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American Airlines' triple play in greater China is part of long-haul rejuvenation, with more to come

Analysis

The new American Airlines is fulfilling old dreams. The world's largest airline had eyed services from Dallas to greater China but was limited by factors including cost base, labour conditions, aircraft type and product to sustainably offer flights. Now through re-structuring, a new fleet and re-vamped product American Airlines has three three new routes in greater China: its first ever Hong Kong service launched in Jun-2014, Dallas-Shanghai launched in Jun-2014 and from May-2015 a planned Dallas-Beijing route.

"We've wanted to do this for a long time," American VP Asia-Pacific Erwan Perhirin said at the launch of the Hong Kong route. Hong Kong with the Beijing and Shanghai routes mark the start of what will likely be further expansion from American in Hong Kong and broader Asia - and maybe even Australia/New Zealand too. The growth is dampened by financial performance, with American CEO Doug Parker remarking American's Asia services are loss-making and "investments for the long term".

American's Asia network has been on-and-off in terms of profitability, with some profitable years but also some unprofitable ones caused by various factors, such as the Mar-2011 tsunami in Japan. Mr Perhirin believes American's new scale and cost base combined with a refreshed fleet can bring consistent profits to American's Asia network.

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