New AA is going to grow in NYC.

[WorldTraveler]

I don't see AA expanding in EWR, I do see them buying or taking on Jet Blue though. Heard a rumor of 777 service to SJU. If you use bigger planes you don't need more slots.

AA has walked away from a number of B6 competitive markets or reduced capacity dramatically in them and flew A300s which are far more cost effective than 777s in those markets at one time.


Why would AA now go back into those same markets not only with more expansive aircraft but also after DL has jumped into a number of those markets?
 

Domestic markets can be entered or exited at any time, as I'm sure you know. The combined US/AA connects a lot of dots across the USA and what is redundant can be moved to bolster underserved markets or open 'new' ones, without adding employees or airplanes. Mgmt is "choosing" it's "key domestic markets" now and there are no roadblocks to serving them.
Just curious, which "key domestic markets" were you referring to......other than ATL and SLC?

Houston and a number of other airline hub markets. The question is really why have DL and UA have been willing to fly into every key business market including into other airline hubs when AA has pulled back service.

AA flew LGA-ATL for years and received one of the lowest average fares in the market.

I have no problem with AA reentering any market but I would like to hear real evidence that something has changed that will make AA viable now that wasn't there before.

AA's costs are not lower than B6 or WN's and less than 2% lower than DL's with whom AA would have to most directly compete; at its worst, AA was 10% higher in CASM than DL but that was for a very short period of time.

 

[commavia]

Domestic markets can be entered or exited at any time, as I'm sure you know. The combined US/AA connects a lot of dots across the USA and what is redundant can be moved to bolster underserved markets or open 'new' ones, without adding employees or airplanes. Mgmt is "choosing" it's "key domestic markets" now and there are no roadblocks to serving them.

 
Not to mention - most importantly - that, contrary to the characteristically-certain and absolute statements and implications, AA does not, actually, have to have a nonstop presence in all the "key domestic markets" in order to provide a competitive and profitable offering for high-yielding NYC O&D customers.
 
AA only needs to sell a nonstop offering in certain markets in order to remain a very viable option for such customers - just as has always been the case (AA has not been the dominant airline in NYC at any time since long before deregulation, if ever).  NYC is by far the largest O&D market in the U.S., and unquestionably generates a very large amount of local demand to many U.S. cities big and small.  But the reality is that for high-yielding NYC business O&D customers, a very large portion of their business travel consists of a relatively few large markets - and AA covers many if not most of those (ORD, LAX, SFO, LHR, etc.).  In many cases, AA can take these high-yielding business passengers to where they want to go nonstop 75% of the time, and get people to connect over DFW/ORD/PHL/CLT for the rest.  Now - are there some people and companies who will naturally gravitate to Delta and United because they can get people where they're going nonstop 90% of the time?  Sure.  But just because Delta and United are larger competitors does not mean AA cannot also be a strong competitor - it doesn't need to be #1 everywhere.
 
So the bottom line in all of these mountains out of molehills and rhetorical gymnastics trying to find some way to prove some meaningless point nobody was ever debating is this: yes, AA does, in fact, have quite a strong offering in NYC that is only further bolstered by the addition of USAirways.  As AA's own President said just last week, this combination is already beginning to reap dividends with corporate contracts.  And this is before AA has even really had much opportunity to fully optimize its huge JFK/LGA slot portfolio, and when AA has just barely rolled out its improved longhaul premium products.  I fully expect AA's fortunes to continue to improve in NYC - as, clearly, does AA management, and just about everybody else except the most committed Delta "bitter clinger."  (Fear, fear, fear.)

 

[AdAstraPerAspera]

At LGA ops the other day I heard the A319s are coming by August. Not sure if it will replace Eagle flying or not but I imagine that would be ideal (assuming the adequate gate clearance is available?) I doubt they'd be replacing any 737 flying because the EPs would piss off on the lack of FC seats avail for upgrades

 

[eolesen]

Houston and a number of other airline hub markets. The question is really why have DL and UA have been willing to fly into every key business market including into other airline hubs when AA has pulled back service.

Perhaps AA2.0 is going to be better at picking & choosing its battles?...

Can you name a "key business market" which isn't an OA hub?

I suspect AA figured out long ago where their key corporate customers want them to fly, but also realize those customers will have some degree of a commitment to fly on UA and DL. That's the norm in corporate travel -- the TMC's and corporate directs won't put all their eggs in one basket. By staying out of the UA & DL hubs, that leaves the TMC's an opportunity to meet those minimal commitments for their clients.

Don't expect AA2.0 to play by the same rules that UA and DL still adhere to. They're not in it to win. They're in it to make money.

 

[WorldTraveler]

perhaps they will be, E, and I commend your faith in believing they can do better this time but I'm just interested in hearing some rational concrete reason why.

And, lest you believe otherwise, DL and UA are both highly committed to making money and to holding onto their revenue in NYC. The notion that DL and UA, as well as B6, aren't interested in doing everything they can do to maximize their revenues and diminish their costs in NYC and everywhere is based on what?

I don't have the numbers to say how much of AA's revenue came from NYC then or now but at one time a large percentage of AA's revenue also came from the transcon markets.

What I do know is that AA's revenues have grown at the slowest rate of ANY airline in NYC since the megamerger trend began. While DL and UA have added service, AA's average fares have grown a slower rate.

While it is nice to think that AA COULD be a niche airline in NYC, I'd be curious to hear where there is a hub where a nice airline that flies more than just spoke to hub routes gets a revenue premium to the hub carrier.

I can't think of a single example where a smaller hub carrier gets a premium to a larger one.

Maybe someone can show me but the longstanding "rule" in network dynamics appears to still be very real in NYC just as it is in other hubs. NYC is a hub. UA by virtue of CO's mass, has long had a revenue premium to AA and DL in NYC. Since DL started its buildup in NYC, DL has had the fastest rate of revenue growth from NYC and the trend can be seen in the most competitive markets such as LAX (one of DL's highest revenue growth markets), MIA, RDU, ORD, BNA, PIT, and CMH.

DO you see a trend there? Every one of those high revenue growth markets are other airline hubs - past or present.

The same reason why DL is the dominant airline on EVERY other airline hub market to from ATL, DTW, MSP, and usually SLC and sometimes CVG and MEM is the same principle that DL intends to use to obtain fare premiums at NYC - by virtue of offering the most service in the market.

Now, tell me again, how when AA is facility AND slot constrained at LGA and how it has the 3rd largest number of slots at JFK, an airport where DL's growth at JFK has come at the cost of B6's short haul markets at JFK, AA will grow in NYC.

Maybe AA will pull it off and I absolutely would love to learn a new trick if they do but mass and size does translate to revenue premiums in the industry and the principle holds true in every hub market just as it does in NYC.

 

[commavia]

Still stuck in the paradigms of the past (or, more specifically, the paradigms that supposedly show Delta's position the most favorably).  No imagination.  Fear, fear, fear.

 

[WorldTraveler]

no, it's not fear.

It's rationality.

It is blind faith and the refusal to accept a whole lot of basic principles of what has worked in the airline industry - including to AA's benefit in other markets - but refusing to accept that they apply just as equally in NYC.

you CANNOT argue about AA's size in LAX and Latin America and say why it makes them viable there and turn around and say it doesn't matter in NYC while also trying to argue that AA has an advantage at LAX over DL.

The simple fact is that no one on this board wants to accept that AA has structural disadvantages in several key markets which they cannot fix and don't want to admit cannot be fixed.

DL and UA aren't trying at this point to compete in a market like MIA to Latin America precisely because they know they have a structural disadvantage and yet there is some great belief that AA can compete in markets where it is at a structural disadvantage.

The only fear is from those who refuse to accept the truth and will probably wake up to realize that all of the pep rallies that AA's new mgmt. team will use cannot change the reality of AA's position in NYC.

BTW, those who wonder what happened in NYC need only look back about 5 years ago when all 3 major NYC airports were not slot controlled.

AA was arguing for slots at LGA to be eliminated. DL, in a completely opposite reaction, added flights at LGA and JFK like there was no end in sight. Guess what happened? DL ended up with a much higher share of the market the day when slot controls went into effect and the amount of slots each carrier had was grandfathered in at existing levels.

I'm not really sure why so many people can't accept that AA wasted a decade, and really only part of it, in failing to defend NYC, the largest market in the US if not the world, while CO first and then DL aggressively expanded and took every advantage to establish a position which no one can match, including a slot portfolio and terminal facilities esp. at LGA which make it impossible for other carriers to ever reach parity.

I suppose it is possible that UA's problems will provide enough of an opportunity in NYC for AA that AA can use to rebuild its presence even given its size limitations relative to DL with whom AA will have to compete at both LGA and JFK and where DL has in total structural advantages. Perhaps number 2 at LGA and JFK is enough of a position to allow AA to shift traffic back from EWR and UA back to JFK and LGA even given the size limitations that AA will likely always face.

 

[700UW]

And AA has just selected as the 3rd best for Business Class in the world, and Delta didnt make the list, lol!
 
 
http://www.gayot.com/travel/best-airline-business-class/american-airlines.html

 

[WorldTraveler]

and that will help AA compete from an airport where their merger partner traded away one-quarter of the slots at the airport how? or that DL has operations in three terminals at LGA and shows no sign of being interested in consolidating its operations which will make the CTB even more congested? or at JFK where AA is a solid #3 behind B6 and DL by counting passengers or behind DL and B6 if you count revenue?

Help me make the connection, 700.

Perhaps you can also tell us how DL has managed to get a higher average system fare than AA without having that award.

but you enjoy it, ok?

 

[737823]

And AA has just selected as the 3rd best for Business Class in the world, and Delta didnt make the list, lol!
 
 
http://www.gayot.com/travel/best-airline-business-class/american-airlines.html

When will you non-rev on it?

Josh

 

[700UW]

And when will you post something that has to do with the topic?

And when will you stop stalking me?

 

[WorldTraveler]

you truly have to get past the notion that you are being stalked. this is an open website. If you don't want to have people respond to you, don't post.

you can help us understand how winning that award has translated into premium revenue for AA and how it will help AA win in NYC.

THAT is relevant to the topic - and you are the one that bothered to throw the award in there without connecting it to anything.

 

[AANOTOK]

you truly have to get past the notion that you are being stalked. this is an open website. If you don't want to have people respond to you, don't post.

you can help us understand how winning that award has translated into premium revenue for AA and how it will help AA win in NYC.

THAT is relevant to the topic - and you are the one that bothered to throw the award in there without connecting it to anything.

You've got to be pretty darn naive if you don't think Josh follows 700 and comments on anything he posts.
He most definitely stalks 700.

 

[ChockJockey]

You've got to be pretty darn naive if you don't think Josh follows 700 and comments on anything he posts.
He most definitely stalks 700.

Josh provokes 700 by attacking the IAM, which he knows 700 identifies with at a deep emotional level. 700 provokes WT by attacking DL, which he knows WT identifies with at a deep emotional level. It's just a game of egoistic circle-jerking in which the object is - so far as I can tell- to get one so riled up with internet angst they threaten legal action (but never actually take it). It's all very mature and informative.

The new AA has just begun its network optimizations. My prediction is the new AA will grow in NYC in some form and manner and it will be terribly profitable, even given the "structural disadvantages" they'll have to contend with.

 

[700UW]

You've got to be pretty darn naive if you don't think Josh follows 700 and comments on anything he posts.
He most definitely stalks 700.

+10000000000000