Even as more airlines have invested in expanding their network of lounges in recent years, the spaces have increasingly felt crowded, especially as more travelers gain entry through memberships, elite status, or as a benefit of their credit cards.
26.01.2024 - 11:21 / skift.com / Glen Hauenstein / Vasu Raja / Robert Isom / Meghna Maharishi / Airlines
Demand for travel has shown no signs of slowing down since the pandemic, but American Airlines is underperforming when stacked up against its competitors.
American posted a profit excluding one-off accounting adjustments of $192 million during the last three months of 2023 — considerably lower than Delta’s $826 million and United’s $664 million.
One of the reasons for the carrier’s significantly lower profit lies in its international network. Strong demand for international travel, particularly long-haul routes to Europe and Asia, has buoyed the Big Three carriers to record profits, but American lacks the same extensive network as Delta and United.
American CEO Robert Isom said during the carrier’s fourth-quarter earnings call that it expects to balance capacity growth between domestic and international. In addition, he said the airline is counting more on revenue from its loyalty program and co-branded credit cards.
American executives said they are seeing more positive trends for its short-haul routes, which include flights to Mexico and the Caribbean, than long-haul ones.
Vasu Raja, American’s chief commercial officer, said the carrier expects flat growth from transatlantic business, and performance on trans-Pacific and long-haul Latin America routes will be slightly down in 2024.
“We’re probably more encouraged by what we see in short haul than maybe any other region at this point,” Raja said.
On the other hand, United and Delta executives said they believed there was still a high appetite for transatlantic travel.
“We had a fantastic year in the transatlantic,” Delta president Glen Hauenstein said of 2023 during its fourth-quarter earnings call. “We’re hoping to beat that, but there’s a really high bar as we move through the year.”
For all three carriers, business travel is finally picking up. American, Delta and United all reported increases in corporate bookings. Isom said business travel during the fourth quarter was at around 90% of 2019 levels.
After a judge struck down the Northeast Alliance, American’s partnership with JetBlue, American became even less competitive in the ultra-saturated New York market compared to Delta and United.
But now, Isom said, “the worst is behind us.”
Isom said the carrier’s performance in New York had improved since the Northeast Alliance ruling, pointing to an increase in sign-ups for the loyalty program and co-branded credit card in the region.
He also didn’t rule out a new potential partnership in the New York area.
“We’re certainly open to — we’re open to any partnership that is better for our customers, period, full stop,” Isom said.
While American doesn’t operate any Boeing 737 Max 9s and wasn’t affected by the grounding, Isom didn’t hold back
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Airport lounges are designed to be a haven away from crowded and stressful terminals. But as more and more travelers have gained access to these coveted spaces, lounges have increasingly started feeling cramped and congested.
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