AA gets three more LGB slots

[LGA Fleet Service]

STL-LGB couldn't hurt.

Speaking of STL, why are we laying people off and removing equipment from service when it could redeployed elsewhere?

Maybe some of the STL assets could be utilized to (Don't laugh here) increase operations from RNO again.

Yes, we were there and gone, but right now the focus has shifted from that elusive high yield passenger to the leisure passenger.

RNO-SEA,MIA,MCO,LAX,SFO.

Why not at this point?

 

[MAH4546]

jetBlue has been forced to give American Airlines three more slots at Long Beach. Any idea where they are going? They are getting rid of ORD-LGB in March to make DFW 5x and JFK 3x. I hardly see a market for more frequency to DFW and JFK. Maybe they will re-launch ORD? Or maybe (and I know I would love this)a daily to MIA (B6 is planning FLL-LGB for a June launch)?

 

[TWAFA007]

Aloha,

Here is JB reply to AA getting 3 more slots. From the JetBlue website:

Westward Ho!
JetBlue To Add Extra New York/JFK-LA/Long Beach, JFK-SF/Oakland, And Washington/Dulles-Long Beach Flights

-- Low Fare Carrier to Offer 7 Daily JFK-Long Beach flights; 6 Daily JFK-Oakland flights; 3 Daily DC-Long Beach flights --
New York, NY (February 4, 2003) - JetBlue Airways (Nasdaq: JBLU), New York's hometown, low-fare carrier, is adding five new flights to the west coast from New York and Washington, D.C., this spring.

JetBlue will add sixth and seventh daily flights between New York/JFK and Long Beach, CA on February 20 and June 26, respectively. The airline will launch fifth and sixth daily flights between JFK and Oakland on May 1 and June 12. Also on May 1, a third daily flight between Washington/Dulles and Long Beach will be added.

"With seven flights a day between LA and New York and six a day between New York and the San Francisco Bay area, JetBlue will not only offer the best coach product and the lowest fares coast to coast, we'll also have more convenient schedules to meet all our customers' needs, said David Neeleman, CEO of JetBlue Airways.

Wow 7 flights to JFK! Thats a lot of lift.

ALOHA, 007

 

[LGA Fleet Service]

Does every thread have to turn into a pissing contest between you two?

 

[FA Mikey]

[blockquote]
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On 2/4/2003 7:18:03 PM TWAFA007 wrote:


Wow 7 flights to JFK! Thats a lot of lift.

ALOHA, 007


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[/blockquote]
Yea, alot of lift with those packed in can 320's. Add AA's lift from LA and SFO to JFK with our 767's and 757's. Now there you have a lot of lift.

 

[Management Guru]

No new flying. These are not "additional" slots.

AA has had "temporary" use of 4 slots that were originally given to JetBlue. AA received those slots back in June while negotiations were conducted on who should have access to what number of slots at LGB.

The temporary slots were due to be returned to JB in March 2003. This agreement allows AA to keep 3 of the slots permanently as long as AA continues to use them. Cancel the flights any time before 2009 and they immediately go back to JetBlue.

AS is also being given 2 permanent slots. No word if they will convert the RJ flights to mainline in order to use the slots. Same conditions apply about needing to use.

[A href=http://www.lbreport.com/airport/lgbagree.pdf]http://www.lbreport.com/airport/lgbagree.pdf[/a]

 

[nyc6035]

I've gotta say, from an outside view, AA expanding at LGB doesn't seem to make a lot of sense. One has to assume that they're loosing money in the market...dumping JFK-OAK would seem to validate that they're not making money against jetblue. In that instance why continue to fund a money losing operation in LGB when you're potentially headed for the poor house (BK)?

Marketshare and giving a competitor a hard time is all well and good when you can afford it...but it seems to me right now they ought to be trying to keep all the pennies in the piggy bank they can hold on to.

 

[jj]

AA is in LGB just to protect its mini hub in LAX.They will take a loss to protect LAX ops.

 

[AAG2000]

In other words, they're trying to do what they did with Legend at DAL. Only this time it won't work, since--let's be honest--JetBlue is no Legend, and is not going away anytime soon.

What's really sad is that they're doing it at a time when they really can't afford to take a loss--for any reason. AA needs to focus on its core business right now, and flying heavily discounted transcons out of LGB is hardly its core business.

 

[Oliver Stone''s Apprentice]

Flying heavily discounted transcans wasn't AA's core business two years ago, but that's not to say AA won't be doing more of it in the future.

MIA-LAS and BOS-LAS are not exactly business routes, either. Neither is JFK-BCN.

AA's core business can't continue to rely on business travel as much as it has in the past, so I think you'll start to see a lot more of these "huh?" type routes going forward.

 

[Hopeful]

So maybe AA should close its doors forever and let JetBlue takeover the world!

 

[Speedbird]

The fact that B6 is increasing LGB-JFK frequency to 7x daily tells me that LAX service is being siphoned away from AA and the other majors serving the JFK market from LAX.

It appears that Neeleman's calculated gamble to open up LGB to transcon service has proven very successful thus far.

The question for AA is do you remain in LGB and continue to get bloodied, or do you cut bait and move out? If OAK and ONT are any indicators, then AA's days serving LGB-JFK appear numbered.

If I'm right, then it will be a shame when one considers the very public complaints AA made to gain those slots last year. Then again, that might serve to be enough reason to hang with it for purely face-saving reasons.

 

[Oliver Stone''s Apprentice]

[blockquote]
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On 2/5/2003 1:55:49 PM Speedbird wrote:

The fact that B6 is increasing LGB-JFK frequency to 7x daily tells me that LAX service is being siphoned away from AA and the other majors serving the JFK market from LAX.

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[/blockquote]

Uh, OK. But if AA is losing traffic at LAX, why increase service in JFK-LAX as they're planning to do?

And, by the way, AA is also adding another JFK-LGB.

[blockquote]
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On 2/5/2003 1:55:49 PM Speedbird wrote:

It appears that Neeleman's calculated gamble to open up LGB to transcon service has proven very successful thus far.

[/blockquote]

If you say so, but they could have had that same success without also trying to take over all the slots at the airport.

When all is said and done, how much did B6 throw away by operating slot-protecting LGB-OAK, LGB-LAS, and LGB-SLC services? How much did they have to pay the City to keep their unused slots over the past year and a half?

As T-100 data becomes available from the DOT, I think it will become a lot more obvious that LGB operated at a loss.

That's probably why B6 never really spoke out over AA's "temporary" use of the four slots they gave up for the past six months, and hasn't raised a fuss over losing five with the latest agreement.

 

[nyc6035]

Eric,

This is all true regarding why on a 'net basis' LGB may not for 2002 have been profitable in totality for B6. That said, as you're aware they ran the routes you mentioned purely to hold the slots until such time as they had the lift they needed to do Transcons/MidCons. It appears now that lift is arriving they're ramping up the 'real' flights they intended to run all along. At the end of the day these guys 'think' they can run rings around AA with based upon their unit cost to put a single flight in the air coast to coast. At the moment, they're correct...on a CASM basis AA can't compete.

With all of this in mind you've got to wonder why AA would go head to head with these guys at LGB...except so as not to cede the slots back to B6. Given the environment, I really can't imagine this is a battle worth fighting. If AA lowers CASMs into the mid 8.5 to 9 cent range maybe... combined with product differentiaton...but with costs as high as they are you would think AA would be better served putting that 757 over to SAN or somewhere else where they'd get better yield.

 

[AAG2000]

[blockquote]
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On 2/5/2003 11:57:32 AM eolesen wrote:

AA's core business can't continue to rely on business travel as much as it has in the past, so I think you'll start to see a lot more of these "huh?" type routes going forward.
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[/blockquote]

When I said this wasn't AA's core business, I didn't mean that AA's core business is entirely business travel. AA's core business is making money by flying routes that make sense for AA's network, as opposed to fighting pointless battles with startups in order to salvage a few scraps of pride.

Obviously plenty of routes are and always have been driven by leisure demand. Not a whole lot of AA's enormous Caribbean presence, for example, has ever been based on business travel, nor has AA's extensive winter service to ski destinations. But that doesn't mean they don't make money.

With that in mind, I wouldn't call those routes you cited "huh?" routes. Vegas is popular with people from all over the world (heck, Singapore Airlines and JAL even fly there all the way from Asia). I'm sure people from Latin America and New England are no exception, so given AA's gateway in MIA and regional hub in BOS, both make perfect sense to me. JFK-BCN makes sense, too, given the high seasonal demand for the route, combined with the Iberia codeshare. These may not be business routes, but like I said, AA has always had plenty of leisure routes that presumably make money.

So, if you can tell me with a straight face that JFK-LGB makes sense for AA right now, then that's great. If there is a huge untapped demand for service to Long Beach, then I stand corrected. But if I were an AA stockholder or employee, having watched what happened with JFK-OAK and JFK-ONT (not to mention the whole Love Field fiasco), I'd be pretty annoyed to see AA pouring money down the drain at LGB just to save face.