OP
- Thread Starter
- #196
I think it's going to take a little more than treats, ice cream and a couple of bottles of water to come close to what Delta has done for Atl. and Ga. !
IT WAS JUST A MATTER OF TIME !
- Thread starter southwind
- Start date
I think it's going to take a little more than treats, ice cream and a couple of bottles of water to come close to what Delta has done for Atl. and Ga. !
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
see you soon... I'm shooting for a 10 year check-up too!
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It's simply about accurately discussing what is going on in the airline industry.... regardless of who wins or loses.
ATL is a superb hub for DL, the numbers for that airport are awesome. However, DL seems to be the only legacy carrier that allowed a LCC to infest its crown jewel hub. Can anyone shed any insight as to why? Usually legacy carriers were downright mean/nasty in defending their hubs from LCCs and crushing them (especially NW). On the other hand, DL allowed in the 1990s (and I suppose the late 1980s?) Valuejet/Airtran to not only co-exist but grow at ATL.
I can't think of another example where a LCC has been able to grow its operation as relatively easily as Airtran at ATL (an airport with a legacy carrier established hub). The only other examples I can think of are:
i) WN entering Denver and PHL, but that was at a time where the incumbent hub carrier was undergoing re-organiztion
ii) the growth of WestJet in Canada, but CP was a far weaker carrier already getting clobbered by AC and did not have the resources to properly addresss WestJet growth.
iii) ???
The entry of WN into BWI and PIT could be another example, however US chose to abandon those cities rather than co-exist. I don't know if the growth of Jetblue at JFK is comparable since politicians coddled B6 during its beginings. I realize WN has a nice operation in MDW and LUV - but I would consider those to be unique since the MDW is not ORD and LUV is not DFW. (I can't recall how WN built up PHX and LAS).
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
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your question is valid, Flyer.
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I think the real answer is that ATL has been a two airline city for decades - part of the design of the original CAB. Not much different from ORD - which is really a 3 hub city over two airports now; DFW/DAL where the #2 carrier changed from BN to DL who subsequently decided it did not need DFW and couldn't obtain sufficient mass relative to AA; and DEN where again the #2 carrier has changed several times and where a 3rd hub carrier has been added - unprecedented in the history of US aviation and likely unsustainable.
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There are certainly those who argue that DL should have crushed FL early on.... and that may be true but remember that DL's share of the ATL market steadily grew after EA's demise and DL's share of the ATL market is far larger than any other carrier has in any other 2 or 3 carrier hub.
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FL also gained quite a bit of market share during DL's bankruptcy when DL could not engage in bruising market share contests.... only to have DL aggressively regain much of the share which FL picked up. DL has been able to protect alot of its domestic markets from ATL by using alot of that capacity to build its international operation, which is the 2nd largest in the US behind CO at EWR. in other words, DL has an enormous amount of capacitiy supporting its int'l operation which it can easily use through revenue management to fight domestic market share battles.
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I don't think it is realistic to think that ATL will ever become a single airline hub... but remember that ATL is much the same thing to FL as it is to DL... it's largest and highest value market, even if FL did not choose to make its HDQ there. FL simply could not compete against DL who after reorganization could put enough pressure on FL to keep them from growing their marketshare... which is why FL increasingly was looking for markets outside of ATL, only to run into WN. With nowhere else to grow and hemmed in at ATL, FL's best option was to sell out while the franchise still had alot of value. WN gains access to the east coast, eliminates a competitor in alot of markets where FL and WN were running into each other, and gained a presence in ATL which was the last major market which WN did not serve.
FL did manage to gain a large presence on the east coast, including to limited access markets like LGA and DCA. I think alot of people put way too much focus on WN's acquisition of FL for ATL compared to its access to DCA and LGA - and it is very likely that WN will shift some of the FL slots (not all of which are to/from ATL) to other markets.
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ATL is not and will never be of the same importance to WN as it was to FL and DL.
I still believe that WN will end up with somewhere between 15-18% of the ATL domestic market which isn't that much different than what they have in other hubs such as SLC and PHL and does allow some growth from FL's current 15%. ATL is a large local market so even a 15% local market share and 50% connecting passengers will produce a large operation (but FL is carrying up to 75% connecting passengers now so WN has to fill alot of seats that are currently being used by connecting passengers just to fill their current level of capacity).
The most significant factor that I think shows that WN won't attempt to push its ATL local market share much beyond the 18% level against DL's resistance is that they simply have not done so anywhere else on their system. WN mgmt is very smart at finding opportunities to grow without getting involved in bruising market share battles; already WN is involved in one in DEN that they would like to get out of but are not about to back away from. Thus, WN's appetite for entering any further market share battles will be limited until the DEN situation is resolved - and WN is able to overcome the current lack of appetite for fare increases in order to cover continually increasing fuel prices.
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I think the real answer is that ATL has been a two airline city for decades - part of the design of the original CAB. Not much different from ORD - which is really a 3 hub city over two airports now; DFW/DAL where the #2 carrier changed from BN to DL who subsequently decided it did not need DFW and couldn't obtain sufficient mass relative to AA; and DEN where again the #2 carrier has changed several times and where a 3rd hub carrier has been added - unprecedented in the history of US aviation and likely unsustainable.
.
There are certainly those who argue that DL should have crushed FL early on.... and that may be true but remember that DL's share of the ATL market steadily grew after EA's demise and DL's share of the ATL market is far larger than any other carrier has in any other 2 or 3 carrier hub.
.
FL also gained quite a bit of market share during DL's bankruptcy when DL could not engage in bruising market share contests.... only to have DL aggressively regain much of the share which FL picked up. DL has been able to protect alot of its domestic markets from ATL by using alot of that capacity to build its international operation, which is the 2nd largest in the US behind CO at EWR. in other words, DL has an enormous amount of capacitiy supporting its int'l operation which it can easily use through revenue management to fight domestic market share battles.
.
I don't think it is realistic to think that ATL will ever become a single airline hub... but remember that ATL is much the same thing to FL as it is to DL... it's largest and highest value market, even if FL did not choose to make its HDQ there. FL simply could not compete against DL who after reorganization could put enough pressure on FL to keep them from growing their marketshare... which is why FL increasingly was looking for markets outside of ATL, only to run into WN. With nowhere else to grow and hemmed in at ATL, FL's best option was to sell out while the franchise still had alot of value. WN gains access to the east coast, eliminates a competitor in alot of markets where FL and WN were running into each other, and gained a presence in ATL which was the last major market which WN did not serve.
FL did manage to gain a large presence on the east coast, including to limited access markets like LGA and DCA. I think alot of people put way too much focus on WN's acquisition of FL for ATL compared to its access to DCA and LGA - and it is very likely that WN will shift some of the FL slots (not all of which are to/from ATL) to other markets.
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ATL is not and will never be of the same importance to WN as it was to FL and DL.
I still believe that WN will end up with somewhere between 15-18% of the ATL domestic market which isn't that much different than what they have in other hubs such as SLC and PHL and does allow some growth from FL's current 15%. ATL is a large local market so even a 15% local market share and 50% connecting passengers will produce a large operation (but FL is carrying up to 75% connecting passengers now so WN has to fill alot of seats that are currently being used by connecting passengers just to fill their current level of capacity).
The most significant factor that I think shows that WN won't attempt to push its ATL local market share much beyond the 18% level against DL's resistance is that they simply have not done so anywhere else on their system. WN mgmt is very smart at finding opportunities to grow without getting involved in bruising market share battles; already WN is involved in one in DEN that they would like to get out of but are not about to back away from. Thus, WN's appetite for entering any further market share battles will be limited until the DEN situation is resolved - and WN is able to overcome the current lack of appetite for fare increases in order to cover continually increasing fuel prices.
2BlacknBlue
Senior
- Oct 4, 2007
- 327
- 47
"Delta's marketing chief, Vicki Escarra, told an employees meeting in Dallas recently that she tosses darts at a picture of Leonard on her office door. On a more serious note, she also told them the proportion of Delta passengers in Atlanta who fly only Delta has dropped from 75 percent to 55 percent, a Dallas newspaper reported.
Leonard seems bemused by AirTran's newfound star status.
"We're the overnight success that's taken 10 years to build," he said."
http://www.ityt.com/forums/f86/skys-the-limit-for-airtran-2063.html
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
I think if you go back ValueJet really went downhill after the crash in the everglades. So they purchased Airtran and dropped the ValueJet name. Is that perhaps what you meant to say in the statement.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
looks like WN is ready to make its mark on ATL....
From Atlanta, Southwest initially will offer 15 nonstop departures each day to five destinations: Baltimore/Washington (BWI), Chicago Midway (MDW), Denver (DEN), Houston Hobby (HOU), and Austin, Texas (AUS)—a route not previously served by AirTran Airways.
NEW ATLANTA SERVICE BEGINNING FEB. 12, 2012 (open today for purchase on southwest.com):
•$99 each way between Atlanta and Austin - two daily roundtrips
•$79 each way between Atlanta and Baltimore/Washington- four daily roundtrips
•$99 each way between Atlanta and Denver - two daily roundtrips
•$99 each way between Atlanta and Houston Hobby - three daily roundtrips
•$79 each way between Atlanta and Chicago Midway - four daily roundtrips
....
forgive me, but this doesn't exactly an overwhelming entrance to the market.... all strong WN cities/hubs and nothing further west than the Rockies...
From Atlanta, Southwest initially will offer 15 nonstop departures each day to five destinations: Baltimore/Washington (BWI), Chicago Midway (MDW), Denver (DEN), Houston Hobby (HOU), and Austin, Texas (AUS)—a route not previously served by AirTran Airways.
NEW ATLANTA SERVICE BEGINNING FEB. 12, 2012 (open today for purchase on southwest.com):
•$99 each way between Atlanta and Austin - two daily roundtrips
•$79 each way between Atlanta and Baltimore/Washington- four daily roundtrips
•$99 each way between Atlanta and Denver - two daily roundtrips
•$99 each way between Atlanta and Houston Hobby - three daily roundtrips
•$79 each way between Atlanta and Chicago Midway - four daily roundtrips
....
forgive me, but this doesn't exactly an overwhelming entrance to the market.... all strong WN cities/hubs and nothing further west than the Rockies...
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
actually the mods would just as soon not see huge cuts and pastes....
Yes, WN's entrance to ATL is not that much different than the way it enters other markets....
maybe they will do something earth-shattering by the summer of 2012 but so far it doesn't look much different from a new station opening with FL continuing to maintain the rest of the ATL operation... with well known results.
Yes, WN's entrance to ATL is not that much different than the way it enters other markets....
maybe they will do something earth-shattering by the summer of 2012 but so far it doesn't look much different from a new station opening with FL continuing to maintain the rest of the ATL operation... with well known results.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
which is why it is also important to note that in the past 5 years, DL has gained or regained 20 points of market share so that they and their regional affiliates - not counting Skyteam codeshare partners - now board 78% of ATL's passengers... during the same 5 year period, FL has reduced its ATL schedule from a peak of over 250 flts/day to the 220 or so it is now.....
Apparently the plan is for FL and WN to codeshare on the overlapping operation until it is all operated as WN presumably w/ the change in service etc..... but since the FL/WN labor thread indicates that the plan is to reduce the amount of ATL flying by FL and bring in WN planes and crews, this appears to be simply a replacement of FL flying by WN. Given that w/ the exception of the AUS service, all of it just connects to existing WN hubs, it doesn't add a whole lot of anything new....
Of course we have lots of years to watch how WN actually succeeds but I I still have yet to see anything that says that WN is making a big push into ATL or that they are going to do anything that DL can't competitively overcome.... right now it appears their strategy is to SLOWLY rebrand the FL service with few additions.
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eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
Nope, doesn't add anything new.
Well, except perhaps for some screen presence from agencies who use SWABiz before looking at a GDS, or customers who look first at Southwest.com...
I know, they're probably not current DL customers. But once DL loyalists start discovering things like how easy connecting is from a big jet to a big jet (no RJ's to get stuck on), and the benefit of tickets that are reusable without change fees that are higher than the value of the ticket, no first or second checked bag fees....
As the topic title says, it's just a matter of time...
And yes, I'm sure DL will find a way to compete. They always do. They didn't really need the $952M they brought in during 2010 from change fees or bag fees...
Oh, wait. They did. Without it, they would have had a ~$400M loss for 2010...
I know, not all of that would be in markets where they compete with WN, but losing out on just half the ancillary revenue would have almost wiped out their 2010 profitability.
Throw in a little erosion, and it won't be all rainbows and unicorns like some have prognosticated...
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