Mixed flights are driving the recovery and growth of American Airlines

Take the change

American Airlines, a travel company? Listen to the company’s commercial director, Vasu Raja, for any length of time, and it’s clear that change is underway at the world’s largest airline.

Edward Russell

American Airlines’ airline business has changed. So-called hybrid trips, or those that include both aspects of work and leisure, are driving the company’s growth as it emerges from the pandemic.

US commercial chief Vasu Raja, speaking at the Skift Global Forum on Tuesday, said nearly half of the airline’s revenue now comes from these mixed flights. Furthermore, this new flight rating is driving the carrier’s revenue growth more than anything else today.

“What the pandemic has really unlocked, and the recovery from, is the great consolidation,” Raja said. “People don’t need to keep their work life five days, personal life two days, and set aside two weeks a year for vacations.”

Raja attributed the 20-point gap between the recovery of US revenue and its capacity in the second quarter to the rapid expansion of business and leisure travel integration. During this period, the company’s revenue increased by 12 percent compared to 2019 while its capacity remained low by 8.5 percent.

The idea of ​​mixed flights, and, more broadly, the ethos of work from anywhere that has rapidly grown in popularity during the pandemic, has led to changes in flight venues. Outbound destinations, whether it’s beaches or mountains, have made a faster recovery — many see more air service today than they did in 2019 — while traditional markets for heavy commercial flights like New York and San Francisco have lagged.

He cited Raga Bozeman, Montana, as an example of a destination that Americans have seen a rise in mixed trekking. US Bureau of Transportation Statistics data showed passenger numbers at Bozeman Airport rose more than 43 percent during the six months to June compared to 2019. Nationwide, passenger numbers are still down about 9 percent over the same period.

Every airline serving Bozeman there has expanded compared to what it was three years ago, according to Diio by Cirium schedules. American flew 50 percent more seats than it did in the six-month period, but the biggest change was the addition of Southwest Airlines that went from not serving Montana at all to being the third-largest airline by seats.

American Airlines travel company?

Raja’s presentation made one thing clear: American Airlines didn’t consider itself an airline anymore. When asked about its shift towards more domestic flights and less international flights since the pandemic, Raja described the airline – or perhaps the travel company – as offering “the largest global network in the world”.

This may sound like a standard standard statement but it’s missing a keyword: “airline”. Before Covid-19, former US CEO Doug Parker and other executives described the carrier as “the largest global network Airline in the world.” By removing that word, Raja suggested what could turn the American into the world’s largest global travel company.

If you are an AAdvantage member [loyalty] Travel Rewards Program, you are a member of the largest and best travel rewards program in the world,” Raja said. He added how travelers can earn and redeem points across a wide range of global partners to more destinations at better rates than any other such program.

“American Airlines does it all,” he said, seemingly referring to the company in the broader travel company sense. “But American Airlines also runs an airline, and it just so happens to be called American Airlines, too.”

He said the air side of his business is increasingly adding flights on North American lines as he sees the biggest return on his growth, particularly from mixed flights. Internationally, travelers can get where they need to go via connections with US partners, including British Airways, Japan Airlines and Qatar Airways. The American airline, still, flies to distant destinations but is increasingly focusing on these long-haul flights on partner hubs, for example Doha and London.

“Increasingly, where we choose to go and fly our flights, it will realistically be more important in the local system,” Raja said. “[It] That will probably be for a while due to the fact that the demand base in North America has at the moment recovered at a much greater rate than the rest of the world.”

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