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The Airbus A321neo is currently the most delivered 180+ seat single-aisle airliner. The aircraft also has a useful range, so we see airlines in Europe and Iceland extensively use it to serve the United States. JetBlue is using this aircraft from the US in the same way as in Europe. In Canada, Air Transat does the same.
This puts the A321neo in a similar role to that played by the 787; it is a route opener. The popularity of the 787 speaks for itself, and there is no more debate about whether the future will be A380- or 787-sized aircraft. The A321XLR will be a formidable route opener.
The North Atlantic market between North America and Europe saw the first use of the 757 as a single-aisle aircraft capable of playing the role of a route developer. This is now the role played by the A321neo. The A321neo is the focus of this analysis, but any aircraft with the same characteristics could play the same role.
Fracturing routes is an economic boom for “secondary cities.” The truth is that flying into and from the US is a far better experience when avoiding the vast ports of entry. Such flights are also likely to help reduce emissions.
To explain our thinking, we use data from the I-92, which is current through October 2023. This makes it the most current international travel dataset available for the US market.
The following chart illustrates this. The red arrow highlights what we would regard as the primary US ports of entry. Tier one ports if you like. The green arrow would be the secondary or Tier two.
Focusing on the top 25 US airports simplifies matters. The following charts show US ports of entry used by US citizens departing the country and non-US citizens entering the US.
Notice these ports are listed differently for these two segments. This is a fascinating insight because it might clue us into which of these airports would see an A321neo deployed by a non-US airline. Similarly, we could see which airport might see a US-based A321neo use this as a departure point.
Here are the same charts for the US-EU market to demonstrate this thinking. Notice the airports are still sorted differently, but perhaps not as widely spread. Iceland’s now defunct WOW flew an A321neo from Reykjavik to Los Angeles. But that is unlikely to be a standard operation. These days, Icelandair is using MAXs to serve markets as far away as Seattle. Being halfway between the EU and North America allows for fleet flexibility.
We expect to see more A321neos operating from Europe to secondary cities on the East Coast, as we do now. Indeed, given the range of an A321neo, the reach could go considerably beyond the coast. Avoiding US hubs is a desirable option for travelers from both ends.
And this is where we believe US airports might want to focus. Any EU-based airline with A321neos is a target. Let’s look at an example of Orlando.
The following map shows a 4,000NM range from Orlando. The airport and tourism authorities in Orlando (and Florida in general) could pitch the destination to airlines as far south as Uruguay. It also includes several Northwestern African airlines. Crucially, several EU airlines also fall into the “catchment area.”
Of course, the approach should not be exclusively looking at inbound opportunities. US airlines with A321neos could perform the same flights.
The following table lists where 740 A321neos have been delivered since January 2021.
We have highlighted some of the obvious target airlines.
Others exist, like United Airlines, British Airways, and Aer Lingus. TAP Portugal, SAS, and Jet2.
The bottom line is that a new aircraft like the A321neo offers destinations like Orlando a significant opportunity.
Airlines must sell approximately 156 seats to break even, a low bar. They do not need to deploy a larger twin-aisle aircraft like an A330, 767, or 787, where breakeven is likely 200 seats or more.
Of course, once the market proves itself and builds momentum, these larger aircraft can be deployed – even seasonally as needed.
Across the US, some airports should be watching airline fleets closely for opportunities. The I-92 dataset is a valuable tool for tracking traffic about a month behind. This is faster than anything the DoT publishes.
The combination of reasonably fresh traffic data and fleet deliveries forms a crucial source of insight into opportunities.
