American Airlines, the world's largest carrier, is pinning its hopes for growth in the New York market to a $1.3 billion terminal, unveiled on Wednesday, that could net 50 percent more passengers at John F. Kennedy International Airport.
The nearly completed terminal of American, a unit of AMR Corp, will compete more aggressively with Continental Airlines Inc, which has a hub in Newark, New Jersey, and Delta Air Lines Inc, the only other legacy carrier with a hub at JFK.
American's investment at the airport represents a major attempt to increase its slice of the New York market.
This is a very important market for American, AMR Chief Executive Gerard Arpey said at the terminal, which features a mural of landmark buildings from around the world.
We've got lots of opportunity for growth. I think we're just getting started.
JFK, the seventh busiest U.S. airport, saw 43.8 million passengers arrive and depart in 2006, according to data provided by the Air Transport Association.
It's probably the deepest pool of revenue in the U.S. market overall, considering the international market and the domestic market from New York, said airline consultant Robert Mann. It's a hotly competitive market.
American's new terminal has 36 gates, 19 of which are capable of handling international arrivals. American currently serves about 8.5 million customers a year at JFK, but its terminal is capable of handling about 13 million.
American flies from JFK to 38 destinations, 23 of them international, with 92 flights a day.
The carrier is promoting its new terminal by offering New York travelers departing New York's JFK, LaGuardia or Westchester County airports a 10 percent discount on tickets to any AMR destination.
It also is offering discounts of up to 25 percent when New York-area travelers download American's DealFinder software.
Mann said the new terminal, plans for which began in the late 1990s, poses the biggest threat to Delta at JFK. He said that, in the next few years, Delta will have to update its own facility just as American's terminal hits its stride.
In the sense of timing, American clearly stole the march on Delta, Mann said.
AMR shares were up 1.63 percent at $23.74 on the New York Stock Exchange.