Which of American’s Nine Hubs Are on the Chopping Block?
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EastCheats
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- Mar 12, 2012
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About the author:
Alex attends Emory University in Atlanta, Georgia, double-majoring in business and political science.
He stayed in a Holiday Inn Express last night with his parents
View attachment 11116
Alex attends Emory University in Atlanta, Georgia, double-majoring in business and political science.
He stayed in a Holiday Inn Express last night with his parents
View attachment 11116
It's not the worst-written article on the subject I've ever seen, but he makes one glaring error:
In 2014, US+AA had a 64% market share of the local market - the O&D passengers. Still impressive, but not a 90% or 88% market share.
Thing is, he mentions O&D but does not address CLT's somewhat small O&D numbers. Compounding his error, he uses his "88% market share" fallacy as another factor that argues in favor of keeping the CLT hub at or near its present size. The number that will influence decisions about CLT is the 65% share of the local market and the fact that on average, only 15% of the passengers that US boards at CLT are O&D, and 85% of the passengers that US boards at CLT are connecting. That's a very high connecting percentage.
Meanwhile, the other airlines, including DL, UA, WN, B6, LH and the rest are carrying almost exclusively O&D, as that group has attracted 36% of the CLT O&D. Delta alone has 19% of the market share (O&D) at CLT.
PHX is a huge O&D market and AA should be able to maintain a large presence there, despite the huge presence by WN. Plus, every other airline also flies to PHX, so DL and UA soak up some of the O&D. PHL? Fairly large O&D market except for NYC and WAS (due to Amtrak) and decent connectivity up and down the east coast. Not enough O&D to sustain TLV, and perhaps some other European destinations end once the three-year promises expire.
Actually, in 2014, US+AA boarded just over 90% of the passengers at CLT, but that does not equate to a "market share" or 88% or 90%.
In 2014, US+AA had a 64% market share of the local market - the O&D passengers. Still impressive, but not a 90% or 88% market share.
Thing is, he mentions O&D but does not address CLT's somewhat small O&D numbers. Compounding his error, he uses his "88% market share" fallacy as another factor that argues in favor of keeping the CLT hub at or near its present size. The number that will influence decisions about CLT is the 65% share of the local market and the fact that on average, only 15% of the passengers that US boards at CLT are O&D, and 85% of the passengers that US boards at CLT are connecting. That's a very high connecting percentage.
Meanwhile, the other airlines, including DL, UA, WN, B6, LH and the rest are carrying almost exclusively O&D, as that group has attracted 36% of the CLT O&D. Delta alone has 19% of the market share (O&D) at CLT.
PHX is a huge O&D market and AA should be able to maintain a large presence there, despite the huge presence by WN. Plus, every other airline also flies to PHX, so DL and UA soak up some of the O&D. PHL? Fairly large O&D market except for NYC and WAS (due to Amtrak) and decent connectivity up and down the east coast. Not enough O&D to sustain TLV, and perhaps some other European destinations end once the three-year promises expire.
whatkindoffreshhell
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When did Alfred E. Neuman get glasses?? Oh yeah, PHX is toast.
eolesen
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- Jul 23, 2003
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I'm still not convinced that PHX is toast.
What AA probably should do is *not* lean too heavily on DFW.
DFW's bag performance habitually sucks from the large real estate footprint, and when storms hit, AA's DOT standings wind up in the toilet for the entire month. I'd look at more of a parallel network for fail-over possibilities.
What AA probably should do is *not* lean too heavily on DFW.
DFW's bag performance habitually sucks from the large real estate footprint, and when storms hit, AA's DOT standings wind up in the toilet for the entire month. I'd look at more of a parallel network for fail-over possibilities.
WorldTraveler
Corn Field
- Dec 5, 2003
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the article is poorly written and says nothing that anyone didn't see years before the merger was even announced.
The only certainty is that AA will rationalize its network. it has way too many hubs competing for way too much connecting traffic.
Given that AA's RASM trails the industry and it is facing growing competition in its most important markets, it has to do something to push its revenue performance back in line with the industry or its stock value will continue to fall.
Not that long ago, AA was at parity with DL in stock value. Now, DAL market cap is $10B higher. given that all carriers are paying roughly the same for fuel, the difference is all revenue and balance sheet related.
AA has to address its revenue problem and that starts with attacking the revenue problems with its network. The latest round of route cuts won't be the last.
how that takes place remains to be seen.
The only certainty is that AA will rationalize its network. it has way too many hubs competing for way too much connecting traffic.
Given that AA's RASM trails the industry and it is facing growing competition in its most important markets, it has to do something to push its revenue performance back in line with the industry or its stock value will continue to fall.
Not that long ago, AA was at parity with DL in stock value. Now, DAL market cap is $10B higher. given that all carriers are paying roughly the same for fuel, the difference is all revenue and balance sheet related.
AA has to address its revenue problem and that starts with attacking the revenue problems with its network. The latest round of route cuts won't be the last.
how that takes place remains to be seen.
Kev3188
Veteran
Probably about as well as Texans would take to snow half of the year...Albert said:
Kev3188
Veteran
Touché.
Ironically, last time I was there, it was coated in a lovely sheet of ice...
Ironically, last time I was there, it was coated in a lovely sheet of ice...
