No airline is an Island, or safe from the industry shake out. Who will be left standing? no one knows for sure. Just dont count AA out. There always 3 backup plans and we always seem to come out of the down turns 3 steps ahead of the rest.
Who will AA dance with.
- Thread starter FA Mikey
- Start date
Now that NWA, CAL, and DL have tied the knot and US, and UA have done the same. What will AA do to counteract this?
Seems in these tough times no airline is an island....
Seems in these tough times no airline is an island....
KCFlyer
Veteran
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
luv2fly
Veteran
[blockquote]
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On 1/18/2003 2:14:45 PM KCFlyer wrote:
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
----------------
[/blockquote]
While I admit the conditions still need to be digested, on what basis and information do you conclude the alliance will yeild losses for the CO/DL/NW alliance?
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On 1/18/2003 2:14:45 PM KCFlyer wrote:
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
----------------
[/blockquote]
While I admit the conditions still need to be digested, on what basis and information do you conclude the alliance will yeild losses for the CO/DL/NW alliance?
KCFlyer
Veteran
[blockquote]
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On 1/18/2003 3:09:58 PM luv2fly wrote:
[blockquote]
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On 1/18/2003 2:14:45 PM KCFlyer wrote:
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
----------------
[/blockquote]
While I admit the conditions still need to be digested, on what basis and information do you conclude the alliance will yeild losses for the CO/DL/NW alliance?
----------------
[/blockquote]
Perhaps I will explain that as soon as someone explains how this agreement will MAKE money for any of the airlines involved.
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On 1/18/2003 3:09:58 PM luv2fly wrote:
[blockquote]
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On 1/18/2003 2:14:45 PM KCFlyer wrote:
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
----------------
[/blockquote]
While I admit the conditions still need to be digested, on what basis and information do you conclude the alliance will yeild losses for the CO/DL/NW alliance?
----------------
[/blockquote]
Perhaps I will explain that as soon as someone explains how this agreement will MAKE money for any of the airlines involved.
Excellent post KC Flyer
Maybe as soon as a non licensed mechanic does not make $60,000 a year to cut cargo pit floor boards ( and that is all he does) for the airline!
Maybe as soon as a non licensed mechanic does not make $60,000 a year to cut cargo pit floor boards ( and that is all he does) for the airline!
luv2fly
Veteran
[blockquote]
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On 1/18/2003 3:45:58 PM KCFlyer wrote:
[blockquote]
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Perhaps I will explain that as soon as someone explains how this agreement will MAKE money for any of the airlines involved.
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[/blockquote]
That's what I thought you would say.
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On 1/18/2003 3:45:58 PM KCFlyer wrote:
[blockquote]
----------------
Perhaps I will explain that as soon as someone explains how this agreement will MAKE money for any of the airlines involved.
----------------
[/blockquote]
That's what I thought you would say.
KCFLYER,
OK...alliances 101. Is it going to make CO, NW, or DL profitable? NO! Will it shift revenue FROM other airlines? Yes! Here's how:
In a CRS display a person from Savannah can earn Skymiles flying on an itinerary that connects to a Continental flight to a city in Texas that Delta doesn't serve. Is that important? Hell yes! Why? Well, there's a better chance that AA would get the revenue otherwise. How's better off with the revenue in DL's eyes? DL or AA? Also, from a corporate contracts perspective DL can go out and sell a contract that allows them to leverage a network that includes one of the strongest Pacific route structures (NW's), the #2 route structure to Latin America (CO), and the #1 Atlantic Network (DL). Add to that the inclusion of KLM in the Atlantic group of SkyTeam partners (already includes Alitalia and AirFrance)...and you have some serious leveraging power. AA right now doesn't have as strong a Pacific to leverage, as strong an Atlantic to leverage, as strong an East coast presence to leverage. They're disadvantaged.
OK...alliances 101. Is it going to make CO, NW, or DL profitable? NO! Will it shift revenue FROM other airlines? Yes! Here's how:
In a CRS display a person from Savannah can earn Skymiles flying on an itinerary that connects to a Continental flight to a city in Texas that Delta doesn't serve. Is that important? Hell yes! Why? Well, there's a better chance that AA would get the revenue otherwise. How's better off with the revenue in DL's eyes? DL or AA? Also, from a corporate contracts perspective DL can go out and sell a contract that allows them to leverage a network that includes one of the strongest Pacific route structures (NW's), the #2 route structure to Latin America (CO), and the #1 Atlantic Network (DL). Add to that the inclusion of KLM in the Atlantic group of SkyTeam partners (already includes Alitalia and AirFrance)...and you have some serious leveraging power. AA right now doesn't have as strong a Pacific to leverage, as strong an Atlantic to leverage, as strong an East coast presence to leverage. They're disadvantaged.
A couple of things come to mind, that being, that in a sense AA is "joined at the hip" with TWA(and lets not forget ALL those route authority's that came with them)
AND,
I like to think that this will get all the party's involved with AA/BA, "off their duffs" !!
NH/BB's
AND,
I like to think that this will get all the party's involved with AA/BA, "off their duffs" !!
NH/BB's
[blockquote]
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On 1/18/2003 2:14:45 PM KCFlyer wrote:
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
----------------
[/blockquote]
Correct you are. Code shares mitigate exactly none of the reasons the cartel airlines are hemorhaging red ink. If anything, they tend to contribute to the bleeding.
First, codeshares do not create new passengers; they may to some degree cause a customer to choose airline X instead of airline Y in certain situations, but it also works the other way in other instances to the extent of no net gain for either.
Secondly, codeshares do absolutely nothing to address the issue that more than any other is sinking the hub-and-spoke airlines -- anemic yields resulting from the ongoing revolt of business travelers fed up with being targeted for unconscionable fleecing. Codeshares do absolutely nothing to make customers willing to pay more.
And if the carriers involved suppose they can jack up fares by colluding to manipulate capacity in the markets they share (as appears to be at or near the top of their codeshare agenda)... history has shown that such scheming ultimately backfires on the perpetrators (did someone say low-cost competition?).
Codesharing adds to costs in ways that are difficult to measure. Untold human resources are spent on keeping up with what the partners are doing and even more so in either passing the buck (the preferred approach) when problems occur in codeshare operations or being in the place where (when the buck can no longer be passed) one becomes unavoidably entangled in customer service/operational/marketing issues caused by one of the partners. As if each of the airlines doesn't have more than enough details to tend to in running their own show smoothly.
My advice to AA: if you intend to imitate Southwest in no other way, at least copy their sound judgment in steering clear of domestic code-sharing. It's worked for them and it will work just as well for AA -- one thing AA doesn't need is the baggage created by codeshares added to the unbearable weight of the baggage by which you are already encumbered.
----------------
On 1/18/2003 2:14:45 PM KCFlyer wrote:
I still believe that code shares are little more than smoke and mirrors that will allow 3 airlines to lose money together. AA doesn't need a codeshare, especially a domestic code share.
----------------
[/blockquote]
Correct you are. Code shares mitigate exactly none of the reasons the cartel airlines are hemorhaging red ink. If anything, they tend to contribute to the bleeding.
First, codeshares do not create new passengers; they may to some degree cause a customer to choose airline X instead of airline Y in certain situations, but it also works the other way in other instances to the extent of no net gain for either.
Secondly, codeshares do absolutely nothing to address the issue that more than any other is sinking the hub-and-spoke airlines -- anemic yields resulting from the ongoing revolt of business travelers fed up with being targeted for unconscionable fleecing. Codeshares do absolutely nothing to make customers willing to pay more.
And if the carriers involved suppose they can jack up fares by colluding to manipulate capacity in the markets they share (as appears to be at or near the top of their codeshare agenda)... history has shown that such scheming ultimately backfires on the perpetrators (did someone say low-cost competition?).
Codesharing adds to costs in ways that are difficult to measure. Untold human resources are spent on keeping up with what the partners are doing and even more so in either passing the buck (the preferred approach) when problems occur in codeshare operations or being in the place where (when the buck can no longer be passed) one becomes unavoidably entangled in customer service/operational/marketing issues caused by one of the partners. As if each of the airlines doesn't have more than enough details to tend to in running their own show smoothly.
My advice to AA: if you intend to imitate Southwest in no other way, at least copy their sound judgment in steering clear of domestic code-sharing. It's worked for them and it will work just as well for AA -- one thing AA doesn't need is the baggage created by codeshares added to the unbearable weight of the baggage by which you are already encumbered.
LGA Fleet Service
Veteran
[A href="http://www.washingtonpost.com/wp-dyn/articles/A8683-2003Jan17.html"]http://www.washingtonpost.com/wp-dyn/articles/A8683-2003Jan17.html[/A][BR][BR][FONT size=1]A dozen attempts later, I was finally able to get the system to accept my post.This new software is more bug ridden than CFS 3.
![FONT]](/proxy.php?image=http%3A%2F%2F%5B%2FFONT%5D&hash=0d6351e37a4ccfa95612ec13bd95b56f)
[blockquote]
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On 1/18/2003 7:44:22 PM flyhigh wrote:
KCFLYER,
OK...alliances 101. Is it going to make CO, NW, or DL profitable? NO! Will it shift revenue FROM other airlines? Yes! Here's how:
In a CRS display a person from Savannah can earn Skymiles flying on an itinerary that connects to a Continental flight to a city in Texas that Delta doesn't serve. Is that important? Hell yes! Why? Well, there's a better chance that AA would get the revenue otherwise. How's better off with the revenue in DL's eyes? DL or AA? Also, from a corporate contracts perspective DL can go out and sell a contract that allows them to leverage a network that includes one of the strongest Pacific route structures (NW's), the #2 route structure to Latin America (CO), and the #1 Atlantic Network (DL). Add to that the inclusion of KLM in the Atlantic group of SkyTeam partners (already includes Alitalia and AirFrance)...and you have some serious leveraging power. AA right now doesn't have as strong a Pacific to leverage, as strong an Atlantic to leverage, as strong an East coast presence to leverage. They're disadvantaged.
----------------
[/blockquote]
Isn't the NW/DL/CO alliance a domestic codeshare only? They cannot book on eachother's international routes can they?
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On 1/18/2003 7:44:22 PM flyhigh wrote:
KCFLYER,
OK...alliances 101. Is it going to make CO, NW, or DL profitable? NO! Will it shift revenue FROM other airlines? Yes! Here's how:
In a CRS display a person from Savannah can earn Skymiles flying on an itinerary that connects to a Continental flight to a city in Texas that Delta doesn't serve. Is that important? Hell yes! Why? Well, there's a better chance that AA would get the revenue otherwise. How's better off with the revenue in DL's eyes? DL or AA? Also, from a corporate contracts perspective DL can go out and sell a contract that allows them to leverage a network that includes one of the strongest Pacific route structures (NW's), the #2 route structure to Latin America (CO), and the #1 Atlantic Network (DL). Add to that the inclusion of KLM in the Atlantic group of SkyTeam partners (already includes Alitalia and AirFrance)...and you have some serious leveraging power. AA right now doesn't have as strong a Pacific to leverage, as strong an Atlantic to leverage, as strong an East coast presence to leverage. They're disadvantaged.
----------------
[/blockquote]
Isn't the NW/DL/CO alliance a domestic codeshare only? They cannot book on eachother's international routes can they?
G4G5,
AA already has a codeshare with AS. AS has it's code on a lot of AA's system. AA can't place its code on AS flights due to APA's contract. The frequent flyer deal is also pretty lucrative for both sides.
AA already has a codeshare with AS. AS has it's code on a lot of AA's system. AA can't place its code on AS flights due to APA's contract. The frequent flyer deal is also pretty lucrative for both sides.
KCFlyer
Veteran
[blockquote]
----------------
On 1/18/2003 7:44:22 PM flyhigh wrote:
KCFLYER,
OK...alliances 101. Is it going to make CO, NW, or DL profitable? NO! Will it shift revenue FROM other airlines? Yes! Here's how:
In a CRS display a person from Savannah can earn Skymiles flying on an itinerary that connects to a Continental flight to a city in Texas that Delta doesn't serve. Is that important? Hell yes! Why? Well, there's a better chance that AA would get the revenue otherwise. How's better off with the revenue in DL's eyes? DL or AA?
----------------
[/blockquote]
I believe the actual answer to that is "neither" - CO is the one who's getting the revenue. If the fare was a 21 day advance purchase fare, CO is also the one who would enjoy the "loss", although ultimately Delta will lose too because the passenger will use the "skymiles" accrued to fly Delta to PAris on a free ticket (which doesn't make them much revenue, but it does make their load factors look better - more butts in seats)
As far as leveraging overseas routes - that is not much of a deciding factor when your company has branch offices in Durham, Memphis, Chicago, and LA. In other words, when the bulk of your business passengers aren't going to Asia, Europe or South America. "Who has the lowest fare to Seattle" is going to be the driving force. And if my options are calling Delta to be put on a flight with a stopover in MSP, or calling AA with a stopover in ORD, the "code share" won't really be a factor in the travellers decision. But let's look at this one...A person in Jacksonville needs to go to Phoenix. He picks up the phone and calls Delta and is told Delta has a flight at 8:00 a.m. (too early) and 5:00 p.m. (too late). So, using the "code share" they find that CO has a flight at noon (perfect for my schedule). So the Delta agent books the flight under the Delta 98xx code share flight number, and the passenger (and ticket revenue) go to Continental. What did Delta gain from this except the cost of their employee to book a flight on their competitor? And the customer got to accrue skymiles for a free trip on Delta later in the year. That sure seems like a recipe for success to me.
----------------
On 1/18/2003 7:44:22 PM flyhigh wrote:
KCFLYER,
OK...alliances 101. Is it going to make CO, NW, or DL profitable? NO! Will it shift revenue FROM other airlines? Yes! Here's how:
In a CRS display a person from Savannah can earn Skymiles flying on an itinerary that connects to a Continental flight to a city in Texas that Delta doesn't serve. Is that important? Hell yes! Why? Well, there's a better chance that AA would get the revenue otherwise. How's better off with the revenue in DL's eyes? DL or AA?
----------------
[/blockquote]
I believe the actual answer to that is "neither" - CO is the one who's getting the revenue. If the fare was a 21 day advance purchase fare, CO is also the one who would enjoy the "loss", although ultimately Delta will lose too because the passenger will use the "skymiles" accrued to fly Delta to PAris on a free ticket (which doesn't make them much revenue, but it does make their load factors look better - more butts in seats)
As far as leveraging overseas routes - that is not much of a deciding factor when your company has branch offices in Durham, Memphis, Chicago, and LA. In other words, when the bulk of your business passengers aren't going to Asia, Europe or South America. "Who has the lowest fare to Seattle" is going to be the driving force. And if my options are calling Delta to be put on a flight with a stopover in MSP, or calling AA with a stopover in ORD, the "code share" won't really be a factor in the travellers decision. But let's look at this one...A person in Jacksonville needs to go to Phoenix. He picks up the phone and calls Delta and is told Delta has a flight at 8:00 a.m. (too early) and 5:00 p.m. (too late). So, using the "code share" they find that CO has a flight at noon (perfect for my schedule). So the Delta agent books the flight under the Delta 98xx code share flight number, and the passenger (and ticket revenue) go to Continental. What did Delta gain from this except the cost of their employee to book a flight on their competitor? And the customer got to accrue skymiles for a free trip on Delta later in the year. That sure seems like a recipe for success to me.
