Dallas Love Field

[goingboeing]

AA has just announced that they intend to start service from Love Field.This is due to the Missouri restriction being removed from the Wright Amendment.

source: yahoo airline news

 

[corl737]

AA has just announced that they intend to start service from Love Field.This is due to the Missouri restriction being removed from the Wright Amendment.

AA simply had to do this. They made such a stink about how any changes to the Wright Amendment would devastate their DFW hub that to prudently compete by lowering fares to MCI/STL would make them look like "chicken littles." (Did you notice how they already lowered their fares to those markets a few weeks ago. Of course, they say, it had nothing to do with the upcoming competition from SWA!)

I anticipate their discontinuing service to about a dozen small towns as well under the "we told you so" mantra. When you predict a disaster you better make sure it happens! :down:

 

[NewHampshire Black Bears]

AA simply had to do this. They made such a stink about how any changes to the Wright Amendment would devastate their DFW hub that to prudently compete by lowering fares to MCI/STL would make them look like "chicken littles." (Did you notice how they already lowered their fares to those markets a few weeks ago. Of course, they say, it had nothing to do with the upcoming competition from SWA!)

I anticipate their discontinuing service to about a dozen small towns as well under the "we told you so" mantra. When you predict a disaster you better make sure it happens! :down:

+++++++++++++++++++++++++++++++++++++++++++++++++++++++

Corl737,
Your ABSOLUTELY CORRECT !!


NH/BB's

 

[Bagbelt]

If they get what they want from the pilots SW's main competition may be eagle.

 

[swflyer]

<_< Has anyone else noticed that ALL of the connecting service offered is thru TUL or OKC???
Aren't these cities in the state to be so hurt by an opening of the Wright Amendment that it's Senator offered a bill to close Love Field??? <_<

Just noticing...........

AA simply had to do this. They made such a stink about how any changes to the Wright Amendment would devastate their DFW hub that to prudently compete by lowering fares to MCI/STL would make them look like "chicken littles." (Did you notice how they already lowered their fares to those markets a few weeks ago. Of course, they say, it had nothing to do with the upcoming competition from SWA!)

I anticipate their discontinuing service to about a dozen small towns as well under the "we told you so" mantra. When you predict a disaster you better make sure it happens! :down:

 

[AirwAr]

If they get what they want from the pilots SW's main competition may be eagle.

I've always wondered how the CASM of a 100 seat aircraft operated by Eagle would turn out. Would it be anywhere near WN's?

 

[KCFlyer]

<_< Has anyone else noticed that ALL of the connecting service offered is thru TUL or OKC???
Aren't these cities in the state to be so hurt by an opening of the Wright Amendment that it's Senator offered a bill to close Love Field??? <_<

Just noticing...........

Actaully, if you look at the schedule, there are several flights between MCI and DAL that are via TUL or OKC. Now it's a legitimate two step instead of "dirty dancing"

 

[CruelSummer]

AA simply had to do this. They made such a stink about how any changes to the Wright Amendment would devastate their DFW hub that to prudently compete by lowering fares to MCI/STL would make them look like "chicken littles." (Did you notice how they already lowered their fares to those markets a few weeks ago. Of course, they say, it had nothing to do with the upcoming competition from SWA!)

I anticipate their discontinuing service to about a dozen small towns as well under the "we told you so" mantra. When you predict a disaster you better make sure it happens! :down:

Kind of a cynical way to look at it, don't you think? If they didn't do it, you'd instead talk about how they bluffed... I do think that AA simply had to do this...it is the market decision that they had to make given what's happened with MO. Curious to see what happens at Love now that AA will be there too...

 

[KCFlyer]

Kind of a cynical way to look at it, don't you think? If they didn't do it, you'd instead talk about how they bluffed... I do think that AA simply had to do this...it is the market decision that they had to make given what's happened with MO. Curious to see what happens at Love now that AA will be there too...

I think we already know the answer....look back at their DAL-AUS flights.

 

[corl737]

Kind of a cynical way to look at it, don't you think? If they didn't do it, you'd instead talk about how they bluffed... I do think that AA simply had to do this...it is the market decision that they had to make given what's happened with MO. Curious to see what happens at Love now that AA will be there too...

AA doesn't compete out of Love to any of the other Wright Amendment cities. Instead, it prices competitively with SWA to SAT/AUS/ELP/HOU/MSY/ABQ/OKC/TUL/LIT right out of DFW and uses its strength at that hub to attract connecting passengers. Why - other than for PR reasons - does service to STL/MCI require a different strategy? (SWA flies more flights to SAT alone than the combined service to MCI and STL!)

As someone else mentioned, by promoting the fact that Love is so much more convenient to AA's "best customers" they risk losing them to SWA for flights to destinations within the WA boundaries that AA doesn't fly to. These are AA loyalists who previously drove right by the "inferior" Love Field but who are now being asked -- by AA nonetheless -- to "give Love a try!"

Whether or not AA's plan will work is yet to be seen. (I don't wish any bad things for AA, and in fact hope they do well -- just not too well!) Still, it's shaping up to be a classic stragegy event that will be studied in business schools for years!

 

[ELP_WN_Psgr]

The last valid O&D numbers I could get my hands on show DFW-MCI at 680 psgrs per day at an average fare of $208.74 and STL as 700 psgrs per day at an average fare of $215.21.

Let's say, for the sake of argument, that Southwest puts 4 RTs a day in each market and American maintains about 12 RTs in each market - although American splits their flights out to where 8 operate from DFW and 4 operate from Love.

I would estimate that the average fare in the market falls to (129+59)/2 or $94.

The markets will be stimulated to some level of about 2.38 times their current size, 1620 and 1667 psgrs per day respectively.

1215 and 1251 psgrs per day, respectively, will choose to fly from DAL over DFW.

Southwest will capture 65% of the Love Field market, which will give them 789 psgrs per day between DAL & MCI and 813 psgrs per day between DAL & STL.

There are currently 156 psgrs per day flowing from MAF, LBB, and ELP thru DFW and on to MCI or STL.

Let's say this sees a market stimulation (due to price) of 25%....that puts it up to 195 psgrs per day. We'll assume WN gets 40% of that, or 78 psgrs.

So Southwest is looking at boardings of 828 psgrs per day between MCI and DAL and 852 psgrs per day between STL and DAL.

That achieves a Load Factor of 75.5% and 77.7%, which probably means you are looking at them adding a 5th RT in each market pretty quick.

American's Love Field boardings, on the other hand, amount to 425 psgrs per day between DAL & MCI and 438 psgrs per day between DAL & STL. That gives them, assuming they use MD80s, a LF of 37.4% and 38.6% to MCI and STL, respectively, at an average fare of $94.

Let's say AA has a CASM of 13 cents for stage lengths of roughly 500 miles.

Each Kansas City flight will cost them $8510 and each St Louis flight will cost them $10,171

That means each flight to or from Kansas City will lose AA $3517 and each flight to or from STL will lose AA $5025.

The whole thing will not cost AA all that much, really, just an additional $25 Million a year in losses.

By the same token, if you figure WN CASM at 8 cents you have this scenario making them an additional...$24.9 Million a year on the bottom line.

So keep this post in mind about 18 months from now when the DOT figures become available for Q1 of 2006 and see how close I am.

 

[NewHampshire Black Bears]

ELP WN Psgr,

Speaking of " O/D ",

Take a moment to view my post on the AA board.
( #36 "AA....(dallas love field)"

????


NH/BB's

 

[CruelSummer]

As someone else mentioned, by promoting the fact that Love is so much more convenient to AA's "best customers" they risk losing them to SWA for flights to destinations within the WA boundaries that AA doesn't fly to. These are AA loyalists who previously drove right by the "inferior" Love Field but who are now being asked -- by AA nonetheless -- to "give Love a try!"

Whether or not AA's plan will work is yet to be seen. (I don't wish any bad things for AA, and in fact hope they do well -- just not too well!) Still, it's shaping up to be a classic stragegy event that will be studied in business schools for years!

I agree that it is probably better at this point for AA to not actively recruit its loyal DFW flyers over to Love...I think it is more interested in not losing travel to Love than increasing its market share by going there.

I also agree that this will be a classic case years from now - if only we knew now how it will shake out!

 

[Dont call me Shirley]

This month's "American Way" magazine has a hilarious piece quoting some study claiming that repealing the Wright Amendment would while (possibly) not resulting in the end of Western Civilization, might lead to the end of nonstop flights from DFW to just about aanywhere worth going to: (LGW, FRA and the like anlong with Kileen and Waco and somesuch.)