An American Airlines jet is shown at Seattle-Tacoma International Airport during a February 2019 ... [+]
The theory is that American Airlines finally decided to fight back against Delta, which has come to be regarded as a better airline and which is now trying to diminish the value of American’s crown jewel international hub in Miami, by encroaching on Delta hubs in Boston and Seattle.
Nah, says Vasu Raja, American senior vice president of strategy.
“The whole idea behind this (expansion) is that it’s all done through the will of the customer,” Raja said in an interview. “We just go where our customers want.”
In fact, Raja said Bangalore, India, is “the top corporate ask in our system” while “Outside of our hubs, our largest customer loyalty base is Boston,” a result of a historic presence by American as well as predecessor US Airways, which merged with American in 2013.
American and Alaska said Thursday they will form an alliance, including codeshares and Oneworld membership, enabling connectivity in Seattle, where Alaska battles Delta for dominance, and in Los Angeles. American will also begin service from Seattle to Bangalore and London.
“There’s a customer in Seattle, historically loyal to Alaska, who craves more long-haul flying,” Raja said. “(And) there is a customer hungry to have non-stop service to Bangalore.”
Before the alliance, Raja said, both American and Alaska were “incomplete value propositions” in Seattle, one with an international route structure, the other with a regional primarily domestic route structure. Thursday’s deal, he says, “creates opportunities for our customers that no other alliance can do.”
Regarding Seattle/Bangalore, Raja said, “So many companies across the U.S. – companies in Raleigh/Durham, Austin, Nashville, DFW and Boston – have big bases of operations or even Asian headquarters in Bangalore. One stop connectivity is huge; bringing Alaska into Oneworld is huge.
“Years ago, I mentioned we wanted to fly to India,” he said. “We bought the 787 so we could fly to new frontiers.” Asked why American chose Seattle over Los Angeles for Bangalore service, he said SeaTac is closer (by about 1,000 miles) with fewer air space issues and less construction. An LAX flight would push 18 hours, he said, compared with 16 to 17 hours from Seattle.
Regarding Boston, “We have been asked to have more service in Boston,” Raja said.
“What’s changed is our ability to deliver it,” he said. With growth at the two largest hubs, DFW and Charlotte, enabled by airport expansions and now well underway, American is in a position to growth elsewhere, he said.
In June, Delta said it would build a Boston hub. In September, Delta announced it would block American’s long-planned partnership with LATAM, the largest airline conglomerate in Latin America, by spending $1.9 billion to buy 20% of the Santiago-based company. Delta said it would challenge American’s Miami-centric Latin American dominance.
In October, American announced Boston-London service. In December, American announced Boston-Austin and Boston-San Jose routes. In January, American announced Boston-Indianapolis service. And on Thursday, American moved on Seattle, where Delta began to build a hub in 2014.
Raja noted that as American grows in Boston, “the marginal cost of growing Boston-Austin is small.” At Boston-Logan International Airport, American has 18 gates, a crew base and a line maintenance station. Also, Boston-Indianapolis is a good market in which American passengers “were taking weird connections” to fly one-stop through Philadelphia or Chicago, Raja said. “Indianapolis is key for us,” he said. “It is a market we’re not serving as well as we could.”
Dennis Tajer, spokesman for Allied Pilots Association, which represents American pilots, expressed skepticism that American is acting purely in response to customer demand, with no regard for the impact on Delta.
“I can tell you that what our loyal customers want is they want us to go out and beat Delta,” Tajer said. “And so do the employees of American Airlines.
“We are glad that our airline is trying to take action and compete,” Tajer said. “But just being on the field doesn’t mean you are competing. You have to work with employees to make sure operations and passenger experience are as good as they can possibly be.”
