Q3 results are out for the big three U.S. airlines, and they were largely as expected. Delta and United made money while American lost a smidge.

This week, we consider how the ticket revenues have changed over time by looking at each of the four major regions into which each airline breaks revenue: Domestic, Atlantic. Latin America, and Pacific.

Using full year 2018 as a base case (for no better reason than we’re sick of the 2019 comparison), overall ticket revenues have grown. Even the Pacific region has experienced 8% revenue growth since 2018.

By including ticket revenues from all three airlines, we can get a clear picture of demand in each market. What does that picture say? Transatlantic travel is where it’s at. Domestic is strong, though plateauing. Latin America is showing warning signs, and the transpacific is disappointingly flat.

Considering where each airline deploys its resources (and subsequently earns its ticket revenues), you start to see a more macro picture appearing. United is most heavily focused on the transatlantic market, where the highest amount of growth has been. Conversely, American is disproportionately exposed to Latin America compared to the other two, as well as the plateauing domestic market.

Which leaves the Pacific. The region isn’t doing great, and it represents 10% of United’s ticket revenues. But when we look at the detail from the region, a different picture emerges (this time comparing with Q3 2019 directly to avoid seasonality variations).

United’s revenue growth in the Pacific is up over 21% while American is down almost 19%. Delta is also down in the region by just over 4%, meaning the stagnant Pacific market has seen the most shifts. Growth has been harvested by all airlines in all regions, except for the Pacific where United has grown directly at the expense of Delta, and primarily American.

A few conclusions can be drawn from this data: first, we can see the impact of American’s lost widebodies and longer-haul 757s. The revenue impact is largely from the Pacific. This makes a lot of sense (gasp, rational thinking at airlines!?!?). American tossed the 757, 767, and A330 from its widebody fleets during COVID, the older and cheapest aircraft to own (but not necessarily to fly). While Delta and United held on to their old widebodies, they could wait out the Pacific lull, allowing the aircraft to fly when they were profitable, which coincided with the reopening of transpacific markets and the surge in transatlantic travel.

Second: Markets where American is strongest are not performing well right now. Basically, anything except transatlantic flying. Latin America is still challenged and not looking to improve anytime soon, given the geopolitical tensions emanating from the United States. But the domestic market growth has been waning across all airlines. American has 70% of its ticket revenue exposure within the 50 U.S. States (and Canada, in a weird convention where the country is considered domestic by revenue metrics simply because it can’t be described as Atlantic or Latin, and numbers are too small to break out separately. Sorry, Canada).

Research published this week

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