hubs for American and US Airways will see a 25 percent to 50 percent loss of connecting traffic?

[usa1]

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Fitch Ratings on Wednesday released a report arguing that the merger, which would create the largest carrier in the world, could weaken operations at certain airports.......................The primary hubs for American and US Airways will see a 25 percent to 50 percent loss of connecting traffic while secondary hubs could lose up to 100 percent of transfer traffic, Fitch predicts.[/font]

Fitch says connecting traffic loss ranges in the 75 to 100 percent for American's Chicago and Dallas-Forth Worth hubs while Miami airport may only face a 50 percent connecting loss, which can be attributed to the airport's unique international gateway operations to Latin America along with its domestic connections.
[font=Helvetica Neue']As US Airways' leading hub, Philadelphia International Airport is assumed to lose 50 percent of its connecting traffic while Charlotte/Douglas International Airport was assumed to lose all of its hub operations.[font=Helvetica Neue']

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[font=Helvetica Neue']http://www.bizjourna...s.html?page=all[/font]

Can someone explain how? IM not saying it can't happen ... but I don't see it?

 

[wings396]

Hogwash of an article, note their frequent use of the word "ASSUME".

 

[ograc]

http://www.bizjourna...s.html?page=all

Can someone explain how? IM not saying it can't happen ... but I don't see it?

I don't see it either. Where would all this traffic go? I am concerned though about their announced projected 1 billion in cost savings. I fear job loss could contribute significantly to this projected savings.

 

[usa1]

The phrase, " [background=rgb(252, 252, 252)]connecting traffic" is used. Could they be saying passengers that use to fly from RIC to DFW or MIA or ORD on US via CLT connection will now be able to go non-stop. And AA passengers that use to fly from IAH to PHL or DCA or CLT via DFW will be able to go non-stop etc? Eliminating the need for a connection? Are they trying to say that CLT & DFW could become big focus cities???? Nuts?[/background]

 

[wings396]

Just the line about CLT losing it all kills any credability that they may have had. Stupid people being let loose in the media....

 

[FWAAA]

The phrase, " [background=rgb(252,252,252)]connecting traffic" is used. Could they be saying passengers that use to fly from RIC to DFW or MIA or ORD on US via CLT connection will now be able to go non-stop. And AA passengers that use to fly from IAH to PHL or DCA or CLT via DFW will be able to go non-stop etc? Eliminating the need for a connection? Are they trying to say that CLT & DFW could become big focus cities???? Nuts?[/background]

I've posted before that some of the US connecting traffic thru CLT duplicates routes already served by AA thru DFW, like the hypothetical JAX-TUS passenger. At US, they'd need to double connect at CLT and PHX. AA already serves that with one connection via DFW. That said, there are plenty of domestic connections for which CLT makes a lot of sense.

It's no secret that although CLT is one of the busiest airports in the country, most of its passengers are connecting and not Origination or Destination. As we joked about before, nobody from Brasil is looking to vacation in Charlotte. And there aren't many CLT passengers headed to Brasil. If nearly everybody on a particular flight connected at CLT from somewhere else, it might make sense for that flight to depart a different hub. Might not.

CLT has very low per-passenger costs, to be sure. Orr has built a lot of cheap space that's functional. And being in CLT instead of NYC or LA, construction costs are extremely cheap (like a new runway for less than $200 million). At PHL or LAX, runways run more like five times that amount each. And the more passengers pushed thru CLT, the lower the per-pax costs. If US shrinks CLT, then the airport will have to recover its costs from fewer pax.

The article you linked is from the perspective of the airport bond rating community, and they're looking out for their constituents, the investors in those airport bonds. Mergers and possible reductions set off their alarm bells. I can't blame them for that. They've seen the cutbacks at CLE, CVG, MEM, PIT, DAY, BNA, RDU, STL and others.

I don't see CLT being getting the PIT or STL treatment. DFW is AA's Atlanta (DL) or Houston (UA), and those three mega-hubs are here to stay. PHL? Nothing wrong with having a huge presence in NYC and Philly.

 

[usa1]

In the past Parker has avoided head to head competition in a hub. He pulled back in LAS and BWI, made a stand in PHL against WN and won. Going forward Chicago comes to mind? Do you see him going head to head with United there ..... Will he continue to go head to head in PHX? Could he move some of the ORD traffic to DFW or could some of the empty space in PIT get called on once again?

http://aviationblog.dallasnews.com/

The merger of American Airlines and US Airways is not expected to create are large number of job losses because the two carriers have little operational overlap, the chief executives of both carriers said today in a news conference at the Dallas/Fort Worth International Airport.
“We’re not anticipating any major layoffs,” said US Airways CEO Doug Parker. “The airline will be based in Dallas-Fort Worth and some people won’t want to move from Phoenix [US Airways is based there]. Most of this well take care of itself.”
That’s mainly because the two airlines expect “very little redundancy” their operations, American CEO Tom Horton said. Only 12 of more than 900 flight routes between the two airlines overlap.

 

[wings396]

Parker had nothing to do with the retreat in BWI, that happened years before he came into the picture.

 

[robbedagain]

I THINK THE BWI DOWN SIZE CAME IN THE 90S MAY BE EARLY 2000S ACCRDING TO MY COWORKERS THE LAS ONE CAME UNDER PARKER

 

[usa1]

Parker had nothing to do with the retreat in BWI, that happened years before he came into the picture.

You re right .... still wondering how head to head in ORD will be view and if anything good could come to PIT from merger?

 

[necigrad]

Sadly, the highlights posted of that article show that pretty much every one of us on this board would make a better analyst on this issue. Personally I think it's written by someone throwing the whole pot of pasta on the wall just to see if one or two pieces stick. If they're right on anything they'll be able to say "See? I TOLD you that would happen!"

 

[FWAAA]

In the past Parker has avoided head to head competition in a hub. He pulled back in LAS and BWI, made a stand in PHL against WN and won. Going forward Chicago comes to mind? Do you see him going head to head with United there ..... Will he continue to go head to head in PHX? Could he move some of the ORD traffic to DFW or could some of the empty space in PIT get called on once again?

If he waves the white flag in Chicago, then what do you tell all the corporate accounts when they ask about your abandonment of CHI? CHI is a huge market for business travel and one of the largest international gateways in the country. Anything's possible, but if he's scared of competition, then perhaps he should apply to be CEO of a public utility (a monopoly without any competition)? NYC, CHI and LAX are the three largest markets in the country and are not dominated by any airline (nor will they ever be). If you're going to serve those three largest markets, you're going to have to compete.

Truth be told, Parker retreated from NYC because US couldn't compete with DL or UA. Now, he's the second biggest airline at LGA (despite the moronic gift of LGA slots to Delta) and big at JFK. AA has maintained a dual hub (with UA) at ORD for over 30 years. LAX? The new airline is the biggest on the block, but not by much. Airlines need to serve the places where people want to go, and NYC, CHI and LAX are where a lot of people are based and where a lot of others want to go. Give up on them because you don't have a fortress hub in those cities and you might as well liquidate the new airline.

PIT? Never coming back. It's over.

PHX? The new airline has about 60% of that market. WN is facing its own issues with digesting FL and its foray into overwater flights like the Caribbean plus its somewhat high wages now that AA has been thru bankruptcy. HP has been battling WN at PHX since the beginning, and US has the largest share of that market. Why quit now?

 

[usa1]

Parker made the lga dca swap because he knew he would have to do it in a aa us merger anyhow. Better to make a deal with dl than to have the gov give it to wn.

 

[FWAAA]

Parker made the lga dca swap because he knew he would have to do it in a aa us merger anyhow. Better to make a deal with dl than to have the gov give it to wn.

No, I've been over this before. With the slot swap, US-AA has about 32% of the LGA slots. Without the swap, US-AA would have more than half, and the government would have required US-AA go divest down to DL's current dominant position.

At DCA, with the slot swap, US-AA has more than half and the government will probably require US-AA to give up enough so that US-AA has no more than half (which equals the AA slot inventory in number). Without the slot swap, US-AA would have had about half the slots, and no giveaways necessary.

So no slot swap would mean that US-AA would have almost half the LGA slots and half of the DCA slots. But instead, thanks to the slot swap, US-AA has just 32% of the LGA slots to DL's 45%+ that it holds. DL gets to be the dominant airline at LGA when it would have been US-AA (absent the slot swap). At DCA, US-AA is no stronger after the merger, as slots will have to be divested.

 

[700UW]

http://charmeck.org/city/charlotte/Airport/News/Pages/CLTBreaksPassengerTrafficRecordin2012.aspx

CLT Breaks Passenger Traffic Record in 2012 More than 41 Million Travelers Visited the Airport