American Airlines Insiders Say The Old Strategy Never Died — They’re Half Right, But Not For The Reason They Think

Insiders argue American Airlines has reversed disastrous sales and distribution mistake while still running the same old strategy that left it weak in major markets. That critique is partly right, but incomplete: American’s Sun Belt focus was less a fresh strategic choice than the result of years of retreat from competition, premature aircraft retirements, slot and gate constraints, and a long-running failure to value the markets that drive loyalty and credit card spend. Aviation watchdog JonNYC shares a theory of what’s wrong with American Airlines strategy. It’s not his theory, but it’s an interesting one to contend with. I just think it misses quite a lot. "Literally. The strategy was, reverse the sales/distribution error, and run with literally every other failed strategy unchanged." — JonNYC (@xJonNYC) August 13, 2026 The argument here is that American is still running the “Sun Belt Strategy” that the airline laid out at its March 2024 Investor Day. Avoid expensive head-to-head fights for premium customers in the largest coastal markets. Dominate smaller, disproportionately Sun Belt markets using multiple hubs and lower trip cost regional aircraft. monetize those customers through connectivity, AAdvantage and the credit card. How The Sun Belt Strategy Was Supposed To Work It wasn’t so much flying more routes within the Sun Belt as a bet that American’s southern hubs gave them an advantage serving smaller and midsize communities, building on the old US Airways small market strategy. (Cranky Flier showed their advantage in some of thest markets was modest at best compared to Delta and United. Southwest was even stronger in some cases.) The argument was that population and economic activity were shifting toward American’s geography of Texas, Florida, Arizona, North Carolina and ten other southern and western states which were growing faster than New York, Boston, Los Angeles and the Bay Area. And these markets also saw less competition, where yields were higher. Hubs at DFW, Charlotte, Phoenix and Miami were well-placed to connect passengers from El Paso and regional jets well-suited to these markets with lower trip costs than mainline. Then this short-haul network would feed international partners instead of requiring American to duplicate United’s and Delta’s long-haul breadth. American plus its partners purportedly covered approximately 90% of U.S. long haul demand, with American concentrating its own aircraft on higher-yielding markets like London and Tokyo. And American would convert that network advantage into AAdvantage enrollment and credit card acquisition. Why American Airlines Had No Alternative – So Sun Belt Was The Least Bad Thing Left The ‘Focus on the Sun Belt’ strategy Vasu Raja articulated was downstream of: CEO Doug Parker’s and then-President Robert Isom’s long history of avoiding competition, dating to US Airways at least. That’s expressly why they ran from New York in 2014 (‘use scarce slots to serve passengers flying to New York rather than New Yorkers) and from Los Angeles as a transpacific gateway. Their decision to retire widebodies and 757s early in the pandemic, so they didn’t have the planes to compete long haul or to build back Dallas and Charlotte as well as places like Chicago O’Hare. They had no choice but to choose, so choosing these hubs was semi-rational, at least when they still had their JetBlue partnership for the Northeast (and werebetting they’d successfully build their Alaska partnership on the West Coast). Their head of Network Planning Brian Znotins (who reported to Raja at the time) has long said he prefers more narrowbodies to flying larger widebodies. He has argued that the best long haul markets become oversaturated. So that’s not where they make money. It’s a narrow view, and one that hurt United when he was doing route planning there under disgraced CEO Jeff Smisek (it’s the first high profile thing that Scott Kirby reversed when he moved from being American’s President to United’s, and he explained it explicitly on the basis of credit card customers). The JetBlue partnership got killed for antitrust, but it wasn’t unreasonable for American to think – prior to that Investor Day, of course – that it wouldn’t be when they’d entered into a settlement with the federal government that allowed it to proceed. The Alaska partnership didn’t really develop. Small Ball Continues – For Now A key problem is that American still hasn’t ordered widebody aircraft (though they’re still finally expected to). They have finally begun to build back Chicago. They are a couple of years off from being able to do that at LAX due to gate constraints there. And they are slot-limited in New York. Unquestionably they need more aggressive route planning, because running away from the biggest spending markets in the country drove the relative decline in charge volume on their cobrand cards where they revealed at that 2024 Investor Day that they’d dropped to #3 (behind Delta and United, and indeed they used to be #1). And that credit card spend is what drives U.S. major airline profit. There’s still Sun Belt strategy going on, which is to say ‘too much small ball and not enough competition in markets where customers spend the most on card’. Some of that is an artifact of gates and slots and the airline’s prior abandonment of those cities. Some of that is the retirement of aircraft, and the airline’s failure to replace them when it became clear this was a binding constraint. And some of this is a deeply ingrained history dating back at least to US Airways to avoid competition. But they are also starting to turn a little bit, at least we’ve seen that in Chicago. And little of it was really new with ‘the Sun Belt strategy’ – that was just “all they had” given the constraints and hole that Isom and Parker had dug for themselves, and they do seem to understand to some degree the mistakes of that era, even if those take a long time to shed. Topics on this page