SanJuan Expansion
- Thread starter chucky
- Start date
There goes B6! Trashin' the yields once again. They'll fill the flights, but not at a price to cover the gas....
Anyone ever think maybe there was a reason AA pulled out/ reduced? Seems like B6 is spinning in circles looking for any market to throw planes at.....
Really? AA pulls some widebodies. JetBlue add a couple of narrowbodies. This is trashing yields? None of these are new markets for JetBlue, just some increased frequency. They've learned their lesson on yield-trashing frequency; that's not what's happening here.
I have no idea why AA is reducing SJU. But some guesses are: reduced feed (they're pulling some of the ATR's back to the mainland), reduced yield compared to monopoly flying ($500 tickets vs. the $1000+ they used to get), shedding TWA's legacy (STL is a shadow of what it was too). Etc. None of that implies that JetBlue isn't making money there, though.
Agreed.
A common retort to arguments that the legacies need to shrink (and maybe some of them go out of business entirely) is that the LCCs will just backfill any reduced capacity. That was certainly the case when gas was cheap (practically free by comparison to today's prices) but I figured (incorrectly) that times had indeed changed. With Neeleman's departure and $4/gal jet fuel, I mistakenly assumed that B6 would NOT immediately backfill this capacity. I was wrong, and it's gonna cost the B6 shareholders plenty of money.
I have to think that if AA couldn't make money in SJU that no one can right now. There are going to be certain markets that are going to have to have enough capacity cut that the airlines can get the fares that support the product. What I think will happen eventually, is that the major airlines are going to get tired of the smaller carriers backfilling capacity and then they are going to go after them.
Point being, it seems that if AA feels it necessary to reduce capacity in order to increase fares, B6 adding narrowbodies will just lead to the same overcapacity, and thus fares that do not support the price of fuel. I have no doubt B6 will fill the flights, they just will not command a fare high enough to cover the costs. Hence why AA is reducing capacity in many SJU markets, as well as other markets to come. I think B6 will have a hard time finding markets for their new planes that do not fall into this category.....
At current fuel prices, the amount of leisure traffic SJU enjoys is simply not profitable. By reducing capacity, or ending service to certain cities, AA is able to command a higher fare premium in certain markets. B6 adding all these flights just makes them susceptible to the lower yield AA is trying to get away from. Again, B6 will fill the flights, at a loss.
Never said B6 does not make money in SJU, I would not know about that, just that the add'l capacity being added is what AA found necessary to pull out. I highly doubt that B6 will enjoy high enough fares on 7 daily JFK- SJUor 4 SJU-MCO flights to cover the cost of fuel, and AA couldn't. Not gonna happen. If average fliers were willing to pay a healthy fare premium for TV's in every seat etc.., that would be different. Unfortunately, they are not.
Not necessarily. I'm not sure that B6 will make money on these additional flights, but it may be that they will lose less money than on other routes that these planes might fly. Transcon yields are terrible so SJU might actually be an improvement. I suspect that the only other meaningful alternative available to B6 would be to sell more planes. That may happen as well, but probably after AA has parked another 50-100 S80s.
Why would you think that? AA's CASM is much higher than B6's. That said, I doubt that there is much profitable domestic flying anywhere today.
Bingo. Again, B6 is looking to put their planes where they lose less money than they are now, just like most other domestic airlines. I am not convinced that they SJU yields are much stronger with the cost of fuel. If that were so, AA wouldn't be shuttering ~50% of their SJU hub. 7 flights a day JFK-SJU and 4 MCO-SJU? Hmm....
I firmly believe that ALL yields are terrible within the USA at this time. Cost of fuel, coupled with the overcapacity. Scary.
Agreed. Taking any more planes at this point to delpoy domestically seems risky.
A great deal of the mainland to PR traffic is cruise ship passengers. As a former member of that category, I know that the airlines are not making much money (if any) off the bulk rates given to the cruise lines.
Several years ago, my late wife and I went on a cruise that began in San Juan and ended in Lisbon, Portugal. We flew IAH to MIA to SJU to begin the cruise, and flew LIS-EWR-IAH at the end. The airfare portion of our cruise fare was less than $500/pp r-t at a time when just a r-t coach fare from LIS to EWR was supposed to be up near $1000.
That being said, with its CASM, maybe JetBlue can make those markets work for them better than AA could with its CASM.
Several years ago, my late wife and I went on a cruise that began in San Juan and ended in Lisbon, Portugal. We flew IAH to MIA to SJU to begin the cruise, and flew LIS-EWR-IAH at the end. The airfare portion of our cruise fare was less than $500/pp r-t at a time when just a r-t coach fare from LIS to EWR was supposed to be up near $1000.
That being said, with its CASM, maybe JetBlue can make those markets work for them better than AA could with its CASM.
I can't quote details, but suffice it to say that JetBlue's routes in and out of PR are some of the highest yielding in the system. Except when they're not (see FLL-PSE and -BQN, which are both gone). The incremental flying that they're adding, two flights per day, is not backfilling capacity to nearly the extent that it is being removed by AA. And in any case, I think RDU22 is confusing yield with cost. Yield is revenue per occupied seat per mile. Fuel has nothing to do with it. Your assertions that pax won't pay for TV's notwithstanding (ahem, the TV's don't work to SJU anyway...), JetBlue still gets more money per seat mile going there than for most of the routes it flies, so it makes sense to capture some of the (to them, high yielding) traffic that AA is abandoning.
yesterday while talking to the agent working our flight out of SJU said, AA pays 1.5 mil per year to operate 83 flights a day out of SJU....not landing fees ect but the use of the termainal. They are at par with MIA.
To contrast, JB uses 2 gates in SJU, not an entire concourse. Maybe they'll go way out on that limb someday and get a third gate. 
