American Airlines CEO says money-losing Asia routes are an investment in future

American Airlines CEO Doug Parker says the carrier’s new routes to Asia aren’t gambles — they are investments in the airline’s future.

Speaking after ceremonies marking the launch of flights to Hong Kong and Shanghai, China, Parker acknowledged that American's Asian routes have historically had a tough time making money. But Asia is a market that American has to be in, he said.

“It’s an extremely important part of the globe,” Parker said. “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.”

He made his comments after airline, airport and government officials offered speeches and ribbon cuttings to celebrate the new flights that started Wednesday between Dallas/Fort Worth International Airport and the two Asian cities.

With Wednesday’s launch, American now has 10 daily flights between the U.S. and Asia, with five of them operating out of D/FW — two to Tokyo and one each to Hong Kong, Shanghai and Seoul, South Korea. The carrier also has daily service to Tokyo and Shanghai from Chicago and Los Angeles and a daily flight between Beijing and Chicago.

Even with the new flights, American’s Asia service lags far behind that of its two major U.S. competitors, United Airlines Inc. and Delta Air Lines Inc. Though that part of American’s network loses money, Parker said, the airline remains committed to Asia.

“Our current routes have not been, over time, profitable as of yet. We hope they will be,” Parker said.

“We’ve seen nice improvement, and indeed our Asia revenue per ASM [available seat mile flown] 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,” he said.

Officials launched the new flights with great enthusiasm and optimism as they stressed the importance of connecting two thriving economic regions, as well as linking the two Asian cities with American’s largest hub.

“Because our mission at the airport is to connect the world, today marks one of the biggest milestones in the 40-year history of D/FW Airport and our region as we begin the new era of service connecting Dallas/Fort Worth and Shanghai,” airport chief executive Sean Donohue said at ceremonies preceding the Shanghai flight.

“The direct route to Shanghai will open new avenues and tourism for our region. Conversely, we expect our Asian visitors to quickly discover that the D/FW Airport is the preferred point of entry for visitors in the United States,” he said.

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