United777
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AA's Plans For SJC And The West Coast?

Tue Jan 28, 2003 12:49 pm

What is American Airlines exact plan for it's hub in San Jose. I know they fly to a few destinations from SJC but do they plan anymore expansion around the US especially west coast routes. Will they expand more to Asia soon?
Once the economy and they finish all the work they are doing at the SJC airport will AA expand?

Also what happened to the SEA-SJC that Reno Air flew but American Airlines took over after the merger. Do they code-share with AS on the route? What happened to AA buying Reno Air to increase it presence on the west coast. They turned to Alaska Airlines for that it seems like.
 
LAXintl
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RE: AA's Plans For SJC And The West Coast?

Tue Jan 28, 2003 12:56 pm

I honestly do not believe AA has much if any plans for the West Coast. They have tried several times to build a network only to withdraw after a few years. Even the most recent experiment of using AA Eagle Embraer jets is being dismantled. International service beyond the upcoming LAX-NRT service has also been trimmed back with SEA, LAX and SJC all seeing reduction of flying. It seems AA along with DL have given up on California and surrendered the market to United and Southwest.
From the desert to the sea, to all of Southern California
 
gigneil
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RE: AA's Plans For SJC And The West Coast?

Tue Jan 28, 2003 1:01 pm

And Alaska.

Its a false sense of complacency. If the market improves, AA will be back on that like white on rice.

If UA goes under, DL will also certainly swoop in, if able.

N
 
DCA-ROCguy
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RE: AA's Plans For SJC And The West Coast?

Tue Jan 28, 2003 1:33 pm

AA's purchase of Reno Air, a lower-cost carrier, was not about increasing market share on the West Coast. It was about destroying competition, if I remember correctly. Reno Air was a successful, lower-cost carrier with expansion potential, and AA had its then-larger SJC presence and yields to protect. By a couple of years ago, AA had dismantled almost the entire former Reno Air system.

Shame on Reno Air owners for selling out!

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
ont 737
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RE: AA's Plans For SJC And The West Coast?

Tue Jan 28, 2003 9:09 pm

DCA-ROCguy,

I was with American at the time of the Reno Air buyout. I really felt sorry for the employees when they had to come over. Many had to move out of RNO if they still wanted a job because AA downsized RNO pretty much from day one. All of the exReno Air employee were given a very recognizable AA ID numbers and treated very poorly by many current AA employees. ("stealing seniority" blah blah blah) Yes it was pretty clear that AA had no intention to keep a RNO hub or even a focus city, it was all about getting more gates at SJC and squeezing out compeition.
 
flyboy7974
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 5:24 am

to all about the loss of Reno Air, damn to American, and anything dealing with American Air, curse them. word on the street because my brother and many friends were with them, was that long ago, when AA started to dismantle SJC, BNA, and RDU, AA looked to numerous smaller airlines to come in, pick up the market share, and do it at much lower costs than AA could ever afford, but still allow AA pax to receive some AA benefits, just on other airlines, such as in SJC with QQ and in RDU with ML. at the time, Crandall had profit shares and much financial backing to supporting this, and eventually it came out that he had a good chunk in Reno Air towards the very end, not early on, but in the end. when Reno Air showed profitability and was kicking butt out west, even against UA and SW, Crandall wanted his money back. add this to the slots that Reno Air held in O'Hare and in Orange County, and that was worth the AA purchase. AA never wanted to hub in RNO, or SJC for that matter, never did they want a west coast market share, nor did they want the fleet, which was not compatable to AA's MD-80's, it was politics. few of the original routes are even still offered by AA, some went to AA Eagle, now even most of those are gone.
 
sllevin
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 5:26 am

I disagree somewhat with Jim.

I think American intended to grow their West Coast presence. (Again. Let's not forget AirCal).

The trouble is that the AA way of doing things competes poorly with WN and Alaska, and thus has failed -- again. They have to realize that it's more than just buying some routes and gates, and that people in that short haul market, by nature, are looking for convience and low price -- and AA's simply not delivering that in the north-south market. So they simply pack up and go home for a while.

The next boom cycle, they'll try again, and probably fail.

This same thing is what US did when they bought PSA.

Maybe they aren't using enough sunscreen?  Smile

Steve
 
FlyingTexan
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 6:12 am

I agree fully with Flyboy7974

I was with AA post-QQ days. I recall one lady saying ‘You F&$%*ing AAssholes come into to Reno and cut our non-stops!’

What happened to MSP, SFO, SJC, LAS, SEA....etc...from Reno?

I think AA continued to cut most QQ vintage RNO n/s down to like ORD, LAX, and Dallas/Fort Worthless. (Now, STL with TWA).
"Wouldn't your boss like to fly home nonstop at 4:30 on a Friday afternoon?" -Airline Exec to Congressional Staffer
 
FATFlyer
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 7:55 am

The tech crash has hit SJC hard. 2002 O&D passenger counts were down about 15% from 2001. Let's not talk about what has probably happened to yields. AA has put Eagle's feed into LAX not SJC ever since they closed the hub the first time. They never really restarted feeding a hub at SJC. I don't see AA ramping up at SJC for anything more than O&D in the future.

The pullback from QQ's old ops at Reno have also hurt that airport. Passenger counts at RNO have been declining constantly. 2002 finished 8.5% below 2001, continuing a multi year slide. For example RNO figures show:
6,104,086 passengers in 1999 but only
5,626,034 passengers in 2000
4,932,648 passengers in 2001
4,510,406 passengers in 2002.

No wonder a passenger would complain, they're speaking with their wallets too.
"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain
 
brons2
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 9:49 am

I am glad WN is succeeding on the West Coast, finally a successful LCC that won't get bought out by a cartel carrier.

The cartels have destroyed every carrier they ever bought out there in the West. Is it really that hard to understand the market and give people what they want?

[Edited 2003-01-29 01:49:30]
Firings, if well done, are good for employee morale.
 
MAH4546
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 9:54 am

I think AA continued to cut most QQ vintage RNO n/s down to like ORD, LAX, and Dallas/Fort Worthless. (Now, STL with TWA).


Just ORD and DFW. LAX ended about three weeks ago.
a.
 
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OzarkD9S
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 10:06 am

WN serves RNO rather well...AA's cost structure could never support a significant west coast operation.
Coast to Coast and Border to Border, Ozark Flies YOUR Way!
 
N659AA
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 1:47 pm

AA's purchase of Reno Air, a lower-cost carrier, was not about increasing market share on the West Coast. It was about destroying competition, if I remember correctly. Reno Air was a successful, lower-cost carrier with expansion potential, and AA had its then-larger SJC presence and yields to protect. By a couple of years ago, AA had dismantled almost the entire former Reno Air system.

(I wish I knew how to put a quote in Italics)

Couldn't DISAGREE with you more Jim (aka DCA-ROCguy). AA's purchase of Reno Air was NOT about increasing "West Coast" market share. Theoretically, that was already being achieved with the AAdvantage deal between the two carriers, prior to the outright purchase. AA's purchase was NOT about destroying competition either...that would imply that AA and QQ WERE IN competition. That was simply not the case. If I remember correctly there were no overlapping routes. How can there be competition when there were no common routes? AA was feeding passengers onto the QQ system and vice versa. It was a mutually beneficial relationship.

Like ONT737, I was with AA (Capacity/Network Planning) at the time of the Reno Air purchase. The most significant reason for the purchase of QQ was this...

AA was a big player in the Transcon market, (and more or less, an East/West carrier) but even so, it was loosing a lot of passengers in this market because it did not have any kind of north/south network on the West Coast (in particular LAX-SFO). Why does the West Coast market have anything to do with Transcons you ask?? Well, lots of people originating on the East Coast do business in both Southern California as well as Northern California. Because UA, and to a much lesser extent, DL had north/south flights on the LAX/SFO corridor, many (high fare, premium traffic) passengers flew on those two carriers instead of AA because they did not have to fly multiple carriers on their itinerary.

It was reasoned that with even a small presence in the LAX/SFO corridor, AA could gain just a couple of additional share points in the BIG MONEY transcon market. AA knew it would not make money on an "onboard" (or stand alone) basis on the west coast routes, but the contribution to the overall network, it was thought, would be positive.

AA's purchase of Reno Air was about improving the AA NETWORK, and thus the desirability of AA in general, to the million-mile+ road warriors flying on the competition. It was about stealing from UA and DL, not destroying QQ. What happened to the dedicated professionals of Reno Air was very unfortunate and I, as well as the vast majority of the AA family, wish it could have been avoided.

I will now get off my soapbox.

 
DCA-ROCguy
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RE: AA's Plans For SJC And The West Coast?

Wed Jan 29, 2003 2:42 pm

That was simply not the case. If I remember correctly there were no overlapping routes. How can there be competition when there were no common routes? AA was feeding passengers onto the QQ system and vice versa. It was a mutually beneficial relationship.

An airline doesn't need to overlap another airline route-for-route to be considered a competitor. Reno Air was a growing airline with lower costs in a region in which you correctly note AA had market share and wanted to grow that market share. Do the math. AA wanted pax on AA planes, not on Reno feeders. Reno was growing, and direct overlap (on more than just RNO-ORD) was sure to develop.

Well, lots of people originating on the East Coast do business in both Southern California as well as Northern California. Because UA, and to a much lesser extent, DL had north/south flights on the LAX/SFO corridor, many (high fare, premium traffic) passengers flew on those two carriers instead of AA because they did not have to fly multiple carriers on their itinerary.

Again, AA wanted increased West Coast market share. Yes, grabbing Reno also bought them more MD-80's to use as they pleased elsewhere on the West Coast, which they did as others have noted. That was part of the picture too.

AA's purchase of Reno Air was about improving the AA NETWORK, and thus the desirability of AA in general, to the million-mile+ road warriors flying on the competition. It was about stealing from UA and DL, not destroying QQ. What happened to the dedicated professionals of Reno Air was very unfortunate and I, as well as the vast majority of the AA family, wish it could have been avoided.

That's hilarious....it's kind of like Michael Corelone saying "what happened to the dedicated professionals of the Barzini, Tattaglia, etc. families was very unfortunate, and I, as well as the vast majority of the Corleone family, wish it could have been avoided. Blood is bad for business."

AA's purchase of Reno was predatory and destructive, hurting both the Reno area and all the people who benefited from Reno's lower cost structure and (from what I read, I never flew them) quality service. If AA just wanted more MD-80s to fly around the West Coast and feed transcons, they didn't have to destroy an airline and a medium-size city's successful business to do it.

There was more to the Reno Air purchase than that; stamping out an uppity upstart was part of the picture. Crandall, now as then one of the most brilliant people in aviation (even if now retired), would not have missed that implication.

Jim
Need a new airline paint scheme? Better call Saul! (Bass that is)
 
ScottB
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RE: AA's Plans For SJC And The West Coast?

Thu Jan 30, 2003 11:38 am

On the contrary, Reno Air was not a highly successful business. In their last full year, they posted an operating loss of $11.6 million on $384 million in revenue -- for an operating margin of -3%. While their cash position improved in 1997, this was due to the company taking on a substantial amount of indebtedness in the form of long-term debt and preferred shares (with guaranteed payouts). While QQ did show a small profit in 1996 and an operating margin of roughly +0.7%, one might argue that the lapse in the federal excise tax on plane tickets that year was likely the reason for their profit that year.

Reno bounced in and out of markets, adding service to OKC, ONT, and DTW in 1997 and pulling out of ONT, DTW, ABQ, PIE, and GPT in 1998. They also faced a difficult competitive environment with WN, UA, HP, and AS all having a significant presence in the West. Moreover, QQ had a close relationship with AA, both by offering AAdvantage miles AND by subleasing some of the gates freed up when AA reduced service at SJC. In fact, there was a joke at the time which said "AMR" stood for "American-Midway-Reno."

To be frank, RNO is a crummy place for a hub. Yields are low and the market size is pretty limited. For example, 3Q1998 yields between Chicago and Reno were 9.3 cents/mile for QQ (and that's yield, not RASM). Average yields to/from RNO lower than in all but a half-dozen other markets.

I'm sure AA never intended to keep a hub at RNO. But having one there didn't make much sense. I think AA had two primary goals: improving their route structure in the West, thus strengthening their East-West presence, as others have said, as well as getting a larger presence back at SJC, which was benefiting from boom times in Silicon Valley. AA did have market share in California, but it was *complementary* to QQ's (which makes sense, the AAdvantage partnership provided benefits to frequent flyers at both airlines). Grabbing Reno Air's business is small potatoes strategically compared to grabbing a few percent of market share away from United and Delta in the West. Problem is, they didn't learn much from the AirCal purchase.
 
N659AA
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RE: AA's Plans For SJC And The West Coast?

Thu Jan 30, 2003 1:55 pm

An airline doesn't need to overlap another airline route-for-route to be considered a competitor.

Agreed, but even under your definition, AA and QQ were still not competitors. Two carriers can compete on a given O&D yet not compete on the same routes. Let's use the O&D "SAN-SEA" as an example. QQ served SAN-SJC and SJC-SEA, thus QQ served this O&D via its SJC hub (SAN-SJC-SEA). AA did not serve this market, meaning you could not travel on AA from SAN to SEA (unless you backhauled over DFW....which I do not count since this is not a logical itinerary). AA and QQ did not compete in the same O&Ds, that is why I do not consider AA and QQ competitors.

Do the math. AA wanted pax on AA planes, not on Reno feeders. Reno was growing, and direct overlap (on more than just RNO-ORD) was sure to develop.

Not sure what math you want me to do?? It would be more accurate to say that AA wanted west coast passengers on AA planes and buying QQ was a quick way to do it....no argument there.

Just an FYI....AA did not serve the RNO-ORD market at the same time QQ did, if so, it was for the briefest of periods. So the math tells me that there were no overlapping routes.

Again, AA wanted increased West Coast market share.

Not true. That was just a secondary by-product. As I said earlier, intra-w/c routes were going to be a money loser and everybody at AA knew it. AA did not enter the w/c market to gain market share on money losing routes. AA needed a more complete network to attract additional east-west passengers that it wasn't already carrying. Trust me on this one....I worked in the department that did this study. I may not be a graduate student in theology, but I do know a thing or two about airline route networks....especially the network of the airline I spent ten years at.

AA's purchase of Reno was predatory and destructive, hurting both the Reno area and all the people who benefited from Reno's lower cost structure and (from what I read, I never flew them) quality service. If AA just wanted more MD-80s to fly around the West Coast and feed transcons, they didn't have to destroy an airline and a medium-size city's successful business to do it.

There was more to the Reno Air purchase than that; stamping out an uppity upstart was part of the picture.


That is your opinion, and I can respect that. I just have to disagree with you whole heartedly on this point.

By the way...I did fly Reno Air, and yes, they did have a very good product.

N659AA
 
AAR90
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RE: AA's Plans For SJC And The West Coast?

Thu Jan 30, 2003 2:31 pm

I've seen far too many emotional arguments on this (and other) subjects to know there is no changing anybody's mind if they're basing their position on emotions. All I ask is those of you who believe AA purchased QQ for "predatory" or "destructive" (or whatever) reason do a little honest research.

QQ management placed Reno Air up for sale. AA management did not want to buy QQ and publicly stated so. NW & CO both sent teams to Reno to go over QQ's books in detail (multi-day stays) months before AA. In the end, AA management decided the damage from a major competitor getting access to its west coast based AAdvantage members was too great a risk and upped the ante eventually winning a private bidding war for QQ.

All of this was public information back then so you'll probably have to do a little digging to find it now. But those are the facts. Anything else is supposition and guesswork.
*NO CARRIER* -- A Naval Aviator's worst nightmare!
 
Boeingfan
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RE: AA's Plans For SJC And The West Coast?

Thu Jan 30, 2003 3:04 pm

AAR90 makes a valid point.

It was just business, nothing personal for/against QQ and its employees.

The same happened with AirCal and TWA, it was just business, AAdvantage member access, market share, gates and slots.

AA will increase SJC presence once the economy begins to roll again, and more people start traveling. Don't look for AA to totally reduce SJC, there remains some profitable flying out of the area. You still can not beat AA's frequency for connections to cities back east.

Something special in the San Jose, Ca. air.

Boeingfan
 
738_Driver
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RE: AA's Plans For SJC And The West Coast?

Sun Feb 02, 2003 3:09 pm

Wow, it looks like my Hawaiian friend was indeed paying attention in all those staff meetings. Nice memory!
 
HlywdCatft
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RE: AA's Plans For SJC And The West Coast?

Mon Feb 03, 2003 12:11 am

If something happened to AA where it would be gone, it wouldn't bother me. I hate to see all of the workers lose their jobs (except for the CEOs and guys leading the company). That's why I am not bothered by United's problems either. Both UA and AA have put many other companies out of business or have tried to- so lets just say to UA and AA- what goes around comes back around.
 
Matt D
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RE: AA's Plans For SJC And The West Coast?

Mon Feb 03, 2003 12:18 am

I miss Reno Air and AirCal as much as the next person. But don't worry. We WILL get another one eventually. As bad as things are now, they will improve in time, and another airline will set up shop. We lost AirCal and got Reno Air. We lost Reno Air, and will get another one. Southwest will NOT enjoy the near monopoly they currently do forever.

Remember the days of PEOPLExpress and everyone bemoaning their demise? Well, a few years later, we got Valujet. Then, when they went under, a few years after that, we now have JetBlue. And when JetBlue falls off the screen (they may be doing great now, but history shows that the long term odds of this airline succeeding are overwhelmingly against it), we'll have yet another.
 
Matt D
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RE: AA's Plans For SJC And The West Coast?

Mon Feb 03, 2003 1:44 am

nd just to prove my point, before I get flamed about JetBlue, here is a list of all the airlines that flew jet aircraft on scheduled services since deregulation in 1978 (I'm sure I forgot a couple):


Access Air
Air 1
Air 21
Air Atlanta
Air Berlin
Air Florida
Air Hawaii
Air South
Air Tran
Air Wisconsin
AirCal
AirTran
Allegiant Air
Altair
America West
American International
Aspen
ATA
Best Air
Braniff
Capitol
Carnival
Cascade Airways
Eastwind
Emerald
Empire
Florida Express
Frontier
Frontier Horizon
Grand
Jet America
Jet Train
JetBlue
KIWI
Legend
Leisure Air
Liberty
Markair
McClain
Metro
MGM Grand
Mid Pacific
Midway
Midway II
Midwest Express
Morris Air
Muse Air/TranStar
National
New York Air
Northeastern
Pacific East Air
Pacific Express
Pan Am
Paradise
PEOPLExpress
Pilgrim Air
Presidential I
Presidential II
Pride Air
Private Jet/National
Pro Air
PSA
Regent Air
Reno Air
Rich International
Royal West
Spirit
Sun Country
SunCoast
SunJet
Sunworld
Tahoe Air
The Hawaii Express
Total Air
Tower Air
Transamerica
Transtar
TriStar
Trump Shuttle
UltrAir
Valujet
Vanguard
Western Pacific
WinAir

And here's how many of them are left today:

AirTran
Air Wisconsin
Allegiant Air
America West
ATA
JetBlue
Frontier
Midwest Express

This speaks for itself.

 
HlywdCatft
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RE: AA's Plans For SJC And The West Coast?

Mon Feb 03, 2003 1:49 am

**Well, a few years later, we got Valujet. Then, when they went under,**

Valujet never went under, they changed their name to Air Tran. Although if they didn't change their name they probably would have gone under by now.
 
Matt D
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Joined: Fri Nov 19, 1999 6:00 am

RE: AA's Plans For SJC And The West Coast?

Mon Feb 03, 2003 1:53 am

Well they WERE grounded for a few months. They did restart operations. But the damage was done and their name was mud.

They bought out the original Air Tran, took on that carriers identity and rebranded themselves along with a new look, and more "uppity" service. While todays AirTran is the direct descendent of Valujet, it is so far separated from that carrier that it is safe to say that for all intents and purposes, Valujet DID go under, which as you noted, they most likely would have anyway.
 
FATFlyer
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RE: AA's Plans For SJC And The West Coast?

Mon Feb 03, 2003 2:34 am

Matt,

Good list and your point is well made. But I think you missed a couple that are still flying.

SunCountry is still around, albeit a much smaller company. Main ops still at MSP along with a focus city at Laughlin, NV.
http://www.suncountry.com

Spirit is still flying.
http://www.spiritair.com
"Travel is fatal to prejudice, bigotry, and narrow-mindedness." - Mark Twain