The Centre For Aviation has an interesting article about American’s growth strategy in Asia, entitled ”American Airlines’ triple play in greater China is part of long-haul rejuvenation, with more to come.” It’s well worth a read.
Continue reading: American Airlines’ Asia Growth Strategy
Share your questions, experiences, and thoughts below.
It will be interesting to see what happens between Qantas and American, Qantas seems to be getting more in bed with people outside OW than inside of it, so American might just be hedging for an eventual Qantas departure from OW and being ready to step in.
Think there's any chance of DFW-HKG being operated by a 787 in the future? A 787-8 could make the trip distance-wise ...
@ Justin -- I definitely do. Or perhaps if the route does well, I wouldn't be surprised if their second HKG route is operated by a 787 instead.
It may not be ultra-Long haul but united has very short turn around times on their ewr-tlv route. I'm guessing the 20 hours has more to with scheduling than anything else in the same way that Iceland air keeps their 757's on the ground in Seattle for example for long periods of time.
As a resident of the Dallas area, It is very exciting to hear about American's plans for Dallas. I just hope they continue to grow out of Dallas versus their other hubs! Though to me it does not completely make sense for them to grow so many Asian Routes out of Dallas. It seems like Chicago would be a better option for them.
Who writes these articles (I mean the Center for Aviation!)? American is trying to establish itself in China - Beijing, HK, etc. That's natural since China is the biggest economy in Asia (and in the world almost) and they are very late to the game. But that's not an Asia strategy - maybe a springboard into some future and as yet undefined Asia strategy. American doesn't fly to Indonesia, or Singapore, or anywhere else in SE Asia. Part of that issue is geography (a hub in Dallas doesn't help). It doesn't fly to the Indian subcontinent (United's direct flights are always packed and priced much higher than connections), nor the Middle East. It doesn't have a flight to Istanbul or Tel Aviv (US Airways does). American is basically a US/Latin American/European carrier. It's going to be very hard for them to build, compete and be profitable to Asia. Just wait till the next economic downturn - they will not be able to invest for the long haul.
It would be interesting to know AAs long term plans on this route. I'm with Lucky that they are going to have a hard time making money on this ultra-long haul flight particularly having to pay to park the plane in HK for 20 hours. The connections at DFW are strong but for someone coming from anywhere other than Texas, OK or the Southeastern USA, DFW is really out of the way. I just dont see business travelers from anywhere other than Texas or the Southeastern USA flying to Dallas on the way to Asia. Anyone who cares about time in BOS, NYC, Philly or DC is either going to fly direct or get an on the way connection in Seoul or Tokyo. From the West Coast it makes even less sense to fly all the way back to Dallas. It just seems like they need business travelers to make this route work and yet the geography of this route is so unappealing for most of the affluent American markets. Perhaps they think there is enough of a market in Texas to support this route or hope that business flyers wont mind spending an extra 2-6 hours in the air to route through Texas.
Hmmm... At least AA finally admitted what everyone's been suspecting about profitability of the route to HKG.
@ Lucky -- with 787 and A350 coming online, are you thinking airlines (esp. US airlines) will go to more direct routes internationally instead of routing via a partner hub? Seems to be heading that way. And is that going to create friction in alliances?
Seeing as QF pulled out of AKL-LAX, it would be nice to see a 787 run AKL-DFW... pipe dream I know.
DFW is poorly located for service to Asia. It's 3 flying hours further than SFO for most destinations.
AA simply doesn't have any good hub locations for Asia service.
@Ivan Y
Parker said the same thing about Asia being unprofitable before the launch of the DFW-HKG flight, so I'm guessing they are using that quote instead of it being a new quote specifically referencing the profitability of the DFW-China flights. That said, I have no doubt that their Asia routes are as unprofitable as ever.
@ Ivan Y -- Absolutely do think so. After all, that's the biggest selling point of those planes.
Lucky,
So, Boston to Hong Kong is $5484 on American and $5612 on Etihad. Is there any reason to go with AA other than existing loyalty/points? What incentive is there for a business traveler to go with AA vs the other Asian or Gulf airlines.
@ John -- Assuming miles don't matter and you don't mind flying the long way then I'd probably go with Etihad, yes.
Best made plans and all.....my basic question is why anyone flying in premium cabins (particulaly First Class) would pay the same $$ for the questionable, third-grade service of a North American airline versus the wonderful service and comforts offered on long-haul flights by truly international airlines? I tried it once - never again.
Using DFW as the focal point of the Asia service is surprising. As others have noted, the only part of the US that it serves well is the southeast. Connections to Latin America may work well but for the biggest markets in South America they have to compete against the gulf carriers and the asian carriers, couple that with the need for a transit visa and it seems like flying through DOH or DXB would be easier. In some cases it's faster to fly from Asia to South America thru Australia. American is clearly trying to build up the connection between those markets though, right now their J fares ex-HKG flights to SCL are less than half the typical price range, and fares to GRU are cheaper than anyone else by at least 10%.
For west coast, east coast or upper midwest travelers it seems like there are too many other good options to/from Asia for AA to really compete.
Lucky, you have a sick blog man.
I think it's a big "if" to Lucky's last statement...."if" there is not a downturn. Over a full cycle, DFW to Asia is just folly. LAX, ORD and JFK should be the bases. I've heard at least one foreign airline executive privately snicker about DFW, and have to imagine AA's US-based competitors are amused as well. Serve Asia out of DFW?! This is bull market decision-making whenever the next downturn strikes, this "investment" is going to be cut. LAX will stay but DFW is laughable. Just does not make sense for both passengers who have to back-track, and fuel economics...especially given most Asia-based carriers have far products that have cash-ticket pricing power over AA's premium cabins, which are filled with elites usually not paying cash fares for the seats they're in.
AA bean counters had some fantasy idea that they could pull ex-HKG traffic to Latin America via DFW. Well, that hasn't happened. Now they're changing their tune and calling it an "investment" in Asia. Just bad management. People would far rather connect on CX via LAX or JFK to Latam. Basing an Asia hub in DFW is asking for Asia route competitors like UA out of SFO, ORD and EWR, Delta out of Seattle, and frenemies like CX, to eat AA's lunch. As posted in Lucky's recent HKG-DFW thread on AA, J class pricing (10k USD, equivalent to CX HKG-JFK) is just ridiculous for those of us who don't post miles to AA and actually buy full cash fares, so we care about the product. There is no chance I'd pay the same price to fly AA premium class metal versus CX to North America or even connecting.
The competitive environment to Asia ex-North America is only going to get worse given CX is growing its North American presence. To the John guy above...Cathay launches Boston in early 2015. And some of the first destinations Cathay is expected to launch with its new A350s in the next 18 months are likely to include additional North American cities and frequencies. American is just enjoying the short-lived high of their restructuring; picking DFW as one of their Asia hubs, or as a showcase for their Asia "investment" or whatever they're calling it, shows their heads are still in the sand.