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AA Philosophy At DAL Vs. UA's At MDW  
User currently offlineMattnrsa From United States of America, joined Dec 2002, 395 posts, RR: 1
Posted (8 years 9 months 2 weeks 4 days 13 hours ago) and read 3429 times:

With all the talk of AA's response to possible changes of the Wright Amendment at DAL, I was wondering why AA's philosophy is so different from UA's at ORD/MDW. Although UA is huge at ORD, they are content to have minimal service at MDW where WN is the dominant carrier, even though MDW is closer to downtown. By contrast, AA has even more of a dominating presence at DFW, but view WN's flight increase at DAL flights as a big threat.

I'm not trying to debate the merits of the WA, but am curious as to the reasons behind AA's competitive response. Any thoughts?

13 replies: All unread, jump to last
 
User currently offlineHole_courtney From United States of America, joined Jun 1999, 569 posts, RR: 1
Reply 1, posted (8 years 9 months 2 weeks 4 days 13 hours ago) and read 3390 times:

I think the first thing one should think about is the population difference between Chicago and Dallas/Ft. Worth.

Chicago has a metro area population of 9.4 million, and the Dallas/Ft. Worth area has 5.3 million people (all taken from wikipedia.) Further, I'm guessing that the Chicago metro area is more dense than Dallas/Ft. Worth. Therefore, Chicago has more people in a smaller space than Dallas/Ft. Worth.

The Dallas/ft. Worth area doesn't have the O/D market that Chicago has. One could use that information to determine that UA's strategy in Chicago has to be different than what AA would use at DFW. Dallas simply doesn't have enough traffic to support both an AA@DFW and WN@DAL without restrictions. One of the airports will lose to the other. That's just the way it's going to go.

Doesn't really answer your question mostly cos I don't know about airlines' corporate philosophies, but it's definitely something to think about,

cheers!



"[He] knew everything about literature, except how to enjoy it." - Yossarian, Catch 22
User currently offlineUSXguy From United States of America, joined Jan 2006, 1041 posts, RR: 5
Reply 2, posted (8 years 9 months 2 weeks 4 days 7 hours ago) and read 3248 times:

Well, UA at MDW isn't flying on top of all of WN's routes.. I believe they are only doing a couple DEN trips and IAD trips (which are CR7's). AA in DAL has repeatedly said they aren't there to make money...


xx
User currently offlineSCCutler From United States of America, joined Jan 2000, 5615 posts, RR: 28
Reply 3, posted (8 years 9 months 2 weeks 4 days 6 hours ago) and read 3203 times:

AA is not serving DAL to create a profitable niche; it is doing so purely to follow-through on its threats.


...three miles from BRONS, clear for the ILS one five approach...
User currently offlineCkfred From United States of America, joined Apr 2001, 5309 posts, RR: 1
Reply 4, posted (8 years 9 months 2 weeks 4 days 5 hours ago) and read 3182 times:

My understanding is that DAL is closer to most of the major businesses in the Metroplex, as well as many residential areas.

On the other hand, the Loop is about equal driving time from MDW and ORD. Even though MDW is closer, you lose a lot of time driving Cicero Avenue from I-55 to the terminal, since there are a number of traffic lights, and the speed limit is 35mph.

ORD is a lot closer to the businesses and residential areas that are north, northwest, and west of Chicago.

A friend of mine would love to fly WN, but he is 20 miles north of ORD, so driving past ORD to MDW just doesn't make sense. A day trip to STL is two hours longer out of MDW than ORD, when he factors in driving time.

That's why UA runs only Ted out of MDW to IAD and DEN, and AA has only a few flights to DFW out of MDW.


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 5, posted (8 years 9 months 2 weeks 3 days 21 hours ago) and read 3098 times:

Quoting Ckfred (Reply 4):
My understanding is that DAL is closer to most of the major businesses in the Metroplex, as well as many residential areas.

Back in 1974, that was a true statement. Drive past DFW today and you'll find corporate headquarters in an area known as "Las Colinas", which BORDERS DFW Airport. Add to that the OTHER corporate office parks, put a pretty large number of major businesses within a stones throw of DFW Airport. AA's "presence" at MDW consists of about 5 flights (3 of them RJ's) to DFW. I guess they started that to maintain the "market share" of folks two stepping from MDW-HOU-DAL.

Quoting Hole_courtney (Reply 1):

Chicago has a metro area population of 9.4 million, and the Dallas/Ft. Worth area has 5.3 million people (all taken from wikipedia.) Further, I'm guessing that the Chicago metro area is more dense than Dallas/Ft. Worth. Therefore, Chicago has more people in a smaller space than Dallas/Ft. Worth.

Indeed the population is more dense in Chicago...The 5.4 million population number includes Dallas, Fort Worth (about 35 miles away from Dallas), and the "mid cities" (which DFW is located in). That means roughly HALF the DFW population would have to drive PAST DFW to get to DAL. What I can't understand is why AA would feel it necessary to operate from an airport that is closer to only 50% of their market? Why not compete on price from what is arguably a "more convenient" airport (DFW)?


User currently offlineCMB320 From United States of America, joined Oct 2000, 415 posts, RR: 6
Reply 6, posted (8 years 9 months 2 weeks 3 days 20 hours ago) and read 3024 times:

Quoting Hole_courtney (Reply 1):
Dallas simply doesn't have enough traffic to support both an AA@DFW and WN@DAL without restrictions. One of the airports will lose to the other. That's just the way it's going to go.

I just don't see how that could be a true statement. Even though the City of Houston is much larger than the city of Dallas, the Houston metro area is still smaller in population than the DFW metro area. However, Intercontinental with Continental Airlines and Hobby with Southwest Airlines operate FULLY without restrictions together and do quite well, so it seems that DFW and DAL should be able to do the same with an even larger population than Houston.


User currently offlineCMB320 From United States of America, joined Oct 2000, 415 posts, RR: 6
Reply 7, posted (8 years 9 months 2 weeks 3 days 18 hours ago) and read 2983 times:

I was wrong... I guess the populations of Houston metro and Dallas metro are not that different. I just did a Wikepeida search and the Houston-Galveston metro area is 5.2 million while the Dallas/Ft. Worth metro area is 5.7 million. Not too big of a difference... so I still feel that DFW and DAL could operate no differently than IAH and HOU.

User currently offlineCIDflyer From United States of America, joined Apr 2005, 2362 posts, RR: 3
Reply 8, posted (8 years 9 months 2 weeks 3 days 12 hours ago) and read 2887 times:

Quoting CMB320 (Reply 7):
so I still feel that DFW and DAL could operate no differently than IAH and HOU.

I have often thought that exact same thing. It really should not be all that different.


User currently offlineBoeingguy1 From Ireland, joined Jan 2006, 415 posts, RR: 1
Reply 9, posted (8 years 9 months 2 weeks 3 days 11 hours ago) and read 2878 times:

I'm not firmilar with the whole AA and WN Situation at DAL/DFW, but the logical person would think that a "family" or the "last minute" traveler would go to WN at DAL only because it would be cheaper. AA Frequent Fliers and others wanting to go internationally or do more destinations than WN has to offer at DAL, would use AA at DFW. Or people would get smart and just take AA at DFW because they have a better FF Systerm (because of more routes, etc) than WN... so theoretically, they could co exist. Just my two cents.


Gatwick South! Id rather crash in Brighton!
User currently offlineJayDavis From United States of America, joined Jan 2001, 2000 posts, RR: 15
Reply 10, posted (8 years 9 months 2 weeks 3 days 11 hours ago) and read 2868 times:

The situation at DFW and DAL for AA is that the MAJORITY of their full-fare, super-duper, triple Platinum members live MUCH closer to DAL than to DFW. The two areas are Highland Park and University Park. Many, many, many wealthy people live in these areas of Dallas. I guess it is similar to 90210 zip code in the LA area...............

That is the reason that AA gives for starting up service out of DAL, but I just don't buy it.

If you are a Platinum member on AA, I don't care what WN is offering out of DAL, you are going to fly out of DFW to continue to earn your Platinum status, your first class upgrades, etc.......

WN and AA are like night and day in terms of the products they offer, along with the very noticeable difference in their employee's attitudes towards customers as well. Southwest is warm and cuddly, American is cold and reserved, more or less.


User currently offlineGoingboeing From United States of America, joined Dec 1999, 4875 posts, RR: 16
Reply 11, posted (8 years 9 months 2 weeks 3 days 9 hours ago) and read 2821 times:

Quoting JayDavis (Reply 10):
The situation at DFW and DAL for AA is that the MAJORITY of their full-fare, super-duper, triple Platinum members live MUCH closer to DAL than to DFW. The two areas are Highland Park and University Park. Many, many, many wealthy people live in these areas of Dallas.

And how many of those folks are flying to Kansas City or St Louis? My guess...not that many. Most of them are going to either coast or international. But while those are wealthy areas, the population of BOTH cities is just barely over 30,000. AA's spending a bunch of money to make sure many of those 30,000 people stay with them. DFW is closer to MILLIONS of other residents. Besides, a good number of the residents of Highland Park or University Park don't fly commercial anyways...they're usually in planes that depart from DAL, but they are usually Gulfstreams, or Learjets, or some other bizjet.


User currently offlineTinPusher007 From United States of America, joined Feb 2005, 983 posts, RR: 1
Reply 12, posted (8 years 9 months 2 weeks 3 days 9 hours ago) and read 2795 times:

It seems utterly stupid and carless for AA to ADMIT that they are doing this, not to make money, but to knowingly lose money just to give WN a headache. Now lets see what happens the next time they need concessions from their employees which are just "too expensive" for them to afford.


"Flying isn't inherently dangerous...but very unforgiving of carelessness, incapacity or neglect."
User currently offlineTismfu From United States of America, joined Nov 2005, 88 posts, RR: 0
Reply 13, posted (8 years 9 months 2 weeks 3 days 6 hours ago) and read 2728 times:

Quoting Goingboeing (Reply 11):
And how many of those folks are flying to Kansas City or St Louis? My guess...not that many. Most of them are going to either coast or international.

Just because you're wealthy doesn't mean you don't travel to closer-in locales.



Quoting Goingboeing (Reply 11):
But while those are wealthy areas, the population of BOTH cities is just barely over 30,000. AA's spending a bunch of money to make sure many of those 30,000 people stay with them. DFW is closer to MILLIONS of other residents. Besides, a good number of the residents of Highland Park or University Park don't fly commercial anyways...they're usually in planes that depart from DAL, but they are usually Gulfstreams, or Learjets, or some other bizjet.

30,000 in the Park Cities, but tack on Preston Hollow, the Strait Lane estate area (where the likes of Ross Perot live), North Dallas, Lakewood, Uptown/Downtown, Turtle Creek, Greenway Parks and maybe even Addison and you've got a heck of a lot more than 30,000 people with lots of cash to spend. We must also realize that DFW's population is weighted more towards the Dallas side.

Yes, there are a lot of wealthy people in the aforementioned areas, but let's be real. The number who fly private is a drop in the bucket. Only the wealthiest of the wealthy are jumping town in a Gulfstream.

Many of these people love the convenience of Love Field and don't discriminate merely because they have to fly WN. Love Field is prime airport property, closer to the wealthiest neighborhoods, just like ORD is.


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