And the best transcon airline is...
- Thread starter AdAstraPerAspera
- Start date
- Status
robbedagain
Veteran
- Oct 13, 2003
- 11,125
- 2,676
Uh oh Ad a certain cheerleader wont like that one bit. Great article glad to see AA nbr 1 there
Glenn Quagmire
Veteran
- Apr 30, 2012
- 4,809
- 4,343
Pax are just human cargo in the revenue chain. No need to ask what they prefer.737823 said:
I know but for months we were schooled that AA is abandoning a valuable segment of the market by using smaller A321Ts to replace the 762s which of course have fewer Y seats and lack the same containerized cargo capabilities. Of course the 763 from DL is only temporary as the 757s mods are still underway. So DL will have an inferior product and lack containerized cargo once the 763s are gone on the route.Glenn Quagmire said:
Josh
robbedagain
Veteran
- Oct 13, 2003
- 11,125
- 2,676
shhh DONT invite him! on the other hand he may need more of those meds after he reads that article AA the best not DL!!! WooHoo!
silverbird007
Senior
Wow, thats good news! I wonder of we are going to get the A321 T on any other routes? Maybe MIA-LAX? Or even ATL-LAX?
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #9
if JFK-LAX and SFO are considered transcon markets, DL was already the number 1 carrier in terms of passengers and revenue in the local markets by the first quarter of this year, the most currently available.
By the first quarter, AA had fully converted JFK-LAX to 321Ts and DL operated 4 763 flights compared to the current 5.
for JFK-LAX DL was the largest passenger carrier and their yield did go down by 6% but their total revenue went UP by
4%. AA's average fare went up by only 5% but that was enough to help them maintain their position as the highest yielding carrier in JFK-LAX. BUT AA's total passenger revenues fell by 19% on 23% fewer passengers.
and, yes, AA lost nearly all of the cargo revenue - about 1.5M pounds/month moved from AA to DL.
It's notable that VX and UA both had larger average fare reductions than DL.
So, AA did indeed cut a huge amount of revenue and a lot of costs out of the market.
and DL's strategy to use larger aircraft resulted in them increasing their total revenue.
And in the JFK-SFO market, which still used AA 767s for a large portion of the first quarter, AA was already the #4 carrier with average fares that were below both UA and DL. (yes, DL had a higher average fare than AA and VX)
DL's 763s in transcon config carry twice as many passengers as AA's 321Ts. Even given AA's higher average fares, DL carries 2/3 more passenger revenue - before the cargo revenue is considered which likely comes close to covering a large part of the increased fuel burn.
Personnel costs are not significantly different between AA and DL for these two aircraft.
The economics of DL's 757s are not quite as favorable but DL still carries about 1/3 more total revenue.
the chances are high that DL's margin is higher on its transcon flying due simply to the larger number of passengers and the lack of a higher AA average fare premium.
whatkindoffreshhell
Veteran
So this bozo writer took one transcon flight and self-proclaimed a 'best carrier' on that particular lane?
See why the media is not be trusted....
See why the media is not be trusted....
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #11
it's also worth noting that in the past 5 years, average fares in the JFK-LAX have gone up close to HALF of the increase that was seen in all domestic flights from JFK or LAX.
JFK-LAX average fares are not increasing at the same rate as the rest of the industry and they will struggle to move up even as much as they have with the increase in discounted premium products.
it's great to win awards for a high quality product but the first and foremost goal for any business is to make money.
It is hard to see how an increasingly premium strategy can accomplish that in the US transcon markets.
JFK-LAX average fares are not increasing at the same rate as the rest of the industry and they will struggle to move up even as much as they have with the increase in discounted premium products.
it's great to win awards for a high quality product but the first and foremost goal for any business is to make money.
It is hard to see how an increasingly premium strategy can accomplish that in the US transcon markets.
topDawg
Veteran
- Nov 23, 2010
- 2,957
- 2,298
hate to say it, cause we all love how these threads end up, but have to agree here.whatkindoffreshhell said:
meh as much as I enjoy what could come of this, this isn't the best proof.AdAstraPerAspera said:
No better than me flying on Delta or United or Virgin and writing a blog about it say they are the best.
jimntx
Veteran
Might try actually reading the article..particularly the first part of the first sentence in the first paragraph. "Having recently test-flown transcon nonstop in business or first class (watch now) on the five competing airlines that fly these routes..." He flew all 5 airlines that fly the transcons. Yes, he can now offer his opinion as to which one of the five does it best. That's what travel writers do and are paid to do. They sample the competing products and then offer their opinion of the differences.whatkindoffreshhell said:
And, don't try with "well, one trip on each doesn't tell you much." It tells a passenger all he needs to know. Yeah, the purser at DL might have been having a bad day, or the AA crew discovered half-way through the meal preparation that the oven dishes had no vegetables in them, but the passenger doesn't know that. He/she just knows that they didn't get their money's worth on airline A or B, and probably won't fly them next time unless their company has a contract with one of these airlines. At the price point that passengers pay on transcon business and first class, it needs to be top-notch every time.
kirkpatrick
Veteran
Silver, no other route has the demand for premium seats. The 17 Ts we have are intended for JFK-LAX/SFO only. Using them elsewhere would mean cutting frequencies, and the JFK-LAX frequencies are one of our best selling points.
MK
MK
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #15
except a limited sample of anything doesn't translate to what someone can expect on a larger sample.
if 200 people, even 20 flew each carrier and there was a strong correlation between what each said on their experiences then it becomes valid for the 21st person to be able to shape his expectations on the experiences of the first 20.
but experiences still miss the point - which I am not doubting - that AA probably does offer the highest quality product for at least some segment of the market.
the point is that the best product in any market won't last long if it is not financially viable.
AA made the decision to walk away from about half of the coach market and yet their average fare went up by less than 10% while DL's went down by about as much as AA's went up - and yet DL's total revenues went up while AA's went down.
DL INCREMENTALLY and with little added costs added the lower yielding passengers which AA dropped while AA probably did not cut its costs near as much as its drop in revenue because AA increased frequencies, offsetting a major portion of the cost cuts. and cargo is incremental revenue to most airlines at minimal added costs which in this case likely more than pay for the increased cost of jet fuel.
Ultimately, any strategy has to be economically justifiable. Given that average fares in the transcon markets are increasing at a far lower rate than in other markets at the same time that increased discounting of the premium cabin is taking place, it is all the more difficult to justify a decision to become more premium while increasing frequencies. Given that UA is adding back seats to its strategy that was similar in design to AA's several years ago, it is hard to believe that AA can succeed where UA did not, esp. since overall capacity in the market is increasing to replace capacity AA cut, offsetting a major portion of the yield boost that AA might have been expecting.
AA's problem with the transcon was the high costs of the 762s which needed to be replaced. the strategy that has been implemented runs counter to the overall trends in the market.
- Status
