More layoffs are coming. Now it's GIG and GRU

[WorldTraveler]

CLT-GIG is a money loser on an A330. It also takes two aircraft to service the route. The 767s won't be around forever and there are much better places to deploy an A330 than GIG. The last A330 delivery is in May...there are no more on order until the A350s come on line in 2017. I have flown GIG and will not miss it in the least. I hate people losing their jobs but I haven't seen a merger where it didn't happen to some degree and it seems that Parker and crew are getting their house in order right away. I heard rumors months ago that the route would move to MIA.

given that US has improved revenues on CLT-GIG, it's a little surprising that US decided to pull the plug.

MIA may be the capital of Latin America but it simply doesn't have the connectivity that CLT does. It might not make any difference for alot of passengers but there will be cities that will lose single connection service on new AA.

It also calls into question the idea that CLT can really be a challenge to ATL if AA can't or won't duplicate the same type of network that DL flies from ATL. ATL is the 2nd largest single carrier Latin America gateway behind MIA including a half dozen flights daily to deep S. America.

CLT doesn't have quite the caché as a global hub if it serves only Europe.

Josh,
if the question came down to ADDING a 2nd TLV flight, MIA might make sense but it makes no sense to dump a flight from the NE that has good connectivity to nearly all of the US-TLV market in order to add a longer flight that won't serve as much of the country.
If the LY codeshare really happens, then it might make sense for LY or AA to start a codeshare flight from MIA capturing some of the traffic from Latin America that currently flows over European carriers.

 

[700UW]

CLT has thrived and grown in the past 20 years and the new International terminal that will be built will further expand CLT and the New AA.
 
One new terminal is being built/planned and expansion of A, B and E concourses will also be done.
 
And it seemed EA, PI, US and now AA will be growing CLT and has been successful in competing against DL at ATL.

 

[WorldTraveler]

I'm not doubting that... and I also have never posted against the viability of CLT as a vibrant business city.

But if its longhaul int'l service consists solely of Europe, it isn't in the same league as ATL, DFW, DTW, ORD, and the NYC airports that serve 4 or more continents. ATL serves 5.

 

[wings396]

"It also calls into question the idea that CLT can really be a challenge to ATL if AA can't or won't duplicate the same type of network that DL flies from ATL. ATL is the 2nd largest single carrier Latin America gateway behind MIA including a half dozen flights daily to deep S. America."
 
Perhaps AA doesn't need to duplicate ATL because they have MIA as an alternate option for service to S. America. It's also a possibility that you will see AA start some service to SA out of PHL at some point in the future. AA will have the advantage of drawing traffic to SA out of the northeast thru PHL as well. Give AA/US some time to adjust the schedules before passing judgement on how they are bound to fail in competing with Delta.

 

[700UW]

US flies to 26 Caribbean, South America and Latin American Destinations from CLT and 10 European.

 

[A320 Driver]

US flies to 26 Caribbean, South America and Latin American Destinations from CLT and 10 European.

Exactly. If there are good and consistent revenues to be made with the CLT hub, who cares if it looks like ATL etc...

 

[traderjake]

It also calls into question the idea that CLT can really be a challenge to ATL if AA can't or won't duplicate the same type of network that DL flies from ATL. ATL is the 2nd largest single carrier Latin America gateway behind MIA including a half dozen flights daily to deep S. America.

 
Do you understand difference between a hub and a network? 
 
CLT will never be ATL and it doesn't have to be for AA to be successful.

 

[Crash Pad DCA]

 

 

[commavia]

"It also calls into question the idea that CLT can really be a challenge to ATL if AA can't or won't duplicate the same type of network that DL flies from ATL. ATL is the 2nd largest single carrier Latin America gateway behind MIA including a half dozen flights daily to deep S. America."
 
Perhaps AA doesn't need to duplicate ATL because they have MIA as an alternate option for service to S. America. It's also a possibility that you will see AA start some service to SA out of PHL at some point in the future. AA will have the advantage of drawing traffic to SA out of the northeast thru PHL as well. Give AA/US some time to adjust the schedules before passing judgement on how they are bound to fail in competing with Delta.

 
Precisely.  The only reason ATL has the level of South America service it has on Delta presently is that Delta has no alternative - if Delta had a better option, the South America focus would be there, and not in ATL.  Only once in history have ATL and MIA both been incorporated as major hubs into a single, unified carrier network - and that was Eastern.  And precisely how many flights to Latin America did Eastern offer from ATL vs MIA?  With respect to AA, MIA and Latin America, Delta and ATL will never even be close.  However, none of this can be said of AA, which has the undisputed 800 lb gorilla of Latin America hubs all to itself, and therefore naturally will continue to focus its resources there with respect to flights to that region.  MIA doesn't offer the domestic connectivity of ATL, or CLT, but it doesn't need to - it has O&D to Latin America that so summarily dwarfs both, and offers sufficient connectivity to the U.S. markets that generate most of the Latin America connecting demand.  So congratulations to Delta for building the second largest U.S. carrier hub to Latin America - the growth genuinely has been impressive.  But based on Delta's own reported numbers and its route history in the region in the last decade, said growth does not appear to have been particularly profitable.  Bottom line: while ATL may be #2, it's a very distant #2. 
 
As to the broader discussion of CLT vs ATL, and this whole notion of CLT being/becoming "a challenge to ATL," that's yet another ridiculous red herring thrown up to distract from the larger, far more important point.  CLT cannot, and never will be, a hub as large or extensive as ATL.  Not only is the local market itself smaller to begin with, but CLT also isn't the regional economic, political and cultural capital of the entire Atlantic Southeastern U.S., as ATL is and always will be.  Nonetheless, that's not really what matters, anyway.  CLT need not precisely replicate ATL with a 1,000-flight hub and nonstop service to 200 cities.  CLT only needs to provide a competing, compelling alternative to ATL for access into, and out of, the Atlantic Southeast.  AA's network has other hubs that can provide the broader connectivity and fill the role that ATL fills for Delta.  This is the same as calling into question whether SLC will ever truly be "a challenge" to DEN.  Well no, of course it won't.  It's a smaller, less important city in an arguably inferior location.  But it's "good enough," and that's what ultimately counts.

 

[700UW]

CLT is sixth for Fortune 500 companies, and ATL is fourth.

And is the second largest financial center in the US

[SIZE=18pt]*Number of Headquarters includes Family Dollar in Matthews, NC, which is in Mecklenburg County, but does not include Lowe's, which is located in Iredell County or Domtar which is located in York County.[/SIZE]
[SIZE=18pt]While Charlotte did not gain any new Fortune 500 headquarters in the 2013 listing, a few companies climbed up in the rankings. After its merger with Progress Energy in 2012, Duke Energy jumped from No. 186 in the rankings to No. 145. With more than $110 billion in total assets, Duke Energy is the nation’s largest utility. Sonic Automotive jumped 23 spots from No. 330 in 2012 to No. 307 in 2013. The car-dealer group has more than 100 dealerships in 14 states. Family Dollar Stores rose 14 spots, from No. 301 to No. 287.

The Charlotte area also boasts seven Fortune 1000 headquarters. Resolute Forest Products, formerly AbitibiBowater Inc., in Catawba, S.C., joined the 2013 list. This brings the total number of Fortune 1000 headquarters in the Charlotte region to 15 (including the Fortune 500 companies).

The state of North Carolina is home to 12 Fortune 500 headquarters, with the City of Charlotte claiming the largest number of headquarters in the state (5). Winston-Salem boasts two headquarters, and Matthews, Mooresville, Cary, Burlington and Greensboro each claim one.

The research for this report was conducted by referencing the 2013 Fortune 500 list to online directories and company websites to produce a list of Fortune 500 affiliates and subsidiaries located in Charlotte and Mecklenburg County. The goal of this report is not to link all Fortune 500 companies in the area to their parent; it is to identify a major holding of the parent in the Charlotte market to ensure its presence. Thus, all of the Fortune 500 affiliates that do business in Charlotte may not be listed in this report. Only those companies with major affiliates clearly identified by a physical office or location within Mecklenburg County are included. One major office for each identified Fortune 500 company is listed. Any additional subsidiaries are listed by name and can be referenced to the local phone directory for further contact information.

The full Fortune 500 list can be found at money.cnn.com.[/SIZE]
 

 

[Crash Pad DCA]

US/AA only has to encircle ATL with DFW-MIA-CLT to keep DL in check in the southeast and internationally.

 

[WorldTraveler]

"It also calls into question the idea that CLT can really be a challenge to ATL if AA can't or won't duplicate the same type of network that DL flies from ATL. ATL is the 2nd largest single carrier Latin America gateway behind MIA including a half dozen flights daily to deep S. America."
 
Perhaps AA doesn't need to duplicate ATL because they have MIA as an alternate option for service to S. America. It's also a possibility that you will see AA start some service to SA out of PHL at some point in the future. AA will have the advantage of drawing traffic to SA out of the northeast thru PHL as well. Give AA/US some time to adjust the schedules before passing judgement on how they are bound to fail in competing with Delta.

I would certainly hope that AA can pull off some PHL-S. America flights.. but it isn't terribly heartening that US put in a couple years effort and Parker (who presumably ok'd it all) pulls it up as the first major int'l mark he is making on the combined network.
 
 

US flies to 26 Caribbean, South America and Latin American Destinations from CLT and 10 European.

yes we get that... but deep S. America won't be a part of it and I'm sure Africa and Asia won't either.
 

Do you understand difference between a hub and a network? 
 
CLT will never be ATL and it doesn't have to be for AA to be successful.

yes, I do and it is precisely because CLT won't duplicate ATL that the networks will be different.
 
 

Precisely.  The only reason ATL has the level of South America service it has on Delta presently is that Delta has no alternative - if Delta had a better option, the South America focus would be there, and not in ATL.  Only once in history have ATL and MIA both been incorporated as major hubs into a single, unified carrier network - and that was Eastern.  And precisely how many flights to Latin America did Eastern offer from ATL vs MIA?  With respect to AA, MIA and Latin America, Delta and ATL will never even be close.  However, none of this can be said of AA, which has the undisputed 800 lb gorilla of Latin America hubs all to itself, and therefore naturally will continue to focus its resources there with respect to flights to that region.  MIA doesn't offer the domestic connectivity of ATL, or CLT, but it doesn't need to - it has O&D to Latin America that so summarily dwarfs both, and offers sufficient connectivity to the U.S. markets that generate most of the Latin America connecting demand.  So congratulations to Delta for building the second largest U.S. carrier hub to Latin America - the growth genuinely has been impressive.  But based on Delta's own reported numbers and its route history in the region in the last decade, said growth does not appear to have been particularly profitable.  Bottom line: while ATL may be #2, it's a very distant #2. 
 
As to the broader discussion of CLT vs ATL, and this whole notion of CLT being/becoming "a challenge to ATL," that's yet another ridiculous red herring thrown up to distract from the larger, far more important point.  CLT cannot, and never will be, a hub as large or extensive as ATL.  Not only is the local market itself smaller to begin with, but CLT also isn't the regional economic, political and cultural capital of the entire Atlantic Southeastern U.S., as ATL is and always will be.  Nonetheless, that's not really what matters, anyway.  CLT need not precisely replicate ATL with a 1,000-flight hub and nonstop service to 200 cities.  CLT only needs to provide a competing, compelling alternative to ATL for access into, and out of, the Atlantic Southeast.  AA's network has other hubs that can provide the broader connectivity and fill the role that ATL fills for Delta.  This is the same as calling into question whether SLC will ever truly be "a challenge" to DEN.  Well no, of course it won't.  It's a smaller, less important city in an arguably inferior location.  But it's "good enough," and that's what ultimately counts.

 
mostly well said...you are usually pretty on the mark with what you write.

...when DL starts MIA-Latin America service, and it is when, not if, DL won't intend to replace its ATL operation.

DL doesn't fly ATL to S. America because it is the next best option to MIA. They fly ATL-S. America because it is profitable and the strength of the ATL hub makes flights work.

It is ridiculous to argue that DL only flies ATL to Latin America because they have no better alternative but it is ok to say that AA flies DFW to Asia and Latin America because DFW is a strong hub.



 

US/AA only has to encircle ATL with DFW-MIA-CLT to keep DL in check in the southeast and internationally.

And we could probably say the same thing about DL keeping AA in check in the NE with DL's LGA and JFK operations which are far larger than AA's and DL's DTW and MSP hubs which completely overshadow AA in the midwest.

both airlines have strong networks....

AA is still the dominant airline to Latin America, doesn't fly to Africa or Australia on its own metal which DL does, is still a distant #3 to Asia.

And DL is profitable on a year round basis to all of its global regions.

and will still have 3 gateways to deep S. America and is growing its Latin America network at a rate that equals or exceeds AA's.