robbedagain
Veteran
- Oct 13, 2003
- 11,125
- 2,676
700 is the higher the yield the better and more profits the airline makes
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Merger News
- Thread starter chellow
- Start date
drifterreno
Veteran
- Aug 21, 2002
- 611
- 3
Just saying---if Doug tells you something and promises it is so---think twice before you believe it.
NewHampshire Black Bears
Veteran
- Aug 20, 2002
- 10,154
- 681
FWAAA,
Your correct. (And you ...now....have me feeling better about the AA/US 'International situation') (the Domestic will take care of itself)
After looking at the map between BOS and IAD, I now see that the 'new AA' will pull passengers going anywhere in Europe from this following geographical AREA (and thats as O+D traffic)
The following area;
Maryland: BWI-north, and All of eastern MD.
Delaware: ALL
Penn: All Eastern PA which includes PHL(naturally), Harrisburg, Scranton, Allentown.
New Jersey: ALL (Trenton/Newark)
New York: Albany south and ALL of Long Island
Connecticut: Hartford south, including New Haven/Stamford.
This is(as I SEE Now) an ENORMOUS population area !
The trick is to be able to balance which Europe flights go out of where.
The combined AA/US will DWARF DL from the northeast to Europe, and also UA(from EWR)
It wouldn't surprise me to see my current employer AMTRAK (somehow) getting into the Act with the new AA by moving folks around by High Speed Rail between the points of BWI/NHV with Higher speeds to come Soon between ALB to NYC.
Yea, (thanks to You), I LIKE what I see !
Your correct. (And you ...now....have me feeling better about the AA/US 'International situation') (the Domestic will take care of itself)
After looking at the map between BOS and IAD, I now see that the 'new AA' will pull passengers going anywhere in Europe from this following geographical AREA (and thats as O+D traffic)
The following area;
Maryland: BWI-north, and All of eastern MD.
Delaware: ALL
Penn: All Eastern PA which includes PHL(naturally), Harrisburg, Scranton, Allentown.
New Jersey: ALL (Trenton/Newark)
New York: Albany south and ALL of Long Island
Connecticut: Hartford south, including New Haven/Stamford.
This is(as I SEE Now) an ENORMOUS population area !
The trick is to be able to balance which Europe flights go out of where.
The combined AA/US will DWARF DL from the northeast to Europe, and also UA(from EWR)
It wouldn't surprise me to see my current employer AMTRAK (somehow) getting into the Act with the new AA by moving folks around by High Speed Rail between the points of BWI/NHV with Higher speeds to come Soon between ALB to NYC.
Yea, (thanks to You), I LIKE what I see !
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #36
Hey Bears,
I'm glad you have the optimism to believe that AA/US combined will be a powerhouse from the NE to Europe. Problem is that the data doesn't even come close to showing that it could become reality.
AA/US combined today would have to grow 25% in the region you mentioned in order to grow to the same size DL is to Europe - and I am not even counting AF/KL/AZ which is larger from the same region than oneworld partners. Add in that DL is buying 49% of Virgin Atlantic, will implement a JV w/ them, and DL will have even more "friendly capacity" and it is even harder to imagine how AA/US will surpass DL.
In fact, AA/US will be about the same size from the NE as UA; the merger will (if it happens) gain parity with them but remember they have two very powerful hubs in the region as well and just based on what we have seen in ORD, they have given nothing up to AA internationally.
You also seem to forget (or want to overlook) that AA/US combined would control about 65-70% of the slots at DCA which almost certainly requires divestiture. You know EXACTLY who will get those slots - WN and B6 - and you also know AA and US individually have fared in competing against B6 and WN; to somehow think those two low fare carriers are not going to focus on AA/US' most valuable markets from DCA. Between them, they easily will win a half dozen new flights each from DCA - maybe more. When you factor in the revenue losses that AA/US would suffer at DCA because of low fare carriers, the total may offset whatever gains AA/US gains in overall size in the NE. Add in that weakening AA/US' position in the NE overall at the hands of low fare carriers would offset some of the gains they come up w/ internationally, and it isn't at all clear that AA/US will be any stronger, esp. in NYC where AA is already at half the size of DL and UA internationally.
Glad to see your optimism but you and others fail to consider that the AA/US merger has been so publicly planned for a full year and every competitor has had time to develop their own strategies.... the minute the merger announcement is made, those carriers are going to escalate their planning to minimize whatever gains AA/US could make - and the whole process of approval will take a minimum of 6 months with even the earliest codeshares months away.
BTW, UA just reported their traffic results for Jan and have cut enough capacity systemwide including to Europe to now have RASM increases on par with what US posted. If UA is now serious about walking away from market share battles in order to regain profitability, then they will be even more focused on going after the best revenue that is available - and it will also make it very difficult for AA/US to win by playing its own market share games at the expense of developing a profitable operation.
So far, AA has not reported its Jan traffic and RASM data.
I'm glad you have the optimism to believe that AA/US combined will be a powerhouse from the NE to Europe. Problem is that the data doesn't even come close to showing that it could become reality.
AA/US combined today would have to grow 25% in the region you mentioned in order to grow to the same size DL is to Europe - and I am not even counting AF/KL/AZ which is larger from the same region than oneworld partners. Add in that DL is buying 49% of Virgin Atlantic, will implement a JV w/ them, and DL will have even more "friendly capacity" and it is even harder to imagine how AA/US will surpass DL.
In fact, AA/US will be about the same size from the NE as UA; the merger will (if it happens) gain parity with them but remember they have two very powerful hubs in the region as well and just based on what we have seen in ORD, they have given nothing up to AA internationally.
You also seem to forget (or want to overlook) that AA/US combined would control about 65-70% of the slots at DCA which almost certainly requires divestiture. You know EXACTLY who will get those slots - WN and B6 - and you also know AA and US individually have fared in competing against B6 and WN; to somehow think those two low fare carriers are not going to focus on AA/US' most valuable markets from DCA. Between them, they easily will win a half dozen new flights each from DCA - maybe more. When you factor in the revenue losses that AA/US would suffer at DCA because of low fare carriers, the total may offset whatever gains AA/US gains in overall size in the NE. Add in that weakening AA/US' position in the NE overall at the hands of low fare carriers would offset some of the gains they come up w/ internationally, and it isn't at all clear that AA/US will be any stronger, esp. in NYC where AA is already at half the size of DL and UA internationally.
Glad to see your optimism but you and others fail to consider that the AA/US merger has been so publicly planned for a full year and every competitor has had time to develop their own strategies.... the minute the merger announcement is made, those carriers are going to escalate their planning to minimize whatever gains AA/US could make - and the whole process of approval will take a minimum of 6 months with even the earliest codeshares months away.
BTW, UA just reported their traffic results for Jan and have cut enough capacity systemwide including to Europe to now have RASM increases on par with what US posted. If UA is now serious about walking away from market share battles in order to regain profitability, then they will be even more focused on going after the best revenue that is available - and it will also make it very difficult for AA/US to win by playing its own market share games at the expense of developing a profitable operation.
So far, AA has not reported its Jan traffic and RASM data.
wings396
Veteran
- Aug 20, 2002
- 3,672
- 1,122
To sum up what WT is saying, nobody will ever top Delta in any shape, anywhere, at anytime. They are, and always will be the biggest, best, the true Kings of the airline industry. They now rule NYC, and he is in all his glory over this situation alone. Nobody can ever compete with them, so why even bother. In due time, I can see all of the other airlines conceding everything to Delta since they can't keep up with them.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #38
sorry you missed the point.
There is a first mover advantage in almost all strategic actions by companies; DL moved first in the current round of megamergers and then executed the NW/DL merger nearly flawlessly at least from a strategic perspective. DL is now moving into a whole new series of strategic initiatives to ensure that whatever strategic weakness it had relative to its competitors is addressed and to ensure that DL is positioned to retain whatever it had gained as a result of its merger if not grow it relative to other carriers.
Regarding NYC, most of the largest coastal cities - NYC, BOS, LA, WAS have been divided among the network/legacy carriers for years with no clear dominant carrier as US has at PHL. NYC happens to be the largest travel market in the US and one where AA and US have a strong historical presence. DL has focused its strategic efforts on NYC during the past 5 years and is now the largest domestic airline in NYC and largest airline to Europe - and AA/US together won't change that ranking.
UA still has a very strong hub in NYC as well as at IAD and they clearly recognize the strategic implications of the AA/US merger; they have been too focused on getting their own merger to work in order to focus their efforts outwardly but you can bet they will not just roll over and let AA/US gain an advantage on the east coast. UA has kept AA at a disadvantage at ORD in the international arena and the growth of LCCs at ORD has negatively impacted AA more than UA.
Add in that US might end up having to give up most of what it gained from DL at DCA as a result of the slot swap and AA/US will not be anywhere near as large on the east coast as simply adding the 2 carriers' sizes together.
AA/US will be much stronger exactly where the two are strong today - East Coast to Latin America and from the combined carriers' hubs. But all of the other markets where AA/US COULD gain a benefit from its increased size - including NYC, LAX, BOS - will be the cities where other carriers will expand to ensure that AA/US does not gain benefits from the merger.
And it won't be just DL that will be acting strategically. DL has a head start but they are hardly going to be the only carrier that kicks their strategic plans into high gear.
Add in that DL's success in NYC means they now have a lot of bandwidth to start pursuing other strategic options and you will see DL's focus shift more and more to the west coast, Asia/Pacific, and Latin America. Don't be surprised if you see additional strategic moves from DL as well. DL now owns equity in 3 foreign airlines in key global markets that it will leverage to increase its position in those markets; not surprisingly, in all of those right now, DL is not the largest carrier from the US. They are making investments in markets where they need to grow.
just a few examples from the media today involving both Gol and Virgin Atlantic
http://www.bloomberg.com/news/2013-02-08/virgin-atlantic-on-offensive-as-delta-deal-ends-wilderness-years.html?cmpid=yhoo
Virgin Atlantic Airways Ltd. will go on the offensive under new Chief Executive Officer Craig Kreeger as an equity deal with Delta Air Lines Inc. gives it the backing to take on bigger rivals, outgoing CEO Steve Ridgway said.
“There’s now a shareholder with a significant strategic interest in what Virgin Atlantic brings them,” Ridgway said in an interview. “We’ve been in fighting mode for the last four to five years. This should put us back on a growth trajectory.”
The first task for Kreeger, who took over on Feb. 1, will be to expedite the two-month old joint venture agreement with Delta, Ridgway said. The new CEO’s 27 years at AMR Corp., where he helped coordinate a joint venture between American Airlines and BA, should help him deliver on the new tie-up, he said.
http://finance.yahoo.com/news/gol-delta-launch-exclusive-benefits-123500222.html
GOL Linhas Aereas Inteligentes, the largest low-cost and low-fare airline in Latin America, and Delta Air Lines, hereby announce an alignment of the management of their respective loyalty programs, SMILES and SkyMiles. "The idea is to provide frequent fliers with more and better benefits every day," emphasized Flavio Vargas, Director of the SMILES program. "Other novelties and special services are in the pipeline and will be launched soon."
If AA/US yields better salaries and benefits for the employees of the combined company, then I am happy for you. I really am. But it doesn't change that AA/US is the 3rd megamerger to happen (if it does), other carriers have major strategic advantages and head starts that they are not going to give up, and AA/US still doesn't come close to addressing all of the strategic needs that AA/US must address in order to compete with DL and UA, including a very weak position in Asia/Pacific and a shrinking position in NYC.
There is a first mover advantage in almost all strategic actions by companies; DL moved first in the current round of megamergers and then executed the NW/DL merger nearly flawlessly at least from a strategic perspective. DL is now moving into a whole new series of strategic initiatives to ensure that whatever strategic weakness it had relative to its competitors is addressed and to ensure that DL is positioned to retain whatever it had gained as a result of its merger if not grow it relative to other carriers.
Regarding NYC, most of the largest coastal cities - NYC, BOS, LA, WAS have been divided among the network/legacy carriers for years with no clear dominant carrier as US has at PHL. NYC happens to be the largest travel market in the US and one where AA and US have a strong historical presence. DL has focused its strategic efforts on NYC during the past 5 years and is now the largest domestic airline in NYC and largest airline to Europe - and AA/US together won't change that ranking.
UA still has a very strong hub in NYC as well as at IAD and they clearly recognize the strategic implications of the AA/US merger; they have been too focused on getting their own merger to work in order to focus their efforts outwardly but you can bet they will not just roll over and let AA/US gain an advantage on the east coast. UA has kept AA at a disadvantage at ORD in the international arena and the growth of LCCs at ORD has negatively impacted AA more than UA.
Add in that US might end up having to give up most of what it gained from DL at DCA as a result of the slot swap and AA/US will not be anywhere near as large on the east coast as simply adding the 2 carriers' sizes together.
AA/US will be much stronger exactly where the two are strong today - East Coast to Latin America and from the combined carriers' hubs. But all of the other markets where AA/US COULD gain a benefit from its increased size - including NYC, LAX, BOS - will be the cities where other carriers will expand to ensure that AA/US does not gain benefits from the merger.
And it won't be just DL that will be acting strategically. DL has a head start but they are hardly going to be the only carrier that kicks their strategic plans into high gear.
Add in that DL's success in NYC means they now have a lot of bandwidth to start pursuing other strategic options and you will see DL's focus shift more and more to the west coast, Asia/Pacific, and Latin America. Don't be surprised if you see additional strategic moves from DL as well. DL now owns equity in 3 foreign airlines in key global markets that it will leverage to increase its position in those markets; not surprisingly, in all of those right now, DL is not the largest carrier from the US. They are making investments in markets where they need to grow.
just a few examples from the media today involving both Gol and Virgin Atlantic
http://www.bloomberg.com/news/2013-02-08/virgin-atlantic-on-offensive-as-delta-deal-ends-wilderness-years.html?cmpid=yhoo
Virgin Atlantic Airways Ltd. will go on the offensive under new Chief Executive Officer Craig Kreeger as an equity deal with Delta Air Lines Inc. gives it the backing to take on bigger rivals, outgoing CEO Steve Ridgway said.
“There’s now a shareholder with a significant strategic interest in what Virgin Atlantic brings them,” Ridgway said in an interview. “We’ve been in fighting mode for the last four to five years. This should put us back on a growth trajectory.”
The first task for Kreeger, who took over on Feb. 1, will be to expedite the two-month old joint venture agreement with Delta, Ridgway said. The new CEO’s 27 years at AMR Corp., where he helped coordinate a joint venture between American Airlines and BA, should help him deliver on the new tie-up, he said.
http://finance.yahoo.com/news/gol-delta-launch-exclusive-benefits-123500222.html
GOL Linhas Aereas Inteligentes, the largest low-cost and low-fare airline in Latin America, and Delta Air Lines, hereby announce an alignment of the management of their respective loyalty programs, SMILES and SkyMiles. "The idea is to provide frequent fliers with more and better benefits every day," emphasized Flavio Vargas, Director of the SMILES program. "Other novelties and special services are in the pipeline and will be launched soon."
If AA/US yields better salaries and benefits for the employees of the combined company, then I am happy for you. I really am. But it doesn't change that AA/US is the 3rd megamerger to happen (if it does), other carriers have major strategic advantages and head starts that they are not going to give up, and AA/US still doesn't come close to addressing all of the strategic needs that AA/US must address in order to compete with DL and UA, including a very weak position in Asia/Pacific and a shrinking position in NYC.
wings396
Veteran
- Aug 20, 2002
- 3,672
- 1,122
Oh I didn't miss anything, as all of your "points" are the same. They all point to the superior mothership, Delta. I'm not going to waste my time debating with you, since everyone on here already knows your chant. Find me ONE person on here, except Spectator who hasn't seen thru your sham by this time. I truly do hope that Richard over at DL has put you on his payroll after all of your hard work. I would hate for everyone to think that you were stupid enough to defend DL on here 24/7 for free on your own time.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #40
What percentage of your time on the clock does Parker pay for you to post here? I don't have delusions that anyone who really looks at their companies objectively is paid to participate in this or any other forum.
Just like everything else I have posted over the past 9 1/2 years on here, I am happy to subject my posts to the test of time to see how accurate they have become.
My track record on speaking to the major strategic issues that have confronted the industry has been very close to the target.
You and everyone else are more than welcome to discuss and debate.... please just be willing to admit if you are wrong.
And if I prove to be wrong about what happens with AA/US (if it happens), I will most certainly be willing to admit I am wrong.
As it is, if the merger announcement is made next week, I'll be shelling out a gift card to the sole lucky person who was willing to put his neck on the line regarding whether AA would emerge as a standalone or not.
I commend him for believing in his positions enough to back them up.
Just like everything else I have posted over the past 9 1/2 years on here, I am happy to subject my posts to the test of time to see how accurate they have become.
My track record on speaking to the major strategic issues that have confronted the industry has been very close to the target.
You and everyone else are more than welcome to discuss and debate.... please just be willing to admit if you are wrong.
And if I prove to be wrong about what happens with AA/US (if it happens), I will most certainly be willing to admit I am wrong.
As it is, if the merger announcement is made next week, I'll be shelling out a gift card to the sole lucky person who was willing to put his neck on the line regarding whether AA would emerge as a standalone or not.
I commend him for believing in his positions enough to back them up.
wings396
Veteran
- Aug 20, 2002
- 3,672
- 1,122
Aren't you the guy that was prematurely drooling over Delta flexing their muscle in a bidding war over AA, and picking up DFW & MIA? How is the accuracy of that prediction looking? Give it a break already, as you are the only one who enjoys and believes everything that you post. Is there any topic on these boards anywhere that you haven't started a fire with someone? Any posts that don't somehow happen to incorporate Detla and how superior they are in some way? Take time to read all of the BS propaganda that you post, and just perhaps your broken record rants will jump out at you. An obsession such as yours with a company that you don't work for isn't healthy.
NewHampshire Black Bears
Veteran
- Aug 20, 2002
- 10,154
- 681
W T,
To repeat,....I ONLY mentioned NE (PHL/JFK) to Europe,....NOT Virgin..NOT LA/SFO,...NOT DCA,....NOT S A. , NOT anybody's JV,....and NOT the price of TEA in Cambodia !!!!.
When it's Finally combined,....'TWO' International Airlines W I L L have MORE service to Europe, than 'ONE' International Airline, be it...UA OR DL.
AND if the new AA is forced to 'Kick back' dca slots, perhaps the FEDS will look at ALL the slots DL has in LGA, and how they obtained them.
Methinks that 'things' are on the Cusp of getting 'Interesting once more !
Hmmmm !
To repeat,....I ONLY mentioned NE (PHL/JFK) to Europe,....NOT Virgin..NOT LA/SFO,...NOT DCA,....NOT S A. , NOT anybody's JV,....and NOT the price of TEA in Cambodia !!!!.
When it's Finally combined,....'TWO' International Airlines W I L L have MORE service to Europe, than 'ONE' International Airline, be it...UA OR DL.
AND if the new AA is forced to 'Kick back' dca slots, perhaps the FEDS will look at ALL the slots DL has in LGA, and how they obtained them.
Methinks that 'things' are on the Cusp of getting 'Interesting once more !
Hmmmm !
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #44
no, actually, AA-US will not be larger than DL to Europe based on the most recent DOT statistics not just from the NE but also from the entire US - and that is just DL's metal. AA-US combined are about the same size as UA and smaller than DL. Perhaps you don't appreciate how much AA has cut from JFK and how much other carriers have grown.
All the tea in China won't change the fact that AA and US combined are going to have to fight like nobody's business to try to keep competitors from taking any more of those two carriers' key passengers including in the NE. The notion that those two carriers are going to grow and pull back passengers that they have lost is something that has never been done in US airline history. Any claims that AA-US can do it today will be met by a healthy degree of skepticism.
If they become larger, it will be because they grow - and there is nothing stopping any other carrier from growing as well.
What I don't deny is that AA/US will be in a similar-sized league as DL and UA in terms of total size. Obviously AA/US will still be larger to Latin America and even though it is certain that other carriers will grow there, it is no more realistic to think that AA/US will grow 20% to overcome competitor size to Europe than it is to think that DL or UA will grow and close the gap with AA to Latin America.
It also still doesn't change that AA/US will still be very small to Asia and AA faces competition from UA in nearly every Asia market AA flies - and UA outperforms AA on every one of those routes in revenue performance.
As much as you and others hold NYC dear to your heart, AA has allowed competitors - including DL - to steal enormous amounts of revenue from AA over the past 10 years; US swapped away 1/4 of the slots at LGA and never had much of a presence at JFK. Now AA is #3 in revenue in NYC and #4 in domestic markets and the combination of AA/US is not going to change that.
As for DCA/LGA, DL has just under 1/2 of the slots at LGA. US has just over half of the slots at DCA. It was obvious to most of us as soon as the slot deal was announced that US had no room to acquire any other carrier that had DCA operations w/o being forced to surrender slots.
The Feds so far have made it very clear that 50% is the max percent of slots they will allow any carrier to have. DL has not exceed that but AA/US will at DCA.
WN and B6 are salivating at the prospect of gaining slots at DCA and the Feds will be sure to trot out the benefit to consumers at DCA by injecting a lot more low fare competition. Remember that B6, a low fare carrier, has a substantial presence in NYC. There is no comparable large LCC presence at DCA or IAD and the feds are very cognizant of the pubic perception of having no significant LCC presence in the nation's capital.
I very much appreciate the loyalty you have to AA and want just like you to see AA turn around. But it is not reality to think that AA and US individually or as one are all of a sudden going to reverse changes that have been taking place for years given that neither carrier has been able to close the gaps on their own.
Mergers, like marriages, bring two people, imperfect as they both are, together. It takes a whole lot of work after the fact to make a merger work.
Fortunately in marriages, you don't have to compete with or compare yourself to others.
In business, that is not the case.
Yes, BOS does have the potential to be a city where AA/US could gain some presence... but remember that AA has now given up flying on its own metal and B6 is in just about every domestic market from BOS that matters. It is no more realistic to think that AA-US can grow in BOS than they have been able to in JFK and LGA.
And back to you, Bears, alliances very much matter. As much as you want to look at AA and/or US alone, all of the big 3 have joint ventures that involve revenue sharing. The size that DL has at BOS and JFK with its partners very much does count... and the revenue that Virgin will bring to DL will absolutely matter. Add in that unlike any other joint venture between a US and foreign carrier, DL will have a significant ownership potential in VS that will allow them to redeploy assets between the two carriers and dictate what is best for the combined company. You can absolutely count on that DL's partnership with VS will be much more than just the addition of what the two carriers have today.
Again, I wish you and other AA and US employees and fans well with AA's emergence and now possible/likely merger.
But the amount of work that it will take to make AA/US compete against other airlines hasn't even come close to where it needs to be.
All the tea in China won't change the fact that AA and US combined are going to have to fight like nobody's business to try to keep competitors from taking any more of those two carriers' key passengers including in the NE. The notion that those two carriers are going to grow and pull back passengers that they have lost is something that has never been done in US airline history. Any claims that AA-US can do it today will be met by a healthy degree of skepticism.
If they become larger, it will be because they grow - and there is nothing stopping any other carrier from growing as well.
What I don't deny is that AA/US will be in a similar-sized league as DL and UA in terms of total size. Obviously AA/US will still be larger to Latin America and even though it is certain that other carriers will grow there, it is no more realistic to think that AA/US will grow 20% to overcome competitor size to Europe than it is to think that DL or UA will grow and close the gap with AA to Latin America.
It also still doesn't change that AA/US will still be very small to Asia and AA faces competition from UA in nearly every Asia market AA flies - and UA outperforms AA on every one of those routes in revenue performance.
As much as you and others hold NYC dear to your heart, AA has allowed competitors - including DL - to steal enormous amounts of revenue from AA over the past 10 years; US swapped away 1/4 of the slots at LGA and never had much of a presence at JFK. Now AA is #3 in revenue in NYC and #4 in domestic markets and the combination of AA/US is not going to change that.
As for DCA/LGA, DL has just under 1/2 of the slots at LGA. US has just over half of the slots at DCA. It was obvious to most of us as soon as the slot deal was announced that US had no room to acquire any other carrier that had DCA operations w/o being forced to surrender slots.
The Feds so far have made it very clear that 50% is the max percent of slots they will allow any carrier to have. DL has not exceed that but AA/US will at DCA.
WN and B6 are salivating at the prospect of gaining slots at DCA and the Feds will be sure to trot out the benefit to consumers at DCA by injecting a lot more low fare competition. Remember that B6, a low fare carrier, has a substantial presence in NYC. There is no comparable large LCC presence at DCA or IAD and the feds are very cognizant of the pubic perception of having no significant LCC presence in the nation's capital.
I very much appreciate the loyalty you have to AA and want just like you to see AA turn around. But it is not reality to think that AA and US individually or as one are all of a sudden going to reverse changes that have been taking place for years given that neither carrier has been able to close the gaps on their own.
Mergers, like marriages, bring two people, imperfect as they both are, together. It takes a whole lot of work after the fact to make a merger work.
Fortunately in marriages, you don't have to compete with or compare yourself to others.
In business, that is not the case.
Yes, BOS does have the potential to be a city where AA/US could gain some presence... but remember that AA has now given up flying on its own metal and B6 is in just about every domestic market from BOS that matters. It is no more realistic to think that AA-US can grow in BOS than they have been able to in JFK and LGA.
And back to you, Bears, alliances very much matter. As much as you want to look at AA and/or US alone, all of the big 3 have joint ventures that involve revenue sharing. The size that DL has at BOS and JFK with its partners very much does count... and the revenue that Virgin will bring to DL will absolutely matter. Add in that unlike any other joint venture between a US and foreign carrier, DL will have a significant ownership potential in VS that will allow them to redeploy assets between the two carriers and dictate what is best for the combined company. You can absolutely count on that DL's partnership with VS will be much more than just the addition of what the two carriers have today.
Again, I wish you and other AA and US employees and fans well with AA's emergence and now possible/likely merger.
But the amount of work that it will take to make AA/US compete against other airlines hasn't even come close to where it needs to be.
Super FLUF
Senior
- Jun 10, 2011
- 313
- 206
AMR Stands to Gain Vast Route Network
By JACK NICAS
The anticipated marriage of American Airlines parent AMR Corp. and US Airways Group Inc. would represent a departure from other airline mergers in recent decades, aimed more at creating a huge route network that leapfrogs the competition, rather than at culling money-losing and overlapping flights.
The prospective deal could restore American, which has suffered billions of dollars of losses in recent years, to its former status as the world's biggest carrier.
The new American would have hubs at seven of the nine busiest U.S. airports and boast a strong presence in Europe and Latin America. It would suddenly become a major player in Boston and Tampa, Fla., and at New York's LaGuardia Airport and Reagan National Airport near Washington.
The merger would be good news for frequent fliers of both American and US Airways, offering them dozens of new destinations and a healthier, more stable airline industry. But the deal wouldn't solve a crucial problem for the airline: a lack of service to Asia, the world's fastest-growing air market.
American's main rivals, United Continental Holdings Inc . and Delta Air Lines Inc., are the two biggest carriers between the U.S. and Asia, accounting for nearly a third of the seats on those routes, according to Innovata LLC, which analyzes airline- schedule data. American accounts for less than 5% of those seats, and US Airways doesn't fly to Asia at all.
"China is the flashing red light this merger doesn't address," said Bill Swelbar, an airline researcher at the Massachusetts Institute of Technology.
United and Delta also enjoy partnerships with big Chinese carriers, but the Oneworld airline alliance, in which American is expected to remain after the merger, lacks a member in mainland China.
As reported, AMR and US Airways are ironing out the final details of a merger. The plan still could fall apart if they can't agree on economic and management issues. And any such deal would require approval of the U.S. Bankruptcy Judge overseeing AMR's reorganization and the U.S. Justice Department.
The expected merger poses potential disadvantages for fliers. Rick Seaney, chief executive of FareCompare.com, said less competition, both now and in the future, means an overall increase in airfares over the long term. But other analysts say that because American and US Airways overlap on just 12 routesnearly all between their hubsthe merger wouldn't significantly increase fares.
Jonathan Kletzel, head of the transportation practice at accounting and consulting firm PricewaterhouseCoopers LLP, said mergers don't necessarily lead to an increase in fares, and that from 2004 through 2011a period that includes some of the biggest airline mergersdomestic airfares actually decreased by nearly 1% a year when adjusted for inflation.
But he expects fares to rise over the next several years, with or without the merger, as the industry has gotten better at making fare increases stick.
There also are questions over whether the combined carrier could support eight hubs and, if not, which U.S. city might be on the chopping block. In most recent airline mergers, at least one hub has suffered deep cuts to its service, such as Cincinnati following the 2008 merger of Delta and Northwest Airlines.
In the expected American tie-up, analysts point to Phoenix as the likely target, partly because it is sandwiched between American hubs Los Angeles and Dallas.
A merger would give American's frequent fliers greater flexibility. "American has been squeezed out east of the Mississippi" River, said aviation consultant Mike Boyd. "So for frequent fliers at AA, you'll have a lot more options."
The merger also would be a boon for US Airways fliers from its three hubsCharlotte, N.C., Philadelphia and Phoenixwho could connect to one of American's five hubsNew York, Los Angeles, Chicago, Dallas and Miamito fly on to more than 125 new destinations, many in Texas, the Midwest and Latin America, according to Innovata. US Airways would contribute nearly 60 unique destinations, mostly clustered in the northeastern U.S.
US Airways would boost American's service to Europe, with near daily flights from Philadelphia to 11 European cities, including Amsterdam, Brussels, Munich and Rome, four cities not served by American.
The deal also would bolster American as the No. 1 U.S. carrier in Latin America, buoyed by its 71% market share in Miami. US Airways would add more flights to the Caribbean and, more importantly, would allow American to pull traffic from dozens of new cities in the northeastern U.S.
Combining American's and US Airways' traffic would make the combined carrier a strong presence at several important U.S. airports, including Boston and Tampa, which could help the airline win new corporate contracts.
At LaGuardia, where Delta has built a 40% market share, the new American would increase its market share to 31% from less than 20%, according to Innovata.
At Reagan National Airport, nearly half of which is currently controlled by US Airways, the new American would offer 62% of departing seats. However, in its antitrust review of the expected merger, the Justice Department could force the carrier to divest some of those slots at the flight-constricted airport.
The mergers that formed what are now the world's two largest airlines, United and Delta, surpassing American, were intended to reduce capacity in an industry known for chasing market share over profits. American's expected merger with US Airways is about catching up.
The recent wave of consolidation has meant higher profits and more stability for the industry, which has led airlines to invest in technology, new airplanes and better customer service. "It's not all bad news," said Mr. Seaney of FareCompare. "A healthy airline industry means a better flying experience overall."
Write to Jack Nicas at [email protected]
By JACK NICAS
The anticipated marriage of American Airlines parent AMR Corp. and US Airways Group Inc. would represent a departure from other airline mergers in recent decades, aimed more at creating a huge route network that leapfrogs the competition, rather than at culling money-losing and overlapping flights.
The prospective deal could restore American, which has suffered billions of dollars of losses in recent years, to its former status as the world's biggest carrier.
The new American would have hubs at seven of the nine busiest U.S. airports and boast a strong presence in Europe and Latin America. It would suddenly become a major player in Boston and Tampa, Fla., and at New York's LaGuardia Airport and Reagan National Airport near Washington.
The merger would be good news for frequent fliers of both American and US Airways, offering them dozens of new destinations and a healthier, more stable airline industry. But the deal wouldn't solve a crucial problem for the airline: a lack of service to Asia, the world's fastest-growing air market.
American's main rivals, United Continental Holdings Inc . and Delta Air Lines Inc., are the two biggest carriers between the U.S. and Asia, accounting for nearly a third of the seats on those routes, according to Innovata LLC, which analyzes airline- schedule data. American accounts for less than 5% of those seats, and US Airways doesn't fly to Asia at all.
"China is the flashing red light this merger doesn't address," said Bill Swelbar, an airline researcher at the Massachusetts Institute of Technology.
United and Delta also enjoy partnerships with big Chinese carriers, but the Oneworld airline alliance, in which American is expected to remain after the merger, lacks a member in mainland China.
As reported, AMR and US Airways are ironing out the final details of a merger. The plan still could fall apart if they can't agree on economic and management issues. And any such deal would require approval of the U.S. Bankruptcy Judge overseeing AMR's reorganization and the U.S. Justice Department.
The expected merger poses potential disadvantages for fliers. Rick Seaney, chief executive of FareCompare.com, said less competition, both now and in the future, means an overall increase in airfares over the long term. But other analysts say that because American and US Airways overlap on just 12 routesnearly all between their hubsthe merger wouldn't significantly increase fares.
Jonathan Kletzel, head of the transportation practice at accounting and consulting firm PricewaterhouseCoopers LLP, said mergers don't necessarily lead to an increase in fares, and that from 2004 through 2011a period that includes some of the biggest airline mergersdomestic airfares actually decreased by nearly 1% a year when adjusted for inflation.
But he expects fares to rise over the next several years, with or without the merger, as the industry has gotten better at making fare increases stick.
There also are questions over whether the combined carrier could support eight hubs and, if not, which U.S. city might be on the chopping block. In most recent airline mergers, at least one hub has suffered deep cuts to its service, such as Cincinnati following the 2008 merger of Delta and Northwest Airlines.
In the expected American tie-up, analysts point to Phoenix as the likely target, partly because it is sandwiched between American hubs Los Angeles and Dallas.
A merger would give American's frequent fliers greater flexibility. "American has been squeezed out east of the Mississippi" River, said aviation consultant Mike Boyd. "So for frequent fliers at AA, you'll have a lot more options."
The merger also would be a boon for US Airways fliers from its three hubsCharlotte, N.C., Philadelphia and Phoenixwho could connect to one of American's five hubsNew York, Los Angeles, Chicago, Dallas and Miamito fly on to more than 125 new destinations, many in Texas, the Midwest and Latin America, according to Innovata. US Airways would contribute nearly 60 unique destinations, mostly clustered in the northeastern U.S.
US Airways would boost American's service to Europe, with near daily flights from Philadelphia to 11 European cities, including Amsterdam, Brussels, Munich and Rome, four cities not served by American.
The deal also would bolster American as the No. 1 U.S. carrier in Latin America, buoyed by its 71% market share in Miami. US Airways would add more flights to the Caribbean and, more importantly, would allow American to pull traffic from dozens of new cities in the northeastern U.S.
Combining American's and US Airways' traffic would make the combined carrier a strong presence at several important U.S. airports, including Boston and Tampa, which could help the airline win new corporate contracts.
At LaGuardia, where Delta has built a 40% market share, the new American would increase its market share to 31% from less than 20%, according to Innovata.
At Reagan National Airport, nearly half of which is currently controlled by US Airways, the new American would offer 62% of departing seats. However, in its antitrust review of the expected merger, the Justice Department could force the carrier to divest some of those slots at the flight-constricted airport.
The mergers that formed what are now the world's two largest airlines, United and Delta, surpassing American, were intended to reduce capacity in an industry known for chasing market share over profits. American's expected merger with US Airways is about catching up.
The recent wave of consolidation has meant higher profits and more stability for the industry, which has led airlines to invest in technology, new airplanes and better customer service. "It's not all bad news," said Mr. Seaney of FareCompare. "A healthy airline industry means a better flying experience overall."
Write to Jack Nicas at [email protected]
