What to do about Columbus??

[Columbia blue]

Another interesting spot would be IAD. Why?? Well because if the US-UA codeshare goes through, which seems a pretty good possibility, the combined alliance would have a stranglehold on the D.C. market. With US's DCA slots ( about 40 to 50% of DCA's slots, if they still have all of their slots from a year or two ago), and UAL's hub at Dulles, you would think something has to give. Add in UAL's DCA presence and U's IAD flights, and you have roughly a 70 to 80% of flights to/from Wash. D.C. held by the two carriers.
Since DCA slots are like gold..IAD would be the natural place to shed routes if the DOJ/DOT requires it..Something to think about anyway.

 

[funguy2]

Ok. A couple things here... First, how a topic called What to do about CMH got into discussions of opening focus cities at PHL and/or IAD is beyond me. Frankly, nothing about how to fix CMH has been noted, other than it is supposed to lose money every year of the publicly available 7 year plan. I have to think there must be some profit-making ability there because otherwise it would not be in the 7 year plan, yet nobody here has any ideas on that topic?

Secondly, I don't see these great opportunities at PHL or IAD. Two to four gates which may or may not be available is hardly enough to mount an operation even the size of CMH. They have 10 gates or so at CMH right? And why would you move in on a carrier in BK. If US was still struggling outside BK or on the verge of collapse, maybe I could see it. But everyone knows the worst competitor in the airline business is a bankrupt airline. Why? Because they don't have to pay all their bills like the non-bankrupt airlines. Execs at UA, AA, DL, NW etc have all complained about the competitive disadvantage they face compare to an airline in bankrupcy over the last 20 years, particularly those that linger on. The AWA/N7 issues at LAS is one example. So why should AWA volunatarily take on an airline that can undercut them and yet is stronger than them, and incur some expense to do it?

Ok, so for a moment lets assume that for whatever reason, AWA decides to take on US at PHL. Where does AWA fly? Transcons against US and UA? AWA will lose to the other frequent flyer programs. Regardless of the new ticketing policies, AWA cannot offer the kinds of rewards UA and US can, like Europe, Caribbean, Asia, etc. Not to mention that UA has a huge FF presence in LA and US has a huge following in PHL. Not too many AWA FF's at either end. Should they fly PHL-BOS vs US and AA? Don't see that. Or maybe PHL-Florida vs US and FL. Nope that won't work either, AirTran already has AWA's niche. PHL-ORD vs. US, UA, and AA. God help them. With 2-4 gates, you cannot create effective connecting banks, so places like BDL, ORF, YUL won't work without the flow traffic.

So this big opportunity at PHL is based on p-o-ed pax about the FF and ticketing restrictions. They will probably get over it (I know, hard to imagine right now, especially the US FF's), or it won't last when someone (like AWA and LUV, or even NW since they haven't been going with the other majors on fare increases) don't match the policy anyway. In the mean time, AWA comes in, lowers fares, and US matchs, so FFs stick with USAir. Just like they did with AirTran on PIT-PHL and PIT-LGA. Just like they did when other low-fare guys tried PIT-PHL and PIT-BOS. Just like they did when Midway was in town. The only reason AirTran works to Florida is because the vacation traveller is going for the fare, not the FF/Hub carrier benefits.

Also, the last time US was challenged at PHL, they sent Midway to bankrupcy. Lets see... Down economy... check. Ambitious expansion... check. In fact, US is stronger at PHL now than they were then with Midway, from a monopoly power stand-point.

And I won't even mention the congestion at PHL as being an added cost to a low-cost airline...

And, I don't think the new management at US is running things the same way the old guys did. To quote a old slogan, This ain't you father's USAir. If Wolf and Co were still at the top of US, this might be a good opportunity. But these guys seem on the ball... More so than the last administration. They have publicly stated that PHL is their best O/D Hub. I've got to think they would vigorously defend it.

And many of the arguments work for IAD.

So, I understand where you guys are coming from, trying to find places for AWA to expand... And I am not trying to rain on your parade, I just think this idea is way too risky, given that you are fighting a loss at CMH (the original topic of this thread) and N7 at LAS (maybe?). And, I think AWA would be more successful fighting UA out west should UA begin to fall apart given their lack of leadership and the fact that AWA has a bit more staying power because they are bit more known out west than fighting US back east. That is, should they run out of ideas for CMH and LAS...

Meanwhile several other hubs have poor low-fare service where low-fare competition can't seem to get a foothold... MSP, DTW, CLE, PIT, CVG I think PHL is similar to these other hubs.

Just my opinion.

 

[frntvngd]

WELL SAID funguy...

I too dont understand why everyone was so gung-ho about Philly on this topic??

 

[Columbia blue]

Re: IAD and PHL
Interesting comments...and attacking any fortress hub has it's perils and problems..however it is certainly not impossible, FF members or not. Funguy, you've made some valid points about PHL ( and to a lesser extent IAD).... however it can be accomplished..Just ask Southwest about BWI...another U hub. It took WN all of 2 years to crush U at BWI...and U tried everything from mainline to Metrojet. Having said that it must be pointed out that AWA doesnt have the resources or strength of SWA..But I will guarantee you that EVERY low fare carrier has been studying exactly how Southwest did it at BWI. And yes the focus of these posts is CMH...and I believe it has been addressed at least a bit. But sometimes you just have to roll with the tide

 

[funguy2]

SWA moved in on BWI because of the demographics of the PHL-DCA area and because US was obviously not sure what to do with their acquisition. US probably showed the same lack of foresight with the BWI hub as it did with its PSA acquisition, which SWA had also swooped in on. I don't think US has anything left to overlook. And I think this management team is more focused than others in the past. I don't think there is much to study here. You attack the your competitors weak spot. I don't think that PHL is a weak spot.

 

[motnot]

funguy, I'd like to know where you got the idea that CMH is unprofitable, or that it says so in the seven-year plan, or that it says it will be unprofitable for all seven years. I've read the plan more than once, and I don't remember seeing anything about CMH specifically. But it is possible I missed it. Please point me to the specific parts you saw.

I think AWA management has said that CMH is profitable, or at least was before the industry fell into so much trouble. It may still be, but I don't remember any comments specifically on CMH lately from management.

So I'm not sure there really is anything to fix in CMH. It's just not a great moneymaker, and the company sees more profitable expansion out of PHX.

And according to a story in today's Arizona Republic, Parker thinks AWA could be slightly profitable in 2003. Which ain't too shabby.

 

[funguy2]

Motnot:

I went blindly on based on alphafloor's comments from 8/30 this thread:

What I would like to see is for Chautauqua to receive some ERJ-135's, as well as ERJ-170's, to fly under the America West Express banner.

I would like to see AWA stop subsidizing Chautaqua's losing operation in CMH and begin operating the necessary aircraft themselves. According to the 7-year plan submitted to the ATSB (SEC website), the Chautaqua operation is forecast to lose millions of dollars per year for every year of the 7 year plan. Chautaqua (or Mesa for that matter)isn't entitled to be sheltered from the effects of a turbulent industry, especially when that protection comes at the expense of AWA personnel and their career progression.

If any major can operate their own small-jets (and they can), it's AWA.

But, since I did that, and you called me on it, I figured I had better go look at the Plan on the SEC site myself, or admit my folly. Well I have admitted my folly, but I think alphafloor is correct. On Page 39 of the SEC document, it has RASM and CASM numbers for both Chautauqua and Mesa. Chautauqua's CASM is greater than its RASM for each year.

 

[MiAAmi]

How does HP do on the CMH-DFW route against AA? If they do well against AA I'm surprised they don't take on DL on the CMH-ATL route.

 

[N905AW]

CMH-DFW acutally performs quite well for America West. Only a few months after its introduction, the number of daily flight was bumped up from 2 to 3. Currently flights usually come in and go out nearly full.

America West did start CMH-ATL last summer. In fact, it was the first route to utilize Chautauqua's ERJ-145's. It was cancelled after September 11. It wasn't performing very well to begin with. However, I think the route just needed more time. When CMH-YYZ was first started, planes were going out with absolutely no p***engers daily. Now, it's constantly full, and the route will go to 4 times daily starting in October.

 

[lowfareair]

RASM/CASM is shown at a loss for the entire period for Chautaqua through 2008, but load factor is shown at 50%. Raising it to above 60-63% will make it profitable.

 

[MiAAmi]

Is CMH a money maker or not?

 

[motnot]

lowfareair, where did you get this information about Chautauqua?

 

[N905AW]

MiAAmi:

When Doug Parker visited Columbus in March for the hub's 10th anniversary, which was in December he stated that the he was pleased in the hubs performace and that America West was committed to CMH. There were two articles in the Columbus Dispatch concerning the America West's hub, each saying that America West now considers the CMH an integral part of their route structure, ironically enough, in large part due to the increased Regional Jet flying from the hub.

 

[barbee tantrum]

[blockquote]
----------------
On 9/10/2002 1214 AM MiAAmi wrote:

Is CMH a money maker or not?
----------------
[/blockquote]

When AWA was using mainline to fly CMH to LGA, PHL, MDW, etc., there supposedly was talk of shutting CMH down. Low load factors and competition from carriers such as US Airways resulted in repeated losses. A decision to use RJs for Chicago and east coast cities came to fruition and yields were successful. How much money CMH is making is a secret to everyone. I believe only one person ever knew and he was shot in the head and buried outside of Pickerington. (kidding.) Phase 3 of AWA expansion at CMH was on hold until further notice, as stated by Doug Parker in March, until CMH started making money again. Now Phase 3 is back in motion, last I've heard. Someone must have made some money.

 

[motnot]

So barbee, what does Phase 3 entail? And I'm assuming you work for AWA. If so, would you care to share in what capacity?