The Mystery Of American’s Los Angeles To Cabo Route…

I’m writing this post not because I’m trying to be an armchair CEO and tell the airline they’re doing something wrong, but rather because I’m genuinely curious if anyone has an explanation.

If there’s one thing that US airlines have gotten good at, it’s filling just about every seat on a plane. They’ve gotten so good at it that I get genuinely giddy when I get an empty middle seat in economy nowadays, as it’s quite rare (well, except between Los Angeles and Toronto).

Airlines are also great at optimizing capacity to meet projected demand, which can be done by adjusting the type of plane that’s scheduled to operate a route, or changing up the frequencies. Of course there are other motivations with which airlines operate routes:

  • In certain business markets it can make sense for an airline to operate a route even if it individually loses money, as it’s part of the bigger picture objective of operating a route network that will lure business travelers
  • In some markets cargo can be lucrative, so even though the cabin might not be full, the airline is making a killing off of what’s in the belly

This brings me to what must be American’s strangest narrowbody routes within North America. I recently helped Ford book a ticket from Los Angeles to Cabo, and my jaw dropped when I saw the seatmap only a few days out — there were only a couple of dozen seats taken. I assumed that had to be a one-off, or else American would have adjusted capacity.

American operates in the market twice daily with Boeing 737s, and since then, I’ve looked at the flight every single day. That flight wasn’t an exception, but rather was the norm. I’ve looked at the seatmaps up until departure, and best I can tell, not a single day did business class go out full, even after accommodating non-revs.

As far as economy goes, just how empty is it? Let’s take a look at the two flights today from Cabo to Los Angeles. The flight where the door is about to close has 10 seats taken in economy.

By comparison the flight this evening is packed to the gills, and has 23 seats taken.

Like I said, I get that sometimes on a one-off basis flights will be empty, and I bet that as we progress into mid-March, this flight will be packed, as this is no doubt a popular spring break flight.

However, I find it truly puzzling that American has operated two daily flights pre-spring break, given that the flights seem to be really empty. It’s not unusual for airlines to adjust capacity even by the week, so you’d think that for the past several weeks they wouldn’t have operated twice daily flights that are mostly empty.

Anyone have any insights here? Is this a huge cargo route (it seems unlikely, but…)? Does American not care about taking a loss on the route for a few weeks prior to spring break? Why not adjust capacity down from two flights to one flight per day?

Comments

  1. @ TJ — That’s easy, because I’m a nerd when it comes to this kind of stuff, in case you haven’t noticed. 😉

  2. As a condition to approve and operate the route perhaps the Mexican government required that AA(or any airline) supply a certain number of seats per day/week?

  3. I agree that this route is particularly odd, especially since it’s a pure leisure route. RDU-LHR can go out half empty in coach but they’re going to profit on the high end business travelers in paid F. This flight has no strategy other than bringing tourists to SJD

  4. How do you know the profit and loss on a route ? Otherwise they would not operate with the frequency they do
    You need to check forecasts and the load factors over a long period
    Checking a few seat maps doesn’t make someone a revenue manager

  5. @ Icarus — I don’t know the profit and loss of a route, and I’m not claiming to be in revenue management. That’s why I’m asking the question!

  6. Couple of factors. 1) Open skiies between US and Mexico has resulted in more capacity this winter. There have been a lot of $200-250 round trip sales to Mexico lately. 2). Violence in and around Cabo San Lucas has impacted tourist visits

  7. So my first thoughts were:
    -Return might have a higher load factor (which was incorrect)
    -Plane flies a V route (LAX-SJD-DFW) and the DFW flight was full, however AA turns each plane back to LAX

    So my best guess is that:
    -AA has needs to use it’s slots at LAX (as slots are use it or loose it). AA has determined that it is better to run a 2hr empty flight to keep a slot vs risking losing the slot to UA or DL that could use the slot to compete with AA on a profitable LAX-Asia route.

  8. perhaps those 23 people are part of more expensive connecting flights out of LAX. Or maybe those 737s have nothing better to do than sit at LAX, so AA decided to utilize them. Just like those pointless JFK-BOS flights on the A321T.

  9. Maybe someone important has a house there?

    United was running a very unprofitable flight to NC to buy off someone at the NY Port Authority.

  10. 1) Seat maps tell you nothing about revenue or even the number of seats actually sold. Have you looked at Expert Flyer or some other tool to see what’s actually for sale on the flight?

    2) Do you know the fares that the people on the flight paid?

    3) Possibility of large group bookings where people have not assigned seats.

  11. @ Bob — I’m looking at the seatmaps within 30 minutes of departure, where it absolutely does reflect how many people are actually booked on the flight, since everyone would have been checked in and assigned a seat (especially as there are non-premium seats available). I of course don’t know how much people paid, though it doesn’t seem to be much, given that the walk-up fare LAX-SJD is $366 roundtrip including all taxes and fees.

  12. I just flew this route on SW, and it was absolutely empty both LAX-SJD and SJD-LAX (and both were weekend flights). Furthermore, I purchased those tickets just two days before departure, and only paid $240 roundtrip! I was wondering the exact same thing as you–so peculiar. Sorry for not contributing something more helpful, but thanks for posting this article Lucky! Very interesting indeed.

  13. American’s narrowbody planes do not carry cargo.
    Accroding to DOT government data, the route saw a 70% average load factor in 2017. It went from a low of 49% in September to a high of 89 percent full in July. So it varies by month. Some months are busier than others. The market has seen several additional airlines start on it in the last couple of years – maybe the market is too saturated. Regardless, it’s not always empty, but some times are busier than others.

  14. It’s empty because of the violence in the area. As to why American wouldn’t just cut bait, I imagine it has to do with expecting the market to eventually recover and not wanting to lose its place.

  15. “I get genuinely giddy when I get an empty middle seat in economy nowadays…..”

    Seriously???? How many times do you fly economy on AA, or any other airline as far as that goes??

  16. JJJ – I didnt place a value judgment on the load factor one way or another. I just said what it was. Load factor may or may not be indicative of strength of the service, just depends on average fare. I would know this as I have worked in airline network profitablity, so am aware of the pitfalls of load factor. Either way, it’s not always empty, not always full either. Why AA chooses to keep it is entirely up to them and not really relevant to us.

  17. Flights between the US and Mexico require sign offs with operators and the mexican government which takes several months. By the time AA realized they were going to run empty here it was likely too late to swap it to an RJ while still getting approval from the mexican government.

    If AA is that empty, then everyone else will most likely be similarly as empty and it ends up being a game of chicken waiting for someone else to pull capacity which will improve profitability for everyone else still flying

  18. I think lucky is like that guy who pretends he has a lot of money to impress the girl.

    The girl wears padding under her bra to impress the guy.

    I think when lucky is not reviewing a product he flies economy.

  19. Not sure if this applies – but i have often found seat maps to be misleading (in terms of determining load factor) since the rise of premium economy. often, they assign you a seat just a few minutes before boarding begins. So, the seat map can look open up until that point, even though there are dozens more ticketed passengers, just without seating assignments.

  20. Debit – not everyone can be a high roller like you and fly on top of the plane. You studly poophead you!

  21. @Debit

    To impress Lucky, you would need a guy and stuff the padding in a different place…

  22. Flew LAX-SJD, then back via PHX over Christmas last year on AA. Easy upgrade to clear for two on the way down. Empty economy plus (two rows to myself) on the way back. Airport at SJD was a different story – completely packed (over 2 hrs in line to clear customs). Maybe Southwest has siphoned some of this traffic away from AA? Many carriers, including AS, AA, DL, UA, WN, and Interjet fly this route. Also, now WN and AS fly from SNA as well. So while demand is high, maybe everyone has too much capacity. As it is mostly a one-way leisure route (not a ton of traffic originating at SJD), fares have to stay low.

  23. “..and since then, I’ve looked at the flight every single day..”

    It must be magic to be in your house/hotel room/bed…The excitement never stops.

  24. @ Lucky:

    ” my jaw dropped when I saw the seatmap only a few days out ” “since then I’ve looked at the flight every single day”

    How many days have you looked? 2? 10? 15? 20? What’s a significant sample to have confidence you know the booking levels?

    How many people on the flight are O/D? The fare LAX-SJD might be not relevant if a lot of people are connecting (I don’t know if these flights are timed well for connections or not).

    Is AA receiving a subsidy or guaranteed payment from the city/state of Las Cabos or from any of the resorts there? (No clue if this exists in this market – but it is certainly a thing that happens in many markets)

    What are the routings of the planes? Does AA have a “better” use for them or not? Does it make more sense to keep them on the ground in LAX, fly them on some other service, or fly them to Los Cabos?

    Etc…etc…etc…

    Airline revenue management is far, far more complex than snapshot bookings of any given flight. Seat maps tell you nothing meaningful about the revenue/profitability/contribution of a single flight.

  25. i heard its not safe do visit cabo right now. i was actually planning to go during spring break, but after reading all the review on TripAdvisor i changed my mind.

  26. I worked for the airlines for many years… my office was right next to revenue enhancement. Now retired, I now live 45 min north of Cabo, and also have a home in Scottsdale, funny thing trying to find saver awards are sometimes very difficult for business and even coach, whether on nonstop flights SJD-PHX or connecting flights SJD-LAX-PHX and vice versa. I rarely ever see a coach saver award via LAX at all, usually that segment will be on Alaska (more miles), even though coach has lots of available seats. Same thing in business too, AA rarely ever offers saver rewards on that route and the seat chart shows it wide open!? Go figure and even close-in they do not release any mile saver seats. I typically just ignore that routing and stick to the nonstops anyway since it is such a bargain to book SJD-PHX using my BA miles.

  27. One influencing factor, however minor: No one of the younger prime demographic age for traveling to Cabo has any clue as to who The (70 year old) Red Rocker is and the Cabo Wabo Cantina is where “your grandma used to party”.

  28. We’ve flown AA numerous times (including last March and Oct) between LAX and Cabo and the planes have been full. I would say we flown AA close to every year for over 20 years between LAX and Cabo and have never had anything but full flights. The seat maps you reference are not reflecting true flight capacity.

  29. I am in Cabo now after attending FTU in Seattle and then a day in LA. My Alaska flight on Tues was about 25%full(except for the family with 3 unruly kids under5-Mom was napping most of the flight). My husband flew MSP on SunCountry for $200 and there were 18 people on board. A SC employee told him there were 52 coming back to MSP. The media has over reacted on the safety in Cabo. We have come here twice a year for 2 weeks for 18 years and love these hard working people.

  30. Mexico is really, really dangerous right now. I was at the J.W. Marriott in Los Cabos, which is BEAUTIFUL. Literally one day before I arrived there was a murder on the beach in front of the hotel.

  31. Southwest flies to Cabo from california too. Fridays down and Sundays back are full. Other days seem more like 1/3 full. Fares are absurdly low considering the hefty Mexican fees.

    I don’t understand it either, other than maybe an old fashioned war for market share.

  32. @pablo: yes the JW is incredible if you are not a party person. It gives you the feeling of space, even a whole pool to yourself, even if the hotel is reasonably full. You don’t need to upgrade to griffin club. Eat at the marina hotel at the nearby yacht harbor.

  33. We went to Cabo in January on Southwest and had 12 people on the outbound flight and 22 on the return flight. We thought it was just Southwest because they are new in the market (LAX-SJD), so it’s a surprise to me to learn that American also has fairly empty planes. I’m not quite sure about why American is so empty, but Southwest said they believe it’s just because they are new in the market when I asked the FA.

  34. Ben, I’ve personally flown a flight with 30 pax on a 737… week after week…. for 3 Consecutive years. It was a repo flight, the airline had two dead end near each other time georpgrauy, and time (including the overnight parking).

    While the repo with a loss is one thing, the real mover to me is what you offer for sale.

    In supply, lanes matter – how wide (aircraft class) and frequent matter. Moving a 319 and 320 around, no one notices- but regional to mainline they do party because of subs and partly because of unions (all thanks to unions, the subs wouldn’t exist if they didn’t).

    Anyhow- supply lanes exist outside of demand lanes, and reward users should rejoice, use, and fill these birds!

  35. The bodies hanging from the overpass on the tourist route is enough to keep me away from Cabo now…there are other beach locations in safer places.

    Four bodies were found in the municipality of Los Cabos, the other two near the state capital of La Paz. The bodies were found suspended from three bridges located near the two main international airports and the highways leading to the popular beach resort of Cabo San Lucas.

    https://www.cnn.com/2017/12/21/americas/mexico-bodies-bridge/index.html

  36. The best empty flight I’ve been on was in the late 1990s, DL ATL-MIA-FLL We were headed further north from FLL so we took that flight, it emptied at MIA, the FAs were surprised we stayed on board. I think there were 4 of us on the plane for the up and down flight to FLL…but then it might have been a 727 we were one, can’t remember the plane type.

  37. Been on this route in AA…on a return from SJD, was just me and my wife and the crew. Crew just said sit where ever you like. I was thinking to myself, how much are they losing here!?

  38. USA is really really dangerous right now.

    You don’t know when you have never met will shoot you.

  39. ” I’m looking at the seatmaps within 30 minutes of departure, where it absolutely does reflect how many people are actually booked on the flight, since everyone would have been checked in and assigned a seat”

    Not really – Maybe that doesn’t apply to this route,but there’s a thing called “ID tickets” aka standby tickets for other or same airline workers (+ if they bring a friend with them).They pay mostly only taxes and do not have a seat assigned until middle of the boarding usually(sometimes even 5min prior departure). I was a standby “+ one” on a AA flight LON-CLT 2 years ago and we got our seats assigned 3 min before departure. Luckily it took only 30 seconds to board the plane 🙂

  40. So after getting called out, Lucky now looks at a minuscule sample size and asks a question that may have been answered by looking at a larger sample size.

  41. This security situation in Cabo comments are naive and ill-informed. First, Cabo is safer than most major metropolitan cities. There were some high profiles attacks, and they were “high profile” only because NOTHING usually happens there. Second, Cabo is in the high season right now, but this is a bit of a shoulder between holidays and spring breaks. The rates are high, but there is no compelling reason to be there. No three day weekend or spring break. I tried to go last weekend and couldn’t find a room at a 5 star hotel for under $2k (only suites were available). Third, there is a lot of capacity from LA, but LA people aren’t traveling down there as much this time of year. It’s the rest of the country freezing their asses off who are grabbing the rooms, driving the prices up. We (LA people) aren’t seeing the “deals” we normally do that compell us to pop down. If you are afraid of the security situation in Cabo, go back down into your fallout shelter, and certainly don’t come to LA!!

  42. The Griffin Club inside the JW Narriott serves the equivalent of 3 free meals/day; free cocktails & some light entertainment to members; & free spa acess, making it completely unnecessary to venture away from its stunning private pool area & lounge. An archirectural marvel – better than Las Ventanas, Esperanza, Pedragal, & One & Only Palmilla, all of which I’ve also stayed. I felt safe & well-cared for within its confines, more importantly. As for loads, AA’s employee system is a much better gauge than seatmaps.

  43. On February 9, I took a flight from LAX to LHR on United and had the same experience. The whole plane was only 20% full. Before the flight, UA kept sending me the offer to upgrade with a very low cost, but I didn’t. I was able to take a whole row of economy seat to sleep. It was great, but as a company profit, this probably doesn’t make sense. I guess, they can’t change the plane schedule often, so that airport doesn’t get confused.

  44. @EncinoMan —>. “Alaska pretty much has that route sewn up.”

    According to Google flights, AS has two NS flights a day LAX-SJD. So, too, does DL (AM), AA, and WN. UA has another one. Not sure how having two of nine daily non-stops qualifies has having the traffic “sewn up.” What am I missing?

  45. DING DING DING! FREE UPGRADES FOR LUCKY AND BOB!

    The secret words were ‘revenue management’ — great work, you two!

    Runner up is Icarus, who had ‘revenue manager’ — free pretzels for you.

  46. I’ve flown the LAX-SJD route ~20 times in the past 10 years and flights have always been completely full. I’m sure the recent news of crime in the area are scaring some tourists away but I doubt the seatmap is an accurate indication of actual load.

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