American Airlines has a prolific array of partners around the world. This includes members of the oneworld alliance, like British Airways and Qatar Airways, but also others like JetBlue and GOL. Beyond partners within and outside of the oneworld alliance, American developed two different models of partnerships: short-haul and long-haul partners, and each has a different role in American’s portfolio. However, of these two, American is definitely eyeing more short-haul partners.
American’s partners
American Airlines has an extensive array of partners across the world. This includes Alaska Airlines, British Airways, Japan Airlines, Qantas, Qatar Airways, China Southern, GOL, and JetBlue, among others. Additional partners are also expected to come online, like JetSMART and GOL in the coming months.
Some partnerships are close than others. For example, American Airlines has a joint venture with Qantas covering flights between the US and South Pacific. In the transatlantic market, American has a joint venture with British Airways, Iberia, and Finnair.
However, the two distinct models of partnerships are long-haul connecting partners and short-haul endpoint partners. Airlines like British Airways and Qatar Airways fit this category. Meanwhile, carriers like GOL and JetBlue fit the second approach.
Hungriest for short-haul partners
Speaking on an exclusive webinar interview with Simple Flying, Chief Revenue Officer at American Airlines, Vasu Raja, stated the following on its view on partners:
“What we’re hungriest for are really great short haul partners that are out there that complement our network, like they can offer endpoint connectivity on to the network. What we find working with any number of carriers that tend to be smaller, more agile, more nimble, whether it is JetBlue, or GOL, or JetSMART, or Alaska, is that we can go create a very seamless customer experience pretty quickly. We can innovate a lot faster, we have reciprocal frequent flyer benefits, simple flight changes, things like that, with so many of these short haul partners that we don’t have with so many of our long haul partners.
And so as we look out into the world, we see that short haul space is one that’s evolving very dynamically, especially in emerging markets, as a place where we can very quickly create a lot of value for customers, a lot of value for the partner, and sort a core need of the airline which is to profitably grow long haul.”
Having short-haul partners makes a lot of sense. For years, before the merger with US Airways, neither American nor US Airways was able to significantly grow their long-haul networks as a result of various network deficiencies and a highly competitive marketplace. As a result, long-haul airlines like British Airways did a lot of flying that American funneled its customers onto.
Post-merger, American has a vast domestic market and a lot of jumping-off points to make new long-haul routes work. For example, the airline found success in turning Dallas into a major connecting hub not just for travel to the United States but for significant expansion into Europe and Asia.
Just before the crisis hit, American hit 900 daily departures from Dallas/Fort Worth (DFW). It added more daily flights to key European hubs like Paris. Meanwhile, American was able to add flights to Croatia, Poland, and Hungary from Chicago and Philadelphia when other airlines stayed out of those markets, primarily because of its connecting hubs.
However, this transatlantic growth was significantly propelled by the joint venture agreement between American Airlines, British Airways, Iberia, and Finnair. American had already been able to sell flights to those markets and organically was able to grow its network on that backdrop, which was much easier than adding a long-haul flight on its own and then seeking to build up the route on its own.
Recent moves verify this
After losing LATAM to Delta, American Airlines was in a significantly weaker network position in South America. It had a fantastic network from the US to South America, but it no longer could provide onward connections, nor could it create value for its customers based in South America who needed to fly from São Paulo to New York for business and wanted to fly to a place like Fortaleza for pleasure.
To rectify this, American turned to two airlines: JetSMART and GOL. Both provide the short-haul flights that American cannot do on its own in South America. The importance of these partnerships cannot be overstated.
Another example that comes up is IndiGo in India. American Airlines is set to launch flying to New Delhi in just under a month. In January, it is expecting to launch its highly anticipated flight to Bangalore. American is looking to put its code on some IndiGo flights to nearly 30 destinations across India, which will provide endpoint connectivity to smaller destinations in India.
Two very big partnerships can also be found in the US. Both Alaska Airlines and JetBlue fit this mold, despite JetBlue’s recent launch to London. Both partnerships have been a catalyst for American’s long-haul growth. Out of New York, a major JetBlue hub, American has added Athens, Tel Aviv, and Santiago in the last few months. From Seattle, American has planned Seattle and Bangalore, pending the relaxation of travel bans and the return of demand.
Adding short-haul endpoint connectivity relieves a lot of pressure on American Airlines to make a route work on its own. To stimulate attention on a new long-haul route, some airlines have to either start selling tickets quite some time in advance or else offer robust fare sales or deals to get people to book with them versus another known carrier to fill up planes.
Throw in the mix the opportunity for American Airlines to sell onward connections with a partner, and it makes getting the route to work so much easier. Even if only 25 or 30 passengers off a 300 passenger flight are connecting to a partner, that is 25 or 30 more seats American could fill, generally, without needing to stimulate bookings. This makes more long-haul routes feasible.
from Simple Flying https://ift.tt/3a04hOo
via IFTTT
Comments
Post a Comment