1) Virgin chose DFW and ORD because they've run out of easy markets to enter with the A320. I'd say ORD appears to be more of an affront on UA, but DFW is definitely targeting AA.
But let's see how Virgin does with the economy still on life support and high fuel prices. Having two or three flights a day will win over the brand loyalists, but probably won't win over business travelers who value frequencies over price. Since AA isn't offering DEQMs in those markets (yet), I'd say that the impact is negligible at best right now.
2) Jetblue is indeed a exception in many ways. They came in with a great business model (re-using the People Express model, perhaps?), but you overlook how they did it: Uncle Chuck's earmarked exception slots at JFK, and buying up all the slots at LGB. Essentially free from other carriers ability to match them, they flourished.
3) Let's not forget how B6 got a stronghold in BOS. DL built Terminal A, allowing Jetblue to move into Terminal C ( http://www.bizjournals.com/boston/stories/2005/01/31/daily39.html)
4) There's the impression that AA gave up a lot of domestic markets to B6 (SEA, LAS, PHX, OAK, SJC), yet they are flying just as many transcons as always, and with the exception of BNA, are flying all of the domestic markets they did when I worked at JFK in the 1990's.
How about we look at how many markets Song went into, and then abandoned? You're quick to point out AA's failure to compete, but Song was an utter failure as well.
One move by DL in 2006 essentially lifted up 34% of Jetblue's markets ( http://www.aviationweek.com/aw/jsp_includes/articlePrint.jsp?headLine=Delta%20Slashes%20New%20York%20Schedule,%20Including%20Song''s%20Florida%20Routes&storyID=news/DAL02276.xml )
That same move also saw DL abandon >30% of the gates they'd been leasing in BOS, which in turn opened the door for both VX and WN to enter BOS.
So you can blame AA for both of those carriers gaining in strength, but ironically it was moves by DL which precipitated it. I'm sure you'll now have something self-congratulatory to say about how DL intended to be that way....
5) Your claims a few days ago about DL "pioneering" inland hubs to Europe ahead of AA... Sure, Delta started flying to London, Paris, and Frankfurt during the late 70's and 80's. But the fact remains that AA outpaced both them and UA into Europe.
In 1990, DL had a whopping 8 daily flights to Europe. AA had 9 from ORD, seven from DFW, and at least 2 from JFK if not more. ( http://www.nytimes.com/1990/06/02/business/kennedy-still-no-1-but-slipping.html?pagewanted=4&src=pm )
6) The comparisons to TW and PA would be valid if it weren't for the fact that those airlines had at least 50% of their revenues and network attached to the same airport (JFK) which was as you pointed out being overflown by every other airline.
AA's definitely big at DFW and MIA, but their system revenue and their networks are much more diversified than either TW or PA's was. The same holds true of every other major airline, except for perhaps Frontier.
E,
I appreciate your discussion and am glad we can do so free of personal innuendos - and focus on the facts.
I have never doubted that AA was a pioneer in many regards; I have continually said that AA needs to return to its leadership position in the industry.
But I also don't put a whole lot of stock on what anyone is in history if it doesn't translate into something concrete today.
You better believe that Song and DeltaExpress etc were failures... but it also doesn't change the fact that DL has been able to hold onto its presence as the network airline with the most point to point presence up and down the eastern seaboard. Given that low fare carriers have pushed other carriers including US and AA out of most of those point to point markets, I think the larger question is what strategy ultimately worked to keep a network carrier in those markets.
No one will doubt that wasting money on a new terminal at BOS was horribly painful.. if DL had sunk that money into JFK which offered far more potential, things would have looked differently... but it also reflects the fact that DL at the time was led by a New Englander who was more interested in what looked good to him than what was good for the airline long term.
But regardless of the errors that DL made at BOS and the opening it provided for other carriers, DL TODAY is the largest network carrier at BOS and on the NY side of NYC. What DL or AA or anyone else WAS is far less important than what it is TODAY.
The same principle applies to AA's development of ORD and DFW. I didn't doubt that AA developed ORD and DFW.... but arbitrarily picking a date that shows AA ahead in TATL flights - which incidentally was right before DL's PA route purchases - doesn't tell me much. Half of AA's TATL operation for most of the last 15 years or more has been to/from LHR, which were acquired routes. Why should we give AA a pass on developing LHR by acquisition but say DL can't get the same credit for buying PA's assets and developing from there?
More significantly, what difference does it make what AA was 10 years ago if they have been unable to hold onto it; the simple fact is that DL's ATL gateway to Europe alone is larger than AA is from both ORD and DFW; AA at ORD is smaller than it was in 2000 before 9/11 and in the heyday you speak of.... what's the point of boasting about something in the PAST if AA hasn't translated into a leadership position TODAY?
Yes, AA and DL and others overflew PA and TW's JFK hubs and then turned around and developed JFK into hubs of their own; the difference is that DL has been able to grow BOTH its inland and NE gateways while AA has shrunk ORD, largely because of UA's presence.
SO, tell me what strategically can you say for AA TODAY relative to its transatlantic presence - and tell me where AA's revenue advantage is?
Not necessarily. But you post here like YOUR word is the end-all. Believe it or not you are not ALWAYS correct. You have opinions like everyone else here. And you know what they say about opinions, dont you?
Eastern offered permanent concessions and that was not enough for Frank Borman. He sold to Lorenzo, who wanted blood. They took blood from the PanAm and TWA folks as well. Pilots, FA's and IAM workers all agreed to in the end. Again, with you, management gets a pass....Amazing!
What I find truly amazing is your involvement on this baord...Yes, Yes, it's a free country and this board is open to ALL people. Yeah , Yeah.
But you really stepped up the INFOMERCIALS ever since the TWU negotiators gave the company their proposal.
We are supposed to believe your every word and hang onto it like is LAW?
Bankruptcy might be worth it, then maybe whoever hired you to post here as if you are Arpey and his team's official communicator release you for a job well done.
And your malarchy about us "unionists" not wanting to hear the truth is getting old.
Management and being truthful is a little like an oxymoron.
Just as we don't believe our union-management like leadership, the same holds true for our management team who preached and still does, the "SHARED SACRIFICE" mantra.
Here's how I would respect this management.......
Come right out and say/...."IF YOU GREEDY UNIONS DO NOT GIVE US WHAT WE WANT, WE WILL FILE BANKRUPTCY..."
The only reason they are stalling and beating around the bush is the fact that we are in mediation.
Just tell the mediator that they are done and then file for bankruptcy!
And watch employee morale soar!
didn't say you weren't entitled to opinions... just that if we are discussing facts, I will use facts to make my point.
And for the record, my whole diatribe that AA can't compete longterm with its network and cost structure is obviously an opinion based on what I have seen in the industry to date and based on data which I can extrapolate out from today....
Obviously we will only know whether I am right in a few years but I stand by my statements that unless AA and its employees find a way to move forward and recover lots of lost ground fast, AA's days as Eric remembers it and as we know AA today are vastly numbered.
I wish you would let me know whether the money is that someone is paying me because I sure haven't seen it.
I'm sure you will get your chance at bankruptcy before too long if that is what you want... you might also find that the current "ask" today won't look as bad as you think it is.
The bolded portion is sorta airliners.net-ish. So DL and NW got hitched because NW didn't own any 777s? I thought that large, integrated, fly-everywhere networks were the only ones that could possibly survive, and neither DL nor NW could be described as possessing large, integrated, fly-everywhere networks. Other than one NRT flight (from ATL), DL had no Pacific network and NW had nothing south of Florida, very little in London and nothing else in Europe other than Paris and Amsterdam. Yet above you imply that NW had a chance to survive as an independent airline had it ordered a few 777s along with the A330s?
As eolesen pointed out, VX has entered ORD and DFW because, like bank robbers, that's where the money is. CLE? DTW? CLT? PHL? EWR? Some of those are just too small (and feature too little premium domestic O&D) for VX to worry about. It's not about AA's costs - it's about the huge amount of domestic traffic at fares that are high enough to be attractive to a low-cost carrier. ATL? Not too surprising that VX saw another low-cost carrier already entrenched there in FL (now owned by WN) and choose to try to capture some higher revenue at ORD and DFW instead.
Oh, yes, about that "escalation" by DL in BOS and MIA: we'll see how long DL continues that losing effort. It's great for passengers who like paying less for BE fares in the spring and summer than the typical upgradable M fares to LHR/CDG/AMS, etc. but it can't be all that great for DL. Lots of BE seats to fill and DL is practically giving them away. And by flying 764s on those routes, DL is attempting to make it up in volume. You have previously posted that the carrier with the largest market share generally sets the price and tends to win. Well, to London, that would be AA and its 17 daily flights and the AA/BA jv with 51 daily flights. But like I said, discount-loving passengers are certainly happy. 😀
yes, NW's ability to develop Asia from the interior of the US was greatly hindered by having only 744s which could fly the routes. NW missed the west coast of the US to Asia which like the NE to Europe is essential to domiinating the region. UA had 777s and a very good hub both on the west coast and in the midwest; NW was unable to develop Asia using 744s and what routes the 330s could do from the west coast.
The fact that NW ordered the 787 proves my point... the fact that the 787 was delayed cost them and even if they had the 787, it still didn't deal with the west coast problem, but perhaps they could have developed SEA-Asia which is what DL has done, surprsingly with those old tired 767s.
ok... let's check back again in a year and see how AA fares against low fare carriers in its ORD and DFW hubs since you're convinced it will amount to nothing... or at least you acknowledge that there is lots of premium revenue at ORD and DFW and those LFCs should have no problem developing. We need only look at BOS to LAX as an example where what once was one of AA's premium transcon markets is now predominantly filled with LFCs.
I never doubted that DL's BOS/MIA experiment is proving costly and they might choose after the summer to pull back some of that capacity. But DL's strategic war chest is much deeper than AA's which is why they have been able to hold their own and gain market share even against low fare carriers and take share from other network carriers. DL's share in ATL and SLC is unchanged if not stronger. FL - a far lower cost competitor than WN - has been pulling back its ATL presence. DL's share of NYC relative to low cost carriers has GROWN.
UA's ability to withstand losses on LAX-PVG against AA is much greater given UA's larger size and higher profitability.
I don't know how long DL will wait to fill seats on its new LHR flights and raise fares but for right now it is a direct assault on AA and BA. Also, DL's startup LHR losses are being spread across both DL and AF/KL; not so, AA's losses on its domestic network where it is a 15% cost disadvantage to DL and more than 40% compared to some of its key domestic low fare competitors... which is probably why network and LFCs are going after AA with such force - and why AA's revenue growth (RASM) is trailing the industry.
You can deny the impact - and we will only know after several years - but I continue to assert that AA's revenue leakage and incursions by competitors has just as much significance in determining AA's future as does its dealings with labor.
