The new AA - Attacking Delta one hub at a time

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Jun 10, 2011
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My wager - no less than a 3 page rant from WT.

BY DENNIS SCHAAL, SKIFT
FEB 12, 2013 1:23 AM

An American Airlines-US Airways merger could pose a significant challenge to Delta Air Lines, particularly in relation to Deltas new hub at LaGuardia and indirectly at Atlanta-Hartsfield Airport, too.

Delta boasts a substantial grip on LaGuardia, where its adding 100 daily flights, building a bridge to connect Terminals C and D, and last year opened its third Sky Club, part of a $160 million investment to upgrade facilities there.

Hell-bent on its New York strategy, Delta also announced today that it is adding 11 gates at JFK, and 75,000 square feet of space to Terminal 4′s Concourse B in cooperation with the Port Authority of New York-New Jersey.

Playing the slots

While some analysts believe that Deltas LaGuardia expansion, the largest by any airline there in years, will give Delta a commanding edge, Henry Harteveldt, travel industry analyst at Hudson Crossing, argues that an American Airlines-US Airways combination could give Delta a run for its money at LGA despite the fact that US Airways ceded 132 slot pairs to Delta at the airport in an historic slot swap in 2011.

Delta currently controls 521 (45.5%) of the 1,145 weekly slots pairs at LaGuardia, American operates 239 (20.9%), and US Airways controls 125 (10.9%), according to the Port Authority.

That means the combined muscle of American and US Airways in a merger would control 364 slot pairs (31.8%). Thats not as large as Deltas 45.5%, but it counts for a lot in New Yorks congested air space.

Deltas and American-US Airways slot pair numbers at LaGuardia dwarf all other airlines there, which combined control 260 (22.7%) of the slot pairs.

Another analyst, who declined to be identified, wasnt so sure about a merged Americans clout.

Deltas moves at LaGuardia really give them a scale advantage, the analyst says. I think its new facilities at LaGuardia would really propel Delta ahead, and make Americans challenge more difficult.

The Philadelphia story

Harteveldt also sees other scenarios playing out in the Northeast should a merger take place, and Philadelphia (PHL) would be a beneficiary.

Philadelphia Airport, which is undergoing revedevelopment, is a US Airways hub, and Harteveldt believes that an American Airlines-US Airways combo could transform PHL into more of a transatlantic gateway for connecting passengers for the new American.

That will also help American with its JFK problems, where it flies mostly long-haul with modest feed.

Harteveldt says a merged American Airlines could focus at JFK on passengers flying directly into and out of an airport, which is more profitable than highly competitive routes enabling connecting flights.

Atlanta squeeze play

Meanwhile, given US Airways dominance in Charlotte and Americans hub in Miami, the new American might blanket Delta in Atlanta and compete more aggressively, Harteveldt says.

US Airways, though, has a lot more to gain from a merger than American, Harteveldt says, adding that Americans gains would mostly be domestic, and thus the merger does little to solve Americans problems in China and Japan, where its presence, even through Oneworld, is relatively modest.

Regarding hubs, Harteveldt says American would retain its own hubs in Dallas/Fort Worth, Chicago OHare, Miami, JFK and Los Angeles, and add US Airways hubs in Charlotte, Philadelphia and Phoenix. Reagan-National in Washington is a US Airways focus city.

Phoenix likely would be in store for some trimming as American would consolidate the two airlines headquarters into Fort Worth, and could reduce flights.
 
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This is the network you asked for.

CLT and PHX will shrink in importance, as both are overserved as it is (so is DFW for that matter).

The combined network may bracket ATL via CLT and MIA, but if CLT and MIA stay their present sizes, there's a certain degree of dilution and cannibalization that will occur.

Something will have to give. MIA's a much larger local market, so I see CLT being sacrificed.

PHX and DFW can both shrink a bit; my guess is PHX will probably see more cuts. Weather is always a wildcard, but the 12 or 15 weather events DFW will have at random is made up for by the available pavement, and tends to run more effectively with parallel ops on both sides of the airport.
 
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The newAA could present challenges to not only DL but also to UA.

Without a doubt the new AA will have significant operations along the east coast. BOS-LGA/JFK-PHL-DCA-CLT-MIA.

Back in 2000/2001 when UA and US were to merge, one of the proposals to please the feds about the dominance at DCA was the creation of DCAir as well as the proposal for UA-US to joinly operate the shuttle with AA (somebody correct me on the details). Hopefully they've thought of something similar, or have a plan to please the feds, or have hired the proper lobbyists ... ... ...

Also, with UA at IAD and SW at BWI, there may not be that much of a concern about the dominance of AA-US at DCA.

Just how much of a challenge the newAA will be for DL (and UA) depends on whether the newAA product will remain the relatively good product offered by the current AA (that's relatively good compared to other USA-based carriers). If it is switched for the current cheap & trashy US product then it will be a failure. Sorry US employees, US is not the classy carrier it was when Wolf & Gangwal were in charge.
 
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This is the problem in this industry. Always a battle and continuous attacks on the competition. The Government should place a small regulation back into this industry. A regulation that states "Selling a seat on an aircraft for less than what it cost to produce, is a felony". In other words revenue inbound for a seat cannot be less than the CASM.
 
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This is the problem in this industry. Always a battle and continuous attacks on the competition. The Government should place a small regulation back into this industry. A regulation that states "Selling a seat on an aircraft for less than what it cost to produce, is a felony". In other words revenue inbound for a seat cannot be less than the CASM.

If the Government can't manage not to spend more than they bring in, why would it be fair to impose that on private industry?...
 
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This is the problem in this industry. Always a battle and continuous attacks on the competition. The Government should place a small regulation back into this industry. A regulation that states "Selling a seat on an aircraft for less than what it cost to produce, is a felony". In other words revenue inbound for a seat cannot be less than the CASM.

Unfortunately, there are too many fans of brand-new airlines who enjoy challenging the long-established airlines, and sadly, you (the collective you, not you Dave) are the collateral damage. Some culprits include fine upstanding men like George Soros, who bankrolled low-wage B6 along with Neeleman. When that non-union airline got off the ground, everyone was on the year one payscale and was paid very little. And that made it very easy to charge less than everyone else. And then Richard Branson wanted in on the action and did the same thing with Virgin America (although with no profits thus far).
 
I still dont understand how clt could see reduced flights except on the overlaps with aa but i can see a reduced flight reductions at phx given aa hub at both lax and dfw clt i think compliments as does phl for the east for the new aa
 
Just how much of a challenge the newAA will be for DL (and UA) depends on whether the newAA product will remain the relatively good product offered by the current AA (that's relatively good compared to other USA-based carriers). If it is switched for the current cheap & trashy US product then it will be a failure. Sorry US employees, US is not the classy carrier it was when Wolf & Gangwal were in charge.

No need to apologize, most of us were here to see the change. What you have to remember though is that the airline Wolf and Gangwal produced was a product to be merged and starting in 2001 didn't work. Before the AWA merger that product started it's decline with the aircraft really becoming raggedy. When Robert Isom arrived, the cleaned up the fleet quite a bit.

People make the assumption that Parker and Co will do to the new AA what they did with US. I don't think they will. I think they realize that AA is a different company and they will have to operate on a different level. They consistently said the US had to operate they way it did because of it's stance in the industry. This will be different and hopefully they will bring up the old US standard of service.
 
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I still dont understand how clt could see reduced flights except on the overlaps with aa but i can see a reduced flight reductions at phx given aa hub at both lax and dfw clt i think compliments as does phl for the east for the new aa

I don't know how CLT will fit into the AA-US network, but how many additional cities can one connect to via CLT that I cannot from PHL when flying north-south along the east coast? On the other hand, since PHL is kind of constrained, maybe AA-US will reduce connecting flights at PHL to focus more on O&D and use CLT for connecting flights?
 
This is the problem in this industry. Always a battle and continuous attacks on the competition. The Government should place a small regulation back into this industry. A regulation that states "Selling a seat on an aircraft for less than what it cost to produce, is a felony". In other words revenue inbound for a seat cannot be less than the CASM.

It is not only criminal. It is insane.
 
No, my friends, there will be no long diatribes today nor likely in the future.

This is the day for you to bask in the promise of your own invincibility.

This is the day for you to celebrate the promise of a new beginning.

This is the day for you to dream the dreams that might happen, not what might have been.

This is the day that many of you have waited for; far be it from me to rain on your parade, any more than I would show up at your wedding reception with a list of all the offenses you committed during your fraternity days.

Since this transaction was the most anticipated and pursued transaction in the history of US aviation (and I’m not talking about the forum), these forums are stuffed full of facts, data, and logical reasons why this merger may well not deliver what has been sold. There is no need to repeat them.

This is the day on which you should ponder the prospect of a new tomorrow; whether your dreams and expectations ever come close to the promises you have been sold is something that history itself will measure and judge.

So, for now, my congratulations go to those who have waited for and sought after this day.

Tomorrow will deal with itself. Tomorrow.
 
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This is the day for you to bask in the promise of your own invincibility.


.......far be it from me to rain on your parade, any more than I would show up at your wedding reception with a list of all the offenses you committed during your fraternity days.

.......these forums are stuffed full of facts, data, and logical reasons why this merger may well not deliver what has been sold.

He just can't help himself.
 
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No need to apologize, most of us were here to see the change. What you have to remember though is that the airline Wolf and Gangwal produced was a product to be merged and starting in 2001 didn't work. Before the AWA merger that product started it's decline with the aircraft really becoming raggedy. When Robert Isom arrived, the cleaned up the fleet quite a bit.

People make the assumption that Parker and Co will do to the new AA what they did with US. I don't think they will. I think they realize that AA is a different company and they will have to operate on a different level. They consistently said the US had to operate they way it did because of it's stance in the industry. This will be different and hopefully they will bring up the old US standard of service.

I hope Parker will not turn AA into a larger US clone. People tend to forget one of the main reasons for US turning a profit is the low wages ans second level customer service. I do not knock the employees as they had to work with the cards they were dealt. The AA brand still means something and is one of the most recognized carriers but the new livery with that gaudy tail will take some getting used to. Still, here is a chance to win back lost customers and keep as many jobs as possible.