American Airlines Can't Shrink Its Way Out Of Strategic Failures (NASDAQ:AAL
published 29.07.2020 19:00
American's Ticket Counter at its New LaGuardia Airport Terminal All airlines operate marginally profitable flights in the best of times; some new routes take time to reach profitability while others are considered "strategically necessary."
After its international route announcements, AAL announced two new partnerships that will replace domestic American mainline or American regional carrier service on the west coast and in New York City and Boston.
American's schedules through August show that it is either exiting or rebuilding its capacity from LAX to the western U.S. slower than other carriers as well as exiting a number of routes to other carriers strength markets such as Atlanta (Delta), Houston (United), and Nashville (Southwest) as well as to smaller cities in the west.
During the first two decades of the new millennium, Southwest became one of the big 4 U.S. airlines with market share greater than United and comparable to American and Delta.
However, considering the market share of all of the merger partners that each carrier engaged in, including Southwest, DOT data shows that American, Delta, and United all lost market share over the past two decades even though their revenues grew dramatically.