American Airlines routinely opts not to fly super long-haul routes like Houston to Sydney and Los Angeles to Singapore, even though the airline’s direct competitor United frequently does. Here’s why American is making the decision to prioritize shorter flights.
In 2017, American Airline’s vice president Vasu Raja was the subject of criticism from competitor United Airlines. The VP at United—who used to be an American executive—publicly scolded Raja for not opting to fly more ultra long-haul routes like ones from LA to Singapore and Houston to Sydney.
It’s not that American can’t make those flights; the two companies fly the same type of planes. It’s just that American chooses not to, instead focusing on shorter haul routes.
“Whenever you fly a really long haul, whether that’s across the U.S. or across the globe, you’re tying up an airplane for a really long time,” Raja airlines-is-not-prioritizing-launching-very-long-flights/”>told Skift. “For us, the debate is really more about opportunity costs.”
American runs about 6,500 flights every day and is continually adding more cities to the roster. But out of those cities, American wants to make the best fiscal decision rather than taking the risk of underselling a long flight.
“It’s all about the returns you get on the airplane,” Raja told Skift. “If you go and fly one Pacific route, on balance, that’s two airplanes. Are those two airplanes better in the Pacific or are they better flying in the Atlantic for six months of the year and flying to Hawaii for six months of the year? … In many of these far-flung destinations, you’ve got to tie up an asset or multiple assets for a long time. But very often the total [air] market size is smaller than Lexington, Kentucky. It’s just a really risky proposition. It is not something we’re averse to but, in general, when we go into it, we like to have a partner on the other end or some knowledge of the market that helps go and de-risk it.”