Miami Could Get An Asia Flight, But Probably Not From American…

For years there have been rumors of American launching flights between Miami and Tokyo, though the flight has never come to fruition. Instead American has focused their growth to Asia exclusively out of Dallas and Los Angeles. I understand the Dallas expansion, given that it’s their mega hub. I also understand their Los Angeles expansion in theory, given that it’s a big city American is trying to gain market share in, even though no single airline will ever truly rule Los Angeles.

Miami-Airport

But I’m still surprised that American hasn’t done at least one Asia flight out of Miami, given the amount of connecting traffic American could potentially get from the Caribbean and Central/South America.

What’s interesting is that Miami Airport is actively soliciting flights to Asia, to the point that there’s an “MIA Asia Task Force,” which is traveling to Asia at the moment to meet with airlines.

Per The Next Miami:

In addition to American Airlines, the task force is targeting Japan Airlines, China Airlines, Asiana Airlines, China Eastern Airlines, All Nippon Airways, Cathay Pacific, Air China, Korean Air, EVA Air and Hainan Airlines.

The Asian city with the highest demand to and from Miami is Manilla, Phillipines, but the route is not considered viable for economic and technical reasons.

It’s interesting that Manila is the city with the highest demand out of Miami. It’s not really viable since it would be a 9,300+ mile flight, which would be the world’s longest.

Then again, just because Miami to Manila is the highest demand route doesn’t mean it’s the best fit for the airport’s first service to Asia. A hub like Tokyo would make a lot more sense, since it would allow for one stop flights between the US and virtually every major city in Asia.

American confirmed they aren’t really interested in adding flights from Miami to Asia:

A spokesman recently said that American prefers to focus on adding flights to Asia from Dallas and Los Angeles “for a variety of reasons, including geography and demand.”

Like I said, I understand the expansion out of Dallas and Los Angeles in theory, though American is bleeding money on many of their existing routes to Asia, and I can’t imagine that will change anytime soon. For example, a reader managed to snap a picture of the passenger manifest on a recent Los Angeles to Shanghai flight, and every single business class passenger was either an upgrade or an award passenger (the main manifest shows the fare class, so everyone was in “C” or “U”).

American-787

When the walk-up economy fare on a Los Angeles to Shanghai fare is $700 roundtrip (literally for a flight departing later today), that can’t be good news for economy yields on the flight either.

LAX-PVG

Bottom line

It’s hardly surprising that Miami Airport is actively soliciting international airlines to fly to their airport, given that they don’t have a single flight to Asia. American seems like the obvious option given their huge hub there, but the airline doesn’t seem interested. I’m curious if any airline ends up seeing the value in Miami service.

It would seem to me like a oneworld carrier (either Japan Airlines or Cathay Pacific) would be the obvious option thanks to the connection opportunities for passengers, though Miami to Hong Kong is at the outer range of what a 777-300ER can operate.

British-Airways-Lounge-Chicago-22

I could also see a Chinese carrier hopping on this opportunity, given the Chinese law that only one Chinese airline can operate each longhaul route. This is a big motivator for Chinese carriers to launch routes early, so they can claim ownership to the route.

Otherwise they end up operating flights like Hainan’s Los Angeles to Changsha flight, which they’re operating since other Chinese airlines already operate flights to Beijing, Chengdu, Guangzhou, Shanghai, etc.

Hainan-Airlines-LAX-Lounge - 30

American has long said that they’re on the whole losing money on flights to Asia (the flights are an “investment” in the future), though this route doesn’t seem any worse of a business decision than so many other routes American is operating.

Do you think an airline will launch flights between Miami and Asia, and if so, which one?

Comments

  1. @lucky – when and if CX get their A350-1000’s or their 777x’s, will their range be suitable for a HKG -> MIA run?

  2. Re: Manila, Miami is the cruise ship capital of the world and large percentage cruises line employees are from the Philippines. High volume but low yields as cruise lines are picking up the airfare. Still interesting.

  3. With the flight being just a touch under 9,000 miles, would you be limited to a 787 or A350 to get the job done?

  4. If you want to get to Miami, you can fly CX/JAL/ANA to a variety of North American cities and connect to Miami without stretching the range of aircraft.

    If you want to connect to the Caribbean/LatAm, I imagine you can do that with a variety of airlines, including Delta, where you can connect in Atlanta

    For fun/sun, Japan/Asia have a variety of destinations that are closer (Southeast Asia, Hawaii, etc)

  5. betting on JL 787 vs CX 350
    under the current JV of AA&JL, it might be also of AA’s interest to have JL operate an Asia flight

  6. CX and JL would be a natural add since MIA is a oneworld hub with BA, QR, AA, LATAM, etc. flying in. Considering that both CX and JL have expanded their service in recent years further inland into the East/South, they should by all means go for it.

  7. Swirehouse which has previously developed property in downtown Miami (Brickell Key) is also opening their new hotel “East” in the heart of down town. CX is looking into the route given the parent company’s real estate holdings.

  8. As a Miami-Based AAdvantage EXP and frequent traveler to Asia, I would love to see a MIA – Asia route. It isn’t so much about non-stop service to TYO or HKG, but more of offering one-stop service to almost anywhere in the World via JAL or CX. Currently, our only options are two-stop service via DFW, LAX, ORD, etc… Or we take Qatar Airways over to DOH and then DOH to almost anywhere in the World. However, its a longer route going East on QR, so hoping CX, JAL, or AA step up to the plate and make this happen.

    I also find it interesting that CX has operated out of MIA for cargo for many years (with a stop in Alaska), so they could potentially subsidize “low yields” with cargo service as well.

    One thing is for sure – Once one airline does it, others will certainly follow. Who is going to be first?

  9. I believe that the Phil-Am and Pinoy communities in the US have grown very rapidly over the past few decades. Much faster than the Vietnamese, Japanese and Korean communities (who had initial large influxes after major events but not as much after). However that would only factor with US residents filling the flights rather than as Lucky mentions, connecting passengers from S.A and the Carribean.

    Unfortunately, the economics of a flight to the Philippines will most likely not make sense for a non-Asian airline. In my opinion, the major additional factors are: taxes levied by the Philippines government on flights with destinations outside of Asia (hence KLM changing its very long running AMS to MNL service into a stop in Taipei which altered the journey time from 11hrs to more than 17 hrs as well as incurring substantial ground handling charges in Taipei.), taxes like the terminal fee levied in cash at Philippine airports, sub-par terminal infrastructure, below average ability to sell tickets originating in MNL (low level of disposable income) like what hampered the Emirates Panama flight and possibly the % of Filipinos being denied boarding by immigration due some unique rules to protect their citizens. In my opinion these add to the barriers of entry for a non-Asian flight to Manila.

    I’d say an ideal match would be a Miami to Guangzhou route for Delta (if that’s an option) although I realise they have Atlanta as hub. A flight from Miami would give access to Brazilians and other SA passengers to connect to Guangzhou where a lot of trade originates from (Canton Fair etc) as well as being a hub for their Skyteam partner China Southern giving more connection possibilities.

  10. There’s really not much incentive for a non-stop flight when lots of good connecting options are available. MIA-ORD-HKG and MIA-ORD-NRT are both less than 40 miles longer than MIA-HKG and MIA-NRT. Ultra long-haul flights are also notoriously expensive to operate and only make sense when there’s heavy premium traffic, hence why HKG-JFK works but BKK-LAX didn’t.

    What MIA should be trying to do is get a direct flight with fifth-freedom rights. MNL-YVR-MIA by Philippines or TYO-YVR-MIA by JAL would make the most sense. Changing Cathay’s HKG-YVR-JFK to MIA and adding an another non-stop HKG-JFK might also be an option.

  11. the most important Central/ South American flows to Asia are served over AA’s DFW hub. Caribbean to Asia is negligible. There are MANY other ways to get from South America to Asia, and the Middle East airlines have taken a big chunk out of what use to be the highest yielding Asia – South America traffic (think GRU/EZE/GIG-HKG/NRT, now served over DXB/AUH/DOH – it use to all go through the USA or Europe)
    Manila is the largest unserved market from Miami because of cruise ship workers. Many are Philipinos. This is low yield traffic.
    No real need to have a Miami – Asia route. Besides Manila, it’s a relatively small market and it’s already well served over other hub. There are PLENTY of ways to get to Asia from Miami, and plenty of more valuable places for an airline to put its resources than on Miami – Asia.

  12. @wonkachocolat
    There’s NO WAY that Delta would add MIA- Guangzhou with the hopes of getting random Brazilian feed. I don’t think you’ll see Delta in Guangzhou from anywhere. Delta is having a hard enough of a time serving Asia anyway, forget anything outside of a hub at all.
    Guangzhou – Brazil is already well-served by Emirates and Qatar over their respective hubs. They serve that traffic demand very well.

  13. Miami has only drawn one of the three Middle East carriers. That says a lot about the viability of long-distance flow traffic available there. What’s more, the Brazilian and Chinese economies are softening, putting a dent in an-already tenuous market that has plenty of connecting options from incumbent carriers.

    There’s no question MIA does a fantastic job distributing US traffic across Central/South America and the Caribbean, and has solid demand to/from Europe as well. That doesn’t mean it has roaring demand to Asia. AA has spent the last two years trying to strengthen all those new DFW-Asia and LAX-Asia flights; they’re not about to handicap those efforts by siphoning off whatever flow comes out of Miami and its constituent markets.

  14. @Kris
    Technically speaking yes; but I guess he meant Asia-pacific.
    @Lucky
    Manila-Miami is not a very premium route.

  15. “American has long said that they’re on the whole losing money on flights to Asia ”
    Why are they losing money and which US carrier is making money on transpacific flights?

  16. I doubt an airline will launch flights from MIA to Asia. Demand is not there especially when it’s easy to fly from MIA to LAX/SFO/SEA/ORD/DFW/JFK and then go to Asia from there.
    I wonder why AA is losing money on its trans-pacific routes. I recall Delta’s CEO stating it’ll put more focus on USA to China routes.

  17. There’s barely 45 passengers daily each way MNL-MIA… and the yields are trashy. As China and Brazil grow/recover eventually traffic may be flowed via MIA if transit rules are ever relaxed.

  18. “the Chinese law that only one Chinese airline can operate each longhaul route”

    You always repeat that, however I’m not sure why you’re so convinced in what you keep saying. Maybe such “law” covers only US destination? Since there is a route, just easy example, from Beijing to Moscow, where 2 Chinese airlines operating: Air China and Hainan. Moreover both airlines are using the same airport in Moscow. Moreover their flights are not coordinated (no code share) and before the collapse of Russia’s economy both airlines had daily flights and fierce competition was there. Hainan started flying the route recently (maybe 5 or 6 years ago), so it could not be explained that these 2 airlines were historically on the route.

  19. @Juan- China – Brazil trarfic is already very well served. Air China flies to Sao Paulo, and there are MULTIPLE connecting opportunities available via US cities (DFW, ORD, EWR, ATL, DTW, just for starters), Europe (LHR, MAD, FRA, CDG, AMS, LHR) and the Middle East (DXB, DOH, AUH). MIA adds nothing that isn’t already well covered.

  20. Jason and James S have raised very good points and at least one speaks from personal experience doing network planning for an airline we are all familiar with.

    Just because a plane is full of Filipino travelers headed to Miami doesn’t mean an airline will make a single penny of profit. In fact, a full flight could potentially take a loss. These are basics of Airline Economics and there are so many factors behind network planning that many don’t even know about or realize -and to see statements regularly from teenage armchair CEOs on a.net saying “airline X should fly here because the flights are full” is totally unwarranted and unsubstantiated. Let’s take this notion of Filipino travelers headed to Miami for cruise industry employment — think about this for a second — are these business travelers who will be flying back and forth every two weeks? Nope. They’ll be flying maybe once per year if they have a good contract. And for that once a year journey, changing planes two or three times isn’t a make or break situation for most. Inconvenient as it may be, it will be endured by many. In fact, one real life issue I personally witnessed — connected to the Philippines — in my career is dealing with baggage tags where a traveler has five legs to reach their destination yet an automated bag tag only can hold three connection points. This shows the prevalence and willingness of people to take four or five flights to reach their destination.

    I digress…

    There’s a whole set of companies full of sharp individuals whose sole job is to review statistics and figures to see what potential routes make financial sense. Economic factors such as fuel and operating costs are compared against yield (ie profit) and cargo revenue potential and a host of other items such as aircraft size and crew availability, etc. Network planning is a science and constantly changing — most majors have gotten really good at it but there is still a very lucrative and thriving market (and need) for third party airline consultancies to help focus just on this one activity — network planning.

    Airports have also gotten proactive in trying to lure airlines to start service to a destination as you’ve correctly alluded to. That’s not an easy job to convince an airline to fly to XYZ and in some cases, financial incentives are offered to help offset costs or losses in various forms — marking support (i.e. Airport or local CVB funded advertising for the airline) or reduced landing/operating fees or even revenue guarantees for flights subject to local laws/regulations.

    While you’re an expert at finding loopholes in airline pricing and loyalty programs, and making the most of these programs, I would politely ask you to stay within your sandbox and discuss those topics and leave Network Planning to industry experts.

    Perhaps you should invite some of them to write a guest column sometime about Network Planning Basics as they’re qualified to speak to that (but they aren’t qualified to speak about loyalty programs from the customer point of view, which is your area of expertise).

  21. Oh jeez everyone. Stop being so logical. Air India wants to lose more money and is going to deploy a spanking new 787 on MIA – DEL to serve the massive connecting flows of all 2,000 Indian-Americans in the South Florida area.

  22. There is a non-stop flight from Doha, Qatar (Asia) to Miami on Qatar Airways. As an example, I inserted the following dates and got the following response:

    June 25, 2016:
    Doha – Miami at 08:00 (15h 20m); arrives at 16:20

    July 2, 2016:
    Miami – Doha at 20:05 (14h 15m): arrives at 17:20 (next day)

    Economy class and Business class tickets are available – not First class.

    Hope the information above helps!

  23. So twice today I submitted a comment and neither time it was published. Are comments censored here?

    My comment was pretty lengthy and described some factors going into network planning…

  24. Miami has one big problem: it’s in the USA. And the USA don’t do international to international transit. Nobody between South America and Asia will choose to fly through the USA, have to pay USD 160 for a visa (with the risk of being denied), subject themselves to the inefficient and over empowered USCIS “Immigration” process, and have US customs go through their baggage. There are plenty of more oleasant options, including the ME3.

    Did you know that before the overbearing new rules Iberia actually had a hub serving South America in Miami, but because of USCIS causing demand to dry up it had to dismantle it?

  25. I don’t get this, I guess. For originating traffic out of Miami, sure this is a factor. But for OW traffic from South America onwards to Asia, I don’t see why that traffic would prefer Miami over the existing heap of flights via Dallas or LAX.

  26. Is either one stop in TPE or NRT then to MIA, given CX has only 77w & both are focus city for them.
    However if they get 772LR from EK , maybe non stop could be possible. Or copycat SQ to aquire 359LR.

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