US applies for CLT & PHL to Sao Paulo

[Non Rev]

The US and Brazil will implement an open skies agreement effective 2016. Part of the transition allows for additional slots. The filing for service closed this week and new slots will be awarded for October 2013.

http://finance.yahoo.com/news/us-airways-applies-between-charlotte-234100626.html

 

[gaucho99]

Interesting....so the new AA will have non stop flights to GRU from jfk, phl, clt, mia, dfw and lax...isn't that a bit of an overkill?

 

[FWAAA]

Interesting....so the new AA will have non stop flights to GRU from jfk, phl, clt, mia, dfw and lax...isn't that a bit of an overkill?

This request for Brazil frequencies has to be made as US must operate as a stand-alone airline until the merger is approved. Assuming the merger is approved, I don't think there's a chance that CLT retains its GRU or GIG flights - the daily O&D is just miniscule. PHL? Maybe.

 

[autofixer]

This request for Brazil frequencies has to be made as US must operate as a stand-alone airline until the merger is approved. Assuming the merger is approved, I don't think there's a chance that CLT retains its GRU or GIG flights - the daily O&D is just miniscule. PHL? Maybe.

It seems like most of the Paxs connect to MCO.

 

[BuffaloJoe]

It seems like most of the Paxs connect to MCO.

If the most pax connect to MCO in CLT, then MIA will be even better for them. JFK has the O&D, PHL can focus on the connections plus PHL's O&D, although less than JFK but more than CLT. Also didn't I see that AA applied for ORD-GRU?

 

[zethya]

Regardless, these rights are essentially meaningless after October, 2015, when the U.S. - Brazil (Full) OpenSkies Agreement becomes effective. Even then, there will still be SLOT restrictions of 45 Ops/hour at GRU, which may make it tough for new entries to get reasonable/competitive operating times. IMO, the interesting thing about this submission is the inclusion of PHL, since the Parker regime has always designated CLT as the sole access point to South America - even though the GIG DOT submission - likely for political reasons, had a PHL tag. I'd bet PHL will be awarded a route, if for no other reason than its the only entry with zero flights to South America. CLT - I'm not certain how much weight the US-DL GRU agreement expiration before Open Skies will carry with the DOT. If it does, CLT will likely get the other slot pair. Once the merger is approved, the whole AA GRU route system will likely be refined anyway with/without CLT and/or PHL. Actually, if PHL-GRU (Jan 2014) were to somehow acquire ideal slot times - complementing JFK, this would have been a wise move on Parker's part.

 

[WorldTraveler]

CLT and PHL to GRU are both viable. There is no reason to doubt they will both be retained in the combined AA network. The merger should make it a lot easier to develop PHL and CLT to Asia.

It is precisely because of the DL-US agreement that US will get one set of frequencies one way or the other so there is really only one set at stake. US also has the frequencies from UA until next year and DL could and probably will make a case that US is asking for a new flight to start less than six months after it starts its first GRU flight - which won't even have operated by the time decision is made.

The AA/US merger will be a factor in these frequency awards.... but the development of new gateways for US is likely to carry more weight for US' application than it will for AA - who could have started its own GRU-LAX and GRU-ORD years ago if it wanted to move slots. It also isn't clear that AA has replaced all of its unrestricted frequencies (GRU only flights) that have been used for GIG or other flights - which means that the DOT could deny AA's application if they are sitting on frequencies they could use for GRU flights but are not.

What won't change is that DL will come some of the award in part because UA doesn't seem interested. US' current hubs will get new flights but US will end up returning slots to UA just as Open Skies goes into effect so there really isn't any great demand for new flights above the number of frequencies that are available.

 

[FWAAA]

CLT and PHL to GRU are both viable. There is no reason to doubt they will both be retained in the combined AA network. The merger should make it a lot easier to develop PHL and CLT to Asia.

I disagree about CLT. If the assertion posted above is true (that most GIG-CLT passengers are headed to MCO), then MIA is the superior gateway - no need to fly that widebody an extra 650 miles each way to CLT when MIA is on the way. CLT to Asia? I'm skeptical. PHL to S America and Asia? Certainly.

The AA/US merger will be a factor in these frequency awards.... but the development of new gateways for US is likely to carry more weight for US' application than it will for AA - who could have started its own GRU-LAX and GRU-ORD years ago if it wanted to move slots. It also isn't clear that AA has replaced all of its unrestricted frequencies (GRU only flights) that have been used for GIG or other flights - which means that the DOT could deny AA's application if they are sitting on frequencies they could use for GRU flights but are not.

I'm not convinced that the pending merger will factor into the DoT decision unless that decision is held up until the merger is approved. Until the merger is approved, US and AA are independent carriers. I certainly agree that the concentration of Brazil frequencies in AA's hands (when added to whatever US gets from this proceeding) might require some divestitures, but I don't see the DoT making a decision in this award that assumes the merger will be approved. But I've been wrong before.

It will be an interesting decision to read, given that all three players can point to the relative "unclean hands" of the others (AA could have moved some of its frequencies around, DL shouldn't have given away its frequencies to US and shouldn't have canceled its other Brazil services a year or two ago and US shouldn't get new frequencies just because it entered the market with a short-term lease from UA plus it shouldn't get more when it hasn't even begun its CLT-GRU flight). Lots of good accusations from each party.

 

[cltflyer1]

I disagree about CLT. If the assertion posted above is true (that most GIG-CLT passengers are headed to MCO), then MIA is the superior gateway - no need to fly that widebody an extra 650 miles each way to CLT when MIA is on the way. CLT to Asia? I'm skeptical. PHL to S America and Asia? Certainly.



I'm not convinced that the pending merger will factor into the DoT decision unless that decision is held up until the merger is approved. Until the merger is approved, US and AA are independent carriers. I certainly agree that the concentration of Brazil frequencies in AA's hands (when added to whatever US gets from this proceeding) might require some divestitures, but I don't see the DoT making a decision in this award that assumes the merger will be approved. But I've been wrong before.

It will be an interesting decision to read, given that all three players can point to the relative "unclean hands" of the others (AA could have moved some of its frequencies around, DL shouldn't have given away its frequencies to US and shouldn't have canceled its other Brazil services a year or two ago and US shouldn't get new frequencies just because it entered the market with a short-term lease from UA plus it shouldn't get more when it hasn't even begun its CLT-GRU flight). Lots of good accusations from each party.

I disagree about CLT. If the assertion posted above is true (that most GIG-CLT passengers are headed to MCO), then MIA is the superior gateway - no need to fly that widebody an extra 650 miles each way to CLT when MIA is on the way. CLT to Asia? I'm skeptical. PHL to S America and Asia? Certainly.



I'm not convinced that the pending merger will factor into the DoT decision unless that decision is held up until the merger is approved. Until the merger is approved, US and AA are independent carriers. I certainly agree that the concentration of Brazil frequencies in AA's hands (when added to whatever US gets from this proceeding) might require some divestitures, but I don't see the DoT making a decision in this award that assumes the merger will be approved. But I've been wrong before.

It will be an interesting decision to read, given that all three players can point to the relative "unclean hands" of the others (AA could have moved some of its frequencies around, DL shouldn't have given away its frequencies to US and shouldn't have canceled its other Brazil services a year or two ago and US shouldn't get new frequencies just because it entered the market with a short-term lease from UA plus it shouldn't get more when it hasn't even begun its CLT-GRU flight). Lots of good accusations from each party.

Why would PHL need flights to south america and Asia when JFK can serve that just as well? seems redundant to me to have flights to Asia and South America from both, whether that be from PHL or JFK.OR Ord. CLT-GIG might be not be necessary but i think at least CLT-GRU will stay. While some of the traffic can be routed through MIA some mco will still go through CLT, and there are many destinations that will see service to CLT but not MIA and double connecting to DFW or Mia would be unreasonable.

 

[nycbusdriver]

Why would PHL need flights to south america and Asia when JFK can serve that just as well?

Kirby mentioned in the Q&A with the pilots (which I think are available on YouTube in three parts) why PHL and JFK both make sense for the new airline. They serve entirely different functions. JFK has a huge origination base, and does not have much connecting traffic. But it works because NYC Metro has so many people. PHL, while also having a fair amount of population nearby, does much more connecting traffic.

Given that, PHL might be more effective to Latin America because it has the opportunity for much more feed.

 

[nycbusdriver]

Interesting....so the new AA will have non stop flights to GRU from jfk, phl, clt, mia, dfw and lax...isn't that a bit of an overkill?

Not unless they're unprofitable. Whichever ones don't "click" will probably get dropped.

 

[Non Rev]

Looks like DL is not a happy camper! They should have considered all possible outcomes of the slot swap before they included GRU!

http://www.aviationweek.com/Article.aspx?id=/article-xml/avd_03_06_2013_p03-02-555721.xml

 

[FWAAA]

Why would PHL need flights to south america and Asia when JFK can serve that just as well? seems redundant to me to have flights to Asia and South America from both, whether that be from PHL or JFK.OR Ord. CLT-GIG might be not be necessary but i think at least CLT-GRU will stay. While some of the traffic can be routed through MIA some mco will still go through CLT, and there are many destinations that will see service to CLT but not MIA and double connecting to DFW or Mia would be unreasonable.

I'll start this far too lengthy post with "I may be completely wrong."

I'm starting from the premise that not every hub can profitably support nonstop flights to all of the following: TYO, PVG, PEK, ICN, GRU, GIG, SCL and EZE. I think that's a pretty safe assumption. Pre-merger, US flies exactly one daily flight to one of those destinations: CLT-GIG and CLT-GRU is scheduled to begin later this year. From JFK, MIA, ORD, DFW and LAX, AA currently flies 28 peak daily flights to those destinations (not counting DFW-ICN beginning in May). Even with 28 daily flights to the cities on that list, not every AA gateway has flights to every one on that list. So additional long-haul flights to Asia and S America will, of course, be added where the O&D plus reasonable connections combine for the greatest potential profit. Daily O&D between CLT and Brazil is very low, and if most on the CLT flight from GIG are heading back south 500 miles to MCO, it doesn't make any sense for the S American flights to overfly MIA on their way to CLT. The extra miles aren't just inefficient from the airline's perspective (fuel, labor, etc), it needlessly adds almost four hours to the journey for the mouse-bound.

Sure, CLT has some very small spokes that get 3-4 daily Dash8 flights. Those customers already double connect to get to most long-haul destinations on that list above, and unless UA or DL swoop in with convenient connections to ATL or EWR or IAD or IAH, those people will still have to double connect. The fact is, those tiny spokes that are connected solely to CLT (and not to PHL) don't generate very many trips to S America or Asia.

Why would PHL have flights to S America and Asia and not CLT? Size. O&D. When US applied for China rights a few years back, Parker selected PHL as the gateway. The PHL metro area is triple the CLT metro area population, and despite not having as much domestic O&D as its population would indicate (in part due to Amtrak's convenience to NYC and WAS) PHL has more international O&D than CLT.

During the past few years, we've repeatedly heard that AA needed a southeast connecting hub, as the hypothetical RIC-JAX passenger did not have a sensible AA connection. But AA didn't need CLT as a gateway to Asia or S America. Both RIC and JAX are connected by AA to MIA (taking care of their S American needs) and both are connected by US to PHL, enabling connections to Asia. Congestion at JFK might prevent AA from connecting all the Richmonds and Jacksonvilles to JFK - but no need to, since US already connects them to PHL. And sure, some of the residents of the one-horse towns that have flights only to CLT might still need to double connect - such is life in very small town America. Most international passengers are in the big cities, not those one-horse Dash8-only towns. If O&D from PHL is greater than from CLT, then that's where I predict new AA will start new long-haul flights.

Merger or not, IMO, AA needs to start flights to China from JFK - one of the biggest USA O&D markets to/from China. Many multiples of the daily China O&D from PHL or CLT. Assuming that US has been sending a lot of its loyal customers to help feed UA flights to Asia from EWR, ORD and IAD, there should be some ready-made customers to support some new flights to Asia from ORD, PHL or JFK.

Like I said, I may be completely wrong.