Wow: American Airlines “Ungrounding” All Planes By May

Filed Under: American

While we know that passenger numbers are increasing in the United States every week, an American Airlines executive has just painted a very optimistic picture of how demand is recovering.

American Airlines seeing increasing demand

Maya Leibman, American Airlines’ Chief Information Officer, has sent a memo to some employees to share the “real upswing in business” that the airline is currently seeing (thanks to @xJonNYC for flagging this). Among other things:

  • Bookings last week through aa.com and the American Airlines app were up 150-400% compared to last year, and within a few points of 2019; bookings last weekend were even higher than they were over the same weekend in 2019
  • The last seven days have been American’s biggest revenue days since the start of the pandemic
  • American had a nearly 80% load factor on domestic flights last week
  • As of May American plans to fly all of its aircraft, and no planes will be grounded anymore

She continues with the following optimistic outlook:

“These are stats we haven’t seen in a year. And all I’m hearing from my friends and family are their travel plans for this summer — you probably are too. It feels like there’s this incredible pent-up demand to GO SOMEWHERE!

Sure, yields are not where we want them to be and we still have a long way to go but there’s no doubt that the train is leaving the station (plane is leaving the hangar — literally!).

Spring has definitely sprung — you can hear it in the birds outside your window as well as the plane engines speeding down the runway.”

American will be taking all planes out of storage by May

All American planes will be flying by May

The most significant and concrete update here is that American Airlines will be putting all of its planes back into service by the May schedule, meaning that in the next few weeks the planes still in storage will be back in the air.

Now, of course it’s worth remembering that American will be significantly smaller than it used to be, even once all planes reenter service. That’s because American Airlines has decided to retire five aircraft types altogether, including the following:

American has retired its entire Boeing 767 fleet

As you can see, these retirements have been largely centered around long haul aircraft, meaning that going forward American’s long haul fleet will consist exclusively of 777s and 787s (until the airline takes delivery of A321XLRs in 2023 at the earliest).

American has placed an order for 50 Airbus A321XLRs

My take on the increase in demand

I have two different thoughts regarding the increase in demand here. First of all, while the demand increase sounds encouraging, the airline still has a lot of challenges ahead:

  • The fact that bookings last weekend were stronger than bookings during the same weekend in 2019 sounds amazing, but probably reflects the change in consumer booking patterns, including that people haven’t otherwise been booking much in advance
  • The demand is overwhelmingly leisure, and business demand is nowhere close to recovering
  • As a result, the current traffic is also generally low yield, though I think we’ll see fares continue to increase in the coming weeks and months
  • With American having eliminated change fees, I can’t help but wonder if the way that people go about booking tickets has changed

Beyond that, to me these statistics very much reflect what we already knew — people are booking short-term travel whether they’re vaccinated or not. With the current vaccine timeline in the US most Americans could be fully vaccinated by July (based on having access to a vaccine in May, and it then taking up to six weeks to develop immunity), but it’s my understanding that a lot of the increase in demand is for travel earlier than that.

US airports are going to be busy this summer

Bottom line

It’s going to be a busy but untraditional summer for US airlines. People really want to travel, and future bookings are reflecting that, at least at American Airlines. American plans to put its entire fleet back into service by May, though it is smaller than it was pre-pandemic.

However, with travel restrictions still in place and demand for business travel limited, the route network is going to look very different than it did in previous years.

Are you surprised by the recovery in demand that American is seeing?

Comments
  1. Where do you expect these planes to fly to apart from “exciting” US destinations like Fort Lauderdale, Anchorage…?

  2. Booked AA SAN-SJU 3/25 few days before going, got last seat in 1st, plane full. Going back AAA 777 4/3 same yield. Good prices, but due to snacky food.

  3. @Stanley AA has announced new service to Tel Aviv and Athens starting in May (I think).

    I’m amazed by how quickly travel has come back. I was flying on empty planes through empty airports just a few months ago. Now every plane I’ve been on recently has been filled, fares are more or less back to normal, and I’ve even experienced being unable to get a seat on a fully booked flight. Time to get the planes back into the sky.

  4. We’re putting 2M shots in arms per day in the U.S. It looks likely that by Memorial Day, anyone who wants a shot, would have already had at least one. I’ve been waiting until I’m fully vaxxed, but beginning late April, I’ve already got a dozen flights planned till the end of the year – most of them on AA. Prices are still cheap, might as well lock in that value. Don’t blame AA for taking the fleet out of moth balls.

  5. More Florida and Alaska flights for everyone… Personally, I don’t really care much about domestic flights…. Fully vaccinated and waiting for more international destinations to open up…

  6. I wouldn’t get too excited with This Announcement/Proclamation….it still comes from an airline led by Doug Parker, the baffoon who is on record saying “we will never lose money again. (When someone is that Ignorant to say such a thing why on earth would anyone believe anything that comes out of his mouth?). Wishful thinking at Best, until the covid virus is contained and people are vaccinated the needle doesn’t move much.

  7. Brave yourself, this is more to prevent damage caused by long-term parking than to cover increasing demand.

    They will reactivate all aircraft but only fly them at a lower frequency.

  8. @Philly380
    I wouldn’t be holding my breath for international destinations opening up anytime soon. Countries are still on different vaccination regimens, and there is still a lot of bad blood and perception that Americans are biohazards. Maybe we can expect Canada and Europe to open up to Americans towards the end of this year. Asian countries, and especially Australia/NZ will open up to Americans on a much, much longer timeline.

  9. Kind of bummed out about this. I thoroughly enjoyed flying both B/E Super Diamond and Zodiac J in the 777-200 on the JFK-LAX route for the past couple months. Randomly looking up flights for April and beyond, the transcon 321T (or is it 321B) is now in place.

  10. @philly380

    Same here just waiting for international travel to open up again. Although you seem like more of a TATL person I’m more TPAC.

  11. Planes are full but they can’t be making money. Some of the AA airfares, including upfare offers are outrageously low. I think a lot of this is about generating cash flow with the hopes of surviving (and lowering losses) until more lucrative business travel return.

  12. I think you are right regarding booking behavior having changed. I’ve been making reservations for everyone in the family for trips into next year on the theory that if fares go up I’ve locked in travel but if dates need to move then I’m no worse off than if we hadn’t booked.

    So it’s certainly changed our thinking to book early, book speculatively even if you travel enough to not be concerned about having a bunch of credit for future travel.

  13. Good news overall. How is AA’s summer schedule look in comparison to 2019? I assume it’s down, and international is bleak.

    Booked an AA flight back to my other hometown, Austin, for next week, my first time back in over a year. I can’t wait!

  14. @D3kingg, personally i want to return to SE asia asap but i know better that they are unlikely open anytime soon (i’m not falling for Thailand’s tourism bs talks such as phuket gonna open up on July 1, because Thais show insanely level of fears over covid yet do nothing about daily fatal auto accidents in their country).

    I am going to focus on burning miles to few countries that are relatively open to Americans such as Turkey, UAE, maybe Greece, etc. Would hate to tie up few grands with airlines with so much uncertainty over international travel.

  15. Not sure why people are ‘waiting’ for international travel to open up.

    Hit 7 countries already this year. All on US passport.

    Will be in Peru and Bolivia next. Then over to Africa for 3 months. Then Europe.
    Then Africa. Then Asia.
    Then Europe.

    Many Flights booked, doing more each week.

    The world is wide open if you avoid the panic stricken countries that melted down.

    Which I’m happy to do 🙂

  16. Why is it that the only people I know who have had COVID are the ones who a) felt they were being “safe enough” while “living their life”, and b) travelled frequently in the last 12 months?

  17. How abut LAX to FLL for $50 one way – includes all taxes. And First Class – $495 Roundtrip.

    Just starting buying AA tickets last week – 3 RT F tickets for $3K. 2 of the trips are in Oct/Nov.
    As long as AA keeps F reasonable – I will continue to buy and not worry about upgrades.

  18. American’s booking patterns might be looking like 2019 but it is likely because they had so many flights that had virtually no bookings just a couple months ago and those flights are now filling up now w/ deeply discounted fares.

    AA’s capacity is down 38% for March 2021 vs 2019, 27% down for April, and May is down 25%.
    AS and WN will have returned a slightly higher percentage of capacity by May than AA while DL is flying just 1% less system capacity than AA for May – assuming Delta stops blocking middle seats at the end of April when their current seat blocking ends.

  19. MM – same here, you are spot-on.

    Sure, everybody, go fly as much as you can. The pandemic is completely over, or was never real to begin with (I forget which one but who cares). Let’s all head for Tanzania, where the president said he didn’t believe in vaccines, and didn’t need any because god took COVID away last spring and nobody has died from it since then. May he rest in peace.

    Now where are my Q-horns and can I get the through the TSA?

  20. Lucky it is worth mentioning they did return (and expand) their Max fleet and they’ve taken delivery of more NEOs. Also they’ve densified almost their entire 738 fleet. So while they dumped a bunch of planes their capacity isn’t reduced by quite as much.

  21. I’m guessing American might have a slightly better handle on its future bookings than any of us do. Jus sayin’ …

  22. While the caveats are well advised, this is good news and reflects where we are headed: a return to normal. We aren’t there yet but I think most people are seeing a light at the end of the tunnel. I got my first shot yesterday and should have my second by mid-April. We were considering a trip in June regardless, now I know that I won’t have to be too on edge for that trip. International won’t be in the cards this year but hopefully next. After having to cancel one trip in fall 2019 due to illness and then last year due to the pandemic, I am more than ready to get back to Europe!

  23. So chances are if you are taking a flight now you are likely going to be packed into a plane with a bunch of unvaccinated people some of which are carrying variants of covid who don’t really care that the pandemic is still ongoing. Too bad they don’t mandate people who are flying to be vaccinated first. That would encourage people to get vaccinated and stop the covidiots from further spreading the virus. Hawaii is already complaining about all the tourists showing up and refusing to wear masks.

  24. You should see what Hawaii looks like right now
    Spring break brought near high-season numbers to Maui. Some places are booking solidly up to August. My concierge pals at the 4S Makena told me that there are no rental cars left on the island right now.
    I’m putting all my car reservations and plane tickets on lock before 3/31 when the waiver fees go away since I am now commuting back and forth between here and the mainland for work almost monthly these days.

  25. MM & “Bobo,” thank you for the shrieking fear merchant point of view. I returned to the skies in May 2020 not only to “live my life,” but to keep my business, and those I employ, financially alive as well.

    I’ve managed to do both with nary a sniffle.

    If you’re afraid, stay home.

    The rest of us are only too happy to be airborne again.

    Sorry about your narrative…

  26. Bobo comes on to a blog about airlines and traveling to complain about people traveling…buddy you’re at the wrong place Lol go to Twitter where you can echo-chamber yourself into delusion.

  27. Not surprised by recovery in demand. As Delta’s Ed Bastian said recently, people are ready start “re-claiming” their lives. Will be interested to see how this plays out in Q2 financials, specifically cashflow. Wonder how many of these travelers are net-new bookings versus people returning to cash-in previous travel credits?

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