MIA new routes

[boston]

Should of known this thread would revert to The "River Airline". My Dads a ret Dal pilot and my Mom renamed them that,as she says Delta is nothing more than a river, that subjects pax to Hawaiian fruit juice WT, you spend 
, well Id say full time on educating us on River Airlines, this must be your full time job. 

 

[WorldTraveler]

I'm guessing that means your dad was as died in the wool as other DL employees. It is a cult but it works to keep DL employees fighting hard for the company.

Í don't work for DL any longer. And yes I was part of mgmt. in my last stop there. Half of my career on the frontline; half in mgmt. It is good to see you on here, WeAAsle.

And it is absolutely possible that DL could have a much more sane operation at MIA that is largely focused on the local market and a few connections instead of the mega Latin hub that AA runs.

I have heard from two groups of passengers that flew AA via MIA to Latin America in just the past week and both had lost bags. one of them was 5 days ago and AA has been promising delivery for several days - yet nothing.

You need only look at what DL has done since deregulation in terms of entering markets that AA or UA once dominated compared to what AA and UA have done in DL markets.

The simple fact is that DL dominates its hubs far better than any other airline dominates their own.

It is precisely DL's dominance of its markets that allows DL to go after much more competitive markets that form the backbone of AA and UA's route systems while DL is able to defend its own core markets.

And SFO is a large hub but few people want to admit that DL is well on the way in only a couple years in providing a true and viable challenge to UA on the west coast. The big difference is that UA uses much larger aircraft.

Add in that UA has a significant cost disadvantage that becomes more and more of a disadvantage on longer flights and the advantage that so many think UA has with SFO might not amount to much since DL has been adding two int'l flights/year from SEA and does indeed have int'l growth plans from LAX.

As of this summer, DL offers 2/3 of the int'l flights from SEA that UA has from SFO. Further, UA has only 1/3 of the int'l seats from SFO compared to other carriers while DL has half from SEA.

Dominating the local market is what DL does and that is exactly the direction they are heading for at SEA.

DL also has more growth on top for SEA.

back to MIA-Latin America, nobody expects that DL will dethrone AA. But given that AA so dominates the market, it will take very few additions by DL to begin to erode AA's dominance.

And as much as the AA fans want to believe that AA is invincible at MIA to the rest of the country, DL serves most of the same markets from ATL to Latin America and focuses on the connecting markets via ATL where DL has a significant cost advantage. Data shows that DL competes very effectively in nearly every market from the US to Latin America except to/from S. Florida.

Thus, DL has to put very little capacity into the market in order to become a viable force in the market.

And specific to the topic of MIA to Europe, DL has two powerful TATL hubs that sit north of MIA; UA has two as well.

The notion that AA is going to add significant capacity from MIA to Europe without a significant response from other carriers is simply not realistic.

 

[WeAAsles]

I'm guessing that means your dad was as died in the wool as other DL employees. It is a cult but it works to keep DL employees fighting hard for the company.

Í don't work for DL any longer. And yes I was part of mgmt. in my last stop there. Half of my career on the frontline; half in mgmt.

And it is absolutely possible that DL could have a much more sane operation at MIA that is largely focused on the local market and a few connections instead of the mega Latin hub that AA runs.

I have heard from two groups of passengers that flew AA via MIA to Latin America and both had lost bags. one of them was 5 days ago and AA has been promising delivery for several days - yet nothing.

You need only look at what DL has done since deregulation in terms of entering markets that AA or UA once dominated compared to what AA and UA have done in DL markets.

The simple fact is that DL dominates its hubs far better than any other airline dominates their own.

It is precisely DL's dominance of its markets that allows DL to go after much more competitive markets that form the backbone of AA and UA's route systems while DL is able to defend its own core markets.

And SFO is a large hub but few people want to admit that DL is well on the way in only a couple years in providing a true and viable challenge to UA on the west coast. The big difference is that UA uses much larger aircraft.

Add in that UA has a significant cost disadvantage that becomes more and more of a disadvantage on longer flights and the advantage that so many think UA has with SFO might not amount to much.

I don't know? I know this is a very simple equation I'm posting here but I don't think any of the big 3 are going to encroach on each others home turf anymore now that The AA/US merger has finished the last piece of the puzzle? DAL took full advantage as they should have in AA's weakened state before the BK to grow. Especially in NYC. But now there really isn't much point in them growing too much in other areas except the ones they are weak on. Not to say that there won't be a few flights into each others yards to accommodate those high value customers though. But it won't be any invasion IMO.

 

 

[WeAAsles]

Basically as one of the other posters commented on. It's a very new and different world now.

 

[hp-csr-phx]

Without the feed how would DL fill the planes? Is'nt that what kept the DL MIA-LHR flight from succeeding? 

 

[WorldTraveler]

I don't know? I know this is a very simple equation I'm posting here but I don't think any of the big 3 are going to encroach on each others home turf anymore now that The AA/US merger has finished the last piece of the puzzle? DAL took full advantage as they should have in AA's weakened state before the BK to grow. Especially in NYC. But now there really isn't much point in them growing too much in other areas except the ones they are weak on. Not to say that there won't be a few flights into each others yards to accommodate those high value customers though. But it won't be any invasion IMO.

 
again, I appreciate your rational and non-emotional approach to discussion. it is commendable and has long been missing here.

your participation is a breath of fresh air.

stay engaged.

Every one of the now big 3 has strengths and weaknesses and each will have to develop their weaknesses; each one also has an advantage relative to at least one of their peers in how they approach their weaknesses.

ie. AA is weak to Asia but UA right now is at a cost disadvantage to AA; a 5% cost advantage to UA can go a long ways on int'l flights - and that is precisely why AA and DL both have the ability to move the dial on the Pacific relative to UA.

UA does have an advantage to non-Japan Asia and northern Europe which is doing better economically than southern Europe and France. but UA has higher costs and a network which is too big relative to its revenue generating capacity.

AA has an advantage to Latin America but DL has the ability to pick off much of the connecting traffic via ATL at much lower costs. ATL is a highly efficient and cost effective hub - and airport costs are much lower than via MIA.

If it comes down to AA and DL competing for the connecting passengers from all but S. Florida to Latin America, DL is in a very strong position.

What DL is missing is S. Florida to Latin America.
 

Basically as one of the other posters commented on. It's a very new and different world now.

while true, there is no evidence from history that the world suddenly changes as some would to think it will for AA. you don't become a new person just because you are married and companies aren't different just because they have merged or come out of BK.

And far too many people here think that other competitors will stand still just because AA and US now have size and are out of BK.

DL and WN are very well positioned to compete against new AA and both are focusing their strategic efforts where AA is both strongest and most vulnerable - both extremes.

further, AA's size is due to a large domestic route system where WN and other low cost carriers are still a threat. AA is not at an advantage in the int'l market and didn't move its relative position compared to DL and UA because of the merger.

We have yet to see the effects on AA because of the slot and gate divestitures and the opening of DAL to longhaul domestic flying.

Every one here wants to think these are non-events and yet historical evidence shows that similar events have indeed been significant and AA is likely to lose some of its revenue advantage because of each of these events.

Add in that new AA is the largest marketer of small RJ services and AA has more hubs than other carriers, and their domestic network is ripe for contraction...

each of those factors could quickly result in AA losing portions of its size advantage it now has.


 

Without the feed how would DL fill the planes? Is'nt that what kept the DL MIA-LHR flight from succeeding?

DL doesn't have to focus on filling planes with connecting passengers. It needs to focus on the local market. MIA is a huge local market; evidence in every other market shows that consumers choose competitors when given a choice. DL will win over chunks of the local MIA-Latin America market just because it won't take a lot of effort on DL's part to win that business.

IF AA chooses to go after DL aggressively, AA erodes their own margins because they undercut their own most profitable hub.

Remember that DL operates BOS-LHR on a point to point basis because DL has very little real feed to help its BOS-LHR flight.

MIA-LHR is a smaller market than most of the MIA-Latin America markets; many markets in Latin America can be operated with small narrowbody aircraft like the 319.

DL had zero feed on MIA-LHR but it will have feed from the US to many of the top markets in the US if it sets up a MIA-Latin America operation.

Like SEA, DL won't be focused on dominating the market; they are merely interested in taking a big enough share of the markets that matter to move the market to DL.

and remember that MIA is the primary gateway to Latin America and yet it is served by one US carrier; no other major gateway between the US and another global region is as dominated.

The market is ripe for a competitor and the market knows it.

The growth of low fare carriers in S. Florida to Latin America makes it that much easier for DL to move into the market; AA can ignore them and lose share to FLL and perhaps a few LCCs at MIA or AA can match fares which makes it easier for DL to break AA's dominance of the market.

Open Skies throughout Latin America makes it easier for LCCs and DL combined to add service at AA's expense.

also, DL does have a strong domestic presence at MIA; in terms of domestic local market share, DL is at 28% of AA's size in the local MIA domestic market. Much of AA's domestic size at MIA is to carry connecting passengers. DL has a strong historical and current presence at MIA as evidenced by how easy it was for DL to quickly grow to 1/3 of the LGA-MIA market, one of the largest on AA's system.

There will be more markets like that and it doesn't take too many large domestic markets added from MIA for DL to begin to significantly increase its share of the local market.

Having a bunch of RJs to CMH and other cities won't matter to DL; serving a number of major markets like NYC, BOS, WAS, LAX etc can very much make a difference - and with a relatively small number of new flights.

 

[boston]

Not out in California WT the pilots did their own things, raise families, volunteer, live life but didn't get into the company cult stuff further away the better, however very ALPA. This thread was about what had others heard regarding new or resumed routes out of MIA for AA, plain and simple not about Delta RSM,ASM nor LAM.
 
Its Black cloth, the last time I looked, all black.

 

[tadjr]

I'm not surprised that some of the new routes might not be 7 X a week either. Parker and team at US have a history of running flights only certain days of the week and not every day. It's also a good way to test the waters in a market without committing a plane to a single route. The ones that make money stay and/or expand, the ones that don't go away without a full loss incurred during the trial process. Also having people and facilities in place on both ends doesn't really incur any start up costs to try a market like starting a brand new city would require. Can't wait to see what else is in store for Miami-Europe.

 

[WorldTraveler]

black cloth? covering your eyes?

talk about sticking to the subject.

I got the gist of the thread and have noted that, just like all of the rumors of new routes by new AA, any growth by AA into markets where other carriers have something at stake will result in a competitive reaction from those that have an interest and history of defending their markets.

It also doesn't change that AA has about 20-25% more employees than DL and UA on a size adjusted basis and has every incentive to try new routes in order to avoid laying off employees or stop growing which is what UA has done and which has caused so many labor problems for them.

problem is that the jury is still far from out that even the last wave of AA's growth, esp. to Asia and Europe, will produce positive earnings for AA.

Right now, AA is riding the wave of strong domestic pricing which is due in part to the end of the US policy of undercutting competitors. it isn't a surprise that AA is seeing some of the same strong revenue performance that was expected as part of the merger.

But it doesn't mean that AA will have success adding service into int'l markets which AA or US didn't serve or in which they weren't strong.

They are just trying to get the most mileage from the strong domestic revenue environment as quickly as they can, icnlduing before the slots at DCA and LGA are divested and before WN can start flying longhaul from DAL. The long-term revenue environment for AA is still far from clear.

tadjr,
you are correct. There is little cost risk in starting a lot of these routes... but it still doesn't change that there has to be solid revenues produced in order to sustain the flights on a long-term basis.

Further, it is still far from clear what parts of US' int'l network can be maintained with the move to oneworld.

It is a little much to think that so much of the PHL-Star hub flights can be maintained when AA serves some of the same markets from JFK and some of those same markets are also served from CLT and are ones being rumored for MIA expansion.

Serving 3-4 non-alliance hubs just from the east coast is a little much to expect.

it is more likely that AA is looking at shifting some of the routes to MIA which is a larger local market and where alliance feed on the other end is much less important.

 

[700UW]

There you go again with our misinformation with your newest rant.
 
US/AA is not over staffed, if they were shy did PMUS just agree to no furlough clause with Ramp and Mechanic and Related?
 
Why is US and AA hiring Flight Attendants?
 
And why is PMUS hiring pilots?

 

[WorldTraveler]

yes, AA/US is overstaffed. If you could look at the number of employees relative to revenue generated, you would see it.


Since you have proven repeatedly that you don't have the ability or won't look at big picture data, it isn't surprising you don't see it.

Given that AA and US are still operating separately, what one side or the other is doing in one department or another doesn't matter relative to the whole.

AA/US hasn't come close to removing the duplicate functions which exist when a company is merged and which DL has long since resolved and UA is moving more and more aggressively to resolve, even at the expense of the loss of a lot of jobs.

but in time those divisions have to come down or the cost benefits of the merger won't be realized.

AA/US is trying to grow its network in order to avoid doing the tough job of cutting costs; it is the same strategy that AA standalone used for almost 10 years and which ultimately resulted in their trip thru BK.

If a company has excessive costs relative to their peers, the costs have to come out regardless.

note again that AA and US both pay their employees less than DL or UA which is why they can hold onto more employees.

People can get that jobs need to be preserved in a merger but if one is faced on a long -term basis with being underpaid in order to keep excess people on the payroll, there will be a growing push to get the excess people out so that salaries can go up.

 

[eolesen]

This is about as off topic as normal.

I think we should just let WT have the forums all to himself this week -- everyone else, take the next week off.

Maybe if the page views start dropping, the forum owners might start to realize just how much of a forum cancer he is....

 

[WorldTraveler]

no, it isn't off topic at all.

and your desire is to have not to have to read any real logic that would challenge the notions that so many here want to push.

If it is worth opening discussions of business issues, it is worth discussing opposing view points.

you want to have a board where anything positive can be said without being challenged.

you are free to challenge whatever you want; just use logic and facts because that is what I will use.


This topic is about discussing the notion that AA can add all of these new routes esp. in the int'l arena where the merger did nothing to move AA's position relative to DL and UA; the merger gave AA a huge amount of domestic bulk but ended up resulting in significant asset divestitures about which we have yet to see the results.

I still expect that AA will do well as a result of this merger but the notion that every other carrier will stand by on the sidelines while AA adds routes, esp. in other carriers' strength markets, is just not realistic. AA will be strong but the hyperoptimism that so many have will come face to face with the reality that what AA is doing has taken place at other carriers before and the results are a lot more predictable and a lot more down to earth than people here are predicting for AA.

 

[WeAAsles]

 
again, I appreciate your rational and non-emotional approach to discussion. it is commendable and has long been missing here.

your participation is a breath of fresh air.

stay engaged.

Thank you. Not a fan of letting my emotions get the better of me but some of the agenda posters do make me wince a little.

Every one of the now big 3 has strengths and weaknesses and each will have to develop their weaknesses; each one also has an advantage relative to at least one of their peers in how they approach their weaknesses.

ie. AA is weak to Asia but UA right now is at a cost disadvantage to AA; a 5% cost advantage to UA can go a long ways on int'l flights - and that is precisely why AA and DL both have the ability to move the dial on the Pacific relative to UA.

UA does have an advantage to non-Japan Asia and northern Europe which is doing better economically than southern Europe and France. but UA has higher costs and a network which is too big relative to its revenue generating capacity.

AA has an advantage to Latin America but DL has the ability to pick off much of the connecting traffic via ATL at much lower costs. ATL is a highly efficient and cost effective hub - and airport costs are much lower than via MIA.

If it comes down to AA and DL competing for the connecting passengers from all but S. Florida to Latin America, DL is in a very strong position.

What DL is missing is S. Florida to Latin America.

I think I read recently that UAL had rented some gate space to AA on the West coast or something? I think all 3 may wind up subletting space to each other to shore up the networks thus maybe keeping any low cost carriers from gaining footholds? Much to the chagrin of the DOJ.
 
while true, there is no evidence from history that the world suddenly changes as some would to think it will for AA. you don't become a new person just because you are married and companies aren't different just because they have merged or come out of BK.

And far too many people here think that other competitors will stand still just because AA and US now have size and are out of BK.

Of course not. DL had the ability to take advantage of AA before they went into BK and the merger and had AA remained standalone I think in 5 years US would have been back in BK and (maybe) been broken up into pieces? 

DL and WN are very well positioned to compete against new AA and both are focusing their strategic efforts where AA is both strongest and most vulnerable - both extremes.

further, AA's size is due to a large domestic route system where WN and other low cost carriers are still a threat. AA is not at an advantage in the int'l market and didn't move its relative position compared to DL and UA because of the merger.

WN and JBL are having issues as there costs are rising and they're losing there low cost advantage. Especially WN. That's why their Labor negotiations are so difficult at the moment.

We have yet to see the effects on AA because of the slot and gate divestitures and the opening of DAL to longhaul domestic flying.

Absolutely. But I lived in Dallas for 12 years. DFW is still a better airport to fly out of. Although many people work in Dallas, not a lot as of yet live there in the city itself. People are pretty well scattered all over the metroplex. Your leisure traveler may fly out of LUV. Just not so sure about everyone else. There was a reason that they built DFW exactly between Dallas and Ft Worth. 

Every one here wants to think these are non-events and yet historical evidence shows that similar events have indeed been significant and AA is likely to lose some of its revenue advantage because of each of these events.

Add in that new AA is the largest marketer of small RJ services and AA has more hubs than other carriers, and their domestic network is ripe for contraction...

All the analysts talk about PHX in regards to downsizing? I think the rest of AA's network is pretty solid? If we keep getting more problems like Venezuela in Lat Am that could  cause some problems but I think there has been tremendous growth out of Brazil. We've added quite a few cities. 

RJ or feeder service is a place where we all may be battling it out a little although I don't think there is a huge amount of revenue in people who come from small cities but they do fill seats.
 
each of those factors could quickly result in AA losing portions of its size advantage it now has.

DL doesn't have to focus on filling planes with connecting passengers. It needs to focus on the local market. MIA is a huge local market; evidence in every other market shows that consumers choose competitors when given a choice. DL will win over chunks of the local MIA-Latin America market just because it won't take a lot of effort on DL's part to win that business.

I don't know if they'll necessarily win over if they come in more so then basically have fair competition in exchange for other areas where DL is strong against AA? What is DL's presence like out of FLL? I just think all three will be fairly evenly matched in the future as far as revenue and passengers. They may not be able to legally collude on price but other areas can be discussed.

IF AA chooses to go after DL aggressively, AA erodes their own margins because they undercut their own most profitable hub.

Remember that DL operates BOS-LHR on a point to point basis because DL has very little real feed to help its BOS-LHR flight.

MIA-LHR is a smaller market than most of the MIA-Latin America markets; many markets in Latin America can be operated with small narrowbody aircraft like the 319.

also, DL does have a strong domestic presence at MIA; in terms of domestic local market share, DL is at 28% of AA's size in the local MIA domestic market. Much of AA's domestic size at MIA is to carry connecting passengers. DL has a strong historical and current presence at MIA as evidenced by how easy it was for DL to quickly grow to 1/3 of the LGA-MIA market, one of the largest on AA's system.

Personally as an employee I would like to see AA grow in FLL. I live 5 miles from that airport and would like to maybe transfer there someday. Maybe more domestic?

There will be more markets like that and it doesn't take too many large domestic markets added from MIA for DL to begin to significantly increase its share of the local market.

Having a bunch of RJs to CMH and other cities won't matter to DL; serving a number of major markets like NYC, BOS, WAS, LAX etc can very much make a difference - and with a relatively small number of new flights.

Now I have to admit that I'm an absolute novice on these type of conversations so I am just winging it a little.

But my opinion where all 3 airlines are going to need to differentiate themselves is in service. AA absolutely needs to do some improvements in that area vs Delta but as these new aircraft come on line that certainly will help.

 

[WeAAsles]

yes, AA/US is overstaffed. If you could look at the number of employees relative to revenue generated, you would see it.

Since you have proven repeatedly that you don't have the ability or won't look at big picture data, it isn't surprising you don't see it.

Given that AA and US are still operating separately, what one side or the other is doing in one department or another doesn't matter relative to the whole.

AA/US hasn't come close to removing the duplicate functions which exist when a company is merged and which DL has long since resolved and UA is moving more and more aggressively to resolve, even at the expense of the loss of a lot of jobs.

but in time those divisions have to come down or the cost benefits of the merger won't be realized.

AA/US is trying to grow its network in order to avoid doing the tough job of cutting costs; it is the same strategy that AA standalone used for almost 10 years and which ultimately resulted in their trip thru BK.

If a company has excessive costs relative to their peers, the costs have to come out regardless.

note again that AA and US both pay their employees less than DL or UA which is why they can hold onto more employees.

People can get that jobs need to be preserved in a merger but if one is faced on a long -term basis with being underpaid in order to keep excess people on the payroll, there will be a growing push to get the excess people out so that salaries can go up.

I don't know if AA is overstaffed or if DL outsources more work so you don't get the clear picture of actually how many people do the work? There usually is a redundancy in Management and support staff that can be trimmed but not so much on the frontline workforce.

There was an article a few months back I read by Bill Swelbar where he gave a pretty in depth analysis on why carriers need to begin to insource more of their work. It actually went on to state better control on costs and service than outsourcing provides.

Back to the point I made on how the 3 airlines are going to need to differentiate themselves and a lot of that is going to come back to customer service in the future.