With American Scaling Back in New York City Their Premium Transcon Service Centers on LA .

American Airlines may be the largest carrier in the world, but they’re the fourth airline in New York behind Delta, United, and JetBlue.

American management traded away their big operation at New York LaGuardia, when they were running US Airways, for more slots at Washington National (and cash). But when they took over American they had to give up slots at Washington National.

Now, in airline President Robert Isom’s words, their goal in New York is to offer “a product that’s boutique-like” for business travelers.

American Airlines Terminal, New York JFK

They seem to view business flights and leisure flights as separate, and believe they can pick and choose the business flights they want to operate. For instance they’ve pulled out of key business routes like New York JFK – Zurich. They’re focused on London, and that’s a great market, but their New York business customers have to look elsewhere for many business destinations both in the US and abroad.

Of course business customers are also leisure customers. When American doesn’t meet the needs of their business customers wherever those customers want to go, like the Caribbean, those business customers look for another airline. And they become more likely to give that other their (like Delta) their London Heathrow, Los Angeles, and San Francisco business. As American shrinks at New York JFK, they lose customers and make existing flights less profitable.

Now American reveals that the strength in their premium flying between New York and Los Angeles is coming out of Los Angeles much more than New York, which shouldn’t be surprising at all.

At a Crew News session with American Airlines employees and top management, one employee asked about flying premium cross country flights with better products, why not pick up cheap used 777s “with a really nice interior” that customers will pay a premium for and use them for cross country flights?

The airline’s Vice President – Planning Vasu Raja suggests they don’t have a lot more opportunity today for extra premium domestic flying any plans for lie flat 757s domestically notwithstanding,

We do actually have a couple of lines where we run the 777 from Miami to LA, which has quickly become interestingly enough one of the largest premium cabin markets in the system. There’s a ton of back and forth especially in the entertainment and media community there.

…About buying more airplanes to go and fly the transcon, the challenge with that is one we have enough widebodies and typically enough widebody time where we can go and utilize an airplane like Miami – LA which then turns around and flies to South America at night so we don’t necessarily need to go and buy another airplane to get the exact same thing. And two for the transcons at large not all of those markets are created equal. And increasingly a lot of the strength we see in the transcon is in LA more so than it is in the East Coast markets.

So we have the 321T in Los Angeles to New York, we have the 777 flying LA to Miami and those really enable us to go win a lot of the entertainment business. And beyond that there isn’t as much of a demand for a widebody in a market like Kennedy – Seattle or something like that.

New York JFK – Seattle is a bit of a straw man, that’s a market where Delta has struggled on and off with a lie flat product. However premium business for American airlines is increasingly centered around LA rather than New York, which is what happens when you scale back in what’s perhaps the most important air market in the world.