You really just have to move on already. The divestitures don't add up to anything significant. AA will be the largest carrier on the east coast. Period.
Does it matter in the marketplace? Size is an important factor, especially in how an airline is able to feed, say, a long-haul factor. I don't think it puts DL or UA at a disadvantage since they are all very large, but it will allow AA to move into markets where it previously could not.
You're the one that cares most about size, though. I just find it funny how you continually went on bragfests regarding Delta's size, and now that it's the smallest network carrier, you shut up about it. I guess size only matters when Delta is the largest.
http://www.airliners.net/aviation-forums/general_aviation/print.main?id=4103511
From a network perspective the most interesting thing is that the new AA will be hubbed in seven of the eight largest urban areas in the United States - only missing Houston.
http://en.wikipedia.org/wiki/List_of_United_States_urban_areas
my point with size is that you really cannot predict how large AA/US will be. You can add the current networks together but the divestitures are very large whether you want to admit it or not.
Size also mattered a whole lot more because the difference in size between DL post merger and the rest of the industry was a whole lot larger than what AA gains today, even if it retains all of the size difference it has today.
new AA will be at best a couple percent larger than UA and DL... it just isn't terribly significant other than for bragging rights.
There is the potential that over 7500 seats per day could shift between AA/US and the divested carriers... that is several percent of AA/US' combined network.
It is not insignificant.
And it still doesn't change that there are a lot of new markets being added by AA/US competitors esp. in the SE. RDU is seeing a lot of new service including now double daily RDU-LAX on DL next summer and UA is adding SFO-RDU. DL added PHL-RDU just a few months ago and indications are that it is doing very well. Who would have thought that DL could pull off a point to point route like that in a key US market.
RDU is a key market in the backyard of US' CLT hub. It is also divided and wealthy.
There will be more and more competitive adds in AA/US markets. That is just a given. And it is exactly what the DOJ wants to see.
Further, I get the whole idea about being able to compete. I really do. But AA, DL, and UA will all be about the same size. The ability to negotiate corporate contracts and win business will be very similar for each carrier - based largely on their presence in key markets.
And yes AA/US will have hubs in many of the key markets - but AA already does that.
You can look at UA today to see that the best placed hubs don't translate into a revenue advantage for several reasons. First, hubs are designed to CONNECT traffic. There are a whole lot of good reasons why connecting traffic in a highly competitive market is not going to generate the level of profitability that it will in hubs where the carrier has a much higher share of the market.
Second, AA may have hubs in the top markets in the country but they are not #1 in several of them including NYC and CHI. If you think that AA will be #1 in CHI in the local market, go ahead but they will not. The local market has nothing to do with the number of seats a carrier offers in the market but how many seats are bought by customers flying to/from that city. AA and UA have very different shares in the local market, and UA does generate the highest amount of revenue and carry the largest amount of traffic from both ORD and MDW.
Third, there remain a number of major strategic challenges that face AA that no other carriers face including the enormous amount of new capacity that will come online from competitors at DCA and DFW. AA is a distant #3 at NYC and there is no sign that the erosion of revenue in key AA markets is slowing, as much as you hate to hear that.
AA does have its strong presence in Latin America and MIA which I know matters a great deal to you. But AA's position in Latin America has come because the markets are not fully open to competition but they will be in the next few years. It is an absolute given that AA will face significant competition to/from Latin America in the next few years.
OTOH, AA is in better shape in terms of reworking its regional jet fleet than UA and has managed to keep the operation more stable. The chances are real high that AA will not repeat many of the mistakes that have cost UA a lot of business.
UA also has the highest costs in the industry and will likely go up faster than they will for AA/US.
I'm glad to see you posting over here... you are welcome to do so at any time.
🙂
