Why American Loses Money Flying 777s & 787s Domestically

I don’t think this should surprise most people, though it’s always interesting to hear an airline executive provide some insights…

American SVP explains carrier’s domestic wide body strategy

All of the “big three” US carriers operate wide body aircraft on some domestic flights. Sometimes this is due to having spare wide body aircraft, while other times it’s to reposition wide body aircraft between long haul flights.

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Historically, American has frequently flown wide bodies on some frequencies between Miami (MIA) and Los Angeles (LAX). Last week, Simple Flying reported how as of September 4, 2024, American no longer shows any wide body jets flying between the two airports for the fall and winter.

Now, personally that didn’t surprise me, since American often only adds wide body aircraft to the schedule closer to the actual flight date, to maximize flexibility. Following the above story, a Reddit user sent an email to American’s SVP of Network Planning, Brian Znotins, who provided a surprisingly detailed explanation for this decision. Here’s what he wrote:

We generally don’t prioritize a widebody on MIALAX. Our widebodies are really meant for long-haul (trans-oceanic) travel, and only when we have surplus time on them they will end-up on MIALAX.

You probably aren’t too interested in the financial reason for this, but if you are, the short explanation is that it’s really difficult for us to monetize the flat beds in the business class cabin on domestic routes. A flat bad consumes about 4x the space of a coach seat, so we generally need to get 4x the fare on those seats vs coach to make the widebody work. We can do that on long-haul flying, but domestically, we’re lucky to get 2x. So a widebody almost always loses money for us domestically.

I do understand that there’s a bigger picture here about overall loyalty and it’s not lost on me. So feedback like yours helps to keep that in mind as we build our schedules.

While I wish I had better news for you, for now we don’t have plans to put a widebody on the route. But it could appear anyway as we work through our schedule builds and see if there’s any available time left over for us to fit a round-trip or two in!

The Reddit user followed up with Znotins, seemingly asking about the possibility of putting specially configured A321Ts on this route, to which he responded the following:

We have our entire 321T fleet tied-up with NYC/BOS-LAX/SFO, but we do think about the 321XLR on LAXMIA deeper into its delivery stream. Still likely 2026 before we get anywhere near that, though. Airbus is almost as bad as Boeing at getting us our airplanes on-time.

We do need to move widebodies between hubs from time to time, and MIALAX (alongside the reasons I noted before) tends to be a priority for that. So while I can’t guarantee widebodies on the route, there are a number of reasons that they will “end up” there after all of our planning is done. Hopefully that happens frequently!

Huge kudos to Znotins for being so open to engaging with customers in this way! It’s not every day that airline executives respond to openly to questions like this.

This explanation (of course) makes perfect sense

I don’t think the above should surprise anyone, but I think the rough numbers used by a network planning executive provide interesting context:

• On average, American needs to command 4x the fare for business class vs. economy when offering flat beds; that’s possible on long haul flights
• On domestic flights, it’s more common to get 2x the fare, which works when we’re talking about domestic first class, but flat beds take up a lot more space

While some domestic markets can command higher premium fares than others, I think some people overestimate how “premium” some markets are, and the extent to which they can profitably have service from a wide body aircraft:

• On long haul flights, people are willing to pay huge premiums for first and business class, while people aren’t willing to pay those same premiums in most domestic markets
• Some wide body aircraft don’t actually add much capacity; for example, American’s 787-8s have 234 seats (20 of which are business class seats), while American’s A321neos have 196 seats (20 of which are first class seats), and the 787 is a lot more expensive to operate in every way, despite capacity being only 20% higher
• Miami to Los Angeles isn’t even a competitive domestic market, as it’s dominated by American in terms of frequencies, so it’s not like people will book away from narrow body aircraft

All that being said, I suspect we’ll continue to see American operate a large number of wide bodies on domestic flights, and I predict we’ll even end up seeing them between Miami and Los Angeles this winter. The reality is that it’s not about whether operating a 777 or 787 between those cities is profitable in absolute terms, but rather it’s a function of whether it’s the best use of resources.

Long haul demand is highly seasonal — there’s huge demand to Europe in summer, while Asia (and particularly China) continues to be challenging. Sure, American can shift some capacity to Latin America and the South Pacific during the northern winter, but there’s only so much that can be done.

Unless American gets aggressive about retrofitting 777-300ERs with the new business class this winter, I have to imagine the airline will have excess wide body aircraft, and we’ll see more of them on domestic flights.

Bottom line

Flying wide body aircraft on domestic flights often isn’t profitable for airlines, but may still be the best use of resources. American’s SVP of Network Planning has provided commentary on how the carrier goes about allocating wide body aircraft on domestic flights, and I think it’s something that many avgeeks will find to be interesting…

What do you make of these insights on wide body aircraft on domestic flights?