Shrink our way to profitability...now where have I heard that before?
Pride goeth before the fall.
Is AA deemphasizing ORD?
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Shrink our way to profitability...now where have I heard that before?
Pride goeth before the fall.
ORD is probably the best as far as geographic location for reaching most of the populous parts of the world. But the problem with ORD is the winter, the colder it gets the longer it takes to do anything outside when it comes to maintenance. There are a lot of things you cant do with gloves on and your hands can only function for a short amount of time in the bitter cold, you have to stop and warm them up. DFW occasionally gets cold but it doesnt stick around like it does in ORD.
The question stands. If he knows that NY is not the center of the Universe then he must know where the center is.
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Then it certainly is capital of the world. (Born and raised in NYC). Like it or not, it's the largest and most conpetitive airline market in the United States. If AA wants a good size of hat market they need to do more than have a $1 billion terminal at JFK. That's nice and all but unless they offer flights to places people want to go not much else matters. DL is poised to make serious gains, CO+UA will bolster their overall position.
AA has reduced EWR substantially, removed mainline from HPN, ended SWF altogether, and only serves a small handful of destinations from LGA-mainly just the cornerstones and historically strong AA markets (RDU and STL). Sure they have a few RJs to medium sized business centers too but why no flights to FLL, PBI from LGA? I'd like to see AA gain slots at JFk to add more international service to places like PEK or PVG, FRA, MEX, TLV, TXL, etc.
CO serves all those from EWR and DL has a number of them from JFK. AA on the other hand keeps leveraging this JBV and feels they don't need to operate those routes and assume people will gladly connect at LHR/NRT with BA/JL respectively.
Josh
eolesen
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People living there obviously feel otherwise, but no, NYC has not been the center of the universe for at least 10 years. It may be the financial universe for the US, but London now owns that title for global banking, and probably will continue to do so given the lack of confidence in the US banks to self-regulate.
Combining co-terminals, LHR+LGW and NRT+HND outrank the three NYC airports combined.
If you look at airports as individual entities, ATL (2), LAX (7), ORD (12) and DFW (15) easily outrank JFK (20), EWR (47) and LGA (66).
Even if you use WT's "NY side of the Hudson" metric often used to defend DL's dominance, ATL still comes out as a bigger market than JFK+LGA, and ORD+MDW is within less than a percentage point of JFK+LGA.
Start throwing things like disposable income into the mix, and the data gets skewed even worse for NYC...
Combining co-terminals, LHR+LGW and NRT+HND outrank the three NYC airports combined.
If you look at airports as individual entities, ATL (2), LAX (7), ORD (12) and DFW (15) easily outrank JFK (20), EWR (47) and LGA (66).
Even if you use WT's "NY side of the Hudson" metric often used to defend DL's dominance, ATL still comes out as a bigger market than JFK+LGA, and ORD+MDW is within less than a percentage point of JFK+LGA.
Start throwing things like disposable income into the mix, and the data gets skewed even worse for NYC...
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What do the ranks represent? Global annual enplanement ranks? NYC is still very central to AA's success by the admission of Arpey, Horton, et al. I acknowledge the fact that NYC is less of a financial center today than 10-15 years ago but the fact remains that it is one of the largest, most competitive, and most lucrative airline markets. How come all the major airlines operate clubs in their New York area airports? Why do carriers often use their JFK route to launch new aircraft and on-board products? Why are AA/DL/UCH going head-on to compete for NYC customers? Clearly it is a valuable network for AA but their strategy has not been effective in winning over meaningful customers.
Josh
eolesen
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Which carrier has used JFK for an inaugural route recently? Air France or Lufthansa? Emirates? I'm sure they'd love to have flown an A380 to LAX instead, but the load factors from Europe or the Middle East don't justify the airframe costs.
Clubs? They're a reflection of two things: international service, and paid memberships. If an airline has international service, there's an expectation for a premium class lounge.
Clubs? They're a reflection of two things: international service, and paid memberships. If an airline has international service, there's an expectation for a premium class lounge.
Whether or not NYC is the center of the airline travel universe, the fact is that AA hasn't abandoned NYC despite its losses in market share to Do No Wrong Delta and Biggest Airline in New Jersey UA/CO. Further, there's no need for AA to abandon CHI to build up its NYC (or DFW or MIA) presence.
Over on Flyertalk, there's a small contingent of very angry posters who tend to be from STL, BOS and SFO who constantly post that AA should just give up on CHI because AA has de-emphasized their favorite spoke city. I don't recall any of them being from NYC (like the OP here).
AA might right-size its CHI presence but it amount to an abandonment of ORD so that UA can rule.
Crandall built up the international departures from ORD to secondary European cities in part because he didn't yet have significant LHR access, but as AA gained LHR access, the ORD flights to secondary cities were reduced. NW, DL, CO and US were forced to concentrate on secondary European cities for the same reason: lack of access to LHR and limited access to even LGW. Of course, now that Open Skies gives everyone access to LHR, all of the other airlines have flocked to LHR.
Over on Flyertalk, there's a small contingent of very angry posters who tend to be from STL, BOS and SFO who constantly post that AA should just give up on CHI because AA has de-emphasized their favorite spoke city. I don't recall any of them being from NYC (like the OP here).
AA might right-size its CHI presence but it amount to an abandonment of ORD so that UA can rule.
Crandall built up the international departures from ORD to secondary European cities in part because he didn't yet have significant LHR access, but as AA gained LHR access, the ORD flights to secondary cities were reduced. NW, DL, CO and US were forced to concentrate on secondary European cities for the same reason: lack of access to LHR and limited access to even LGW. Of course, now that Open Skies gives everyone access to LHR, all of the other airlines have flocked to LHR.
WorldTraveler
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No, AA hasn't abandoned NYC but their shrinking size is directly translating into reduced revenues.... guess you noticed that AA's RASM growth was 2nd tier to that can-do-no-wrong airline in every global region except... drum roll... Latin America.
Sure enough, market size really does translate into pricing power after all.
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your 3rd paragraph isn't entirely clear but "right-sizing" in a competitive market is a euphemism for giving up and letting the competitors win. You don't pull down your capacity when others are not and expect to maintain a viable competitor.
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problem w/ the theory in your last paragraph is that those other carriers aren't pulling down their service to other cities any more than they are to the "big cities".... given that LHR is slot controlled, even AA and UA have been forced to fly intra-Europe tags to keep the slots active. When you compare DL and UA's capacity changes to secondary cities, there isn't any difference with their cuts at places like CDG or FRA... unless you want to try to tell us that everything outside of LHR is a secondary city - despite the fact that LHR really only comprises 15% of the total TATL market among US carriers.
Sure enough, market size really does translate into pricing power after all.
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your 3rd paragraph isn't entirely clear but "right-sizing" in a competitive market is a euphemism for giving up and letting the competitors win. You don't pull down your capacity when others are not and expect to maintain a viable competitor.
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problem w/ the theory in your last paragraph is that those other carriers aren't pulling down their service to other cities any more than they are to the "big cities".... given that LHR is slot controlled, even AA and UA have been forced to fly intra-Europe tags to keep the slots active. When you compare DL and UA's capacity changes to secondary cities, there isn't any difference with their cuts at places like CDG or FRA... unless you want to try to tell us that everything outside of LHR is a secondary city - despite the fact that LHR really only comprises 15% of the total TATL market among US carriers.
eolesen
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Really, now. UA hasn't flown tags at LHR in ten years, if not longer.
And I don't recall AA ever scheduling a tag out of LHR aside perhaps a ghost flight due to cancellations. I'm not even sure if the fifth freedom authority TW had to feed LHR came along with the slot transfer, since TW was still operating to LGW.
WorldTraveler
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you might want to check last winter's schedule.
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Open Skies gives US airlines the right to operate within Europe.. which is why the Europeans believe the table is unbalanced... US carriers have access to to the internal EU market (between specific countries) while the EU does not have access to the US domestic market. but then again, the concept of the EU itself is in for a bit of a revision based on current economic events. .
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Admittedly I don't understand what you mean by ghost flight but AA did do a BOS-LHR-BRU-LHR-BOS last winter (flight 108/109) on a 763.
Josh
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Are you sure about that?
I'm not a treaty lawyer, but I thought it was a more-or-less straightforward any US carrier from anywhere in US to any EU country (for example AA from ATL-CDG if they chose to) and any EU carrier from anywhere in EU to anywhere in USA (for example AF from LHR to LAX).
I didn't think there is anything in the deal regarding cabotage?
From the 2007 agreement: us-eu open skies deal
Article 3 Grant of rights:
1(c) the right to perform international air transportation between
points on the following routes:
(i) for airlines of the United States (hereinafter US airlines),
from points behind the United States via the
United States and intermediate points to any point or
points in any Member State or States and beyond; and
for all-cargo service, between any Member State and any
point or points (including in any other Member States);
(ii) for airlines of the European Community and its Member
States (hereinafter Community airlines), from points
behind the Member States via the Member States and
intermediate points to any point or points in the
United States and beyond; for all-cargo service, between
the United States and any point or points; and, for combination
services, between any point or points in the
United States and any point or points in any member
of the European Common Aviation Area (hereinafter
the ECAA) as of the date of signature of this Agreement;
{I don't think there is anything about cabotage here - or am I mistaken? I read it as that a USA carrier can fly USA-France-Spain-USA but not market the intra-EU segment in the EU. Likewise, then an EU carrier can fly EU-DTW-CVG-EU if they chose to but not market the DTW-CVG segment in the USA}?
Article 3 Grant of rights:
2. Each airline may on any or all flights and at its option:
(c) serve behind, intermediate, and beyond points and points in
the territories of the Parties in any combination and in any
order;
{To me this means that a US airline can fly, for example USA-EU-MidEast and an EU carrier can fly, for example, EU-USA-Canada}?
Article 3 Grant of rights:
6. Nothing in this Agreement shall be deemed to confer on:
(a) US airlines the right to take on board, in the territory of any
Member State, passengers, baggage, cargo, or mail carried
for compensation and destined for another point in the territory
of that Member State;
(B) Community airlines the right to take on board, in the territory
of the United States, passengers, baggage, cargo, or mail
carried for compensation and destined for another point in
the territory of the United States.
{I guess this section says that no US airline can do USA-FRA-MUC-FRA-USA for example, and that no EU airline can do EU-SFO-LAX-SFO-EU}?
WorldTraveler
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a US airline cannot do MUC-FRA on a revenue basis (note that TXL was considered at one time an exception). US airlines can do LHR-BRU or CDG-MXP but US airlines have almost entirely decided it is not worth trying to fly within the US given that their European partners can do it more cost effectively and there are largely revenue sharing/joint venture agreements in place.
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