Frontier adding at CVG

eolesen

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Jul 23, 2003
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http://airlineroute.net/2014/08/29/f9-cvg-w14/

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I'm sure someone will try to make this about other airlines, but I'm sure DL will take notice. I like how they waited to load this until the long holiday weekend.
 
that is precisely what happens when a carrier (DL) decides they don't want to commit the resources to chase low fare passengers in a market. You can do that when you have a hub and a significant presence. You can't do that when you operate a type of schedule like what DL has at CVG.

CVG is a fairly rich business market and F9 isn't going to steal those types of passengers. They don't operate many of the flights on a daily basis and the schedules vary from week to week. They also don't have the type of business model that generally attracts corporate travelers.

This is one of the biggest increases in LCC service that CVG has seen since DL pulled down the hub which takes a lot of pressure off of DL for locking up the market but if this is indicative of what CVG can win, it is likely that the core business market that DL serves now and has since the hub was created 25 years ago will remain flying largely on DL. NO other carrier that has reduced a hub has as high of a local market share or average fares as high as DL has at CVG. The local business market is still very loyal to DL.
 
WorldTraveler said:
that is precisely what happens when a carrier (DL) decides they don't want to commit the resources to chase low fare passengers in a market.
 
Which is exactly why I think ATL is now ripe for the picking by an enterprising ULCC
 
no, you missed the point that ATL is still a hub and a massive one at that.

and ATL does still have WN alongside DL.

the ULCCs opportunistically look for markets where they can get just enough of the market without invoking the wrath of the network carrier into whose hubs they start service.

the ULCC model doesn't create levels of demand anywhere close to large enough to compete with the multiple frequencies per day that network carriers have in their largest hubs.

F9 isn't even offering daily service at CVG - a city that has largely been dehubbed. They aren't going to add multiple flights/day in markets like ATL and DFW
 
The fare "canopy" created by Delta allowed one of the first LCCs to establish their largest hub there, ValuJet. With that hub largely dismantled (by your own contention) by WN and, (also by your own contention) ATL being geographically suited for connections, it stands to reason that an Ultra-LCC has an opportunity that I bet Harts-Jack management would love to help make happen, one way or the other.
 
except WN has removed connecting capacity but so far has managed to hold onto their share (FL before) local market.

I believe that there will be more and more markets in which WN can't compete with the low number of frequencies they will have compared to DL's hub - but WN is far from off the scene in ATL.

You need only look at where the ULCCs are growing to know that ATL is no more of a priority - and in many cases less of one - than other hubs. ULCCs have demonstrated they do best where there is a legacy hub but no other large low fare carrier at the airport.

F9 and NK have grown far more at hubs with single carriers than those with two.

ATL simply does not fit the profile of an airport where a ULCC will grow rapidly and the evidence of where they have grown shows it - DFW, DTW, IAD, IAH, MSP - and CVG, which was accustomed to having a hub, is still a city with a decent market but few alternatives to DL other than to other carrier hubs.
 
Your argument ignores two examples that show how well a ULCC can do in the shadows of two larger carriers:

F9 has held its own at DEN in the shadow of WN & UA. I'm surprised they've held out as long as they have after WN moved in, but they seem to be doing better than just breaking even.

NK's also doing quite well at FLL, given the presence of B6 and WN. Arguably, you could also point to the power AA has at FLL and the extent it has empowered the ULCC's and LCC's at FLL.

If AA is vulnerable to ULCC's at DFW (which you've asserted before), then it's really not all that inconceivable for DL to have some vulnerability at ATL.
 
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I never cease to be amazed at how hard you work to try to prove your point by ignoring every piece of data which someone else points out that is contrary to your position.

First, AA isn't even close to having any power at FLL. based on the latest DOT origin and destination data, pre merger AA has 5% of the FLL market and is #4 out of 4 among the big 4 airlines - and of course all of the legacies are smaller than B6 as well. Even with the merger, AA and US are still smaller than DL. AA has no power at FLL.

Second, F9 is not "holding its own" at DEN. It has been losing revenue share for a number of years, mostly against WN. If they were holding their own, they wouldn't have thrown in the towel on their previous strategies and restructured the airline as a ULCC.

Third, you completely ignore even the most basic schedule data - which you have repeatedly demonstrated you can view - which shows that DFW has the highest percentage of ULCC seats relative to a network carrier of any of the legacy carrier hubs.

Further, ATL is #13 of the list of the top cities in the US for ULCCs. OTOH, DFW is #4 on the list only behind DEN, LAS, and FLL. and yet DFW has considerably more ULCC seats than ORD, MSP, DTW, LAX, MCO, IAH, and LGA - all of which have more ULCC seats than ATL. In fact, DFW has 3 times the number of ULCC seats than ATL has.

Anyone who even remotely understands the airline industry knows that DEN has been F9's biggest base for years so DEN is expected. LAS and FLL are major leisure destinations so they can be expected. But DFW has more than 2/3 the number of seats that these major leisure destinations have.

Finally, DOT data shows that the ULCCs have grown faster at DFW than they have in any other legacy carrier hub and the ULCCs have succeeded at gaining a larger portion of the total domestic market at DFW than they have at other hubs. Even though legacy carriers consistently hold onto the majority of the market in their hubs (not surprising), the 2nd largest carrier could be either an LCC or a ULCC. DEN is the only major legacy carrier hub that has a large presence (double digit share) by both an LCC and a ULCC. ULCCs and LCCs compete among themselves to a far less degree than with the legacy carriers; nearly every legacy carrier hub will have one or the other - but DEN is the only one with both.

The difference with DFW vs. MSP and DTW and ATL is that DFW and ORD have a low cost carrier hub at another airport in the same city; DL's hubs are one airport cities.

WN's presence at ATL is enough to keep ULCC interest to a minimum - and that is reflected by the fact that ULCCs have less than 1.5% of the domestic seats.

Not only will AA have a larger ULCC presence at DFW than exists at any other hubs but AA at DFW, not DL at ATL, will have a LCC hub at another airport.

You've tried for years to deny the effect of growing low fare competition on AA in N. Texas and tried to paint that the risk is DL's at ATL and yet the evidence overwhelmingly shows just the opposite.
 
JFK, LGA are hubs for DL and yet isnt EWR right there also and its a major hub of CO.
 
so what is your point? The ULCCs have a very small presence in NYC. There are technically legacy hubs at all 3 airports and an LCC hub at JFK.

NYC and the WAS airports validate exactly what I said. ULCCs tend to find breathing room at legacy carrier hubs where there is little LCC competition.

DFW is the largest legacy hub that doesn't also have a major LCC presence at the same airport. The ULCC presence has grown significantly there.

DAL/DFW will look more like ORD/MDW in a few years than it will like ATL. N. Texas will have a legacy carrier and LCC hub at each airport but with a large ULCC presence at DFW. ORD has the legacy carrier hubs while MDW is the LCC hub. With the exception of DEN, no airport has a large presence by all 3 types of carriers.

It is noteworthy that no carrier in Chicago or Denver has a majority share of the market.
 
given that Spirit and Frontier have both started participating in the DOT's airline consumer travel report and have scored below average in a number of metrics, including having a complaint ratio TEN TIMES WORSE than DL's, F9 will at best pick up a few very few price sensitive customers that will be poorly treated and decide it isn't worth that kind of discount.

Even ULCC customers have other things to do with their lives than wait around airports for flights or be told that they next available flight is 5 days away in the event of an IROP.

http://www.dot.gov/sites/dot.gov/files/docs/2015MarchATCR_0.pdf