American Airlinesis one of the world's largest carriers. The airline, based in Fort Worth, Texas, was once known for being on the cutting edge in the post-deregulation era. It was the first major US airline to offer a loyalty program, and led the charge in establishing some major hubs that connect passenger traffic from across the world. The carrier has reached impressive heights and continues to carry millions of passengers every year with a large fleet of commercial jets.
Despite its impressive size, American has been criticized in recent years for its underperformance compared to peers like Delta Air Linesand United Airlines. The carrier, among other challenges, has ceded valuable market share in key destinations to competitors, weakening its position in potentially lucrative markets. This includes destinations like Boston Logan International Airport. But why did American Airlines turn its back on Boston?
American Airlines Focuses On Key Hubs
American Airlines Airbus A319 at DFW shutterstock_2536901027
Photo: Austin Deppe | Shutterstock
Many industry experts have noticed a distinct trend with American Airlines' network planning, according to Forbes. The carrier tends to focus on markets where it can remain a major player, and, if that is not possible, the airline tends to redirect its attention to the markets it dominates, leaving secondary markets like Boston in the dust. Today, American's Boston operations are a shadow of what they used to be, as it has opted for growth in hubs it already dominated or inherited through mergers.
Destinations like Dallas-Fort Worth International Airport, Charlotte Douglas International Airport, and Ronald Reagan Washington National Airport all enjoyed major growth as American shrank its network in Boston. Growth continues in some of these markets today, with American opening a brand-new terminal at DFW. The carrier believes doubling down on successful hubs is the best route forward, rather than competing for market share where does not have the upper hand.
However, it wasn't always this way, specifically in Boston. American used to be Logan Airport's largest carrier, serving more passengers than its rivals for years. However, in addition to American's network strategy, intensifying competition and a merger forced the airline to reconsider its Boston schedule, and its footprint is now well below that of its biggest competitors.
The Carrier Used To Be A Market Leader in Boston
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Between 2001 and 2009, American was Boston's largest carrier. In 2003, the airline served 33 destinations from the city, and, while this number is not massive compared to other hubs, it is notably higher than the standard 'spoke' in a hub-and-spoke carrier's network. However, by 2013, this number had dropped to a much more modest six routes.
Within 10 years, American shrank to the airport's fifth-largest carrier, and, as it shrank, rival JetBlue grew. By 2010, the hybrid carrier took American's title as Boston's largest carrier. While the airline is facing some serious struggles in the post-COVID era, JetBlue's dominance of Boston remains one of its strengths, so it seems that American Airlines might have forfeited a profitable and important market.
Interestingly, American's Boston schedule was still larger than its hub at New York's John F. Kennedy International Airport, according to View From The Wing. As recently as 2020, the carrier's shift to focus on flying local passengers rather than connecting ones in New York set American far behind rivals in terms of market share. As such, it seems that Boston is not the only contested market the airline has essentially forfeited.
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Boston Is A Competitive Market
Boston Logan International Airport
Photo: ruimc | Shutterstock
Given American's network strategy, Boston still remains a rather unattractive market for the airline. This is largely because the city is a highly contested destination, with two powerful competitors vying for dominance: Delta Air Lines and JetBlue. Even if American wanted to restore its robust schedule, it would be facing an uphill battle.
American has been struggling to differentiate itself from its peers. While carriers like Delta Air Lines, United Airlines, and even JetBlue have made major investments in a premium experience, American has been criticized for falling behind in the travel segment. In hyper-competitive markets, the airline has few true advantages over its peers, making it more difficult to win over the favor of premium passengers.
According to the United States Department of Transportation Statistics, JetBlue is the airport's largest mainline operator, and the New York-based carrier handles 27% of Boston's passengers. Delta trails JetBlue, with its mainline operations being 5% smaller than its rival, although this does not, however, account for Delta's regional subsidiaries. Even with two dominant players, the Boston market is fragmented, as detailed in the table below.
Airline Boston Market Share
JetBlue Airways 27%
Delta Air Lines 21%
American Airlines 14%
United Airlines 11%
Spirit Airlines 6%
It is worth noting that recently, JetBlue announced a new partnership with United Airlines. While the collaboration is focused on the New York market, this partnership could give United an advantage over American in Boston as well. American lost its partnership with JetBlue years ago, and was not able to get it back when JetBlue began looking for another airline partnership.
Philadelphia Is An Adequate Transatlantic Hub
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Photo: Philadelphia International Airport
American might lack a robust presence in Boston or New York, but it has formed a strong European gateway at Philadelphia International Airport. The airline inherited the hub from US Airways following their merger in the early 2010s, and it has since remained a critical part of American's network. The Philadelphia market may not be as large as New York, but the carrier dominates it, making it consistent with American's network strategy.
American's mainline flying accounts for an impressive 47% of Philadelphia's passengers. With such a consolidated hub, having other major European and transatlantic gateways in the northeastern United States may not make sense for the airline. After all, Philadelphia is a strength in the American network, as even its largest rivals in the city have schedules far smaller than American's.
Airline Philadelphia Market Share
American Airlines 47%
Frontier Airlines 13%
Delta Air Lines 6%
Spirit Airlines 6%
Southwest Airlines 5%
Given that American inherited its dominance of Philadelphia in its merger with US Airways, the city might have been part of the reason why the carrier surrendered the Boston market. With such a strong Philadelphia schedule, a large presence in Boston might have cannibalized its new hub, with the two cities competing for the same connecting passengers. However, American's east coast hubs don't end in Philadelphia, rendering a Boston hub even more obsolete.
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American Airlines Does Not Need More East Coast Hubs
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Photo: Charlotte Douglas International Airport
Philadelphia is not the only East Coast hub American has, contributing to American's indifference to Boston. It also serves Charlotte Douglas International Airport, which has grown to be one of its largest hubs. Like Philadelphia, this hub was inherited from US Airways, but it only strengthened in the decade following the merger. Charlotte has a wide range of short and long-haul destinations, further solidifying American's massive footprint in the mid-Atlantic and northeastern regions. The carrier boast 64% market share in the North Carolina hub.
Washington National Airport is another American hub, also inherited from US Airways. Unlike Charlotte and Philadelphia, American cannot operate long-haul flights from this gateway, due to the airport's relatively small size and perimeter rule. However, it still fosters domestic connections and gives American a major presence in one of the United States' most lucrative markets.
With such a large East Coast presence, it seems American doesn't really need another hub like Boston. Instead, by doubling down on destinations like Charlotte and Philadelphia, the airline can position itself for transatlantic and domestic connections alike. An additional hub might add unnecessary costs and complications to an already robust schedule in the Northeast.
The Carrier Simply Isn't Interested In Boston
N116AN American Airlines Airbus A321-231
Photo: Vincenzo Pace | Simple Flying
Overall, offering a more robust schedule from Boston simply does not align with American Airlines' strategy. The carrier prefers to double down on its strengths, while avoiding growth in non-hub markets where the airline doesn't enjoy a leading position. This could be partially due to American's struggle to offer a truly premium and competitive product. Without one, it might be hard for the airline to win over customers on other airlines. Boston is a highly contested market, giving American (or any airline) an uphill battle in winning the favor of Massachusetts residents. It simply may not be worth the cost.
The airline also seems to be doing just fine without a Boston hub. With three major gateways located along the northeastern seaboard, an additional hub might be redundant and cannibalize American's existing business. Hubs are most successful when they can consolidate flight schedules and itineraries without competing with each other. Investing in existing hubs makes a lot of sense for the carrier, and this is a strategy American has continued to embrace.
Only time will tell if American has picked a winning strategy. However, as it financially underperforms compared to rivals, change could be on the horizon. This might involve an introduction of more premium products, a network shuffle, more changes to its core business. Perhaps the airline will rethink its approach and invest in non-hub flying, but, for now, Boston isn't an important city for American- and for good reason.