Uh Oh: Will American End A321T Premium Transcon Flights?

Filed Under: American

As of now this is a rumor, though it’s something that I could unfortunately see happening…

The basics of American’s A321T fleet

American operates a special subfleet of Airbus A321s (known as A321Ts), which have historically operated premium transcontinental routes from New York to Los Angeles and San Francisco.

These planes are unique, as they feature just 102 seats, and include four seating options:

  • There are 10 first class fully flat reverse herringbone seats with direct aisle access, in a 1-1 configuration
  • There are 20 business class fully flat seats, in a 2-2 configuration
  • There are 72 economy seats, with 36 of those seats being Main Cabin Extra, featuring extra legroom

American’s A321T first class seats

Because of the low capacity of these planes, American has been able to operate some of the highest frequencies in the market, in some cases offering near hourly service.

American’s A321T business class seats

American may reconfigure transcon A321Ts

For now this is just a rumor, but the always knowledgeable @xJonNYC reports that American is seriously considering getting rid of its A321T subfleet. If the airline did this, it would reconfigure these A321Ts with the same configuration as standard A321s, with up to 190 seats.

In other words, these would no longer be premium planes, but rather would be flown in standard domestic and short haul international markets.

Presumably American’s plan would then be to operate 777s and/or 787s in these premium markets (American is even operating 777s between New York and Los Angeles right now), since those are the only planes with flat beds, and those are a must in the market. What would this mean for consumers?

  • It would mean there would be no more three cabin first class
  • This would be an upgrade for business class passengers, since American currently has reverse herringbone seats in first class, while 777s and 787s have reverse herringbone seats in business class
  • We might see American start selling premium economy if this were to happen, since 777s and 787s feature premium economy
  • Presumably American would operate significantly fewer frequencies than before, since 787s and 777s have 2-3x the capacity of A321Ts

What would happen to Flagship First Dining if A321Ts were eliminated

My take on American ending A321T service

My first question is whether there might be some connection here to the partnership between American and JetBlue, which will launch soon and include premium transcontinental flights. I’m not sure how the economics would make sense, but could JetBlue take over premium transcontinental flying with its incredible Mint product?

JetBlue’s incredible Mint product on the A321

Beyond that, you can look at this update in terms of the short term implications or the long term implications.

Let’s talk about the short term first. For at least the next year (and probably much longer than that):

  • It’s unlikely American will be able to operate its A321Ts profitably in transcon markets, since a plane with just 102 seats relies on high yield business travelers to be profitable
  • American has more than enough wide bodies due to lack of international flying, and these are better suited for the type of passengers (a higher ratio of economy seats), as well as for cargo
  • United is about to start flying transcon out of New York JFK with premium-heavy 767s, so this will present American with quite some competition

United will offer a top notch product on JFK transcon flights

But what about beyond that, at a time when demand does recover?

  • Won’t American want to go back to a high frequency schedule and be a market leader, which won’t be possible to do with wide body aircraft?
  • Won’t American need its wide bodies for international flights?
  • While American does have 50 A321XLRs on order, aren’t those a waste for these routes (since they have a lot more range), and also won’t they have the wrong configuration (as they’ll feature business class, premium economy, and economy)?

Personally I hope American doesn’t eliminate its A321T subfleet. However, if it does, I guess the strategy would be:

  • 777s and 787s are a good fit for these routes for the next few years
  • After that, maybe American will use A321XLRs for these routes, even though it does seem like a bit of a waste

I can’t help but feel like if American does eliminate the A321T fleet, it’s essentially just paving the way for United to grow at JFK, as it reenters the market. Unfortunately American just seems to like shying away from competing.

777s and 787s could be a good fit for the next couple of years

Bottom line

While nothing is confirmed, it sounds like there are at least serious discussions at American about the possibility of the A321T subfleet being eliminated.

On the one hand, it’ll be a while before these planes can profitably operate in transcon markets again. On the other hand, when demand does return to pre-coronavirus levels, American will have lost a huge competitive advantage.

Unfortunately I wouldn’t be surprised to see this because it largely seems like this is the direction American was headed in anyway — the airline isn’t particularly focused on being premium, and somehow thinks it’ll be successful primarily targeting low yield travelers while having a significantly higher cost structure than ultra low cost carriers (and to be clear, this strategy already applied pre-coronavirus).

What do you think — could American eliminate its A321T subfleet?

Comments
  1. @ James S — The environmental argument could go either way here. It’s not like 190 seat planes will be replacing 110 seat planes in the same market, so it’s not apples-to-apples.

    The 190 seat planes could be used in leisure markets, where low fares often stimulate demand that may not have otherwise been there before. What’s worse for the environment — a plane with 102 seats filled with people who would have flown anyway, or a plane with 190 seats, with half of the people traveling because they got a $39 fare?

    Again, I’m not saying you’re wrong, I just think the environmental argument is a little more nuanced. Lufthansa’s CEO argues it’s unethical to sell $10 tickets, while Wizz Air’s CEO argues that it’s unethical to sell business class. I don’t think either person is wrong (or right, for that matter).

  2. The a321T was the main reason for my loyalty to AA when I started travelling for work.

    Nobody else could consistently offer lie flat seats, near hourly schedule between SFO and JFK.

    Looks like I’ll be matching to united to ride those 767 when travel picks back up.

  3. For the short term this may be a good move, at least financially. They could always go back and reconfigure the planes when market conditions improve.

  4. I suspected this when they took them off the schedule land replaced with 2x 777. I think they’ll leave those two AA flights for aircraft positioning purposes and code share the rest of the schedule with JetBlue. Maybe even Alaska on the SFO slots.

  5. I don’t see how using 777 or 787 equipment vs narrowbodies “paves the way” for United. AA will still have lie-flat seats, and will be all aisle access. I expect they will deploy 2-4 nonstops in the market and (eventually) let JetBlue carry the demand for additional frequencies.

    If the high-frequency, premium heavy product makes sense again in the future, AA can revisit the product. First is probably a loser for the foreseeable future, and aisle access for every Business passenger is increasingly a competitive necessity as well based on DL and UA products….so any return of high-frequency narrow-body service will likely reflect that.

  6. This article is clickbait. American pulled the A321T’s from the schedule for two reasons. Premium demand is all but dead. So, why dump pricey seats and fly empty premium cabins across the country, when the demand is mainly for economy seats which is why the 777s are flying JFK-LAX now. Second, the lockdowns in CA are having a further detrimental effect on transcontinental demand overall. So, while B6, UA, and DL dump capacity and product, AA is cutting some of the bleeding. There will be further slack in the widebody fleet and if they put the 777s and 787s on these routes, it will be a winner for premium and economy demand. The A321T’s are also said to be undergoing maintenance as they had some wear and tear, notably in the cabins from 4 years of heavy usage (they were introduced in 2014 and replaced the 767-200s). American is likely not interested in competing with heavy capacity on transcons once demand recovers. So, for now, they will use the widebodies because of the slack. If business travel recovers, the A321T’s will likely be back.

  7. @IKS Vikrant – AA has not had a nearly hourly schedule between SFO and JFK. They had at most 5, maybe 6 flights a day, in pre covid times

  8. It’s a sign of the times. Fewer business travelers paying top dollar for first class seats at the last minute. If these seats are just getting filled with upgrades and redemption pax it doesn’t make sense to operate them. The ratio of premium to coach seats is just too high for the current state of the world. Blame Zoom and its ilk for making videoconferencing a semi-viable alternative to business travel.

  9. This is not a customer friendly move. While I always refused to fly American to SFO due to reliability issues, the 777 is less customer friendly than a 321 because it takes longer to board in my opinion. I always liked the 321 because it is quick to deplane on.

    United will be holding a significant amount of share of the transcon market, especially to SFO from NYC.

    I expect Delta and Jetblue to gain marketshare back, but right now United probably has at least 50% marketshare on the transcon routes, very imrpessive!

  10. @ shoeguy — This post isn’t about the A321T being pulled from the schedule (which was many weeks ago), but was rather about what is allegedly under consideration as a long term plan.

  11. And as for what would happen to Flagship Dining, I believe I read somewhere it was mentioned that it would be considered as an add on to someone’s travel experience.

    Didn’t they do this on a trial basis at one point for EP at $200 entry cost ?

  12. @ John G — They did, and I can see that working at the margins, though I can’t imagine that in and of itself would justify FFD staying open.

  13. Well if AA isn’t getting that premium F demand then sure. It’s not like any other airline is running a 3 class on a NY/LA/SFO route. AA would still be offering a lie flat all aisle access business class seat on these routes. It’s not like they plan on jamming premium passengers into the F cabin of a Max. Which by the way some of the LAX/MIA runs where on the Max before it was taken out of service.

  14. @Ben,

    I doubt the overhead is as big a you think given they have other hot food options in the main lounge. It’s a relatively small portion of the lounge that’s segmented off. Not to mention Cathay F has access to it, maybe Qatar will offer it in a higher business class fare.. who knows.

  15. Lufthansa just decided there wasn’t going to be any F to the USA for early 2021. So did Cathay. Those are very good F products, not “eh, you’re calling something three-class F but it’s nothing special” like American Flagship F. And remember that American’s an outlier among US airlines in offering a three-class product domestically.

    Bill Gates is on record for saying business travel will be down 50% going forward thanks to widespread adoption of videoconferencing as a pandemic substitute. He may not be right, but it doesn’t have to go down a whole lot to make premium-heavy planes unprofitable, and businesses are going to notice that the world didn’t end just because they couldn’t make as many customer visits and run conferences.

  16. American’s A321T strategy hasn’t worked from a share perspective and likely hasn’t been profitable either. The A321T strategy was released after AA lost millions with its 767-200s. As Virgin America started a discounted business class product, AA’s answer was to use a more fuel efficient aircraft and eliminate a good part of the coach capacity -but B6 upped the game with its Mint product and even more discounted seats. DL added 767s with Delta One which added seats in both the premium and coach cabins. DL and B6 are the two largest carriers from JFK to the west coast. AA has become less and less relevant in the transcon markets that were once the backbone of AA’s network.
    DOT data shows that Delta is the largest carrier by revenue in the combined NYC (EWR, JFK, LGA) to LAX local market while United is the largest by revenue to SFO. AA dropped to 3rd in revenue and 5th in passenger share to LAX and 5th in revenue (out of 5 carriers) and 5th in share to SFO (also out of 5 nonstop carriers). AA’s higher average fares were never high enough relative to other carriers to offset the much higher CASM on the A321T.
    United’s former strategy at JFK was also as a niche premium carrier with the 757 – and that didn’t work. UA is now returning with an even larger, more premium aircraft in a market where other carriers – mostly DL and B6 offer plenty of coach capacity and also premium cabins with lie-flat seats.

    American and United have both tried to shift to a premium, niche strategy in the JFK transcons and neither have yet to succeed in doing so. Further, there is no example of any nationwide carrier succeeding as a niche carrier in a specific market.
    The A321T strategy was based on flawed assumptions. AA can no longer afford to support strategies that are not financially viable which is why the A321T strategy’s demise was a given from the day it was announced.

  17. Would it not just be better to store them for a few years if they’re already going to be storing other planes?

  18. I saw about 5 or so of these parked outside the Superbay hangar at SFO last week.

    Weren’t these planes getting refreshed interiors (already).

    Either way it’s clear UNITED is rising and making the aggressive moves.

    Back to the future with 3 cabin widebodies on transcons again, which is frankly better. Just the old ‘first’ cabin is a lot bigger with better seats as ‘business’ class.

  19. Sounds like a move in the direction of equality. If this level of service cannot be offered on all flights it should not be permitted to be offered anywhere. Only deep state employees deserve this level of service anyway.

  20. American should Keep the A321T premium service and do either three of the following;

    1)non revs are no longer permitted in flagship first. If the seats aren’t sold or they can go out empty. Non revs are not confirmed space so they won’t be able to fly even if the only seats left are in first class.

    2) improve flagship first service . Caviar. Champagne. Being driven across the tarmac in a Cadillac. Etc

    3) just market these flights as 2 class service and eliminate business class. Operating 30 first class seats. No need to reconfigure the planes.

  21. When/Is Delta going to become a real competitor in this premium transcon market? Don’t think their product is very competitive now with 767-300ers. I’ve read that the 330neo is a replacement, but will the neos be deployed on transcon? Are there enough 767-400s to serve transcon and Europe when demand returns?

  22. @D3kingg – why ban nonrevs from sitting in first class when seats are available? They work for that privilege and is an expressed benefit of their job.

  23. Even before the pandemic, I didn’t see how AA planned to continue with their first class product (either 77W or 321T). It’s so undifferentiated from business, yet management never seemed interested in investing in better onboard experience. I had always expected that AA would reconfigure 321Ts to 2-class with new direct aisle access seats in Biz.

    FWIW, I could see AA abandon the 321 transcon config and use wide bodies to fill the transcon market for now. When the time is right, perhaps AA will pivot back to a high-frequency & premium-heavy strategy and reconfigure 321s into a 2 or 3-class config.

  24. honestly the three cabin configuration never made much sense to me. I’m very skeptical that there were enough people actually willing to buy those first class seats that AA got a yield premium sufficient to justify the reduced density. Just a slightly superior business class seat and virtually identical catering to J. I feel like it existed as mostly a perk for elites.

  25. The sad part is, if the A321T configuration is to go, AA First is not long for this world. It will be the end of 3 class first service for any carrier in the Americas (I believe). Very sad…

  26. Just terrible! These are the top seats for these routes along with JetBlue’s hands down. DL and UA just don’t compare. They’re the only flights I’d take for NYC-LAX. A huge shame…

  27. My money is that businesses realized how much money could be saved by reducing business travel during the pandemic, thus it is normal to expect that the business travel demand will never get back to pre-virus levels.

    I am not saying all business travel demand will be gone. But that brings radical changes even if one third of them changes to virtual meetings.

    And obviously one third is a conservative estimates.

    There are more to come, for airlines that previously pivoted itself in meeting Business Travellor’s demand. This is just the start

  28. I think what I’ve thought since day one- American is no longer. They are now USAir. Once that bitter pill is swallowed everything they do makes sense.

  29. @Thomas

    Not banning non revs entirely from first class. only on 2 premium products. Transcon Flagship First on the A321T and Internetional Flagship First on the 77W. In order to create a better environment, lower volume , more exclusive product that can compete in the luxury market

    Non revs would still be permitted in all other premium cabins ie domestic first , long haul business class etc.

    I’ve heard feedback from full fare first class passengers before that they were the only passenger in the cabin between HKG and DFW only to have the cabin filled with employees just before departure. Doesn’t sound very Cathay pacific.

  30. I’d like to politely disagree that JetBlue Mint is an acceptable replacement for the A321T. I loathe AA otherwise, but this plane is so civilized going across the country – 102 people at the gate and onboard makes it much more bearable than the mess of those United 777 HD’s at Newark.

  31. Several people have made comments about the “quality” of one carrier’s premium cabin products vs. others. While there might be qualitative preferences, there isn’t any public data that shows that any one product does better financially than any than another.
    There is clear data that shows that “moving up” or “down” to a different type of product does impact average fare data which does become public eventually. Virgin America’s average fares (which include all cabins) dropped when Mint became available, which itself helped B6′ average fares improve dramatically in the transcon markets. When AS dropped the VX product, their average fares fell.
    However, DL and UA are still the high fare/high volume leaders and both use mixed cabin or domestic type aircraft from their respective NYC hubs.
    AA had a niche strategy with its A321T product and it is also high cost.
    At the same time, marketing strength and the ability to procure contracts has helped DL and UA in markets where they compete with Mint and also against AA which is weaker than DL and UA in both NYC and BOS.
    DL gets higher average fares in nearly all markets from JFK to the west coast even where it competes w/ B6 and the same will likely be true of UA when average fare data comes out as B6 builds EWR.

    From BOS, AA’s average fares in the transcon markets fell as competition heated up esp. between B6 and DL. Market strength matters.
    AA has been challenged by market position in NYC for years. Having a high cost, premium heavy product increases the financial challenge.
    Fare data shows that the “quality” of a premium product in similar categories (lie-flat or traditional domestic first class) matters less than how well each carrier is able to serve the entire market to the largest and richest group of travelers.

  32. @D3kingg – items 1 & 2 either have no impact to the financials (item #1) or hurt the financials (item #2). Not sure what the point of introducing either would be. AA will not add costs to an already challenging model, so item #2 is definitely out .

    As for item #3, that is basically eliminating the A321T model which is exactly what AA is currently considering.

  33. The F cabin always seemed like a huge waste of real estate on a small plane. It was a dream to fly, but seemed like they could have cut the cabin down to 4 seats and been just fine. Also, being SFO based, there was almost no differentiation between J and F on the ground here. I know a few non-revs that will be sad – because they said SFO-JFK in F was one of the easiest premium routes to snag a seat on. Which clearly means it wasn’t selling. Also, the policy of allowing non-revs seats before elite upgrades (from paid J) to F was really strange. Also, inconsistencies in dinner vs supper flights did not make the premium of F worth it. I am a fan of the J on this plane as I find it comfortable. Sure direct aisle access is nicer, but I didn’t hate the lie flat business either. Sad to see these planes go, as it was one of the last vestiges of what kept me loyal to AA and differentiated them.

  34. The configuration works between NY and LA where there is real demand for people seeking the 1×1 layout and related privacy. That market is not dead by any means. Those people aren’t moving to Denver long term. For people who are public figures (or believe they are) no other airline offers a comparable experience to AA transcon first. SFO really doesn’t have the same crowd or appeals to the audience that can and will pay an extra $5,000 a seat just to be left alone. Very shortsighted move by AA.

  35. These are different times and could be permanent. I just returned to driving for Uber for the first time since the pandemic began and there’s not a business person in site. Just everyday people.

  36. It seems to me the XLR will be perfectly suited to this route. JFK-SFO or LAX is consistently the same flight time as JFK-LHR, sometimes longer with an active jet stream. Despite the fact that JFK-SFO doesn’t fully utilize the XLR range I think that’s beside the point when the plane can fly transcon say 3x daily to supplement 2x on the 772’s running cargo plus pax. It could also deploy on BOS-LAX or SFO-MIA better than the 321T. Repositioning to the west coast for flights to HI, AK and Latin America could give them plenty more reason to deploy the XLR transcon.

    I give this a 95%+ chance of happening as a move to homogenize their fleet in anticipation that XLR will give the frequency back to these routes in addition to more overall fleet flexibility in 2022 and beyond.

  37. Makes sense!
    With the growth in virtual meetings during COVID, the demand for business travel will structurally change.
    Companies have realised how much can be achieved remotely and the impact on costs and productivity. It is highly unlikely that they will let this go.
    So while demand May for premium business travel may rebound somewhat, it will be drastically lower then pre-Covid. Subsequently, the demand for premium travel will be severely diminished and airlines with premium heavy configurations need to take a good long look at their fleet plans. I see even United revisiting their premium heavy configurations and wouldn’t be surprised to see all economy sub-fleets on narrow body aircrafts as well.

  38. I don’t see why they can’t just reconfigure the aircraft.

    Shrink the size of the F cabin down to 2 rows.

    Cut the J cabin size by 1-2 rows.

    Fill the space with rows of standard Y.

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