Summer 2010: New Routes

[IORFA]

In regards to ORD-DEN AA is the fourth airline on that route. Two being LCC's and both have a larger presence in DEN than AA does. Let alone UA with their FF's on both ends. RJ's are better than no flights. Plus what is it, 2 AE flights a day? There will still be mainline.

 

[FWAAA]

In regards to ORD-DEN AA is the fourth airline on that route. Two being LCC's and both have a larger presence in DEN than AA does. Let alone UA with their FF's on both ends. RJ's are better than no flights. Plus what is it, 2 AE flights a day? There will still be mainline.

Are you guys talking about LAX-DEN? I don't see any ORD-DEN Eagle service on the horizon, but I've been wrong before.

I don't see the problem that jimntx obviously sees; currently, LAX-DEN has two daily mainline flights and AA is adding two more daily flights flown by Eagle, presumably at the slower times of day with demand for fewer seats.

 

[jimntx]

In regards to ORD-DEN AA is the fourth airline on that route. Two being LCC's and both have a larger presence in DEN than AA does. Let alone UA with their FF's on both ends. RJ's are better than no flights. Plus what is it, 2 AE flights a day? There will still be mainline.

Yes, well unless your "handle" is misleading, I can certainly see why you would not care that two domestic mainline flights are being replaced by Eagle flights. Not an issue to you, is it?

Are you guys talking about LAX-DEN? I don't see any ORD-DEN Eagle service on the horizon, but I've been wrong before.

I don't see the problem that jimntx obviously sees; currently, LAX-DEN has two daily mainline flights and AA is adding two more daily flights flown by Eagle, presumably at the slower times of day with demand for fewer seats.

No, when the company announced the new CRJ's with f/c, they said that they would be used on longer routes--such as, ORD-DEN. When I say ORD-DEN, I generally do not mean LAX-DEN.

 

[FWAAA]

No, when the company announced the new CRJ's with f/c, they said that they would be used on longer routes--such as, ORD-DEN. When I say ORD-DEN, I generally do not mean LAX-DEN.

I apologize for my oversight; I found the flights loaded for later in 2010. Plus the addtional RJs LAX-DEN.

I still don't see the problem - UA does the same thing ORD-DFW by running three daily First Class-equipped RJs along with a few mainline planes. On ORD-MIA, UA flies only RJs (with First Class). Yes, it would be nice if AA could fly 737s to all destinations, but those days are long gone.

 

[Skymess]

It's a problem all the legacies have - they can either match fares with low cost competition to keep the business or they can drop routes that are unprofitable because the yields aren't high enough. They just can't do both for too long.

Just saw two pieces this morning. One says that the low cost carriers have replaced almost all the capacity that the legacies have cut since 2003 (not route by route but generally). The other talked about the "Southwest effect" at MSP, particularly the MSP-Chicago market - passenger numbers have exploded because average fares have dropped significantly.

Jim

Let's look at it this way: If AA is banking on a cooling off period automatically resulting in a PEB and not a strike they may be in for a surprise.
In order for a Presidential Emegency Board to be appointed by a President the NMB would have to determine that "a work stoppage would cause significant disruption to essential transportation services for any section of the country". Considering how saturated every market in the U.S. is with both legacy and low cost carriers, this ruling wouldn't be as sure as it was even as little as 7 years ago.

 

[IORFA]

I absolutley care if AA moves flights to AE. But I would rather keep some AA mainline if it means that some of the flights move to AE rather than lose the frequency and end up losing the customers all together. ORD-DEN is a highly competitive route. There are 4 airlines that fly it. All three have a bigger presence than AA does in DEN and of those, 2 have a large presence on both ends. Where AA is second fiddle on one end and fourth on the DEN side. Hopefully they keep the loads and eventually they go back to mainline. Are you still mad they dropped the STL-DEN flights awhile back?

 

[Bob Owens]

It's a problem all the legacies have - they can either match fares with low cost competition to keep the business or they can drop routes that are unprofitable because the yields aren't high enough. They just can't do both for too long.

Yea they can.

Jet Blue and Air Tran combined have less than 300 airplanes while AA has 600. So AA could not only match the low fares, but undercut them and lose money until both Jet Blue and Air Tran are wiped out(in reality Air Tran would be Deltas job), as long as they make up the loss on the routes where they use the other 300 airplanes and those carriers dont service. I know its simplistic but so is the arguement that these upstarts are such an immediate threat to the legacies. We've been hearing it for thirty years. I think the biggest threat the lagacies face are other legacies.

 

[1AA]

Any new routes to Europe from the East coast, JFK, EWR, RDU, MIA?

 

[MAH4546]

Any new routes to Europe from the East coast, JFK, EWR, RDU, MIA?

JFK-MAN and JFK-MAN this summer.

MIA-BCN might come in November, and is ever more likely now that IB ATI is tentatively approved.

Why on earth would there be new RDU/EWR-Europe flying?!?

 

[Hopeful]

JFK-MAN and JFK-MAN this summer.

I think you mean JFK-MAN and JFK-MAD...

 

[eolesen]

Yea they can.

Jet Blue and Air Tran combined have less than 300 airplanes while AA has 600. So AA could not only match the low fares, but undercut them and lose money until both Jet Blue and Air Tran are wiped out(in reality Air Tran would be Deltas job), as long as they make up the loss on the routes where they use the other 300 airplanes and those carriers dont service. I know its simplistic but so is the arguement that these upstarts are such an immediate threat to the legacies. We've been hearing it for thirty years. I think the biggest threat the lagacies face are other legacies.

Only two major problems with your argument, Bob...

First, these guys aren't upstarts... Jetblue is ten years old, and Airtran is closer to 17 if you consider the predecessor companies. They're now pretty well entrenched in their home markets. DL couldn't run them off in ATL, and B6 was smart enough to operate in everyone else's shadow and hub at JFK and BOS where nobody else was dominant.

Second... they're wildly profitable with their cheap fares. Jetblue and Airtran have a positive operating margin averaging around 7-10%. Jetblue has been as high as 13%. These guys can drop fares 6-9% below their current fares and still break even.

With AA's CASM, you're barely breaking even when matching the same fare levels they're earning their 7-10% on. Undercutting would bleed them much slower than the damage you'd be inflicting on yourselves. Is it worth losing $2 for every $1 you take away from them?

The only way AA could effectively bleed them dry by undercutting on a price basis is to have a lower operating cost basis, and that ain't gonna happen in our lifetimes.

 

[mwa]

Me thinks many are missing the paradigm shift. Let me illustrate; when DAL had a hub in DFW they competed directly with aa on the dfw/ord city pair. It was not until aa offered hourly service to ord that pax booked away from DAL because of the frequency/flexibiity and eventually DAL farmed that city pair to a Comair crj 200 - you know the 50 seater. The strategy was obvious; keep the network together while paying more for the casm's. This in essence has been what has been happening industry wide and the ord replacemement flying is no exception. Now that there are signs that the economy may be turning the corner and business travel is picking up the trend may be nearing its end. Believe me when I say this, there is no conspiracy to spite labor rather it's simple economics.