American Airlines takes less dogmatic view of hubs

American Airlines has adopted a somewhat different view of its hub airports during the COVID-19 pandemic, pivoting away from having defined roles for its largest bases, and instead is using those airports to maximize unique itineraries for passengers.

Speaking during a recent investor conference, American chief revenue officer Vasu Raja said “there was probably a bygone era where I think we had a more dogmatic view that all the hubs should be utilized for certain purposes, and their purposes shouldn’t be crossed.”

He explained American would use its hub in Dallas/Fort Worth (DFW) “for things that we didn’t use Phoenix [PHX] or Charlotte [CLT] for.”

But during the pandemic, the airline’s view of how to utilize its hubs has changed. “Far from having defined roles … we want to use the hubs for us to maximize their full-scale potential, because the marginal cost of adding another flight into Philadelphia [PHL] or [PHX] … is relatively small,” Raja explained.

Raja said American can use its hubs, regardless of geographic location, “to construct O&Ds [origin and destination trips] that are unique for the customer, that creates value … When you create unique value for your customers, they pay more and fly you more, and we’ve seen that throughout the pandemic.”

Increasingly, Seattle (SEA) and DFW “will become the cradles of our Pacific network, augmented by some trips from LAX [Los Angeles],” Raja said. New York (JFK) and PHL “will both be massive transatlantic gateways for us, and they’ll be complemented by services across every one of our hubs and a couple spoke cities out there,” Raja said.

“Other than that,” he added, “our goal is just to create as many unique O&D combinations for the customers that we can.”

Photo credit: Joe Pries

Lori Ranson

Lori covers North American and Latin airlines for Aviation Week and is also a Senior Analyst for CAPA - Centre for Aviation.