olddominion727 From United States of America, joined Jan 2012, 415 posts, RR: 0 Posted (2 years 10 months 1 hour ago) and read 10214 times:
This may sound crazy but there are many markets that AA could fly in the South and be very competitive should they not merge with US. Would MEM give AA a magnanimous offer they couldn't refuse (with the down-sizing of DL), or could they jump back into BNA and retain their former loyal customers? The only way we're going to get back some of the glory days of AA is to stop contracting and start investing, while blazing trails of old.
USAirALB From United States of America, joined Sep 2007, 3351 posts, RR: 2
Reply 1, posted (2 years 10 months ago) and read 10131 times:
In a transportation studies class I took last semester, we did a case study on the number of airline hubs located in a megalopolis. In short, the study determined that a megalopolis can only have so many airline hubs before the region becomes over saturated, and eventually, the weakest (or weaker) of the hubs will likely be shut down, simply because it cannot compete, especially in today's market.
Historically, the Piedmont Atlantic mega region has had three hubs. (Yes, RDU and BNA were "hubs" at one point, but they were never as large as DL,EA at ATL, US/PI, EA at CLT, or NW at MEM. CLT was a hub for EA, and PI, which eventually changed to US, and Republic at MEM, which eventually merged into NW.) After September 11th, and years of consolidation, it just became unnecessary for airlines to have so many hubs located literally on top of each other. So we saw the closing of PIT and STL, as well as the "closing" of CVG. After the DL/NW merger, it became apparent that MEM would likely eventually be closed, which DL is currently in the process of doing. Again, the weakest of the hubs in a region will be closed, and in the case of the Piedmont Atlantic, this hub was MEM.
In today's economy, the Piedmont Atlantic can only support two hubs: ATL and CLT. Sure, you can have tiny focus cities like DL in RDU, but no airline will ever built another hub in the South. Even if they did, where would they build it? RDU is too close to CLT, and BNA has WN.
IMHO, AA should have built RDU up in the early 70s, when PI was still a local carrier, but these days, the ship has already set for RDU to become a hub.
AeroWesty From United States of America, joined Oct 2004, 20822 posts, RR: 61
Reply 2, posted (2 years 10 months ago) and read 10101 times:
Reading through the many pro/con threads for DL's MEM hub, the Memphis metro area doesn't seem to have a robust enough local base of O&D to support a hub, which is one of the reasons DL is letting it go. I'm not sure what purpose creating a hub at MEM would serve, when there could be other more lucrative opportunities for where to use a fleet of shiny new planes, rather than competing with ATL and CLT for connecting traffic to/from/within the South.
Which money-making routes would you think that AA could offer as a better choice for passengers by routing them via a new hub located somewhere such as MEM or BNA vs. the existing competition?
jmc1975 From Israel, joined Sep 2000, 3351 posts, RR: 14
Reply 3, posted (2 years 10 months ago) and read 10010 times:
Airlines don't just open hubs for kicks & giggles. They must have a strategic purpose and be able to contribute significant value to an airline's network. That said, with the DL pullout in MEM, existing legacies could likely back-fill some of the capacity by means of up-gauging equipment on certain routes; and LCCs such as WN would do well to enter MEM and expand their operations...not as a major hub, but perhaps a 30-40 departure/day operation.
EricR From United States of America, joined Jul 2010, 1906 posts, RR: 1
Reply 4, posted (2 years 9 months 4 weeks 1 day 17 hours ago) and read 9568 times:
Quoting USAirALB (Reply 1): AA should have built RDU up in the early 70s, when PI was still a local carrier, but these days, the ship has already set for RDU to become a hub.
I don't think you can say that in hindsight. You would need to place yourself in the environment of the early 1970's before you can come to that conclusion.
In other words, back in the 1970's, the aviation industry was a regulated industry. It is not like today where you can just open up a hub anywhere and fly whatever routes you desire. Furthermore, RDU may not have been an ideal location for a hub back in the early 1970's. The metro pop, business environment, and airport facilities were not the most ideal to support a hub of decent size during the early 1970's.
TWA85 From United States of America, joined Feb 2012, 258 posts, RR: 0
Reply 6, posted (2 years 9 months 4 weeks 1 day 16 hours ago) and read 9372 times:
If AA does not merge with US, then their best (although not likely) option for the area would be to first strengthen their presence from the south to their already existing hubs and focus more on transporting passengers to/from the south vs. transporting passengers within the south. After strengthening their presence from the south to their existing hubs, then AA would be in a position to consider re-building a hub in the south. If AA was going to re-build a hub in the south, their best option would probably be to re-build both the BNA and RDU hubs in tandem as they did before. Yes BNA and RDU are not as strong as ATL and CLT, however combined they are comparable to ATL or CLT and each would their own distinct traffic flows that complement each other more than competing with each other. The ultimate problem with RDU and BNA before was the lack of the right size of aircraft at the time. The MD80 and 727 were too large and the AA regional aircraft at the time were too small. Now that AA has more relief on the APA scope agreement in regards to large regional jets, AA will be in a much better position to build regional hubs in BNA and RDU with the right size aircraft than they were in the mid 80's - mid 90's.
ItalianFlyer From United States of America, joined Nov 2007, 1174 posts, RR: 2
Reply 7, posted (2 years 9 months 4 weeks 1 day 16 hours ago) and read 9292 times:
IMHO what doomed AA's southern strategy was building RDU and BNA at the same time. The split stream idea cannibalized RASM and guaranteed losses on both ventures. If they had done one or the other.....I'm willing to bet it would still be alive today. The second caveat was the collapse of EA and the void left in ATL. In the wake of EA's demise, the city, state and airport authority were literally freaking out over the suddenly unoccupied space in B & C. Officials were chasing every airline with some handsome incentives to back-fill the vacuum....AA & UA were the prize targets.
commavia From United States of America, joined Apr 2005, 12959 posts, RR: 62
Reply 9, posted (2 years 9 months 4 weeks 1 day 16 hours ago) and read 9185 times:
AA already has a southern hub. In regards to a southeastern hub, all the viable ones have already been spoken for. That region can only support a total of 2, and those 2 will always be ATL + 1 of either CLT or RDU. In the 80s CLT and RDU fought it out for the region's #2 hub, but CLT won. At this point, absent a merger, AA's only option is to bolster direct flights from major regional markets to DFW, MIA and other hubs (basically what they've been doing for the last 6-7 years).
Quoting rfields5421 (Reply 8): basically abandoned the airport as a hub - saying there was no reason for a hub in that region of the nation.
That wasn't AA's justification at all - quite the opposite, actually. AA never contended that there was "no reason" to have a hub in the midwest/central U.S., but rather that AA already had 2 hubs essentially in, or close, to that region - DFW and ORD. Given that, STL was superfluous.
TSS From United States of America, joined Dec 2006, 3108 posts, RR: 4
Reply 10, posted (2 years 9 months 4 weeks 1 day 16 hours ago) and read 9174 times:
Quoting ItalianFlyer (Reply 7): IMHO what doomed AA's southern strategy was building RDU and BNA at the same time. The split stream idea cannibalized RASM and guaranteed losses on both ventures. If they had done one or the other.....I'm willing to bet it would still be alive today.
I'll agree in theory, but the question then as now is: Which one? I'd expect BNA has plenty of the coveted premium pax courtesy of the recording industry while RDU has a larger overall pax base due to the number of schools there.
Able to kill active threads stone dead with a single post!
bobloblaw From United States of America, joined Jan 2012, 1725 posts, RR: 1
Reply 11, posted (2 years 9 months 4 weeks 1 day 15 hours ago) and read 9095 times:
Quoting olddominion727 (Thread starter): Would MEM give AA a magnanimous offer they couldn't refuse (with the down-sizing of DL), or could they jump back into BNA and retain their former loyal customers?
NO NO NO NO NO NO NO NO NO. If DL cant make MEM work, how could AA????? MEM would just use up large RJs AA needs in ORD and NYC. Also MEM is too close to DFW. BNA???? Ok good luck taking down those 90+ WN flights per day.
Quoting USAirALB (Reply 1): IMHO, AA should have built RDU up in the early 70s, when PI was still a local carrier, but these days, the ship has already set for RDU to become a hub.
The early 70s??? Really??? When RDU had a population 1/5 what it has today and the CAB gave out route awards.
Quoting USAirALB (Reply 1): In a transportation studies class I took last semester, we did a case study on the number of airline hubs located in a megalopolis. In short, the study determined that a megalopolis can only have so many airline hubs before the region becomes over saturated,
I think that is true. Look at the midwest and southeast in 1990 and today.
CLE-gone by 2017
CVG-gone by 2015
MEM-Gone by 2014
There will be no more hubs opened by legacy carriers anymore.
Maybe I should have said ANOTHER hub in that region. Yes, the reason STL was not needed as a hub was that DFW and ORD were already serving the region well.
Quoting TSS (Reply 10): Which one? I'd expect BNA has plenty of the coveted premium pax courtesy of the recording industry while RDU has a larger overall pax base due to the number of schools there.
The recording industry and colleges are neither business travel generators for airlines. Which is the core group needed for a hub to succeed.
The business drivers for BNA would be healthcare, automotive and insurance/ finance. Probably on par with SDF as a business travel generator.
The business drivers for RDU are the high tech research associated with the region (and thus the colleges do contribute) and life sciences. RDU is probably on par with San Antonio/Austin as a business travel generator.
ERJ170 From United States of America, joined Apr 2004, 6857 posts, RR: 16
Reply 15, posted (2 years 9 months 4 weeks 1 day 13 hours ago) and read 8727 times:
BNA is already a WN hub and therefore they would have to go into a strong WN station.. something AA hasn't really done before. There may be DAL, but they put a stranglehold on WN in order to limit their flights there so I doubt AA would be interested in restarting a BNA hub. It would be a competitive nightmare and WN would probably win.
Everyone says that the southeast already have two hubs in ATL and CLT. But the Southeast is growing very fast and has probably added more residence than any other area. With the lower cost of living and lower cost of working in the southeast, it has drawn quite a large number of residence in business so I think it can handle a third hub. The options are RDU, BNA, and GSO. BNA has WN and GSO doesn't have as large a base. RDU would be the best choice in my opinion and would be able to manage the traffic similar to ATL and CLT. It is also strategically geographically located to capture North-South, Europe-West, North/Northeast-Caribbean, and South/Southwest-North/Northeast/Europe..
Now, currently RDU is pretty content not being a hub but probably would not mind a build up of focus city by American. It currently has 8 gates that could probably handle a few more flights and if desired, could potentially work with RDU to secure more gates on the C concourse of Terminal 2. A large scale hub would require AA to move to Terminal 1 and build Terminal B to include a FIS. They could add as many gates as needed and there is room for a 3rd parallel runway if needed.
But all of this is hypothetical. If AA needed a southeast focus/gateway, they could easily return to RDU and build it up to do it. And they would be able to compete with US at CLT and DL at ATL.. the big question is what would DL do and IMO, they would probably fight because I do believe they now consider RDU their turf..
mayor From United States of America, joined Mar 2008, 11609 posts, RR: 14
Reply 17, posted (2 years 9 months 4 weeks 1 day 12 hours ago) and read 8286 times:
To the best of my recollection, the reason that AA built up BNA and RDU in the first place was to support the routes to London that they had just been awarded. I don't believe the DOT was going to award these route unless it was obvious that they had the support needed.
Having said that, DL was in competition, in the compeition for a London route (with SLC-LGW) at the same time AA was trying for RDU and BNA. Only two routes were to be awarded and DL thought they had it made. DL & AA were the only two carriers, I believe, that had applied. An airline could only get one route award, but they got around it because the officials in BNA (with the help of Tennessee senators, officials, etc.) by applying for the route on behalf of the city. Once they were awarded the route, AA was chosen to operate it, by offering the airport to open up a hub there. Pretty slick way to get around the rules and shut out DL.
"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
GSPflyer From United States of America, joined Jul 2010, 382 posts, RR: 0
Reply 21, posted (2 years 9 months 4 weeks 1 day 12 hours ago) and read 8088 times:
I said something about them having one at CLT post-merger with US, but then I read the "non-merger" part of the title, so I will provide some useful input.
I think it would be beneficial for them to have a hub within the Southeast. Most of the smaller southeastern destinations (like GSP) are only served by MQ to DFW. DFW is only a good connecting point from the area if one is traveling west. We no longer have ORD, which is in a good place for connections to Europe, the midwest, and sometimes the Northeast.
Other smaller Southern cities (like CHS) have MIA as well, but that's not great for connections other than South America, the Caribbean, and possibly Europe.
I think BNA or RDU could've been great for AA, but their mistake was building and maintaining both at the same time.
rampart From United States of America, joined Aug 2005, 3198 posts, RR: 6
Reply 22, posted (2 years 9 months 4 weeks 1 day 12 hours ago) and read 8087 times:
Quoting USAirALB (Reply 1): In a transportation studies class I took last semester, we did a case study on the number of airline hubs located in a megalopolis. In short, the study determined that a megalopolis can only have so many airline hubs before the region becomes over saturated, and eventually, the weakest (or weaker) of the hubs will likely be shut down, simply because it cannot compete, especially in today's market.
I think that's a fascinating premise. Did you/your class do anything with the study beyond the class? Is it based on an existing published study? If you have an references you could shoot my way, your own or others, I'd appreciate it! PM me if you'd like.
boeing773ER From United States of America, joined Dec 2011, 469 posts, RR: 0
Reply 23, posted (2 years 9 months 4 weeks 1 day 12 hours ago) and read 8038 times:
It brings me much dispair when people say there will be no new hubs for legacy carriers. I don't know if everyone realizes it but DL built up LGA into a hub just last year. Of course LGA was sort of a special case; but it still did occur. Who knows; maybe DL will build a new hub some where else around the country. They are very good at finding special opportunities to open new hubs. Unlikely, but it is not imposible.
Who knows, more than likely there will be a major fuel hike in the future. This could just break the straw with a carrier; and they could bankrupt leaving a large Metro without a hub. With consolidation today; this will unlikely happen. But you can't say it is imposible.