Virgin America expands schedule at DAL

[AdAstraPerAspera]

Tangentially, now that DFW is connected seamlessly to Trinity Rail system it is even more accessible and convenient to the Plex. Not to mention how centralized it is already, it seemss like DFW remaining the preeminent airport for the region will remain and any benefits from the end of Wright will be a wash

 

[WorldTraveler]

I don't think there is anyone suggesting that DFW's premier position in the Metroplex will be challenged.

However, DFW was the ONLY option for service to a number of cities and, since the DL hub shut down, a large number of the top 20 domestic markets from DFW have had only AA service.

thus, ANY service that is added by another airline and from another airport is going to create customer choice for Metroplex travelers and decrease the size of AA's share.

Perhaps, and it is far too early to know, but perhaps the market will grow to decrease the amount of share loss AA suffers. but since AA is not adding service, the only way their share won't decrease is if they rework their revenue mgmt. systems to take higher percentages of local traffic on their existing flights.

Further, WN knows full well that they cannot expect to pull much traffic over to DAL without reducing fares so the chances are very high that average fares from the Metroplex will fall.

Add in that some markets will have 2 new competitors with both WN and Virgin and the impact could be greater, perhaps offset somewhat by Virgin's departure from DFW.

The only real question is how well Virgin and Southwest will coexist at DAL but I would bet they do given their different product focus.

No one is expecting that DFW will be displaced as the largest or most significant airport in the Metroplex but there is no doubt that the growth of low fare carriers in N. Texas and the addition of alternatives to markets which have not had one in years, if ever, will rearrange the N. Texas market.

 

[AdAstraPerAspera]

But with the increased convenience provided by the inter connectivity to regional transport, DAL just quite simply, isn't as appealing or accessible for the vast majority if the metroplex, is my point.

 

[WorldTraveler]

and that may well be true... but WN and VS - along with UA and DL which have been there and still will be - aren't trying to appeal to as large of a market because they don't don't have near as many seats as they have at DFW.


But in the total scheme of the N. Texas market, there will be far more seats available than there are today - before the WA restrictions fall - and many of them are to destinations which currently have far fewer if any competitors.

 

[eolesen]

However, DFW was the ONLY option for service to a number of cities and, since the DL hub shut down, a large number of the top 20 domestic markets from DFW have had only AA service.

Really? I'd say "a large number" are really a minority.

UA's kept a presence in DFW-ORD/SFO/DEN/EWR/IAH/IAD/LAX.

DL and NW stayed in DFW-MSP/SLC/ATL/DTW, and was in DFW-MEM up until recently. I'd assume they also kept DFW-CVG constant.

US certainly kept PHX, CLT, and PHL service. AS has kept SEA service. NK provides competition to LAS, FLL, LAX, and MCO, and I believe that FL was also serving MCO up until the merger.

VX has been active in LAX/SFO

Really, the only major markets I can think of where there's been any lack of competition are DFW-BOS/MIA.

What other ones didn't AA have any competition in?

 

[737823]

Really, the only major markets I can think of where there's been any lack of competition are DFW-BOS/MIA.What other ones didn't AA have any competition in?

B6 has been in the BOS market since spring 2012.

Josh

 

[WorldTraveler]

and yet in nearly all of those markets, AA still has the majority of the market - as most legacy carriers do.

See the F9/CVG thread but DFW will be the only legacy carrier other than DEN where a ULCC and a LCC will both have more than 10% of the seats in the market - including on a combined basis between multi-city airports.

AA is highly exposed at DFW and VX's movement from DFW to DAL only increases the penetration of other carriers at DFW.

It is very likely that AA at DFW will fall below 50% market share on a combined airport basis within the next few years - one of the few legacy carrier hubs to do so.

 

[AdAstraPerAspera]

Oh GMAFB

 

[WorldTraveler]

... because you just learned that there are 3X more ULCC seats at DFW than ATL so your argument doesn't work the way you thought it would? of that DFW will be like DEN in having large LCC and ULCC operations in the same city, something not even CHI, NYC, or LAX have? and neither does ATL.

 

[AdAstraPerAspera]

No, because VX moving down the road to DAL puts the pressure on WN, and relieves it on AA, not the opposite, except in your addled brain

 

[WorldTraveler]

we'll see how VS moving from DFW helps or hurts AA.

You are right that it shifts some of the market away from AA but there are way too many people who think that DAL and DFW are much different markets - like ORD vs MDW and IAH vs HOU.

DAL and DFW are the closest two airports that will be hubs to a legacy carrier vs. WN.

Further, unlike MDW or HOU, DAL has a much higher income catchment area and those passengers DO currently fly from DFW.

If nothing else, DAL will succeed at pulling passengers from DFW that were going there but for whom DAL is a viable alternative. The mere fact that DFW IS right now the only option for longhaul nonstop travel from N. Texas now while DAL will be another option soon means DFW will lose some of its strength.

Specific to ULCCs, it is precisely because there is little competition to AA and the legacy carrier presence ot their hubs that ULCCs have grown at DFW as much as they have.

Spirit and the ULCCs are very good at finding markets and jumping into them even if LCCs show up later.

The evidence will be available to see within the next few months but AA's share of the N. Texas will go down bcause of the growth of other carriers at both DAL and DFW>

 

[eolesen]

Statistically, both DTW and MSP have far more ULCC activity than DFW does.

ULCC's make up about 32 departures a day at DFW (6 on F9, 26 on NK), which is a drop in the bucket when you look at the overall market and 1000 departures a day. (I say about because they're not all daily markets -- same for every other airport below)

At DTW, they offer about 20 departures (17 on NK, 3 on F9) out of 591 departures a day.

At MSP, they offer about 38 departures (22 on SY, 11 on NK, and 5 on F9) out of 600 departures a day. I'm sure WT will argue that SY isn't a LCC, but they sure do behave like one...

Neither really compares to LAS, though, where there are more than 60 (35 on G4 alone) out of 540 flights per day.

 

[WorldTraveler]

based on fares that SY charges and what they show on DOT data, their fares are more like an LCC than a ULCC but you knew that based on your response.

And the measure of impact is not flights but seats and not just seats offered but seats filled.

DFW is a much larger hub than DTW or MSP and it also offers service to many places that ULCCs do not fly. Comparing seats to cities that are served both by the legacy and ULCC, AA at DFW has more direct ULCC competition than does DL at DTW or MSP - and certainly more than ATL where someone made the assertion that DL would be more impacted.

Not only are there very, very few cities that have a strong legacy, LCC, and ULCC presence but both the ULCC and LCC presence in the N. Texas market are growing and are growing at far faster rates than for the country as a whole.

It will become apparent within the next six months how it all shakes out, but NK was not and is not content to cede N. Texas to WN so they jumped into DFW and will be AA's direct ULCC completion while WN will focus on DAL, an airport that you have repeatedly argued will have little impact on AA at DFW and I believe otherwise. WN's statements about the success of their bookings from DAL to new markets validates what I and swamt have said.

The Wright Amendment was an enormous restriction on competition in N. Texas and as it falls, AA will face a far larger increase in competition than if they had simply been forced to compete with other carriers from the beginning.

Considering that N. Texas is nowhere near the leisure destination that LAS or Florida is, it is highly telling that the ULCC presence in N. Texas is so much larger than in other business markets alongside the LCC presence as well.