Troubled Elsewhere American Airlines Flies High In Miami
Written by Scott Blake on November 17, 2011
By Scott Blake
American Airlines’ financial woes seem a world away when looking at the carrier’s dominance at Miami International Airport.
This year, American has increased its already large presence at Miami International and plans to add more flights in coming months, building on its leading network of routes linking the US, Latin America and the Caribbean.
American now handles about 63% of the airport’s passenger traffic, and the carrier’s Miami market share increases to 68% when counting its regional carrier, American Eagle Airlines, according to the Miami-Dade Aviation Department, which manages the airport.
In comparison, the largest carrier at Orlando International Airport, Southwest Airlines, has about a 19% market share there.
Miami International is on pace this year to handle more passenger traffic than ever before and "our growth is largely due to American Airlines," said Aviation Director Jose Abreu.
Tom Hoban, communications chairman for the Allied Pilots Association, which represents American’s nearly 8,000 pilots, called Miami "the crown jewel" and "enormously successful" among American’s network of hubs.
Even in the Dallas area, where American is based, the airline faces significant competition from Southwest Airlines, but not so in Miami.
"There isn’t much in the way of competition from US carriers," Mr. Hoban said.
American stepped up its presence in Miami after Eastern Airlines and Pan Am World Airways, which both operated many flights through Miami and Latin America, went out of business in 1991.
The American stronghold in Miami "developed because of the demise of Pan Am and Eastern," Mr. Hoban said. "We inherited their Latin American [flight] structure."
Elsewhere, American hasn’t fared so well.
Fort Worth, TX-based AMR Corp., American’s parent, recently reported another quarter of losses, primarily citing higher fuel costs and its high labor costs, which include a longstanding contract negotiations stalemate with its pilots union.
In reporting last month a loss of $162 million in the third quarter, AMR said it is considering selling off its AMR Eagle subsidiary, which runs American Eagle and Executive Airlines.
The poor results also stirred speculation among airline industry analysts that American may be headed for Chapter 11 bankruptcy protection. There also have been reports that America is considering consolidating its operations in some cities, although Miami has not been mentioned.
Overall, AMR didn’t sound optimistic in its quarterly report.
"It will be very difficult for the company to continue to fund its obligations on an ongoing basis, and to return to profitability, if the overall industry revenue environment does not continue to improve, if high fuel prices persist, or if labor costs remain uncompetitive," the company said in a statement.
It all contrasts sharply with American’s business at Miami International.
In Miami, American Airlines alone carried more than 18 million passengers from January through September, according to the Miami-Dade Aviation Department, representing a more than 5% increase over the same period last year, including both domestic and international passengers.
Together, American and American Eagle now operate more than 300 flights a day through Miami International.
American’s cargo shipping business through Miami International also has remained strong.
In Miami, American uses both passenger and cargo planes to ship freight to and from Latin America, including food and other perishables, electronics, auto parts, refinery parts and pharmaceuticals, said Leandro Moreira, American’s Southeast director of cargo sales and marketing.
While American has struggled companywide, a massive and costly renovation and expansion of Miami International’s North Terminal — done mainly with American Airlines in mind — is nearly complete.
Already American has moved its operations to a new 290,000-square-foot section of the North Terminal that features 58 ticket agent positions, 66 self-service check-in devices and 14 curbside check-in positions.
"From Miami, American flies to more destinations in Latin America than from any other city and more than any other carrier," said American spokeswoman Dori Alvarez.
With the growth of economies in Latin America in recent years, American has been there to handle the accompanying increase in air travel to Miami and has plans to expand its network.
American now operates an average of 60 flights daily from Miami to Mexico and Central and South America, Ms. Alvarez said.
That includes flights to 19 destinations in South America, which will increase to 20 this month with the addition of flights to Valencia, Venezuela; nine destinations in Central America; and two destinations in Mexico.
"In December," Ms. Alvarez added, "we will increase our frequencies between Miami and Brasilia, as well as Belo Horizonte [both in Brazil] from four times a week to daily. In November 2012, we will begin direct service from Miami to Manaus, Brazil — our seventh destination in the country."
American also has gotten creative in providing some of its flight service between Miami and Europe, having been granted trans-Atlantic anti-trust immunity by the US government, said Chris Mangos, the Miami-Dade Aviation Department’s marketing director.
As a result, American has partnered with British Airways and Iberia Airlines to sell and operate flights to and from Madrid and London as if they were one carrier, "creating a seamless travel experience" for travelers, Mr. Mangos said.
Meanwhile, America is in its fifth year of contract negotiations with its pilots union, Hoban said. The pilots continue to work under the conditions of the previous contract, which officially expired in 2006.
In 2003, partly resulting from the downturn in business following the Sept. 11, 2001, terrorist attacks, American laid off about 2,500 pilots and the rest accepted pay cuts of 25% to 50%, among other concessions that, overall, totaled about $800 million in annual savings, according to Mr. Hoban.
The airline continues to search for savings, with plans to close its crew base in San Francisco, and is considering doing the same in Boston and Washington, DC, Mr. Hoban said.
But, he added, "There are no staffing cuts planned in Miami."To read the entire issue of Miami Today online, subscribe to e -Miami Today, an exact digital replica of the printed edition.