Branson wants to try and sway Dallas for DAL gates

[yoyodyne]

And what does that have to do with DL and DFW?
 
PIT MTC is still open for US.

for now...

 

[swamt]

All I have to say is sit back and watch SWA "EXPLODE" at DAL.  Here comes the wave from SWA.  And also watch the market get into a frenzy...

 

[eolesen]

that's what you want to believe but DAL is in a far more advantageous position relative to the wealth centers in N. Texas than either HOU or MDW are in their respective cities.

I love that this industry has so much publicly available data. It won't take long not only to see how successful DAL will be, which will mean that your and AA execs' willingness to walk away from it was costly, but also how well WN will do there.

You lose perspective at times. At best, AA was going to add 24 flights out of its two gates, assuming higher productivity than what DL's schedule was going to offer, and what WN expected to operate if given the chance. That limits the markets and choices, so you're really stretching to say that was a costly mistake.

Being close to the money is an interesting strategy, but the truly wealthy don't need to fly commercial...

DAL's closer to the old wealth along the Turtle Creek-Park Cities corridor, but the Metromess has changed quite a bit over the years, and the money's no longer concentrated there. Quite a bit of it moved up the US-75 corridor towards Plano/Sherman, and a lot more is over in Southlake and into Denton County. The side-street issue starts to be a deterrent outside the LBJ's boundary, which starts to skew people towards DFW.

Here's where Zillow says the million+ homes on the market are located:

Now look at HOU... Far more of the wealth is concentrated near Hobby, mainly because the energy companies are concentrated in that direction...

 

[WorldTraveler]

I'm so glad that you are putting so much effort into arguing why DAL will not work, E, because it will be yet one more topic about which you are fantastically wrong.

Swamt is completely right. WN will be enormously successful at DAL and the fact that they have fewer gates to work with will only drive them to be even more efficient and even more aggressive in using what they do have to the max.

the fact that you can say what you say about DAL while completing ignoring the fact that WN has an equal or dominant share of traffic from DAL compared to AA at DFW in every market in which the two compete is truly breathtaking. WN is more than capable of taking half of AA's revenue in every major market in which it can compete... and it will decide that the local LBB-DAL etc market doesn't need near as much service as they think it does.

Further, in your attempts to discredit the value of DAL, you fail to grasp (yes) that the reason why AA walked away from DAL which had nothing to do with the US merger was because the value of the merger gains which the creditors saw is more than the loss of service to DAL - on the surface.

but when you factor in that AA will be in a position for at least 10 years of being unable to defend its core markets - including LGA, LAX, and ORD - from competitors - the price AA will pay for the merger will quickly grow.

It will take very little time before it is completely apparent how valuable DAL is, how different it is from HOU or MDW, and why AA's decision to walk away from DAL is as bad strategically as US' "leadership" was as saying they couldn't make money at LGA with 1/4 of the slots they walked away from and gave to a competitor.

as to DL at DFW, once again a few people want to throw it in without understanding exactly what DL did but opening the door once again for their own argument to be used against them.

DL cut its share of the LOCAL DFW market by very little. It did cut out huge amounts of connecting capacity - people flying from Florida to California, MSY to PHX etc. Much of that traffic can and is being carried over ATL and SLC and MEM when it existed (and there are still some connections over MEM). DL lost very little of that flow traffic.
DL did redeploy dozens of aircraft to strengthen ATL and to build NYC, a far larger market than DFW and where DL has been able to shift the market decidedly in DL's favor - as evidenced by the fact that now has nearly identical revenue shares of the NYC originating transcon market to AA, which has been in the market as revenue leader for decades.

So, yeah, we can talk about what DL did at DFW any time you want. And we'll always connect it to NYC because that is where the resources went.

And then we can talk about how DL is now the revenue leader in the local DFW market to is big 4 interior hubs even though all of them except for ATL are smaller than AA at DFW.

And we'll talk about why DL continues to push to get into DAL to ensure that its market leadership from N. Texas continues to grow, just as it is in Houston and Chicago to its hubs, even where DL doesn't serve every one of its hubs from both airports.

WN will do swimmingly well. AA will pay a huge price for agreeing to give up access to DAL. DL will continue to build its position from N. Texas in the key markets which it chooses to serve.

 

[robbedagain]

I thought I had seen a link somewhere on here last nite that WN CEO indicated as many as 50 new flights out of DAL by year end following the WA ending 
SWAMT can you confirm that bro?   If so that's gonna be the start of a successful explosion of WN at its home base

 

[LD3]

 

 Some rumors are flying on the hangar floor that SWA will try to run VA off somehow and try to regain the 2 gates to add flights at a later date sometime, mind you, this is just shop talk on the floor, I am not saying this is what SWA is going to do.

 
If that were to happen down the road, is there a possibility that American could get those gates back? AA gave up the gates per the DOJ, but that shouldn't bar them from ever serving LF should it?

 

[WorldTraveler]

It is very likely that AA would be prohibited from returning to DAL for 10 years which is what E said is the length of the AA/US settlement agreement.

In reality, ten years from now, the N. Texas airline market will look a whole lot different.
The chances are real high that WN will succeed at another modification of Wright that would at the minimum allow them to operate int'l flights from DAL if they can figure out how to fit int'l flights in the relatively few number of flights they can operate. There is absolutely no risk that any int'l operation at DAL is going harm DFW.

It is also possible that WN could decide that it is worth going to DFW after they have established themselves in the N. Texas operation and operate from both airports, something they haven't done in other cities. But other cities are not the same as WN's hometown for many reasons, including the limited space at DAL.

WN could well argue that AA chose to give up its access to DAL as part of the merger agreement which is not the same basis as the original Wright restrictions.

In ten years, AA should be allowed to return to DAL if they can find the space - and I expect that Virgin probably tried specifically to clarify what happens at the end of the 10 year sublease.

 

[eolesen]

With all those great adjectives you've weaving into your response, you're clutching the pearls a little to tightly, Skippy...
 

I'm so glad that you are putting so much effort into arguing why DAL will not work, E, because it will be yet one more topic about which you are fantastically wrong.

I'm not saying DAL won't work -- what I'm saying is that the value of DAL to airlines who are also serving DFW is minimal at best, and I've said that pretty consistently for the past ten years...

I'm also pointing out that your assumptions on where the wealth is in proximity to HOU and DAL is flawed.

Legend didn't fail because of competition. They failed because their flights weren't full. It's the same reason AA pulled back on its beyond perimeter flying twice. Their flights weren't full (even with the FQTV base).

The industry may have changed a lot in the past 14 years since those attempts, but the geography and demographics haven't improved.
 

WN will do swimmingly well. AA will pay a huge price for agreeing to give up access to DAL. DL will continue to build its position from N. Texas in the key markets which it chooses to serve.

Again, I'm sure WN will do well, and I've never said otherwise.

They're also not diluting their own traffic at DFW.

That's a game only DL seems willing to play. We'll see soon enough if it's successful.

I'm of the opinion both AA and UA decided it's not worth spreading themselves thinner across two airports which are as close together as DAL and DFW are. VX is already a bit player, and had nothing to lose. There aren't too many destinations where they can really grow from DAL, and that lack of diversity in their network is what will ultimately be their downfall more than anything else.

As much as you repeat yourself on the examples of other cities with two airports, there's no comparison from DAL to the situation at MDW or HOU, which are 33 and 29 miles apart (~45 minutes driving), vs 14 miles for DAL to DFW.

The population densities are also no comparison. MDW and HOU support metro areas with populations of 9 million (4x that of Dallas County) and 6 million (2x that of Dallas County).

Feel free to continue to come up with all your parallels and examples of where DL has done better somewhere else.

DAL is different. What may have worked somewhere else isn't going to work there because of the proximity factor and lack of density.

No other multi-airport situation has that combination to overcome.

 

[AirLUVer]

DL cut its share of the LOCAL DFW market by very little. It did cut out huge amounts of connecting capacity - people flying from Florida to California, MSY to PHX etc. Much of that traffic can and is being carried over ATL and SLC and MEM when it existed (and there are still some connections over MEM). DL lost very little of that flow traffic.
DL did redeploy dozens of aircraft to strengthen ATL and to build NYC, a far larger market than DFW and where DL has been able to shift the market decidedly in DL's favor - as evidenced by the fact that now has nearly identical revenue shares of the NYC originating transcon market to AA, which has been in the market as revenue leader for decades.

So, yeah, we can talk about what DL did at DFW any time you want. And we'll always connect it to NYC because that is where the resources went.

 
You need to brush up on your history.  DL built up JFK/LGA on it's cuts at CVG, MEM, DCA.  They pulled out of DFW in 2004 quite a few years prior to their expansion in JFK/LGA.   And that was several years after it had basically turned it into a regional operation a la CVG.

 

[FWAAA]

I've repeatedly posted that WN dominates the inside-perimeter markets from DAL and that it similarly dominates the inside-perimeter markets from HOU (if we pretend for discussion that HOU was subject to the Wright Amendment perimeter).   
 
I've also pointed out that WN does not dominate the more-distant outside-perimeter cities from HOU as one might expect it to.   Instead, to the more distant cities, UA(CO) manages to attract a larger share of the local market at higher average fares from IAH.   
 
WT dismisses that evidence with "DAL is completely different."    The part that has never been adequately explained is why HOU is so preferred for short-haul flights (within the imaginary WA perimeter) yet IAH continues to get more of the local traffic for the 3-4 hour flights (at higher average fares, no less).  
 
Simple-minded me would have thought that the dominance of WN at HOU for the short-haul flights would translate into similar dominance for HOU to LAX, SFO, SEA, BOS, NYC, WAS, etc.   If HOU was as geographically-challenged as WT has asserted, then how come WN owns the short-haul flying in Houston from the HOU airport?   Why would so many of the business travelers within Texas, for instance, prefer HOU over IAH when it's clear that longer-haul passengers to/from Houston pick UA at IAH over WN at HOU?    
 
I'm a long-time shareholder in WN and I fly WN on one-hour short-haul flights BUR-LAS/SJC etc.   Before the new seating, the WN-experience was tolerable for those one-hour hops.   I could do without the AAdvantage miles/upgrades/assigned seating - after all, it was only an hour.    But on long-haul flights?   No, AA still won my business.    And that was before the new seats on WN.   Now, even those hour-long flights are not as tolerable as they used to be.   
 
Will WN win at DCA and LGA?   While rarely gouging customers, WN fares are no longer always the lowest.    Offering a few former FL international leisure destinations from HOU isn't going to sway the major corporate customers in BOS, NYC, PHL, WAS, CHI, DFW, HOU,  SFO, LAX, etc.   My guess is that most of those customers will still choose AA, DL or UA.   Likewise, will WN dominate from DAL?    I doubt it.    

 

[swamt]

I thought I had seen a link somewhere on here last nite that WN CEO indicated as many as 50 new flights out of DAL by year end following the WA ending 
SWAMT can you confirm that bro?   If so that's gonna be the start of a successful explosion of WN at its home base

Southwest Airlines CEO Gary Kelly lays groundwork for future growth
 
Here it is.  Without rereading it again, I don;t think it said 50 new flights by end of year, but over the next 5 years.  By the end of this year is the full integration of AT into SWA (November is planned).

 

[WorldTraveler]

just between the summer of 2004 and 2005, DL added approx. 1300 seats/day to the NYC market including an average of 14 new daily flights. DL didn't walk in and decide overnight to flood the market with new flights; it has taken place over a decade. 5% growth every year when your competitors are not growing doesn't take long before it adds up.

I also noted that DL built up ATL which is partly why FL's market share there dropped by several points, leading to WN's decision on top of the opportunities they now have for WN to decide it wasn't worth trying to force their way back into ATL but instead to settle for the 15% share of the local market which isn't that much different from what they have in other DL hubs.

E,
surely you realize that Legend could not operate aircraft that had more than 56 seats beyond the perimeter, the same limitation that AA had.

That is all going away.

you can argue about internal network dilution if you want but DL has a far better track record of having a balanced network from multi-airport cities than probably any other US carrier. IN addition to Houston and Chicago, DL also has int'l flights on its own metal from EWR alongside its own JFK operation. Can you tell me in what other other airline hubs AA and UA have int'l service, let alone in a multi-airport city?

FWA,
part of the reason for the difference between WN and the legacy carriers in shorthaul markets is because WN has long built its network around shorthaul, high frequency flights over longer haul. WN's network simply has fewer longhaul flights, esp. in other carrier hub markets. Look at the number of flights from HOU to shorthaul destinations and compare it to what UA has. Further, UA uses regional jets on many short haul flights (they use them on 3-4 hour flights as well) but they do have fairly high frequency mainline service in many shorthaul markets. Also, WN has focused on low fares and the leisure traveler.

Look at ORD/MDW. In most cases, AA and UA have far more service to most cities than WN has from MDW. Yet in a city like MCO, WN carries the most local Chicago passengers even though MDW is far
from the larger wealth centers of Chicago.

and again specific to where the wealth centers are in N. Texas, DL has taken the approach that it wants to be closest to all of them, not unlike the approach that Kroger or Safeway or Walgreens or any multisite national retailer has. Be in as many places as possible. There is far more chance that you will gain a bigger share of the total market and get higher revenues per unit because of the brand preference you create than because you run the risk of putting a store too close to one of your competitors.

and, yes, WN does not have the penetration to corporate revenue and high value revenue of small/medium size businesses in part because the global carriers have the advantage of larger loyalty programs and global networks. The challenge that WN has is now competing against 3 megacarriers that not only can largely do what WN does domestically (perhaps not on exactly the same scale) but also offered a more sophisticated product (more amenities, much of it at no extra charge like assigned seating) including global networks.

part of DL's success at MDW and HOU is precisely because there are different customer bases and DL can cater to a different crowd and get premium revenue even in key WN markets.

 

[swamt]

 
 
If that were to happen down the road, is there a possibility that American could get those gates back? AA gave up the gates per the DOJ, but that shouldn't bar them from ever serving LF should it?

That's a good question and I am not sure of the correct answer to it.  Without reading the entire DOJ requirements and restrictions, not sure if they could come back.  I do know that SWA cannot go to DFW unless they are willing to give up a gate for a gate at LF, and that isn't going to happen.

 

[swamt]

It is very likely that AA would be prohibited from returning to DAL for 10 years which is what E said is the length of the AA/US settlement agreement.

In reality, ten years from now, the N. Texas airline market will look a whole lot different.
The chances are real high that WN will succeed at another modification of Wright that would at the minimum allow them to operate int'l flights from DAL if they can figure out how to fit int'l flights in the relatively few number of flights they can operate. There is absolutely no risk that any int'l operation at DAL is going harm DFW.

It is also possible that WN could decide that it is worth going to DFW after they have established themselves in the N. Texas operation and operate from both airports, something they haven't done in other cities. But other cities are not the same as WN's hometown for many reasons, including the limited space at DAL.

WN could well argue that AA chose to give up its access to DAL as part of the merger agreement which is not the same basis as the original Wright restrictions.

In ten years, AA should be allowed to return to DAL if they can find the space - and I expect that Virgin probably tried specifically to clarify what happens at the end of the 10 year sublease.

I see we are on the same page about the future of DAL and the possibilities as well as more challenges in the future.
 
On Legend Airlines, not really knowing the exact reasons they failed, but it is my opinion that they just ran out of money.  AA kept them so tied up thru the courts, and Legend was trying to cater only to the business travelers and people willing to pay the price they were asking for lots of leg room and first class service with gourmet meals pampering etc...  Also they were using some very, very old DC9'S that cost them a bundle to convert and operate, huge fuel bills at a time fuel cost were starting to rise.  Alot of different things were what sank Legend IMO, If someone knows the exact reasons please post...

 

[FWAAA]

On Legend Airlines, not really knowing the exact reasons they failed, but it is my opinion that they just ran out of money.  AA kept them so tied up thru the courts, and Legend was trying to cater only to the business travelers and people willing to pay the price they were asking for lots of leg room and first class service with gourmet meals pampering etc...  Also they were using some very, very old DC9'S that cost them a bundle to convert and operate, huge fuel bills at a time fuel cost were starting to rise.  Alot of different things were what sank Legend IMO, If someone knows the exact reasons please post...

I would argue that fuel prices weren't a large factor in Legend's demise.   During 2000, spot prices ranged from about $0.72/gal to about a dollar a gallon.   The bigger problem was under-capitalization (they simply didn't start with a big enough pile of cash) from the start plus the competition from AA, which matched Legend's prices and service so that both flew half-empty 56-seaters during 2000.    

AA drained Legend of a lot of cash in the court fights pre-startup and then AA put a damper on Legend's revenue by competing with Legend (matched Legend's fares and matched service as well).   The only advantage Legend had was its new terminal while AA operated from its old DAL gates.      
 
Remember that AA kept up the charade for nine months after Legend's shut-down, ending the DAL F-100 56-seaters only after September 11, 2001.