AA must either beat JetBlue or die

[Upsgnr]

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On 7/13/2003 8:53:19 AM AAplanesareold wrote:

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On 7/13/2003 8:29:53 AM Hopeful wrote:


And the reason that AA is adding seats is because the load factor is pretty high. At JFK you can''t get a seat on an aircraft bound for ANY destination.


AA flies mostly widebodies to SJU and THEY ARE ALL FULL! Since JetBlue has 5 flights a day to SJU and they are kicking AA''s ass, then AA should not be filling any of its aircraft. Simple arithmetic.


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That''s not accurate. SJU does not get mostly widebodies. AA flies A300s, 757s and 737-800s into SJU.


AA has been cutting back on seats and planes into SJU for some time now.


Another poster said JetBlue will be flying LGB-FLL-SJU soon twice a day. You better get real comfortable waiting for that one. JetBlue isn''t flying into FLL now since they know they can''t get a decent load factor on the A320s (without giving the seats away). Even running it through to LGB is not going to work for them, since there is just not enough West Coast to SJU traffic. When TWA had a nonstop LAX-SJU flight, the loads were horrible. The only reason TWA did it, was because the government of Puerto Rico subsidized the route.


JetBlue doesn''t want/need government subsidies for their routes.


Unless Neeleman has changed his mind on that (which you never know), JetBlue will not do FLL-SJU anytime soon. Maybe with the RJs in 2006 or something.


Look for BOS-SJU twice a day when JetBlue gets into BOS. Maybe even MCO-SJU next year, just to mess with Song which started MCO-SJU flights recently.


Getting back to AA, they do need to figure out a way to stop JetBlue. I have friends at AA in SJU sales and in DFW sales. They tell me the same thing:


AA is very worried about losing market share to JETBLUE!!!

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AA should be worried! They have zero money in the bank to wage a predatory price war against Jet Blue like they did against Legend.

It''s highly amusing to see Jet Blue add more room to economy when AA is taking room away (and yes there are other reasons for their doing so other than competing against AA).

AA won''t be able to outprice Jet Blue, so they had better figure out another way to take compete.

 

[AAmech]

Getting back to the subject at hand I think people are blowing this all out of proportion. Its a lot a fun to boil it down to a JB vs AA but its really AA having to compete against ALL Low Cost Carriers. AA does not have to dominate the JFK-LGB route to succede. They just need to grab their fair share and do it at a profit. So what if they''re cannablizing their LAX passengers. The world is changing and customers want low fares. AA MUST provide them. One of AA''s biggest problem is getting the message out that they CAN find low fares on AA! I don''t where this "AA has burned up its goodwill" comes from. AA''s customer sat surveys are doing very well, better than even JB though only by a hair. The couple times I''ve looked at how these flights to LGB are doing they were bursting at the seams LF wise so AA is doing something right!

 

[AAmech]

How long are you going to keep blaming AA for Legends demise? Legend was a bad idea that was poorly managed from its inception. Over half its routes were flown with NO competiton yet they could barely hit a 50% LF on a 56 seat aircraft. And thats with them practically giving first class seats away. $299.00 fares RT DAL-LAX!!! And this is during the BOOM years! Legend falls into a catagory with Vanguard, AirSouth, Reno, and SunJet. Bad ideas started by people with more money than sense!

 

[Upsgnr]

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On 7/13/2003 356 PM AAmech wrote:


How long are you going to keep blaming AA for Legends demise?  Legend was a bad idea that was poorly managed from its inception.  Over half its routes were flown with NO competiton yet they could barely hit a 50% LF on a 56 seat aircraft.  And thats with them practically giving first class seats away.  $299.00 fares RT DAL-LAX!!!  And this is during the BOOM years!   Legend falls into a catagory with Vanguard, AirSouth, Reno, and SunJet.  Bad ideas started by people with more money than sense!

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It''s true that Legend had a lot of other problems than just AA''s predatory pricing(against which it was too thinly captalized). Interesting to note that as soon as Legend was history AA discontinued its all premium seating from Dallas to the Legend routes.

The AA dinosaur management can''t understand anything other than predatory pricing against its rivals( probably because of walnut-sized brains). Unfortunately this won''t work against Jet Blue. AA loses lots of money on every $299.00 roundtrip JFK-LGB fare while Jet Blue makes money, AND AA is now too thinly capitalized to keep this up fo long.

How about trying something different, like marketing the heck out of "more-room-in-coach" (instead of removing seats), frequent flyer perks, customer service standards, free internet on the plane,assigned seats for all, etc. AA is going to lose trying to go head-to-head based on price.

 

[gogogadget]

While it is true that jetblue is severely influencing the pricing structure on many routes, JB is not just competeing with AA. Do not forget DAL and the new song, UAL and whatever almagamation they come up with, CAL is also in the NY area and are very fierce competitors along with the remaining carriers that seem to somhow match whatever JB is doing. The problem that JB has to overcome is not overexpaning too fast as the other carriers transform their NONoverlapping segments. The problem with many failed carriers is that they could not adapt fast enough while at the same time overexpaning faster than the capacity they actually carried.

Jetblue is already changing and adapting to a marketplace they are not 100% compatible with. Think about it, SWA has a niche nobody can touch but they are totally focused on that one niche. Jblue is buying Embraers which are very expensive to operate and will increase JB costs. NEW types and more aircraft in the system. Airbus does make a the 318. Why are they getting the emb? Mostlikely because they can not expand fast enough, hince the first mistake of many. Never lose focus. Pretty soon JB will be just like AA and all the rest, sitting there hoping to be bought up with the Hub and spoke failure like everyone else. the whole country can not feed JFK on Jblue alone.

No defense to AA because we muct adapt or die and when JB starts running bigger busses to international destinations, we will all be in for a rough ride.

 

[Diesel8]

Actually, jetBlue looked at the EMB-190, the CRJ-900 and the A-318.

In the end, the CRJ was not comfortable enough, the A-318 weighs a lot and was deemed uneconomical, the EMB-190 is large, roomy and economical. It will be used in areas where the Hub and Spoke cariesr are using small RJs, 50 seaters an the like and offer lower fares in otherwise high fare markets.

While SWA only operates one a/c, the 737, there is enough differences between the different variations, 200, 300, etc, that it is on par with operating different types. SWA, if they continue to expand their transcons, could well use 757 or similar. The 757 is about the most eceonomical a/c to operate on long hauls, at least it was hyped as such.

Just my two cents.