Bob was right about 3Billion profit
- Thread starter Buster CRC
- Start date
eolesen
Veteran
- Jul 23, 2003
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Quoting the airport's departure stat is worthless if it's over-served to begin with.
The top 3 financial centers in the world are HKG, LON, and NYC.
Charlotte?
Not on this list:
http://en.wikipedia.org/wiki/Global_Financial_Centres_Index
Or this list:
http://www.statista.com/statistics/166518/top-financial-centers-on-the-global-financial-centres-index/
Or this one:
http://www.longfinance.net/Publications/GFCI%2012.5.pdf
Maybe you can share your source for Charlotte being such a global financial center?
And "around 12" Fortune 500 companies?... CLT is so big that it didn't even make this graphic as a "hotspot".
Here's the "official" list from Fortune Magazine of who is headquartered in NC:
http://money.cnn.com/magazines/fortune/fortune500/2012/states/NC.html
If having 7 is your definition of "around" 12, forgive me for not putting a lot of faith in your statistics... But 5 of the 12 actually headquartered in NC are in RDU, GSO, and INT, not exactly "just around the corner" from CLT, and just as easily connected out of another hub.
The top 3 financial centers in the world are HKG, LON, and NYC.
Charlotte?
Not on this list:
http://en.wikipedia.org/wiki/Global_Financial_Centres_Index
Or this list:
http://www.statista.com/statistics/166518/top-financial-centers-on-the-global-financial-centres-index/
Or this one:
http://www.longfinance.net/Publications/GFCI%2012.5.pdf
Maybe you can share your source for Charlotte being such a global financial center?
And "around 12" Fortune 500 companies?... CLT is so big that it didn't even make this graphic as a "hotspot".
Here's the "official" list from Fortune Magazine of who is headquartered in NC:
http://money.cnn.com/magazines/fortune/fortune500/2012/states/NC.html
If having 7 is your definition of "around" 12, forgive me for not putting a lot of faith in your statistics... But 5 of the 12 actually headquartered in NC are in RDU, GSO, and INT, not exactly "just around the corner" from CLT, and just as easily connected out of another hub.
STL had a lot going for it as well.
- Banned
- #49
http://charlottechamber.com/business-profile/fortune-500-companies/
http://www.fins.com/Finance/Articles/SB126504482673838635/The-Top-Six-U-S-Financial-Hubs-Not-Named-New-York-City
http://money.cnn.com/galleries/2012/real_estate/1204/gallery.US-Cities/index.html
http://www.fins.com/Finance/Articles/SB126504482673838635/The-Top-Six-U-S-Financial-Hubs-Not-Named-New-York-City
http://money.cnn.com/galleries/2012/real_estate/1204/gallery.US-Cities/index.html
Who cares. Miami and DFW are the biggest hubs for AA. Miami covers the Latin community and DFW covers the US community. CLT is geographically out of position for the AA structure. It will exist but not as a hub the way it is today.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
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- Banned
- #51
The whole issue of how well CLT will fare in the merger is clearly a sensitive topic.
It is hard to know what plans US mgmt has but DOT data does give some insight as to how CLT performs relative to other hubs.
Most people recognize that ATL and CLT are essentially competing hubs – for the same traffic flows, the same region. Nonetheless, DL's total ATL domestic revenue (a fair comparison since DL and ATL are both far more "international" than US or CLT) is almost 3X larger than US at CLT. CLT may be a big financial center but the entire local market is small compared to other cities, as E notes.
DL’s average fare for ATL local US domestic passengers is actually 12% lower than US’ at CLT, not surprising given that DL shares ATL with the largest low fare carrier hub in any other network carrier hub.
However, the power of both ATL and CLT is evident in that the average fare on DOMESTIC SEGMENTS is higher than the local, meaning all of those small and medium sized cities on the east coast generate high fares which support the hub… both DL in ATL and US in CLT make a lot of money connecting passengers from small/medium cities to its network, in this case domestic flights.
However, DL’s average segment fare on ATL segments is higher than US’ average fares on CLT segments. In fact, US’ average fares on domestic segments flowing thru CLT is 19% higher than the local while DL’s average segment fares on ATL domestic flights is almost twice that amount.
Yes, CLT probably makes good money for US…. But DL has higher revenues per passenger (local ATL and flow passenger considered) via ATL.
I still have yet to see that CLT is at risk – but it simply doesn’t generate revenues on par with the most profitable airlines in the industry – and thus, the notion that AA/US will generate $3 billion profits seems far-fetched based on this and many other data points.
It is hard to know what plans US mgmt has but DOT data does give some insight as to how CLT performs relative to other hubs.
Most people recognize that ATL and CLT are essentially competing hubs – for the same traffic flows, the same region. Nonetheless, DL's total ATL domestic revenue (a fair comparison since DL and ATL are both far more "international" than US or CLT) is almost 3X larger than US at CLT. CLT may be a big financial center but the entire local market is small compared to other cities, as E notes.
DL’s average fare for ATL local US domestic passengers is actually 12% lower than US’ at CLT, not surprising given that DL shares ATL with the largest low fare carrier hub in any other network carrier hub.
However, the power of both ATL and CLT is evident in that the average fare on DOMESTIC SEGMENTS is higher than the local, meaning all of those small and medium sized cities on the east coast generate high fares which support the hub… both DL in ATL and US in CLT make a lot of money connecting passengers from small/medium cities to its network, in this case domestic flights.
However, DL’s average segment fare on ATL segments is higher than US’ average fares on CLT segments. In fact, US’ average fares on domestic segments flowing thru CLT is 19% higher than the local while DL’s average segment fares on ATL domestic flights is almost twice that amount.
Yes, CLT probably makes good money for US…. But DL has higher revenues per passenger (local ATL and flow passenger considered) via ATL.
I still have yet to see that CLT is at risk – but it simply doesn’t generate revenues on par with the most profitable airlines in the industry – and thus, the notion that AA/US will generate $3 billion profits seems far-fetched based on this and many other data points.
US posted plenty in losses and has been to BK twice and also won over three rounds of concessions, what a blazing success USAir has been. The issues with AA were structural relating to labor costs-specifically crushing work rules that made certain markets uneconomical to serve, not because they didn't have a hub in Charlotte, try again. MIA is the preferred gateway to Latin America, the AA brand has considerable name recognition and history in that region, AA at MIA is much larger and serves more markets in Latin America and the Caribbean than DL at ATL or UA at IAH. The facilities at CLT are dumpy, it's not a major market that people travel to and from like BOS, LAX, MIA, NYC, etc.
CLT is big for US because that is all they have along with DCA, PHL, and PHX not because it is some amazing market that all the airlines are rushing to serve.
Josh
I think you need to be careful with that kind of logic. Because if you apply it consistent across the board then you would believe that the combination of AA/LLC is going to be a very formidable airline competitor based on most Wall Street analysis. And looking into the past Wall Street had no expectations that AA would end up where it did. Especially considering the financial/competitive advantage it had at one point in time relative to its competitors. Bottom line is that all these airlines have taken there turns at being at the bottom of the heap. Even the mighty Delta!
chris perry
Veteran
- Sep 17, 2008
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WT what you haven't taken into account is this airline has been fudging the number for years (crying wolf).
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
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- Banned
- #56
You are both absolutely right..... Deregulation rendered the legacy model incapable of adapting w/o major changes that could be obtained only in BK.
The question is how quickly any given airline has bounced back and returned to success. AA has been restructuring for 10 years, in large part because they expected other carriers to fail to minimize the deeper cuts they otherwise would have had to make in 2003. And regardless of what Wall Street has said, I have noted here and elsewhere that AA's restructuring efforts at the time weren't sufficient, and if they didn't achieve what was necessary, AA would end up exactly where it is today.
Keep in mind that AMR is not even out of BK that was itself the culmination of a 10 year downfall from AA's inability to adapt and now we have people believing that in the very year AMR emerges from BK (we're all expecting it to do so this year), it will show profits of $3B as the majority part of a new merged airline. Given that US' profits were $600M or so last year, that leaves $2 1/2 billion to AMR.
THAT is the far-fetched part of this whole discussion.
No one says that the new AA won't be profitable, but to expect that they will posts profits that exceed anything any other airline has reported in the very year it emerges from BK and just months after a merger is approved is off-the-charts unrealistic - without accounting adjustments and unless the entire industry shows equally huge profits.
And it still doesn't change that AA is the last legacy airline to restructure and AA/US is the last megamerger among existing legacy airlines. Other airlines are showing real fruits of their restructuring efforts, whether in BK or not and are sharing their financial benefits with their employees.
It is equally absurd to think those other airlines won't continue to enhance and improve their model because BK isn't the only way to restructure and well-run companies continually adapt and change. Too many people think that a company will have a particular place in the industry because they had it at one time - sort of like expecting that a runner in a marathon can sit out for an hour, rejoin the race, and expect to return to his position before he quit running. Life and competition move on, regardless of whether a company is capable of competing or not.
Too many people here think that BK is the only way that airlines can restructure and because AA is now doing it they have a tool which no one else can use.
Restructuring and adapting are normal parts of business even if the others are not doing it in BK.
It takes years to gain the fruits of restructuring and mergers.
The new AA will be restructuring, adapting, and merging at the same time that other airlines will continue with their own strategic initiatives which are intended to maintain and enhance their own position.
The question is how quickly any given airline has bounced back and returned to success. AA has been restructuring for 10 years, in large part because they expected other carriers to fail to minimize the deeper cuts they otherwise would have had to make in 2003. And regardless of what Wall Street has said, I have noted here and elsewhere that AA's restructuring efforts at the time weren't sufficient, and if they didn't achieve what was necessary, AA would end up exactly where it is today.
Keep in mind that AMR is not even out of BK that was itself the culmination of a 10 year downfall from AA's inability to adapt and now we have people believing that in the very year AMR emerges from BK (we're all expecting it to do so this year), it will show profits of $3B as the majority part of a new merged airline. Given that US' profits were $600M or so last year, that leaves $2 1/2 billion to AMR.
THAT is the far-fetched part of this whole discussion.
No one says that the new AA won't be profitable, but to expect that they will posts profits that exceed anything any other airline has reported in the very year it emerges from BK and just months after a merger is approved is off-the-charts unrealistic - without accounting adjustments and unless the entire industry shows equally huge profits.
And it still doesn't change that AA is the last legacy airline to restructure and AA/US is the last megamerger among existing legacy airlines. Other airlines are showing real fruits of their restructuring efforts, whether in BK or not and are sharing their financial benefits with their employees.
It is equally absurd to think those other airlines won't continue to enhance and improve their model because BK isn't the only way to restructure and well-run companies continually adapt and change. Too many people think that a company will have a particular place in the industry because they had it at one time - sort of like expecting that a runner in a marathon can sit out for an hour, rejoin the race, and expect to return to his position before he quit running. Life and competition move on, regardless of whether a company is capable of competing or not.
Too many people here think that BK is the only way that airlines can restructure and because AA is now doing it they have a tool which no one else can use.
Restructuring and adapting are normal parts of business even if the others are not doing it in BK.
It takes years to gain the fruits of restructuring and mergers.
The new AA will be restructuring, adapting, and merging at the same time that other airlines will continue with their own strategic initiatives which are intended to maintain and enhance their own position.
BNA and RDU are not good comparisons to ATL or CLT the reason being is that they were opened as a result of the lawsuit against sabre in the 80's. aa listed their flights first at all the travel agent terminals. the settlement was something to the effect that the first flight to leave or arrive was listed first and then everyone else in order of arrival or takeoff cant remember which next. when internet travel grew and and travel agents basically went out of business it was a moot point and RDU,BNA and to an extent San Jose out lived their usefulness. That was the only reason those hubs were opened just to get listed in sabre first. so for all you geniuses that spin it any way you want that's the way the worm turns one day your on top next your not. who knows it could nd probably will turn again.
eolesen
Veteran
- Jul 23, 2003
- 15,959
- 9,374
Wow, so much bad information in there that I don't know where to start....
Travel agencies still book ~60% of the business that AA, DL, UA, AS, and HA carry. The only airlines who aren't relying on them to that degree are the guys who started out without using agencies (WN, NK, B6) but even there, they use agencies.
BNA and RDU? Started up to compete for directional flows in a day and age when just about every other state had an airline hub.
And we know how that worked out for AA. So why will it be any different today when you still have MIA as a major Latin American hub? DFW (MAJOR HUB) is not too far away. Remember commercial aircraft can fly fast over longer distances today than they did back in the days of piston powered aircraft. So you do not need hubs so close to each other. Is it necessary for a pax to fly to MIA from BNA connecting in CLT?
This seems to be what some are saying here by increasing flights in CLT and reducing domestic traffic in MIA. Do we reduce domestic flying at DFW and MIA to justify CLT as a hub? Wiil PAX still be able to fly non-stop from JFK to MIA or do they have to connect in CLT because it is a hub?
Excellent April Fools Day post.
That's the only explanation I can come up with for such a factually-deficient nonsense post. Well played.
The BNA and RDU hubs were not successful, but they were not established for the reasons you listed. And yes, SABRE and AA manipulated the placement of competitors' flights in some obvious screen bias, but that's not why BNA or RDU hubs were built up.
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