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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 9:30 am

Dear All,

in order to consolidate the AA/US merger threads (and after input from users, which we highly appreciate) the moderators decided to start separate threads each discussing one aspect of the AA/US merger and its impact to both the industry and the two airlines involved.

Please continue discussing this hot news in their individual official threads:

AA/US Merger Impact: Fleet
AA/US Merger Impact: Hubs (THIS THREAD ONLY)
AA/US Merger Impact: Employees
AA/US Merger Impact: HQ
AA/US Merger Impact: Livery
AA/US Merger Impact: Unions
AA/US Merger Impact: Routes
AA/US Merger Impact: Inflight Service

Enjoy & have a nice weekend!

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apjung
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 9:38 am

Well, since PHX is a US hub that is about to be absorbed into AA, I hope AA would have the foresight to add the PHX-MSY route that HP abruptly canceled just before Hurricane Katrina made landfall and never resumed when they merged with US.
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 11:25 am

I'm pretty sure BA will come back to CLT. That will be nice to see.
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STT757
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 11:38 am

The Wall Street Journal has an article discussing AA/US's post merger hub network. They surmise that, unlike DL and UA who used their mergers to trim capacity, AA/US would keep their network intact. And that the purpose of the merger is to make AA bigger, again, and not to remove capacity. I tend to agree with their analysis.

To read the article type in "AMR stands to gain vast network" to Google news.

In the other merger discussion threads everyone keeps speculating the three US hubs, CLT, PHL and especially PHX would be slashed. I disagree, I think CLT will perhaps be reduced a little with the removal of some of the smaller regional flights but overall will continue to grow to the Caribbean and Latin America. PHL I took see getting a trim to some smaller communities but overall growing by adding routes like AUS, SAT and perhaps NRT long term on AA or JAL via a 787. And PHX keeps getting compared to CVG, STL, PIT, MEM etc.. It's not, PHX is a booming sunbelt city. It doesn't have the biggest business community, but it has tons of O&D. PHX might get realigned, but it's not going the way of PIT, CVG or STL. The local market is just too big, and unlike the rust belt hubs PHX is growing.

As for AA hubs, I don't see anything changing in ORD. I see MIA continue to grow and as for JFK/LGA, there's not going to be any to really spark any renewed growth. US doesn't have that large of a slot portfolio anymore, what I see is US A330s replacing AA 763s on routes from JFK.
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AeroWesty
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 11:47 am

Quoting STT757 (Reply 3):
And PHX keeps getting compared to CVG, STL, PIT, MEM etc.. It's not, PHX is a booming sunbelt city.

What your link says:

Quote:
There also are questions over whether the combined carrier could support eight hubs and, if not, which U.S. city might be on the chopping block. In most recent airline mergers, at least one hub has suffered deep cuts to its service, such as Cincinnati following the 2008 merger of Delta and Northwest Airlines.

In the expected American tie-up, analysts point to Phoenix as the likely target, partly because it is sandwiched between American hubs Los Angeles and Dallas.
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commavia
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 12:29 pm

Since we're treating this as if it's already happened, my predictions on the hubs ...

I suspect the higher costs (relative to either independent, post-bankruptcy AA or US) will lead to inevitable optimization and capacity rationalization in the domestic network. For the markets below specifically the (#, #) represents my approximate prediction for the overall net % change in departures followed by overall net % change in seats over a period of 2-3 years following the merger (all estimates pro forma to each carrier’s independent operations today):

CLT (-5, -10): reduction in both departures and capacity simply driven by higher costs of combined entity; CLT remains the prime north-south connecting hub for the eastern U.S., and the key gateway into the southeastern U.S.; loses some longhaul flying to MIA but otherwise retains key international linkages

DFW (+2, +3): relatively minor overall growth driven primarily by picking up some connections previously handled by PHX, and some current PHX-exclusive US (and former AA) destinations such as LGB and OAK; offset by somewhat reduced capacity to the southeastern U.S. where connections are shifted over CLT and DFW sees markets like SAV, CHS, CAE, GSO, etc. lose some frequency in favor of larger, 2-class RJs

LAX (unchanged, +1): little change as a result of the merger, with a potential for some targeted domestic additions (e.g., PIT) to take advantage of combined strength, increased capacity on hub routes (e.g. 767 on 1 LAX-PHL rotation), and rationalization on overlapping routes (e.g., ending current Eagle schedule LAX-PHX)

MIA (+2, +2): continual growth, with MIA picking up some international connections from CLT (Caribbean, South America, CLT-FCO shifting to MIA-MXP); MIA continues to add new domestic and international markets (e.g., AUS, MCI, SAN, MKE)

NYC (JFK/LGA) (unchanged, +2): with domestic and some international connections shifted to PHL, NYC (both JFK and LGA) operations freed to focus on utilizing slots more effectively for local O&D, taking advantage of stronger combined AA presence to expand AA NYC links to major domestic (MCI, IND, IAH, MSY, CVG, DEN 1-3x daily each) and international (FRA, TLV 1x daily each) O&D markets

ORD (+7, -5): increase in departures but decrease in seats driven by shifting more mainline flying to large regional jets; in addition, ORD gains back connectivity to markets in northeastern U.S. where it had either shrunk or lost AA connections entirely in the last decade (BDL, PVD, ROC, BUF, ALB, etc.) and in select western markets (PDX, possibly SMF) where it is a more convenient connecting point than PHX for some city-pairs/itineraries

PHL (-5, -3): relatively small reduction in capacity and seats, but nothing major as PHL becomes the singular AA hub for handling connections to/from the northeastern U.S., as well as AA’s primary gateway to continental Europe

PHX (-40, -50): gradual but substantial reduction, with PHX shifted to focus on the large PHX outbound/inbound O&D market; PHX retains connections to 40-50 major U.S. markets (including HNL and probably OGG) plus YYC and YVR in Canada and the major Mexican beach markets, but with a substantial amount of the intra-west flying either eliminated or shifted to smaller (likely non-mainline) aircraft; of the 50% of capacity eliminated, approximately 35% is simply exited altogether, with 10% shifted over DFW and 5% over ORD and/or other hubs

WAS (DCA) (-2, -1): slight reduction in both departures and seats driven largely by forced slot divestitures at DCA (focused primarily on overlapping RDU/BNA routes), but offset by expanded presence in key hub markets (near-hourly shuttle to ORD, increased capacity to DFW, etc.)

Other Markets/Point-to-Point: combined strength of AA supports (re)introduction of nonstop flying in select O&D markets (e.g., BOS-RDU, BOB-SFO, etc.)
 
airbazar
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 12:55 pm

Quoting commavia (Reply 5):

PHL (-5, -3): relatively small reduction in capacity and seats, but nothing major as PHL becomes the singular AA hub for handling connections to/from the northeastern U.S., as well as AA’s primary gateway to continental Europe

Do you really think AA is going to give up JFK in favor of PHL, as the primary gateway to Europe? I don't think so. PHL's problems are well known and documented and I'm certain that PHL will be the biggest loser in this deal. JFK will grow as a TATL hub, CLT will grow as a North-South hub, MIA will grow as a Caribbean/Americas hub and PHL will slowly shrink into a "focus city", over time.
 
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STT757
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 1:02 pm

Quoting airbazar (Reply 6):
JFK will grow as a TATL hub

With what slots?
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commavia
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 1:14 pm

Quoting airbazar (Reply 6):
Do you really think AA is going to give up JFK in favor of PHL, as the primary gateway to Europe?

It's not a matter of "giving up" one in favor of the other. It's the sheer reality of slots and competition. PHL has no slots, and virtually no competition. JFK has onerous slot constraints, and tons of competition. In that environment, and given that US already has a bigger transatlantic operation out of PHL than AA does out of JFK, why would they cut one in favor of the other? Both serve a viable purpose, and can nicely compliment each other.

Quoting airbazar (Reply 6):
PHL's problems are well known and documented

True, although the "problems" one could ascribe to PHL could essentially be said of virtually every hub in the northeast.

Quoting airbazar (Reply 6):
I'm certain that PHL will be the biggest loser in this deal.

I'm near certain you're wrong. If this merger happens, the biggest loser - from a hub standpoint - is almost certain to be PHX. Nearly everyone seems to be in agreement on that.

I still don't understand why people think PHL is due for massive cuts. It's a huge hub, serving a huge market, with little meaningful competition, and in a relatively good location. JFK would also be a great asset for a combined airline - great terminal, huge local market, (relatively) large holding of slots, etc. But JFK cannot ever be a hub for AA the way PHL is for US and may soon be for AA. It's simply not possible.
 
seatback
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 1:17 pm

Quoting airbazar (Reply 6):
PHL becomes the singular AA hub for handling connections to/from the northeastern U.S., as well as AA’s primary gateway to continental Europe



JFK relies on O&D, whereas PHL would serve as the primary "connecting" hub to Europe.

I wouldn't expect AA to diminish the NYC market more than it already has.
 
LAXdude1023
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Fri Feb 08, 2013 1:27 pm

Quoting airbazar (Reply 6):

If AA could have all the slots and gates they wanted at JFK, I might agree. But they can't really grow at JFK at all.

Shutting down PHL is a the equivalent of telling DL and UA, "Hey guys, we're not interested in making any money in the Northeast outside of NYC". Simply put, JFK cannot serve the same purpose PHL can. JFK cannot be the Northeast connector that PHL is. Not to mention, PHL itself is a very large market. Why give that up?

PHL probably will lose secondary destinations in Europe like ATH, GLA, and LIS. But I see PHL-NRT becoming a reality since that market can support it with connections on both ends.

Also disagree about CLT. It will be a key hub for the combined airline for sure, but it isn't going to grow.
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airbazar
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Fri Feb 08, 2013 2:05 pm

Quoting commavia (Reply 8):
It's not a matter of "giving up" one in favor of the other. It's the sheer reality of slots and competition. PHL has no slots, and virtually no competition.

PHL has no competition because no one wants to go to PHL  Sorry that's the reality. If you think people in NYC are going to chose AA and fly NYC-PHL-Europe you are out of your mind. The reality is that NYC is the single biggest market to/from Europe and to leave NYC in favor of PHL is ludicrous. JFK's slot restrictions are artificial. No one has ever been denied access to JFK. A truely slot restricted airport wouldn't be able to close a runway for 4 months for repaving. B6 hasn't had any problems growing at JFK. They're even expanding their terminal. And So is DL. So the idea that AA can't grow at JFK doesn't pass the sniff test.

Quoting seatback (Reply 9):
JFK relies on O&D, whereas PHL would serve as the primary "connecting" hub to Europe.

Fair enough but why not do that thru CLT which is already US's biggest hub and it's a better airport than PHL in every category? To/From Europe, the northeast can connect via JFK while the southeast can connect via CLT. PHL is the third wheel in my opinion   For domestic connections, I can see PHL's usefulness because CLT is too far south but there's also DCA. So I really don't see PHL growing at all.
 
HPRamper
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 2:19 pm

Quoting airbazar (Reply 11):
Sorry that's the reality. If you think people in NYC are going to chose AA and fly NYC-PHL-Europe you are out of your mind. The reality is that NYC is the single biggest market to/from Europe and to leave NYC in favor of PHL is ludicrous.

Nobody is suggesting that.

AA will retain NYC-Europe service. It will also retain PHL-Europe service for the majority of the country who will not be connecting at JFK.
 
commavia
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Fri Feb 08, 2013 2:25 pm

Quoting airbazar (Reply 11):
Sorry that's the reality.

Reality according to who?

Quoting airbazar (Reply 11):
If you think people in NYC are going to chose AA and fly NYC-PHL-Europe you are out of your mind. The reality is that NYC is the single biggest market to/from Europe and to leave NYC in favor of PHL is ludicrous.

Nobody said that. I'm not suggesting AA just leave NYC and route everything through PHL. I'm suggesting AA keep their already-robust JFK-Europe schedule - and actually expand it somewhat - alongside the already-robust PHL-Europe schedule. I continue to be fascinated that many - apparently including you - seem to think the two cannot coexist.

Quoting airbazar (Reply 11):
JFK's slot restrictions are artificial. No one has ever been denied access to JFK.

  

Quoting airbazar (Reply 11):
So the idea that AA can't grow at JFK doesn't pass the sniff test.

Well I don't know what it is you're "sniffing."

Quoting HPRamper (Reply 12):
Nobody is suggesting that.

AA will retain NYC-Europe service. It will also retain PHL-Europe service for the majority of the country who will not be connecting at JFK.

  

Thank you.
 
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 2:27 pm

Quoting airbazar (Reply 11):
PHL has no competition because no one wants to go to PHL  Sorry that's the reality. If you think people in NYC are going to chose AA and fly NYC-PHL-Europe you are out of your mind. The reality is that NYC is the single biggest market to/from Europe and to leave NYC in favor of PHL is ludicrous. JFK's slot restrictions are artificial. No one has ever been denied access to JFK. A truely slot restricted airport wouldn't be able to close a runway for 4 months for repaving. B6 hasn't had any problems growing at JFK. They're even expanding their terminal. And So is DL. So the idea that AA can't grow at JFK doesn't pass the sniff test.

And even though PHL has no slots (although it probably should since it's always had delay issues), it's still a very, very congested airport with little room to grow. Can that airport handle more traffic with it's horrible runway configuration? Not really. And didn't US say they'd de-hub PHL if that new runway proposal goes through? Surprised nobody has mentioned that.
 
commavia
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Fri Feb 08, 2013 2:30 pm

Quoting corinthians (Reply 14):
And even though PHL has no slots (although it probably should since it's always had delay issues), it's still a very, very congested airport with little room to grow.

Welcome to doing business as an airline in the northeast U.S. Just about every northeast airport is congested, crowded, overtaxed, run down, etc. PHL is hardly unique.

Quoting corinthians (Reply 14):
Can that airport handle more traffic with it's horrible runway configuration? Not really.

I don't think "more traffic" is really realistic. I think the PHL hub will shrink somewhat, both in terms of flights and capacity.

Quoting corinthians (Reply 14):
And didn't US say they'd de-hub PHL if that new runway proposal goes through?

There's plenty of money involved. I suspect they'll work something out.
 
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Fri Feb 08, 2013 2:34 pm

Quoting commavia (Reply 5):
PHX (-40, -50): gradual but substantial reduction,

You realize you are implying that AA will drop their west coast market share significantly? While DFW and ORD could be up some of that traffic, cutting PHX that much means a retreat Eastward that would cost AA revenue. It might be what has to happen... But I would not suspect that level of cuts. Not unless DFW cuts their costs more than I anticipate.

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usairways85
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Fri Feb 08, 2013 2:35 pm

Quoting corinthians (Reply 14):
And even though PHL has no slots (although it probably should since it's always had delay issues), it's still a very, very congested airport with little room to grow. Can that airport handle more traffic with it's horrible runway configuration? Not really. And didn't US say they'd de-hub PHL if that new runway proposal goes through? Surprised nobody has mentioned that.

It's a combination of a few things
-Poor terminal design with tight alley ways between terminals
-Average to Poor airport design that impedes aircraft movement
-Tight airspace stuck in between NYC and WAS

US is just throwing around some weight to negotiate the deal and I imagine the combined carrier will do the same. It is in the best interest of both US (AA) and PHL to improve (expand) the airport. That is why US and PHL just came to a short term agreement for improvements.

[Edited 2013-02-08 06:37:32]
 
Bobloblaw
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Fri Feb 08, 2013 2:35 pm

Quoting commavia (Reply 5):

Pretty good overall. Not sure that NYC loses anything though.

Will AA retain props? Props are very important to CLT and to a lesser degree PHL.

This tie up benefits ORD the most. Larger RJs, 319s and E90s for ORD are needed badly. Helps AA in the east as well.
 
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DolphinAir747
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 2:41 pm

How big is AA at DCA? That will certainly affect how many slots AA/US has to give up at DCA.

BOB-SFO-you mean BOS-SFO, right? A flight to Bora Bora woukd be awesome... 
 
corinthians
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Fri Feb 08, 2013 2:44 pm

Quoting usairways85 (Reply 17):
It's a combination of a few things
-Poor terminal design with tight alley ways between terminals
-Average to Poor airport design that impedes aircraft movement

The main parallel runways are just too close together and they can’t be used independently. Even the proposed new runway will be too close to allow for simultaneous independent operations. Won’t increase capacity all that much, as US Air said. Not even with NextGen. Very big cost considering limited to no operational improvement.

Quoting usairways85 (Reply 17):
-Tight airspace stuck in between NYC and WAS

Even with the tight airspace, PHL always had more operations than any of the NYC or DC airports. Just too many scheduled flights there.
 
brilondon
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 2:47 pm

Quoting southwest737500 (Reply 2):

I'm pretty sure BA will come back to CLT. That will be nice to see.

No, they will be less likely to come back to CLT because of the relationship that AA has with BA outside of their alliance tie up. Now, in the future I think that may be say in 10 years if AA survives that long, you may see AA flying directly to LHR, but I doubt that.
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usairways85
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Fri Feb 08, 2013 2:58 pm

Quoting corinthians (Reply 20):
Even with the tight airspace, PHL always had more operations than any of the NYC or DC airports. Just too many scheduled flights there.

I don't have specific numbers so anyone feel free to provide them but I suspect EWR has more movements than PHL and I suspect NYC (EWR/JFK/LGA/TEB) has almost triple the number of movements as PHL.

I suspect PHL does have more than the WAS airports individually but once again BWI/DCA/IAD probably have over double the number of movements than PHL. Don't forget about Dover AFB, Andrews AFB, Mcquire AFB, ACY, IST, etc.
 
jfidler
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Fri Feb 08, 2013 2:58 pm

Didn't CLT recently announce plans for a large expansion of the airport? I wonder if this will affect their plans.
 
SCQ83
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Fri Feb 08, 2013 3:04 pm

Quoting airbazar (Reply 6):
Do you really think AA is going to give up JFK in favor of PHL, as the primary gateway to Europe? I don't think so. PHL's problems are well known and documented and I'm certain that PHL will be the biggest loser in this deal. JFK will grow as a TATL hub, CLT will grow as a North-South hub, MIA will grow as a Caribbean/Americas hub and PHL will slowly shrink into a "focus city", over time.

I totally agree. I think PHL will be one of the most affected hubs. It is extremely close to NYC and Philadelphia is not an economic powerhouse or booming city in the States today... with little to absolutely no appeal for Europeans (which are most if not all of its long-haul routes). Also, for congestion and weather, PHL is not even a good airport to be as alternative to JFK, and even its layout can be annoying (for instance the connection for the international side to I think it is T5). If AA+US wants to keep an alternative airport to the West Coast, Midwest, they could keep CLT, which has no congestion or weather issues, and can probably compete more with the likes of ATL in terms of geography (of course I am not saying CLT is or is going to be ATL, but they can target some same secondary markets). For me PHL was an oddity that US Airways used to have access to the Northeast, and conveniently located between New York and Washington, keeping also a monopoly in Philadelphia.

I have even flown myself a couple of times Europe-PHL-LGA (since it was much cheaper than direct Europe-NYC) and every other person in the PHL-LGA seemed to be connecting from Europe (including half of my flight). Of course it doesn't mean PHL can retain some major hubs like LHR (like BA flies to BWI in addition to IAD).

Just look at who flies in addition to US to Europe: BA to LHR and LH to FRA... that is all.



[Edited 2013-02-08 07:08:43]
 
corinthians
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Fri Feb 08, 2013 3:10 pm

Quoting usairways85 (Reply 23):
I don't have specific numbers so anyone feel free to provide them but I suspect EWR has more movements than PHL and I suspect NYC (EWR/JFK/LGA/TEB) has almost triple the number of movements as PHL.

Individually, PHL has more movements than any airport in the Northeast. This has been the case for many years. Even before EWR got slotted, PHL still had more movements. I don’t know the exact stats, but PHL handled something like 450K movements last year and EWR around 430K. PHL's operational traffic has been in decline for a few years and I remember when it handled over 500K in movements per year. You can find them on Airports.org, but I can’t check it out from my office.
 
LAXdude1023
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Fri Feb 08, 2013 3:17 pm

Quoting SCQ83 (Reply 25):
Quoting airbazar (Reply 11):

What do you realistically propose the combined airline do in the Northeast? Keep in mind, as most of us learned from 2nd grade geography, North Carolina is not in the Northeast.
It is what it is...
 
bizjet
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Fri Feb 08, 2013 3:19 pm

I think the Philadelphia naysayers are forgetting that the metro area is the 6th largest in the country. Plenty of traffic that wants to move. I think its hub status is very safe.
 
commavia
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Fri Feb 08, 2013 3:21 pm

Quoting lightsaber (Reply 16):
You realize you are implying that AA will drop their west coast market share significantly?

Not sure how "significantly" net-net, but yes. The west is generally the lowest-yielding part of the U.S. AA - at a post-merged cost level - will not be able to make money in many of the PHX-west markets.

Quoting lightsaber (Reply 16):
cutting PHX that much means a retreat Eastward that would cost AA revenue.

Wouldn't really mean a "retreat Eastward" at all. PHX today serves very little intra-west connections - it's mostly used for connections between the west and somewhere else. And for the vast majority of traffic PHX now handles, DFW and/or ORD can handle those some connections just as well, and in some cases even better.

Quoting bobloblaw (Reply 18):
Not sure that NYC loses anything though.

I see some shifting between the two, but net-net, I agree, NYC would not lose much if anything at all.

Quoting bobloblaw (Reply 18):
Will AA retain props? Props are very important to CLT and to a lesser degree PHL.

Yes. Props make lots of sense for many of the markets served out of CLT/PHL, and out of DFW/ORD/MIA. I think AMR post-merger would have the potential to do with props just what AA did with the 737/A320 - use the lure of a huge volume buy to get a great deal from either Bombardier or ATR.

Quoting bobloblaw (Reply 18):
This tie up benefits ORD the most. Larger RJs, 319s and E90s for ORD are needed badly.

Absolutely. ORD would stand to gain a lot, strategically, in a merger.

Quoting brilondon (Reply 21):
No, they will be less likely to come back to CLT because of the relationship that AA has with BA outside of their alliance tie up. Now, in the future I think that may be say in 10 years if AA survives that long, you may see AA flying directly to LHR, but I doubt that.

Huh? US was already planning on flying CLT-LHR this summer. AA, with a merger, would be flying it instantly. And I could definitely see BA coming back to CLT with a second daily CLT-LHR flight. The halo effect of the alliance would drive lots of traffic on CLT-LHR, which is part of why CLT-FRA would likely get cut back (my guess is to 1x daily 763).
 
flyinghippo
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:23 pm

Quoting HPRamper (Reply 12):
AA will retain NYC-Europe service. It will also retain PHL-Europe service for the majority of the country who will not be connecting at JFK.
Quoting commavia (Reply 13):
Nobody said that. I'm not suggesting AA just leave NYC and route everything through PHL. I'm suggesting AA keep their already-robust JFK-Europe schedule - and actually expand it somewhat - alongside the already-robust PHL-Europe schedule. I continue to be fascinated that many - apparently including you - seem to think the two cannot coexist.

So... let me see if I understand you...

The combined AA/US will have two TATL hubs within 150 miles of each other, and they will STILL operate as TATL hubs?

JFK TATL ops will be enough just based on the local O&D, while PHL will need to rely on connecting passengers from a relatively small area of the US to justify a robust TATL ops.

Sorry but I just don't see it that way...

Anything south or west of PHL, passengers will connect via DFW or MIA to go to Europe or S. America. Anything north/west of PHL will connect via ORD or JFK. ORD, MIA, JFK and DFW have enough local O&D traffic to justify a robust international hub, and AA/US will add more passengers to those hubs... Where PHL will mostly rely on connecting traffic, the cost of maintaining two TATL/International hubs within that close proximity is not cost effective.

I can see PHL maintaining some TATL routes to cities such as LHR and CDG, and maybe 757/788 service to cities such as MAD, other than that, PHL's TATL ops will be absorbed by JFK or MIA.
 
airbazar
Posts: 6948
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:26 pm

Quoting commavia (Reply 13):
Reality according to who?

According to the Europe-PHL O&D numbers and the fact that US has the cheapest TATL fares around. The market is relatively small and low yield.

Quoting commavia (Reply 13):
Nobody said that. I'm not suggesting AA just leave NYC and route everything through PHL. I'm suggesting AA keep their already-robust JFK-Europe schedule - and actually expand it somewhat - alongside the already-robust PHL-Europe schedule. I continue to be fascinated that many - apparently including you - seem to think the two cannot coexist.

JFK isn't any worse than PHL as far as congestion. How can you suggest that JFK can't grow but PHL can?
More importantly, PHL and NYC airspace overlap and both are affected equally in bad weather because they are so close together. Operating your 2 TATL hubs less than 100miles apart in the most congested air space region of the country just doesn't make a lot of sense.

Quoting corinthians (Reply 14):
And even though PHL has no slots (although it probably should since it's always had delay issues), it's still a very, very congested airport with little room to grow. Can that airport handle more traffic with it's horrible runway configuration? Not really. And didn't US say they'd de-hub PHL if that new runway proposal goes through? Surprised nobody has mentioned that.

  
Thank you.
 
SCQ83
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:32 pm

Quoting bizjet (Reply 28):
I think the Philadelphia naysayers are forgetting that the metro area is the 6th largest in the country. Plenty of traffic that wants to move. I think its hub status is very safe.

I know some Philly yaysayer would come with that. PHL is the 7th in terms of GDP in 2010 according to the US Department of Commerce (I wouldn't be surprised it is now the 8th or 9th since San Francisco and Boston were very near behind).

The issue with Philadelphia is that is has no interest for anyone in Europe other than the business traffic they might have... you might forget that places like Miami, New York, San Francisco... or even Boston or Los Angeles have a huge amount of leisure traffic from Europe, in addition to businesses.

Another issue is that PHL is very close to New York and Washington metro areas, so passengers in their metro area easily go to EWR or IAD by train/car... that will hardly happen in other comparable metro areas like BOS, SFO or MIA (even if San Francisco or Miami have SJC, OAK or FLL... they don't have long-haul services to Europe).
 
ckfred
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:36 pm

Quoting STT757 (Reply 3):
As for AA hubs, I don't see anything changing in ORD.
Quoting commavia (Reply 5):
ORD (+7, -5): increase in departures but decrease in seats driven by shifting more mainline flying to large regional jets; in addition, ORD gains back connectivity to markets in northeastern U.S. where it had either shrunk or lost AA connections entirely in the last decade (BDL, PVD, ROC, BUF, ALB, etc.) and in select western markets (PDX, possibly SMF) where it is a more convenient connecting point than PHX for some city-pairs/itineraries

Apparently, there has been talk from US directed towards the employees at the ORD hub. Parker feels that management has downsized ORD too much, considering the amount of O&D traffic in the Chicago metro area, as well as the amount of traffic in and out of the upper Midwest.

AA has simply let too much business in Chicago and the upper Midwest slip to UA at ORD, WN at MDW, and to a lesser extent, DL at MSP and DTW.

Chicago is still a very, very large destination for business travelers. Chicago is trying to regain convention business that has been lost to Las Vegas and Orlando.

Further, it seems to me that AA would be shifting some of the RJ flying from the Embrear 135/140/145 and CRJ 700 to either larger Embrears and/or A319s. People have been saying for years that AA shot itself in the foot at ORD, when it returned the 717s and retired the F100s. Rather than fly half empty MD-80s and 738s, AA was running the RJs, often against UA and WN mainline aircraft. That just drove more people away from AA.
 
rwy04lga
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:37 pm

What will happen at LGA? Who will go where? Who will trade gates with who?
Just accept that some days, you're the pigeon, and other days the statue
 
usairways85
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:38 pm

Quoting flyinghippo (Reply 30):
Anything south or west of PHL, passengers will connect via DFW or MIA to go to Europe or S. America. Anything north/west of PHL will connect via ORD or JFK. ORD, MIA, JFK and DFW have enough local O&D traffic to justify a robust international hub, and AA/US will add more passengers to those hubs... Where PHL will mostly rely on connecting traffic, the cost of maintaining two TATL/International hubs within that close proximity is not cost effective.

I can see PHL maintaining some TATL routes to cities such as LHR and CDG, and maybe 757/788 service to cities such as MAD, other than that, PHL's TATL ops will be absorbed by JFK or MIA.

First the JFK AA domestic network is a shell of the PHL US domestic network and I think the consensus is AA/US do not have the slots to build JFK into a "megahub". They won't have the domestic network to use JFK as a European connection point.

Second UA makes IAD and EWR work and they are what ~225 miles away from each other. JFK and PHL will serve two different purposes. JFK focusing on the O&D markets, while PHL will focus on key markets and will serve as a connecting hub.

Quoting corinthians (Reply 26):
Individually, PHL has more movements than any airport in the Northeast. This has been the case for many years. Even before EWR got slotted, PHL still had more movements. I don’t know the exact stats, but PHL handled something like 450K movements last year and EWR around 430K. PHL's operational traffic has been in decline for a few years and I remember when it handled over 500K in movements per year. You can find them on Airports.org, but I can’t check it out from my office.

Ok, I was wrong

2010
EWR: 403K movements
PHL: 460K movements
JFK: 399K movements
 
commavia
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:40 pm

Quoting flyinghippo (Reply 30):
So... let me see if I understand you...

The combined AA/US will have two TATL hubs within 150 miles of each other, and they will STILL operate as TATL hubs?

JFK TATL ops will be enough just based on the local O&D, while PHL will need to rely on connecting passengers from a relatively small area of the US to justify a robust TATL ops.

No. You don't understand me.

The two transatlantic operations - at JFK and PHL - already coexist now, just for two different airlines. In a merger, I could see some shifting of capacity, with each market gaining or losing a limited number of flights. I don't think that's inconceivable. Beyond that, I did not say the JFK operation would be "just based on the local O&D." JFK would still handle connections, it just wouldn't be optimize for them quite as much as now, and as PHL would be.

What I'm suggesting is hardly unprecedented. This is to some extent what UA has done with EWR/IAD.

Quoting airbazar (Reply 31):
How can you suggest that JFK can't grow but PHL can?

I'm not suggesting either airport substantially grow. I think JFK will probably be about flat and PHL actually slightly down in a merger. No growth - just optimization.
 
SCQ83
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:40 pm

Quoting usairways85 (Reply 35):
Second UA makes IAD and EWR work and they are what ~225 miles away from each other. JFK and PHL will serve two different purposes. JFK focusing on the O&D markets, while PHL will focus on key markets and will serve as a connecting hub.

You cannot compare New York and Washington DC (which btw are already much further apart) with New York and Philadelphia in terms of traffic and I bet yields. It is like apples and oranges.
 
airliner371
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:43 pm

Quoting DolphinAir747 (Reply 19):
How big is AA at DCA?

50 daily departures.

Quoting DolphinAir747 (Reply 19):
That will certainly affect how many slots AA/US has to give up at DCA.

I am thinking 20-30 daily departures.

Quoting rwy04lga (Reply 34):
Who will trade gates with who?

I think it is a solid guess that AA/US will consolidate at Terminal B concourses C&D but there are so many options for who to put where at the other gates that its too much to guess.

[Edited 2013-02-08 08:09:03]
 
flyinghippo
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:54 pm

Quoting usairways85 (Reply 35):
Second UA makes IAD and EWR work and they are what ~225 miles away from each other. JFK and PHL will serve two different purposes. JFK focusing on the O&D markets, while PHL will focus on key markets and will serve as a connecting hub.

EWR gets a lot of international traffic from local passengers. Same goes for IAD, so funneling passengers to those hubs makes sense and is cost effective.

I'd be interested to see what international traffic is generated from the PHL area. I suspect it is a fraction of JFK/EWR/IAD.

Say a flight out of JFK on a 77W to LHR is generally 75% full, do you think AA wouldn't want to funnel some traffic to JFK so that flight leaves with 90% capacity? Or would they rather funnel those connecting passengers to PHL and fly a 75% full A332 to LHR? (And that A332 is 75% full only because US funnels passengers to PHL from the rest of the country)

If they funnel international passengers from Mid West/North East to ORD/JFK, and SE to MIA/DFW, there wouldn't be enough passengers in the PHL area to justify maintaining an international hub at PHL.
 
HPRamper
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:54 pm

Quoting corinthians (Reply 14):
And even though PHL has no slots (although it probably should since it's always had delay issues), it's still a very, very congested airport with little room to grow. Can that airport handle more traffic with it's horrible runway configuration? Not really. And didn't US say they'd de-hub PHL if that new runway proposal goes through? Surprised nobody has mentioned that.

Many if not most delay issues at PHL are caused by airspace congestion, not ground congestion. PHL has undergone major improvements and according to several pilots for US I've talked to, and one or two express pilots, they prefer PHL to CLT these days.

Quoting flyinghippo (Reply 30):
The combined AA/US will have two TATL hubs within 150 miles of each other, and they will STILL operate as TATL hubs?

JFK TATL ops will be enough just based on the local O&D, while PHL will need to rely on connecting passengers from a relatively small area of the US to justify a robust TATL ops.

Sorry but I just don't see it that way..

I wouldn't call the majority of the country minus NYC a relatively small area. Even taking into the consideration the (smaller number of) connections into JFK from elsewhere.

Quoting flyinghippo (Reply 30):
Where PHL will mostly rely on connecting traffic, the cost of maintaining two TATL/International hubs within that close proximity is not cost effective.

If they can both fill planes with a positive yield, then it's cost effective.
 
corinthians
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 3:54 pm

Quoting commavia (Reply 36):
What I'm suggesting is hardly unprecedented. This is to some extent what UA has done with EWR/IAD.

This was probably UAL's intention, but it hasn't turned out that way. EWR is roughly split in half between O&D and connecting traffic. According to the Port, it is a connecting hub...unless those stats are wrong.

EWR.pdf" target="_blank">http://www.panynj.gov/airports/pdf-traffic/NOV2012_EWR.pdf

Not sure what IAD's numbers are, though, or where to find them.
 
flyinghippo
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:01 pm

Quoting HPRamper (Reply 40):
I wouldn't call the majority of the country minus NYC a relatively small area. Even taking into the consideration the (smaller number of) connections into JFK from elsewhere.

I wish I have a map that I can draw here...

If there are already well established hubs in JFK, MIA and CLT on the east cost, ORD, DFW in the middle, where do you think PHL will draw international traffic from that would justify keeping PHL as a major international hub? Remember IAD for UA is just an hour down the interstate, and EWR is just 90 minutes north.
 
commavia
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:09 pm

Quoting flyinghippo (Reply 42):
If there are already well established hubs in JFK

But that's the key - JFK isn't a "well established hub" now. It's a limited hub because of slot constraints and because it splits its local market with other airports that are, in some ways, more convenient and more popular. As such, JFK can never serve as a hub in the way PHL or EWR can. PHL and EWR are 2 of a kind in the Northeast, and cannot be replicated at JFK.

Quoting flyinghippo (Reply 42):
Remember IAD for UA is just an hour down the interstate, and EWR is just 90 minutes north.

Yes - and yet PHL manages to coexist with both of them, including being a larger hub than IAD, now.
 
usairways85
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:09 pm

Quoting flyinghippo (Reply 39):
Say a flight out of JFK on a 77W to LHR is generally 75% full, do you think AA wouldn't want to funnel some traffic to JFK so that flight leaves with 90% capacity? Or would they rather funnel those connecting passengers to PHL and fly a 75% full A332 to LHR? (And that A332 is 75% full only because US funnels passengers to PHL from the rest of the country)

If they funnel international passengers from Mid West/North East to ORD/JFK, and SE to MIA/DFW, there wouldn't be enough passengers in the PHL area to justify maintaining an international hub at PHL.

I think they would rather fly a 75% full 777 JFK-LHR made up predominantly of O&D and have the space for any last minute paxs that they will charge a high premium that only JFK-LHR can demand. Then route the connections through PHL to supplement the O&D that is high but not at the level of JFK.

You are proposing to turn JFK into a EWR type hub so they get the extra 15% capacity. Not only are there slot issues but JFK is a blood bath with B6 and DL already there as well as countless Foreign carriers that typically offer better products and service than the US carriers. And if you add the 200 flts to make it that type of hub JFK likely becomes just as bad as PHL is wrt delays.

I don't contest the NYC market is much larger than PHL and certainly commands a higher yeild but PHL can hold its own.
 
flyinghippo
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:24 pm

Quoting commavia (Reply 43):
Yes - and yet PHL manages to coexist with both of them, including being a larger hub than IAD, now.

I partially agree. My argument all along is that PHL will continue to be a hub, but not for international flights. Most of the international flights out of PHL will be absorbed by JFK/ORD/MIA and maybe CLT.


Quoting usairways85 (Reply 44):
You are proposing to turn JFK into a EWR type hub so they get the extra 15% capacity. Not only are there slot issues but JFK is a blood bath with B6 and DL already there as well as countless Foreign carriers that typically offer better products and service than the US carriers. And if you add the 200 flts to make it that type of hub JFK likely becomes just as bad as PHL is wrt delays.

JFK is just a hub out of many that AA has already. It doesn't need to absorb that many flights.

If flying out of SYR to LHR, the merged AA/US will route that passenger to ORD, not PHL. Same goes for passenger out of PIT. Passenger flying out of MSY to Europe would route to DFW/MIA, and if CLT does not fly to NRT, they will fly connect via JFK or DFW. AA/US can route passengers outside of the immediate PHL to not only JFK, but MIA, ORD, DFW, so JFK will not absorb all of the connections that's currently made to PHL.
 
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jfklganyc
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:30 pm

Quoting usairways85 (Reply 35):
They won't have the domestic network to use JFK as a European connection point.

But AA connects people everyday. And the flights do fine with O and D...no need for huge numbers of connectors.

I think that there will be a teething period where this all gets sorted out.

But much like Delta found out in the ATL, JFK tug of war that went on for most of the 90s, it is easier to serve one flight a day Euro cities, with strong ethnic ties to NYC from a place like NY then ATL. I suspect we will see a lot of that with PHL/JFK.

Also, no airline has successfully had 2 hubs this close in the past. They are always miserable failures.

B6 is trying it now with JFK and BOS. I guess AA will try it with PHL, JFK.

My thinking is, something will have to give down the road. It will likely be PHL focusing on domestic connections and JFK focusing on 1 to 2 banks of flights feeding international stuff. (Much like exists now)
 
SCQ83
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:33 pm

Comparing WAS VS PHL

Foreign carriers serving Washington DC: Aeroflot, Aeromexico, Air Canada, Air France, ANA, Austrian, Avianca, BA, Brussels, Cayman Islands, Copa, Emirates, Ethiopian, Etihad, Icelandair, KLM, Korean, Lufthansa, Porter, Qatar, Saudia, SAS, South African, Swiss, TACA, Turkish, Virgin Atlantic.

Foreign carriers serving Philadelphia: Air Canada, BA, Lufthansa.

The difference is appealing. DC is served by 27 foreign carriers, and PHL by only 3. That might give an idea of which is a more important international market (and the US Airways hub excuse is not valid, since United has a hub at IAD themselves with a lot of international routes too).

Quoting jfklganyc (Reply 46):
B6 is trying it now with JFK and BOS. I guess AA will try it with PHL, JFK.

My thinking is, something will have to give down the road. It will likely be PHL focusing on domestic connections and JFK focusing on 1 to 2 banks of flights feeding international stuff. (Much like exists now)

BOS and JFK have little to no overlap... not the case for JFK/EWR and PHL. Also Boston is a more important international destination than Philadelphia hands down with a larger and wealthier catchment area that is not a hub for any major carrier (and probably B6 has lower costs than US, making routes profitable easier).

[Edited 2013-02-08 08:36:39]
 
masseybrown
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:33 pm

Quoting flyinghippo (Reply 42):
Remember IAD for UA is just an hour down the interstate

No way - more like two to three hours, depending on time of day, EZ-Pass, and good weather. If it's raining/snowing, IAD is more than an hour from Washington.

Edit: I was thinking the merger makes the DL/US slot swap seem like a much better deal for US than it seemed at the time. Essentially they got an unassailable position at DCA and a bunch of cash; and now the merger restores their position at LGA, assuming they want it. DoT willl probably force them to shed some slots at both airports, but they still come out in good shape at both airports.

[Edited 2013-02-08 08:38:26]
 
usairways85
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:38 pm

Quoting flyinghippo (Reply 45):
If flying out of SYR to LHR, the merged AA/US will route that passenger to ORD, not PHL. Same goes for passenger out of PIT. Passenger flying out of MSY to Europe would route to DFW/MIA, and if CLT does not fly to NRT, they will fly connect via JFK or DFW. AA/US can route passengers outside of the immediate PHL to not only JFK, but MIA, ORD, DFW, so JFK will not absorb all of the connections that's currently made to PHL.

You are proposing a ton of "backtracking" connections there. AA/US will have to drop fares otherwise many of those paxs will all go to DL/UA through ATL/IAD/EWR.
 
LAXdude1023
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AA/US Merger Impact: Hubs (Part 1)

Fri Feb 08, 2013 4:45 pm

Quoting flyinghippo (Reply 39):
Quoting SCQ83 (Reply 37):

PHL isnt NYC or BOS or DC. Im not going to pretend that it is. That doesnt mean there isnt a market and a sizable one at that. Below are the largest city pair from PHL to Europe in passengers per day:

Total PHL-Europe PDEW: 1,125

London: 209
Paris: 93
Rome: 91
Frankfurt: 89
Tel Aviv: 56
Dublin: 50
Manchester: 49
Madrid: 45
Barcelona: 40
Amsterdam: 36
Munich: 35

This is relatively smaller compared to NYC or BOS, but its still a pretty big European O&D base. Its about the same ATL-Europe and much larger than CLT-Europe.

Now, what I (and many others) are arguing is not that PHL will grow nor that PHL will keep all of its current European destinations. I think we can agree it wont. Right now, PHL has 12 daily departures to Europe all year and that number is 18 in the summer. That number will decrease for sure. What I am arguing is the notion that PHL will somehow be shut down. When you take the local markets listed below and couple them with connections, the market definately works. What is likely is that the number of European departures per day will probably go down to 7-8 year round and 12 during the summer. The destinations served from PHL will probably be limited to LHR, CDG, FCO, FRA, TLV, MAD, DUB (seasonal), and MAN. The rest will be moved to JFK or be terminated.

Remember, there are lots of midsized markets in the Northeast that offer lots of O&D to Europe that AA cannot feed through JFK. PHL will serve as the connector to Europe and JFK will served the O&D in NYC.

Now if we look at PHL-Asia, the current local market size is about 210 PDEW. That is not very large, however it is pretty well documented that the PHL area bleeds a lot of Asia traffic to EWR. I do not see PHL being able to support multiple flights to Asia, but with connections, a daily flight to NRT is well within reason. I suspect that local market size will jump from 210 to around 325-400.

Looking at PHL-Latin America, its almost all leisure. I dont see any need for flights to Latin America.

Now, lets look at PHL's domestic market. Below are the largest domestic markets to PHL by daily passengers:

Orlando: 3059
Chicago: 2412
Atlanta: 2061
Miami/Fort Lauderdale: 2015
Los Angeles: 1751
Boston: 1569
San Francisco: 1546
Las Vegas: 1264
Denver: 1212
Dallas: 1156
Tampa: 958
Raleigh: 941
Houston: 925
Pittsburgh: 844
Minneapolis: 752
Seattle: 675
San Diego: 610
Charlotte: 601
Nashville: 583
Detroit: 545
Jacksonville: 493
Manchester, NH: 493
Indianapolis: 413
Fort Meyers: 389
Kansas City: 383
New Orleans: 381
Salt Lake City: 330

Bottom line, PHL is a viable hub. It is able to capture all the connecting traffic that JFK cannot and PHL is a decent sized local market. Will it shrink some? It probably will in the form of losing some smaller destinations in Europe. I cannot imagine that AA/US is dumb enough to get rid of it completely.
It is what it is...