AA luv flights

[jj]

Just wondering how 1st day ops went loads etc. B)

 

[Hopeful]

Just wondering how 1st day ops went loads etc. B)

Does it treally matter? AA doesn't expect to make a profit because they HAVE to be there!

 

[SharoninSAT]

Does it treally matter? AA doesn't expect to make a profit because they HAVE to be there!

Why in the name of good business would they do that? :blink:

 

[coolflyingfool]

Doesn't a company have a duty to its employees and stockholders to make them money? To come out and say we are going to lose money is a crazy way to do business. just my thoughts......

 

[Hopeful]

Doesn't a company have a duty to its employees and stockholders to make them money? To come out and say we are going to lose money is a crazy way to do business. just my thoughts......

bizjournals.com
American says Love Field service won't make money
Tuesday February 21, 1:36 pm ET


American Airlines Inc. will compete aggressively with low-cost Southwest Airlines Co. at Dallas Love Field, said an airline executive Monday, adding it's doubtful the legacy carrier will make money flying from its newest airport.
ADVERTISEMENT


American on Monday unveiled to the media the three gates from which the airline will operate at Love Field.

Southwest has more than 90 percent of the flights at Love Field, where the carrier has operated for more than 30 years. American plans to steal some of those customers, according to David Cush, an American vice president and general sales manager.

American starts its new service from Love on March 2, with 16 flights a day to Austin, San Antonio, Houston, Kansas City, Mo., and St. Louis.

The carrier was driven to expand from its fortress hub at Dallas/Fort Worth International Airport to serve Love Field by a recent relaxation of the federal Wright Amendment, which uniquely restricts Love to short-distance flights in jets with more than 56 seats.

With the recent relaxing of Wright to include Missouri, American is now on the defensive to stem any losses of its customer-base in the North Dallas area. American has a huge customer base in the area, said Cush.

But chances are American -- which has seen a near steady run of losses since Sept. 11, 2001 -- won't make money doing it, he indicated.

"It's tough to forecast a profit anywhere in the airline business," said Cush. "My guess is it will be tough to make a profit here. ...It will be tough sledding."

American has vigorously opposed any relaxing or elimination of the Wright Amendment. But Cush said American will do whatever it takes to compete hard against Southwest out of Love.

"As silly as it sounds, we're not here to make a profit off this operation, we're trying to serve our customers," he said, adding later, "We're going after Southwest customers."

Tim Smith, a spokesman for American, added however that "It would cost us lots more in lost business to not compete."

According to Beth Harbin, a spokesperson for Southwest Airlines, "American's interest in Love Field is to make a point, not a profit."

Even so, she said in an e-mail response to American's comments, American will no doubt benefit from the well-known "Southwest effect" that has found passenger volumes increase at airports where Southwest and other airlines compete.

However, she added, Southwest believes American's strength and best product offering locally has always been from its hub at D/FW "and not stringing itself out at Love Field."

"It's their choice, however, to locate where they see fit and we will work alongside them at Love Field as we do in many of our other cities," said Harbin.

In an aggressive marketing push, American is already offering triple bonus miles through May to frequent fliers who choose Love Field. That gives AAdvantage Miles customers the opportunity to earn 60,000 miles -- enough to fly to Hawaii, Europe or Japan in off-peak season, said Linda Johnson, American's general manager at Love.

"That's one of the richest offers in the history of our program," said Johnson. "Thousands have already signed up to qualify for this program."

American's first flight out of Love is an early morning departure on March 2 to Kansas City, Mo., said Cush.

The airline will have 1,000 seats a day out of Love Field, but Cush declined to say how many passengers might actually board the planes. A typical "load factor" for the airline is 70% to 80% full. Planes moving through Love Field won't be that full, though he declined to specify a number.

"Because we'll be carrying only local traffic we'll expect to see load factors significant lower than at D/FW," said Cush.

Published February 20, 2006 by the Dallas Business Journal

 

[local 12 proud]

I suspect that AA will not only fail to make money but will in fact LOSE money. With fuel cost being a major money drain on AA, why are they going to fly half empty planes just to prove a point?

 

[SharoninSAT]

I suspect that AA will not only fail to make money but will in fact LOSE money. With fuel cost being a major money drain on AA, why are they going to fly half empty planes just to prove a point?

I agree..."to prove a point" is not smart business! :blink:

 

[jimntx]

I agree..."to prove a point" is not smart business! :blink:

In a warped way, it is to "make money." One of the company spokeperson's said in one interview, "We will not make money on this service, but we will lose less (emphasis mine) than if we didn't compete there at all."

Reducing a loss is sort of a back door way to "make money."

 

[local 12 proud]

In a warped way, it is to "make money." One of the company spokeperson's said in one interview, "We will not make money on this service, but we will lose less (emphasis mine) than if we didn't compete there at all."

Reducing a loss is sort of a back door way to "make money."

Im sorry but that does'nt even make sense. Your telling me that flying half full flights losing money is better than Not flying at all?

Please explain how AA will be losing "LESS" by competing in a market that is doomed to fail already.

Does one run a foot race knowing in advance that there is no way you can defeat your opponent :unsure:

 

[flyhigh]

local12,

Apparently you haven't watched the olympics. Did the Jamaican bobsled team really think they were going for gold? Of course you still run the race.

Here's why AA is running this service...A lot of their current Kansas City & St Louis bound travelers live closer to Love Field. If they chose not to fly this service at all, those travelers would most likely be inclined to fly Southwest. In that case, AA only loses what they fly on Southwest...right? The reality is that most business travelers make more holistic decisions (actually their companies do). So, now that WN offers this service and my employees prefer it (bacuase it's closer to home...and Love is more convenient thatn DFW), I'm going to renegotiate my overall contract with AA to say that MCI & STL can be split with WN. Well, since I can now fly WN for that, why not fly them for some of my other trips to say SAT, AUS, ELP, HOU, etc. Since most of my business was to MCI/STL (which is probably true since MCI alone is a pretty big local market), why not fly my terciary/secondary trips to the cities above on WN and just provide my loyalty to WN since now it's more convenient overall and my trips are short. With that, AA loses all of their secondary business too causing other flights to lose money. By simply adding this service, they continue to maintain the overall relationship with these passengers.

What would be nice to see is employees start getting in on the action and reminding the community how big, and important, AA is to Dallas/Ft Worth and asking them to support AA's service over WN (who is willing to entertain a move to Phoenix). Remind them that the city of Dallas is breaking it's promise to the community years ago about closing Love.

 

[s80dude]

What would be nice to see is employees start getting in on the action and reminding the community how big, and important, AA is to Dallas/Ft Worth and asking them to support AA's service over WN (who is willing to entertain a move to Phoenix). Remind them that the city of Dallas is breaking it's promise to the community years ago about closing Love.

AA is already doing that. Through American Adovcates, townhall meetings with congressional reps, letter writing campaigns, AMR is using the employees to communicate their view on the Wright Ammendment.

 

[jimntx]

Im sorry but that does'nt even make sense. Your telling me that flying half full flights losing money is better than Not flying at all?

Please explain how AA will be losing "LESS" by competing in a market that is doomed to fail already.

Does one run a foot race knowing in advance that there is no way you can defeat your opponent :unsure:

Because they do not lose to "travel convenience" those customers who have always driven out to DFW because there was no non-stop service between DAL and MCI/STL.

Reducing a loss is a valid way to increase revenue. If the loss would have been $1000 (due to business lost to SW), and by competing we reduce the loss to $500, then we have increased revenue by $500--i.e., there is $500 less being subtracted from the bottom line.

 

[eolesen]

I just bought a GPS over the weekend from one national chain for a third of the price they were selling it for, simply because I walked in with one of their major competitors ad. To make it even better, they gave me a store credit on the spot for the amount of the mail-in rebate that the competitor was offering (which was cool considering I didn't have to wait the 6-8 weeks and send off receipts and box tops...).

Now, did they take a loss on the product? Most certainly.

But they even if I don't spend that $30 credit on something that costs more than $30, it still keeps my money from going to a competitor.

While I don't necessarily agree with the decision to chase market share like this, the fact is that any money which goes into LUV's bank account is money which will make it easier for LUV to keep nibbling away at our chance of profits.

I'm not too concerned about the $1M or $2M we might lose over the course of a year at DAL, but I am worried about the potential of losing $10 to $50M at DFW if those customers start choosing WN for more and more of their travel, especially now that DFW-MDW is included under the ATA codeshare.

 

[corl737]

Remind them that the city of Dallas is breaking it's promise to the community years ago about closing Love.

This is yet another huge distortion of the truth that AA and DFW want the public to believe. There was never any agreement to close Love Field any more than to close Fort Worth's Meacham Airport. The wording of the 1968 Regional Airport Concurrent Bond Ordinance states:

"Accordingly, the Cities, each with respect to its own individually owned airport facilities, as above named, hereby covenant and agree that from and after the effective date of this Ordinance, shall take such steps as may be necessary, appropriate, and legally permissible (without violating presently outstanding legal commitments or covenants prohibiting such action), to provide for the orderly, efficient and effective put at Love Field, Redbird, GSIA and Meacham Field, of any and all Certificated Air Carrier Services, and to transfer such activities to the Regional Airport effective upon the beginning of operations at the Regional Airport."
[emphasis added]

The airports were clearly intended to remain open. Dallas' Love and Fort Worth's Meacham airports became meccas of corporate activity for their respective cities. (Obviously for geographic reasons GSIA was closed.)

If you truly want to point a finger at why SWA got to stay at Love Field, look toward Continental, Trans-Texas, and Braniff. Why? Because when SWA originally intended to start flying in 1967, these three airlines sued to prevent its start-up. By the time the dust settled it was the early 1970s and the active Love Field carriers had already signed the legally-binding agreement to move to DFW.

Had SWA been in operation in 1968 it is doubtful (IMHO) they would have had the public support to remain at Love. By not being a party to the agreement, however, it was not legally permissible for Dallas to force their eviction and, if for no other reason than to stick-it-in-the-eye of those who caused it so much grief, SWA exercised their right to fly from Love Field.

SWA was also unique in that unlike the other interstate airlines, it was certificated by the Texas Aeronautics Commission to conduct intrastate flights specifically from Love Field. Thus, the City of Dallas could not override the State's authority and the Federal Government had no jurisdiction over matters contained wholly within Texas. Dallas sued SWA in 1973 (Dallas, Texas vs. Southwest Airlines Co.) to try once again to make SWA move to DFW. However, again the courts (including the US Supreme Court) upheld SWA's right to fly from Love. The only alternative would have been for the City of Dallas to completely shut down Love Field, an unacceptable proposition that would have undoubtedly been met with a demand that Meacham be closed entirely, too.

 

[mrman]

local12,


What would be nice to see is employees start getting in on the action and reminding the community how big, and important, AA is to Dallas/Ft Worth and asking them to support AA's service over WN (who is willing to entertain a move to Phoenix).

As a Dallas business traveler I can tell you that is a very hard sell for the Dallas community. When the buisnes traveler knows that if they walked up today for a ticket to PHL is over $1,200 RT and if WN was allowed to service that market WN highest RT fare in any market is $600, it leaves a very bad taste in the business travelers mouth. You will find very little sympathy in Dallas. I believe somewhere I read that amoung business travelers in the DFW area about 80% want Wright dropped.

One also wonders for Dallas if WN is more valuable as their fleet is taxed in Dallas for propoerty tax purposes and AA is in the next county.