American Airlines Set For Big Growth Out Of Dallas And Charlotte

If you have ever tried to book a connecting itinerary on American Airlines, you have likely seen plenty…

American Airlines Set For Big Growth Out Of Dallas And Charlotte

If you have ever tried to book a connecting itinerary on American Airlines, you have likely seen plenty of options through Charlotte Douglas International Airport (CLT) and Dallas/Fort Worth International Airport (DFW). Dallas is American’s largest hub, while Charlotte comes in second place. The key factor with both of these hubs is that American Airlines is set to grow even more out of both airports.

American Airlines has received new gates at Dallas and Charlotte that are preparing the airline for growth. Photo: DFW Airport

American Airlines gets more gates

At both airports, American Airlines has access to more gates. This includes 19 additional gates at Dallas, while there are four additional gates available in Charlotte compared to pre-pandemic infrastructure. Another three gates will open up in Charlotte later this year. This sets the airline up for incredible growth.

Dallas/Fort Worth is already American’s largest hub. Pre-pandemic, the carrier was flying 900 daily departures out of the hub, making it the largest in American’s history and one of the most significant airports. Passengers looking to travel domestically, whether from Omaha to Tampa, Fresno to Richmond, or Anchorage to Austin, will likely find a connecting itinerary through Dallas.

DFW is American’s largest hub. Photo: DFW Airport

This August, AA is planning to have domestic operations that are larger than August 2019. Buoying this is the redistribution of some widebodies that would previously fly long-haul international sectors to Asia on key domestic routes and an overall increase in domestic connectivity to handle the increased leisure demand.

Charlotte will be able to handle over 700 daily departures. This was a milestone the carrier hit shortly before the crisis hit, but it had to severely pull back operations in the wake of the massive drop-off in demand and travel restrictions. This is one of American’s core hubs, however, and has come back incredibly strong.

Why Charlotte and Dallas are proving winners

American Airlines has hubs across the country. This includes Chicago (ORD), Los Angeles (LAX), Miami (MIA), New York (JFK/LGA), Philadelphia (PHL), Phoenix (PHX), and Washington D.C. (DCA), in addition to DFW and CLT. It also now has a major partner gateway in Seattle (SEA).

Dallas and Charlotte are ideal hubs for American Airlines. The carrier faces no major competition in either hub, which is not true for Chicago or New York, and they were already primed for impressive growth. As pre-pandemic leading airports for American Airlines, the carrier already had the footprint to put those hubs back together as the recovery continued.

American, even pre-crisis, placed Charlotte and Dallas high up in the carrier’s hub rankings. Photo: Getty Images.

These two airports were also heavy domestic hubs for American Airlines. With international travel restrictions, Americans turned to their metaphorical backyards and explored more of their home country. This led to expanded capacity and flights off to destinations like Bozeman, Palm Springs, Las Vegas, Los Angeles, and – most of all – Florida.

Dallas, as a mid-continent hub, is great for numerous traffic flows. Whether it be traffic heading from one coast to the other, traffic from the Pacific Northwest to Florida, from the Southeast to the Southwest, the mid-Atlantic to Hawaii, or the Midwest to the South, Dallas is not too far out of the way for most passengers to make sense as a connecting itinerary.

Dallas is also expected to get a new Terminal F once more travel demand starts to come back. This will further expand American’s capabilities at the airport, though it remains to be seen when that project officially comes to fruition.

Charlotte is also ideal for capturing traffic flows down to Florida and connecting the East Coast to the West Coast, Southwest, Mountain West, Midwest, and more. During the crisis, the airline also launched a nonstop Charlotte to Honolulu flight to cater to increased demand for flights to Hawaii.

American Airlines Getty
American Airlines has expanded its capacity to major markets like Florida, Hawaii, and California from both hubs. Photo: Getty Images

What about other hubs?

While most airlines brought their coastal hubs back slower, American Airlines embarked on a significant expansion out of New York – especially out of JFK. American Airlines came into the crisis with a smaller footprint than its large peers like Delta and United in the area.

However, buoyed by a partnership (the Northeast Alliance) with JetBlue, the airline decided to grow its footprint significantly out of JFK as demand started to come back and to put up a fight for its share of travelers in the region.

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Even with Dallas and Charlotte coming out on top, American has not shied away from growth in other hubs. Photo: Vincenzo Pace | Simple Flying

Two more very important hubs for AA are Phoenix and Miami. Phoenix has been an important destination during the crisis as well as a connecting hub for many regional destinations in the western United States. Miami, meanwhile, is American’s gateway to Latin America and the Caribbean – which has been one of the stronger international markets throughout the crisis. American has come back strong in this market and is putting up a fight in Miami against the growing competition.

Another major hub, Washington D.C., has also seen significant improvements from American Airlines. The carrier has ended single-class regional jet flying from DCA and has benefited from an expanded new concourse that marked the closure of Gate 35X, DC’s most hated gate. This was not really a gate but a chaotic waiting room for passengers waiting to take the bus to their plane, mostly operated by regional jets, from a remote hardstand.

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American’s team has been working on its international network pre-crisis and will continue to do so. Photo: Vincenzo Pace | Simple Flying

Chicago was a sort of hub in transformation for American Airlines before the crisis hit. While capturing traffic flows heading from one coast to the other and a great point for connecting traffic from smaller Midwestern US destinations, American had started to pivot the hub more toward transatlantic flying after cutting most of its Asia portfolio. There is still some work left for American Airlines at this hub, though it is fiercely competitive. United Airlines also runs a massive operation out of ORD.

Another transatlantic hub, Philadelphia, has also seen a slower rebound, largely because American used it as a gateway to Europe. However, American has brought back a good portion of its Philadelphia network both domestically and internationally as international travel has started to come back. The airline intends to maintain its Philadelphia hub alongside the expanded New York operations.

Are you glad to see American Airlines come back strong in Dallas and Charlotte? Let us know in the comments!

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Southwest Airlines Looking Closely At Its Boeing 737 MAX Options

As Southwest Airlines navigates its way out of the crisis, the carrier is sitting on incredible flexibility with…

Southwest Airlines Looking Closely At Its Boeing 737 MAX Options

As Southwest Airlines navigates its way out of the crisis, the carrier is sitting on incredible flexibility with its order book. Recording over 730 Boeing 737 jets in its fleet already, the airline is one of the largest carriers in the world and has plenty of room to grow even bigger. Speaking on the airline’s second-quarter earnings call, Southwest’s executives indicate that the carrier is looking closely at its MAX options in 2022, and it may end up taking all, or at least most, of the options it has.

The Boeing 737 MAX options at Southwest seem all but certain to become firm orders for 2022. Photo: Vincenzo Pace | Simple Flying

Southwest Airlines on its Boeing 737 MAX options

Southwest Airlines announced a blockbuster Boeing 737 MAX order for 100 firm aircraft and 155 options in March. It followed up in June with an expansion of its 2022 firm orders by 34 aircraft, meaning it had 64 firm MAX 7s on order and accelerated 10 MAX options from 2023 to 2022. Then, on July 1st, the carrier exercised three options for delivery in 2022 . Thus, It ended the second quarter with 67 firm MAX 7s and 47 options.

However, as part of its second-quarter earnings release, the carrier also announced it intended to exercise three of its 47 options. This takes its overall firm commitment, once finalized, to 70 MAX 7 jets and 44 MAX options for 2022.

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Southwest expanded its order book with a blockbuster 100-jet order in March, then expanded its firm orders in June, and finally added three more options in early July. Photo: Boeing

On the carrier’s second-quarter earnings call, the airline’s executives were asked whether it was fair to consider that the airline set a “very high bar” to not exercise its options, meaning that the airline had set a very low bar for exercising its options. Chief Financial Officer, Tammy Romo, stated the following on that assessment:

“I think that it’s absolutely fair. As pointed out, we have a very cost efficient Boeing order book. Obviously, we have a very strong balance sheet with ample cash..there is a strong ROI [return on investment] on those options either way.”

Southwest’s plans for the MAX 7s

Taking 70 aircraft in a year is a big deal for Southwest Airlines. That comes in at just under 10% of its current fleet that it would be adding into service. However, Southwest is turning to a dual-prong strategy with the MAX jets.

As Ms. Romo further stated:

“And obviously, we are hoping we can continue to grow the airline here, but if not, it’s [a] compelling business case for us to retire the older -700s.”

Southwest Boeing 737-700
Southwest flies over 450 Boeing 737-700s, and it is looking to draw down those jets over the next 10 to 15 years. Photo: Vincenzo Pace | Simple Flying

Southwest Airlines has gradually started to draw down its large fleet of Boeing 737-700 jets. The carrier returned one leased 737-700 to a lessor in the second quarter and expects another return to lessor later this year, taking its overall 737-700 retirements in 2021 to 10 aircraft.

Southwest expects over half of its MAX aircraft backlog will go to replacing the 461 Boeing 737-700s it recorded. The drawdown of the 737-700s will take roughly 10 to 15 years. Southwest expects to retire approximately 30 to 35 737-700s annually.

Does Southwest need all those planes?

In a word, yes. There is a very strong business case for the airline to take on the Boeing MAX jets. First and foremost, the airline has come out of the crisis with a strong balance sheet and investment-grade credit ratings. This sets the carrier up to be in a strong financial position to expand the fleet significantly, especially considering the carrier definitely got an excellent deal on the MAX jets.

Southwest MAX 8
Currently, all of Southwest’s MAX jets are the larger MAX 8 fleet. Photo: Vincenzo Pace | Simple Flying

The second thing in Southwest’s favor is the flexibility with the MAX 7s. All 70 of the aircraft, if necessary, could be deployed to replace older Boeing 737-700s. The same could be said for any or all of the 44 options Southwest could exercise.

If current demand trends continue, then Southwest can turn to a split usage of the 737 MAX jets toward expanding the airline’s route network and facilitating the retirement of older 737s. Remember, Southwest went on a massive expansion spree in 2020 and 2021, and it has added a host of new routes to cater to leisure travelers.

At some point, Southwest Airlines needs to get back to rebuilding its network. This is especially true on the short-haul, higher-frequency routes the carrier operations. It is on routes like those where the MAX 7 would be a perfect fit. This would also help bring the airline back to flying more nonstop passengers over connecting ones.

The Boeing 737-700s will be entirely replaced with Boeing 737 MAX jets. Photo: Vincenzo Pace | Simple Flying

Also, do note that the options are relatively flexible. Southwest needs to provide advance notification to Boeing for obvious reasons, but it can choose to take more MAX 8s instead of MAX 7s if its fleet needs demand them. The MAX 8s could be especially useful in markets like Hawaii.

Ultimately, the cards appear to be in favor of Southwest Airlines exercising more options for 2022. However, whether it chooses to exercise all 44 remaining options or fewer will depend on what the airline believes its fleet needs will be over the next few years coming out of the crisis.

Do you think Southwest should exercise all of its 737 MAX options? Let us know in the comments!

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