JetBlue to build up FLL looks like a challenge to AA in MIA
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WorldTraveler
Corn Field
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B6 is clearly pushing FLL and the Feds to make FLL into a fully int'l capable hub facility with the capacity for B6 to grow as much as it wants.
Latin America is a very fast growing region along with Asia but unlike Asia, Latin America can be served with narrowbody aircraft by US low fare carriers... in addition, many of the bilateral agreements between the US and countries in Latin America are moving to Open Skies in the next couple years which will usher in a new era of growth in US-Latin America traffic. WN's growth in the region will also be significant but likely focused more heavily from the central and southwest US where WN has more historic strength.
S. Florida remains the largest US-Latin America market particularly in terms of the number of seats offered. AA's dominance of the market which is unlike what exists in any other gateway to any other region of the world means that competition is certain to grow. Given AA's reliance on Latin America and the necessity for AA to continue to dominate the region from MIA in order to retain its position elsewhere, the competition will be fierce.
Latin America is a very fast growing region along with Asia but unlike Asia, Latin America can be served with narrowbody aircraft by US low fare carriers... in addition, many of the bilateral agreements between the US and countries in Latin America are moving to Open Skies in the next couple years which will usher in a new era of growth in US-Latin America traffic. WN's growth in the region will also be significant but likely focused more heavily from the central and southwest US where WN has more historic strength.
S. Florida remains the largest US-Latin America market particularly in terms of the number of seats offered. AA's dominance of the market which is unlike what exists in any other gateway to any other region of the world means that competition is certain to grow. Given AA's reliance on Latin America and the necessity for AA to continue to dominate the region from MIA in order to retain its position elsewhere, the competition will be fierce.
Two different markets altogether. Maybe the same CSMA by the US Census and a 45 minute drive apart but FLL is not MIA, or vice versa. AA has a long history of serving Latin America and the Caribbean, they serve more markets than any other US carrier. The AA name has considerable pull in the region, go to Bogota or San Pedro see AA has city ticket offices in prominent city center locations. This will get interesting especially with AA's FF partnership with jetBlue, but it is unclear if that will remain or not. MIA has a unique and strategic role in AA's network they aren't going to walk away from it without a fight.
Josh
Josh
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Corn Field
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The B6-AA relationship is not much diferente from what DL is facing with AS... legally and in every other form they are competitors and they have to act as such... B6 will do what it needs to do in order to grow its franchise and if it steps on AA's toes, so be it.... doesn't matter who the two competitors are but between domestic carriers there is no such thing as joint ventures....
There was a time when EWR and LGA/JFK were considered different markets but that was before CO built EWR into a credible hub for NYC.
The only reason why FLL and MIA are considered separate markets is because there has not been comparable service from both airports.
NK tried to build FLL into a gateway but they simply don't have a similar enough product to be considered a competitor to a network carrier; B6 most certainly does.
MIA like JFK has geographic advantages that put it closer to a larger pool of passengers but that doesn't mean that FLL just like EWR doesn't have the potential to be a much larger int'l gateway than it has historically been.... add in that B6 has a very strong presence on the east coast where most Latin America connections outside of the MFL originate and B6 should have no problem filling planes... remember they have a 15% or more cost advantage over AA and also use smaller aircraft which means they can price lower and fill planes easier than AA can. As noted, FLL airport is vying to be a lower cost alternative to MIA as well.
B6 can and will be a viable alternative to AA at MIA if they even half put their mind to it... and they clearly appear to be doing so.
Further, history has shown that when a low cost carrier moves into a network carrier dominated hub, the result is also more network carrier competitor service because the low fare carrier breaks the stranglehold that the network carrier has had in that market. The same will likely be true at both MIA and FLL with other network carriers.
A few years down the road and it will be harder and harder to say that FLL and MIA do not compete for the same passenger....
There was a time when EWR and LGA/JFK were considered different markets but that was before CO built EWR into a credible hub for NYC.
The only reason why FLL and MIA are considered separate markets is because there has not been comparable service from both airports.
NK tried to build FLL into a gateway but they simply don't have a similar enough product to be considered a competitor to a network carrier; B6 most certainly does.
MIA like JFK has geographic advantages that put it closer to a larger pool of passengers but that doesn't mean that FLL just like EWR doesn't have the potential to be a much larger int'l gateway than it has historically been.... add in that B6 has a very strong presence on the east coast where most Latin America connections outside of the MFL originate and B6 should have no problem filling planes... remember they have a 15% or more cost advantage over AA and also use smaller aircraft which means they can price lower and fill planes easier than AA can. As noted, FLL airport is vying to be a lower cost alternative to MIA as well.
B6 can and will be a viable alternative to AA at MIA if they even half put their mind to it... and they clearly appear to be doing so.
Further, history has shown that when a low cost carrier moves into a network carrier dominated hub, the result is also more network carrier competitor service because the low fare carrier breaks the stranglehold that the network carrier has had in that market. The same will likely be true at both MIA and FLL with other network carriers.
A few years down the road and it will be harder and harder to say that FLL and MIA do not compete for the same passenger....
WT,
International O&D is centered in Miami (Dade County) not Lauderdale or Broward County. Miami is an international city with business and cultural ties to Latin America, most all the Latin banks have offices in Brickell as the article said they must be chasing lower yielding traffic that isn't bothered by the drive.
Josh
International O&D is centered in Miami (Dade County) not Lauderdale or Broward County. Miami is an international city with business and cultural ties to Latin America, most all the Latin banks have offices in Brickell as the article said they must be chasing lower yielding traffic that isn't bothered by the drive.
Josh
NewHampshire Black Bears
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Hmmm.
Maybe...if B6 become too 'bothersome'......AA will 'digest' them.
Problem solved !
'P O O O F F F' !
Maybe...if B6 become too 'bothersome'......AA will 'digest' them.
Problem solved !
'P O O O F F F' !
WorldTraveler
Corn Field
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Why is American Airlines so afraid of actually competing instead of constantly talking about buying them if the competition proves to be a threat; it is clear that AA as a company has indoctrinated its employees well that it isn't necessary to compete because "we can just buy and then dismantle them."
Josh,
I understand the way the S. Florida market works but it doesn't mean there is no potential to develop markets at FLL. Remember, B6 doesn't compete for the top end business traveler and wouldn't get it at FLL anyway.... they are not likely targeting it anyway. But if they can start flying narrowbodies full of passengers to key Latin America destinations from FLL, they will take a chunk of the market. No legacy hub can effectively compete w/o having a viable pool of leisure passengers.
Latin America is unlike Europe and Asia; Latin America is close enough to the US to use narrowbodies and be viable destinations for low fare carriers while Asia and Europe are not. To think that B6 or any other low fare carrier can't have a major influence in Latin America would be a huge mistake.
The only reason it doesn't exist now is because none has really tried it other than NK which is in a different market category.
Mikey,
apparently you missed that FLL is investing billions in new facilities, B6 is still the lowest cost large jet operator in the US, and their founder has strong ties to Latin America...
none of that was true with US.
Maybe B6 will succeed and maybe thought won't... right now, they aren't even committing to building a hub because the facilities aren't there yet....
WN has said they intend to aggressively expand into Latin America as well so this isn't just about B6.
If B6 or WN truly can't do anything to AA, then there is nothing to worry about.
If those two can genuinely become viable forces in the market, then AA had better be prepared to compete, something AA hasn't done well in highly competitive markets for at least a decade.
BTW, DOT stats are in for the 4th quarter and they clearly show that DL's growth in NYC has come at the expense of AA and B6.
DL now has 1/3 of the combined LGA/JFK-MIA market, is the largest carrier in LGA/JFK-PIT, and at least double digit market shares in every AA/US market from LGA and JFK.
There are a number of markets that DL has shifted overall share from JFK to LGA and to DL from B6. A large part of the reason why B6 is looking for other growth opportunities is because they are being squeezed at JFK.
AA/US can talk about the power of the combined network but there are few markets for either AA or US where they are dominant amidst large-scale competition.
Josh,
I understand the way the S. Florida market works but it doesn't mean there is no potential to develop markets at FLL. Remember, B6 doesn't compete for the top end business traveler and wouldn't get it at FLL anyway.... they are not likely targeting it anyway. But if they can start flying narrowbodies full of passengers to key Latin America destinations from FLL, they will take a chunk of the market. No legacy hub can effectively compete w/o having a viable pool of leisure passengers.
Latin America is unlike Europe and Asia; Latin America is close enough to the US to use narrowbodies and be viable destinations for low fare carriers while Asia and Europe are not. To think that B6 or any other low fare carrier can't have a major influence in Latin America would be a huge mistake.
The only reason it doesn't exist now is because none has really tried it other than NK which is in a different market category.
Mikey,
apparently you missed that FLL is investing billions in new facilities, B6 is still the lowest cost large jet operator in the US, and their founder has strong ties to Latin America...
none of that was true with US.
Maybe B6 will succeed and maybe thought won't... right now, they aren't even committing to building a hub because the facilities aren't there yet....
WN has said they intend to aggressively expand into Latin America as well so this isn't just about B6.
If B6 or WN truly can't do anything to AA, then there is nothing to worry about.
If those two can genuinely become viable forces in the market, then AA had better be prepared to compete, something AA hasn't done well in highly competitive markets for at least a decade.
BTW, DOT stats are in for the 4th quarter and they clearly show that DL's growth in NYC has come at the expense of AA and B6.
DL now has 1/3 of the combined LGA/JFK-MIA market, is the largest carrier in LGA/JFK-PIT, and at least double digit market shares in every AA/US market from LGA and JFK.
There are a number of markets that DL has shifted overall share from JFK to LGA and to DL from B6. A large part of the reason why B6 is looking for other growth opportunities is because they are being squeezed at JFK.
AA/US can talk about the power of the combined network but there are few markets for either AA or US where they are dominant amidst large-scale competition.
robbedagain
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I thought that US was the largest carrier in the carribbean as i thought they over took AA a few yrs ago.... esp when AA pulled down the SJU hub
WorldTraveler
Corn Field
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Sorry if you missed the connection... let me spell it out.
B6 is looking for opportunities to expand its network outside of NYC precisely because they are feeling the pressure from DL at LGA.
There.
It's relevant to the discussion.
If B6 was doing as well as they once did in NYC then they might not be thinking about FLL and Latin America quite as much.
You might not want to hear but the industry is a whole lot more "one unit" than you think.
B6 is looking for opportunities to expand its network outside of NYC precisely because they are feeling the pressure from DL at LGA.
There.
It's relevant to the discussion.
If B6 was doing as well as they once did in NYC then they might not be thinking about FLL and Latin America quite as much.
You might not want to hear but the industry is a whole lot more "one unit" than you think.
FYI....US has roughly 7 to 11 flights per day depending on the day of the week.
B6 took over in SJU with more than 40 flights a day, with AA down to 14 flights a day from as high of 40. Btw American Eagle completely shut down.
Go figure!
robbedagain
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so american eagle no longer flies thru the carribbean? does AA still have carribbean runs out of SJU or is it just mia? so it sounds like B6 took over as the largest in the caribbean wow
traderjake
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B6, like American and United might as well declare Chapter 7 now because nobody can compete with Delta.
wings396
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I didn't miss anything, just pointing out that you can't make it thru a single post without bringing Delta and/or the tremendous NYC fortress that they have assembled to conquer the world.
