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AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 2:23 am

An AMR press release on my broker's news line (sorry, I can't link it.) notes that STL was reduced so that ORD and DFW could grow. It goes on to say that now they plan to do the same thing at the Miami hub in May.

That's fine about the growth in MIA, but do they also mean it comes at the further expense of STL?
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 3:26 am

I don't think so at this point. The cutting is done, and slowly expanding at STL begins, like the new service to MSY announced today. MIA is the Latin/Caribbean hub for AA, and it makes sense that they would grow this hub.
I hope to see more flights out of St.Louis, but the whole point for cutting services was to make STL profitable, which I think is working so far.
Cookies are the Gateway pastry. They lead to Éclairs and Bear Claws.
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 4:44 am

I feel bad for the folks at STL but have come to a couple conclusions about AA's service reductions:

1-STL may not have been the most geographically suited hub for AA considering ORD and DFW ops
2-Maybe the STL hub was never as profitable for TWA as we were all led to believe. If this is so, then AA realized that redeploying ops at MIA and DFW are much more profitable. TWA continued to retreat to STL, but even with their final turnaround effort, they were still not making the profits one might think they would.

Any comments?
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 4:53 am

I don't think STL has much concern with MIA. It's a totally different passenger base. MIA is more concentrated towards Latin America but they are expanding more domestically. American's STL hub was competing with DFW & ORD, their bread & butter, and it is located in the same geographical area as ORD. They realized 2 major hubs that are that close together wasn't going to get the job done. Just take a look at US Airways with their recent downsize of PIT and the closure of BWI years ago. Why expand at PIT when you could do it at PHL with numerous international connections. That's the same thing that AA is doing to STL, keeping it as a hub/focus city. I doubt STL will be an AA hub for much longer.

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John F. Kennedy International Airport: Where America Greets The World.
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 5:00 am


Yes its a bad situation, but don't feel bad for us. STL was never really a cash cow for TW, but it was all they had and in the end were trying to take all of their eggs out of one basket and distribute them into places like SJU and LAX. In the end, I believe STL was profitable at times for TW, but all the factors that were up against TW led to its demise.

As for the geographically suited issue, it may not be right now, but it was back then. TW was acquired so STL could become a reliever hub for AA at DFW amd ORD when they were maxed out. With nowhere to go, they needed another option to filter passengers w/o making them go way out of their way, STL was perfect for this. Send high yielding traffic thru other midwestern hubs, and send low yielding connecting pax thru STL.

You bring up MIA, DFW, and ORD......Of course they are more profitable than STL. All have better o/d, better facilities, higher yielding traffic etc. Hypothetically, (like a draft scenario) if airlines had to drop all their operations and start from scratch and pick new hubs, those three airports would be snatched up in the first 6-8 picks or so.

As for how STL is doing right now, AA execs have reported it is turning some type of a profit, how large or small I have not an idea. Even as cool as it was with the old hub days seeing tons and tons of AA, I'd rather have this smaller hub, and have flights being added back quite a bit instead of cut after cut with the old 400/500 flight a day hub.

[Edited 2004-03-23 21:03:03]
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 6:08 am

It would seem to me that AAs size at STL is just about right and may now begine to expand a little. Just about right in that if it were downsized any further it would attract some serious attention from more low cost carriers.

There is a need for service at STL. STL just needs a carrier with the cost structure that will allow it to make a profit.
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 11:50 am

really lame comment here.

but if STL was profitable for TWA, they'd probably still be around today............
~ ~ ~ ~ pRoFeSsIoNaL hUrRiCaNe DoDgEr ~ ~ ~ ~
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 12:05 pm

SegmentKing, it wasn't that the STL operation wasn't profitable in itself. It was the other factors that made their operations unprofitable such as Karabu, bad credit, etc.
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RE: AMR MIA Growth To Cost STL?

Wed Mar 24, 2004 12:17 pm

It means they are depeaking MIA in May, like they already did to ORD and DFW....(smoothing out flight banks)

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