Word is AA/US have settled with the DOJ
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WorldTraveler
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which validates that you have no real grasp of the issues at hand or any ability to respond to them.
eolesen
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There's the classic WT splitting of hairs....
Now the definition of "local market" only includes domestic enplanements......
It's like when he tried to define "largest airline in New York City" and excluded EWR from his math, as if the NYC market somehow stops at the city limits....
In that count, all DL's international enplanements counted. Here, they don't?....
Fortunately, airlines are a little more pragmatic in their analyses, and less focused on spin control. Otherwise WN wouldn't have bought AirTran or be planning on expanding internationally.
Now the definition of "local market" only includes domestic enplanements......
It's like when he tried to define "largest airline in New York City" and excluded EWR from his math, as if the NYC market somehow stops at the city limits....
In that count, all DL's international enplanements counted. Here, they don't?....
Fortunately, airlines are a little more pragmatic in their analyses, and less focused on spin control. Otherwise WN wouldn't have bought AirTran or be planning on expanding internationally.
WorldTraveler
Corn Field
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Pragmatism has nothing to do with the analysis.
Facts and data do.
I included the numbers for AA's entire int'l operation and they are not much different... 27 vs 26 local DFW passengers per flight.
The reality is that the massive operation that AA runs carries only about 50% more total local passengers than seats WN operates from DAL now.
It is absolutely appropriate to look at the size of AA's domestic operation including local passenger share since that is the restriction placed on WN by the Wright Amendment - if it stands.
What you can't counter is that this invincibility with which you have viewed AA's DFW operation doesn't exist in reality, esp. when AA has to face not just WN but also DL in its top markets from N. Texas.
And since you asked, DL is the largest domestic airline at LGA, JFK, and EWR while UA is the largest int'l airline.
IOW, AA's entire local DFW boardings could be accommodated on 165 737-800s per day at 80% load factor.
AA is currently the 4th largest domestic airline from the 3 NYC airports that you want to include behind DL, UA, and B6. AA is the 3rd largest int'l airline.
The merger will move AA above B6 in the domestic airline rankings but not change the overall or int'l rankings.
IOW, AA's entire DFW local boardings can be accommodated on 165 737-800 flights/day at 80% load factor.
Facts and data do.
I included the numbers for AA's entire int'l operation and they are not much different... 27 vs 26 local DFW passengers per flight.
The reality is that the massive operation that AA runs carries only about 50% more total local passengers than seats WN operates from DAL now.
It is absolutely appropriate to look at the size of AA's domestic operation including local passenger share since that is the restriction placed on WN by the Wright Amendment - if it stands.
What you can't counter is that this invincibility with which you have viewed AA's DFW operation doesn't exist in reality, esp. when AA has to face not just WN but also DL in its top markets from N. Texas.
And since you asked, DL is the largest domestic airline at LGA, JFK, and EWR while UA is the largest int'l airline.
IOW, AA's entire local DFW boardings could be accommodated on 165 737-800s per day at 80% load factor.
AA is currently the 4th largest domestic airline from the 3 NYC airports that you want to include behind DL, UA, and B6. AA is the 3rd largest int'l airline.
The merger will move AA above B6 in the domestic airline rankings but not change the overall or int'l rankings.
IOW, AA's entire DFW local boardings can be accommodated on 165 737-800 flights/day at 80% load factor.
WT,
I don't think Delta is going to be able to stop "reregulation". Reregulation has been ongoing since 1978. As I wrote on another forum it has to do with public insistence that airline fares must remain at or near 1978 levels while providing limitless competition to the point where it must be written in the constitution somewhere and I just missed it. As soon as an airline makes a profit there is a large hue and cry with much wailing and moaning in the news. The flying public does not acknowledge that fuel is way more expensive than it was in 1978 in fact pretty much everything in the airline business is more expensive except the fares and employee wages. I just don't see this changing because the public has come to accept cheap travel as a right.
Cheers,
Bob
WorldTraveler
Corn Field
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Bob,
You are right that the demand is for cheap seats but the logic that the DOJ has used that so-called low fare or low cost competitors provide a better bargain for consumers is flawed and DL is prepared to show that.
WN is not disadvantaged in size and is not a significantly lower cost provider than DL and at times has had higher costs. DOT data clearly shows that WN receives HIGHER fares that competitors in many markets including ones from Love Field where it dominates the N. Texas market.
DL has succeeded because it has been able to successfully compete against carriers of all kinds and DL has succeeded in open markets. DL competes in ATL against FL/WN and yet there are ample gates available for new competitors. DL's operations in NYC have multiple competitors including B6, the lowest CASM large jet nationwide airline.
DL's hubs at MSP and DTW both have ULCC presence and LCC and ULCC operators have 20% or more share of the market - about what DL faces in ATL.
What DL will vigorously argue is that competition lowers fares and lower fares do not come from protected markets. DOT's own data overwhelmingly shows that multiple competitors of any type are what will ensure that consumers win.
N. Texas aviation has been defined by a carefully scripted duopoly between AA and WN since WN's beginnings. new AA and WN convinced the DOJ to replicate the same duopoly in carving up the divested assets as AA and WN have had in N. Texas for decades.
Neither AA nor WN want to compete against DL. AA (and its merger partner US) have lost enormous amounts of revenue and market share to DL. WN can stand up to DL but they certainly have been very wise in selecting the markets and market size they have pursued against DL.
What AA and WN have done is illegal and so are the statements by AA/US execs and the DOJ that they would limit participation of carriers in the asset bidding process to a subgroup of carriers, excluding DL and UA.
UA so far has not seemed to care.
DL has played along in N. Texas because DL did what it needed to do. DL still has a strong customer base and DFW is a very profitable city for DL.
As I have said here, DL recognizes that one of its strategic needs is to build its presence in the S. Central/SW US where DL is the only one of the big 4 that does not have a hub.
DL simply wants to and expects to be able to fly from DAL just as it does from other airports that are WN strongholds. The law clearly is behind DL's idea of competition and not AA or US' or the DOJ's views.
It is not an exaggeration to say that the AA/US merger agreement, the Wright Amendment and its revisions, and the future of Love Field and the divested slots are at risk of all changing if DL does not obtain the right to maintain and expand its operation at Love Field and to bid on slots at DCA.
This merger settlement and the notion that Parker thought he could script it all will turn out to be just one more strategic failure at the hands of DL who has consistently outsmarted US at one turn after another.
You are right that the demand is for cheap seats but the logic that the DOJ has used that so-called low fare or low cost competitors provide a better bargain for consumers is flawed and DL is prepared to show that.
WN is not disadvantaged in size and is not a significantly lower cost provider than DL and at times has had higher costs. DOT data clearly shows that WN receives HIGHER fares that competitors in many markets including ones from Love Field where it dominates the N. Texas market.
DL has succeeded because it has been able to successfully compete against carriers of all kinds and DL has succeeded in open markets. DL competes in ATL against FL/WN and yet there are ample gates available for new competitors. DL's operations in NYC have multiple competitors including B6, the lowest CASM large jet nationwide airline.
DL's hubs at MSP and DTW both have ULCC presence and LCC and ULCC operators have 20% or more share of the market - about what DL faces in ATL.
What DL will vigorously argue is that competition lowers fares and lower fares do not come from protected markets. DOT's own data overwhelmingly shows that multiple competitors of any type are what will ensure that consumers win.
N. Texas aviation has been defined by a carefully scripted duopoly between AA and WN since WN's beginnings. new AA and WN convinced the DOJ to replicate the same duopoly in carving up the divested assets as AA and WN have had in N. Texas for decades.
Neither AA nor WN want to compete against DL. AA (and its merger partner US) have lost enormous amounts of revenue and market share to DL. WN can stand up to DL but they certainly have been very wise in selecting the markets and market size they have pursued against DL.
What AA and WN have done is illegal and so are the statements by AA/US execs and the DOJ that they would limit participation of carriers in the asset bidding process to a subgroup of carriers, excluding DL and UA.
UA so far has not seemed to care.
DL has played along in N. Texas because DL did what it needed to do. DL still has a strong customer base and DFW is a very profitable city for DL.
As I have said here, DL recognizes that one of its strategic needs is to build its presence in the S. Central/SW US where DL is the only one of the big 4 that does not have a hub.
DL simply wants to and expects to be able to fly from DAL just as it does from other airports that are WN strongholds. The law clearly is behind DL's idea of competition and not AA or US' or the DOJ's views.
It is not an exaggeration to say that the AA/US merger agreement, the Wright Amendment and its revisions, and the future of Love Field and the divested slots are at risk of all changing if DL does not obtain the right to maintain and expand its operation at Love Field and to bid on slots at DCA.
This merger settlement and the notion that Parker thought he could script it all will turn out to be just one more strategic failure at the hands of DL who has consistently outsmarted US at one turn after another.
robbedagain
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If ua doesnt care.. how bad are they hurting since dl began the hrly shuttle flights from ord to nyc and does dl also do shuttle flights from dca to ord?
Kev3188
Veteran
Wow.WorldTraveler said:
I suspect (and would hope) it has a lot to do with how RM & planning depts. at every carrier make their decisions...
WorldTraveler
Corn Field
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robbed,
UA may or may not be interested in acquiring more space at DAL but it doesn't appear that they risk losing their lease. The problem for DL arises because DL subleases its space from AA who has to divest it as part of the settlement agreement. DL intends to ask the legal basis for why the DOJ came to the decision that no legacy carriers which mean DL and UA are eligible or likely to gain any assets from the slot divestiture. If it is a true bid, then DL has as much of an opportunity to acquire the assets as any other carrier.
The obvious reality is that AA/US and WN want the prize to be carved up between them... that is the way N. Texas aviation has been done for years.
DL will not allow itself to be pushed out of a key market because AA/US and WN managed to convince the DOJ that what has "worked" in N. Texas for decades should be applied on a national scale.
Yes, Kev, the facts that I cited SHOULD be the basis for what any network/revenue mgmt./strategic planning dept. should use.
The decision to serve markets or not should be based on facts and not pragmatism.
AA/US execs as well as the DOJ took great pride in announcing to the press that DL and UA had no chance of winning any assets as part of the divestment process.
That is a statement that they need to back up with legal evidence showing where they have the right to choose which carriers can use national aviation assets based on an economic basis. They also need to demonstrate where they have the legal right to determine how much of the market should be controlled by supposedly low fare or low cost carriers and how much should be served by network/legacy carriers like DL.
Given that there is no legal basis for what the DOJ and AA/US execs said about selectively excluding DL or any other carrier, there will be a redo of the settlement agreement with the very likely result that DL will continue to operate at DAL and they will also be free to bid on DCA slots.
DL's strategies in this case are based on facts and law and not pragmatism.
Perhaps you and E can explain how any carrier would come to a different conclusion that is based on pragmatism while preserving the rule of law.
UA may or may not be interested in acquiring more space at DAL but it doesn't appear that they risk losing their lease. The problem for DL arises because DL subleases its space from AA who has to divest it as part of the settlement agreement. DL intends to ask the legal basis for why the DOJ came to the decision that no legacy carriers which mean DL and UA are eligible or likely to gain any assets from the slot divestiture. If it is a true bid, then DL has as much of an opportunity to acquire the assets as any other carrier.
The obvious reality is that AA/US and WN want the prize to be carved up between them... that is the way N. Texas aviation has been done for years.
DL will not allow itself to be pushed out of a key market because AA/US and WN managed to convince the DOJ that what has "worked" in N. Texas for decades should be applied on a national scale.
Yes, Kev, the facts that I cited SHOULD be the basis for what any network/revenue mgmt./strategic planning dept. should use.
The decision to serve markets or not should be based on facts and not pragmatism.
AA/US execs as well as the DOJ took great pride in announcing to the press that DL and UA had no chance of winning any assets as part of the divestment process.
That is a statement that they need to back up with legal evidence showing where they have the right to choose which carriers can use national aviation assets based on an economic basis. They also need to demonstrate where they have the legal right to determine how much of the market should be controlled by supposedly low fare or low cost carriers and how much should be served by network/legacy carriers like DL.
Given that there is no legal basis for what the DOJ and AA/US execs said about selectively excluding DL or any other carrier, there will be a redo of the settlement agreement with the very likely result that DL will continue to operate at DAL and they will also be free to bid on DCA slots.
DL's strategies in this case are based on facts and law and not pragmatism.
Perhaps you and E can explain how any carrier would come to a different conclusion that is based on pragmatism while preserving the rule of law.
Kev3188
Veteran
...The interpretation of facts and data should be a pragmatic one, as should any decision to execute a plan going forward.WorldTraveler said:
Which one might say is rash, or "un-pragmatic" on the part of AA/US execs.
eolesen
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WT's math is quite creative....
Using real schedule data (not data gleaned from the internet), here's the breakdown of average seats per departure:
AA's average seats per departure: 149 (based on 72509 seats per day and 491 departures).
Eagle's average seats per departure: 46 (based on 12209 seats per day and 265 departures, includes Republic and Skywest plus Eagle)
The only way WT's 112 seats per departure works is to include Eagle, which is indeed creative, since those aren't flying to the same places WN would, but hey, it's his flawed analysis, not mine.
Assuming the 42% local boarding % already established, the math still works out to what I was saying before: 35,000 local boarding customers, and AA's enplanements are 4.85x that of WN's.
As UpNAway just said, comparing WN and DL's operations at ATL aren't all that dissimilar from what AA's are to WN in Dallas.
If WN isn't a threat in ATL, then I'm still struggling to understand why it would be come the fall of the Wright Amendment.
Since WT is so big on making predictions that are easy to predict, here's one:
1) The guys who want their upgrades and pre-reserved seats on longer flights, with the safety-net of hourly service in business markets, are going to continue to fly on AA regardless of whether or not WN is serving the route.
2) The guys who want to fly WN out of Love Field, or who want to avoid bag fees and change fees because they don't have elite status are going to continue to fly on WN.
3) The same level of pricing detente' which already exists in just about every other major business market, including LAX, LGA and ORD, is going to exist in Dallas, and nothing material is going to change....
Using real schedule data (not data gleaned from the internet), here's the breakdown of average seats per departure:
AA's average seats per departure: 149 (based on 72509 seats per day and 491 departures).
Eagle's average seats per departure: 46 (based on 12209 seats per day and 265 departures, includes Republic and Skywest plus Eagle)
The only way WT's 112 seats per departure works is to include Eagle, which is indeed creative, since those aren't flying to the same places WN would, but hey, it's his flawed analysis, not mine.
Assuming the 42% local boarding % already established, the math still works out to what I was saying before: 35,000 local boarding customers, and AA's enplanements are 4.85x that of WN's.
As UpNAway just said, comparing WN and DL's operations at ATL aren't all that dissimilar from what AA's are to WN in Dallas.
If WN isn't a threat in ATL, then I'm still struggling to understand why it would be come the fall of the Wright Amendment.
Since WT is so big on making predictions that are easy to predict, here's one:
1) The guys who want their upgrades and pre-reserved seats on longer flights, with the safety-net of hourly service in business markets, are going to continue to fly on AA regardless of whether or not WN is serving the route.
2) The guys who want to fly WN out of Love Field, or who want to avoid bag fees and change fees because they don't have elite status are going to continue to fly on WN.
3) The same level of pricing detente' which already exists in just about every other major business market, including LAX, LGA and ORD, is going to exist in Dallas, and nothing material is going to change....
WorldTraveler
Corn Field
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Data analysis is NOT pragmatic. It is concrete.
You can come up with a pragmatic solution to a problem using data which does not provide the ideal situation for one to work but data analysis is a mathematical, cut and dry exercise.
IN this case, it says that WN could easily fit half of the local DFW market controlled by AA on the aircraft which WN operates using even the 16 gates WN has now at DAL.
The pragmatic part of the whole deal is what AA does given that reality and what WN does given that DL will be competing against WN in a number of the routes that WN might have thought - even for a minute - that it would exclusively serve from DAL.
we can agree on your second statement, esp. since DL will make sure that DL's interests as defined by being able to bid on the assets is preserved.
You can come up with a pragmatic solution to a problem using data which does not provide the ideal situation for one to work but data analysis is a mathematical, cut and dry exercise.
IN this case, it says that WN could easily fit half of the local DFW market controlled by AA on the aircraft which WN operates using even the 16 gates WN has now at DAL.
The pragmatic part of the whole deal is what AA does given that reality and what WN does given that DL will be competing against WN in a number of the routes that WN might have thought - even for a minute - that it would exclusively serve from DAL.
we can agree on your second statement, esp. since DL will make sure that DL's interests as defined by being able to bid on the assets is preserved.
WorldTraveler
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E,
give it up.
You are using homemade formulae to try to replicate data that really does exist. It is quite public information.
AA does not board 30K passengers per day on its own aircraft.
It boards just over 20K on the aircraft it and Eagle use.
AA's average aircraft size for its AA/AE operation is indeed 109.XX passengers/flight.
BTW, what type of aircraft does AA use to fly to HOU? Is HOU a market which is also served by WN from DAL? AMA? BHM?
You can keep holding on to the hope that AA will be able to compete against WN but then you need to explain why AA is not the dominant carrier in the local market (not including all of those connections that AA pushes thru DFW) in one city after another. Those same reasons should exist for every other market but that hasn't changed the fact that AA isn't the dominant carrier in any one of the markets that WN can serve from DAL.
It also doesn't change that DL does intend to serve DAL, DAL does use two class aircraft, and DL has a history even with fewer frequencies of attracting business travelers in highly competitive markets.
You do realize that DL has about 20% of the LGA-DFW market now, 20% of the LGA-ORD market, and over 35% of the LGA-MIA market. and in each market they have a whole lot less flights and frequencies than AA but get fares that are quite comparable to what AA gets.
Would you like to tell us what makes your back of the envelope analysis of DAL/DFW different from what has happened in real AA-DL and AA-WN competitive markets?
The sooner you can grasp that WN really does have the ability to take half of the DFW domestic local market from AA, the better you can start working on that pragmatic business plan.
No,
UP, DFW and ATL are actually similarly sized business markets.
Network carrier hubs carry relatively small amounts of local passengers per aircraft and legacy airlines create their mass which helps them control the local market by filling planes with connecting passengers.
It doesn't change that WN picks the largest markets from its hubs/focus cities and uses big aircraft which have the ability to easily accommodate large portions of the local demand.
WN's percentage of local traffic in most of their major cities is higher than it is for WN at DAL and what it is for network carriers in their hubs.
WN could also fit all of DL's local business demand on WN aircraft using the facilities that WN has at ATL if they wanted to and could win the market.
DL recognizes full well that WN is a threat and DL competes aggressively against them.
WN has about 15% of the market in ATL, including what FL carries.
WN could eat any carrier's lunch if they wanted to including AA's in DFW.
The error is for E to try to argue that AA is safe and that WN will have no affect on AA's hub at DFW even given how large it is.
give it up.
You are using homemade formulae to try to replicate data that really does exist. It is quite public information.
AA does not board 30K passengers per day on its own aircraft.
It boards just over 20K on the aircraft it and Eagle use.
AA's average aircraft size for its AA/AE operation is indeed 109.XX passengers/flight.
BTW, what type of aircraft does AA use to fly to HOU? Is HOU a market which is also served by WN from DAL? AMA? BHM?
You can keep holding on to the hope that AA will be able to compete against WN but then you need to explain why AA is not the dominant carrier in the local market (not including all of those connections that AA pushes thru DFW) in one city after another. Those same reasons should exist for every other market but that hasn't changed the fact that AA isn't the dominant carrier in any one of the markets that WN can serve from DAL.
It also doesn't change that DL does intend to serve DAL, DAL does use two class aircraft, and DL has a history even with fewer frequencies of attracting business travelers in highly competitive markets.
You do realize that DL has about 20% of the LGA-DFW market now, 20% of the LGA-ORD market, and over 35% of the LGA-MIA market. and in each market they have a whole lot less flights and frequencies than AA but get fares that are quite comparable to what AA gets.
Would you like to tell us what makes your back of the envelope analysis of DAL/DFW different from what has happened in real AA-DL and AA-WN competitive markets?
The sooner you can grasp that WN really does have the ability to take half of the DFW domestic local market from AA, the better you can start working on that pragmatic business plan.
No,
UP, DFW and ATL are actually similarly sized business markets.
Network carrier hubs carry relatively small amounts of local passengers per aircraft and legacy airlines create their mass which helps them control the local market by filling planes with connecting passengers.
It doesn't change that WN picks the largest markets from its hubs/focus cities and uses big aircraft which have the ability to easily accommodate large portions of the local demand.
WN's percentage of local traffic in most of their major cities is higher than it is for WN at DAL and what it is for network carriers in their hubs.
WN could also fit all of DL's local business demand on WN aircraft using the facilities that WN has at ATL if they wanted to and could win the market.
DL recognizes full well that WN is a threat and DL competes aggressively against them.
WN has about 15% of the market in ATL, including what FL carries.
WN could eat any carrier's lunch if they wanted to including AA's in DFW.
The error is for E to try to argue that AA is safe and that WN will have no affect on AA's hub at DFW even given how large it is.
Kev3188
Veteran
... And no one would claim otherwise. The interpretation of said data by carriers, and the execution of any plan based on said data is (or should be) a pragmatic one.WorldTraveler said:
You can argue against that if you want, but what you will be saying is that RM & planning departments act in an irrational manner. I don't speak for you, but I'm willing to bet that's not what you want to get across.
A pragmatic process in RM or planning comes to ordered solutions (ideal, next best, etc.) using multiple data points & "facts," does it not?
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