MIA new routes

[WorldTraveler]

...which goes to show that the questions about Virgin America from the beginning had validity.

Either Branson really didn't understand the US airline industry or he was overly optimistic in thinking that he could build an airline that could be profitable as a niche premium airline - and convince enough US investors to join him.

Given that there is no history of a viable, long-term premium airline in the US, a point which I have made regarding AA's strategy in NYC and on the transcons, VX stands as yet another argument why niche airlines and niche strategies don't work. You either have to be large enough to play to win in the whole market or be prepared to lose a lot of money.

Yet, VX is legally permitted to operate in the US and they have cost AA and UA specifically enormous amounts of money because VX has targeted key industry markets and esp. the transcons where AA and UA have historically operated.


It is quite likely that AA's current profits are not coming from the trancons but from its domestic hubs and Latin America operation as well as Europe during the peak season. All of those regions are doing well.

Specific to this topic, we have yet to see evidence that AA is going to build out MIA to Europe. it is possible they could announce new service to begin this winter but we are getting close to the end of the period in which that can be done and have sufficient time to sell.

If it doesn't happen within the next few weeks at most, the chances are it won't happen until next summer.

given that there are few TATL routes which have strong peaks for as long in the northern hemisphere winter as they do in the summer, I am doubting that Parker is going to be adding much TATL capacity this winter.

 

[eolesen]

There's no long term success of an all- premium airline anywhere, but AA has traditionally had a larger premium cabin than UA at a domestic system level. The data held that where AA operated their 14-22 seat narrowbodies against UA's with 8-12 seats, AA had a yield premium.

That's not a new phenomenon, either. It's spanned several decades.

 

[WorldTraveler]

can you show some examples of that... within the past 5 years? what happened decades ago doesn't reflect the current market.

in the ORD domestic market, the largest AA/UA domestic overlap, UA has about a 10% average fare advantage over the last year.

In LAX domestic (again excluding int'l since UA is stronger to Asia), UA has a higher average domestic fare.

 

[kirkpatrick]

WT, yes, the scheduled turn time was exactly an hour.  There have been some tweaks in the schedule since we hit full service on the 13th, but not much.  Let me add that with 102 seats this plane boards and deplanes very quickly, although for some unknown reason the company insists on boarding 40 minutes before departure if possible.  Also, there is ample overhead space for all - coach can use overflow in FC and BC is needed, and that speeds things up.
 
Frequency is very important - a frequent flyer knows he can show up and have his butt on a cushion in 45 minutes.  Arrive a little early, chances are he can move up an hour.  Meeting runs a bit late, don't worry, there's another flight right away.
 
As for FC capacity increases, I suspect (but it's just speculation) that the cabin configuration has something to do with having ten seats.  Taking out a row of FC and adding a row of BC might not be feasible even if it would fit, and it looks awkward and could present service difficulties. 
 
MK