportation it has - and it is wealthier than SAT; population is not a direct correlation to the amount of air service.
Please post the profitability for DL's SEA hub and for any other airline's hubs while you are at it.
You can't because they don't publish that data; anything that is said is pure speculation. Ben mentioned SEA solely to stimulate conversation and page clicks and he will probably succeed.
Even if DL loses money in SEA, why haven't other airlines - esp. AA and UA -managed to build two new hubs and grow its presence in 4 major coastal markets? The US domestic airline industry was deregulated in 1978 and AA and UA have had the same time to build out their route systems as DL has had.
If DL can add AUS to its list of money-losing projects and still lead the industry in profitability, then pity the competitors that get in DL's way.
Is SEA really on life support? I know there are definitely some weaker routes there, but everything DL has done is expand there.
New routes to MIA, DCA, and even TPE for longhaul. Doubling up on AMS. New SkyClub and Delta One lounge.
Delta might still pale in comparison to Alaska out of SEA domestically, but it seems like they're invested in growing the hub still?
@yoloswag420, they're definitely invested in growing the hub, as you pointed out; that being said, it's still unprofitable, as Ben alluded to in his article
but then again, American is losing money on a lot of its flying; for that matter, it seems to be a similar story with Delta’s domestic growth in Seattle
which is why it strikes me as being on life support; have any future hit to profits at the fortress hubs and DL will have no choice but to shut SEA
Coast people ruined Austin.
Tim Dunn ruined airline blogs.
We don’t have data to show Seattle is unprofitable for Delta (and I don’t think that’s true). What we do know is Seattle is the worst performing hub for any US3.
Delta actually does quite well on long-haul flying from SEA to Paris, Amsterdam, and Seoul. Based on their LF data it’s likely they’re at best breaking even to Shanghai and definitely losing a ton to London, but overall I’d assume it is positive. Their...
We don’t have data to show Seattle is unprofitable for Delta (and I don’t think that’s true). What we do know is Seattle is the worst performing hub for any US3.
Delta actually does quite well on long-haul flying from SEA to Paris, Amsterdam, and Seoul. Based on their LF data it’s likely they’re at best breaking even to Shanghai and definitely losing a ton to London, but overall I’d assume it is positive. Their issue is where to grow from there - Taipei has done well this summer which is peak season, but those LFs are already dropping with new carriers to break-even levels, and one more is still to come (plus the shift to off-season). Any other Europe destinations are likely a non-starter. So, they got a foothold (albeit not a large one), but it won’t be a viable Asian transit hub or large-scale West Coast - Europe point.
Domestically they’re clearly behind Alaska, but they do well in many of the same routes. There’s definitely overcapacity they’re serving to many destinations which is very likely losing a ton, but I’d assume the net is slightly positive.
Jeremy,
although this article is about AUS, Ben wisely through the comment about SEA in there to generate page clicks.
a few things about SEA - which generates way more talk and not near enough facts:
1. Enilria (or whatever his name is - I'm not dyslexic) never said anything about profitability. he compared domestic RASM but did not include international revenue because he doesn't have access to it (it is highly...
Jeremy,
although this article is about AUS, Ben wisely through the comment about SEA in there to generate page clicks.
a few things about SEA - which generates way more talk and not near enough facts:
1. Enilria (or whatever his name is - I'm not dyslexic) never said anything about profitability. he compared domestic RASM but did not include international revenue because he doesn't have access to it (it is highly protected by the DOT and other sources). Unlike AS, DL operates a fairly large longhaul operation at SEA relative to its domestic size and the domestic flights are prorated against the total trip revenue which makes the domestic revenue very low compared to AS which could never accept domestic revenue as low as DL does in order to feed its international flights.
2. DL said from the day that it announced a hub at SEA that the intention was to replace Narita as a transpacific hub. DL has multiple hubs that connect the midwest and even the west to other places in the western US and connects far less domestic traffic through SEA. In contrast, SEA IS AS' only major domestic hub and they connect lots of traffic through SEA. The share statistics that are usually cited are boardings - which does not address the local market.
3. In the local market including all domestic and international, DL has consistently received about 70% of the total SEA local market revenue that AS does. DL gets far higher fares than AS to the eastern US and obviously has international - even if connecting over another hub. DL and AS get comparable fares in the western US other than to Alaska where AS gets higher average fares - but not by a huge amount. DL's average fare from SEA is considerably higher than AS because of the longer stage length.
4. AS had a pretty low profit margin last year but is expected to increase it this year. DL could easily have had an equally low margin at SEA as AS' system average and still be profitable.
5. If DL was really losing money at SEA, AS would go after them for predatory behavior but the chances are high that AS loses money on other parts of its network so EVEN IF DL was losing money at SEA, other carriers including AS likely do it in parts of their own networks - so everyone accepts the status quo
the key to Tim’s argument is that Delta actually secretly has really good revenue in Seattle despite terrible LFs and terrible domestic fares. What’s missing from his calculation is the cost-side. SEA is a much more expensive hub than other places in the country. So the threshold for profitability is higher. Delta also has spent a bazillion dollars marketing in Seattle, including long-term multi-million dollar deals such as with the Seahawks. These costs don’t show...
the key to Tim’s argument is that Delta actually secretly has really good revenue in Seattle despite terrible LFs and terrible domestic fares. What’s missing from his calculation is the cost-side. SEA is a much more expensive hub than other places in the country. So the threshold for profitability is higher. Delta also has spent a bazillion dollars marketing in Seattle, including long-term multi-million dollar deals such as with the Seahawks. These costs don’t show up in your standard CASM spreadsheets but they’re a huge expense.
Totally possible Delta someday pulls the plug, but they probably wouldn’t do that before Seahawks sponsorship or similar deals expire so there’s already a ton of fixed cost built-in.
As for the comment on local boardings / regular pax - Alaska is the *beloved local brand* and takes a disproportionate amount of local traffic. Delta on the other hand is connecting people from Eugene to San Diego via Seattle with ridiculously low fares
Surprising that Austin–Bergstrom International Airport is so limited. It just opened in 1999, replacing the closer in, Robert Mueller Municipal Airport.
Most of my flying into Austin on business was to the old airport, and when the new aiport opened it just wasn't as convenient to go way out to Bergstrom.
AA started a focus city in AUS during covid because Texas was much more open than the NE where AA could pull RJs and because DL had previously said that it would make AUS a focus city.
As it does with every strategy, DL took the long road and waited for AA to pull back - which it had to do in part because the percentage of RJs that AA used at AUS violated its...
AA started a focus city in AUS during covid because Texas was much more open than the NE where AA could pull RJs and because DL had previously said that it would make AUS a focus city.
As it does with every strategy, DL took the long road and waited for AA to pull back - which it had to do in part because the percentage of RJs that AA used at AUS violated its pilot agreement. As they rebuilt ORD and were forced to use their slots at LGA and JFK after the NEA was defeated by the DOJ, they had to "return" those RJs to the weak northern tier of their network.
DL or DL Connection flies all of the domestic cities from AUS that AA is dropping except for SNA. WN is still larger than DL in every one of those markets but that is a dynamic that plays out in many WN markets - DL is the largest legacy carrier and benefits from those passengers that will not fly WN.
This move is certain to cement DL as the 2nd largest airline at AUS - just as it is at DFW, Love Field, and HOU.
AUS is just like BOS, LGA, JFK and LAX where DL has grown as AA has shrunk.
The real question is what DL does with AUS in the medium to long term but it has been able to get the gate space it wants to keep incrementally adding a market or two at a time. There are still smaller Texas cities like LBB and AMA that DL could benefit from re-adding to its network plus "beefing up" additional markets
As for whether DL loses money in SEA or not (something not a soul can prove because airlines don't report hub profitability), it is notable that DL is still the most profitable US airline and that is not likely to change this year.
It is also noteworthy that, even with the CrowdStrike impact, DL affirmed its guidance at the high end of its annual expectations while United is not increasing its guidance even though fuel is lower and the internet universe thinks that UA came out unscathed from the CRWD meltdown (even though they cancelled 2.5% of their flights in July compared to 4.2% for DL). multiple airlines including DL are guiding to stronger 3rd and 4th quarter performance but UA is not. It is also very probable that UA realizes it has to settle with its FAs and the cost of doing so will be far more than DL's CRWD impact as I have previously noted.
If DL wants to add building a true hub in AUS to its list of developmental projects that it can support and still be the most profitable US airline, the obvious question is why other airlines cannot duplicate the strategies that DL has the profit-maximizing strategies that DL is using.
“This move is certain to cement DL as the 2nd largest airline at AUS - just as it is at DFW, Love Field, and HOU.”
Yep. Certain OMAAT readers won’t like to hear that, but I think that’s a pretty solid prediction baring any major shakeups over the next several years.
Austin certainly is a weird wet dream for a lot of delta fanboys. Apparently a foothold in texas is a desire for all the Atlanta trailer park wannabes
Meanwhile, BA is increasing flights while VS is no more and KL can’t even sustain daily service while delta has been smaller than aa and WN all year despite the pullback from aa,
In July, delta market share actually decreased vs previous months in austin
None...
Austin certainly is a weird wet dream for a lot of delta fanboys. Apparently a foothold in texas is a desire for all the Atlanta trailer park wannabes
Meanwhile, BA is increasing flights while VS is no more and KL can’t even sustain daily service while delta has been smaller than aa and WN all year despite the pullback from aa,
In July, delta market share actually decreased vs previous months in austin
None of which changes:
1. Delta has no gates to grow and won’t for, at least, 6 years
2. Southwest is more than double AA’s size and was almost triple Delta’s size in July. You’d have to be stupid to think Southwest would give up their relative position in gates or market share
3. Any potential delta hub would be in the smallest hub city for population/GDP of any US3 hub outside SLC while having zero dominant share vs anyone
By delta’s own standards, that’s a massive loss leader
But the delta boys sure do seem to think being four points aa in austin validates their fanboyism, I’ll give you that
Not rooted in anything real, but it sure is a passport plum wet dream
AUS market share by percentage of passengers transported for 2024 (top 3): WN 41.9%, AA 20.3%, DL 14.5%.
Regis,
if you are using DOT data - which it looks like you are - that is reported by operating carrier which means that regional carrier operations are not included - just AA and DL mainline. WN operates all of their flights so their number is accurate.
And since AA is now cutting a number of cities that are operated by mainline after first cutting regional jet markets, it is a given that...
Regis,
if you are using DOT data - which it looks like you are - that is reported by operating carrier which means that regional carrier operations are not included - just AA and DL mainline. WN operates all of their flights so their number is accurate.
And since AA is now cutting a number of cities that are operated by mainline after first cutting regional jet markets, it is a given that AA's market share will fall.
julie,
while the interwebs are fixated on DL's strategies - esp. for its network - there is some basis to talk about AUS. DL designated AUS as a focus city while removing that label for other cities; no one agrees what a focus city is but the theme is that DL intends to grow at AUS and there is good reason for them to do so. The question is simply how and how much.
And the theme is that DL has figured out, once again, a place to grow where AA ends up pulling back.
the only real remaining strategic question between AA and DL is when DL decides to start growing in S. Florida to Latin America on its own metal
Austin airport publishes the marketing carrier data, tim
About time to research before you write. Regis’ data is correct
There are multiple sources of market share data and it is customary to give a source when citing data.
And since you highlighted AUS's site, this is what they say for 2024 YTD
"Passenger Activity: Total passenger traffic for January – May 2024 was 8,808,722, up 0.8%, compared to January – May 2023. January – May 2024 enplanements totaled 4,409,768, up 0.73%. Southwest Airlines passengers totaled 3,712,966, up 10.4%; American Airlines passengers totaled 1,836,506,...
There are multiple sources of market share data and it is customary to give a source when citing data.
And since you highlighted AUS's site, this is what they say for 2024 YTD
"Passenger Activity: Total passenger traffic for January – May 2024 was 8,808,722, up 0.8%, compared to January – May 2023. January – May 2024 enplanements totaled 4,409,768, up 0.73%. Southwest Airlines passengers totaled 3,712,966, up 10.4%; American Airlines passengers totaled 1,836,506, down 15.4%; Delta Air Lines passengers totaled 1,235,866, up 24.7%; United Airlines passengers totaled 1,031,449, up 4.7%; Alaska Airlines passengers totaled 310,315, down 10.1%; Spirit Airlines passengers totaled 149,692, down 58.3%...."
it's not hard to see that has picked up far more passengers than any other airline at AUS and DL's gain has come from multiple sources.
thanks for noting the source which confirms even further how well DL is doing in AUS and at whose expense they are growing.
There actually aren’t multiple sources of “fact” when it comes to passengers at an airport.
And yet delta shrunk June to July and has seen little growth since January. Your attempt to change the obvious data are pathetic, as usual. Delta probably will grow in austin. But that data just isn’t there to support that YoY or YTD. Seasonal growth means nothing an
But welcome to an attempt to use actual data provided to you...
There actually aren’t multiple sources of “fact” when it comes to passengers at an airport.
And yet delta shrunk June to July and has seen little growth since January. Your attempt to change the obvious data are pathetic, as usual. Delta probably will grow in austin. But that data just isn’t there to support that YoY or YTD. Seasonal growth means nothing an
But welcome to an attempt to use actual data provided to you by others.
Delta is a third place (and will remain so for a long time vs oneworld )with no supporting hub nearby with no ability to grow in austin with no gates
Julie,
the only thing that is pathetic is that there are a handful of people in every discussion that can't accept reality so not only argue incessantly but denigrate the people that tell them the reality they don't want to hear.
The reality, in this case, is that
-DL announced its intentions to build a focus city at AUS.
- AA jumped in and built its own focus city
- WN...
Julie,
the only thing that is pathetic is that there are a handful of people in every discussion that can't accept reality so not only argue incessantly but denigrate the people that tell them the reality they don't want to hear.
The reality, in this case, is that
-DL announced its intentions to build a focus city at AUS.
- AA jumped in and built its own focus city
- WN didn't do much other than add capacity in a few markets it already served
- DL put AUS on the back burner and instead grew at BOS and LAX and has grown far larger relative to not just AA but every other, becoming the largest carrier in both cities - both of which are larger markets than AUS.
- AA flamed out at AUS and DL likely add a few more routes on an incremental basis.
- AA is cutting enough capacity that it is almost certain that DL will overtake AA as the 2nd largest carrier at AUS not because DL will grow that much more but because AA is shrinking.
- DL has been the fastest growing airline at AUS and even the data which you want to tout shows that for anyone that can do simple math and both DOT and AUS airport data show it.
SNA-AUS being cut is a surprise.
Nonstop flights have existed since the mid to late 2000s. Must have, until recently, been a great performer for AA.
The real question is, where does AA use that SNA slot for?
Maybe bring the red eye back from SNA-JFK...
Ugh. I hated that red eye. I much prefer AA's SNA to JFK schedule now. Adding another non-red-eye flight would be amazing. UA runs three flights a day (including one red eye) to EWR, so there's demand. BOS would be an incredible option as well, as no one else flies SNA to BOS.
There's a bit more to it. AA went big on AUS during COVID because it saw opportunity through the fact that it has a large FF base in the city, many of whom use AA to connect through DFW onto other destinations. The AUS economy was stronger during the pandemic than it is now and AA had, or so it thought. the planes and the crews to bulk up in AUS, moving those assets away...
There's a bit more to it. AA went big on AUS during COVID because it saw opportunity through the fact that it has a large FF base in the city, many of whom use AA to connect through DFW onto other destinations. The AUS economy was stronger during the pandemic than it is now and AA had, or so it thought. the planes and the crews to bulk up in AUS, moving those assets away from ORD and PHL principally. AA ran into pilot scope clause issues with some of its AUS network, and from the beginning, the focus on AUS provided to be fleeting. AA was selling cheaper connections via AUS than through DFW. Not a good sign. The presence of WN (the largest carrier at AUS) exerts pressure on AA, and probably on DL a bit too. AA really doesn't need a big presence in AUS, given what it has at DFW, whereas DL, which has no TX stronghold, relative to AA and UA, has limited options, with AUS being the logical one. Finally, the AUS airport itself may have excellent food but the airport is a nightmare. It is too small for what it handles, and the security lines are frequent bottlenecks.