American Airlines Betting on Cancun
Photo courtesy of Thinkstock
American Airlines is making a big bet on Cancun. While all eyes are on Cuba this year, the legacy carrier has been quietly adding routes to the popular destination on Mexico’s Caribbean coastline. The new services start this weekend, just in time for Spring Break vacations.
Connecting Cancun with new markets
The direct flights are from four airports that have growing markets but that are certainly not considered international air hubs. The new flights will take off each Saturday from Raleigh-Durham International Airport, Kansas City International Airport, Nashville International Airport and Pittsburgh International Airport.
With these additions, American now has nonstop service to Cancun from 12 different U.S. cities. The demand is certainly there. Five million tourists visited the beach town last year and hotels enjoyed an 82 percent occupancy rate. American is hoping that this popularity will create demand for direct flights even in smaller markets.
Struggling in a market that it used to dominate
Because, in large part, of its base in Miami, American has always been a major player in the Caribbean and Latin America. It appears AA hopes to continue this dominance; at least that is how it seems given the Cancun flights and the fact that it has applied for more of the allotted Cuban slots than any other U.S.-based airline.
However, two major low-cost carriers are also expanding in the Caribbean, and their success has meant a smaller market share for American. JetBlue was the first of this LCC pair to push into both Latin America and the Caribbean. Southwest also has its own expansion plans in the region as it looks to increase its international reach. American has seen one of the most important revenue figures fall in the region in the early part of 2016: its revenue passenger miles numbers were down more than three percent in the Caribbean and Latin American markets in January.
More challenges on the horizon
JetBlue recently doubled down on its Latin American bets by launching service to Quito, Ecuador from Fort Lauderdale. It is also starting service to Barbados from Fort Lauderdale on April 28 as it waits for word on its application for slots in Cuba.
Southwest, meanwhile, has made a major advertising push to highlight its routes in the Caribbean and Latin America.
READ MORE: Another Side of Cancun
A safe bet to hopefully create some momentum in the region
American’s service to Cancun is a sure bet because of the destination’s popularity with U.S. travelers and the fact that these are once-weekly flights, not daily services. If the flights prove popular, however, perhaps more smaller and mid-sized cities will get their own direct flights to Cancun or some other destinations in the region.
American is certainly not out of the game in the region yet. Its huge share of the Miami market will always make it an influential airline in the region, and it has been adding flights to both the Caribbean and Latin America from its newer hub at Charlotte Douglas. AA may have to adjust its fares and perhaps even up its marketing game to compete with ambitious JetBlue and Southwest on some routes, but it could once again be a dominant force in the region if it is able to find routes like the ones to Cancun that have high demand.
More by Josh Lew
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