US/AA merger settlement imminent!

[dfw gen]

When it comes to delta it matters!
Go team delta! Woo hoo!

(World travelet hand stand!)

 

[MetalMover]

Lovely,
We get to debate the BOS-LGA-DCA Shuttles on Thanksgiving Day as if it provides some sort of evidence of the success or failure of the AA/US merger.


 

Why not? YOU get to discuss Delta on the AA board 365 days a year!

 

[WorldTraveler]

Oh please, you of all people should know the LF's aren't as important on a flight where the fares are largely walk ups between 250-400 per pax. That's $1/mile at a minimum, a nice premium for any airline, and means that even a 40% LF is pulling in $0.40 per ASM. If route specific CASM is in the $0.25 range (just a guess), that's still a nice margin.

How many other mainline flights are there which regularly extract an average fare of $1 per mile?

Except both of those numbers are inflated from reality on one or more segments for one or more airlines.

Further, DL and US are both using Ejets that could be used on other parts of their network to generate more revenue. Since both DL and US/AA have limits on large RJs, dedicating large RJs to an operation that uses those assets so far much less than they could be used elsewhere is a strategic problem both AA and DL will have to face.

My bet is that the merger will provide yet one more opportunity to restructure the BOS-LGA-DCA routes so that they become more and more just like any other route to/from a hub.

 

[eolesen]

And yet, those "suddenly money losing" shuttles are the sweetener that DL has used for the past 20 years to sway corporate contracts their direction vs. AA, UA & CO.

If the ever powerful DL sees the need to restructure the Shuttle and redeploy the assets, then why haven't they done it?

Are they that afraid of US not following suit?....

Seems to me you're underestimating the value of the Shuttle's power, Skippy.

 

[Bob Owens]

Except both of those numbers are inflated from reality on one or more segments for one or more airlines.Further, DL and US are both using Ejets that could be used on other parts of their network to generate more revenue. Since both DL and US/AA have limits on large RJs, dedicating large RJs to an operation that uses those assets so far much less than they could be used elsewhere is a strategic problem both AA and DL will have to face.My bet is that the merger will provide yet one more opportunity to restructure the BOS-LGA-DCA routes so that they become more and more just like any other route to/from a hub.

Let Delta be the leader like you claim they are and go first. Let them reduce presence in perhaps the busiest market serving the most densely populated area of the country, we wont complain. If they ever put in High Speed rail (which I believe they should because its better for the environment and will relieve congestion at the airports) you may have a point.

 

[Kev3188]

Why not? YOU get to discuss Delta on the AA board 365 days a year!

 
An inconvenient truth.

 

[WorldTraveler]

And yet, those "suddenly money losing" shuttles are the sweetener that DL has used for the past 20 years to sway corporate contracts their direction vs. AA, UA & CO.

If the ever powerful DL sees the need to restructure the Shuttle and redeploy the assets, then why haven't they done it?

Are they that afraid of US not following suit?....

Seems to me you're underestimating the value of the Shuttle's power, Skippy.

absolutely they are sweeteners for corporate contracts but if no one has something the other doesn't then there is no advantage.


I have never said that DL would terminate the Shuttles. They could upgrade and keep things exactly the way they are. They could also cut pricing in the Shuttle markets such that AA has yet one more market that they have to defend on top of a million other competitive fires all over the US - plus a merger.

And it also doesn't change much if DL builds p BOS on its own - and that could very much happen. The real benefit of connecting the Shuttles to the rest of DL's LGA hub is because the LGA hub is DL's largest operation in the NE. IF DL serves the top markets in the NE nonstop from BOS, then they gain even more of an advantage.

As part of the settlement agreement, US cannot use RJs from DCA to NYC which could well give DL the ability to provide more frequency to JFK where DL's JFK operation does provide abundant connectivity.

One way or the other, DL's presence in the NE will grow. Whether the Shuttles are part of it is a lot less significant than the fact that they will.

 

[dfw gen]

go team delta! woo hoo!

 

[WorldTraveler]

excellent! I say woo hoo to team AA too.

I have said multiple times that I want AA's employees to fight like all get out to make this merger work.

But I have also said that the notion that any competitor would lay down and let AA/US gain an advantages from this merger without a challenge is not reality.

So, run, team AA and run hard. Like your life depends on it.

But don't be surprised if you turn around for a quick glance to see other runners hot on your tail pulling up right along side and ready to pass whether than means on one market, a region, or the entire system.

 

[eolesen]

Surely, if DL or any other airline saw value in scheduling LGA like a hub and building the connections, it would have been done by now.

But it hasn't, probably because airline schedulers are smarter than you.

It doesn't take a Doctorate (edited by moderator) to understand that marketing connections via LGA would eventually lead to higher advance bookings, which would in turn result in lower yields. They'd also wind up spilling last-minute traffic onto other carriers' flights.

 

[WorldTraveler]

you aren't aware that DL does operate LGA as a hub?

How incredibly behind the times you are!

DL also has one of those slick O&D revenue mgmt. systems that you seem to think is the trademark of legacy airlines so they have that going for them to make sure they don't take too much connecting traffic too soon.

You do understand how those systems work, don't you?

And I'll bet my next paycheck that AA uses one of those slick systems to make sure they don't take too many advance bookings via connections.

Wanna bet, rocket scientist?

 

[700UW]

Lets bring back the CEO at AA that flooded BN's reservations and put them out of business and do it to the soon to be Universe Dominating AIrline DELTOID!

 

[eolesen]

Aw, poor WT had to run to the moderators to edit one of my posts.

As I said, it would have already been run as one if it made sense.

 

[WorldTraveler]

LGA is a hub for DL....that is why they traded the slots with US.  DOT data shows that DL carries 15-20% connections via LGA.  Proper revenue mgmt ensures the maximum revenue is obtained from each leg.  DL~s revenue data shows they can do that.The Shuttles will conitinue to to evolve.  US made the first big change with the slot swap.  There will be more.  Now it is AA and DL running the Shuttles.  Botha re very good at revenue mgmt. 
New AA's best marketing and RM people will have to overcome DL's lead in both legs of the Shuttle which is now higher than it has ever been.  AA can move the Shuttle over to the CTB with the rest of the AA operation but will certainly lose even more passengers due to the loss of convenience.
For that reason alone, the DL Shuttle could stay at the MAT and AA may or may not be able to unlock the value that comes from the Shuttle to those corporate contracts which you accurately note, E.

 

[dfw gen]

go team delta! woo hoo!