Delta, US Airways Close Deal to Transfer Flying Rights in New York and Washington, D.C.

[WorldTraveler]

Seems to me they turned LGA into CVG redux...

The local market in NYC is far larger and CVG never saw the percentage of large RJs that LGA is getting.
I don't imagine that US will initially add a huge number of mainline aircraft right off the bat either - except where they are needed for range or the market is very large, such as it is NYC-MIA....
there still is a good possibility that some of these routes will be upgraded in the future while others will see reduced service or perhaps may be cut... but overall DL at LGA and the corresponding changes that will occur at JFK and US at DCA will be much stronger and able to compete against other airports in the regions that do not have slot controls or where an incumbent aleady had a large position before slot controls were implemented.

 

[signals]

You might miss the impact as a whole. Unless US-X has flights to other markets, it will lose flights in the entire web, so layoffs may have a further affect than just LGA.

Just saying.

 

[Travelpro72]

What I find odd about this whole transfer is Delta with TWO hubs twelve miles apart. With mergers etc, all we hear is PHL/JFK is very close and something would have to be given up or DCA/IAD/BWI are all so close that something would have to go. How is it that Delta will now run a full scale hub at two different airports? Granted they are in the same city but they are two completely different airports and it appears that Delta will basically have LGA locked down. Monopoly anyone? I just find it rather odd. <_<

 

[usa1]

But now Delta is trying something never tried: operating hubs at two New York airports, LaGuardia and Kennedy, a dozen miles apart. The carrier said Friday that by summer, it will build its LaGuardia operations into a hub providing 264 daily departures to more than 60 cities. They include competitors' hubs in Charlotte, N.C., Dallas, Houston, and Miami; key destinations in upstate New York; and small cities such as Wilmington, N.C

http://finance.yahoo.com/news/Delta-Unveils-Schedule-New-prnews-2863060164.html?x=0

This puts more pressure on AA to merge ... maybe Doug knew it would

 

[Kev3188]

What I find odd about this whole transfer is Delta with TWO hubs twelve miles apart. With mergers etc, all we hear is PHL/JFK is very close and something would have to be given up or DCA/IAD/BWI are all so close that something would have to go. How is it that Delta will now run a full scale hub at two different airports? Granted they are in the same city but they are two completely different airports and it appears that Delta will basically have LGA locked down. Monopoly anyone? I just find it rather odd. <_<

I think the idea is that JFK will still ply the role it is currently (and the flights to/from it as well), while LGA will focus on O&D traffic. As for being locked down, I believe come this summer, the Widget will have 46% of the slots there...

 

[WorldTraveler]

your number is correct, Kev. And US is just about 50% at DCA which is why there was potential concern from the DOJ at DCA but not from LGA.
Pro,
the real value of DL's LGA operation is the same as US at DCA - is that LGA and DCA are the preferred business airports in their regions.... but both have perimeter restrictions so they can't serve as the only hubs in the region.... thus DL has the best access to the NYC market for short haul flights within the perimeter from LGA while US has it from DCA. DL HAPPENS to also have a hub at JFK - as does AA and B6 - but DL has the advantage now of having greater density of flights from two airports.
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Part of the benefit of having a HUB at LGA is that DL can connect enough passengers onto those flights into other carrier hubs such as LGA-CLT/DEN/DFW/IAH etc to help offset the strength those carriers have on those routes by connecting passengers beyond their hubs. And of course no other carrier has ever operated the list of cities from LGA that DL has... and part of the reason why it was necessary to gain the NE cities in addition to the cities in FLA and elsewhere in the rest of the country (south/midwest) is to be able to connect passengers. A big reason why US lost its position at LGA was that it quit flying LGA-FLA, which are some of the highest volume markets to/from NYC... having cities N/NE of NYC doesn't accomplish much if you can't connect passengers.
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And finally, there are clearly strategic targets for DL's strategy. B6 created a huge amount of demand from JFK to the NE and won a lot of political favor in doing so... but LGA is the preferred airport and DL will gain business over B6 because of the proximity of LGA to the Manhattan market. AA, formerly headquartered in NYC, has long been the largest airline for NYC corporate travel - and DL was determined to crack that market.... by leap frogging AA's size, DL now is in a position to gain much more of that corporate business. And finally, DL's combined LGA-JFK business has grown to about 90% of the size of PMCO... when CO/UA merged, DL had to ratchet the game up, esp. given that UA offered alot more from LGA and JFK. The slot deal has the potential to keep UA and DL on similar terms in the NYC market - and potentially could give DL an edge given the proximity of LGA.
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As Kev notes, the LGA and JFK operations are separate and thus it does not matter that the two airports are in the same borough. US will gain the same benefits using DCA and PHL/CLT together. US just can't focus on the nonstop int'l market from DCA but as you probably do know, they carry alot of int'l traffic from DCA via PHL.
.

 

[Dog Wonder]

There is not much lift between DCA and PHL.

IAD is the international airport out of DC.

 

[usa1]

Another interesting number .... combine US & AA and the playing field is level again between (DL) and (US/AA). I saw the numbers somewhere ... each would be like 26-27% each from NYC.

 

[nycbusdriver]

I don't imagine that US will initially add a huge number of mainline aircraft right off the bat either - except where they are needed for range or the market is very large, such as it is NYC-MIA....

US wil NEVER put aircraft to Miami out of New York. They pulled out of all of the non-stop LGA-Florida years ago.
And, with (compared to now) very few LGA slots, they can't "add a huge number" of any kind of aircraft in LGA....ever.
US will serve BOS, DCA, CLT, and PHL out of LGA. Period. I expect BOS and DCA will be almost exclusively E190s, with A319s thrown in here and there when they know there will be demand for something bigger. CLT will likely continue to have the same mix of mainline and express service it now has out of LGA. LGA-PHL will lose all those Dash 8s and RJs which have been used as "place holders" for all those precious slots that Tempe couldn't figure out how to use. Funny how Delta seems to be out of the gate running with those same slots that the "Low Cost Carrier" couldn't make a profit on.

That certainly isn't reflected in the bid that just closed... There were no additional E190 pilot positions, and quite a few FO slots were not filled.... I can't see how they could hire and train the additional pilots that would be needed to staff those 5 aircraft by March 1...

Don't throw logic, reason or fact at any of his prognostications and pontifications. It makes him restless and whiny.

 

[usa1]

US wil NEVER put aircraft to Miami out of New York. They pulled out of all of the non-stop LGA-Florida years ago.
And, with (compared to now) very few LGA slots, they can't "add a huge number" of any kind of aircraft in LGA....ever.
US will serve BOS, DCA, CLT, and PHL out of LGA. Period. I expect BOS and DCA will be almost exclusively E190s, with A319s thrown in here and there when they know there will be demand for something bigger. CLT will likely continue to have the same mix of mainline and express service it now has out of LGA. LGA-PHL will lose all those Dash 8s and RJs which have been used as "place holders" for all those precious slots that Tempe couldn't figure out how to use. Funny how Delta seems to be out of the gate running with those same slots that the "Low Cost Carrier" couldn't make a profit on.




Don't throw logic, reason or fact at any of his prognostications and pontifications. It makes him restless and whiny.

MIA flights will be there after Doug merges AA ....

 

[nycbusdriver]

MIA flights will be there after Doug merges AA ....

God help AA if that were to actually happen.

I seriously doubt that it will. Doug may have access to a lot of money from investors who want to see it happen, but I doubt he has much credibility with the creditor committee who will actually make the determination as to where AA will proceed after bankruptcy. The management POR will likely show the creditors being made whole. This entire chapter 11 exercise is not about stiffing the creditors (see $4 billion in unrestricted funds in the bank)....it's about stiffing the employees and stockholders who have little, if any, say in what happens.

AA will emerge as a stand-alone carrier before 2012 comes to a close. Doug will have to look elsewhere for traction on his quest for grandeur and money.

 

[WorldTraveler]

The international market out of DCA (outside of N. America) is actually about 1/2 the size of the IAD market despite the fact that DCA has no flights to outside of N. America.... there are about 1500 passengers per day that fly from DCA to cities outside of N. America, predominantly to Europe via the NYC and BOS airports and Latin America via CLT/ATL/MIA. US has about a 10% share of the total DCA-int'l market and much of that is traffic that flows over PHL.
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I wasn't saying that US would add MIA... I was saying that DL's decision to add a relatively few number of mainline aircraft is because DL is minimizing the risk of starting up that many new flights at one time....although many flights are indeed on 2 class RJs. The MIA reference is that, even though MIA is within the range of an RJ, DL is adding the market with mainline aircraft.. not that US could have or added NYC-MIA.
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AA plus anyone who flies to NYC would increase the size of the combined company... the question is whether such a combination would help the combined company to effectively compete against other carriers - DL and UA who have and still would have larger int'l networks and other carriers that have stronger positions in other parts of the US, including NYC.

 

[No Land Green]

God help AA if that were to actually happen.

I seriously doubt that it will. Doug may have access to a lot of money from investors who want to see it happen, but I doubt he has much credibility with the creditor committee who will actually make the determination as to where AA will proceed after bankruptcy. The management POR will likely show the creditors being made whole. This entire chapter 11 exercise is not about stiffing the creditors (see $4 billion in unrestricted funds in the bank)....it's about stiffing the employees and stockholders who have little, if any, say in what happens.

AA will emerge as a stand-alone carrier before 2012 comes to a close. Doug will have to look elsewhere for traction on his quest for grandeur and money.

I agree with your post above. I personally feel that Tempe has been doing all this downsizing on the hopes of a merger with one of the Big Three......key word "hopes".............I may be wrong, it's just my opinion and I share your's nycbusdriver.

NLG

 

[LGA / 037]

God help AA if that were to actually happen.

I seriously doubt that it will. Doug may have access to a lot of money from investors who want to see it happen, but I doubt he has much credibility with the creditor committee who will actually make the determination as to where AA will proceed after bankruptcy. The management POR will likely show the creditors being made whole. This entire chapter 11 exercise is not about stiffing the creditors (see $4 billion in unrestricted funds in the bank)....it's about stiffing the employees and stockholders who have little, if any, say in what happens.

AA will emerge as a stand-alone carrier before 2012 comes to a close. Doug will have to look elsewhere for traction on his quest for grandeur and money.

Bus Driver..... Step outside the box for a moment..... From the 1% and corporate world Doug Parker and his senior management team look like geniuses to Wall Street and their (analyst) frustration is how they have been able to do it all this time as a stand alone. They have quite a bit of credibility and 3 years ago when finance was flying around trying to drum up finances and dollars they appeared to be turned down at the time. What "we may find out" is what Airways was told at the time was wait a few years to see if AMR finally goes Chap 11 (which they are knew was inevitable) and then come back to us if your balance sheet is strong. $4 billion in cash for an airline the size of AA can go quite quickly through a winter. We shall see............................

 

[WorldTraveler]

What I find odd about this whole transfer is Delta with TWO hubs twelve miles apart. With mergers etc, all we hear is PHL/JFK is very close and something would have to be given up or DCA/IAD/BWI are all so close that something would have to go. How is it that Delta will now run a full scale hub at two different airports? Granted they are in the same city but they are two completely different airports and it appears that Delta will basically have LGA locked down. Monopoly anyone? I just find it rather odd. <_<

a couple more data points that might help understand the DL part of the LGA slot transfer and its position in NYC.
For schedules next summer, DL has about 29% of the slots at JFK (which is about 15% smaller than LGA in terms of total number of flights - in part because the high number of widebodies require greater separation) but DL has about 25% of the total seats.
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DL's average seat size at LGA after the slot deal is about 87 seats per departure, which is almost identical to the current average number of seats per dept for LGA as a whole right now... so the notion that DL is dumping a bunch of small aircraft into LGA and using the slots less efficiently is not accurate.
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Further, if you look at UA/CO's schedule out of EWR to destinations within the same perimeter restrictions that LGA has, DL's average aircraft size is larger than CO/UA's at EWR by about 5 seats per departure.
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The reality is that the short haul market across the country includes many RJ flights today - but DL is still keeping LGA very close to the current average aircraft size.
When you combine DL's slot size at LGA with what it holds at JFK, DL still holds only about 35% of the slots at the two airports combined.