“It’s all about the returns you get on the airplane,” Raja said. “If you go and fly one Pacific route, on balance, that’s two airplanes. Are those two airplanes better in the Pacific or are they better flying in the Atlantic for six months of the year and flying to Hawaii for six months of the year?”
American prefers to fly the highest margin routes, rather than the longest, he said.
“In many of these far-flung destinations, you’ve got to tie up an asset or multiple assets for a long time,” he said. “But very often the total [air] market size is smaller than Lexington, Kentucky. It’s just a really risky proposition. It is not something we’re averse to but, in general, when we go into it, we like to have a partner on the other end or some knowledge of the market that helps go and de-risk it.”