- American Airlines is facing numerous setbacks in South America.
- Rising COVID-19 cases in Chile, Brazil, and Peru forced the airline to cut flights in April.
- Civil unrest and protests in Colombia are now further threatening success in the region.
- See more stories on Insider’s business page.
American Airlines’ expansion strategy in South America is experiencing a seemingly never-ending stream of hurdles.
Tourism-dependent Latin America was among the first regions to welcome US tourists during the coronavirus pandemic, and American was standing ready to fly eager travelers. Earlier in the year, the airline had announced new flights to cities in Chile, Colombia, and Brazil in a bid to attract leisure flyers as it waited for business travel to recover.
But while the continent appeared to be welcoming at first, doing business in South America quickly proved problematic.
Flights to Santiago, Chile, were among the first to be impacted when the country closed its borders for the month of April. American had planned to launch a new non-stop route from New York using one of its largest aircraft, the Boeing 777-200, on May 7.
Chile appeared promising when it opened to Americans in November 2020. But a spike in COVID-19 cases following the country’s summer season prompted the government to once again close its borders to tourists.
The state of emergency in the country planned for the month of April has now been extended through June, according to the US Embassy in Chile. American, as a result, pushed back the launch of its inaugural New York-Santiago flight to July 2; though, Chile may extend its border closure depending on conditions in the country.
Spiking COVID-19 cases were also the reasoning for flight reductions to Brazil and Peru, the airline confirmed to Insider’s Brittany Chang in April. Both countries still allow US citizens to enter despite the rise in cases, according to the US Embassies in Brazil and Peru.
In Colombia, however, American faces a new challenge: civil unrest. Protests have gripped the country with some turning violent and taking the lives of at least 26 people, according to ABC News. The Washington Post Editorial Board is also predicting that Colombia’s levels of unrest could spread to regional countries, like Peru.
American, in response, has issued a travel alert for the Colombian city of Cali, where the protests have been the most extreme, allowing travelers to change their flight to any day between May 4 and May 18.
The protests could discourage future travelers from booking trips to Colombia or encourage flyers with existing bookings to change away from Colombia at a time when American is deploying some of its largest aircraft to the country.
Rebuilding a lost South American network at the wrong time
Gallery: I flew on Southwest and Alaska, the two airlines competing to be the best of the West Coast and the winner is abundantly clear (Business Insider)
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I flew on Southwest and Alaska, the two airlines competing to be the best of the West Coast and the winner is abundantly clear
- Alaska Airlines and Southwest Airlines are in competition to be the airline of the West Coast.
- Both are similar but each has its strengths like Alaska has a greater West Coast route network.
- Southwest is a great option for leisure travelers but Alaska has more perks for business flyers.
- See more stories on Insider’s business page.
The West Coast of the US stretches more than 1,000 miles with no shortage of major cities from San Diego to Seattle.
All the major US airlines serve this important region of the country but two are battling for dominance, Southwest Airlines and Alaska Airlines.
Alaska is based in Seattle, although its name suggests otherwise, and is a mid-tier US airline with the bulk of its operations on the West Coast.
Southwest, on the other hand, is the country’s largest low-cost carrier with a nationwide presence. And while the West Coast is an important region for the airline, it’s just one of many Southwest serves.
Both carriers have sought to grow market share on the West Coast during the pandemic. Southwest added Santa Barbara and Fresno to its California route network while Alaska has added routes from existing cities.
I flew on both airlines this year to see which one was truly the airline of the West Coast. Here’s what I found.
West Coast connectivity: Alaska serves 29 cities up and down the coast, including smaller cities like Everett, Washington; Santa Rosa, California; and Medford, Oregon.
Read More: I flew on Alaska for the first time since it stopped blocking middle seats and it was the closest to normal I’ve seen during the pandemic
Southwest serves 15 West Coast cities and plans to serve two more this summer. Bellingham, Washington flights will also open sometime this year.
Winner: Alaska Airlines. The airline’s connectivity between West Coast cities large and small cannot be beaten by Southwest’s existing network.
What comes with the ticket: Every Southwest ticket includes free seat selection anywhere on the plane after boarding, two checked bags, a carry-on bag, and all the onboard amenities.
Southwest has open seating so any open seat is available for passengers.
Alaska does allow free seat selection for economy but charges extra for seats close to the front and exit row seats.
Alaska, like many full-service carriers, has also embraced restrictive basic economy fares that replaced its cheapest fares. The product is generous with and limited advanced seat assignments and a free carry-on bag but flyers will have to pay more for better seats and checked bags.
Southwest doesn’t have change or cancel fees for any ticket.
Alaska has eliminated change fees but not for basic economy fares, known as “saver” fares.
Winner: Southwest Airlines. The flexibility and free extras offered by Southwest put it well and above Alaska. It’s worth noting, however, that even Alaska’s basic economy fares are more generous than many of its competitors.
Boarding: Alaska boards its aircraft in groups that are assigned based on seat location and fare class. First class boards first, followed by elite status holders, those sitting in “premium class.” Economy then boards back to front, for the most part, and basic economy flyers board dead last.
On Southwest, however, passengers are given a boarding number and group that’s determined by how early they check-in for the flight. Once on the plane, they can select any open seat.
Winner: Southwest Airlines. Alaska’s boarding process relegates basic economy passengers to the very last section while even the passenger with the cheapest ticket on Southwest has the opportunity to board earlier if they check-in at exactly 24 hours prior to departure.
Onboard amenities: Both airlines are in the process of modernizing their fleets but older aircraft remain. On Southwest, for example, I flew on the 737-700 fleet on my most recent trip and it was the furthest from modern.
But its updated aircraft have a great, modern look, as I found on flights from New York to Orlando in 2020.
Read More: I flew on Southwest Airlines during the pandemic and came away impressed by how well the largest low-cost US airline handled social distancing
Alaska has the same issue. Its newer Max aircraft is a show-stopper but older aircraft seem tired.
Both airlines also offer paid in-flight WiFi and streaming content.
Alaska does surpass Southwest, however, by offering in-seat power to keep devices charged.
Winner: Alaska Airlines. Both airlines offer similar products but Alaska just eeks ahead with in-seat power.
In-flight service: Both airlines have restored portions of their in-flight service since the pandemic began. Alaska, for example, serves soft drinks and snacks.
Southwest just brought back Coke, Diet Coke, and 7UP, as well as more snacks.
Read More: Southwest is reverting to its normal boarding policy and bringing back fan-favorite in-flight amenities
Before the pandemic, however, Alaska sold meals and snack boxes while Southwest just stuck to drinks and small snacks.
Winner: Alaska Airlines.
West Coast feel: Alaska has its roots in the West Coast and that shows in its branding. The colors are vibrant, there is a focus on West Coast brands in the in-flight service, and the airline is based in Seattle.
Southwest has a generic appeal as it connects the US through bases across the country with no specific ties to the West Coast. There’s no West Coast feel.
Winner: Alaska Airlines: There’s an undeniable feeling when flying on Alaska that it’s more in tune with the West Coast vibe than Southwest.
National connectivity: Alaska is highly concentrated on the West Coast while Southwest has bases across the US.
Southwest doesn’t have the sprawling West Coast network that Alaska does but it does offer connections between most of the region’s major cities and connections to the rest of the country through its mid-continent bases in places like Phoenix, Denver, Las Vegas, and Dallas.
Alaska only has hubs in the West Coast cities of Los Angeles, Seattle, San Francisco, and Portland, requiring a stop in one of those cities before heading east. The airline does partner with airlines like American to offer mixed-airline itineraries but that could be difficult if the airlines are in two different terminals.
Winner: Southwest Airlines. Having more mid-continent bases allows for more convenient journeys with lower travel times for customers.
Business traveler amenities: Corporate travelers have different priorities than most leisure travelers and will often spend more for seats in premium cabins and access lounges.
Alaska has premium lounges in six airports, and partners with American and Qantas on lounge access for members. Southwest does not have any lounges.
Alaska’s jet aircraft also have first class cabins, the domain of the business traveling road warrior, while Southwest does not.
A special section of economy is also available on Alaska. Called “premium class,” seats in the section offer additional legroom and come with complimentary alcoholic beverages.
Alaska is also a member of the Oneworld airline alliance and Alaska’s elite status holders can use their benefits on other airlines like American and British Airways, and vice versa. Southwest is not a part of any airline alliance.
Southwest does have a special fare for business travelers, called “Business Select,” that includes extras like priority boarding and free alcoholic drinks (suspended during the pandemic).
And Southwest does have better connectivity outside of the West Coast. A business traveler in St. Louis looking to fly to New York couldn’t even choose Alaska if they wanted to.
Winner: Alaska Airlines. Business travelers have more premium amenities at their disposal on Alaska, if the choice is between Alaska and Southwest.
Airline of the West Coast: Alaska Airlines. Both airlines are incredibly similar but Alaska has more West Coast-oriented amenities to help it pull ahead of Southwest.
American’s desire to grow in South American comes as the airline seeks to rebuild following the loss of a partner in LATAM Airlines prior to the pandemic.
Delta Air Lines spent $1.9 billion in 2019 for a 20 percent stake in LATAM, significantly growing its presence in South America. The move saw LATAM drop American and the Oneworld airline alliance to join Delta and the SkyTeam airline alliance, leaving American to rebuild in a historically profitable region.
“Latin America has, for roughly 30 years now, been one of American’s international beachhead,” Henry Harteveldt, travel analyst and cofounder of Atmosphere Research Group, told Insider. “In fact, it’s been American’s most successful region outside of the US.”
With LATAM gone, American was left with Brazil’s GOL Linhas Aéreas, a limited partner in the region. But GOL didn’t have the reach of the larger airlines that were now aligned with American’s competitors.
Delta bought a new partner in LATAM Airlines alongside its existing partner in Aerolíneas Argentinas while United had Avianca and Copa Airlines. To regrow its South American network, American chose to launch new routes from the US with a domestic partner, JetBlue Airways.
American launched its routes to Colombia, Brazil, and Chile in a partnership with JetBlue dubbed the “Northeast Alliance.” For American, the partnership provides access to customers across JetBlue’s network that can connect onto the new routes.
“It’s understandable that American would be eager to start rebuilding its network in Latin America because it is so strategically important to the airline right now,” Harteveldt said.
Ceding Europe to United and Delta, for now
South America isn’t totally lost for American as the airline still operates around 30 daily flights to cities across the continent. Cirium data also shows a steady stream of cargo-only flights operating to Santiago from Miami in 2021, which Harteveldt says helps stem the losses.
But while American focuses on South America, its competitors are locked in on the reopening European continent. United and Delta were both quick to resume flights to European countries open to Americans like Greece and Iceland while also starting new routes to Croatia.
“I think American is looking at this and saying, ‘we’re going to be very careful about which routes we pick and which battles want to fight,'” Harteveldt said, thinking back to 2018 when American launched Iceland flights alongside Icelandair now-defunct Wow Air with flights to Dallas. But the airline hasn’t completely ignored Europe, nor a gradually reopening Middle East.
A new route between New York and Athens, Greece, is scheduled to launch on June 2 and existing routes to Athens from Chicago and Philadelphia will resume in June and August, respectively. The airline also just launched a new route between New York and Tel Aviv, Israel, with plans for another route to Israel from Miami, which may pay off as the Middle Eastern country starts to accept vaccinated tour groups.
American may also be waiting for the European Union to open its doors to US citizens, Harteveldt says, so the airline can fly more passengers on its traditional routes to cities like Paris, France; Madrid, Spain; and Rome, Italy.
But success in South America remains challenging as new and unexpected roadblocks appear that are outside of the airline’s control.
“It’s not American’s fault, for example, that you had a strong surge of virus in a particular country, Harteveldt said. “It’s not American’s fault that travel restrictions are in place when American may have thought that some of these restrictions would have been eased or removed.”
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