timberwolf24
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AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 1:54 am

From the Long Beach Press-telegram today.

http://www.press-telegram.com/archive/news/0302/12/new02.asp

Airline wants JetBlue slots

By Felix Sanchez
Staff writer

LONG BEACH - In a move that steps up its local competition with JetBlue Airways, American Airlines has requested four more daily flights at Long Beach Airport so it can begin service to two new destinations this summer.
But no more commercial flights are allowed because ordinances hammered together after contentious battles among the airport, airlines and residents over noise and safety cap the number at 41.

Of those 41 flight slots, defined as a combination of one takeoff and landing, New York City-based JetBlue Airways has the rights to 27. And even though JetBlue is using only three now, the airline will not give up any of the rest, said CEO David Neeleman.

In response to American's request, the city is asking those with existing contracts if they want to relinquish any flight rights.

American now also has the right to sue to increase the number of flights, a legal maneuver that had been prohibited under a court agreement that expired on Jan. 1.

American's maneuvering came to light as Neeleman flew into Long Beach on Monday afternoon to promote two new JetBlue flights to Washington, D.C., and accompanying price specials of about $100 each way. The service begins in May.

JetBlue has made Long Beach Airport a large part of its operations, flying nonstop three times daily to New York City's John F. Kennedy International Airport. It adds another flight to New York in July.

By the end of May 2003, Neeleman said, JetBlue will be operating all the remaining 21 daily departures out of Long Beach.

Possible destinations are Boston, Chicago, Denver, Oakland, Seattle and Fort Lauderdale, Fla., among others.

Neeleman says American is just stepping up competition.

"It's typical of those guys. When you do this so many times, people become wise to what you're doing. The fact is, there are no flight slots for American. They don't exist," Neeleman said.

American could not be reached for comment.

In its Feb. 22 letter to Long Beach Airport Manager Chris Kunze, American said only 17 of the 41 flight slots at the airport are being used and it should be allowed "to compete at Long Beach on reasonable and non-discriminatory terms.

"It is important that American receive (four) slots so that another air carrier cannot deprive us of the right to operate at Long Beach," wrote Walter J. Aue, vice president/capacity planning at American Airlines' headquarters near DFW Airport in Irvine, Tex.

Besides JetBlue's 27 slots, American Airlines has four, America West has five, United Postal Service (UPS) and Federal Express (FedEx) have two each, and Airborne Express has one.

The 41-flight limit was part of a 1995 federal lawsuit settlement that evolved from clashes between airport management and residents in flight paths. In 1981 the City Council responded to resident complaints about noise by limiting daily flights to 15, but airlines sued, saying that the number was too low.

As part of the settlement, airlines and the city were prohibited from suing each other during the six-year life of the agreement, which ended Jan. 1.

The airport can maintain its 41-flight limit because of the 1990 federal Airport Noise and Capacity Act and Title 21 state noise regulations, Kunze said.

Kunze said America West is being asked to upgrade to full service two flights that were scaled back to regional commuters after Sept. 11. If it doesn't do so, the airline could be asked to return the flight slots, Kunze said.

Edward Shikada with the city's Department of Public Works said airlines are restricted from selling each other their rights to slots. The slots are negotiated and obtained from the city with a $10,000 bond. Once an airline is up and flying for six months, the bond is returned.

If an airline has not started service within six months of getting the slot, it must pay a nonrefundable fee of $5,000 every 90 days to hold each slot.

American began asking questions about three weeks ago that tipped off Kunze and airport officials that the airline might be eyeing service expansion.

Neeleman, meanwhile, said JetBlue will continue its push to lure more costumers to its low-fare, long-distance domestic routes. He announced on Monday promotional $104 to $109 each-way fares from Long Beach to Washington, D.C.

Long Beach is a key to JetBlue's growth, he said.

"The fact is, when we took the flight slots here nobody wanted them," Neeleman said. "Nobody was asking for them, nobody cared about them. We will take a couple of years to grow into them. But we will make the deadline in two years. We will fly."



Living in LA, ORD/MDW will always be home!
 
FATFlyer
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 2:21 am

LGB Photos - If AA does sue, then it looks like someone finally heard you about the Long Beach court agreement having expired.

"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
 
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spinkid
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 2:27 am

Seems like if AA does decide to sue, they won't have much of a case. All jetBlue would have to do to make the entire case moot is start using the slots faster. Which probably wouldn't be that hard. As it is, by the time AA got it's litigation going, May 2003 would probably not be too far off.
 
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EA CO AS
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 2:44 am

Rest assured, if B6 even THINKS of serving SEA from LGB, Alaska Airlines will have their attorneys lining up to slap down lawsuits for slots there.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
FATFlyer
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 2:45 am

But AA could sue the city to have the 41 slots increased. Those slots are based on a local court mediated agreement that expired last year. So AA may be able to make a case against the airport that the city is interfering in interstate commerce, a federal not local jurisdiction.

Noise is also now federally regulated (since 1990) and cities must follow federal law on the issue. LGB and SNA were the only 2 airports allowed to keep their local limits. LGB's expired and SNA's will be expiring in the next few years. SNA is attempting to maintain limits beyond their agreement's expiration. So we could see a battle brew there in the next few years also.



"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
 
N509JB
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:07 am

Good for them...

If you ask me, this is an entire load of crap on AA's part. This coming from the airline notorious for running the little guys out of cities.

That airport sat there pretty much empty for how many years? And they wanna "add service" now...why?... Only cause we're there.

Let’s see how eager they would be to give us slots at DFW or ORD if we wanted to serve there.

When the shoe is on the other foot, guess who turns hypocrite?

B
 
777D
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:11 am

I have to agree with N509JB.

I hope that JB is able to hold off AMR at Long Beach. Exactly when did AMR want to servce LGB, when JB started to take business away from the big boys.

I hope that JB does not give anything up to AMR and that JB does more for the flying public in JFK and any other city that is benefitting from JB
 
Greg
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:16 am

I think AA will prevail..they have a strong California presence. JetBlue is unknown. Don't underestimate that McDonnell-Douglas/Boeing is a huge area employer in Long Beach and AA is/and has been one of their best customers.

I don't think the original agreement would be subject to review. I do however, think it would be easy to raise the cap on departures. It's an environmental concern not a safety issue. It would get more interesting if another airline also lodged a similiar complaint. Or is a consumer group took the initiatize to sue the council for basically setting up a scenario which does not promote competition.

JetBlue should move fast and establish their stronghold.

 
heavymetal
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:18 am

If I were JetBlue I'd paint a Cessna in company colors and hire someone(with a paid fare!) to use all their alloted slots everyday....once up, once down.... For the 24 slots that DONT involve an A320!  Smile/happy/getting dizzy

Then they can simply tell AA "Sorry! We're filled to capacity!"
 
timberwolf24
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:20 am

DFW is not a slot controlled airport so JetBlue does not need slots there and last I read slots end at ORD July 1, 2002. If AA does sue to increase slots at LGB that would also help JetBlue and they could add flights above the 21 slots they currently have.
Living in LA, ORD/MDW will always be home!
 
heavymetal
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:23 am

I'd even have the Cessna tow a banner...."JetBlue means low fares for LGB! NO WAY AA!"

Lil' Branson flair for marketing drama!
 
AAgent
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 4:02 am

Granted, AA may or may not be on your own personal list of favorite airlines, but let's look at what AA really is, an airline. And like most other airlines, AA must remain profitable in the long run to remain a viable airline. Hence competition is as important to AA's future as it is to JetBlue or any other airline.

So let's take a moment to look at the issue from a hypothetical perspective. If you were running an airline and it came to your attention that a competing airline was growing like a weed in a certain market, it is quite probable that you would make every effort to take a share of that market. It's not that you hate the other airline, it's just good business. You can't let a competitor have a free reign or you'll soon be out of the game!

I would expect that JetBlue, being the competitor that it must be, will do everything within it's power to keep AA (or any other airline for that matter) from gaining a significant foothold in their home turf at LGB. However, it's AA's job to make every effort to add slots into LGB, and for that matter, to take advantage of other strategic opportunities elsewhere thoughout the globe.

After all, in the big picture it's all a big game where the playing pieces are airplanes, runways and gates. The simplified object of the game is to compete with other airlines to accumulate the most airplanes, runway landing opportunities and gates at which to service as many passengers (and as much cargo) as possible. The reward for playing the game well is money with which you can buy more playing pieces. Play poorly and you lose all of your pieces and your money. AA and JetBlue are both players in this game for the brave. If they're lucky, the game will be endless.

Now let's play!!!

Respectfully,
AAgent
War Eagle!
 
N509JB
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 4:19 am

In speaking of DFW, I was talking hypothetically. Slots or no, AA would not be busting out the welcome wagon for us. ORD is a different story, and dont be suprised if you see us there this summer  Big grin

Bottomline, AA isnt getting our slots at LGB. They MIGHT get some more slots added, but God, I'd love it if we got some of them too.

This is predatory, pure and simple. I wont be suprised if we see NYC-LGB, OAK-LGB or any other of our routes matched by AA.

B
 
Greg
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 4:28 am

Not that I think you should be nervous, but AA is fairly good at the predatory pricing game. After all, they invented yield management. It's much easier for them to operate at a loss than you. And they can do it for a far longer time.
With an IPO around the corner(?), bad ROI numbers are death. The good news is that courts work very slow. It will be months before any injunction can be awarded.

Curious..what's the problem with JetBlue and their creditors (and YES, there is problems). You received $6M in from the stabilization fund because banks would not float the loans. What gives?
 
timberwolf24
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 4:58 am

I don't want to see JetBlue loose any slots at LGB, in fact I want to see them add flights at LGB and I think the caps are absurd. I'm wondering, would you call it predatory if Southwest, ATA or Frontier were wanting the slots or predatory if JetBlue started DFW-ORD. =)
I do agree with you the reason AA is doing this is because of JetBlue, I have seen this first hand by good old AA at MDW when ATA announced service from MDW to DFW next thing we knew there was AA with F-100s MDW-DFW. However we fly 737-800s and 757s on that route and do quite well as I'm sure Jetblue would do quite well against AA. When you guys do start service just go to ORD, it's bad enough that we have Southwest at MDW. =D
Living in LA, ORD/MDW will always be home!
 
Kubla
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 5:07 am

Is this a good time for some predatory pricing by the majors? We've been led to believe that they are burning through their cash at an alarming rate.

 
777D
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Add Flights?

Wed Mar 13, 2002 5:35 am

With AMR thinking of adding flights to and from LGB where were they 3 years ago, 2 years ago or even 1 year ago?

Jetblue is making inroads into the big boys territory and that makes them nervous. I am glad to see Jetblue doing well, I hope they are at least.

Yes AMR can afford to lose money on this route longer than Jetblue, but then why are they(AMR) saying they are losing millions per day?

I hope Jetblue does prevail!!

With these slots, where are they going to start service? With what equipment? All the Jetblue planes are in service so where are the other planes coming from?

Thanks...


777D
 
Greg
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 5:40 am

I think the issue is that with a limited route network, AA can operate at a loss on specific routes very easily. They can make up the cost...dollar for dollar on any other route not competing with JetBlue. Hemmoraging cash-wise a bit more to eliminate a competitor may actually be in their best interest.

Is it fair? Not really.
Will it happen? Very likely.

JetBlue has a great market at JFK...why are they not concentrating their efforts there? N509JB?
 
DCA-ROCguy
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AAgent

Wed Mar 13, 2002 6:00 am

Granted, AA may or may not be on your own personal list of favorite airlines, but let's look at what AA really is, an airline. And like most other airlines, AA must remain profitable in the long run to remain a viable airline. Hence competition is as important to AA's future as it is to JetBlue or any other airline.

It's not a matter of AA being anyone's "favorite" airline or not. They are a gigantic Cartel carrier with a massive route network and high operating costs. They don't like the idea that any airline with a lower cost structure, and thus the ability to make money on lower fares, is out there with the possibility to hurt their yields, somewhere, anywhere.

AA would not give a rat's tail about LGB if JetBlue were not there. AA can't make money at LGB beyond its 4 daily M80's to DFW, or so their accountants seem to think, since there hasn't been a peep out of AA about LBG til now. This move is *strictly* predatory, not competitive. If AA drove JetBlue out on transcons, which is unlikely anyway, they would drop back to their old schedule so fast it would create a cyclone.

This move is NOT about "competition" or offering consumers more options. It is about attacking a competitor who has a lower cost structure and can offer consumers lower fares. AA does NOT want that at any cost.

So let's take a moment to look at the issue from a hypothetical perspective. If you were running an airline and it came to your attention that a competing airline was growing like a weed in a certain market, it is quite probable that you would make every effort to take a share of that market. It's not that you hate the other airline, it's just good business. You can't let a competitor have a free reign or you'll soon be out of the game!

Funny, that doesn't seem to be how Southwest and AirTran operate...they seem to be growing nicely in a symbiotic fashion in the East, with different marketing, profit, and operational strategies. American does not want a "share" of LGB because sans JetBlue they wouldn't even know it was there (a staffer would probably have to remind Carty about the 4 daily M80's to DFW).

AA is attacking a perceived threat to their NY-LA area transcon yields, and nothing else. They don't want to let Southwest happen again, because they want consumers paying high fares on their planes to pay for their high cost structure. Which they can certainly do in enough markets.

I would expect that JetBlue, being the competitor that it must be, will do everything within it's power to keep AA (or any other airline for that matter) from gaining a significant foothold in their home turf at LGB. However, it's AA's job to make every effort to add slots into LGB, and for that matter, to take advantage of other strategic opportunities elsewhere thoughout the globe.

I'm no lawyer, but the whole idea of local communities messing with interstate commerce for NIMBY or other reasons stinks. As long as the cap on flights is there, though, JetBlue is well-justified to hold those slots. They can easily use every one of them by mid 2003.

After all, in the big picture it's all a big game where the playing pieces are airplanes, runways and gates. The simplified object of the game is to compete with other airlines to accumulate the most airplanes, runway landing opportunities and gates at which to service as many passengers (and as much cargo) as possible. The reward for playing the game well is money with which you can buy more playing pieces. Play poorly and you lose all of your pieces and your money. AA and JetBlue are both players in this game for the brave. If they're lucky, the game will be endless.

It would be nice if the US airline industry were that simple, but it isn't. The trouble is, that we have two airline industries in the country. One, the UA-AA-DL-CO-NW-US Cartel and their regional affiliates, has high fixed costs and a motive to keep fares high to feed those costs. Even if it means playing dirty with low-fare competitors.

The other airline industry, the low-fare industry, offers low fares, excellent service, and liberation for communities--especially medium-size cities--who are vulnerable to the high fares of the Cartel. Fortunately, the current generation of low-fares is well-managed, and might even survive an all-out assault by the Cartel. (Whom I used to call the "Six Families" before a few people complained).

Both types of airlines are needed because of their different route structures and benefits. WN can't serve Chattanooga profitably but United Express can. Similarly, Rochester can support AirTran, and travelers who don't want lounge chairs or need FF miles good to Singapore, can enjoy low fares.

The Cartel's history indicates that they are not to be trusted any further than the Attorney General can spit at them in the matter of predatory pricing and capacity dumping at low fare carriers. Justice only lost the USA v. AMR suit because of its sloppy legal work, and weakness in the Sherman Act's current definition of capacity dumping. (Congress should amend that).

I'm not trying to be rude or dismiss your points out of hand, AAgent, please don't take any offense. But the LGB situation is a little microcosm of a much bigger, ongoing, case of a high-cost oligopoly trying to protect its empire, using advantages like deep capacity to tolerate price and capacity wars, that its competitors don't have.

Of course, if AA does get more LGB slots, JetBlue probably will do well anyway, they're building a loyal customer base. But nevertheless DOJ should watch the situation like a hawk.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
777D
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DCA-ROC Guy

Wed Mar 13, 2002 6:07 am

whoa
 
johnboy
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 6:14 am

"But nevertheless DOJ should watch the situation like a hawk."

Let me put it mathematically:

(Ashcroft/DOJ) + Bush x (Hutchison/Armey/DeLay) - California = $$$$ for AA.
 
pelicanlarry
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 6:20 am

Maybe it is a good time to check the history of jet blue in Long Beach and what the members of the forum had to say back then, this is it:
http://www.airliners.net/discussions/general_aviation/read.main/475128/
 
heavymetal
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 7:07 am

DCA-ROC put it wonderfully.

The free market is something that corporations pay tremendous lip service to....until someone comes along that does it better than them. Then it's hire the best attorneys and lobbyests around to tilt the system unfairly in their favor.

The sad thing is, this poisoned process is so common now that we've somehow fooled ourselves that it's actually part of the free market. Every major industry in America is guilty of it.

American has every right to fly into and out of LGB. And LGB should have every right to tell them how often.
 
AAgent
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 7:15 am

DCA-ROCguy, I have taken NO offense to your post. As a matter of fact I very much enjoy a lively debate!!!

In regards to JetBlue giving up slots at LGB... If I were JetBlue, you'd have to pry them from my cold dead fingers. However, AA, being a strong competitor, must make every effort to either force the addition of new slots into LGB or otherwise encourage JetBlue to relinquish control of some of the slots. In any case, I would greatly prefer that AA refrain from an attempt to squash JetBlue in the process of slot acquisition as we aviation enthusiasts enjoy the very existence of a wide variety of airlines. (It makes for better aircraft spotting!)

I wish JetBlue continued success, but please don't begrudge AA for doing what it is supposed to do, and that is that AA must compete in the airline industry by providing air travel services to it's customers while providing profits to it's shareholders. If that means AA has to compete aggressively to maintain and/or expand it's operations, so be it. Make no mistake, I fully expect that JetBlue will make every effort to compete, fiercely if necessary...and I don't blame them.

Let the games begin.


Respectfully,
AAgent
War Eagle!
 
blink182
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 7:53 am

If Jetblue were to start ORD-DFW, they would not stand a chance. First of all, American has hubs at both airports and United has a hub at ORD whereas Jetblue has no presence currently at both airports. Jetblue would be dead in the first few months of that service.

I am an AA fan, but I think most of this is predatory and if AA eliminates Jetblue, AA will not return to LGB. In all fairness to AA, they are just trying to make money and capitalize.

AAgent- Very nice analogy about the game, very nice  Smile.

blink
Give me a break, I created this username when I was a kid...
 
Boiler Special
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 7:59 am

Granted, American had no interest in LGB until jetBlue arrived in town. They also had no interest in Vanguard until they started flying DFW-ICT.

Simply put, American, or any of the other airlines, will not stand by while a low-fare airline builds up its market presence in a MAJOR market like the LA metro area. You people at jetBlue didn't honestly think you'd be able to fly 21 flights a day out of Long Beach without nay a challenge from another airline did you? Especially when you propose to go face-to-face with some of these airlines on some of their prized routes. It is their right, reaffirmed by last year's AA vs. DOJ ruling, to compete.

Will they be able to compete using jetBlue's slots? Not as long it is their legal right to possess the slots but not use them. Will they be able to get rid of the slot rule at LGB? Never underestimate a good lawyer, especially one that has plenty of information to support his or her case.

In another view, look at it like this. There was no DEMAND for service at LGB until B6 came into the market and created a demand by offering low fares. Now, there is a demand in the market and look for other airlines to grab a share of it.
 
AAgent
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 8:00 am

Thank you, Blink182.

Respectfully,
AAgent
War Eagle!
 
Skyway1
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 8:38 am

I hope JetBlue is able to hold off AMR, for the sake of travellers in the LGB area. Like stated above, if AMR was able to drive JetBlue out of the market, they would be out there like a "hot potato" as well. This all sounds like Northwest's monopoly in the Minneapolis hub, I mean the predatory pricing of all the low fare entrants, e.g. Vanguard, Reno Air, and Sun Country. My vote is for JetBlue on this one.

Chris
KNUK, KNUK, KNUK woowoowoo
 
PSU.DTW.SCE
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 8:40 am

I normally would stay out of these arguements, but keep this point in mind....

Businesses are allowed to compete against each other, airlines are no different.

I really don't understand why their is this faction that believes the Big-6 carriers are the devil and "low-fare/frill" carriers are the holy angel.

Low-Fare/Frill carriers, sure they're great too, and they have a good purpose. Unfortunetely their route structure is rather limited compared to the majors. I don't see JetBlue, Southwest, or Vanguard knocking on the door at State College, PA or Pellston, MI. Face it, they can't get a majority of the people in this country where they want to go, and I don't see that changing anytime soon. The majors in some way provide a very valuable service to smaller communities that the low-fares don't.

We also can't deny all the innovations that the majors have had over the years. Low Fares too. The two types co-exist because of each other and make each other better.

So, at least acknowledge that, no need for the hostility. I've had many incredibly low fares on the majors, and yes, I've had rather expensive tickets on the likes of Southwest. The more planes flying the better!!
 
Jer32382
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 8:50 am

All I have to say is that I wanna see JetBlue kick some AA ass.
 
ScottB
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 8:58 am

Actually, I think AA's strategy is to get their request in for slots and to establish a legal right to claim those slots if jetBlue doesn't use them in the next 14-1/2 months. Moreover, this maneuver puts pressure on B6 to use those slots or lose them. jetBlue was granted exclusive rights for two years to 27 slots in May, 2001; any unused slots revert to the city in June, 2003. Given that over a year into their agreement jetBlue will have only used 6 of 27 slots (less than a quarter of the total), they will need to embark upon a significant expansion of service at LGB (nearly 20 additional departures in 12 months). There exists a potential impact on profitability (do you run extra flights just to hold the slots?) as well as on their ability to expand in three areas AA cares about: NYC, South Florida, and San Juan. After all, adding 20 flights at LGB would require at least 5-7 of the new aircraft. There's also a possible impact on B6's ability to use all of its slot exemptions at JFK, which may also be subject to forfeiture if not used.

I suspect that the LGB slot rules, antiquated terminal, and less-desirable demographics around LGB are a large part of why WN never started service there. Don't forget LGB's history with failed startup air carriers.
 
picarus
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 9:04 am

Deja vu all over again. AA pulled this crap in the early 80s at SNA; took it to court, and won. I wouldn't be surprised to see the slot limits "renegotiated" to accomodate AA. I wonder if AA would be the least bit interested if JetBlue hadn't developed big plans for LGB...hmmmmm?????
 
AAgent
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 9:44 am

We can't say whether AA would or would not have been terribly interested in LGB had it not been for JetBlue's ambitions there. The only thing we can say with reasonable certainty is:

~ JetBlue offers service from LGB.

~ JetBlue wishes to expand service to some core markets served by American.

~ JetBlue and American Airlines are competitors.

~ American Airlines wishes to be more competitive out of LGB.

Regarding speculation as to whether or not AA may drive JetBlue out of service or if American would discontinue service out of LGB if it were to uproot JetBlue...well, it's just that...speculation. We don't know for sure what would happen.

So the real question is...

Is there anything inherently wrong with American Airlines (or any other airline for that matter) attempting to gain additional slots at LGB?

Please keep in mind that I do not dislike JetBlue. It's just that they should be ready for some stiff competition when they start going for the core markets in which major airlines fight tooth and nail for passengers. As always, I wish JetBlue and the other airlines of the world the best of luck. However, please don't begrudge American Airlines when they step up to the plate and say, "bring it on!"

Respectfully,
AAgent
War Eagle!
 
searpqx
Posts: 4173
Joined: Thu Jun 29, 2000 10:36 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 10:36 am

Guys, slightly off topic, but I just want to say, 'This is what I come here for!' Thank You! AAgent and DCA-ROC Guy, thanks for laying out your positions without resorting to the name calling that seems to happen all too often.

As for the subject itself, I tend to agree with AAgent's summary. As a strong and vibrant competitor, and one that wants stay that way, AA is all but required to respond to JetBlue, including going after additional slots in a slot restricted market. Since JetBlue is really the only one w/ unused slots (and coincidentaly the catalyst for all this activity), its both logical and convenient that its their slots AA goes afer. The key, as several people have pointed out, is to ensure AA doesn't do anything illegal as it faces off with JetBlue. And while I don't think AA is above doing whatever it thinks it can get away with (don't get me wrong, I'm a very loyal former AA employee, but a realistic one), AA is also very aware that every regulatory agency going, as well as JetBlue (and who know whom else), is watching, just waiting for a misstep. The folks at AA are hardnosed, but they're not dumb.

So to quote AAgent, Let the games begin!
"The two most common elements in the universe are Hydrogen and stupidity"
 
txagkuwait
Posts: 1388
Joined: Fri Aug 27, 1999 7:39 am

What To Do If You Are Jet Blue, Sue

Wed Mar 13, 2002 10:55 am

I'm sorry, I could not resist a chance at some alliteration. Far too few people get any mileage out of the English language. But I digress....

I'm not David Neeleman. But if I were, here's what I would do.

I'd use my slots. Every one of them. Every stinking one of them. And I'd do it now.

I am reminded of an axiom (or is it a proverb?): He who hesitates is lost.

This almost happened in the Southwest vs MuseAir struggle.

The only thing is Southwest was faster, more nimble, and unafraid to execute a plan.

Back before Southwest bought Muse, Muse was losing quite a bit of money. They had managed to do this by laying right on top of Southwest in a whole bunch of markets. Taking on a low fare competitor with a loyal following is unwise, even if you are offering a quality product (Muse did) and enjoy low costs (they did that also).

What Muse had not done was get away from Southwest. Well, neither of them offered service dallas Love to Little Rock. So Muse announced they were planning on it, oh, within several months. Mike Muse went around making comments in the paper about their planned service to Little Rock. They went so far as to put a proposed schedule with proposed fares in the newspaper.

Well, one afternoon, a couple of months or so before Muse was saying he might start service, I guess they got to talking about Little Rock in the Southwest conference room. They'd always considered Little Rock for future expansion...it was a city that the Wright Amendment would let you fly to from Dallas, it was an old TTa/Texas Intl route that did well.....they were eventually going to get around to doing Little Rock.

So with Muse saying he is going there in, oh, maybe 8 or 9 weeks...I guess they got to talking one Thursday afternoon at SW Headquarters on Regal Row in Dallas and somebody said, "hmmmm, I wonder how quickly we could inaugurate service there."

The answer was Tuesday morning.

Seize the bull by the horns. If you are Jet Blue, take those Long Beach slots and start using them. But do not be stupid. Folks will fly a one stop transcon, no problem, if (as Bob Barker would say) the price is right. Let's see LGB-JFK-DEN. Maybe LGB-MSY-FLL. LGB-ORD-IAD. Lots of things you can do.

What going one stop allows you to double the potential destinations your LGB market has, makes you less dependent on a single market. It might be tough to fill 4 x 162 passenger airplanes a day from LGB to JFK.....but it isn't as hard to find 80 pax to Denver and 80 pax to JFK on each of those 4 flights.

I would not get into a protracted legal battle with American. Despite their current malaise they have more money than God, or at least they still have plenty to spend on dragging JetBlue through the court system.

No, the easy solution is - you have the slots, use the slots. Put up or shut up time for the big enchilada.

Had I been Neeleman I am not convinced I'd have put my planes into Long Beach to begin with. I have just never found it as desirable an airport in Southern Cal as either Burbank, Ontario, John Wayne, or even LAX. (For a huge airport LAX is surprisingly manageable).

But since Neeleman did select LGB, the thing to do is take it and run with it. Foot dragging is not going to fix any of this.

TxAg
 
MAH4546
Posts: 24597
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RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 11:00 am

TxAgKuwait, your forgetting one very important thing. jetBlue currently does not have enough planes to fill all those 24 slots. They are expected to be up to 10 dailies by the end of the summer (4x JFK, 1x IAD-FLL, 2x OAK, 2x DEN, 1x FLL is my guess). Also, they are not having a hard time filling up 162-passenger A320s on JFK-LGB. Loads are superb.
a.
 
AA-SAN
Posts: 134
Joined: Mon Apr 24, 2000 10:09 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 11:01 am

Scottb brought up a very interesting point...

It seems clear that at the very least this is an attempt by AA to but pressure on B6 to use these slots. Considering that AA seems to be the only airline sticking to JFK besides B6, this could be to divert B6's attention from the east coast to the west coast. If B6 feels that their LGB slots are important enough, this could "drive a wedge" through B6's strategy. B6 is a great carrier and I've enjoyed their service now a couple of times, but I just don't see them in a position to hold off competition on two fronts just yet. AA seems to have made a very clever competitive move, now it seems to be up to the lawyers to see if their stragegy pays off. B6 should take a little history class and realize the near impossibility of maintaining two fronts for any extended period of time, especially when one of these fronts is as fragile as LGB appears to be. If B6 is forced to spend valuable $ as well as send aircraft to the west, both of which could be used more safely on the east coast, it may be a little too much for our new favorite low-cost to keep up for an extended period of time. We'll see what the future has to hold.
 
IMissPiedmont
Posts: 6200
Joined: Wed May 23, 2001 12:58 pm

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 11:38 am

Hmm. Does Americans AActions Aat DAL ring AA bell? They went out of their WAAy to get slots to compete with Legend. AAfter they forced Legend out of business, they promptly withdrew from DAL. Kind of fishy to me. LGB has been a wide open airport for years, why all of a sudden do the Dallas Dingbats want so badly to fly there?

I used to like AA too.
The day you stop learning is the day you should die.
 
tcttx
Posts: 215
Joined: Fri Dec 10, 1999 11:40 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 11:43 am

Does Americans AActions Aat DAL ring AA bell? They went out of their WAAy to get slots to compete with Legend. AAfter they forced Legend out of business, they promptly withdrew from DAL.
------------------------------------------------------

Wrong! Legend stopped flying around 12/2000, but AA kept flying from DAL until 9/11/2001. 9 months later! And AA was set to start using the new gates and ticket counter in mid-September 2001.
 
AluminumShower
Posts: 143
Joined: Tue Jan 18, 2000 11:05 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 1:47 pm

Slots? At DAL???? When were there slots at DAL?

James, I am not sure how you equate AA adding flights into LGB as being predatory. It sounds like good old American business to me....
 
Goldenshield
Posts: 5008
Joined: Sun Jan 14, 2001 3:45 pm

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 2:05 pm

I heard something about AA also wanting to start 2x daily nonstops, ONT-JFK to rival B6. With what AA is doing, that is very much considered predatory, plain and simple.
Two all beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun.
 
AluminumShower
Posts: 143
Joined: Tue Jan 18, 2000 11:05 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 2:08 pm

No.... AA already said they were not ging to do JFK-ONT, however, adding service in a market alone does not define predation.
 
LoneStarMike
Posts: 2802
Joined: Sat Jul 01, 2000 1:02 pm

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:09 pm

Seize the bull by the horns. If you are Jet Blue, take those Long Beach slots and start using them. But do not be stupid. Folks will fly a one stop transcon, no problem, if (as Bob Barker would say) the price is right. Let's see LGB-JFK-DEN. Maybe LGB-MSY-FLL. LGB-ORD-IAD. Lots of things you can do.

I was thinking along the same lines. There has been much speculation that jetBlue might start LGB-FLL in the future, why not make it a one-stop transcon through DFW? You know if it got ugly the Dallas press would have a field day, which would just give jetBlue more publicity (free publicity, I might add.) When Southwest was in its infancy and didn't really have a lot of money for advertising, all the reports in the paper regarding Braniff and Texas Internationaltaking Southwest to court to prevent them from flying turned out to be benefit Southwest due to all that free publicity. It made people aware of who Southest was. Perhaps jetBlue could achieve the same results.

Just a thought.

LoneStarMike

 
LV
Posts: 1546
Joined: Mon Jun 04, 2001 6:02 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:19 pm

Well, if the problem is planes, I would think with the market the way it currently is it wouldnt be that hard to lease a few A320s temporarily from somebody with to much capacity. Of course, I realize there are some compatibility issues but when your airline is riding on it, you will make do.
Also, they could wetlease some crafts and crew from someone like ATA or Sun Country, right?

Third, just to fill those slots, use what new craft you have to do some shorter hops on the west coast vs. transcons, gets you better utilization of slots.
For example, I would think they could do two round trips a day LGB to LAS and fill it. Yes, it is low yield but you at least break even and keep AA out of your territory.

I wondered about putting their eggs in the LGB basket.

Or, they cant sale them, can they lease slots out, say to Sun Country to do a LGB-IFP run?

Maybe use a plane to run IFP and LAS routes (although I doubt you can make IFP work daily out of LGB)
 
AA@DFW
Posts: 392
Joined: Sat Sep 09, 2000 8:06 pm

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:25 pm

Normally I would not elect to use such tactics as I am about to, but in this case I will make an exception...


SCREW JET BLUE


AA has been through hell-and-back over the past 6 months. All bets are off.

AA@DFW
 
777D
Posts: 285
Joined: Fri Jun 15, 2001 7:27 pm

Similar To AMR/BA In Lhr?

Wed Mar 13, 2002 3:28 pm

The irony of this situation is that other carriers wanted AMR/BA to give up slots at LHR but AMR/BA decided it was too large of a price to pay to allow other US carriers fly to LHR and grant AMR/BA anti-trust in there alliance.

"In a move that steps up its local competition with JetBlue Airways, American Airlines has requested four more daily flights at Long Beach Airport so it can begin service to two new destinations this summer."

Since Jetblue holds the cards @ LGB, AMR is now using the idea of competition to help the public when in LHR it would benefit the flying public AMR does not want to give their monopoly/market share to other carriers.

I realize their is a international agreement between the UK and US but there is slight similarity regarding this issue at LGB and LHR which is slot controlled as well

I hope Jetblue does not give up those slots anytime soon.

 
DCA-ROCguy
Posts: 3894
Joined: Fri Apr 21, 2000 5:03 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 3:33 pm

TgAxKuwait....I agree completely. If JetBlue is going to do this LGB thing, and has those slots, they need to use them. Maybe start by flying all to existing JetBlue stations as someone suggested above--DEN, FLL, SEA, OAK, maybe even TPA. That way they minimize the costs since they won't have to set up new stations.

AAgent...History is a perfectly good basis to predict what an airline is likely to do. One doesn't need absolute off-Carty's-desk confirmation of plans to say what historical data suggest is very likely to happen. Moral certitude is an ordinary part of debate. And there's a very strong moral certitude that AA's sudden interest in LGB is only JetBlue-related.

That said, AA entering LGB on JetBlue markets would of itself *not* be strictly predatory, as AluminumShower says. IF AA simply matches capacity and fares, they would be acting legally. The question becomes, if they start undercutting JetBlue with fares that even B6 couldn't profit with, then there's a problem. Or if they dump 763's into the market or something.

In a fair fight, I think JetBlue would do fine. They cater to a different market, one that isn't drawn by armchair-type seats and FF miles good to Tokyo. AA would probably just lose money, since gold-platium-uranium AAdvantage members want to go to LAX anyway.

And as I said earlier, "slots" at a small airport like LGB shouldn't even be an issue. Airports have an interstate commerce role, which Congress can regulate, but I'm not convinced that local communities can. Better that LGB was open and anyone who wanted could come.

But these are tough times for the Cartel, and the temptation to turn predatory is pretty strong. I think Ashcroft would enforce anti-trust law--remember, he is the AG who killed UA-US. There'd be a lot of Congressional pressure for a probe if AA turned pit bull, and I don't think the Bush-AA connection would stop it.

777d--hehe, haven't you read one of my sermons about the Cartel before? They're my specialty.  Smile

To he or she who asked "why the hostility towards the major airlines"....if you were from Rochester, New York, you'd understand our hostility. I've spent my life being gouged to fly home, even on 21-day advance, because the low-fare airlines weren't there for so long. The "Cartel-low fare" market duality only works as long as a big low-fare carrier is at your airport. Otherwise, it's bend over. And we've been real sick of that for many years. Fortunately, JetBlue is at ROC and AirTran arrives on Thursday. And we haven't given up on Southwest, either, BUF or no BUF.

But as I said above, both kinds of carriers have roles to play in the marketplace. The low-fares are quite happy to "live and let live," offering low fares and great service wherever they can. It's the Cartel that doesn't seem to accept the idea of both kinds of carriers existing. Their past behavior makes clear they have to be watched.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
strickerje
Posts: 706
Joined: Tue Feb 20, 2001 1:35 pm

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 4:58 pm

In all fairness to AA, major companies do this sort of thing all the time. Remember the Microsoft case? (Sorry, just had to bring that up...) They feel that JetBlue is a threat to their business, and they want to eliminate it, which they, being a large company, feel that they have the power to do. JetBlue, being a small company, knows it couldn't survive in a place like LAX, so it decides to start out in the smaller airport, LGB. American and American Eagle on the other hand have a significant presence at LAX, so I really don't see that they have any use for expanding service in LGB except to drive away JetBlue. If they push JetBlue out of LGB, you'll see AA disappear from LGB as well. A bit mean, perhaps, but it's still fair business. What I think is absurd, however, is that AA would (if they do) sue JetBlue for taking the majority of the slots at LGB. That's like suing the kid who sets up his lemonade stand next to yours. If this were right, JetBlue should be able to sue AA or UA for occupying enough of LAX to keep them away, but they won't, because that's a case they can't possibly win. JetBlue isn't breaking any laws by buying up most of the slots at LGB; it was vacant so they colonized there. If AA's lawsuit against JetBlue does occur, I hope the judges see that it is just a case of a major company abusing its power to eliminate the competiton.

-Jeffrey S.
 
Fleet Service
Posts: 473
Joined: Wed Apr 12, 2000 11:58 am

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 5:32 pm

American wouldn't actually be suing jetblue, it would be the airport authority.
Yes, I actually *do* work for an airline,how about you?
 
LoneStarMike
Posts: 2802
Joined: Sat Jul 01, 2000 1:02 pm

RE: AA Wants JetBlue Slots @ LGB

Wed Mar 13, 2002 5:50 pm

I posted this article a little while ago in The Wright Amendement thread, but I'm also going to post it in this one simply to illustrate how far AA will go to get what it wants. AA has always been a fiere competitor ho will stop at nothing to get what they want and they have lots of political connections. The article is from the Dallas Observer.

The (W)right to Fly
10/16/1997

http://www.dallasobserver.com/issues/1997-10-16/feature.html/page1.html

American Airlines may be something special in the air, but they are cut-throat in the courtrom. I just hope jetBlue knows what they're up against.

LoneStarMike