New AA is going to grow in NYC.
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nycbusdriver
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All of those key assets are dependent on JFK operations, and not the more lucrative LGA (which had been previously all but abandoned by the US Airways portion of th New American.)
JFK is slot-controlled during some periods each day. Can the New American make JFK work in the way Kirby envisions?
nycbusdriver said:
Nothing Kirby said yesterday implied that AA had any major plans for growth in NYC in terms of departures, which is what would require additional slots. Rather, the "upside" I expect AA is seeing is more in terms of improving the financial returns from its existing slot portfolio by leveraging the combined strength of the merged network to attract higher-yielding corporate traffic (which Kirby said is already starting to happen). I predict this "upside" in NYC will take take the form primarily of larger aircraft and select new routes using existing slots - AA has a better opportunity now to optimize its huge NYC slot portfolio primarily for the enormous NYC O&D market, allowing connections to flow over PHL.
jimntx
Veteran
This statement really surprised me..."Earlier, Delta President Ed Bastian, speaking at the same conference, said Delta has historically been unprofitable in New York but expects that to change this year." (Which means it hasn't happened yet.) I thought DL was already tearing up all the profit records for the past half-century in the New York market.
At JFK, AA has been sitting on nearly two dozen prime-time departure slots (3 pm to 9 pm), using them to fly to places like BWI and TPA and ORD and DFW. They're place-holders. Those are the slots that old AA was stockpiling so that once it jammed more efficient, lower-cost contracts down its pilots' and FAs' throats, it could begin to fully use that gigantic Terminal 8 for which AA spent nearly $1.5 billion,nycbusdriver said:
All Kirby and Parker are saying now is the obvious: Now is the time for post-bankruptcy AA to begin flying those O&D centric routes from JFK that don't require hundreds of 37 seat Dash 8s and 50 seat CRJs to fill up those flights the way similar long-hauls from PHL and CLT require. NYC to Europe tend to fill planes fairly well on their own. Connecting passengers are already arriving at JFK from SEA, SFO, LAX, SAN, LAS and PHX to help fill the remaining seats.
Before Parker dragged Horton to the alter, Parker and Kirby were saying things like "JFK is maxed out and there's no way for AA to grow there." That was misleading BS, as I've summarized above. AA has enough JFK slots to add plenty of long-haul flying and has enough logical feed from the western cities that are outside the LGA perimeter. And if the new long-haul flights soak up too many of the seats on those western domestic flights for connecting passengers, then those flights can be upgauged to make room.
I've said it a bunch and I'll say it again: Old US did as well as it could from the hubs it had. US yields across the Atlantic and to Latin America have lagged the industry for at least 20 years. New AA could ignore NYC and focus on low-yield PHL and CLT if that's Parker's plan, but it he pursues that path, then how is new AA going to afford the higher wages that the US pilots and FAs are getting?
In a nutshell, that's why the future of long-haul flights is from NYC and MIA, the cities with more O&D and thus, higher yields. Doesn't mean PHL ad CLT will lose all their international flights, but growth should occur in the areas where AA can attract higher fares.
nycbusdriver
Veteran
Delta has turned Terminal 3 from its nadir as the US Airways ghost town of Dash 8s into a near mob scene of passengers. I would not have believed it had I not been seeing it for the past few years since US traded all those LGA slots to Delta.
But Delta certainly has made some missteps. They decided to come in and serve "everywhere" from LGA that they could given the perimeter rule. They found out the hard way that some markets just are NOT "Delta" markets, like LGA-PHL. I doubt that their few RJs that plied that route (and likely others) ever had more than a 10% load factor. I flew on one that had 8 people...all employees. They are learning the hard way which routes were dormant, and why. (Kind of like Harding Lawrence and his debacle with Braniff at th start of deregulation.)
But Delta certainly has made some missteps. They decided to come in and serve "everywhere" from LGA that they could given the perimeter rule. They found out the hard way that some markets just are NOT "Delta" markets, like LGA-PHL. I doubt that their few RJs that plied that route (and likely others) ever had more than a 10% load factor. I flew on one that had 8 people...all employees. They are learning the hard way which routes were dormant, and why. (Kind of like Harding Lawrence and his debacle with Braniff at th start of deregulation.)
WorldTraveler
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except AA has abandoned several markets that it started such as IAH as well as a number in the Caribbean that it has served for years and is already downsizing gauge on the transcons.commavia said:
It's also worth noting that AA has said they intend to do all kinds of stuff on the Pacific but has yet to demonstrate they can make money flying there.
Actions speak louder than words.
And yet DL managed to pull down the world's largest profit just from its hubs and it still has the resources to build out the west coast.jimntx said:
DL faces the same issues in NYC that AA and UA does: A delay prone region where feed is necessary to fill planes but where the market is heavily divided not just between the big 3 but also with foreign airlines.
It's great to talk about the markets that AA is going to enter and succeed at that it couldn't have done before but AA quite simply needs mass to compete with DL and UA - and they simply have not shown that they are willing to provide and maintain the full palette of markets that are part of a hub.
driver,
DL entered PHL from NYC precisely because US did the same and DL wasn't going to allow US to have advantage fares to pull traffic out of NYC. US' TLV flight alone was filled with lots of NYC originating traffic.
The future of PHL to NYC is doubtful as long as airlines on both ends don't try to rob each others hubs. Most experienced travelers know ATC delays alone make a connection within the NE quite risky.
I wish JFK-IAH came back, took the flight numerous times and it often had very light loads (~45 pax on a 738) and empty seats in FC. Interestingly there has been considerable discussion about this route on the forum:
http://www.airlineforums.com/topic/52486-american-needs-jfk-iah-service/
http://www.airlineforums.com/topic/54778-some-new-routes-lax-jfk-and-mia/
Josh
http://www.airlineforums.com/topic/52486-american-needs-jfk-iah-service/
http://www.airlineforums.com/topic/54778-some-new-routes-lax-jfk-and-mia/
Josh
nycbusdriver
Veteran
WorldTraveler said:
As someone who travels LGA-PHL a lot...a WHOLE lot...US has no problem getting good loads on the service they provide. The route has been in operation at US for at least the last 16 years that I have been using it. DL, on the other hand, dropped the route after about 2 months; they were obviosuly clueless about the concept of connecting passengers, i.e. US has them in PHL, DL not so much.
The loads are definitely not all about TLV, either. The route operates all day with decent loads simply because of the US hub in PHL. DL didn't have a prayer with that route
The only reason someone flying NYC-TLV would choose USAIR/PHL over ample better alternatives is lower fares. Of course now that pilot and F/A compensation has risen to market levels and PHL doesn't generate the same kind of revenue as MIA/NYC who knows how successful the flight will be going forward. DL likely operated LGA-PHL for PHL originating passengers, not with the intent of sending connections over PHL.
Josh
Josh
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the only reason why anyone would fly NYC-PHL at all is to make connections and except for a few markets out of JFK, all of the service is duplicated from both hubs.
DOT data shows that US carries less than 3% local traffic (LGA-PHL) and its top markets on the segment are almost all other airline hubs, mostly DL, and their average fares are all well below the average fare that the carrier gets on the nonstop.
But it's not just DL hubs that US has gone after; their top market on LGA-PHL was LGA-ORD and at an average fare that was significantly below nonstop fares in the market.
LGA-PHL exists solely because of US' habit of raiding fares from other carrier hubs. It is precisely what they said in the emails that they would have to eliminate or they would find out that AA's larger hubs would be the target of the same action. The only reason why US did it is because their hubs all have smaller local markets than the hubs of other carriers
DL operated LGA-PHL as a counter to what US was doing but decided it wasn't worth trashing its own revenues and losing money when LGA slots could be used far better.
The fact that DL is winning over corporate revenue at NYC and yields there are growing faster than on the rest of DL's system, which is already leading the industry, says DL is doing the right thing.
And, it still raises the issue of how the combined AA/US is going to grow when US was competing against some of AA's own routes and now exposes larger AA routes to the same pricing action.
DOT data shows that US carries less than 3% local traffic (LGA-PHL) and its top markets on the segment are almost all other airline hubs, mostly DL, and their average fares are all well below the average fare that the carrier gets on the nonstop.
But it's not just DL hubs that US has gone after; their top market on LGA-PHL was LGA-ORD and at an average fare that was significantly below nonstop fares in the market.
LGA-PHL exists solely because of US' habit of raiding fares from other carrier hubs. It is precisely what they said in the emails that they would have to eliminate or they would find out that AA's larger hubs would be the target of the same action. The only reason why US did it is because their hubs all have smaller local markets than the hubs of other carriers
DL operated LGA-PHL as a counter to what US was doing but decided it wasn't worth trashing its own revenues and losing money when LGA slots could be used far better.
The fact that DL is winning over corporate revenue at NYC and yields there are growing faster than on the rest of DL's system, which is already leading the industry, says DL is doing the right thing.
And, it still raises the issue of how the combined AA/US is going to grow when US was competing against some of AA's own routes and now exposes larger AA routes to the same pricing action.
One thing American still does very well in New York is catering to the corporate crowd. Delta has tried very hard but has still failed to win over any big AA contracts except Conde Nast. And it's been trying for a decade now.
Major New York corporate employers like Credit Suisse, Bank of America, Citibank, AT&T, Pepsi, Comcast/NBC, Hearst, etc., etc. - AA is the preferred airline vendor at all of them.
Time to turn those PHLLGA/EWRLGA slots into more useful things (one PHLEWR becomes MIAEWR in the fall).
Major New York corporate employers like Credit Suisse, Bank of America, Citibank, AT&T, Pepsi, Comcast/NBC, Hearst, etc., etc. - AA is the preferred airline vendor at all of them.
Time to turn those PHLLGA/EWRLGA slots into more useful things (one PHLEWR becomes MIAEWR in the fall).
