American Airlines Tightens Its Grip on Latin America
Two recent events will help American consolidate its grip on the region. On Feb. 14, American said it plans to merge with US Airways (LCC) , strengthening its ability to feed its Latin American routes. On March 7, Tam Airlines , Brazil's biggest carrier, said it will join Oneworld alliance, already the biggest alliance in South America.
"Our organic growth in the region is pretty good," said Art Torno, vice president for Mexico, Caribbean and Latin America, in an interview. "Should the merger be approved, it would add three more hubs into our network, and we also have the recent decision of TAM to come into Oneworld. Those things give you good strength in Latin America. I can't say we are ever content, but we are very optimistic."
A year ago, Torno replaced Peter Dolara as the chief of American's Latin empire. Dolara had represented American in Miami since shortly after former CEO Bob Crandall purchased Eastern's Miami-focused Latin American network in 1989 for about $320 million. Of all the things Crandall did to build American, the best one may have been his move on Latin America.
On Dec. 20, 1989, Crandall flew to Miami to announce the deal. The previous week, American had bought TWA's London-Chicago route authority and Braniff's landing rights at Chicago and New York. On Dec. 21, The Miami Herald (pictured) proclaimed: "American Airlines, already the top domestic airline, has suddenly become a major international player as well, paying weak competitors $665 million for valuable foreign routes to 18 countries."
The Latin presence has grown. American's Miami hub today offers 328 daily departures. It serves 21 destinations in South America, 28 in the Caribbean, 12 in Central America and Mexico, four in Europe, two in Canada and 48 in the U.S. (some are seasonal).
Systemwide during the peak summer season, including flights from Dallas and other hubs, American flies 322 weekly flights to 21 destinations in South America, 174 weekly flights to 10 destinations in Central America, 552 weekly flights to 32 destinations in the Caribbean and 417 weekly flights to 19 destinations in Mexico. The total is 2,191 weekly flights to 82 destinations.
Meanwhile, United (UAL) has 1,043 weekly flights to 61 destinations in the region, including 287 to South and Central America, 168 to the Caribbean and 588 to Mexico, where it has 28 destinations. Delta (DAL) has more than 1,000 weekly flights to 49 destinations in Latin America and the Caribbean, including 460 weekly flights to Mexico.
Even before the merger, American was growing in the region. It grew Latin American capacity by 4.5% in 2012, adding service including Miami to Asuncion, Manaus and Roatan, a Honduran island. This year the carrier plans to add routes from Miami to Curitiba and Porto Alegre in Brazil. Torno loves to talk about Brazil, a large country where the economy, the middle class and the desire to travel are growing rapidly. While American's presence in Asia is less than its two competitors' presence, the airline's view is that the strong presence in Brazil compensates, at least partially.