tphuang wrote:

jagraham wrote:

jbs2886 wrote:

That doesn't prove at all the route is a "huge money looser" - it just shows its getting less revenue per flight, which isn't really surprising given that it is new and up against established competitors. You are also assuming Delta doesn't want to take that revenue hit in order to get contracts for SEA-based customers.

An additional assumption is that $241 average fare is a money losing fare. Not necessarily.

And flying ORD to SEA is not just about SEA based customers. DL is building an Asian gateway at SEA. Internationally that means competing with the likes of EK. Which has proven that there is significant demand connecting Asia to Europe thru Dubai. EK is now building that model in the US as they are able to get route authorities.

So unless DL wants to be a domestic only airline, they must provide a lot of nonstop destinations from their gateways. To 15 or 20 metro areas. Including all of the top ten. And it does not have to be widebodies - they can do it using a couple of 717 if that is all the route can handle at this time.

That is in addition to UA/CO and AA/US now being national behemoths. AA/US has hubs in 7 of the top ten metro areas, and focus cities in 2, leaving only Houston as a top ten metro area without a significant AA/US presence. Eventually AA/US will rationalize their domestic network such that each hub and focus city has multiple nonstops to every other hub and focus city. And since over 80% of domestic travel is between top ten metro areas, AA customers will be able to fly nonstop for most of their travel needs. Even most of the small city flying will be only one stop. It is going to happen. UA is already starting to respond (see UA at LAX).

DL will have to make moves in this regard. Not a hub at ORD, but nonstop service from their hubs. And yes they have other holes such as Texas. Which they abandoned before all these megamergers. Things have changed since then.

The more relevant number to looking at is q3 since it’s for the full quarter. My point is that if they are yielding 25 to 30% less than ua on a flight to a non fortress hub like sea, how much worse would they do if they try adding a non hub route out of ord? Things to think about before banging on the door that delta will be a large player in Chicago.

jagraham wrote:

One last thing - a lot of a.netters said that DL was an also ran in NYC about a decade ago. And DL couldn't do anything about it.

And that DL was an also ran in LAX. And couldn't do anything about it.

Recently people have been saying that what DL is doing in SEA would amount to nothing.

And some of you want to add ORD to this list . . .

ILS28ORD wrote:

You mean beside the fact that DL is a major network carrier with major international partners and b6 is LCC that is primarily east coast centric with few international partners?

ADrum23 wrote:

Couple of things.

1. Why don't they just demolish and rebuild the existing Concourse C to better fit into the new Concourse?

2. Why isn't anything being done with Terminal 3? Won't something have to be done there eventually? The space between the new Global Terminal and the existing Concourse G seems rather tight.

3. Are the underground tunnels going to include a people mover (a la ATL, CVG, etc). It seems that would make the most sense, especially when ORD inevitably needs to expand to the west.

airbazar wrote:

ILS28ORD wrote:

You mean beside the fact that DL is a major network carrier with major international partners and b6 is LCC that is primarily east coast centric with few international partners?

First of all, you're missing the whole point. DL will never be interested in a hub in ORD so connections with partners are irrelevant. Which SkyTeam airline flies to ORD but doesn't fly to either JFK or LAX?
Second, B6 has few international partners? Seriously? I suggest you go inform yourself a little better.
https://www.jetblue.com/airline-partners/
As for strictly codeshare partners B6 has 18 vs. 20 for DL. As you can see, not a huge difference.
And third, DL is not actually gate restricted at ORD today while B6 is. So I'll repeat: If anyone is to benefit more from gate increases it's B6 more so than DL.

United787 wrote:

jagraham wrote:

One last thing - a lot of a.netters said that DL was an also ran in NYC about a decade ago. And DL couldn't do anything about it.

And that DL was an also ran in LAX. And couldn't do anything about it.

Recently people have been saying that what DL is doing in SEA would amount to nothing.

And some of you want to add ORD to this list . . .

I try to avoid the DL love/hate fest but the major difference with ORD is that DL already has two fortress hubs nearby at MSP and DTW. DL doesn't need nor do I suspect that they want to make ORD a hub. I think UA and AA do fine at ORD and is a major component of their networks... but I don't think they are rolling in the dough here, too much competition. DL knows that their yields are far better at MSP and DTW and will continue to funnel their pax there. ORD will remain a strong station for DL and probably grow a little bit to it's hubs and one off point to point routes that it is good at.

But BACK to the topic at hand... I don't understand how a thread about ORD's expansion, a hub for UA and AA, gets hijacked by the DL lovers/haters... you should watch this video... https://www.youtube.com/watch?v=mQZmCJUSC6g

jagraham wrote:

One last thing - a lot of a.netters said that DL was an also ran in NYC about a decade ago. And DL couldn't do anything about it.

And that DL was an also ran in LAX. And couldn't do anything about it.

Recently people have been saying that what DL is doing in SEA would amount to nothing.

And some of you want to add ORD to this list . . .

william wrote:

United787 wrote:

jagraham wrote:

One last thing - a lot of a.netters said that DL was an also ran in NYC about a decade ago. And DL couldn't do anything about it.

And that DL was an also ran in LAX. And couldn't do anything about it.

Recently people have been saying that what DL is doing in SEA would amount to nothing.

And some of you want to add ORD to this list . . .

I try to avoid the DL love/hate fest but the major difference with ORD is that DL already has two fortress hubs nearby at MSP and DTW. DL doesn't need nor do I suspect that they want to make ORD a hub. I think UA and AA do fine at ORD and is a major component of their networks... but I don't think they are rolling in the dough here, too much competition. DL knows that their yields are far better at MSP and DTW and will continue to funnel their pax there. ORD will remain a strong station for DL and probably grow a little bit to it's hubs and one off point to point routes that it is good at.

But BACK to the topic at hand... I don't understand how a thread about ORD's expansion, a hub for UA and AA, gets hijacked by the DL lovers/haters... you should watch this video... https://www.youtube.com/watch?v=mQZmCJUSC6g

ScottB wrote:

jagraham wrote:

With the mergers, there are four domestic megacarriers. In the 3rd largest metro area - Chicago - Delta is NOWHERE. That is a major issue.
The days of being strong in one or two regions - against UA and AA in their current forms - is not tenable in the long term. Delta must raise Chicago to at least the level of a focus city.

No. Just no. Delta cannot be everything to everyone, and neither can their competitors. The 4th largest combined statistical area is Washington-Baltimore and that's (1) a bit over 2% smaller than the Chicago area and (2) likely to surpass Chicago by the end of the decade. Does that mean DL must have a hub or focus city in Washington or Baltimore? UA, AA, and WN all do. How about the S.F. Bay Area? #5 and it will probably rival Chicago by the time the new ORD terminals are completed. Does DL need a focus city there, too?

DL has far larger network issues: the complete lack of a hub in the South Central U.S. is a big one. Two of the top ten metro areas are in Texas and DL is an also-ran in those markets. But they have very strong positions in their core markets and have even turned a very shaky position in NYC into a lead in the market. Chicago is only essential to DL as a well-served spoke.

flymco753 wrote:

william wrote:

United787 wrote:

I try to avoid the DL love/hate fest but the major difference with ORD is that DL already has two fortress hubs nearby at MSP and DTW. DL doesn't need nor do I suspect that they want to make ORD a hub. I think UA and AA do fine at ORD and is a major component of their networks... but I don't think they are rolling in the dough here, too much competition. DL knows that their yields are far better at MSP and DTW and will continue to funnel their pax there. ORD will remain a strong station for DL and probably grow a little bit to it's hubs and one off point to point routes that it is good at.

But BACK to the topic at hand... I don't understand how a thread about ORD's expansion, a hub for UA and AA, gets hijacked by the DL lovers/haters... you should watch this video... https://www.youtube.com/watch?v=mQZmCJUSC6g

Maybe DL wouldn't as so much expand the amount of service offered from ORD, but reduce RJ flying. Other large cities see all mainline service to other domestic hubs. LGA/BOS/DCA-ATL/DTW/MSP are all mainline. ORD-MSP/DTW sees frequent CR7/9 service. Maybe DL is trying to get at moving to mainline flying to strengthen their amount of seats going to other hubs. It's already changing, as DTW and MSP have seen a lot more mainline flying to ORD than what it was before.

william wrote:

I asked the same question twice. AA's facility is 55 years old now. I imagine they may go to the new west side terminal but that will put them at a disadvantage for travelers coming from downtown.

Mikey711MN wrote:

william wrote:

I asked the same question twice. AA's facility is 55 years old now. I imagine they may go to the new west side terminal but that will put them at a disadvantage for travelers coming from downtown.

FWIW, I interpreted T3's absence from the plan that AA will be the major tenant for the new West Terminal, if only temporarily, until a renovated T3 is in-place.

-Mike

ORDfan wrote:

If you're trying to use socioeconomic metrics to prove a point regarding demand for air travel and subsequent demand for hubs/focus cities, perhaps metro GDP is a better indicator. Metro CSA Chicago GDP is 26% greater than Metro DC CSA, and 39% greater than San Fran CSA. Perhaps this doesn't fit your narrative about why DL should not increase service to Chicago. Subjectively, I don't really care since I think DL is so overrated that it's laughable. If they left ORD tomorrow, I wouldn't bat an eyelash for them.

ORDfan wrote:

[Furthermore, metro Chicagoland (collar counties and NWI) is growing at .5 to 1.0% year depending on the source. I highly doubt San Fran or DC surpasses it in terms of population in the next decade and even if they do, they are so far behind on GDP that they are unlikely to surpass on monetary measures of a market's value for air travel. PWC's projections for top global cities by GDP in 2030 includes only 3 American cities: guess which ones. Bottom line is that UA and AA were/are here first and they will defend vigorously against any DL creep because it is worthwhile defending their market share in the 8th highest GDP city in the world.

yeogeo wrote:

Delta spokesperson: "We are okay with the expansion — moving Delta to Terminal 5 gets us right next to SkyTeam partners, and that's a nice situation for us competitively in Chicago."

https://www.bizjournals.com/chicago/new ... j=80228051

ScottB wrote:

ORDfan wrote:

If you're trying to use socioeconomic metrics to prove a point regarding demand for air travel and subsequent demand for hubs/focus cities, perhaps metro GDP is a better indicator. Metro CSA Chicago GDP is 26% greater than Metro DC CSA, and 39% greater than San Fran CSA. Perhaps this doesn't fit your narrative about why DL should not increase service to Chicago. Subjectively, I don't really care since I think DL is so overrated that it's laughable. If they left ORD tomorrow, I wouldn't bat an eyelash for them.

In 2016, the S.F. Bay Area CSA (officially San Jose-San Francisco-Oakland) had estimated GDP of $821 billion, third in the nation. Washington-Baltimore was just behind at $724 billion. Chicago was fifth at $659 billion. So no, Chicago doesn't produce greater GDP than either of those regions and in fact it significantly lags both in GDP per capita as well. Both the Bay Area and Washington-Baltimore are growing significantly faster than Chicago as well; if current growth rates hold, Washington-Baltimore will eclipse Chicago in population by 2020.

Chicago is an important market and DL needs to serve it well from its hubs and focus cities if it wants to be the preferred carrier for business travel in those markets, but it is no more critical to the airline than WAS/BWI and SFO/SJC/OAK. Arguably Delta recognizes the value of serving Chicago well from its core hub markets in that they are the only legacy carrier still serving MDW, and from three hubs no less.

YouGeeElWhy wrote:

ORDfan wrote:

[Furthermore, metro Chicagoland (collar counties and NWI) is growing at .5 to 1.0% year depending on the source. I highly doubt San Fran or DC surpasses it in terms of population in the next decade and even if they do, they are so far behind on GDP that they are unlikely to surpass on monetary measures of a market's value for air travel. PWC's projections for top global cities by GDP in 2030 includes only 3 American cities: guess which ones. Bottom line is that UA and AA were/are here first and they will defend vigorously against any DL creep because it is worthwhile defending their market share in the 8th highest GDP city in the world.

If MSAs were a stocks Chicagoland would not be worthy of investment. It has been stagnant for a decade or more. HIgh growth MSAs like Houston, DFW and DC will pass Chicagoland in both GDP and population in the coming 10-15 years. DL knows that, which is why they do not feel the need to enter the fight between AA/UA/WN. It is not a four player market like LA or NYC.

With that said like others have noted DL has a giant hole in the Texas/Southwest area. The two markets in Texas (Houston,DFW) that will pass Chicagoland are only two player airline markets with a healthy dose of ULCCs. Feels like those ULCCs might keep DL from coming back to Texas in any meaningful manner, which is unfortunate, so Chicagoland should consider itself fortunate that it will have a three player market when future bigger / richer areas will only have two.

yeogeo wrote:

Delta spokesperson: "We are okay with the expansion — moving Delta to Terminal 5 gets us right next to SkyTeam partners, and that's a nice situation for us competitively in Chicago."

https://www.bizjournals.com/chicago/new ... j=80228051

jagraham wrote:

yeogeo wrote:

Delta spokesperson: "We are okay with the expansion — moving Delta to Terminal 5 gets us right next to SkyTeam partners, and that's a nice situation for us competitively in Chicago."

https://www.bizjournals.com/chicago/new ... j=80228051

This caught me by surprise. Delta gains nothing from being next to their Star Alliance partners unless they intend to supply connections. Which entails more than a focus city.

cosyr wrote:

It would obviously be unreasonably expensive, but there is more than enough room to move 22R to the Northwest a little bit. It would have been smart decades ago, but the net gain in space probably wouldn't be worth the cost.

ORDfan wrote:

Factually incorrect. Your source please?? Not sure which wiki search you are using.

Here's mine:

https://bea.gov/newsreleases/regional/g ... ro0917.pdf

ORDfan wrote:

ScottB wrote:

jagraham wrote:

With the mergers, there are four domestic megacarriers. In the 3rd largest metro area - Chicago - Delta is NOWHERE. That is a major issue.
The days of being strong in one or two regions - against UA and AA in their current forms - is not tenable in the long term. Delta must raise Chicago to at least the level of a focus city.

No. Just no. Delta cannot be everything to everyone, and neither can their competitors. The 4th largest combined statistical area is Washington-Baltimore and that's (1) a bit over 2% smaller than the Chicago area and (2) likely to surpass Chicago by the end of the decade. Does that mean DL must have a hub or focus city in Washington or Baltimore? UA, AA, and WN all do. How about the S.F. Bay Area? #5 and it will probably rival Chicago by the time the new ORD terminals are completed. Does DL need a focus city there, too?

DL has far larger network issues: the complete lack of a hub in the South Central U.S. is a big one. Two of the top ten metro areas are in Texas and DL is an also-ran in those markets. But they have very strong positions in their core markets and have even turned a very shaky position in NYC into a lead in the market. Chicago is only essential to DL as a well-served spoke.

If you're trying to use socioeconomic metrics to prove a point regarding demand for air travel and subsequent demand for hubs/focus cities, perhaps metro GDP is a better indicator. Metro CSA Chicago GDP is 26% greater than Metro DC CSA, and 39% greater than San Fran CSA. Perhaps this doesn't fit your narrative about why DL should not increase service to Chicago. Subjectively, I don't really care since I think DL is so overrated that it's laughable. If they left ORD tomorrow, I wouldn't bat an eyelash for them.

Furthermore, metro Chicagoland (collar counties and NWI) is growing at .5 to 1.0% year depending on the source. I highly doubt San Fran or DC surpasses it in terms of population in the next decade and even if they do, they are so far behind on GDP that they are unlikely to surpass on monetary measures of a market's value for air travel. PWC's projections for top global cities by GDP in 2030 includes only 3 American cities: guess which ones. Bottom line is that UA and AA were/are here first and they will defend vigorously against any DL creep because it is worthwhile defending their market share in the 8th highest GDP city in the world.

...
“But American cannot sign the lease in its current form because of a secret provision, inserted at the last minute, awarding additional gates to United."
...
Scott, the American spokeswoman, argued awarding extra gates under the expansion would give United an unfair advantage in the market.

“Chicago is extraordinarily well positioned with three carriers operating hubs and competing aggressively against each other. The United gate deal would undermine competition, allowing the largest airline at O’Hare to expand its size advantage for years into the future,” she said. “The United gate deal creates a clear winner, United, and clear losers: namely, competition, Chicago travelers and American Airlines.”

My take on it: If Chicago gives AA three extra gates, in addition to the 5 gates the city is "secretly" giving UA, AA agrees to the project. That's not unreasonable, and I think neither UA nor the City should oppose AA's request.

jagraham wrote:

yeogeo wrote:

Delta spokesperson: "We are okay with the expansion — moving Delta to Terminal 5 gets us right next to SkyTeam partners, and that's a nice situation for us competitively in Chicago."

https://www.bizjournals.com/chicago/new ... j=80228051

This caught me by surprise. Delta gains nothing from being next to their Star Alliance partners unless they intend to supply connections. Which entails more than a focus city.

chicawgo wrote:

It sounds like this is based on the previously reported issue whether to count the "stinger" gates as new or not. AA is spinning it as the city secretly giving UA 5 extra gates at the very end. But they're just referring to the previous disagreement.

piedmontf284000 wrote:

What a mess. An announcement of this magnitude should be one filled with balloons, smiles, and pat on the backs. Instead the whole thing has been turned into a soap opera with AA refusing to sign and the Mayor having egg all over his face. You would have thought that the Mayor would have ensured actual signatures on the dotted line before announcing this project, which IMO will be north of 10 billion when it is all said and done.

AA certainly has a right to complain considering that the five new gates, which are an extension of L, should have zero to do with the major expansion. They were previously announced two years ago, are due to be finished by May, and are only for small jets. In no way should that be part of a deal which will see UA get 80 percent of brand new modern facilitates while AA has to stay in T3, which is a dilapidated infrastructure, and only get a handful of new gates in the new global terminal. The city of Chicago had a chance to hit a home run today and they popped up. Amateur hour. On a side note, I do find it ironic that AA is complaining about backroom deals when they did this for decades under Bob Crandall, who had multiple secret deals with the city of Miami that created the fortress hub they have today. Hypocrisy at its best.

kngkyle wrote:

I don't know how much leverage AA actually has in this now though. Their gate lease is up in May and the fees will dramatically increase then without a new deal signed. If AA decides not to sign on to the new lease agreement then what? Will the city move forward with the plan and AA will just lose out even more? Threatening to reduce operations would just result in UA/others filling the void. The city really holds all the cards.

Delta openly talking about being in favor of the deal and claiming it would allow them to "better connect with their skyteam partners" lends one to imagine some interesting scenarios now knowing AA is not happy.

neomax wrote:

You bring up a good point. AA is in a bad spot in terms of leverage, especially with UA on the other side. UA is still king at ORD and the city knows it. The city is not going to lose if UA gets stronger and UA definitely isn't going to lose anything. It's really AA that stands to lose, and then you have the wild card-DL. DL is staying silent to avoid attracting attention, but there is no question they have plans in the wings. I can definitely see a situation where UA gains a stronghold and leaves AA to split the rest with a stronger Int'l Skyteam and Delta presence as a growing equal to AA. AA needs to fight a lot harder if they want to stay relevant in ORD. They're already trailing behind UA and could be in the rearview of DL if they don't act fast. The biggest mistake somebody can make in this industry is underestimate their competitor. They've already done it once with UA, and they're about to do it again with DL. People may laugh at the idea of DL challenging AA in ORD, but it may be a reality sooner than we think, and if anyone is going to do it, it's DL.

United787 wrote:

Hopefully just posturing so AA can negotiate a better deal. Could be easily resolved with Rahmbo cracking some skulls and a lot of swearing... Wonder if this will still go before the City Council today or not...

United fired back: "It is disingenuous for American to make these claims.

"This was not a secret deal reached at the last minute," an airline spokesman said. "Our agreement with the city for five additional gates was made more than 18 months ago in response to American's deal with city for five additional gates. American has been aware of our agreement for over a year and has worked to block the implementation at every opportunity."