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US Airways May File Papers in Weeks on Delta NYC-Washington Swap
- Thread starter USA320Pilot
- Start date
hp-csr-phx
Senior
Art at ISP
Veteran
It's time to approve this one already......let everyone move on.
it is closing, and nope, its just pdt trying to break up one of the bastions of anti-piedmont sentiment
signals
Veteran
That $1100 trip to Washington was on US
SparrowHawk
Veteran
- Nov 30, 2009
- 7,824
- 2,707
That $1100 trip to Washington was on US
RE: Senator Schumer
I've always wanted to meet him so I could ask "What's UP, Chuck"
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #83
Hey Jim,
DL and US' leadership both continue to say that they believe this will be approved by the DOT... I continue to believe neither would make those comments -which do have implications to stockholders i- f they weren't true.
DL's CEO recently said that after the DOT approval, the process before the DOJ will need to begin.
DL is not planning to be able to operate the increased flights at LGA until well into 2012.
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Based on that timetable, this slot transfer will take longer to obtain gov't approval than did the merger of UA and CO which involved the same market area - where CO has a higher market share at EWR than DL will in LGA after the slot transfer or US at DCA.
Perhaps Doug was right that it would have been easier to have tried to acquire DL and then sort out the antitrust ramifications in one big slugfest rather than the piecemeal approach that is being used to deal with the Feds involvement in the NYC and WAS air travel markets.
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Painfully slow as it may be, no one continues to believe that the current way the slots are being used is sustainable for the carriers involved or healthy for the industry or consumers.
It also does not appear that competitors have a whole lot of other options to counteract US and DL's increased market positions at DCA or LGA.
DL and US' leadership both continue to say that they believe this will be approved by the DOT... I continue to believe neither would make those comments -which do have implications to stockholders i- f they weren't true.
DL's CEO recently said that after the DOT approval, the process before the DOJ will need to begin.
DL is not planning to be able to operate the increased flights at LGA until well into 2012.
.
Based on that timetable, this slot transfer will take longer to obtain gov't approval than did the merger of UA and CO which involved the same market area - where CO has a higher market share at EWR than DL will in LGA after the slot transfer or US at DCA.
Perhaps Doug was right that it would have been easier to have tried to acquire DL and then sort out the antitrust ramifications in one big slugfest rather than the piecemeal approach that is being used to deal with the Feds involvement in the NYC and WAS air travel markets.
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Painfully slow as it may be, no one continues to believe that the current way the slots are being used is sustainable for the carriers involved or healthy for the industry or consumers.
It also does not appear that competitors have a whole lot of other options to counteract US and DL's increased market positions at DCA or LGA.
signals
Veteran
So what's in this for Southwest, er, ah, I mean AirTran? Or the slot-swap that went awry :blink:
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #85
WN - solely because of UA's acquisition of CO - now has/will have about 6% of the domestic seats from EWR and that number will likely go up quite a bit as they acquire the 738s.
At LGA, WN and FL combined now have about 8% of the seats which makes them the 5th largest airline at LGA but also gives them 85% of the seats of the COMBINED mainline UA/CO at LGA, 70% of seats on US mainline flights above, HALF of AA's mainline seat share, and about 1/3 of DL's mainline seat share.
And again WN's seat share will go UP as they add the 738s which will be heavily used out of EWR, LGA, and DCA.
At DCA, WN will have about 20% of US' mainline seat share, about 1/3 of what AA and DL will each have, and about 2/3 of what UA/CO will have....
All of these seat shares are subject to change based on how carriers upgrade or downgrade flights based on the slot deal but it shows that WN will become in both cases quite competitive in market size in the NE with its much more established network carrier peers - and larger than any other low fare carrier.
It also says that the slot deal will do for DL at LGA and US at DCA exactly what I have pointed out on the DL forum and that is that when network carriers maintain a size advantage of 3-4 times OVER a low fare carrier, there is little to no evidence where the network carrier has lost their ability to command premium markets. In US' case in PIT, they have shrunk their presence but still managed to keep the highest value revenue - exactly what a carrier should do when it pulls down a hub.
Given that each of these slot controlled airports will continue to have a number of other low fare carriers besides WN, there is little reason to think that WN can't succeed based on its business model while allowing at least one or two network carriers will continue to compete quite effectively against WN and the LFCs.
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What is more significant is that despite having larger hubs in the NYC and WAS areas, UA/CO will be #4 out of the four network carriers at LGA and DCA and the gap between the largest network carrier and UA/CO will grow even further after the slot swap. Given the overlap in WN and UA's operations at Chicago, Houston, and DEN, it shouldn't be hard to guess where WN will focus alot of attention in growing its presence from the NE.
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WN's growth usually comes at the expense of one or more network carriers in each market while in most cases one network carrier manages to compete quite effectively against them.
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It should be apparent which carriers will be able tocompete effectively against WN in the NE after this slot swap and WN's rapid entrance into these markets.
At LGA, WN and FL combined now have about 8% of the seats which makes them the 5th largest airline at LGA but also gives them 85% of the seats of the COMBINED mainline UA/CO at LGA, 70% of seats on US mainline flights above, HALF of AA's mainline seat share, and about 1/3 of DL's mainline seat share.
And again WN's seat share will go UP as they add the 738s which will be heavily used out of EWR, LGA, and DCA.
At DCA, WN will have about 20% of US' mainline seat share, about 1/3 of what AA and DL will each have, and about 2/3 of what UA/CO will have....
All of these seat shares are subject to change based on how carriers upgrade or downgrade flights based on the slot deal but it shows that WN will become in both cases quite competitive in market size in the NE with its much more established network carrier peers - and larger than any other low fare carrier.
It also says that the slot deal will do for DL at LGA and US at DCA exactly what I have pointed out on the DL forum and that is that when network carriers maintain a size advantage of 3-4 times OVER a low fare carrier, there is little to no evidence where the network carrier has lost their ability to command premium markets. In US' case in PIT, they have shrunk their presence but still managed to keep the highest value revenue - exactly what a carrier should do when it pulls down a hub.
Given that each of these slot controlled airports will continue to have a number of other low fare carriers besides WN, there is little reason to think that WN can't succeed based on its business model while allowing at least one or two network carriers will continue to compete quite effectively against WN and the LFCs.
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What is more significant is that despite having larger hubs in the NYC and WAS areas, UA/CO will be #4 out of the four network carriers at LGA and DCA and the gap between the largest network carrier and UA/CO will grow even further after the slot swap. Given the overlap in WN and UA's operations at Chicago, Houston, and DEN, it shouldn't be hard to guess where WN will focus alot of attention in growing its presence from the NE.
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WN's growth usually comes at the expense of one or more network carriers in each market while in most cases one network carrier manages to compete quite effectively against them.
.
It should be apparent which carriers will be able tocompete effectively against WN in the NE after this slot swap and WN's rapid entrance into these markets.
signals
Veteran
Even I know that I asked a stupid question
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #87
not at alll....Even I know that I asked a stupid question
While nearly everyone who follows the industry knows WN is gaining a presence in DCA and a much larger presence at LGA through the slot deal and the FL acquisition, most people don't have any idea how large of a position they will have just based on the current revenue FL and WN already carry; factor in WN's ability to raise average fares relative to other low fare carriers and grow the market - something they will be able to do even more with the 738s - and WN will be a decent contender in the key NE business markets.
When you look at where they are relative to UA/CO as the largest US airline in two of the key airports, it becomes more insighful as to how much WN might be able to accomplish.
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Nobody should take WN for granted.. but I also believe that this whole slot deal highlights that WN knew exactly what it needed in terms of a presence in the NE was very coy about "demanding it" and got as big of a piece of the NYC market as it could - and then followed that up with the FL acquisition.
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DL and US OTOH were well aware of what WN could do and started down the path to cementing their positions in the markets that most matter to them and in arguing that they will better use the scarce public assets (slots) which the other cannot use as well.
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I don't think there is any reason why this deal will not move forward - but it is an incredibly slow process. And when the dust all settles, the face of the airline market in the NE will be dramatically reshaped and airlines like DL, US, and WN who could see the future have positioned themselves quite well. It will be other airlines esp. other network airlines that will be on the defensive.
does this plane go to paris
Senior
There seems to be a lot of assumptions that WN will utilize all of their new -800's in the NE. They converted 20 orders and I have a hunch that a few of them are going to be going farther west, ie Hawaii. I have no doubt that a few of them will be in certain NE markets, but I would venture to say that besides Hawaii, they will be put on routes they attempted a few years ago such as OAK/PHL and LAX/PHL etc. I could see them in service on new routes such as EWR/DEN, ATL/LGA, ATL/LAX but I have doubts that they will upgrade all of their LGA and EWR service to all -800 and therefore gain more market share.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #89
I agree w; you Paris that the 738s will go throughout WN's system including some of the suggestions you make but for now FL's average seat size per flight at LGA is 120 while WN is at 137. They can add the equivalent of more than 2 flights per day w/ WN 73Gs if they just upgrade the 717s at LGA to 73Gs... from there, the growth potential grows even more.
And you are right that larger aircraft are necessary for WN to compete with other carriers because the longer the stage length, the less WN's cost advantage helps them... because CASMs flatten out as stage length increases.
FL has flights to CAK and PHF.... I would honestly expect that WN will be making some decisions to use the slots they do have more efficiently - and that may also mean bigger aircraft on ATL-LGA but switch some of the flilghts to other gateways, including DEN or HOU where their ability to connect to the western US is better.
It is also possible that WN might take a different approach to serving EWR and LGA in terms of markets.... they obviously could use alot more slots at both airports but it might make more sense to use the slots they do have in different ways at the two airports.
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I'm also not sure if WN has started the process of setting up ETOPS programs for Hawaii flying but that takes time. Also, unless WN decides to start doing overnight (redeye) flying - which I believe they do not currently do - their ability to serve the Hawaii market will be limited - or they will use alot of planes to get relatively little benefit. The same thing can be said for ATL-west flying. These are major operational changes that WN will have to do in order to use their stronger position on the east coast efficiently.
And you are right that larger aircraft are necessary for WN to compete with other carriers because the longer the stage length, the less WN's cost advantage helps them... because CASMs flatten out as stage length increases.
FL has flights to CAK and PHF.... I would honestly expect that WN will be making some decisions to use the slots they do have more efficiently - and that may also mean bigger aircraft on ATL-LGA but switch some of the flilghts to other gateways, including DEN or HOU where their ability to connect to the western US is better.
It is also possible that WN might take a different approach to serving EWR and LGA in terms of markets.... they obviously could use alot more slots at both airports but it might make more sense to use the slots they do have in different ways at the two airports.
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I'm also not sure if WN has started the process of setting up ETOPS programs for Hawaii flying but that takes time. Also, unless WN decides to start doing overnight (redeye) flying - which I believe they do not currently do - their ability to serve the Hawaii market will be limited - or they will use alot of planes to get relatively little benefit. The same thing can be said for ATL-west flying. These are major operational changes that WN will have to do in order to use their stronger position on the east coast efficiently.
You may have been correct when you wrote this almost two months ago, but you gotta wonder why "final legal reviews and approvals" have taken more than two months since this thread began. IMO, only in Parker's and Kirby's imaginations were the parties close to inking a negotiated deal in this case.
