MIflyer12 wrote:

Bobloblaw wrote:

AA is in a better position in the NE than DL or UA. Id rather have PHL as the connecting hub and JFK/LGA for local traffic than running a bunch of connecting markets that no one in NYC cares about and having a huge operation in NYC with all sorts of operational issues. AA serves the top O&Ds from NYC and connects traffic in PHL. That is a far better situation to be in than UA or DL.

You (and Isom) are rationalizing a 2nd-rate position. This era of Big Hub economics tells carriers to aggregate traffic, not split it across two hubs. The successes of ATL, DFW and CLT should tell you something, as they regularly add destinations and upgauge.

JFK, EWR and LGA arent DFW, ATL and CLT. That type of operation is not possible at JFK or LGA and is a mess at EWR. So obviously youre in the camp that says UA should close IAD and AA should close PHL and jam as much traffic as possible into EWR and JFK.

Aa doesn’t need to close down phl. It needs to be more competitive in nyc so dl doesn’t get more profitable there and then can take even more shots at weakening aa elsewhere like rdu, lax.

Cointrin330 wrote:

AA has four rotations between JFK and LHR. 2 x 772 and 2 x 773.

Oh, well that would of course be totally impossible to do then and I stand corrected..

Bobloblaw wrote:

MIflyer12 wrote:

Bobloblaw wrote:

AA is in a better position in the NE than DL or UA. Id rather have PHL as the connecting hub and JFK/LGA for local traffic than running a bunch of connecting markets that no one in NYC cares about and having a huge operation in NYC with all sorts of operational issues. AA serves the top O&Ds from NYC and connects traffic in PHL. That is a far better situation to be in than UA or DL.

You (and Isom) are rationalizing a 2nd-rate position. This era of Big Hub economics tells carriers to aggregate traffic, not split it across two hubs. The successes of ATL, DFW and CLT should tell you something, as they regularly add destinations and upgauge.

JFK, EWR and LGA arent DFW, ATL and CLT. That type of operation is not possible at JFK or LGA and is a mess at EWR. So obviously youre in the camp that says UA should close IAD and AA should close PHL and jam as much traffic as possible into EWR and JFK.

close Philadelphia?

*WHERE* do these ideas come from?!?!?!

stlgph wrote:

Bobloblaw wrote:

MIflyer12 wrote:

You (and Isom) are rationalizing a 2nd-rate position. This era of Big Hub economics tells carriers to aggregate traffic, not split it across two hubs. The successes of ATL, DFW and CLT should tell you something, as they regularly add destinations and upgauge.

JFK, EWR and LGA arent DFW, ATL and CLT. That type of operation is not possible at JFK or LGA and is a mess at EWR. So obviously youre in the camp that says UA should close IAD and AA should close PHL and jam as much traffic as possible into EWR and JFK.

close Philadelphia?

*WHERE* do these ideas come from?!?!?!

Where do they get the planes to grow NYC? And what markets should they serve? They serve all the top markets that matter to NYC business people. I guess you're saying AA should buy new planes and put them into marginal markets in NYC to simply chase share.

JFK/CLT is pretty much all 738 now. MIA/JFK is usually a mix of 757/763/321.

evank516 wrote:

B6 has a lower cost structure thus not commanding the same level of yield that the big 3 do. They're not going to sell, they're doing very well on their own.

Today, perhaps. But they have aging fleet of 320s, and they need to find solution for the 190. Add in the new labor agreements that will have to come over the next few years, and that advantage goes away quickly. Then what? Sell.

toltommy wrote:

evank516 wrote:

B6 has a lower cost structure thus not commanding the same level of yield that the big 3 do. They're not going to sell, they're doing very well on their own.

Today, perhaps. But they have aging fleet of 320s, and they need to find solution for the 190. Add in the new labor agreements that will have to come over the next few years, and that advantage goes away quickly. Then what? Sell.

This is complete nonsense. WN has been around for many years and have very competitive pay rates and still 20 to 25% lower cost. AS has been around for even longer and have 3 types of aircraft now and still have the same cost advantage. The latest new labor agreement (for AS and NK) have added 2 to 3% CASM-ex. When factoring in the rising fuel prices, new contract may add 1.5 to 2% in the overall CASM. None of which would torpedo the cost control efforts of B6 or other LCCs. With the 8% extra seat on A320, the 200 seated A321 + CASM killer E90 getting replaced, there are a lot of things B6 can do to keep cost growth flat.

Please go look into facts in the future. And if the so called Wall Street investors want B6 to be sold, whoever buying them are going to have to pay a hefty premium for such a profitable airline. Who is going to pay $10 billion for B6 in this market environment?

Where do they get the planes to grow NYC? And what markets should they serve? They serve all the top markets that matter to NYC business people. I guess you're saying AA should buy new planes and put them into marginal markets in NYC to simply chase share.

yes, they serve most of the top business markets. For me, they cover all the ones I care about. However, they don't cover my entire travel need. For that reason, many people have switched. And the more leisure and smaller business markets they cut, the worse their performance in their profitable markets will get. Say what you will about DL, they are not afraid to lose a lot of money on some routes for network coverage.

What happened to AA at JFK anyway? I know what happened to them at LGA thanks to the (idiotic) US Airways/Delta slot swap, but it seems AA at JFK is becoming more of a focus city than a hub.

AA made a big mistake letting DL becoming the number 1 airline in NYC. Imagine if AA's and DL's roles were reversed in NYC. AA would have large hubs in the top 4 markets in the country (New York, Los Angeles, Chicago and Dallas/Fort Worth)!

ADrum23 wrote:

AA made a big mistake letting DL becoming the number 1 airline in NYC.

Many on a.net seem to want to believe this, as evidenced by how many posters make this statement. But posting it does not make it true. DL is not the number 1 airline in NYC.

2016 passenger totals (combined LGA + EWR + JFK):
1. United 29,111,000
2. Delta 28,848,000
3. American 17,758,000
4. JetBlue 16,810,000
https://www.panynj.gov/airports/pdf-traffic/ATR2017.pdf

2015 passenger totals (combined LGA + EWR + JFK):
1. United 30,461,583
2. Delta 29,191,757
3. JetBlue 16,961,170
4. American 14,875,802
https://www.panynj.gov/airports/pdf-traffic/ATR2016.pdf

Bobloblaw wrote:

AA serves the top O&Ds from NYC and connects traffic in PHL. That is a far better situation to be in than UA or DL.

By what metric?

I certainly doubt that "revenue/profit" (the two most important) are the answer.... otherwise US wouldn't have been the last suitor that the larger airlines chose to merge with.

Heck, UA continued to pursue CO (rather than bother with US again) even after being initially rejected.
DL moved heaven and earth to prevent a hostile takeover by US, earlier in the game.

Actions speak louder than words: if PHL+last in NYC were such a great place to be in, airlines would've likely pursued it, rather than leave US as the spoils for the last taker, while concurrently investing millions (or in DL's case, billions) into fortifying their NYC presence.

IPFreely wrote:

ADrum23 wrote:

AA made a big mistake letting DL becoming the number 1 airline in NYC.

Many on a.net seem to want to believe this, as evidenced by how many posters make this statement. But posting it does not make it true. DL is not the number 1 airline in NYC.

2016 passenger totals (combined LGA + EWR + JFK):
1. United 29,111,000
2. Delta 28,848,000
3. American 17,758,000
4. JetBlue 16,810,000
https://www.panynj.gov/airports/pdf-traffic/ATR2017.pdf

2015 passenger totals (combined LGA + EWR + JFK):
1. United 30,461,583
2. Delta 29,191,757
3. JetBlue 16,961,170
4. American 14,875,802
https://www.panynj.gov/airports/pdf-traffic/ATR2016.pdf

Actually, they are. And their billboards state that fact.

With an * that says using NYC airports.

And technically they are correct

Nonetheless, using the region, They are neck and neck with United With an operation that touches all
the airports.

10 years ago they were in a much different spot and so was AA.

IPFreely wrote:

ADrum23 wrote:

AA made a big mistake letting DL becoming the number 1 airline in NYC.

Many on a.net seem to want to believe this, as evidenced by how many posters make this statement. But posting it does not make it true. DL is not the number 1 airline in NYC.

I believe Delta makes the claim based on number of flights. Number of passengers, or RPMs, would seem a better measure to me.

Somehow I think Alaska will keep using number of flights in SEA to fortify its claim, rather than RPMs.

tphuang wrote:

toltommy wrote:

evank516 wrote:

B6 has a lower cost structure thus not commanding the same level of yield that the big 3 do. They're not going to sell, they're doing very well on their own.

Today, perhaps. But they have aging fleet of 320s, and they need to find solution for the 190. Add in the new labor agreements that will have to come over the next few years, and that advantage goes away quickly. Then what? Sell.

This is complete nonsense. WN has been around for many years and have very competitive pay rates and still 20 to 25% lower cost. AS has been around for even longer and have 3 types of aircraft now and still have the same cost advantage. The latest new labor agreement (for AS and NK) have added 2 to 3% CASM-ex. When factoring in the rising fuel prices, new contract may add 1.5 to 2% in the overall CASM. None of which would torpedo the cost control efforts of B6 or other LCCs. With the 8% extra seat on A320, the 200 seated A321 + CASM killer E90 getting replaced, there are a lot of things B6 can do to keep cost growth flat.

Oh, I think toltommy has a point. Alaska used to brag about its cost structure, fitting in between Southwest and UA/AA/DL - but way more costly than NK. Let's see if they update their charts with the same enthusiasm post-merger and post expensive new labor agreements.

Southwest is an interesting case: it relied on rapid growth to bring in lots of new employees at bottom of scale. In spite of low-ish fares it also has very good labor productivity measured as revenue $ per employee. From MarketWatch:

DL $483K
UA $427K
NK $406K
WN $378K
B6 $359K
AS $346K (Want to know why arbitrators didn't award AS pilots DL/UA/AA wages? There you go.)
AA $340K

We know that older planes cost more (maintenance $) and produce less revenue (loss of utilization hours). We know that employees cost more as they move up the scale. Is average seniority increasing at B6? Does B6 have a viable multi-year plan to offset this? They can't keep adding seats indefinitely.

With respect to AA 'letting' Delta gain in NYC - a lot of that was US' doing with the LGA/DCA slot swap. Irony.

It is not ironic at all.

US was the largest carrier at LGA in terms of slots and had no interest in the position.

The same management team in place at American right now.

A leopard doesn’t change it’s spots

NYC is a place you want to be in; or you dont want to be in

It is an expensive place to play

They are not interested.

It doesn't really matter who exactly is larger when including EWR, since a good portion of EWR passengers come from further out in NJ and in PA that simply are not new yorkers. In NYC, it's pretty easy to argue DL is largest right now. And for this particular subject, UA's presence in EWR really has very little relevance, since AA declining in NYC will help out DL more than anyone else. Will be interesting to see what happens if slot goes away at JFK. AA may shrink even further if they don't need to squat on slots.

MIflyer12 wrote:

tphuang wrote:

toltommy wrote:

Today, perhaps. But they have aging fleet of 320s, and they need to find solution for the 190. Add in the new labor agreements that will have to come over the next few years, and that advantage goes away quickly. Then what? Sell.

This is complete nonsense. WN has been around for many years and have very competitive pay rates and still 20 to 25% lower cost. AS has been around for even longer and have 3 types of aircraft now and still have the same cost advantage. The latest new labor agreement (for AS and NK) have added 2 to 3% CASM-ex. When factoring in the rising fuel prices, new contract may add 1.5 to 2% in the overall CASM. None of which would torpedo the cost control efforts of B6 or other LCCs. With the 8% extra seat on A320, the 200 seated A321 + CASM killer E90 getting replaced, there are a lot of things B6 can do to keep cost growth flat.

Oh, I think toltommy has a point. Alaska used to brag about its cost structure, fitting in between Southwest and UA/AA/DL - but way more costly than NK. Let's see if they update their charts with the same enthusiasm post-merger and post expensive new labor agreements.

Southwest is an interesting case: it relied on rapid growth to bring in lots of new employees at bottom of scale. In spite of low-ish fares it also has very good labor productivity measured as revenue $ per employee. From MarketWatch:

DL $483K
UA $427K
NK $406K
WN $378K
B6 $359K
AS $346K (Want to know why arbitrators didn't award AS pilots DL/UA/AA wages? There you go.)
AA $340K

We know that older planes cost more (maintenance $) and produce less revenue (loss of utilization hours). We know that employees cost more as they move up the scale. Is average seniority increasing at B6? Does B6 have a viable multi-year plan to offset this? They can't keep adding seats indefinitely.

With respect to AA 'letting' Delta gain in NYC - a lot of that was US' doing with the LGA/DCA slot swap. Irony.

Without knowing exactly how MarketWatch came up with that number and the context, I think it has very little relevance. JetBlue has their entire support center In-house in SLC, that I'm sure would bring down any productivity numbers.

We do know this, AS and NK have publicly said after their new labour deals that the CASM-Ex increased 2 to 3%. You can google this. It's available online. I don't see why B6 would go up more than that if their AIP passes vote. We know the following:
b6 has publicly stated that they have a cost reduction plan that will keep their CASM-ex growth to flat to 1% for 3 years. That includes locking in engine maintenance contract that they've done recently, new aircraft maintenance contract and other things. They believe now with their larger size, they can lock in better deals. And they've already done that with GTF. It's on their quarterly reports and earning calls. You can look this up.
They are getting densified A320 cabin + new A321s.
They are replacing the maintenance hog and casm killer E90 with something else most likely C Series, which will finally allow them to increase utilization to something close to A320. That would be huge for their CASM. Can you imagine an aircraft with 20% lower fuel burn and they can utilize for 12 hours a day instead of under 9?
They have one of the best balance sheet in the industry and consistently pay off their new aircraft. Which means when the interest rate go up, they are not going to get hurt.
Their improved purchasing power means they can get a better deal on replacement for E90.
Continued purchase of new aircraft with good balance sheet means less exposure when fuel prices go up.

I just don't see why they won't be able to maintain their cost in the same ballpark as WN and AS.

The NYC market is extremely expensive to operate out of. I think AA can make more money focusing on O&D in that market given that they can't recreate what UA or DL have. AA can only make the best decision based on where they are now they can't undo past mistakes. AAs job is to make money for shareholders not fly sentimental routes or work on their image.


Delta has shown the right smaller fortress hubs in lower operating cost cities can turn serious profits.

PHL can do the northeast connections less expensive and NYC is mostly a O&D spot. Conneting people in NYC is expensive even the airport hotel negotiated rates are sky high for missed connections and crew. I think AA knows what they are doing and it's right for shareholders.

jfklganyc wrote:

It is not ironic at all.

US was the largest carrier at LGA in terms of slots and had no interest in the position.

The same management team in place at American right now.

A leopard doesn’t change it’s spots

NYC is a place you want to be in; or you dont want to be in

It is an expensive place to play

They are not interested.

That's not the full picture. US didn't have the JFK or EWR component for TATL/TPAC and out of perimeter domestic (i.e. West Coast). To be game in NYC, it'd needed those. Without those, it was just large slot holder at LGA. At most, it could have done differently than slot squat as much as it did, is it could have send a lot of mainline to central and south Florida and filled on volume there, but it chose to focus on PHL/CLT where it could charge high fares. In the end, US traded the slots with DL for a larger presence in DCA. Then at time of AA and US merger, the DOJ forced them to give more LGA slots than what DL had because of fear of AA would be too big in the Northeast or just East, somehow blurring NYC with the rest, or too big in general and decided that LGA needed more LCC competition (hence the LCCs got a number of divested slots).

LAX772LR wrote:

Bobloblaw wrote:

AA serves the top O&Ds from NYC and connects traffic in PHL. That is a far better situation to be in than UA or DL.

Actions speak louder than words: if PHL+last in NYC were such a great place to be in, airlines would've likely pursued it, rather than leave US as the spoils for the last taker, while concurrently investing millions (or in DL's case, billions) into fortifying their NYC presence.

I agree that PHL major hub + NYC minor hub is not the most ideal, but I assume the cost of fighting to expand marketshare in NYC just is not worth the potential extra profit.

Brickell305 wrote:

Cointrin330 wrote:

Another week, another AA in NY thread. Sure, AA could have made the NYC market, particularly at/from JFK their own once T8 opened, but the airline's economics had changed dramatically by then, post 9/11 (remember AA entered bankruptcy in 2011). While a merger with B6 would make some sense from an operational perspective, it would also come with anti-trust requirements to divest in some markets, notably South Florida.

I actually think a hypothetical AA-B6 merger (which I don't think will ever happen by the way) would actually have more anti-trust issues out of NYC than out of So. Fla. If the two were to merge, AA would largely do away with B6's operation at FLL. They'd really have no reason to keep it. It competes directly with their own operations at MIA. I could easily see AA getting rid of everything at FLL except for the hubs (sans MIA obviously), PAP, KIN, NAS, SJU & HAV. I think everything else either gets dropped or beefed up from MIA. In NYC, there's a lot more AA would keep and very little they'd drop.

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

SumChristianus wrote:

Thanks for sharing this; you have such interesting tidbits. This reminds me of UA's position on its Florida presence (we can't be big there but will have a presence).

It sounds like AA will co-locate with BA at JFK and LHR then....moving to T8? Winder what will happen to T7? WN? NK? F9 ? B6 expansion? UA to return?

Still though AA has a good/;leading position on its hub routes, ORD, DFW, LAX, MIA, CLT, PHX, DCA, and the core buisness markets of LHR, GRU, BOS, NRT (via JAL), as well as HEL, MAD, CDG, DUB, HKG, and others either alone or through partners....it seems they can refocus on these well, offering the highest frequency to their hubs, SFO and LHR.

.....

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Bobloblaw wrote:

stlgph wrote:

Bobloblaw wrote:

JFK, EWR and LGA arent DFW, ATL and CLT. That type of operation is not possible at JFK or LGA and is a mess at EWR. So obviously youre in the camp that says UA should close IAD and AA should close PHL and jam as much traffic as possible into EWR and JFK.

close Philadelphia?

*WHERE* do these ideas come from?!?!?!

Where do they get the planes to grow NYC? And what markets should they serve? They serve all the top markets that matter to NYC business people. I guess you're saying AA should buy new planes and put them into marginal markets in NYC to simply chase share.

AA would have the planes if they ate up B6. Doug Parker is always eager for a hostile takeover.

tphuang wrote:

It doesn't really matter who exactly is larger when including EWR, since a good portion of EWR passengers come from further out in NJ and in PA that simply are not new yorkers. In NYC, it's pretty easy to argue DL is largest right now. And for this particular subject, UA's presence in EWR really has very little relevance

Can we put this argument to bed please?

A large chunk of LGA’s traffic comes form CT. Should we also exclude that traffic from the conversation because it fits a particular biased and ridiculous narrative?

NYC has three major airports that serve the local demand. JFK, LGA, and EWR.

Swadian wrote:

Brickell305 wrote:

Cointrin330 wrote:

Another week, another AA in NY thread. Sure, AA could have made the NYC market, particularly at/from JFK their own once T8 opened, but the airline's economics had changed dramatically by then, post 9/11 (remember AA entered bankruptcy in 2011). While a merger with B6 would make some sense from an operational perspective, it would also come with anti-trust requirements to divest in some markets, notably South Florida.

I actually think a hypothetical AA-B6 merger (which I don't think will ever happen by the way) would actually have more anti-trust issues out of NYC than out of So. Fla. If the two were to merge, AA would largely do away with B6's operation at FLL. They'd really have no reason to keep it. It competes directly with their own operations at MIA. I could easily see AA getting rid of everything at FLL except for the hubs (sans MIA obviously), PAP, KIN, NAS, SJU & HAV. I think everything else either gets dropped or beefed up from MIA. In NYC, there's a lot more AA would keep and very little they'd drop.

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

SumChristianus wrote:

Thanks for sharing this; you have such interesting tidbits. This reminds me of UA's position on its Florida presence (we can't be big there but will have a presence).

It sounds like AA will co-locate with BA at JFK and LHR then....moving to T8? Winder what will happen to T7? WN? NK? F9 ? B6 expansion? UA to return?

Still though AA has a good/;leading position on its hub routes, ORD, DFW, LAX, MIA, CLT, PHX, DCA, and the core buisness markets of LHR, GRU, BOS, NRT (via JAL), as well as HEL, MAD, CDG, DUB, HKG, and others either alone or through partners....it seems they can refocus on these well, offering the highest frequency to their hubs, SFO and LHR.

.....

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Bobloblaw wrote:

stlgph wrote:

close Philadelphia?

*WHERE* do these ideas come from?!?!?!

Where do they get the planes to grow NYC? And what markets should they serve? They serve all the top markets that matter to NYC business people. I guess you're saying AA should buy new planes and put them into marginal markets in NYC to simply chase share.

AA would have the planes if they ate up B6. Doug Parker is always eager for a hostile takeover.

There are no slots at FLL or MCO to sell. Neither is slot restricted.

Swadian wrote:

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

You don't remember what it had to give up in order for the AA/US merger to be approved. Say we go back in time, and AA didn't partner with US, but AA and B6 agreed to merge. B6 disappearing and being formed into AA would raise lawsuits - there'd antitrust issues in NYC with the loss of B6, a low cost carrier, in NYC/ JFK. The DOJ would not permit AA getting those slots and WN would get the JFK slots like how it always does when other carriers merge. All AA+B6 would take from the merger would be BOS but I'm not sure what grip it would have there, while competing against DL there. US was in a good position to buy AA, and it's fortress hubs in CLT and PHL are of value.

toltommy wrote:

tphuang wrote:

toltommy wrote:

Exactly. B6 isn't big enough to survive alone. The only other dance partner left is AS. That gives them a route network like the combined HP/US. Eventually B6 will put themselves up for sale, just like VX did.

Why do you need to be big to survive? If B6 and AS is printing money, why do they need to merge?

In the case of B6, yes they are profitable, but their competition gets better yields on comparable routes. They need to be big because the big 3 can spread costs out further. At some point that turns into a yield issue. When selling makes a better ROI than continuing the fight, you'll see a for sale sign in the yard.

Personally I think B6 would join with NK or F9 or even both before they sell to AA.. BUT I only see that if they are looking to expand their network to stay competitive. I don't think they are currently in that position but I could be wrong. NK & F9, while a different business model, have a very similar fleet and a pretty complimentary route network to B6 (more so NK than F9)

FWIW during the bankruptcy AMR drew up plans and was ready to go after they emerged from C11 to purchase JetBlhe.

Why is B6 not big enough to survive alone? They have strong positions in NYC, leader in BOS and a strong position in SoFL. In terms of ASMs B6 was 20% larger than AS without VX. I doubt DOJ would allow AA to dominate both MIA and FLL (actually WN/NK would drive AA from FLL pretty quickly).

I would bet that AA has a higher profit margin in PHL than DL/UA have in NYC. AA's position in NYC combined with PHL is a better position than what UA has at EWR or DL has at LGA/JFK. AA only has to serve the top O&Ds from NYC, not a lot of feeder routes that clog up the operation without leverging local corporate contracts. No one in NYC cares that DL/UA serve LEX, GRR , DSM and MSN etc from NYC.

DL is forced to grow NYC because they have no alternative, AA does have an alternative. It is a similar story on the west coast. A.netters complain that UA has lost its #1 position in LAX. But UA doesnt need a #1 position in LAX when they have SFO. They should serve the top O&Ds from LAX and let AA/DL fight it out in LAX while UA prints money in SFO.

Let DL/B6/UA fight it out and get low margins, while AA dominates PHL and serves top business markets from NYC. A much better strategy.

[quote="Swadian"][quote="Brickell305"][quote="Cointrin330"]
AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

As someone already mentioned, neither FLL nor MCO have slots. But to your point, if this were to ever happen, I believe AA would close the FLL hub. However, I don't know that it would be the right move. DL appears to be happy with their strategy to be NYC's airline hubbing both JFK and LGA, no reason AA could employ the same strategy to be South Florida's airline assuming it's profitable. Yes, FLL fares do erode MIA fares to some extent however that's already happening with other airlines at FLL. At least they would remain on AA vs. a competitor. When AA flew to LAX from FLL, I would chose to fly from either FLL or MIA depending on the schedule or price, whichever was more important at the time.

Brickell305 wrote:

Swadian wrote:

Brickell305 wrote:

I actually think a hypothetical AA-B6 merger (which I don't think will ever happen by the way) would actually have more anti-trust issues out of NYC than out of So. Fla. If the two were to merge, AA would largely do away with B6's operation at FLL. They'd really have no reason to keep it. It competes directly with their own operations at MIA. I could easily see AA getting rid of everything at FLL except for the hubs (sans MIA obviously), PAP, KIN, NAS, SJU & HAV. I think everything else either gets dropped or beefed up from MIA. In NYC, there's a lot more AA would keep and very little they'd drop.

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

SumChristianus wrote:

Thanks for sharing this; you have such interesting tidbits. This reminds me of UA's position on its Florida presence (we can't be big there but will have a presence).

It sounds like AA will co-locate with BA at JFK and LHR then....moving to T8? Winder what will happen to T7? WN? NK? F9 ? B6 expansion? UA to return?

Still though AA has a good/;leading position on its hub routes, ORD, DFW, LAX, MIA, CLT, PHX, DCA, and the core buisness markets of LHR, GRU, BOS, NRT (via JAL), as well as HEL, MAD, CDG, DUB, HKG, and others either alone or through partners....it seems they can refocus on these well, offering the highest frequency to their hubs, SFO and LHR.

.....

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Bobloblaw wrote:

Where do they get the planes to grow NYC? And what markets should they serve? They serve all the top markets that matter to NYC business people. I guess you're saying AA should buy new planes and put them into marginal markets in NYC to simply chase share.

AA would have the planes if they ate up B6. Doug Parker is always eager for a hostile takeover.

There are no slots at FLL or MCO to sell. Neither is slot restricted.

OK, but the DOJ would still force AA to relinquish FLL to DL except for hubs and transfer the gates.

phluser wrote:

Swadian wrote:

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

You don't remember what it had to give up in order for the AA/US merger to be approved. Say we go back in time, and AA didn't partner with US, but AA and B6 agreed to merge. B6 disappearing and being formed into AA would raise lawsuits - there'd antitrust issues in NYC with the loss of B6, a low cost carrier, in NYC/ JFK. The DOJ would not permit AA getting those slots and WN would get the JFK slots like how it always does when other carriers merge. All AA+B6 would take from the merger would be BOS but I'm not sure what grip it would have there, while competing against DL there. US was in a good position to buy AA, and it's fortress hubs in CLT and PHL are of value.

AA was stronger at JFK then and US was stronger at LGA. If they had kept all the JFK slots they would have become much larger than DL or UA. But now if AA were to merge with B6 they have a skeletal network from JFK and B6 has very little presence at LGA. Plus B6 has a O&D network from JFK which is exactly what AA is looking for.

AA + US at NYC would have been too stronger before the merger. AA + B6 now would only have parity with DL & UA, especially if the E190 flights were cut. At most DOJ would force AA to vacate B6 gates, fill up Terminal 8, and give the rest to DL to maintain parity, but it'd still be a lot more than just BOS. AA would be as strong in NYC as UA or DL and #1 to the Caribbean and on transcons.

soflaflyer wrote:

Swadian wrote:

Brickell305 wrote:

There's no way the DOJ would let AA keep both MIA and FLL if they were to merge with B6. It doesn't matter if AA wants to keep it; the DOJ won't let 'em.

Swadian wrote:

Brickell305 wrote:

Swadian wrote:

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.





No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.



AA would have the planes if they ate up B6. Doug Parker is always eager for a hostile takeover.

There are no slots at FLL or MCO to sell. Neither is slot restricted.

OK, but the DOJ would still force AA to relinquish FLL to DL except for hubs and transfer the gates.

phluser wrote:

Swadian wrote:

AA-B6 would not have anti-trust issues out of NYC because even with the 2 airlines combined, market share is on parity with DL or UA.

AA would take over JFK, BOS, and SJU from B6, move the rest to MIA and sell the slots at FLL, MCO, and LGB. Then there would be no more antitrust issues.

You don't remember what it had to give up in order for the AA/US merger to be approved. Say we go back in time, and AA didn't partner with US, but AA and B6 agreed to merge. B6 disappearing and being formed into AA would raise lawsuits - there'd antitrust issues in NYC with the loss of B6, a low cost carrier, in NYC/ JFK. The DOJ would not permit AA getting those slots and WN would get the JFK slots like how it always does when other carriers merge. All AA+B6 would take from the merger would be BOS but I'm not sure what grip it would have there, while competing against DL there. US was in a good position to buy AA, and it's fortress hubs in CLT and PHL are of value.

AA was stronger at JFK then and US was stronger at LGA. If they had kept all the JFK slots they would have become much larger than DL or UA. But now if AA were to merge with B6 they have a skeletal network from JFK and B6 has very little presence at LGA. Plus B6 has a O&D network from JFK which is exactly what AA is looking for.

AA + US at NYC would have been too stronger before the merger. AA + B6 now would only have parity with DL & UA, especially if the E190 flights were cut. At most DOJ would force AA to vacate B6 gates, fill up Terminal 8, and give the rest to DL to maintain parity, but it'd still be a lot more than just BOS. AA would be as strong in NYC as UA or DL and #1 to the Caribbean and on transcons.

soflaflyer wrote:

Swadian wrote:

There's no way the DOJ would let AA keep both MIA and FLL if they were to merge with B6. It doesn't matter if AA wants to keep it; the DOJ won't let 'em.

Relinquish it to DL? DL doesn’t do anything at FLL besides its hubs. WN and NK are both significantly larger.

Swadian wrote:

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Actually meant the opposite, that if "somehow" AA was able to add 100 daily flights technically/(had the slots) it wouldn't be "worth it" to them. I think I'm actually agreeing with you. It wouldn't be worthwhile for example for AA to offer 6x daily frequency IND-LGA and 3x IND-JFK to beat DL if all they did (in a market already saturated) was lower yield further and operate with 30% load factors. The US/DL slot swap and the CO/UA merger pretty much established UA/DL as tied for first place in the NYC region for O/D, with AA/B6 tied for second. Here is Q3 domestic O/D data for JFK/LGA/EWR (which covers most NYC traffic). https://drive.google.com/open?id=1RZTy7 ... LIt4nb3cIg

Sorry link function doesn't work for me but the link should be valid.
DL is actually largest for domestic O/D with ~27% market share, but the interesting number is WN which has around 6% already (even when ISP is excluded). International would skew these numbers, yes, but they're at least a basic picture of the market.

B6 carries most passengers directly (1.05 flights per one way passenger journey, while AA carries the most flow traffic (proportionally) (1.4 segments/pax)

SumChristianus wrote:

Swadian wrote:

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Actually meant the opposite, that if "somehow" AA was able to add 100 daily flights technically/(had the slots) it wouldn't be "worth it" to them. I think I'm actually agreeing with you. It wouldn't be worthwhile for example for AA to offer 6x daily frequency IND-LGA and 3x IND-JFK to beat DL if all they did (in a market already saturated) was lower yield further and operate with 30% load factors. The US/DL slot swap and the CO/UA merger pretty much established UA/DL as tied for first place in the NYC region for O/D, with AA/B6 tied for second. Here is Q3 domestic O/D data for JFK/LGA/EWR (which covers most NYC traffic). https://drive.google.com/open?id=1RZTy7 ... LIt4nb3cIg

Sorry link function doesn't work for me but the link should be valid.
DL is actually largest for domestic O/D with ~27% market share, but the interesting number is WN which has around 6% already (even when ISP is excluded). International would skew these numbers, yes, but they're at least a basic picture of the market.

B6 carries most passengers directly (1.05 flights per one way passenger journey, while AA carries the most flow traffic (proportionally) (1.4 segments/pax)

Corrected link: https://drive.google.com/open?id=1xyiSG ... 09S3yjtkDC
Now includes JFK/LGA/EWR/ISP/HPN/SWF

SumChristianus wrote:

Swadian wrote:

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Actually meant the opposite, that if "somehow" AA was able to add 100 daily flights technically/(had the slots) it wouldn't be "worth it" to them. I think I'm actually agreeing with you. It wouldn't be worthwhile for example for AA to offer 6x daily frequency IND-LGA and 3x IND-JFK to beat DL if all they did (in a market already saturated) was lower yield further and operate with 30% load factors. The US/DL slot swap and the CO/UA merger pretty much established UA/DL as tied for first place in the NYC region for O/D, with AA/B6 tied for second. Here is Q3 domestic O/D data for JFK/LGA/EWR (which covers most NYC traffic). https://drive.google.com/open?id=1RZTy7 ... LIt4nb3cIg

Sorry link function doesn't work for me but the link should be valid.
DL is actually largest for domestic O/D with ~27% market share, but the interesting number is WN which has around 6% already (even when ISP is excluded). International would skew these numbers, yes, but they're at least a basic picture of the market.

B6 carries most passengers directly (1.05 flights per one way passenger journey, while AA carries the most flow traffic (proportionally) (1.4 segments/pax)

International is pretty large part of traffic out of New York. Wn really is pretty irrelevant out here. My guess is they capture a lot of traffic coming into New York rather than New York originating ones.

SumChristianus wrote:

SumChristianus wrote:

Swadian wrote:

Actually meant the opposite, that if "somehow" AA was able to add 100 daily flights technically/(had the slots) it wouldn't be "worth it" to them. I think I'm actually agreeing with you. It wouldn't be worthwhile for example for AA to offer 6x daily frequency IND-LGA and 3x IND-JFK to beat DL if all they did (in a market already saturated) was lower yield further and operate with 30% load factors. The US/DL slot swap and the CO/UA merger pretty much established UA/DL as tied for first place in the NYC region for O/D, with AA/B6 tied for second. Here is Q3 domestic O/D data for JFK/LGA/EWR (which covers most NYC traffic). https://drive.google.com/open?id=1RZTy7 ... LIt4nb3cIg

Sorry link function doesn't work for me but the link should be valid.
DL is actually largest for domestic O/D with ~27% market share, but the interesting number is WN which has around 6% already (even when ISP is excluded). International would skew these numbers, yes, but they're at least a basic picture of the market.

B6 carries most passengers directly (1.05 flights per one way passenger journey, while AA carries the most flow traffic (proportionally) (1.4 segments/pax)

Corrected link: https://drive.google.com/open?id=1xyiSG ... 09S3yjtkDC
Now includes JFK/LGA/EWR/ISP/HPN/SWF

Posts like this are why I come to A-net. Thanks for the data.

Okay lets get to the nuts and bolts of this, if you where in charge of AA what would you do differently in NYC?

AAs best bet in NYC (I hate to say it) is a purchase and merger with B6.

Forget the other B6 pieces, just concentrate on planes and NYC slots.

It would give AA a 270 departure hub from JFK, they would be a solid number 2 at LGA and they would have a presence in EWR and HPN.

Short of that, they arent going to ramp up NYC.

I think AA's best bet is what they are doing now. Anything else that would be better they'd be doing if they could. BA is doing a great job at JFK so not that much need to do more transatlantically than that. Domestically LGA and the JFK transcon routes are just fine as they are. I'm not sure what the obsession is with having a big operation at JFK, weather wise it's not an ideal location, most long haul carriers in the world fight for their place there driving fares quite low at best of times. Why bother when you have gold mines in DFW and CLT, a great latin/carib network in MIA and ORD/PHL that are doing fine as they are. The build up in LAX makes sense geographically and the fact it is a big O&D destination too for Asia and that no one else has tried to build it out to the likes of SFO. I think they're doing just fine to be honest?

jfklganyc wrote:

AAs best bet in NYC (I hate to say it) is a purchase and merger with B6.

Forget the other B6 pieces, just concentrate on planes and NYC slots.

It would give AA a 270 departure hub from JFK, they would be a solid number 2 at LGA and they would have a presence in EWR and HPN.

Short of that, they arent going to ramp up NYC.

How much of B6's network is viable with AA's cost structure? There's no way AA is going to be running mainline from JFK to Buffalo, Syracuse and Rochester and make money.

They dont have to run mainline.

They have 270 slots at JFK with a B6 takeover...they have a hub. They can make the hub work how they see fit with outsourced RJs and mainline. I suspect their upstate ops would look like UA at EWR.

It is better for JFK (pax count wise) if they stay separate obviously.

RvA wrote:

I think AA's best bet is what they are doing now. Anything else that would be better they'd be doing if they could. BA is doing a great job at JFK so not that much need to do more transatlantically than that. Domestically LGA and the JFK transcon routes are just fine as they are. I'm not sure what the obsession is with having a big operation at JFK, weather wise it's not an ideal location, most long haul carriers in the world fight for their place there driving fares quite low at best of times. Why bother when you have gold mines in DFW and CLT, a great latin/carib network in MIA and ORD/PHL that are doing fine as they are. The build up in LAX makes sense geographically and the fact it is a big O&D destination too for Asia and that no one else has tried to build it out to the likes of SFO. I think they're doing just fine to be honest?

Aa doesn’t have a great margin system wide, so hubs like Mia ord and phl are probably not that profitable. Lax is a bloodbath. Given the importance of New York for many large corporate contracts which affects their other stations, they have to maintain a solid presence here. And if they keep cutting the way they have been, that presence is going to be really barren soon. And lga will also suffer. Do they want jfk to become super profitable for dl? That will be a huge problem down the road for them.

What leads the community to believe that AA is envious of DL's NYC operation? The analyst community estimates DL's NYC profit margin to be in the low single digits -- well below UA & AA, a fact both have touted within the last year or so. DL's LGA operation was largely built with assets US gave up on after a couple decades of losses (and was largely squatting on toward the end) -- and the management team that made that decision is now at the helm at AA, continuing to focus on DCA & PHL, which have proved to be more fruitful.

Seriously, this thread would be better titled "My Favorite Airline Penis Envy!!!"

compensateme wrote:

What leads the community to believe that AA is envious of DL's NYC operation? The analyst community estimates DL's NYC profit margin to be in the low single digits -- well below UA & AA, a fact both have touted within the last year or so. DL's LGA operation was largely built with assets US gave up on after a couple decades of losses (and was largely squatting on toward the end) -- and the management team that made that decision is now at the helm at AA, continuing to focus on DCA & PHL, which have proved to be more fruitful.

Seriously, this thread would be better titled "My Favorite Airline Penis Envy!!!"

Part of it I imagine has to do with being a commanding presence in the markets that are relevant to the top global corporate contract accounts. Your top consulting and accounting firms (Deloitte, PwC, EY, Accenture, McKinsey, etc.) are going to comprise a massive chunk of high volume, premium traffic and revenue all over the world but with a heavy concentration in and out of NYC. In order to secure that global business elsewhere a carrier needs to be relevant in the market that's relevant to those firms.

So, for example, while Delta might not be as profitable in NYC measured by margin as UA or AA, it's their commanding position in JFK/LGA that allows them to secure the business of global corporations elsewhere in the world.

tphuang wrote:

RvA wrote:

I think AA's best bet is what they are doing now. Anything else that would be better they'd be doing if they could. BA is doing a great job at JFK so not that much need to do more transatlantically than that. Domestically LGA and the JFK transcon routes are just fine as they are. I'm not sure what the obsession is with having a big operation at JFK, weather wise it's not an ideal location, most long haul carriers in the world fight for their place there driving fares quite low at best of times. Why bother when you have gold mines in DFW and CLT, a great latin/carib network in MIA and ORD/PHL that are doing fine as they are. The build up in LAX makes sense geographically and the fact it is a big O&D destination too for Asia and that no one else has tried to build it out to the likes of SFO. I think they're doing just fine to be honest?

Aa doesn’t have a great margin system wide, so hubs like Mia ord and phl are probably not that profitable. Lax is a bloodbath. Given the importance of New York for many large corporate contracts which affects their other stations, they have to maintain a solid presence here. And if they keep cutting the way they have been, that presence is going to be really barren soon. And lga will also suffer. Do they want jfk to become super profitable for dl? That will be a huge problem down the road for them.

The margins outside of NYC anecdotally are pretty ok overall. NYC is a low margin battleground, I don’t see it it being super profitable for DL either. Corporate contracts for a large degree revolve around network fit and offering a discount that makes them satisfied at their savings. Not having a big hub in NYC won’t matter that much unless of course it’s a very NYC biased customer. But even still they have enough to make a compelling offering so really don’t see the fixation here in this thread.

evank516 wrote:

American 767 wrote:

evank516 wrote:

I think JFK-CLT still sees 757s at least on a seasonal basis.

It did recently. I flew JFK-CLT twice (once connecting on an A321 to FLL, and once connecting also on an A321 to DFW) within the last year on the 757, it was a morning flight. But I didn't mention it because I saw on aa.com that route wouldn't see the 757 anymore. It would be nice if it comes back. If it does I will consider that when planning trips. Thanks for letting me know. I look for 757s when I plan trips on AA. Those are now getting more difficult to get, compared to a few years ago, so whenever it is possible to get a 757 I take advantage of that now before it is too late.

I flew JFK-MIA-JFK a month ago. Both flights were 757s.

A friend of mine is flying JFK-MIA-EYW today and JFK-MIA is a 757. I remember when DL was pretty much all 757s on LGA-ATL. Also was supposed to be on a 757 in July from ATL-JFK coming home from EYW, but they just switched it this week to a 717. Talk about a snorefest.

Funny you mentioning going to EYW from JFK and having the JFK-ATL leg as 757 we travel BNA-ATL-EYW multiple times a year and going this fall the BNA-ATL flights are going 757! my gain is your loss it seems

winginit wrote:

compensateme wrote:

What leads the community to believe that AA is envious of DL's NYC operation? The analyst community estimates DL's NYC profit margin to be in the low single digits -- well below UA & AA, a fact both have touted within the last year or so. DL's LGA operation was largely built with assets US gave up on after a couple decades of losses (and was largely squatting on toward the end) -- and the management team that made that decision is now at the helm at AA, continuing to focus on DCA & PHL, which have proved to be more fruitful.

Seriously, this thread would be better titled "My Favorite Airline Penis Envy!!!"

Part of it I imagine has to do with being a commanding presence in the markets that are relevant to the top global corporate contract accounts. Your top consulting and accounting firms (Deloitte, PwC, EY, Accenture, McKinsey, etc.) are going to comprise a massive chunk of high volume, premium traffic and revenue all over the world but with a heavy concentration in and out of NYC. In order to secure that global business elsewhere a carrier needs to be relevant in the market that's relevant to those firms.

So, for example, while Delta might not be as profitable in NYC measured by margin as UA or AA, it's their commanding position in JFK/LGA that allows them to secure the business of global corporations elsewhere in the world.

But those too corporates have deals with all 3 major Us carriers and their JBs. DLs position will be fine in NYC but in return the others will get a good share elsewhere from most of the biggest corporates with high volume. Once you’re a certain size you generally have to be in bed with at least 2 alliances if not all 3.

gsg013 wrote:

evank516 wrote:

American 767 wrote:

It did recently. I flew JFK-CLT twice (once connecting on an A321 to FLL, and once connecting also on an A321 to DFW) within the last year on the 757, it was a morning flight. But I didn't mention it because I saw on aa.com that route wouldn't see the 757 anymore. It would be nice if it comes back. If it does I will consider that when planning trips. Thanks for letting me know. I look for 757s when I plan trips on AA. Those are now getting more difficult to get, compared to a few years ago, so whenever it is possible to get a 757 I take advantage of that now before it is too late.

I flew JFK-MIA-JFK a month ago. Both flights were 757s.

A friend of mine is flying JFK-MIA-EYW today and JFK-MIA is a 757. I remember when DL was pretty much all 757s on LGA-ATL. Also was supposed to be on a 757 in July from ATL-JFK coming home from EYW, but they just switched it this week to a 717. Talk about a snorefest.

Funny you mentioning going to EYW from JFK and having the JFK-ATL leg as 757 we travel BNA-ATL-EYW multiple times a year and going this fall the BNA-ATL flights are going 757! my gain is your loss it seems

To a degree, my trip is in July

tphuang wrote:

[quote="RvA"
Aa doesn’t have a great margin system wide, so hubs like Mia ord and phl are probably not that profitable. .

What????

RvA wrote:

Corporate contracts for a large degree revolve around network fit and offering a discount that makes them satisfied at their savings. Not having a big hub in NYC won’t matter that much unless of course it’s a very NYC biased customer. But even still they have enough to make a compelling offering so really don’t see the fixation here in this thread.

But I think that's what AA (and fans of AA) are worried about given the network decisions AA has recently made pertaining to NYC - do they have a large enough presence to make a compelling offer to an NYC biased customer like Deloitte or PwC? Yes, corporations that large often get in bed with two if not three of the US3 given their travel demands, but I think the argument is that AA could be the odd man out given their NYC presence compared to DL in JFK/LGA and UA in EWR, and being the odd man out with a Top 5 consulting firm who books $300M+ in air travel spend annually is a big hit.

RvA wrote:

winginit wrote:

compensateme wrote:

What leads the community to believe that AA is envious of DL's NYC operation? The analyst community estimates DL's NYC profit margin to be in the low single digits -- well below UA & AA, a fact both have touted within the last year or so. DL's LGA operation was largely built with assets US gave up on after a couple decades of losses (and was largely squatting on toward the end) -- and the management team that made that decision is now at the helm at AA, continuing to focus on DCA & PHL, which have proved to be more fruitful.

Seriously, this thread would be better titled "My Favorite Airline Penis Envy!!!"

Part of it I imagine has to do with being a commanding presence in the markets that are relevant to the top global corporate contract accounts. Your top consulting and accounting firms (Deloitte, PwC, EY, Accenture, McKinsey, etc.) are going to comprise a massive chunk of high volume, premium traffic and revenue all over the world but with a heavy concentration in and out of NYC. In order to secure that global business elsewhere a carrier needs to be relevant in the market that's relevant to those firms.

So, for example, while Delta might not be as profitable in NYC measured by margin as UA or AA, it's their commanding position in JFK/LGA that allows them to secure the business of global corporations elsewhere in the world.

But those too corporates have deals with all 3 major Us carriers and their JBs. DLs position will be fine in NYC but in return the others will get a good share elsewhere from most of the biggest corporates with high volume. Once you’re a certain size you generally have to be in bed with at least 2 alliances if not all 3.

If you look at the investment AA has made toward the highest yielding customers in JFK with flagship lounge, the bridge lounge, flagship first dining, 3 class services and having the best international J hard product on the 777s + premium partner airlines, they clearly have their focus on this group. And given the high profile clientele you are like to see on JFK-LAX, JFK-LHR, LAX-LHR, they have a really large portion of that group.

What they seem to ignore is that high yielding customers in new york also want to travel for leisure and they cut more leisure flights this week. It's pretty clear based on what I've seen on FT that AA's ff in New York are switching to dL. Regardless of how many corporate contracts they have, if people are not affiliated with AA, they are only booking AA if it's the cheapest. That's pretty much the reason I book mostly with AA these days.

Bobloblaw wrote:

tphuang wrote:

[quote="RvA"
Aa doesn’t have a great margin system wide, so hubs like Mia ord and phl are probably not that profitable. .

What????

if CLT and DFW are their most profitable hubs. And their system margin is in the single digits, how profitable do you think their other hubs are? MIA is suffering lower yielding from FLL. They are definitely lower yielding than UA at ORD. PHL also splits traffic with EWR.

RvA wrote:

I think AA's best bet is what they are doing now. Anything else that would be better they'd be doing if they could. BA is doing a great job at JFK so not that much need to do more transatlantically than that. Domestically LGA and the JFK transcon routes are just fine as they are. I'm not sure what the obsession is with having a big operation at JFK, weather wise it's not an ideal location, most long haul carriers in the world fight for their place there driving fares quite low at best of times. Why bother when you have gold mines in DFW and CLT, a great latin/carib network in MIA and ORD/PHL that are doing fine as they are. The build up in LAX makes sense geographically and the fact it is a big O&D destination too for Asia and that no one else has tried to build it out to the likes of SFO. I think they're doing just fine to be honest?

They are doing fine on some routes but I'm really not sure why JFK-ZRH was axed. I agree that AA is giving priority to LAX over JFK by capitalizing on their position and that JFK is perhaps best as a domestic and Caribbean O&D hub while letting BA handle the Atlantic.

UpNAWAy wrote:

Okay lets get to the nuts and bolts of this, if you where in charge of AA what would you do differently in NYC?

Well, it's clear that PHL is a more efficient connecting hub than JFK, but JFK is still the biggest O&D market, so AA could at least bring back JFK-ZRH on a 77E instead of that tired 763 they were using. They could put flat-bed J on all transcons (maybe using 75L) and seek an opportunity to merge with B6. I think that's what Doug Parker and his team have decided upon - DP is the most merger-happy CEO in the business today.

Just my 2 cents.

SumChristianus wrote:

Swadian wrote:

No, AA technically cannot draw down PHL and add 100 more daily flights to JFK because they have the gates but do not have the slots. The only way would be a lifting of slot restrictions, a slot swap with someone else, or a merger with B6.

Actually meant the opposite, that if "somehow" AA was able to add 100 daily flights technically/(had the slots) it wouldn't be "worth it" to them. I think I'm actually agreeing with you. It wouldn't be worthwhile for example for AA to offer 6x daily frequency IND-LGA and 3x IND-JFK to beat DL if all they did (in a market already saturated) was lower yield further and operate with 30% load factors. The US/DL slot swap and the CO/UA merger pretty much established UA/DL as tied for first place in the NYC region for O/D, with AA/B6 tied for second. Here is Q3 domestic O/D data for JFK/LGA/EWR (which covers most NYC traffic). https://drive.google.com/open?id=1RZTy7 ... LIt4nb3cIg

Sorry link function doesn't work for me but the link should be valid.
DL is actually largest for domestic O/D with ~27% market share, but the interesting number is WN which has around 6% already (even when ISP is excluded). International would skew these numbers, yes, but they're at least a basic picture of the market.

B6 carries most passengers directly (1.05 flights per one way passenger journey, while AA carries the most flow traffic (proportionally) (1.4 segments/pax)

Yes, we do agree; there isn't really much point for AA to add JFK flights within the LGA perimeter other than for connections that can be flowed through PHL anyway. Even if AA merged with B6, most B6 flights from JFK are O&D, not connecting.

Surprised to find AA not taking full advantage of DCA (unless they're slot-restricted?). Does AA have plans for DCA-SFO, DCA-SEA, or DCA-DEN?

winginit wrote:

Part of it I imagine has to do with being a commanding presence in the markets that are relevant to the top global corporate contract accounts. Your top consulting and accounting firms (Deloitte, PwC, EY, Accenture, McKinsey, etc.) are going to comprise a massive chunk of high volume, premium traffic and revenue all over the world but with a heavy concentration in and out of NYC. In order to secure that global business elsewhere a carrier needs to be relevant in the market that's relevant to those firms.

So, for example, while Delta might not be as profitable in NYC measured by margin as UA or AA, it's their commanding position in JFK/LGA that allows them to secure the business of global corporations elsewhere in the world.

Most companies have corporate travel contracts that are office specific -- for example, KPMG has separate contracts for its Los Angeles and Irvine office, and I'm aware of a large, middle market consulting firm that has separate contracts for Detroit (DL) and Atlanta (WN). So while I agree it's a selling point, I question how much it's bought into.

Reality is, DL's core markets (ATL, DTW, MSP & SLC) are mature (e.g. DL isn't likely to make greater revenue penetration) and thus DL's spending billions to build NYC, LAX & SEA. This is a long-term project, and success will be measured long-term. Status quo, analysts project NYC & LAX as low-margin operations for DL, with SEA yet to turn a profit If DL wins in these markets, the jackpot will be huge. But the a.net narrative that DL's "printing money" in these markets and AA/UA have penis envy is just fictitious.