Doug Parker of American Airlines: Our Asia routes are investments
American Airlines chairman and CEO Doug Parker talked briefly to reporters after his airline launched its inaugural flights Wednesday from Dallas/Fort Worth International Airport to Shanghai and Hong Kong.
Here’s a transcript of our conversation:
Would you start DFW-Beijing flights if you had acceptable slots – takeoff and landing times – in Beijing?
Doug Parker: I’m not certain of the answer to that. We don’t have them, so it’s not something I’d know. I know we’ve asked for slots there. We haven’t been given slots that work. We’d obviously have to reallocate flying somewhere. Anyway, it’s a situation where we don’t have the option of flying now because we don’t have the slots. But we certainly would like to fly DFW-Beijing some time.
Do you think the DFW flights to Shanghai and Hong Kong are big gambles, medium gambles or hardly gambles at all.
Parker: I think they’re investments. It’s an extremely important part of the globe. We’re a global carrier. It’s an area that’s strategically important to us. So we view them as investments for the long term.
Are other China cities under consideration from anywhere in the American Airlines system over the next 12 months?
Parker: Not that I know of. The team may be looking at some, but not that I know.
How are American’s other Asia routes performing?
Parker: Our current routes have not been, over time, profitable as of yet. We hope they will be over time. They are investments. We’ve seen nice improvement, and indeed our Asia revenue per ASM [available seat mile] over the past year has grown at a rate in excess of the industry, so we feel very good about the future prospects. But these, like a lot of routes at airlines, are investments and haven’t yet been profitable.
How do you think the Shanghai and Hong Kong routes will do?
Parker: We’re excited. We hope the routes will do very well. We’re off to a good start. We’re committed to the markets and intend to be flying them forever.
The World Bank today cut its forecasts for global GDP growth, and Lufthansa also said it’s cutting its profit outlook. Are you seeing any evidence of a slowdown here?
Parker: We’ve seen no slowdown of demand in the areas we fly, and indeed demand for our product is very high and we’re really happy with the revenue environment. There certainly are pockets around the globe that are in different shape than others globally. But in general, around the world we’re seeing really strong demand for American Airlines’ product.