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The New AA And The Tatl JBV With IAG  
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Posted (5 months 3 weeks 4 days 15 hours ago) and read 2660 times:

Now that AA (AMR) has become AAG and US is joining OW, the new AA will have a lot more TATL flights than PMAA. I would think that AAG's share of TATL revenue is about to increase. As we all probably know AAG and IAG have a metal neutral revenue sharing agreement that currently results in IAG getting most of the revenue from all TATL tickets sold. I remember reading that BA used to get almost half of all revenue, but I think that figure was before AY joined the JBV last year.

Parker has said that US's European flights are very profitable and he expected them to remain. I would expect that to mean that a revenue recalculation will be coming and IAG might not be too happy about it. I have thought in the past that AA needed a larger presence to mainland Europe and wondered why PMAA was content to let IAG (mostly BA) do most of the flying. I hope Parker keeps AAG's new combined larger presence in the way it is. Any thoughts?

10 replies: All unread, jump to last
 
User currently offlinejfk777 From United States of America, joined Aug 2006, 8372 posts, RR: 7
Reply 1, posted (5 months 3 weeks 4 days 13 hours ago) and read 2393 times:
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These type of things have to have flexibility in them and whatever the formula to calculate which airline get what percentage of revenue and profits has to be able to adapt to changes. The addition of the two US hubs on the east coast boast revenue for both IAG and AA. BA will start flying to Charlotte at some point.

User currently onlinejumpjets From United Kingdom, joined Apr 2012, 818 posts, RR: 0
Reply 2, posted (5 months 3 weeks 3 days 20 hours ago) and read 1773 times:

Quoting user444555 (Thread starter):
I would expect that to mean that a revenue recalculation will be coming and IAG might not be too happy about it

It would seem likely that as a result of the merger the TATL JBA ' revenue cake' is about to get bigger. The merger may mean IAG's percentage share goes down but that doesn't mean the absolute revenue earned by IAG would decline.


Also Willie Walsh made positive noises about the merits of a US AA merger well before it was formally announced so I guess IAG isn't that unhappy or he most likely would have stayed neutral if not anti the merger - or maybe he could see the writing was on the wall and applied the old adage ' if you can't beat em join em'.


User currently onlineskipness1E From United Kingdom, joined Aug 2007, 3251 posts, RR: 1
Reply 3, posted (5 months 3 weeks 3 days 13 hours ago) and read 1462 times:

Quoting user444555 (Thread starter):
I have thought in the past that AA needed a larger presence to mainland Europe and wondered why PMAA was content to let IAG (mostly BA) do most of the flying.

Until Pan Am collapsed and Delta took over, American had a huge daily US - Europe operation flown with B767s. The coming of STAR ALLIANCE forced them out of much of Europe where the based legacy was non ONEWORLD. That's pretty much why AA cannot compete in Europe in the same way UNITED and until recently, US did by getting help from a strong STAR partner.


User currently offlinecommavia From United States of America, joined Apr 2005, 11612 posts, RR: 61
Reply 4, posted (5 months 3 weeks 3 days 11 hours ago) and read 1346 times:

I think the biggest impact to the AA-IAG JV from the USAirways merger will be the injection of PHL into the equation. PHL is an excellent hub, both for connecting continental markets nonstop to the U.S. at a large, well-placed gateway with minimal competition, but perhaps more importantly PHL is an excellent gateway to serve as a nexus linking BA's LHR hub into smaller markets throughout the eastern U.S. that were previously largely inaccessible to the AA-IAG JV because of AA's (lacking) hub structure on the east coast. I suspect that, along with, to a lesser extent, CLT, will have a material positive halo effect on the overall joint U.S.-Europe network.

Quoting skipness1E (Reply 3):
Until Pan Am collapsed and Delta took over, American had a huge daily US - Europe operation flown with B767s.

AA has continued a huge daily U.S.-Europe operation, with 767s and other aircraft, after Pan Am collapsed, up to the present day. What changed in the early 1990s, however, was that AA's U.S.-Europe operation became far more concentrated (at LHR) and far less continental (again, far more LHR-centric). In summer 1988, before Pan Am's collapse, AA was operating a total of 77 weekly flights to 9 European cities, of which 18% were to London. By summer 1992, after Pan Am's collapse, AA was operating 236 weekly flights to 15 European cities, of which 41% were just to London (and another 12% were to Paris). The realignment of AA's European operation after it secured a substantial foothold at LHR is the real story, in my view, rather than the collapse of Pan Am.

Quoting skipness1E (Reply 3):
The coming of STAR ALLIANCE forced them out of much of Europe where the based legacy was non ONEWORLD.

AA's retrenchment from smaller continental markets like DUS, TXL, GVA and LYS long predated the creation of Star Alliance. Once those markets were dropped, what remained stayed fairly consistent, until 9/11.

Quoting skipness1E (Reply 3):
That's pretty much why AA cannot compete in Europe in the same way UNITED and until recently, US did by getting help from a strong STAR partner.

We'll see how things shape up. The "new AA" is now on broadly equal footing with United to Europe. I suspect this will change as some of the more marginal USAirways Europe routes are dropped, but even still AA now has a network that I think is more than sufficiently competitive with United, and Delta, across the pond - particularly when BA's extensive U.S.-LHR network is added in.


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 5, posted (5 months 3 weeks 3 days 9 hours ago) and read 1244 times:

Quoting commavia (Reply 4):
We'll see how things shape up. The "new AA" is now on broadly equal footing with United to Europe. I suspect this will change as some of the more marginal USAirways Europe routes are dropped, but even still AA now has a network that I think is more than sufficiently competitive with United, and Delta, across the pond - particularly when BA's extensive U.S.-LHR network is added in.

From what I have read Parker says they all do well. That is not to say, there might be changes, but US flies to a lot of places where they did not have Star Alliance support. PMUS's European routes about double the number of European destinations for PMAA, and I think PMAA was way too underrepresented in mainland Europe. I could not see any reason why AA did not fly to more major European cities. I think PMUS actually flew to more different cities. T5 at LHR is nice but I think a lot of people would rather not connect at LHR every single time they want to go to major European cities. If UA, DL and US could make it work to a lot of cities, I see no reason why the New AA can't.

I think you are right about PHL though. Now AA has a good East Coast fortress hub and that could have been the secret to Parker's success. AA can feed a lot of their European flights from East Coast connections without passengers having to backtrack to DFW

I am not saying AA does not need European partners. I hope AB stays in OW because they need a Central European partner.


User currently offlineUSAirALB From United States of America, joined Sep 2007, 3079 posts, RR: 2
Reply 6, posted (5 months 3 weeks 3 days 9 hours ago) and read 1219 times:

Quoting user444555 (Reply 5):

From what I have read Parker says they all do well. That is not to say, there might be changes, but US flies to a lot of places where they did not have Star Alliance support. PMUS's European routes about double the number of European destinations for PMAA, and I think PMAA was way too underrepresented in mainland Europe. I could not see any reason why AA did not fly to more major European cities. I think PMUS actually flew to more different cities. T5 at LHR is nice but I think a lot of people would rather not connect at LHR every single time they want to go to major European cities. If UA, DL and US could make it work to a lot of cities, I see no reason why the New AA can't.

PMUS flew to DUB/SNN/MAN/GLA/LHR/LIS/MAD/BCN/CDG/MUC/FRA/AMS/BRU/ZRH/VCE/FCO.

PMAA flew to DUS/CDG/LHR/FRA/FCO/MAD/BCN/ZRH/MXP/DUB/MAN.



E135/E140/E145/E70/E75/E90/CR2/CR7/CR9/717/732/733/734/735/73G/738/739/752/753/762/772/319/320/321/333
User currently offlinebrons2 From United States of America, joined Sep 2001, 3013 posts, RR: 4
Reply 7, posted (5 months 3 weeks 3 days 8 hours ago) and read 1184 times:

Quoting user444555 (Reply 5):
T5 at LHR is nice but I think a lot of people would rather not connect at LHR every single time they want to go to major European cities.

AA files to T3 at LHR, you have to switch to T5 for your BA connecting flight.

Unless it's changed in the last 9 months.

I gave up on the AA/BA double connect and just drive to IAH for the direct DXB on Emirates.



Firings, if well done, are good for employee morale.
User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 8, posted (5 months 3 weeks 2 days 21 hours ago) and read 985 times:

Quoting brons2 (Reply 7):
AA files to T3 at LHR, you have to switch to T5 for your BA connecting flight.

Unless it's changed in the last 9 months.

I gave up on the AA/BA double connect and just drive to IAH for the direct DXB on Emirates.

Yes that is what I meant. I forgot to mention T3. Transferring from T3 to T5 is not a great experience but there are worse connections out there. LHR was not planned out very well when it comes to expansion.


User currently onlinejumpjets From United Kingdom, joined Apr 2012, 818 posts, RR: 0
Reply 9, posted (5 months 3 weeks 2 days 20 hours ago) and read 907 times:

Quoting user444555 (Reply 8):
LHR was not planned out very well when it comes to expansion.

I'm not sure LHR was ever planned it sort of just evolved, squeezing new terminals in wherever they would fit.  


User currently offlineuser444555 From United States of America, joined Aug 2013, 356 posts, RR: 0
Reply 10, posted (5 months 3 weeks 2 days 19 hours ago) and read 770 times:

Quoting jumpjets (Reply 9):
I'm not sure LHR was ever planned it sort of just evolved, squeezing new terminals in wherever they would fit.  

Sad but true and it is too late to redesign the whole thing which is what should have happened before T4 was built. Maybe they can build a secure side people mover type system ala DFW.


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