Raking in the Divestiture Dough
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WorldTraveler
Corn Field
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and to think that DL got 125 slot pairs at LGA for $60M - a HALF MILLION per pair.
No, DL and US traded 125 LGA slots for 45 or so DCA slots a GRU slot which has since been replaced for free and about $60M. All of the DCA slots are now part of the divestiture requirement
Somebody got hoodwinked and someone made out like a bandit.
Invest the $425M well... it won't come close to covering the loss of revenue AA will suffer over the next year with new competitor flights.
No, DL and US traded 125 LGA slots for 45 or so DCA slots a GRU slot which has since been replaced for free and about $60M. All of the DCA slots are now part of the divestiture requirement
Somebody got hoodwinked and someone made out like a bandit.
Invest the $425M well... it won't come close to covering the loss of revenue AA will suffer over the next year with new competitor flights.
WorldTraveler
Corn Field
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which goes again to show how well DL scored that it paid 1/10 what other carriers did.
you are free not to care... DL has used its acquisition at LGA to become the largest carrier in NYC based on the most currently available passenger boardings.
a couple years ago when CO dominated the region, it would have been unthinkable to suggest that anyone else could dethrone them or that AA would fall from carrying one in five passengers from NYC to now less than one in seven.
you are free not to care... DL has used its acquisition at LGA to become the largest carrier in NYC based on the most currently available passenger boardings.
a couple years ago when CO dominated the region, it would have been unthinkable to suggest that anyone else could dethrone them or that AA would fall from carrying one in five passengers from NYC to now less than one in seven.
AdAstraPerAspera
Veteran
WorldTraveler said:
And yet DL's NYC operation has yet to make a single cent, I'm told?
WorldTraveler
Corn Field
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and where did you get that information?
DL has said NYC doesn't mean its profit target, not that it isn't profitable.
If DL can run a 400 flight/day operation at NYC and lose money doing so, push their nose into other carriers' key markets like SEA, and still post the highest profit in the history of aviation, then DL has a whole lot of bandwidth for going where it wants and be able to absorb a lot of losses.
Given that DL does have a plan for turning JFK- the part of its NYC operation that appears to be the bigger drag on corporate profits, I'd expect that DL will turn things around fairly quickly.
Remember also that the first phase of the LGA slot transfers began almost exactly two years ago.
Whether LGA did or didn't make money last year in its first year, the LGA buildup represented the largest single year growth in LGA history. Profits there and the spillover effect on JFK are bound to improve with time.
IF NYC isn't making money, DL's focus this year appears to be on the west. Either DL is content that NYC is fixing itself with the plans in place or they have enough money to use to develop the west and not deal with the NYC issues you seem to think exist.
DL has said NYC doesn't mean its profit target, not that it isn't profitable.
If DL can run a 400 flight/day operation at NYC and lose money doing so, push their nose into other carriers' key markets like SEA, and still post the highest profit in the history of aviation, then DL has a whole lot of bandwidth for going where it wants and be able to absorb a lot of losses.
Given that DL does have a plan for turning JFK- the part of its NYC operation that appears to be the bigger drag on corporate profits, I'd expect that DL will turn things around fairly quickly.
Remember also that the first phase of the LGA slot transfers began almost exactly two years ago.
Whether LGA did or didn't make money last year in its first year, the LGA buildup represented the largest single year growth in LGA history. Profits there and the spillover effect on JFK are bound to improve with time.
IF NYC isn't making money, DL's focus this year appears to be on the west. Either DL is content that NYC is fixing itself with the plans in place or they have enough money to use to develop the west and not deal with the NYC issues you seem to think exist.
WorldTraveler
Corn Field
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for you?
Or can you honestly admit that maybe the great ticket to AA's success might not what you and others expect it to be - and which Parker and co. have done a great job of promising.
Every merger has had promises that weren't fulfilled. It is mindnumbing to think that you and other AA fans can't recognize that there will be broken promises and that there might be people who can tell you where those will come - and not just because AA labor will be treated just like Parker has treated US labor.
I wish AA success. I really do.
But I am not about ready to believe it will be a cakewalk or that other carriers are supposed to give up their success = or pretend it didn't happen - so AA can succeed.
AA very well might succeed but they are going to have to build it in the marketplace, not just because some one promised it and AA and US people both have a deep appetite to win again.
Or can you honestly admit that maybe the great ticket to AA's success might not what you and others expect it to be - and which Parker and co. have done a great job of promising.
Every merger has had promises that weren't fulfilled. It is mindnumbing to think that you and other AA fans can't recognize that there will be broken promises and that there might be people who can tell you where those will come - and not just because AA labor will be treated just like Parker has treated US labor.
I wish AA success. I really do.
But I am not about ready to believe it will be a cakewalk or that other carriers are supposed to give up their success = or pretend it didn't happen - so AA can succeed.
AA very well might succeed but they are going to have to build it in the marketplace, not just because some one promised it and AA and US people both have a deep appetite to win again.
RJcasualty
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- Jun 29, 2004
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No doubt, AAG has its work cut out for it at JFK-LGA--- after years of perplexing neglect. Seems to me a logical short-cut fix would have been a merger or acquisition of B6--- hostile or not. Granted, such a move would further complicate what AAG already has on the table, but the fact remains that AAG is confronting a challenging environment in the NY area. The recent, abrupt termination of the AA-B6 relationship is a mystery to me. Did B6 see a takeover as a distinct possibility and batten the hatches?
WorldTraveler
Corn Field
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I suspect the reason has more to do with the likelihood that B6 could be vulnerable to a much larger AA in the NE who would have little reason to funnel passengers to B6 and a lot of risk of customer information being leaked to AA.
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