One of the best things about the coming Cranky Network Awards on Feb 22 in Oakland is that we sift through a ton of data to help craft the full slate of nominees. And during that process, sometimes we stumble on something surprising that may have nothing to do with the awards themselves, but it sure makes for an interesting post. That’s what I’m writing about today with American’s European fare problem.
After looking over the ARC/BSP data (via Cirium), it seems clear that American is struggling to keep its fares up with Delta and United over the Atlantic. Before we talk about why things might be trending this way, let’s walk through what I found.
It doesn’t really do any good to just look at American, Delta, and United in a vacuum. After all, they are members of joint ventures of the Atlantic that include joint planning and pricing. So we have to at the joint ventures overall.
I went ahead and used current joint venture members in these numbers, so that means Delta excludes Alitalia (but includes Air France-KLM and Virgin Atlantic) and American includes Aer Lingus (along with British Airways, Iberia, and Finnair) even in historical numbers. United hasn’t changed partners, so Lufthansa Group and Air Canada remain constant in the data. Here’s how fares look:
Transatlantic Joint Venture Average Fare US-Europe By Month
United’s JV has long held a fare premium, but Delta and American were neck and neck pre-pandemic. Starting toward the end of COVID, Delta began to separate itself from American, and that has continued for a couple years now.
Normally, the assumption would be that fares lagged because a lot more capacity was added and American and partners had to lower fares to fill a lot more seats. But that’s not the case. Let’s look at capacity.
Transatlantic Joint Venture Seat Capacity US/Canada – Europe By Month
Here, I looked at US and Canada capacity to Europe. I included Canada, because plenty of US-based travelers fly on Air Canada’s ample European network. The United JV wouldn’t be complete without that. United is again light years ahead, but the positions of the carriers relative to each other has remained relatively stable.
If capacity doesn’t show anything, would passenger numbers? I went back to ARC/BSP data and pulled US – Europe passengers. Here are the daily passengers each way (PDEW) by joint venture.
Transatlantic Joint Venture PDEW US – Europe By Month
Before examining this, I have to say that I find it fascinating to see such relative parity between the joint ventures. You have three joint ventures that are all carrying about the same number of passengers over the Atlantic (roughly). It’s remarkable how that has shaken out.
This doesn’t suggest any big surge by American thanks to lower fares. In fact, it shows the opposite.
Prior to the pandemic, Delta was well ahead of the rest in terms of passenger numbers during the summer, and if anything United was the biggest laggard. My how times have changed. United’s big push has seen it surge to often being bigger than Delta, or at least near parity. Meanwhile, American stands at the back of the pack.
Since the pandemic, when American retired all those old widebodies and 757s, it has just lagged, even with its partners being counted here.
What is notable though is that you can see that during the winter, American actually surges into first place while the others fall back, especially United. I assume this is because of American’s absolutely massive presence at London/Heathrow with its joint venture partners. Heathrow is one of the biggest business markets around. Just look at how many premium seats BA puts on its airplanes. So Heathrow probably demands more winter flying than other markets would.
This has a real impact, because of just how much of the American JV’s Transatlantic capacity touches Heathrow.
% AA Transatlantic Joint Venture Seat Capacity in London/Heathrow vs All Europe
It is incredible how much it varies, but the number is always large. This month has AA and friends with 57.6 percent of US/Canada – Europe capacity in Heathrow while summer sees it in the 46-47 percent range. This is actually a reduction over it would have been before Aer Lingus entered the joint venture.
Compare this to the other airlines, and American really does stand alone.
% Transatlantic Joint Venture Seat Capacity in Largest European Hub
It’s no contest at all. The other airlines have much more diversity of flying. Delta and friends have far less seasonal variation in the largest hub in Paris, but Amsterdam actually does have good variation between the seasons. And as you can see, Frankfurt certainly varies. The airlines do tend to lean on their hubs more during weaker times.
American’s lagging performance has been an issue for some time now, but it’s a hard hole to dig out of. While this began before American’s move to gut its sales functions, the airline has spent most of 2023 angering travel agents and corporate partners alike. Those are the high dollar spenders that can really help a lot during those cold winter months. They can help in the summer too, but they’re just a lot easier to replace then.
I’ll be particularly curious to see if the gap widens further this winter once the numbers roll in. In this case, just keeping pace would be a victory, and that’s… not ideal.