77% of US domestic air routes are a monopoly

[Crash Pad DCA]

http://www.anna.aero/2013/12/04/77pc-us-domestic-air-routes-monopoly-nine-routes-least-five-airlines-fighting-passengers/
 
Analysis of airline schedule data reveals that within the US domestic market there are around 2,780 airport-pairs connected with scheduled services in October 2013. Of these, around 2,140 are served by just a single carrier, a further 470 see two carriers competing head-to-head, another 139 offer passengers a choice of three airlines, while on 24 routes there are four airlines competing for custom. That leaves just nine routes (airport-pairs) where five or more of America’s finest airlines compete for market share. Los Angeles-Las Vegas and Los Angeles-San Jose are the only US domestic routes with six carriers competing head-to-head. Curiously, the Los-Angeles-San Jose route leapfrogged to be joint top of this table earlier this year when Virgin America (1 May) and Delta Air Lines (10 June) became the fifth, and then sixth, airlines to serve this intra-Californian market.
 

 
Five of the nine routes involve Los Angeles, three include Denver, while New York JFK and San Francisco both appear twice. The completion of the mergers between AirTran Airways and Southwest Airlines, and American Airlines and US Airways, will have an impact on only two of these routes; Denver-Atlanta and Los Angeles-Phoenix. In fact, US Airways is noteworthy for appearing just once in these highly competitive routes, less often that Frontier Airlines, JetBlue Airways, Spirit Airlines or Virgin America.
....
 
oneWorld (US/AA), Star (CO/UA) and SkyTeam (DL/NW) seem pretty balanced on most of the routes in the table excepting DEN-{ATL, DTW, MSP} where oneWorld is MIA (missing in action).
 
LAX-PHX: US Airways 41 flights/week + American 28 flights/week = 69 flights/week! Twice DL or UA and even more than WN. How long is that going to last?
 
AA seems to be a little weak on LAX-SFO compared to DL and UA. But on par with DL LAX-SJC.
 
Will be interesting to see how the new AA  handles LAX, SFO, SEA and how PHX fares in the mix.
 
Predictions anyone?

 

[im back..!!]

http://www.anna.aero/2013/12/04/77pc-us-domestic-air-routes-monopoly-nine-routes-least-five-airlines-fighting-passengers/
 
Analysis of airline schedule data reveals that within the US domestic market there are around 2,780 airport-pairs connected with scheduled services in October 2013. Of these, around 2,140 are served by just a single carrier, a further 470 see two carriers competing head-to-head, another 139 offer passengers a choice of three airlines, while on 24 routes there are four airlines competing for custom. That leaves just nine routes (airport-pairs) where five or more of America’s finest airlines compete for market share. Los Angeles-Las Vegas and Los Angeles-San Jose are the only US domestic routes with six carriers competing head-to-head. Curiously, the Los-Angeles-San Jose route leapfrogged to be joint top of this table earlier this year when Virgin America (1 May) and Delta Air Lines (10 June) became the fifth, and then sixth, airlines to serve this intra-Californian market.
 

 
Five of the nine routes involve Los Angeles, three include Denver, while New York JFK and San Francisco both appear twice. The completion of the mergers between AirTran Airways and Southwest Airlines, and American Airlines and US Airways, will have an impact on only two of these routes; Denver-Atlanta and Los Angeles-Phoenix. In fact, US Airways is noteworthy for appearing just once in these highly competitive routes, less often that Frontier Airlines, JetBlue Airways, Spirit Airlines or Virgin America.
....
 
oneWorld (US/AA), Star (CO/UA) and SkyTeam (DL/NW) seem pretty balanced on most of the routes in the table excepting DEN-{ATL, DTW, MSP} where oneWorld is MIA (missing in action).
 
LAX-PHX: US Airways 41 flights/week + American 28 flights/week = 69 flights/week! Twice DL or UA and even more than WN. How long is that going to last?
 
AA seems to be a little weak on LAX-SFO compared to DL and UA. But on par with DL LAX-SJC.
 
Will be interesting to see how the new AA  handles LAX, SFO, SEA and how PHX fares in the mix.
 
Predictions anyone?

not necessarily a prediction, but a hope...
the travelling public who have been flying on my dime, travelling to there vacations, while I struggle to keep my kids in school....
those folks will finally pay....
pay for the priviledge to fly instead of drive where they want to go. some of thw trash we have been hauling will go back to the bus, garbagedump is where they belong...
investment tip, buy greyhound stock... there ridership is going up.
finally....

 

[767one]

http://www.anna.aero/2013/12/04/77pc-us-domestic-air-routes-monopoly-nine-routes-least-five-airlines-fighting-passengers/
 
Analysis of airline schedule data reveals that within the US domestic market there are around 2,780 airport-pairs connected with scheduled services in October 2013. Of these, around 2,140 are served by just a single carrier, a further 470 see two carriers competing head-to-head, another 139 offer passengers a choice of three airlines, while on 24 routes there are four airlines competing for custom. That leaves just nine routes (airport-pairs) where five or more of America’s finest airlines compete for market share. Los Angeles-Las Vegas and Los Angeles-San Jose are the only US domestic routes with six carriers competing head-to-head. Curiously, the Los-Angeles-San Jose route leapfrogged to be joint top of this table earlier this year when Virgin America (1 May) and Delta Air Lines (10 June) became the fifth, and then sixth, airlines to serve this intra-Californian market.
 

 
Five of the nine routes involve Los Angeles, three include Denver, while New York JFK and San Francisco both appear twice. The completion of the mergers between AirTran Airways and Southwest Airlines, and American Airlines and US Airways, will have an impact on only two of these routes; Denver-Atlanta and Los Angeles-Phoenix. In fact, US Airways is noteworthy for appearing just once in these highly competitive routes, less often that Frontier Airlines, JetBlue Airways, Spirit Airlines or Virgin America.
....
 
oneWorld (US/AA), Star (CO/UA) and SkyTeam (DL/NW) seem pretty balanced on most of the routes in the table excepting DEN-{ATL, DTW, MSP} where oneWorld is MIA (missing in action).
 
LAX-PHX: US Airways 41 flights/week + American 28 flights/week = 69 flights/week! Twice DL or UA and even more than WN. How long is that going to last?
 
AA seems to be a little weak on LAX-SFO compared to DL and UA. But on par with DL LAX-SJC.
 
Will be interesting to see how the new AA  handles LAX, SFO, SEA and how PHX fares in the mix.
 
Predictions anyone?

Doug and his friends will make a lot of money in good times and bad.

 

[WorldTraveler]

This just says that airlines really would prefer to find niche markets where they don't have to aggressively compete against other carriers and includes low fare and legacy carriers. It is precisely why the DOJ took the steps they did at DCA and LGA.


Carriers that are making the biggest impact on the competitive balance of the industry are those that are adding flights in other carriers' strength markets.

That in part is why the real future of the US airline industry lies in the big cities on both coasts that have been divided between carriers for a long time. When cities like LAX, BOS, and NYC which have not had a single carrier with a significantly larger share over other airlines are being reshuffled in favor of a single (or two) larger carriers or when formerly dominant hubs like DCA and SFO are seeing enhanced competition, the competitive balance of the industry is changing.

With the exception of DFW and the changes that are taking place because of the fall of the Wright Amendment as well as whatever changes take place at DEN, interior hubs are largely set unless a carrier decides to simplify its hub structure... which new AA might choose to do.

 

[PullUp]

I get a chuckle over the irony of the end product (thus far) of deregulation, which was put in place to foster free competition by encouraging 'new entrants' and be the consumer's friend by keeping fares low.
It was supposed to increase competition, and the exact opposite has occurred. Airline leaders have found the only way to win in today's airline marketplace is to be huge - providing seamless service to anywhere the customer wants to go. Now that the big four are established, can a new entrant carrier even hope to survive against these megacarriers?
Welcome to the end result of deregulation: oligopoly.
Finally, maybe fares will rationalize and consumers will truly bear the cost of an airplane ride. They've been receiving a discount for far too long.
Cheers.

 

[767one]

I get a chuckle over the irony of the end product (thus far) of deregulation, which was put in place to foster free competition by encouraging 'new entrants' and be the consumer's friend by keeping fares low.
It was supposed to increase competition, and the exact opposite has occurred. Airline leaders have found the only way to win in today's airline marketplace is to be huge - providing seamless service to anywhere the customer wants to go. Now that the big four are established, can a new entrant carrier even hope to survive against these megacarriers?
Welcome to the end result of deregulation: oligopoly.
Finally, maybe fares will rationalize and consumers will truly bear the cost of an airplane ride. They've been receiving a discount for far too long.
Cheers.

More than likely (sad to say) the comsumers will B&^%$ and moan about the high price of tickets and the law makers will then come up with a way to undo "deregulation" and throw the industry into another 10 or 15 yr dive.
 
All the best,
 
Bob

 

[WorldTraveler]

The DOJ's involvement in the slot proceedings is essentially an effort to "undo" deregulation by forcing low fare competition where it could not otherwise go.

Further, all of the competition between the big 4 carriers - and even the big 3 - will prove the DOJ's basic theory that the network carriers don't compete among themselves to be false.

Network carriers will be more competitive with each other over the next several years than we have seen for years... and that is actually good in arguing that the industry has evolved into an oligopoly.

 

[PHL]

...the travelling public who have been flying on my dime, travelling to there vacations, while I struggle to keep my kids in school....
those folks will finally pay....
pay for the priviledge to fly instead of drive where they want to go. some of thw trash we have been hauling will go back to the bus, garbagedump is where they belong...

Wow...do you really feel that way about your customers?  Trust me, I haven't taken one dime from you when I fly.  But your union certainly does.  Every paycheck.  So why don't you take out some of your angst on them?
 
Prices and profits have been going up over the last several years, so maybe you and your brethren can get a better contract in the next round of negotiations.
 
But on the other hand if you want all the customers to go back to the "garbage dump..where they belong", then you might as well start looking for another job since you, or any of your peers at the company, won't have a job.

 

[Reed Richards]

The DOJ's involvement in the slot proceedings is essentially an effort to "undo" deregulation by forcing low fare competition where it could not otherwise go.

 

I saw Paul Ryan saying today "no new taxes" in the latest budget deal, but somehow he forgot about the doubling of the TSA tax for airline travelers.  What a disgrace.  I can only hope that all the airlines start listing that "tax" as a separate charge above and beyond the ticket price. RR

 

[WorldTraveler]

Not to jump into politics too deeply but you can see who is moving toward the middle with an eye to the future and at the same time using airline passengers as a source of revenue for the overall budget.

Yes, it is a disgrace that the US is taxing its airlines like European governments do- and the result is obvious in their exposure to Middle East carriers and low growth.

Sen. Schuster says he will work toward a national aviation plan that will treat US airlines as a true national asset. Let's see what he does but anything should be better than what we have.

As the US industry consolidates, it makes it all the more important for the industry to be strong... if the structure of a building is weakened from the industry, it doesn't matter how big the industry is within its own borders if it can't stand up to foreign competitors who will be increasingly aggressive from all directions.

 

[im back..!!]

Wow...do you really feel that way about your customers?  Trust me, I haven't taken one dime from you when I fly.  But your union certainly does.  Every paycheck.  So why don't you take out some of your angst on them?
 
Prices and profits have been going up over the last several years, so maybe you and your brethren can get a better contract in the next round of negotiations.
 
But on the other hand if you want all the customers to go back to the "garbage dump..where they belong", then you might as well start looking for another job since you, or any of your peers at the company, won't have a job.

My customers are the equivalent of "self loading freight"... And everyone of them, including you, have been riding on discounted fares. Those fares have been available because employees have given up more than half of their pay and benifits to stay in business.

So, yea, you have been riding on my dime. But not anymore. Now you will pay for the airplane, the fuel, and the person that has to put up with all of you babies.

Get used to the idea of paying for what you want. Or, take your business to the bus.

 

[PullUp]

When filling your gas tank is more expensive than buying an airline ticket, something is wrong....
If you believe in capitalism and free markets, you won't complain when ticket prices rise.
Consumers vote with their dollars and so far - other than vociferous complaining - the airplanes are full and fares are rising.
Demand is strong and industry management is constraining the growth of the supply side. 
It is smart business, and I applaud it. Airlines should be able to report an 8-10% profit margin like every other successful enterprise, n'est pas?
 
Cheers.

 

[WorldTraveler]

Interestingly, though, AA and US have been the most aggressive in adding capacity over the past couple years.

Kinda hard to argue that everyone else should now stop adding capacity when AA and US decided to keep adding when everyone else stopped.

 

[PullUp]

The capacity added was not domestic - US added routes to SA and Europe, with freqs from additional gateways. The only additional airframes US has put into service are 330's.
Non-profitable routes were down-sized or eliminated and high demand routes got bigger aircraft. 
And I don't believe for a minute that United or Delta or Southwest stopped adding capacity in the last few years......
Cheers.

 

[700UW]

Not true, US has taken delivery of 16 A321s this year.