Isn't all of this data publicly available via SEC filings? If so, what part of WT's points are debatable?
In that same vein, wasn't DL's last foray to MAO less than successful due to poor timing (correct me if wrong)? I know there's an idea that the end run to these frequencies is to warehouse them, but in the interim, what will DL be doing differently to make it at least profitable?
Sidebar to Mikey & JFK Fleet Service-- We've "known" each other on these boards a long time, and I hope you know that I agree with damn near everything you two post. That said, I think we (as in labor) need to take posts like WT's (and E's, FWAAA's, etc.) two ways: 1. We (again, general sense) need to be able to understand all sides of the business in order to defend our stake in it, and 2. We need to use forums like this as a platform to better craft our responses to capital. I think labor is all too quick to default to what we're comfortable with, and frankly, that's part of why we've been getting destroyed in negotiations the last several rounds. After all, if we can't do it here, how will we ever be able to do it at the table?
Also, just for the record, I want AA to succeed too. In what seems to have become a trend here, I also happen to have family that work there.
well said, Kev. As usual you demonstrate your wisdom and your ability to walk pragmatically yet comfortably with both labor and mgmt without losing your own convictions.
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As for DL's previous attempt at MAO, I have shown before that it was a high yield, low load factor market with a high component of int'l to int'l connections at ATL that AA cannot duplicate at MIA.
DL is returning to the market with the same timings (according to what I have seen posted) as they used the last time.. a late afternoon dept. from ATL with a midnight turn at MAO and a return to ATL first thing in the a.m. DL retimed the flight to a double overnight pattern like the rest of deep south America flights but apparently decided it wasn't worth the increased aircraft resources it requires - one would end up sitting for the day at MAO vs allowing a 73G to be available for about 8 hours of flying in the peak daytime hours - more than enough for a roundtrip to the northeast or midwest. Given DL is pulling D95s, the 73G is a much less costly machine to operate for a similar sized aircraft - and DL's 73Gs have full IFE at every seat, something that WN's 73Gs won't have when they show up in ATL (to keep this route decision connected w/ the rest of what is going on in ATL).
Other than the G3 (gol) connections available both to DL and AA, I'm not sure why things will be different this time around... but given that there are more than enough frequencies remaining unused, it is possible that AA and DL will fight it out - TAM is also in the MIA-MAO market - and all will be bruised to the point they all back away. Not desired but it's happened before.
Given that the HND flights are being pulled back by both AA and DL, perhaps DL thought their "fighting fund" has a few more pennies to be used for "market development."
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And to reiterate, I have a brother who works for AA... I am fighting like crazy to get people here to recognize that AA has real problems that need to be addressed by real people with real solutions... blaming other people or denying reality won't get it done.
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Well, looks like all the gAAng has come out to weigh in on this topic… one which shouldn’t have gone beyond the first page since there are more than enough frequencies for AA and DL to do what they want to do in this route case and then have enough left over for one of them to still add a daily GIG flight and then some....
However, the following statement was made and required correction….
Delta's previous Atlanta-Manaus failed for the same reason all of their Atlanta-Brazil service has failed outside of Sao Paulo/Rio de Janeiro. The local market is tiny, and despite the size of the hub and the breadth of the connections, Delta couldn't overcome the fact that the vast majority of the market is going to Miami, Orlando, and New York - all three of which can be far better served with nonstops from Miami.
I clearly already established that only 25% of AA’s revenue from its Latin American network comes from MIA and I will refine that answer to say that only 22% of AA’s US-BRAZIL passengers and 20% of AA’s US-BRAZIL revenue comes from MIA.
For years, we have seen a few blindly loyal AA fans attempting to argue that nothing with regard to Brazil specifically and Latin America in general can work outside of MIA yet the facts overwhelming argue against that being true, including the fact that three other airlines (now two w/ CO/UA’s merger) have revenue greater than AA to Latin America – and that doesn’t even include US, NK, B6, AS and others that don’t even fly to S. America.
In fact, the US-Brazil market is LESS CONCENTRATED in S. Florida than most other Latin America markets. That is part of why there are more gateways to Brazil than for any other country in South America and they are all growing.
And then that erroneous statement was followed by
None of the above changes the reality that despite your spin and characteristic Delta P.R., recent history has shown that, generally speaking, Miami is necessary for just about all the secondary cities in South America - very few of which currently support nonstop flights to the U.S. outside of Miami. Delta has tried four non-Sao Paulo/Rio de Janeiro cities from Atlanta in the last few years. Three have failed, and one the jury is still out. I suspect this attempt at Manaus will be no different - with or without GOL.
The fundamental facts - whether you want to acknowledge and accept them or not - are still the same: Atlanta overflies the majority of the market for the U.S. (which is going to Miami and Orlando), and the vast majority of the remainder are markets that can just as easily be served via Miami as Atlanta. And, needless to say, that's before you get to the dramatically stronger and more established local presence AA has in every South American market - including every one in Brazil - compared with Delta, or any other U.S. airline.
Again, completely wrong. IN fact, AA carries only HALF of the traffic from NYC and MCO to Brazil. In fact, there are a number of other gateways that work quite effectively. The reality is that ATL is the #2 US airline gateway for US-Brazil traffic carrying half of the passengers that AA carries through MIA.
Again, the only advantage that AA has is MIA-Latin America traffic and in total that accounts for less than 10% of all US-Latin America traffic carried by US airlines.
There is more than enough room for other carriers to succed and to argue that MIA is necessary for either large or small - secondary or primary markets - is contradicted by DOT data.
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We can debate these facts all day long but what is clear is that a few AA supporters have tried for years to argue that AA owns Latin America, that no one else can make it in Latin America, and that without MIA, no one will succeed to Latin America.
The obvious answer is that these folks are just plain wrong and continuing to act as if AA has some sacred lease on part of the world that no one else can touch is just flat out wrong – and will be challenged as such EVERY TIME.
The vast majority of people who read this forum have no idea where traffic originates or flows and can’t validate that the data that those of us who post is correct… and thus these kinds of “turf” arguments aren’t terribly productive for a public forum.
What is highly significant and can be verified is that despite being the largest airline in Latin America, AA could not generate RASM growth on par with its peers DL and UA. Note that other US airlines serving Latin America do not publish quarterly RASM numbers by region and so cannot be included in this analysis – therefore it is of necessity an AA, DL, UA/CO comparison, also the only US airlines that fly to deep S. America.
http://finance.yahoo.com/news/AMR-Corporation-Reports-1Q-prnews-2771578228.html?x=0&.v=1
AMR
RASM(1)
(cents) Y-O-Y
Change ASMs(2)
(billions) Y-O-Y
Change
DOT Latin America 12.65 6.3 8.1 9.7
Net Income (Loss) $ (436)
Since columns don’t work well on forums, the data shows that AA’s Latin America RASM growth was 6.3% on 9.7% more capacity. AA’s Latin yield was up 4.7% (reported on a separate line)
AMR’s net loss for 1Q2011 was $436 million dollars.
http://finance.yahoo.com/news/Delta-Air-Lines-Announces-prnews-2151105544.html?x=0&.v=1
Delta
Passenger Revenue 1Q11 ($M) YOY Revenue Yield Capacity
Latin America 481 10% 16% 19% (6%)
Net Loss $ (318)
In words, DL’s Latin network had a 16% increase in RASM on 6% less capacity with a 19% increase in yield.
DL’s net loss for 1Q2011 was $318M.
http://finance.yahoo.com/news/United-Continental-Holdings-prnews-1042505455.html?x=0&.v=1
UA/CO
1Q 2011
Passenger
Revenue
(millions) Passenger
Revenue
vs. 1Q 2010 PRASM
vs. 1Q 2010 Yield
vs. 1Q 2010 ASM
vs.
1Q 2010
Latin America 654 20.9% 15.4% 19.9% 4.7%
Net Loss ($213)
UA/CO’s Latin network had RASM growth of 15.4% on 4.7% more capacity with a 19.9% increase in yield.
UA’s net loss for 1Q2011 was $213M.
What these public numbers clearly state is that AA’s RASM growth was the weakest in Latin America driven by capacity additions that clearly came only by limiting revenue growth – including from fare increases. AA’s yield growth was one-fourth of the yield growth at DL, which removed some capacity, and UA/CO which added about half the amount of capacity (on a % basis) as AA.
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Once we get past the notion that some people have that AA by virtue of being the largest airline in Latin America will succeed where others will fail, we can have substantive discussions about the region.
Once it is accepted that AA is adding capacity to Latin America yet failing to generate industry comparable RASM growth, then we can discuss whatever market changes might occur.
Once it can be accepted that all the evidence shows that AA from MIA accounts for about 10% of all US carrier Latin America traffic and that other carriers compete quite effectively for the other 90%, then the heat that has been flying on this discussion can be extinguished.
When it is accepted that AA is making short term decisions to keep its industry high CASM from increasing further by adding capacity which is bringing down not only the financial performance of AA but also the rest of the industry, then we can talk about winning strategies in Latin America.
For now, it is simply preposterous to argue that other carriers are failing at their attempts to manage their Latin networks including adding flights as they see opportunities.
When AA shows industry leading RASM growth in the regions in which it is adding capacity, including Latin America, you can get back with me about how other carriers should not be adding capacity but it is ok for AA to do so. When AA"s losses are no more than what other carriers of similar size are reporting, then it might be time to argue whether AA is doing things better than other carriers.
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Until then, I suggest those who want to argue focus 100% of their attention on fixing AA.
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By all means, those who live in glAAss houses should definitely not throw stones.
