I already tackled the commercial strategy laid out in American’s investor presentation from earlier this week, but these charts just keep calling my name. Today, I want to focus in on one specifically that shows American’s competitive advantage, as defined by American. American says it offers a superior network in an increasing percentage of its markets. Is that true? Maybe. Let’s look at the data.
The above chart is the crux of American’s strategic vision, and it shows — albeit again with a wildly-skewed and misleading Y axis — that American is increasingly becoming the airline with the most superior network in the markets it serves. This chart was yet another that I could try to replicate using Cirium data, but not all the details were clear. Instead of trying to match it exactly, I went with a peak day (Monday) in March 2024 and another in 2019. It turns out, that day was March 11 in each year.
The mice type says this was for Continental US and short-haul Latin American spokes, so I took out American’s hubs and included the Continental US, Mexico, Central America, and the Caribbean in the data set. I then looked at markets where American has an advantage over both Delta and United in either flight frequency or number of destinations served. Later, I added Southwest into the mix, because I think it matters.
With this data in hand, I could really dive into this claim that American is increasing network superiority. Buckle up, and let’s go…
Starting with just the big three, American in 2024 has a superior network — according to its definition — in 68.2 percent of the 277 markets it serves in my dataset whereas in 2019 it was superior in 60.2 percent of the 279 markets. That is pretty close to what American’s slide says, so I figure I’m more or less using the right data here. Even if it’s not perfect, this will tell the story.
American Advantage Market Breakdown 2024 vs 2019
This means there was a good eight-point growth in superiority, but we can’t just leave it at the high level, because there is nuance here. I broke the “superior” markets out into three different subsets as you can see above.
Southwest Overlap
Let’s first take a look at the Southwest overlap markets. In 2019, just shy of 4 percent of markets would flip from American-superior to Southwest once that airline is included in the set. That number is just over 6 percent in 2024.
American makes the argument that it is a global network carrier, so it will have a leg up on attracting those passengers in these cities over Southwest, especially those with a global need. That may be true, but in some of these markets, Southwest has a distinct advantage, including our old friend El Paso.
Back in 2019, American had 19 flights to 4 destinations from El Paso and Southwest had 18 flights to 9 destinations. Even including Southwest, American could consider El Paso a market where it was superior because it had more flights.
In 2024, however, American has only 14 flights to 4 destinations while Southwest has surged to having 26 flights to 10 destinations. Yet in American’s data, it still calls itself the superior carrier here. That will be true for a subset of the population, but it’s certainly a tougher battle than in other types of markets.
American-Only Markets
You’d think that having network superiority in a market requires there to be another airline over which American can be superior, but that’s not the case. Nearly 18 percent of American’s total markets in 2019 and just over 21 percent in 2024 are markets that American serves but Delta and United do not, and those count in the data.
This doesn’t take away from the fact that American has the best network in town, but it’s not like there’s any competition. American is just trying to find markets that don’t make sense for others.
First, we can look at new American-only markets that are served in 2024 but were not served in 2019.
Regardless of how I feel about anything else, I absolutely love what American has been doing south of the border. American has figured out how to push primarily regional jets into some of these secondary markets that hold real promise. Using Miami, DFW, and Phoenix, American can go into markets that others can’t serve either because their hubs don’t have the demand or they’re too far away to operate on short runways. The more American can find markets like these, the better off it will be, but it’s not clear how many more there are like this.
Further, most (but not all) of these are nice vacation spots but they aren’t going to really sway loyalty from, say, a person in El Paso. Sure, if someone is flying to Tortola Beef Island, they’ll probably fly American there. But it’s not a place most people will go frequently enough to make them shift all their flying. In other words, there is a benefit to being in these markets, but I don’t view them as having the same benefit of network superiority as in domestic markets where there is more business, visiting friends and relatives (VFR) traffic, and competition.
Let’s flip this around now. American has also left a bunch of markets between 2019 and 2024.
Almost all of these are small markets that are near other stations that American serves. They also had weak fares and often poor loads. (I assume Cap Haitien is unrelated… probably just an issue of being in Haiti where nobody wants to be flying right now.) Trading these old, poor-performing markets in for the new markets seems good… but then again, American wants to live in the bottom 200, and these are the kinds of markets that fit solidly in that strategy. (Toledo is the largest of these markets based on 2023 seats coming in at #155 from the bottom while Cheyenne is lowest coming in at #12 from the bottom.)
Not all changes, however, are due to American doing the work. Some of them come from other airlines abandoning markets, leaving American alone, as you see below.
Like American, Delta and United have done their share of walking away from small markets. In these cases above, American remains the only one left standing. Often these are markets that are close to other markets those airlines serve… like United flying to Santa Rosa from the San Francisco hub nearby or College Station from Houston. American sees more value as the only remaining legacy carrier with hubs that are further.
Shifting Superiority
American has made much less progress in gaining superiority in competitive markets than it otherwise would appear. It has really only gained two points since 2019 instead of the eight we talked about above after taking out the two categories just mentioned. But even within those two points, there has been a lot of shifting.
First, let’s take a look at the markets where American didn’t have superiority in 2019 but does in 2024. (And this time, I included Southwest in the evaluation.)
In most cases, this is a game of inches and not really indicative of some big change. Let’s use a few examples to help.
- Corpus Christi – In 2019, American had 6 flights while Southwest had 4 but United had 7. In 2024, American is up to 7 flights while United has dropped to 6 and Southwest remains at 4.
Summary: American adds a flight, United cuts a flight, and that shifts the balance… minor improvement - Fargo – In 2019, American had 5 flights while Delta had 8 and United has 7. In 2024, all three are at 5 flights, but since American serves more destinations now (3 vs 2), it gets crowned as dominant.
Summary: There aren’t a lot of flights in this market from any airline, but American has 1 more destination than the others… medium improvement - Lexington – In 2019, American had 13 flights and United had 7 but Delta had 14. In 2024, American is still at 13, but Delta dropped to 9 and United dropped to 4.
Summary: Delta and United dropped, leaving American well on top… notable improvement - Madison – In 2019, American had 14 flights with United right behind at 13, but both trailed Delta at 18. In 2024, American has only 12 flights while United is at 9, but Delta is actually at 13, still ahead. The difference here is that in 2019, Delta served 6 destinations while American was at 5. They’ve flipped in 2024, so now American calls it dominant.
Summary: Delta still has more flights, but American serves one extra destination… minor improvement - Wichita – In 2019, American had 9 flights while Delta and 6 and Southwest 4, but United had 12. In 2024, American is up to 11 flights while United has dropped to 9. Southwest is up to 5 and Delta is down to 4.
Summary: United’s dip is American’s gain… notable improvement
As you can see, it’s a nice statistic to throw around, but it’s hard to say that American is truly superior in all of these markets. In some, American has greatly improved its standing. In others, it’s more of a minor shift. The significance feels overstated when you’re using a binary metric like American is superior or it isn’t.
Another thing we need to look at here is a list of those markets where American was dominant in 2019 but is now no longer. It is a shorter list, but it does exist.
There’s that pesky El Paso which I mentioned, and that is because of Southwest. But where you really see the concentration here is in the northeast, and yes, note that these tend to be more mid-size markets than what we see on the other map.
For example, in Manchester (NH), American was at 11 flights with Southwest at 9, Delta at 5, and United at 3. Now, American is down to 7, Southwest is flat, Delta is out, and United is at 2. This shows as a negative using the binary metric, but the gap between American and Delta and United has grown significantly with American having the real potential to make gains.
On the other hand, in 2019 in Burlington, American had 10 flights while Delta and United each had 9. By 2024, American had dropped to 7, equal to United, with Delta down to 6. All three airlines serve 3 markets from Burlington today. That’s a case where American did lose its superiority, but there’s likely a more minor impact.
In the end, the takeaway is that this is far from a slam dunk assertion that American has significantly increased its network superiority to the level it wants us to believe. It’s a high-level take, using data that lacks nuance. And now that both Delta and United know where American is targeting, it wouldn’t surprise me to see some changes on their side to counter some of what American is trying to do anyway.
It feels like American decided on a strategy and then went looking for the data to back it up. This certainly does that from a high level, but I’d argue there’s a lot more work for American to do to actually reach the kind of impact it’s trying to convey it has made.
