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What Is AA/MQ Thinking...

Wed Dec 14, 2011 3:38 am

...with some of their route selections from ORD? I mean, they've started MHK (a while back), ART (recently), and recently announced ALO, SUX, and YKF. Why are they starting these stations, several of which are likely to go bye-bye the instant the current pilot contract is replaced in bankruptcy court (whether negotiated or crammed down)?

Some of the routes make some sense, (especially given that MHK is also served from DFW), but ART just seems to make no sense, being the only carrier at the airport for an over 600 mile route, either from AA's point of view (just seems like an utterly oddball route) or from the communities' (basically eliminating southbound traffic flows for the community, which is particularly troubling given that it's an EAS route).
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RE: What Is AA/MQ Thinking...

Wed Dec 14, 2011 3:50 am

MHK was starting from ORD because it was a blazing success from DFW.

ALO and SUX are EAS markets. YFK has no other service to the US so they have it to themselves.

They are also starting DFW-GCK which I expect to work well because there is no other jet service to Western Kansas and (by far) the largest O&D air market from Garden City, Dodge City, and Liberal is Dallas. Couple it with the heavy Hispanic presence and a few PDEW to Mexico, and I think you have a winner. Garden City Airport is 11 miles from Garden City, 40 miles from Dodge City, and 60 miles from Liberal so its well placed to serve all the major towns of Western Kansas.

Some of Eagles biggest surprises have come initially from EAS routes. DFW-MHK/SAF/ROW are examples. Ive also heard DFW-GRI is doing very nicely.
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RE: What Is AA/MQ Thinking...

Wed Dec 14, 2011 7:39 am

I work for MQ at MHK and I can confirm that DFW is a resounding success. We recently began a second daily service to ORD mid November. Our loads have dropped some but ultimately we're sending quite a few pax to ORD. Unfortunately, the banks at ORD aren't incredibly well timed for us. ORD is a ways from MHK and our RON leaves at 7:00, which gets to ORD at 9:30, just after the first bank of departures.

Interestingly, I'll check in tons of interline, primarily Star Alliance pax to ORD and I'll get bags from LH, US, and UA all the time. I really hope that MQ can get contracts to have United Express flights in and out of MHK soon. DEN and ORD could (and would) do incredibly well for UA, and would do better for AA if the ORD hub was better built for European connections, namely FRA or FCO, where I send probably 3-4 pax a flight too.

MHK is a great destination and a wonderful market. I find it troubling that AA & MQ are trying to emulate MHK's emergance-from-EAS successes in other EAS markets. From what I gather, JLN is doing pretty well on the ATR and they're filling aircraft, but aside from that, MHK's market is always underrated. MHK retains about 30% of its market, the rest of which bleeds to MCI, but we get pax all the time from McPherson, Topeka, Salina, even as far West as Hays. People love the service we provide, but its only possible because of the base of service the Manhattan local market has. We sell seats by the boatload to soldiers, and the Kansas State students returning home after finals have all five flights overbooked/booked full tomorrow. Garden City (GCK) is a great town and has a healthy business community, but not near the kind of travel-inducing activity that MHK has.

I'm waiting, very patiently, for a CR7 RON to ORD and MHK's 4daily DFW flight.

Sorry to hijack your thread. I hope AA finds great successes with the smaller market RJ flying. God forbid they finally remove CRJs from ORD-LGA and give them to us so we can fill them.
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RE: What Is AA/MQ Thinking...

Wed Dec 14, 2011 7:57 am

ART, SUX and ALO are EAS cities. The government is playing Eagle to fly there.

And while I don't know for sure, I have a strong hunch that Research in Motion is revenue-guaranteeing YKF.
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RE: What Is AA/MQ Thinking...

Wed Dec 14, 2011 1:30 pm

It's actually perfectly logical.

Because of AA/Eagle's system unit cost disadvantage versus their primary competitors - Delta, United, USAirways and Southwest - AA and Eagle have smartly been adding to their network more and more of these small markets that still have latent demand, but have little competition. Many of these cities either have a particularly corporate base to cater to, or lots of government traffic because of a local military base, etc. In these markets, AA and Eagle can charge higher fares, which not only helps the profitability of these markets on a standalone basis, but also has a 'halo effect' on the larger network by bringing more higher-yielding revenue onto the connecting hub networks (particularly through DFW and Chicago).

AA and Eagle have actually had some substantial success with this strategy in a lot of different markets out of DFW and Chicago, where they have in the past few years entered a good number of these types of cities. Some started as EAS, others not, and most have been successful. Once AA and Eagle get their costs in line with the market, and get the right fleet of aircraft into Chicago (A319s and more CRJ700s, primarily), it will only get better still.
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RE: What Is AA/MQ Thinking...

Wed Dec 14, 2011 2:45 pm

Quoting mah4546 (Reply 3):
I have a strong hunch that Research in Motion is revenue-guaranteeing YKF.

I really really REALLY doubt that considering no one i know from RIM even knows YKF exists, and they have a corporate purchase agreement with Air Canada.
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