LAXintl
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Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 3:49 pm

In the recent discussion about American Airlines dropping its ORD-BRU service a few members brought up and questioned AA’s overall presence in Chicago.

I thought it might be interesting to look at how things have evolved in the last decade at O’Hare and the broader Chicago market.

Below is a breakdown of annual enplanement and average daily departures for American and United along with their regional affiliates at ORD.
For reference I also added in ATA and Southwest Airline MDW numbers as that airport certainly does impact the broader air travel picture in Chicago.

One interesting thing to note is that both AA and UA have shifted their ORD activities ever more in favor of regional flying, where today regional movements exceed mainline for both.
AA seems to have made this shift steadily over the decade, while UA’s shift seems to have been more more dramatic recently, especially following the 2009 parking of its 737 fleet which saw mainline network flying decline significantly including at ORD.

Year
Enplanements / Avg Daily Flights:

2000
AA – 10,347,557 /311
AE – 1,544,337 / 139
TTL = 11,891,894 / 450

UA - 13,336,382 / 323
UX – 1,772,810 / 133
TTL = 15,109,192 / 456

TZ – 2,357,861 / 56
WN – 3,225,476 /113


2005
AA – 10,537,583 / 255
AE – 3,145,474 / 232
TTL = 13,652,057 / 487

UA – 12,553,639 / 296
UX – 4,289,830 / 281
TTL = 16,843,469 / 577

TZ – 1,678,719 / 34
WN – 5,404,247 / 170


2008
AA - 9,003,557 / 206
AE – 3,035,792/ 239
TTL = 12,039,349 / 445

UA – 11,939,507 / 264
UX – 4,460,937 / 290
TTL = 16,400,444 / 554

WN – 6,7747,731 / 201


2009
AA - 7,784,199 / 179
AE – 3,013,701 / 234
TTL = 10,797,900 / 413

UA – 9,920,352 / 234
UX – 4,954,013 / 314
TTL = 14,874,365 / 548

WN – 6,992,109 / 211


2010
AA - 7,793,312 / 168
AE – 3,155,749 / 226
TTL = 10,949,061 / 394

UA – 9,304,575 / 197
UX – 6,141,109 / 377
TTL = 15,445,684 / 574

WN – 7,374,691 / 219

Sources: DOT/BTS


So what do these numbers tell us about Chicago market place?

Certainly one for me is that Southwest Airlines has grown its presence very nicely, more than doubling its enplanements over the decade. It boards today about almost 22% of the entire traffic in the Chicagoland region.

Looking at AA, it has experienced reduction in total frequencies, enplanements and capacity at ORD. AA has opted to place ever more of its ORD flying in the hands of AE including most recently with the 2-class CR7s which have been assigned to things such as Northeast markets – at one time places that even saw AA widebodies on them.

For United, it has witnessed ORD enplanements grow slightly (340,000) over the decade with overall flight volume also growing – albeit in favor of regional operations especially post 2009 with the 737 fleet parking.

Back in 2000 both AA and UA offered almost identical number of mainline and regional departures, with UA out boarding AA by about 3million annual passengers(due larger gauge such as more widebodies).
In 2010, AA saw both its mainline and regional departures counts be far lower than UA, to a tune of almost 180 combined daily departures and 4.5mil passengers.
The AA vs UA enplanement market split in 2000 was about 47 vs 53% in favor of United, while in 2010 AA dropped to 42 against United’s 58%.

Also interesting to note how International activity for AA and UA have shifted over the decade. Back in 2000 of AA’s boardred 1.2mil internationally from ORD, in 2010 it did a smidge over 1.0mil. United on the other hand saw its international boarding’s rise from 1.1mil in 2000 to over 1.7mil in 2010 at ORD.

Now what does the future hold for each carrier at ORD?
To me it seems United will very much keep up its activities being the “home town” airline. The carrier has committed to various small improvement projects including modernized lounges, revised tickets counters, cargo facility and such.
Also assuming nothing else changes the CO merger should boost UA ORD enplanements by about 500,000 annually.

For AA, while Chicago is one of its stated “corner stone” markets, it presence as illustrated above has shrunk. I suspect that ORD will possibly to an ever great degree shift from being a East-West connection point to one more focused on local O&D markets. This might have already occurred with downgauge of previously larger aircraft markets such as in the Northeast to RJs now, and continued build up at DFW which is the carriers primary East-West hub. So while I do not see AA walking away from Chicago, I see it focus more on routes that are important for a local presence and not key connection point which probably also helps explain why some international markets like BRU can’t be supported into the future if the transfer feed provided at ORD is diminishing.

Also with AA shift to RJs continuing, dropping international services, plus UA merger giving it a bump in enplanements, the split between AA and UA at ORD in enplanement numbers could see UA head above 60-40 this year if not 2012.

Hope I did not make any typos..
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ripcordd
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 4:07 pm

I think ORD charges for take off's and landing by weight so I think its cheaper to fly 3 rj's vs 1 80 which is one of the reasons for the shift.....ORD is very expensive to fly in and out of so for AA it makes $ sense to transfer them in DFW.. The other side is that who really wants to fly a cr7 to SLC? and then wait 1hr for an open eagle gate and watch the eagle employees throw and destroy your bags. this becomes a snowball effect going down hill..I think AA is slowing moving away from ORD no matter what they say out front but in the back they are looking to move on and out I think. This will only change if they get some new managment in.
 
jacobin777
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 4:19 pm

Thanks for the quick analysis..  .

Quoting LAXintl (Thread starter):
Looking at AA, it has experienced reduction in total frequencies, enplanements and capacity at ORD. AA has opted to place ever more of its ORD flying in the hands of AE including most recently with the 2-class CR7s which have been assigned to things such as Northeast markets – at one time places that even saw AA widebodies on them.

AA's two biggest problem is cost and scope. If AA can get the planes the size of E190/E195's for mainline, I would expect its mainline and overall % to increase quite a bit in Chicago.

Cost is another AA problem with funding pensions the biggest.

Quoting LAXintl (Thread starter):
2010
AA - 7,793,312 / 168
AE – 3,155,749 / 226
TTL = 10,949,061 / 394
Quoting LAXintl (Thread starter):
UA – 9,304,575 / 197
UX – 6,141,109 / 377
TTL = 15,445,684 / 574

It does indeed look as if UA+regionals is much larger than the original % I gave on the other thread. However, my numbers of close to 11 million for AA+MQ were spot on. 11 million isn't to scoff at either. While UA + *A does have an important "stronghold" @ ORD, AA+OneWorld isn't to scoff at either.



Adding CO to the mix will help for UA.
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RamblinMan
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 4:44 pm

Quoting LAXintl (Thread starter):
So what do these numbers tell us about Chicago market place?

That AA and UA are about the same size they were 10 years ago, and that WN has been the real winner.

Not ready to discount AA around here yet. They're still big.

Quoting ripcordd (Reply 1):
The other side is that who really wants to fly a cr7 to SLC? and then wait 1hr for an open eagle gate and watch the eagle employees throw and destroy your bags.

Ain't like you don't get the same treatment on UA, or that they don't use RJs to places as far as BOI, or that you never wait for a gate. I think it's clear why WN has captured virtually all of the last decade's growth.
 
jacobin777
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 4:46 pm

Quoting RamblinMan (Reply 3):

Ain't like you don't get the same treatment on UA, or that they don't use RJs to places as far as BOI, or that you never wait for a gate. I think it's clear why WN has captured virtually all of the last decade's growth.
Quoting LAXintl (Thread starter):

Certainly one for me is that Southwest Airlines has grown its presence very nicely, more than doubling its enplanements over the decade. It boards today about almost 22% of the entire traffic in the Chicagoland region.

I wonder how much more WN will be able to grow out of MDW given the various constraints of MDW.
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Jamake1
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 4:48 pm

Thank you LAX for taking the time to put together the data and provide analysis. I recall reading numerous industry articles that referenced network carriers no longer having the ability to play second fiddle in markets where a more dominant network carrier also hubbed. Both DL and UA embraced this reality some time ago with their pull-downs at DFW and MIA respectively.

While both DL and UA were highly criticized by affected employees and their local customer bases at the time, I have long held the view that the pull-downs were very good strategic decisions for both carriers. From what I have observed, industry analysts have been highly critical of AA's recent capacity additions at both ORD and LAX, especially as the carrier continues to significantly under perform its peers.

I am of the view that difficult strategic decisions are going to have to be made on the part of AA management beyond just bridging the gap in its cost disadvantage. It will be interesting to see how the viability of the ORD hub factors into AA management's longer term strategic direction.
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RamblinMan
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 4:57 pm

Quoting Jacobin777 (Reply 4):
I wonder how much more WN will be able to grow out of MDW given the various constraints of MDW.

In terms of daily flights... maaaaaybe another 10%. In terms of O%D pax...quite a bit. MDW is their biggest connecting hub, and IIRC connecting pax make up over 50% of the total. If you want more local growth, just shift the connecting flows elsewhere or add nonstops.

The fact that MDW is just about at capacity does leave room for AA and UA to make some gains. It will be interesting to see if AA gets aggressive or if it lets UA take it all.

Oh, and don't forget NK. They're small now, doubt they'll ever approach the size of any of the big 3 around here, BUT- they are growing at ORD and they influence prices in a big way.
 
crAAzy
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 5:06 pm

Nicely done.

Alas, as a loyal SA)">AA flyer the continued drawn down of ORD international is disappointing.

However, I don't think ORD is doomed to become only an SA)">AA east-west connector.

I have a feeling ORD long haul is going to continue to see thel SA)">OW staples in UK (LHR,MAN), France (CDG), and Spain (MAD). Though it would be nice to seen MAN with a 767 summer/757 winter schedule.

I think that BRU was going anyway to make room for new annual ORD-BER service next summer and SA)">AA just decided to cut their losses with the pilot retirements and low advanced bookings.

I also think will see more of a strategic shift with more seasonal flights to key SA)">OW European destinations (FCO,HEL,DUB) - also like to see an annual DUB 767 summer/757 winter schedule. I wonder if we could see the seasonal return of ORD-FRA if AB joins SA)">OW or ORD-DME with S7? Could SA)">AA to MAD or BCN be possible on seasonal basis? I don't think the traffic is there to support ORD-BUD and JFK-BUD.

I think there's still a chance of SA)">AA exploiting it's strength in Latin America with one or two mid/deep SA flights as well one or two additional Asia flights in the next few years.
 
jacobin777
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 5:19 pm

Quoting RamblinMan (Reply 6):
Quoting Jacobin777 (Reply 4):
I wonder how much more WN will be able to grow out of MDW given the various constraints of MDW.

In terms of daily flights... maaaaaybe another 10%. In terms of O%D pax...quite a bit. MDW is their biggest connecting hub, and IIRC connecting pax make up over 50% of the total. If you want more local growth, just shift the connecting flows elsewhere or add nonstops.

The fact that MDW is just about at capacity does leave room for AA and UA to make some gains. It will be interesting to see if AA gets aggressive or if it lets UA take it all.

Oh, and don't forget NK. They're small now, doubt they'll ever approach the size of any of the big 3 around here, BUT- they are growing at ORD and they influence prices in a big way.

Yah, I was thinking it wasn't going to be too much either. It will be interesting to see what WN does out of MDW. Maybe increase flights out of MKE for connecting and focus MDW as more O&D (as you suggested).

Quoting jamake1 (Reply 5):
Thank you LAX for taking the time to put together the data and provide analysis. I recall reading numerous industry articles that referenced network carriers no longer having the ability to play second fiddle in markets where a more dominant network carrier also hubbed. Both DL and UA embraced this reality some time ago with their pull-downs at DFW and MIA respectively.

Many carriers would love to have the "second fiddle" numbers AA has at ORD. Again, the problem with AA is costs & scope. If AA can solve those two problems (and certainly not insurmountable), it will be a very formidable competitor at ORD (not that it already is).
"Up the Irons!"
 
ckfred
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 5:27 pm

I believe ORD is the second most expensive airport, based on landing fees. DFW's fees are about half of ORD's, and ATL's are even less, if I remember numbers for a Chicago Tribune article correctly. Jet fuel is also pricey at ORD, since Illinois imposes a fuel tax and and sales tax on jet fuel.

The evidence of this is the closing of STL as a hub. Virtually all of the RJ flying was shifted to ORD, while the mainline flying went to DFW.

Even before the landing fees at ORD became an issue, AA was shifting capacity to DFW, because DFW was less prone to delays. Even on a sunny day, ORD could get behind schedule, if the wind direction and speed didn't allow for an optimal use of runways.

The reason that UA hasn't shifted is that, prior to the merger with CO, it's only non-coastal hub was DEN. Shifting flights to DEN didn't make as much sense for UA as it did for AA to shift flights to DFW.

I would argue that AA could very well try to increase connecting opportunities at ORD, simply with the coming arrival of the A319s. Those aircraft will probably be configured with fewer seats than the MD-80. Couple that with better fuel economy, and those planes make a lot of sense for AA to fly out of ORD.

From what I know, AA could very well order larger Embrears (E170 or E190) or Canadair C-Series (AMR CEO Gerard Arpey made a favorable comment about the C-Series during an analyst call a while back), if management and the APA can work out a scope clause and pay scale that is favorable.

It will be interesting to see if the combined UA/CO eventually shifts any domestic flying to IAH. Logic says that CLE is the hub that makes the least sense for the combined carrier. Yet, if the economy remains lethargic in the Chicago metoropolitan area, while it starts to bounce back across the Sun Belt, CLE flights and even some Chicago flights could move to IAH.

The great unknown is corporate contracts. After the summer of 2000 and the UA pilot sickout, many companies that send employees to and from Chicago and the upper Midwest shifted flying to AA. They were furious with the cancellations, lack of information, and the unwillingness of UA management to sue ALPA, as AA did when the QQ purchase became an issue.

If large companies that rely on ORD, either for O&D or connecting start to favor UA, that would push UA to further stengthening of the hub, while AA could further downgrade service.
 
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IrishAyes
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 5:44 pm

Quoting jamake1 (Reply 5):
Thank you LAX for taking the time to put together the data and provide analysis. I recall reading numerous industry articles that referenced network carriers no longer having the ability to play second fiddle in markets where a more dominant network carrier also hubbed. Both DL and UA embraced this reality some time ago with their pull-downs at DFW and MIA respectively.

I agree with this observation. ORD was always singled out as one of the sole remaining markets where two big legacy carriers seemingly "duke it out" for #1 and #2 spots. For awhile, it seemed like AA was holding its ground against UA, particularly during the latters' rougher patches in the past decade, but AA is slowly losing its grip year after year.

Quoting jamake1 (Reply 5):
While both DL and UA were highly criticized by affected employees and their local customer bases at the time, I have long held the view that the pull-downs were very good strategic decisions for both carriers.

Especially when much of the hub carrier has to resort to regional flying even in core markets, while the competitor is offering a far superior product on mainline services. When Delta operated a hub at DFW, they were cramming PAX on RJs on 2.5 hour + flights to places like OAK, ONT, DCA, etc which really made little to no sense at all.

Quoting jamake1 (Reply 5):
I am of the view that difficult strategic decisions are going to have to be made on the part of AA management beyond just bridging the gap in its cost disadvantage. It will be interesting to see how the viability of the ORD hub factors into AA management's longer term strategic direction.

However, I posted in another thread that I don't think the value of the ORD hub can be underestimated...it still brings plenty of things to the table that DFW, MIA, JFK and LAX cannot bring - most notably, connecting people to the smaller markets in the Midwest/Great Plains region. Even if AA files for Ch. 11 and has to reduce a lot of unprofitable flights, I firmly believe they will maintain a presence in ORD. There will just be a decent amount of fat trimmed, but not an all-out pulldown altogether.
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ckfred
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 6:12 pm

Quoting IrishAyes (Reply 10):
Quoting jamake1 (Reply 5):
Thank you LAX for taking the time to put together the data and provide analysis. I recall reading numerous industry articles that referenced network carriers no longer having the ability to play second fiddle in markets where a more dominant network carrier also hubbed. Both DL and UA embraced this reality some time ago with their pull-downs at DFW and MIA respectively.

I agree with this observation. ORD was always singled out as one of the sole remaining markets where two big legacy carriers seemingly "duke it out" for #1 and #2 spots. For awhile, it seemed like AA was holding its ground against UA, particularly during the latters' rougher patches in the past decade, but AA is slowly losing its grip year after year.

Quoting jamake1 (Reply 5):
While both DL and UA were highly criticized by affected employees and their local customer bases at the time, I have long held the view that the pull-downs were very good strategic decisions for both carriers.

Especially when much of the hub carrier has to resort to regional flying even in core markets, while the competitor is offering a far superior product on mainline services. When Delta operated a hub at DFW, they were cramming PAX on RJs on 2.5 hour + flights to places like OAK, ONT, DCA, etc which really made little to no sense at all.

While AA has shifted a number of business markets out of ORD to RJs, partially or fully, so has UA. Here are some destinations that UA now has some or all RJs. Some of these routes were UA routes long before deregulation.

MSP
BOS (AA has upgraded this route to all 738s)
PHL
DCA
ATL (It wasn't that many years ago that UA had 757s on this route)
SLC (Back in the days of regulation, this route often had DC-8s)
PIT (A few years ago, UA had a 757 on this route, too.)
DFW
CLE (A little surprising, since this is now hub to hub)
CVG
STL

The only upgrade I noticed is that the combined UA/CO have made ORD-IAH all mainline. Prior to the merger announcement, I believe both airlines were flying RJs on the route.
 
UALFAson
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 7:06 pm

Quoting ckfred (Reply 11):
Here are some destinations that UA now has some or all RJs

Perhaps technically true, but incredibly misleading. For example, DCA has exactly ONE UAX flight a day with every other service on mainline equipment. According to tomorrow's schedule, the case is the same for BOS, and PHL shows no UAX service at all--it's all mainline. I didn't bother looking at all the cities.

And a lot of these off-peak UAX services are on Embraer 170 aircraft, which are a heck of a lot nicer than some of the 737s UA used to run on these routes.

I think any future growth for UA at ORD is going to come from adding the occassional flight and increasing frequency, not upgaging aircraft type. Bigger aircraft can more profitably be used elsewhere and a biz market like ORD will appreciate additional frequency and flight options.
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OzarkD9S
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 7:40 pm

Very good analysis LAX.

Do you have totals for the number of markets served for those years? Do the TZ numbers include C8? Just curious...
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BC77008
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 7:48 pm

Quoting ckfred (Reply 11):
The only upgrade I noticed is that the combined UA/CO have made ORD-IAH all mainline. Prior to the merger announcement, I believe both airlines were flying RJs on the route.

Yes, in the recent past flying between ORD and IAH has consisted of a mix of both mainline and RJ flying. It is now almost always (if not 100%) mainline flying. ORD and IAH compliment each other in a way because ORD is strong to Asia and IAH is strong to Mexico/Lat Am. Also consider the fact that many CO Headquarters employees are having to move to Chicago there is going to be a lot of inter-company travel between the two cities. And I can also tell you that the move packages the new UA is offering are pretty generous, including up to one year of positive space travel between Chicago and Houston.
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IrishAyes
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 7:49 pm

Quoting ckfred (Reply 11):
While AA has shifted a number of business markets out of ORD to RJs, partially or fully, so has UA. Here are some destinations that UA now has some or all RJs. Some of these routes were UA routes long before deregulation.

MSP
BOS (AA has upgraded this route to all 738s)
PHL
DCA
ATL (It wasn't that many years ago that UA had 757s on this route)
SLC (Back in the days of regulation, this route often had DC-8s)
PIT (A few years ago, UA had a 757 on this route, too.)
DFW
CLE (A little surprising, since this is now hub to hub)
CVG
STL

The only upgrade I noticed is that the combined UA/CO have made ORD-IAH all mainline. Prior to the merger announcement, I believe both airlines were flying RJs on the route.

Yes, but on a mix of both mainline and RJ. So that doesn't really count. For example, I fly to DFW pretty regularly and I can fly anything from a CRJ to an E-170 on the RJs, or an A319/A320/757 mainline. The UA A320s are exceptionally nice.

Compare this to AA, which is all MD-80 to DFW. Hardly a step up from the CRJ in my opinion. That's about as "mainline" as it gets.
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laca773
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 8:50 pm

This is a great analysis, LAXIntl. Thanks.

I have to wonder if AA's days flying SJC-ORD are numbered and instead we'll see WN increase SJC-MDW and possibly AS start SJC-ORD?

It's still hard to believe SLC can only support CR7s on AA & UA. Even DL doesn't operate all mainline in this hub market? I don't even see UA upgauging to 735s when the merger is complete as these will eventually be retired. Now that DL is flying a lot of A319/A320s from SLC, these would be great for ORD-SLC.
 
gigneil
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 9:43 pm

Quoting ckfred (Reply 11):
DCA

DCA hardly counts. They added two E70s to 14 flights on some days. ORD-DCA is still massive win for UA - especially compared to the PMCO flights.

NS
 
PSU.DTW.SCE
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 9:53 pm

Quoting laca773 (Reply 16):
It's still hard to believe SLC can only support CR7s on AA & UA. Even DL doesn't operate all mainline in this hub market? I don't even see UA upgauging to 735s when the merger is complete as these will eventually be retired. Now that DL is flying a lot of A319/A320s from SLC, these would be great for ORD-SLC.

First of all, (not directed at any one poster in particular) a.net has an infatuation with "mainline" However, for better or for worse, there is minimal difference between the application of 2-class RJs and narrowbody mainline equipment these days. Not just an AA thing, but you can find instances of this at DL and UA too.

Hub -to- competitor hub routes are notoriously challenging. ORD-SLC even more so because of a) the smaller O&D of SLC and b) the fact of the AA-UA-WN trifecta on the Chicago end.
Since there are hubs on both ends of these flights there are a lot of nonstop options, resulting in less flow traffic to the hub, unless there are unique markets not served nonstop. Secondly, you have 2 carriers competing for the O&D and each carrier is typically stronger on the originating traffic a their hubsite. So what's left? Spill traffic and lower-yield traffic seeking better fares over connections and creative routings. You see the same thing on routes like DTW-IAH, ORD-CLT, etc.
 
gigneil
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 10:04 pm

Quoting ckfred (Reply 11):
The only upgrade I noticed is that the combined UA/CO have made ORD-IAH all mainline. Prior to the merger announcement, I believe both airlines were flying RJs on the route.

Also, it isn't all mainline. There are several CR7s on the route to go along with the 738s, 753s, and one 752.


I continue to bet they wish they had more 753s.

NS
 
jacobin777
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 10:13 pm

Quoting laca773 (Reply 16):
I have to wonder if AA's days flying SJC-ORD are numbered

Hi laca773.   Fortunately, SJC-ORD is to one of AA's "cornerstone" hub and while I don't know what yields are (though flights aren't cheap), loads have been good.

Quoting laca773 (Reply 16):
AS start SJC-ORD?

That's what many believe. I think with AS cost structure and a semi-expansion at SJC, it would work.

Regardless, I'm hoping AA doesn't end the route.

Gone are the days when there were 10X/daily SJC-ORD flights between AA and UA... 
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gigneil
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 10:16 pm

And 4x IAD-SJC, and so on.

SJC used to be a very useful airport. Not so much, now.

NS
 
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kgaiflyer
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 10:51 pm

Quoting ckfred (Reply 11):
CLE (A little surprising, since this is now hub to hub)

At least one of the Q400s continues on to IAD from CLE and another continues on to BWI from CLE.
So the full routes would be ORD-CLE-BWI-EWR and ORD-CLE-IAD-EWR
 
LAXintl
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RE: Chicago O’Hare: AA Vs UA

Mon Sep 19, 2011 10:57 pm

Quoting Jacobin777 (Reply 2):
Thanks for the quick analysis..
Quoting jamake1 (Reply 5):
Thank you LAX for taking the time to put together the data and provide analysis.
Quoting crAAzy (Reply 7):
Nicely done.
Quoting OzarkD9S (Reply 13):
Very good analysis LAX.
Quoting laca773 (Reply 16):
This is a great analysis, LAXIntl. Thanks.

Glad to contribute.

Quoting ripcordd (Reply 1):
I think ORD charges for take off's and landing by weight so I think its cheaper to fly 3 rj's vs 1 80 which is one of the reasons for the shift.

Virtually every major airports charges by weight.

At the end of the day its a marketing/network decision for AA to deemphasize ORD. Regardless of cost, if the money was there, they would not be shrinking in such manner.

Quoting Jacobin777 (Reply 2):
It does indeed look as if UA+regionals is much larger than the original % I gave on the other thread.

Yes indeed. UA has really grown ORD especially on the UAX side – there is something like 6 different UAX partners that touch ORD on a daily basis.

Quoting Jacobin777 (Reply 2):
Adding CO to the mix will help for UA.

Yup, about 500,000 additional enplanements.

Quoting RamblinMan (Reply 3):
That AA and UA are about the same size they were 10 years ago, and that WN has been the real winner.

Yes Southwest has done a terrific job growing its presence in Chicagoland. With about 22% of the entire cities enplanements it’s a force that cannot be ignored by those at ORD.

Quoting RamblinMan (Reply 6):
In terms of daily flights... maaaaaybe another 10%. In terms of O%D pax...quite a bit. MDW is their biggest connecting hub, and IIRC connecting pax make up over 50% of the total. If you want more local growth, just shift the connecting flows elsewhere or add nonstops.

Per DOT numbers indeed MDW is the carriers number connection flow station with 43.2% of traffic in 2010. Over time, and now having an additional connecting point such as ATL available SWA could indeed refocus MDW towards more local sales.
This would only mean more bad news for those at ORD.

Quoting RamblinMan (Reply 6):
Oh, and don't forget NK. They're small now, doubt they'll ever approach the size of any of the big 3 around here, BUT- they are growing at ORD and they influence prices in a big way.

And not just NK. Virgin America, JetBlue also in their own ways nibble at the edges and can certainly hurt the incumbents by pushing down market pricing.

Quoting Jacobin777 (Reply 8):
Many carriers would love to have the "second fiddle" numbers AA has at ORD. Again, the problem with AA is costs & scope. If AA can solve those two problems (and certainly not insurmountable), it will be a very formidable competitor at ORD (not that it already is).

Well playing “second fiddle” comes at a price. Also once a hub looses critical mass things tumble from bad to worse. Look at DL at DFW. In an attempt to restructure it turned the place into a RJ heaven, which only produced ever worse results.
With AMRs cost problems both at mainline and Eagle, running a mostly RJ "hub" is likely not too pretty.

Quoting ckfred (Reply 9):
I would argue that AA could very well try to increase connecting opportunities at ORD, simply with the coming arrival of the A319s. Those aircraft will probably be configured with fewer seats than the MD-80. Couple that with better fuel economy, and those planes make a lot of sense for AA to fly out of ORD.

Using ever smaller gauge at ORD will only reduce connectivity. UA has reduced gauge, but also upped flights. AA has shrunk gauge, and flights which negatively impacts connection flow.

Anyhow, like a mentioned in the original post, I’m not sure AA is really chasing connections as much anymore via ORD. My feeling is the market is more geared towards local O&D demand, while maintaining network link to many of the smaller mid-continent communities.

Quoting ckfred (Reply 9):
The great unknown is corporate contracts. After the summer of 2000 and the UA pilot sickout, many companies that send employees to and from Chicago and the upper Midwest shifted flying to AA.

Well since 2000, United has locked in many of the largest employers in Chicago as exclusive clients including IBM, Motorola etc. It even places new converted IPTE cabin capacity specifically to cater to a couple of these contracts ex ORD.

Quoting IrishAyes (Reply 10):
I agree with this observation. ORD was always singled out as one of the sole remaining markets where two big legacy carriers seemingly "duke it out" for #1 and #2 spots. For awhile, it seemed like AA was holding its ground against UA, particularly during the latters' rougher patches in the past decade, but AA is slowly losing its grip year after year.

Yes at one time it seemed the two very pretty close 50-50, but today both enplanements and flight volume paint very different pictures.

Quoting OzarkD9S (Reply 13):
Do you have totals for the number of markets served for those years? Do the TZ numbers include C8? Just curious...

I’m not sure. I looked hard for separate Chicago Express data but could not pull any. Could be back then ATA did the reporting of combined traffic. (?)

Quoting Jacobin777 (Reply 20):
Fortunately, SJC-ORD is to one of AA's "cornerstone" hub and while I don't know what yields are (though flights aren't cheap), loads have been good.

Not too hard to figure out. I’ll compare AA ORD-SJC & SFO.

ORD-SJC
Avg Daily Pax: 257
Load Factor: 89%
Market Share: 60%
Avg Fare: $206.42
Yield cents: 9.93

ORD-SFO
Avg Daily Pax: 722
Load Factor: 86%
Market Share: 26%
Avg Fare: $227.98
Yiled cents: 10.74

Bad news is that SJC trails SFO in average fare – almost 10% less and yield - about a 7% handicap over SFO thank to higher LF.
Also obviously SFO is a much larger market, about 3x size in enplanements for AA.
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nomorerjs
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 12:30 am

While the white flag may not be in the air for AA at ORD, it is definately being in "pulled out of the pocket" mode! AA, due to Scope, does not have a 100 seat aircraft to fly out of ORD. UA (soon to be official CO ops 'mngt is already running this' with Single Certificate to happen soon), is going to own ORD. The only question is, will B6 or someone else replace AA? AA's days at ORD are numbered. This will be the first cornerstone to crack / crumble!
 
gigneil
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 12:40 am

Quoting nomoreRJs (Reply 24):
UA (soon to be official CO ops 'mngt is already running this' with Single Certificate to happen soon),

Do what now? Mgmt is running with what? Enhancing ORD capacity?



NS
 
nomorerjs
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 12:44 am

AA has become the "Big XII" or "Big lEAST" our of ORD! UA is the B1G out of ORD.
 
Jamake1
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 12:57 am

Quoting nomoreRJs (Reply 26):
AA has become the "Big XII" or "Big lEAST" our of ORD! UA is the B1G out of ORD.

Sorry, I don't follow what you're trying to say here...
United's B747-400. "She's a a cruel lover."
 
crAAzy
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 1:31 am

Quoting nomoreRJs (Reply 24):
The only question is, will B6 or someone else replace AA? AA's days at ORD are numbered. This will be the first cornerstone to crack / crumble!

LOL ... really? AA will give up ORD they day they cease to exist. There's no better market in the upper midwest that can compare to the ORD hub and with AA's cornerstone strategy you'd have to be a complete idiot to think they would give up their position.
 
WROORD
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 1:45 am

AA has perfect locations of its hubs, it just needs to do more focus where it flies from them. JFK to Europe and Middle East, MIA to Caribbean and South America, DFW to Central and South America, LAX to Australia and Asia and ORD to Europe and Asia.
It would also help if AA had more seasonal leisure flights from ORD besides MBJ and CUN. UA can fill three flights on ORD to CUN and U5 two and AA has just one.
I used to fly with them regurarly to DCA, but when they switched to RJ I switched to UA, same to BDL and YYZ. At least key business markets should have mainline service.
 
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 1:55 am

I dont understand why people think AA is going to de-hub ORD. The hub still has over 500 daily flights, this is bigger than UA's hub at DEN or US's at PHX. Yes some flying has been shifted to Eagle, just as some flying at DL has been shifted to DL Connection from MSP, DTW, ATL etc. Without ORD where is there another alternative to plug AA into the midwest?? If leaving ORD was in the cards for them they would have beefed up the STL hub and tried to turn it into a fortress like TWA did, but clearly they favored ORD over STL and finally pulled the plug on STL. I would really really be surprised if AA ever abandoned ORD as a hub.
 
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kgaiflyer
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 2:05 am

Quoting nomoreRJs (Reply 26):
AA has become the "Big XII" or "Big lEAST" our of ORD! UA is the B1G out of ORD.


Wow -- your typing is really bad.

**I** know what you mean (Penn State '68) but I doubt if anyone else does.
 
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:26 am

I remember a few years ago when A.net was "when will NW retire the DC-9s?"

Now the favorite topics are "when will AA file Ch. 11?" or "When will AA cut ORD" or "when will DL cut MEM & CVG"

Frankly, I have no idea as well where all the absurd speculation is coming from think that AA is going to pull their hub from ORD. Some please provide some evidence of data that sugggest that, also keeping in mind the general trends of the legacies over the past few years (e.g., reduced domestic ASMs, use of 2 class RJs, showing capacity disipline instead of chasing market share).

The point is that AA is still huge in ORD, it fills a significant role in their network, it is a part of their cornerstone strategy, and AA isn't just going to be a DFW-only airline.

The doom and gloom gets old after awhile. I swear some people are hoping this happens.

AA waving the white flag in ORD????.....really? I think not.
 
LAXintl
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:53 am

Quoting PSU.DTW.SCE (Reply 32):
Some please provide some evidence of data that sugggest that, also keeping in mind the general trends of the legacies over the past few years (e.g., reduced domestic ASMs, use of 2 class RJs, showing capacity disipline instead of chasing market share).

Would the fact that AA has grown in all its other "Corner-Stone" markets with the exception of ORD be a sign?

Enplanement count changes in percent since 2000 -

DFW- 16.9%
JFK - 4.7%
LAX - 8.5%
MIA - 27.3%
ORD - (-8.0%)

I wont even get into flight volume, but even adding a gazillion RJs to the mix saw the ORD flight count dropped by 56 daily departures over the decade.


Seeding capacity and market share is a step backwards......
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Jamake1
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:56 am

Quoting LAXintl (Reply 33):
Seeding capacity and market share is a step backwards......

I think you meant, "ceding" no?
United's B747-400. "She's a a cruel lover."
 
LAXintl
Topic Author
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:59 am

LOL yeah. Fun spell checker..
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Jamake1
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 4:26 am

I wasn't trying to correct your spelling so much as to just get clarity..as "seeding" almost seems to imply the opposite of "ceding."
United's B747-400. "She's a a cruel lover."
 
laca773
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 4:32 am

Quoting Jacobin777 (Reply 20):

That's what many believe. I think with AS cost structure and a semi-expansion at SJC, it would work.

Regardless, I'm hoping AA doesn't end the route.

Gone are the days when there were 10X/daily SJC-ORD flights between AA and UA...

Hey Jacob, I'm hoping AS does continue to add service @ SJC. Will help everyone in the long run. It's sad what has happened to the SJC-ORD market in general. UA even used to fly 757s every once in a while in that market and we pretty much know that route is gone for good.

Quoting LAXintl (Reply 23):

Bad news is that SJC trails SFO in average fare – almost 10% less and yield - about a 7% handicap over SFO thank to higher LF.
Also obviously SFO is a much larger market, about 3x size in enplanements for AA.

Thanks again for the interesting information, LAXintl. I enjoy learning new things from you   .
 
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kgaiflyer
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 4:39 am

Quoting PSU.DTW.SCE (Reply 32):

Don't know why AA has so many haters.

But that's at least part of what's going on.   

[Edited 2011-09-19 21:43:25]
 
delta2ual
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 10:53 am

Quoting Jacobin777 (Reply 8):
Quoting jamake1 (Reply 5):
Thank you LAX for taking the time to put together the data and provide analysis. I recall reading numerous industry articles that referenced network carriers no longer having the ability to play second fiddle in markets where a more dominant network carrier also hubbed. Both DL and UA embraced this reality some time ago with their pull-downs at DFW and MIA respectively.

Many carriers would love to have the "second fiddle" numbers AA has at ORD. Again, the problem with AA is costs & scope. If AA can solve those two problems (and certainly not insurmountable), it will be a very formidable competitor at ORD (not that it already is).

MANY years ago, I read an indepth analysis (I can't remember the author,sorry), which basically came to the conclusion that no airline was successful (i.e. profitable) being #2 in a big hub city. At that time, it spoke of DL @ DFW, UA @ MIA, CO @ DEN. I don't know if this is still the case.

At any rate, if AA could get their house in order, and bring in those new planes when they arrive, I have no doubt they will fight for ORD. I think Chicago is very important to them.
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PSU.DTW.SCE
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 12:24 pm

Quoting LAXintl (Reply 33):
Would the fact that AA has grown in all its other "Corner-Stone" markets with the exception of ORD be a sign?

Enplanement count changes in percent since 2000 -

DFW- 16.9%
JFK - 4.7%
LAX - 8.5%
MIA - 27.3%
ORD - (-8.0%)

I wont even get into flight volume, but even adding a gazillion RJs to the mix saw the ORD flight count dropped by 56 daily departures over the decade.

Making comparisons to 2000 doesn't necessarily what will happen in the future, all that shows is a trend of what has happened historically.

The industry and the world have changed significantly since 2000. Many airlines have hub sites with reduced enplanements compared to 2000. I'm pretty sure that DTW and MSP may be down in enplanements versus 2000. The cost of fuel is up significantly, airline fleet strategies have changed, the competitive landscape has changed. All that is shows, and this is nothing that AA hasn't said, is that they are pulling back capacity in ORD in attempt to improve the yields.

It is a nice analysis but doesn't say anything that would suggest AA is going to downsize ORD.
 
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STT757
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 1:11 pm

Quoting LAXintl (Reply 33):
Would the fact that AA has grown in all its other "Corner-Stone" markets with the exception of ORD be a sign?

Enplanement count changes in percent since 2000 -

DFW- 16.9%
JFK - 4.7%
LAX - 8.5%
MIA - 27.3%
ORD - (-8.0%)

What's interesting is that I would have thought ORD would have seen a nice little bump up in traffic for AA at ORD over the past ten years. The closing of the St.Louis hub should have enabled AA to redirect some of that traffic through ORD, but it appears that much of the St.Louis traffic AA was handling earlier in the decade, when STL was a true hub for AA, just vanished. Perhaps some of that is accounted for in DFW's growth, but at one time AA's TWA hub was pretty large and that much of that business didn't stay with the AA network. Seems like opportunity lost for AA.
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mogandoCI
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 1:44 pm

Quoting DTW.SCE" class="quote" target="_blank">PSU.DTW.SCE (Reply 41):
It is a nice analysis but doesn't say anything that would suggest AA is going to downsize ORD.

it's not AA wanting to downsize, but the snowball effect that forces AA's hand

it's really a death spiral - when enplanements shrink relative to competitors, AA would have to cut the unprofitable routes, which reduce connectivity and value of the hub, plus drive fixed costs higher proportion to total costs. AA loyalists would route via DFW instead, Chicagoans would go for UA/WN that provide the frequency *and* comfort, while transfer pax could easily pick a close-by hub like DTW that offers similar flights.

once you start "rightsizing" with E-jets and RJs, customers will notice (regardless of whether F exists). your choice becomes A320 on UA, 738 on WN, or E-135 on AA. Which ones would customers choose ?

does AA really need 5 cornerstones ?
 
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ramprat74
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 1:52 pm

I remember the days when AA and UA had nonstop flights from ONT-ORD. ONT was my hometown airport growing up. Each of them had 3-4 flights per day including a red-eye. My current airport PDX, AA stopped their ORD flights years ago.
 
washingtonian
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 2:06 pm

Quoting LAXintl (Reply 33):
JFK - 4.7%

Does this account for the TWA merger? Seems to me like a lot of the routes AA started at JFK over the last decade were routes that TWA served (and then stopped at the time of the merger).
 
jacobin777
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 2:45 pm

Quoting LAXintl (Reply 23):
Quoting Jacobin777 (Reply 20):
Fortunately, SJC-ORD is to one of AA's "cornerstone" hub and while I don't know what yields are (though flights aren't cheap), loads have been good.

Not too hard to figure out. I’ll compare AA ORD-SJC & SFO.

ORD-SJC
Avg Daily Pax: 257
Load Factor: 89%
Market Share: 60%
Avg Fare: $206.42
Yield cents: 9.93

ORD-SFO
Avg Daily Pax: 722
Load Factor: 86%
Market Share: 26%
Avg Fare: $227.98
Yiled cents: 10.74

Oddly enough, since I fly SJC-ORD a number of times/year, I've been lately flying out of SFO due to better fares than SJC.

Quoting delta2ual (Reply 40):
MANY years ago, I read an indepth analysis (I can't remember the author,sorry), which basically came to the conclusion that no airline was successful (i.e. profitable) being #2 in a big hub city. At that time, it spoke of DL @ DFW, UA @ MIA, CO @ DEN. I don't know if this is still the case.

At any rate, if AA could get their house in order, and bring in those new planes when they arrive, I have no doubt they will fight for ORD. I think Chicago is very important to them.

IMHO, AA has the "critical mass" for ORD which the other carriers didn't. I'm going to be incessant in stating that if AA can solve its cost and scope situation, it will be able to expand out of ORD again.
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IrishAyes
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:03 pm

Quoting delta2ual (Reply 40):
MANY years ago, I read an indepth analysis (I can't remember the author,sorry), which basically came to the conclusion that no airline was successful (i.e. profitable) being #2 in a big hub city. At that time, it spoke of DL @ DFW, UA @ MIA, CO @ DEN. I don't know if this is still the case

I know EXACTLY which article you are talking about and I think I managed to dig it up - it was published in the Dallas Morning News in September 2004. I still have a copy of the article in print form, stashed somewhere in my bedroom closet back home in Dallas...here it is!

http://archives.californiaaviation.org/airport/msg31826.html
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goldenstate
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:11 pm

Quoting Jacobin777 (Reply 46):
IMHO, AA has the "critical mass" for ORD which the other carriers didn't. I'm going to be incessant in stating that if AA can solve its cost and scope situation, it will be able to expand out of ORD again.

It's as true in Chicago as it is everywhere else. If they can fix their structural issues and get on a path to sustainability, they can compete more aggressively and make long overdue product upgrades.

Labor productivity improvements and a 100 seat aircraft would be transformative for ORD. A B777 fleet mod to improve CASM performance and introduce flatbeds in J would probably drive immediate benefits on ORD-Asia/LHR flying as well.
 
commavia
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:28 pm

AA's market position within the overall Chicago market has declined relative to where it was a decade ago - there's no question about that. On balance, however, I would say that United's has as well - they have both declined relative to the overall market as Southwest has grown so dramatically in the region. Now, that being said, AA has definitely declined more - relative to the market overall, and to United. United will always be #1 in the Chicago region because of its inherent strength in the local market position and historical presence.

However, that being said, I do still believe - call me naive - that AA is sufficiently strong in the Chicago market to continue to support a hub there. Discontinuation of several high-profile and long-running international markets like FRA and BRU are unfortunate and inevitably attract a great deal of attention, but nonetheless AA at O'Hare in 2011 is hardly parallel to Delta/DFW circa 2004, USAirways/Pittsburgh circa 2003, Delta/Cincinnati circa 2010, etc.

AA is still a massive presence at O'Hare - even with most of the departures on regional jets - with substantial frequency to just about every major market of consequence in the U.S., plus lots of flights to major international markets both with AA mainline and partners.
 
jacobin777
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RE: Chicago O’Hare: AA Vs UA

Tue Sep 20, 2011 3:29 pm

Quoting goldenstate (Reply 48):
Quoting Jacobin777 (Reply 46):
IMHO, AA has the "critical mass" for ORD which the other carriers didn't. I'm going to be incessant in stating that if AA can solve its cost and scope situation, it will be able to expand out of ORD again.

It's as true in Chicago as it is everywhere else. If they can fix their structural issues and get on a path to sustainability, they can compete more aggressively and make long overdue product upgrades.

Labor productivity improvements and a 100 seat aircraft would be transformative for ORD. A B777 fleet mod to improve CASM performance and introduce flatbeds in J would probably drive immediate benefits on ORD-Asia/LHR flying as well.

Getting an S&P Ratings downgrade (yet again) is just yet another step towards BK...IMHO..

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