In light of recent developments, I’ve seen many people theorize that American Airlines may launch flights to Manila, Philippines (MNL). Let’s talk about the reason the rumor exists, and analyze it a bit.
In this post:
The case for American launching flights to Manila
We just learned that Philippine Airlines will be joining the oneworld alliance in 2027. While there had been no credible rumors of this being in the works, it sort of makes sense. We’ve increasingly seen Philippine Airlines partner with oneworld carriers, ranging from Alaska, to American, to Qatar Airways, and beyond.
We’ve also just seen American reveal it would cancel its Doha (DOH) flights, and instead, launch service to a new destination.
So the logical question that many people are asking is if this could now lead to American flying to Manila, given that this is essentially a partner hub? The arguments in favor of this are obvious:
- American would have connectivity in Manila, so it would open up some new one-stop service for American in the region, with American as the long haul carrier; that being said, keep in mind American is part of a transpacific joint venture with Japan Airlines, so it ideally wants to route traffic through Tokyo (admittedly that’s not always so valuable for service to secondary Southeast Asia destinations)
- Competitively, in late 2023 we saw United add service to Manila (and seemingly have success, as the airline has added more service since launch), and Delta also plans to fly to Manila as of 2027
Why I’m skeptical of American flying to the Philippines
Personally, I don’t see much merit to American flying to Manila, at least in the context of its current strategy. Let me emphasize that American doesn’t always act rationally, which is how it has gotten to the point where it’s barely profitable. So whether there’s merit to something or whether it actually happens are two completely different topics. 😉
As I see it, there are several major challenges. First of all, out of which hub will American serve Manila? The carrier’s only West Coast hub is Los Angeles (LAX). We’ve seen American try to build up its transpacific gateway out of there, only to ultimately retreat. We now know Delta plans to grow there, so I can’t imagine American trying to match that growth is a smart strategy.
I don’t see merit to American launching Los Angeles to Manila flights, where it would go head-to-head against Delta, as well as multiple daily Philippine Airlines flights. For that matter, American has a massive cost disadvantage compared to Philippine Airlines, so it’s hard to make sense of how the economics would work.
American wouldn’t be able to get a revenue premium to support that service, especially with Delta also operating in the market.
Okay, American could operate the route out of its Dallas (DFW) mega hub, I suppose, but at this point we’re talking about an 8,320-mile flight, which would be American’s longest flight. When you consider the cost of operating such a flight, it’s just hard to imagine the airline would be able to achieve revenue performance that justifies that.
I mean, keep in mind American no longer flies to Hong Kong (HKG), despite partnering with Cathay Pacific, and that route even being a bit shorter. So I have a hard time imagining American can make Manila work, if it can’t make Hong Kong work.
Anyway, we’ll see how everything plays out. If American actually wanted to become a global player, sure, I could see Manila making sense in the context of the overall route portfolio. But as a one-off strategy, I just don’t see how this could make sense.
Bottom line
G
I was hoping for a MIA-MNL nonstop for AA. I recall learning from one of your blog articles years ago that a lot of Filipinos tend to fly Manila to/from Miami.
I was hoping for a MIA-MNL nonstop for AA. I recall learning from one of your blog articles years ago that a lot of Filipinos tend to fly Manila to/from Miami.
There was a time when I flew to Manila 2 to 4 times a year from NYC. Once in the old days LGA-DFW-HKG on AA then CX, and recently JFK-HND/NRT-MNL on AA and JL. But I prefer CX or JL or QR, and will continue to do that because of the far far better service those airlines provide.
And a direct flight from the US to MNL on PAL or AA does not appeal...
There was a time when I flew to Manila 2 to 4 times a year from NYC. Once in the old days LGA-DFW-HKG on AA then CX, and recently JFK-HND/NRT-MNL on AA and JL. But I prefer CX or JL or QR, and will continue to do that because of the far far better service those airlines provide.
And a direct flight from the US to MNL on PAL or AA does not appeal to me, but I do think PAL joining OW makes perfect sense for Filipinos or the gazillion Fil-Ams who are connecting via AA to visit family here or there.
Only in the movies. In the Bourne Legacy, the flight to Manila was on AA. Even at the time of the film, AA didn't fly to Manila.
I find the cost structure commentary to be nascent.
All US airlines suffer this same structural disadvantage. Yet United seemingly finds it possible to do very significant amount of TPAC flying, often head to head against other carriers like CX or BR.
@ yoloswag420 -- Right, but United has a major advantage that American and Delta don't have. It has a mega hub at SFO with great geography and a ton of connectivity, a very loyal local customer base, and lots of corporate contracts, especially in the tech space.
That's what's needed to make this kind of service work, and it's the only reason United is as successful across the Pacific as it is (and keep...
@ yoloswag420 -- Right, but United has a major advantage that American and Delta don't have. It has a mega hub at SFO with great geography and a ton of connectivity, a very loyal local customer base, and lots of corporate contracts, especially in the tech space.
That's what's needed to make this kind of service work, and it's the only reason United is as successful across the Pacific as it is (and keep in mind, United's margins across the Pacific still aren't amazing). These kinds of routes just don't work on a one-off basis, when you can't combine those advantages.
and yet UA makes just over half of what DL does flying the Pacific while AA loses money and has for years flying to Asia. UA operated its TPAC network at breakeven for years precovid but got right that they could regrow faster than Asian carriers.
SFO is a huge local market and UA does serve lots of destinations from SFO; but there are a top 20 feeder markets for any international route and...
and yet UA makes just over half of what DL does flying the Pacific while AA loses money and has for years flying to Asia. UA operated its TPAC network at breakeven for years precovid but got right that they could regrow faster than Asian carriers.
SFO is a huge local market and UA does serve lots of destinations from SFO; but there are a top 20 feeder markets for any international route and a good chunk of UA's SFO hub is to domestic destinations that contribute little to their TPAC network.
LAX is an even larger local market and has far less US carrier service; US carriers consistently carry traffic for US residents/citizens as is true around the world.
And UA has a fleet disadvantage with its use of older generation and fuel inefficient 777s across the Pacific while DL's TPAC network is almost entirely A350s which are larger than AA or UA's 787s but also much more fuel efficient than the 777s. AA has shifted to largely 787s as well so they do not have an aircraft cost problem like UA.
The issue is simply that AA is not competitive from the west coast while UA leads the big 3 and DL is not far behind and intends to challenge UA's western US dominance esp. to Asia.
and right now, DL has the financial strength to develop its western US and will have an advantage as long as this war in the Middle East goes on.
UA makes just over half of what DL makes on TPAC PER ASM.
@ Tim Dunn -- Oh my...
a) as Delta increases its TPAC flying, its profit per ASM will go down as well (though I'm not even sure what math you're using to measure this, so if you can provide "makes," that would be great, without talking about the number of lost bags United has, or how it flies 737s between Newark and Los Angeles)
b) Having a global route network is also about loyalty...
@ Tim Dunn -- Oh my...
a) as Delta increases its TPAC flying, its profit per ASM will go down as well (though I'm not even sure what math you're using to measure this, so if you can provide "makes," that would be great, without talking about the number of lost bags United has, or how it flies 737s between Newark and Los Angeles)
b) Having a global route network is also about loyalty program revenue nowadays, and I imagine your math doesn't factor that in
c) UA is more than a little bit ahead of DL on the West Coast
d) Having larger planes isn't necessarily a good thing, especially when most of the money is made in the forward cabin
Ben, I do believe that you might well be aware that I know little to nothing about the U.S. Airline industry. However, I can read and I can research via reliable sources of information posted on the internet. Furthermore, I have a very keen sense of smell, with an ability to identify bull’s excrement when it is in the vicinity.
Ben, you are being surrounded by the stuff and it is coming at you...
Ben, I do believe that you might well be aware that I know little to nothing about the U.S. Airline industry. However, I can read and I can research via reliable sources of information posted on the internet. Furthermore, I have a very keen sense of smell, with an ability to identify bull’s excrement when it is in the vicinity.
Ben, you are being surrounded by the stuff and it is coming at you in bucket loads from a particular source. I am sure that you do not need me to actually point out from whence it comes?
The information from the ‘ex-pert’ is completely at odds with the majority of unbiased analytical data freely available elsewhere. If I can see the writing on the wall and clearly others can too, perhaps you require a visit to Specsavers on your next UK visit …. :-)
"while UA leads the big 3 and DL is not far behind and intends to challenge UA's western US dominance esp. to Asia."
Tim, it's barely 1030am in the old ATL and you're already this bad at math?
From the West Coast to Asia...
Delta has ~29% of the flights United has. and UA has about 4x the capacity from the West Coast to Asia vs Delta. that's a LOT BEHIND for Delta.
The...
"while UA leads the big 3 and DL is not far behind and intends to challenge UA's western US dominance esp. to Asia."
Tim, it's barely 1030am in the old ATL and you're already this bad at math?
From the West Coast to Asia...
Delta has ~29% of the flights United has. and UA has about 4x the capacity from the West Coast to Asia vs Delta. that's a LOT BEHIND for Delta.
The rest of your spiel is the usual nonsense you want to be true but isn't.
Will you next be telling us about Delta's west coast to Latin America dominance and buildup? By cutting 30% of Flights?
I'm trying to figure out what word you meant when you wrote nascent ( "just coming into existence, beginning to display signs of future potential, or recently formed.") But I also wonder why SFO is so easily dismissed. AA flies there from eight hubs, none of which wants to hear "we can't get you there (in one stop) from here."
Why does it have to be LAX or DFW? Why not PHX? AA offers a lot more connectivity there than LAX and the distance isn't as far as DFW.
@ Larry -- If American doesn't fly to Tokyo out of Phoenix (a joint venture hub, and a much shorter flight), then it seems highly unlikely the airline would fly to Manila, in my opinion.
Purely speculating, LAX-SIN and LAX-MNL could make sense.
LAX-SIN checks all the boxes for O&D, and the QF JV leveraging SIN as a scissor hub. (78P might be a better fit for this route.)
While LAX-MNL by AA may face some challenges, they still have more feed than DL with PR's partnership. I sense it'd also be Nat Piper's response to Delta's posturing at LAX. It's essentially an offence to keep DL out of MNL. 789 (J30) is just about right for this market.
It is doubtful that an AA route could work w/o a joint venture and PR has little incentive to get into a JV unless AA flies the route on its own metal.
AA's problem is that it cannot compete for sales with DL and UA; that was the case why they gave up on their sales team and there isn't any evidence that they are doing any better in building new routes.
AA also...
It is doubtful that an AA route could work w/o a joint venture and PR has little incentive to get into a JV unless AA flies the route on its own metal.
AA's problem is that it cannot compete for sales with DL and UA; that was the case why they gave up on their sales team and there isn't any evidence that they are doing any better in building new routes.
AA also has the lowest profit margin and will probably lose money this year due in part to high fuel prices. Depending on labor settlements, UA might be just breakeven. There is little appetite for route development when profits are as rare as they are right now.
Poor Delta is walking into a slaughter. It should stick with its Europe flying it gave up on Asia as soon as it bought NWO.
let's sit tight and see how this plays out.
DL has done more to develop multiple hubs than any other US airline - and probably any other airline in the world.
DL is already the largest domestic airline at LAX and largest international carrier at SEA.
The A350 is simply THE superior TPAC aircraft and DL is the only US airline that has it
In fact, Scott Kirby is raililng about Rolls Royce...
let's sit tight and see how this plays out.
DL has done more to develop multiple hubs than any other US airline - and probably any other airline in the world.
DL is already the largest domestic airline at LAX and largest international carrier at SEA.
The A350 is simply THE superior TPAC aircraft and DL is the only US airline that has it
In fact, Scott Kirby is raililng about Rolls Royce again undoubtedly because he knows that DL will have an advantage that UA can't touch with its fuel inefficient 777s or its 787s,
Rolls just upgraded technology on the XWB 84 that powers the 359 and fuel burn is down 1.8%. DL has 10 aircraft w/ those engines in service already. 1.8% is huge on longhaul flights.
DL will do just fine. It has targeted AA and B6 esp. over the past 10 years and its focus now is on UA's TPAC advantages from the west coast
If AA is barely profitable , why are the executives paid so much ?
DFW to MNL? Boring. El Paso to Manila. Now that's a route I'd fly!
@Phred They can't even operate a DFW-ELP flight without screwing-up. Ah yes, American Airlines' finest work: turn a routine DFW-ELP hop into a masterclass in self-inflicted chaos. Blow past the -15 Minute boarding cutoff, stuff on extra passengers, fumble the bags, create a paperwork disaster and then point at the approaching thunderstorms with a straight face and call it a weather delay. Nature didn't cause your delay. You handed nature a 45-minute head start.
Maybe Delta will fly to MNL. I won't say dogmatically that it won't. They need to fly planes somewhere.
but their "interest" seemed more about stopping competition on ORD-MNL than actual interest in flying to MNL.
A Route like... I don't know... London from LAX or Europe (they only serve CDG) or South America would seem more pressing on Delta metal but granted... they aren't TPAC destinations. But they do seem more worthwhile than...
Maybe Delta will fly to MNL. I won't say dogmatically that it won't. They need to fly planes somewhere.
but their "interest" seemed more about stopping competition on ORD-MNL than actual interest in flying to MNL.
A Route like... I don't know... London from LAX or Europe (they only serve CDG) or South America would seem more pressing on Delta metal but granted... they aren't TPAC destinations. But they do seem more worthwhile than MNL for building local credit cards.
but AA...
I don't really see it. UA is making MNL work, it seems, but MNL is famously low yield (just by reputation. I'm not saying I know that to be a fact) and AA would seem to be happy just to let PR take customers while LAX gates are still under construction.
No! No! Max, you mentioned the “D”-word. Wait for it now …. :-)
meh. it's Sunday and Tim has no life or family. He's welcome to waste his entire day here in the comments section, per usual
the hypocrisy is top level out of the park, mini brain.
I have no life but you are in here twice and already fixated on me.
get help.
Really.
and like clockwork... less than 4 minutes after I respond to someone else about you, here you are proving me right...
@MaxPower, spray seltzer randomly and a clown ALWAYS appears.