afcjets
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AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:28 am

I wonder if Parker's long term goal is to purchase B6 and may in part explain the DCA swap with DL and why they have abandoned more than 15 mainline markets from JFK, including SJU, where at their peak they flew nine widebodies roundtrip daily from JFK. AA is only the 5th largest carrier in NYC and their overlap with B6 is shrinking, making a merger between the two more likely to be approved. AA has 22.8% of the US market share while B6 only has 4%. Before the merger with US, AA was focused on a four corners strategy MIA, NYC, LAX and ORD. It just seems odd AA is now totally comfortable with coming in last in NYC.
 
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jfklganyc
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:40 am

Most of that shrinkage occurred before Parker. Just saying

Parker, to me, hates NYC for airline ops

He ran US at LGA into the ground. They had the nicest terminal and most slots and by the end (pre slot swap) the terminal had duct tape on the carpets and the signage still said USAir from 10 years earlier. Not to mention the fleet of props slot squatting on the ramp.

Mainline was down to BOS CLT and DCA at the end. That was with 120 or so slots.

That is the man running AA now. His NYC record is there for all to see
 
sagechan
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:47 am

jfklganyc wrote:
Most of that shrinkage occurred before Parker. Just saying

Parker, to me, hates NYC for airline ops

He ran US at LGA into the ground. They had the nicest terminal and most slots and by the end (pre slot swap) the terminal had duct tape on the carpets and the signage still said USAir from 10 years earlier. Not to mention the fleet of props slot squatting on the ramp.

Mainline was down to BOS CLT and DCA at the end. That was with 120 or so slots.

That is the man running AA now. His NYC record is there for all to see


It's safe to say Parker ran scared in NYC, but where did US have any money to invest until the last 2 years or so before the AA merger?
717, 733, 734, 738, 744, 752, 763, 772, 77W, 789, A319, A320, A321, A332, A333, MD88, CRJ, CR7, CR9, DH1, DH2, DH3, S340, ER4, E170, E175, E190/CO, NW, US, AC, NH, AA, UA, DL, WN, WS, SK, VY, LA, QF, AR, AV.
 
MIflyer12
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:58 am

afcjets wrote:
AA is only the 5th largest carrier in NYC and their overlap with B6 is shrinking, making a merger between the two more likely to be approved.


By passenger count across the five PANYNJ airports of NYC, AA is #4, just behind B6, and with 4x the passenger count of #5 Southwest. Basic - published! - facts to do matter.

http://www.panynj.gov/airports/pdf-traf ... C_2017.pdf
 
Cointrin330
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:03 am

If AA were to try and acquire B6, I don't think the JFK operation (or the entire NYC network of B6's) would be the issue that attracts the most regulatory scrutiny. The issue would likely be South Florida, and FLL (B6) and MIA (AA) specifically. But there, I could see AA simply cutting FLL to a spoke with extra capacity to its hubs and remain focused at MIA. The issue with JFK and AA is that they've been downsizing it considerably long before AMR filed for bankruptcy, the merger with US, and the airline's post merger return to profitability. Post merger, AA does not need a TATL gateway as large as what JFK has been given that it has PHL, where there is a strong O&D market, geographic pull, and a lot less competition. AA is happy to use the large oneworld presence at JFK (BA, LATAM, Qantas, Royal Jordanian, Finnair, etc..) to do a lot of the lifting and focus on very specific core markets (GRU, LHR, LAX) plus about a dozen or so more. American does not flow as much connecting traffic over JFK as it did in the distant past, again achieving that at PHL, CLT, etc..If B6 were to be acquired by AA, then yes, AA would likely beef up JFK again, but logistically, it would be a bit complicated as both B6 and AA have large and new terminals, so selling off some of that real estate would be logical but combining operations for the two carriers at JFK would be difficult.
 
afcjets
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:14 am

MIflyer12 wrote:
afcjets wrote:
AA is only the 5th largest carrier in NYC and their overlap with B6 is shrinking, making a merger between the two more likely to be approved.


By passenger count across the five PANYNJ airports of NYC, AA is #4, just behind B6, and with 4x the passenger count of #5 Southwest. Basic - published! - facts to do matter.

http://www.panynj.gov/airports/pdf-traf ... C_2017.pdf


My bad, I meant #4. I was counting U33 plus B6 for a total of 4 and putting AA after B6 at 5 which means I counted AA twice lol. I am actually surprised AA has only 4X the number of passengers as WN.
 
tphuang
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:28 am

B6 is doing very well financially and has no reason to need to merge with anyone.

If they did, AS is probably the most likely and it's hard to say which brand will win out there.

It seems to me that out of the big 4, WN is the most logical one to make a takeover of B6. The factors that make B6 so profitable in NYC/BOS don't really work if they have legacy level of cost. Which is why I don't see how AA would want to make such a move. And also, it seems like AA management doesn't have much interest in NYC.

WN on the other hand are weak in NYC, BOS, Caribbean market and transcon. And their cost is low enough to sustain profitability in most of B6 network. Seems like WN would jump at this opportunity if it's available.
 
Blueballs
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:32 am

We are profitable in spite of ourselves. A pilot contract would go a long way in getting some goodwill back and righting the course of the ship. It won’t take long to be very unprofitable if management doesn’t start making decisions and stop trying so hard to appease Wall Street. I’ve never seen a company pin the working groups against each other so well though. They deserve the flight attendant union that’s about to pass and from what I hear we will soon have ramp, ao, and maintainance union drives. The lack of leadership is going to make us very unionized so in that regard we will be a lot like southwest
Last edited by Blueballs on Tue Mar 13, 2018 1:34 am, edited 1 time in total.
 
afcjets
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:36 am

tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone ...

It seems to me that out of the big 4, WN is the most logical one to make a takeover of B6.


That didn't stop Parker from trying to takeover DL. Actually DL was in BK at the time (only because of 9/11), but they still weren't interested and obviously came back more profitable than ever.

WN has never flown any aircraft but a 737 in their almost 50 year history (except for a few leased Braniff 727s in the 1980s) and even when they bought FL, they got rid off most of their planes which were 717s. With B6 they would have to get rid of every airplane they have or fly a hybrid fleet. WN is also big into assett utilization / quick turns and a JFK hub would be disastrous on that front.
Last edited by afcjets on Tue Mar 13, 2018 1:56 am, edited 3 times in total.
 
usflyer msp
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:40 am

tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.

If they did, AS is probably the most likely and it's hard to say which brand will win out there.

It seems to me that out of the big 4, WN is the most logical one to make a takeover of B6. The factors that make B6 so profitable in NYC/BOS don't really work if they have legacy level of cost. Which is why I don't see how AA would want to make such a move. And also, it seems like AA management doesn't have much interest in NYC.

WN on the other hand are weak in NYC, BOS, Caribbean market and transcon. And their cost is low enough to sustain profitability in most of B6 network. Seems like WN would jump at this opportunity if it's available.


B6 actually has lower costs than WN - I would posit that if you took the B6 network up to WN cost structure it would not make any money, especially given the high costs and heavy competition in NYC area airports that would push WN's costs even higher...
 
isp2
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:01 am

jfklganyc wrote:
Most of that shrinkage occurred before Parker. Just saying

Parker, to me, hates NYC for airline ops

He ran US at LGA into the ground. They had the nicest terminal and most slots and by the end (pre slot swap) the terminal had duct tape on the carpets and the signage still said USAir from 10 years earlier. Not to mention the fleet of props slot squatting on the ramp.

Mainline was down to BOS CLT and DCA at the end. That was with 120 or so slots.

That is the man running AA now. His NYC record is there for all to see


I am quite familiar with L-US Ops at LGA 2000-2015.

You are correct - there was duct tape on the carpets and the terminal did not have good upkeep in the end - but there was not a single USAir sign left anywhere in that terminal after the rebrand to US Airways in 1998. From 1998-2001, LGA was probably the nicest US Airways airport in the system. Gates 1-10 were mainline, 12 was Express, 14-22 were mainline / shuttle. After 9/11, Express took over the entire 1-10 wing (until 2005/2006 gates 8/9/10 were used for mainline RON), 12-22 were mainline / shuttle. Even after the HP/US merger, there was occasional mainline service to AUA/BDA/BUF/FLL/PHL/SJU as well. I believe in the very end gate 22 was given to Southwest for RON's and one of their planes had an incident there.
 
DfwRevolution
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:09 am

tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone..


Mergers and acquisitions aren't necessarily done due to financial weakness of either party. High-performing - but small - companies often make excellent acquisition targets.
I have a three post per topic limit. You're welcome to have the last word.
 
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Goodyear
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:02 am

tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.

It is amazing that people still think "doing well financially" is a reason for an airline not to merge. JetBlue will not exist in 5 years.
 
dc10lover
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:12 am

JetBlue Airways is actually the best airline in the USA.
Why endure the nightmare and congestion of LAX when BUR, LGB, ONT & SNA is so much easier to fly in and out of.
 
727200
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:14 am

And they will NOT merge with AA because the Fed's are not going to allow it. Doesn't matter how much AA pulls down JFK, they would also have to pull down BOS and various other cities as well. The Feds would make them give up so much, it isn't worth it.
 
isp2
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 8:30 am

dc10lover wrote:
JetBlue Airways is actually the best airline in the USA.


If you worked there between 2000 - 2015 like I did you may not agree. They have turned into a very sad company that the majority of the employees dislike - and I am not a bitter former B6-er - I left with full benefits - I’m just telling it like it is as an insider 3+ years later.
 
Blerg
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 8:40 am

I had the opportunity to fly with B6 for the first time a few months ago (I am from Europe) and I found them to be slightly trashy but overall quite ok. I would definitely fly them again and would choose them over AA or UA any day.

From looking at Wikipedia they have 122 aircraft on order, in 2016 they carried 38.3 million passengers, had a net profit of $759 million ...

I fail to see why they would be interested in merging with anyone out there. With all these aircraft on order they will have to grow in new markets. Looking at their profits I am certain they could afford it. After all, didn't they manage to position themselves in highly competitive markets like New York?

In my opinion, the real question is not whether they will merge with anyone but where will they expand next as new aircraft arrive.
 
tphuang
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 11:24 am

Goodyear wrote:
tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.

It is amazing that people still think "doing well financially" is a reason for an airline not to merge. JetBlue will not exist in 5 years.


Except that the majority of airlines mergers in the recent years has been due to financial reasons. And by pure luck, they got outbid for vx and are now not saddled with 2.6 billion in debt and a loosing network.

An airline that has a lot of cash, makes money consistently and have plenty of expansion left still. And it has a network that makes money due to low cost. Which legacy would pay premium for that in the next 5 years? Which merger would not require a huge divestiture of slots and gates?

The most likely merger in the near future is as and nobody really knows who the surviving brand from that.
 
lowfareair
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:13 pm

JetBlue has built up a core loyal following that, along with some small extras like more legroom than the US3, allow them to erase the competitive edge LGA has within the perimeter. AA doesn't have that and this management historically prefers to have the relative size competitive advantage in a hub market over a service/amenity advantage.

If AA merged with B6, they would likely standardize the product to the AA level, erasing the reasons why people chose B6 over DL, especially those who would otherwise travel out of LGA for the convenience.
 
fastmover
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:56 pm

Goodyear wrote:
tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.

It is amazing that people still think "doing well financially" is a reason for an airline not to merge. JetBlue will not exist in 5 years.



They also said that 5 10 15 years ago

Who is going to buy them and why?
 
iyerhari
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 12:59 pm

tphuang wrote:
Goodyear wrote:
tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.

It is amazing that people still think "doing well financially" is a reason for an airline not to merge. JetBlue will not exist in 5 years.


Except that the majority of airlines mergers in the recent years has been due to financial reasons. And by pure luck, they got outbid for vx and are now not saddled with 2.6 billion in debt and a loosing network.

An airline that has a lot of cash, makes money consistently and have plenty of expansion left still. And it has a network that makes money due to low cost. Which legacy would pay premium for that in the next 5 years? Which merger would not require a huge divestiture of slots and gates?

The most likely merger in the near future is as and nobody really knows who the surviving brand from that.

I completely agree with you. AA may not be the leader in JFK or BOS, but they have sizeable presence in both the airports (3rd in JFK and 2nd in BOS although it remains to be seen how long they maintain that standing in BOS). FLL is just a stone's throwaway from MIA so barring a few connections from DFW, or CLT, most of the B6 operations would get unfolded and moved over to MIA. There is nothing much left in B6 after that I believe :)

I do not believe either DL or AA may benefit a lot from B6 - UA is interesting as they may get the valuable slots in JFK and become kind of a leader in BOS - probably they do not care to be a leader in BOS but still a possibility.
 
fastmover
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:00 pm

tphuang wrote:
Goodyear wrote:
tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.

It is amazing that people still think "doing well financially" is a reason for an airline not to merge. JetBlue will not exist in 5 years.


Except that the majority of airlines mergers in the recent years has been due to financial reasons. And by pure luck, they got outbid for vx and are now not saddled with 2.6 billion in debt and a loosing network.

An airline that has a lot of cash, makes money consistently and have plenty of expansion left still. And it has a network that makes money due to low cost. Which legacy would pay premium for that in the next 5 years? Which merger would not require a huge divestiture of slots and gates?

The most likely merger in the near future is as and nobody really knows who the surviving brand from that.




Not really luck. They knew there was a price that would work buying VA and not to go over it otherwise it wouldn’t work. Union issues aside the company is pretty smart on the financial side. Now ALK is stuck with VA and most likely won’t post a profit this Q.
 
SonOfABeech
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:05 pm

Can we stop with the merger mania, please?
 
fastmover
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:07 pm

fastmover wrote:
tphuang wrote:
Goodyear wrote:
It is amazing that people still think "doing well financially" is a reason for an airline not to merge. JetBlue will not exist in 5 years.


Except that the majority of airlines mergers in the recent years has been due to financial reasons. And by pure luck, they got outbid for vx and are now not saddled with 2.6 billion in debt and a loosing network.

An airline that has a lot of cash, makes money consistently and have plenty of expansion left still. And it has a network that makes money due to low cost. Which legacy would pay premium for that in the next 5 years? Which merger would not require a huge divestiture of slots and gates?

The most likely merger in the near future is as and nobody really knows who the surviving brand from that.




Not really luck. They knew there was a price that would work buying VA and not to go over it otherwise it wouldn’t work. Union issues aside the company is pretty smart on the financial side. Now ALK is stuck with VA and most likely won’t post a profit this Q.




As far as mergers go.

If it’s jetblue doing the buying I could see them buying Frontier just to bulk up the operation and give them a better route network. (I would not be shocked by this one)

If it’s Wall St pushing it, it would be ALK and they would say we need each other to survive against the big guys.

If it’s being bought most likely SWA or maybe United, which would give them a nice FLL operation as well as some JFK stuff assuming they would most likely have to divest slots.

Jetblue has been very quiet as to where it is going as a company I think we will know their direction soon.
 
vadodara
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 1:51 pm

JFK, and to a lesser extent BOS, hardly attracted interest. Jet Blue brought life to both these airports.

If Crandall were around, he would have paid a premium for Jet Blue and shut it down. Parker seems to like the hub model as well. Doubt he would want Jet Blue. As others have said, FLL would also prove to be a regulatory hurdle.
 
ahj2000
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 2:19 pm

The only way I could see this is if AA kept B6’s brand on most flights (especially in the Florida bases). If they kept the name and the lower-cost service, but integrated TrueBlue into AAdvantage and added codeshares across the network, (think how Vueling and Mango acquire miles and codeshare pax from their legacy owners) they could have an option for leisure routes and a much better network out of NYC/BOS. The MCO/FLL network could be kept, as it would provide competition to WN and NK who are expanding in FLL rapidly. Add F9 to that list from MCO. That’d be a first in the US, but it has beeen proven in other countries. At dead least, it’d be interesting from an A.netter’s viewpoint
-Andrés Juánez
 
milemaster
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 2:49 pm

I saw a wheelchair being used to cart a passenger to a recent Jetblue flight that was clearly marked as "American Airlines". The merger is inevitable!
 
evank516
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:00 pm

lowfareair wrote:
JetBlue has built up a core loyal following that, along with some small extras like more legroom than the US3, allow them to erase the competitive edge LGA has within the perimeter. AA doesn't have that and this management historically prefers to have the relative size competitive advantage in a hub market over a service/amenity advantage.

If AA merged with B6, they would likely standardize the product to the AA level, erasing the reasons why people chose B6 over DL, especially those who would otherwise travel out of LGA for the convenience.


Have you seen DL's product lately though? If there is any legacy carrier in the US who's domestic product is closest to B6, it's DL. They're actually doing a good job at offering a very similar product. As someone who flies DL and B6 rather frequently, I'm really seeing them close the gap. And I'm not even saying this as a fanboy, I've flown both and see many similarities.

SonOfABeech wrote:
Can we stop with the merger mania, please?


I'm with you, but some just don't shut up.
 
afcjets
Topic Author
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:02 pm

Cointrin330 wrote:
If AA were to try and acquire B6, I don't think the JFK operation (or the entire NYC network of B6's) would be the issue that attracts the most regulatory scrutiny. The issue would likely be South Florida, and FLL (B6) and MIA (AA) specifically. But there, I could see AA simply cutting FLL to a spoke with extra capacity to its hubs and remain focused at MIA.


I agree AA would likely reduce FLL to mainly spoke flying, however FLL is probably the most competitive and budget airport in the nation. Both WN and NK each fly to over 35 US airports nonstop from FLL in addition to more than 10 international destinations for WN and more than 25 for NK.



tphuang wrote:
An airline that has a lot of cash, makes money consistently and have plenty of expansion left still. And it has a network that makes money due to low cost. Which legacy would pay premium for that in the next 5 years? Which merger would not require a huge divestiture of slots and gates?


AA led by Parker, who only rivals Stephen Wolf when it comes to pursuing mergers. Getting rid of a low cost carrier with a huge presence in NYC could make flying from JFK very profitable again.



lowfareair wrote:
If AA merged with B6, they would likely standardize the product to the AA level, erasing the reasons why people chose B6 over DL, especially those who would otherwise travel out of LGA for the convenience.


AA would do that with any merger and in this case it would be mainly about erasing B6 completely.



iyerhari wrote:
AA may not be the leader in JFK or BOS, but they have sizeable presence in both the airports (3rd in JFK and 2nd in BOS although it remains to be seen how long they maintain that standing in BOS)


AA is 3rd in BOS behind B6 and DL.



vadodara wrote:
If Crandall were around, he would have paid a premium for Jet Blue and shut it down. Parker seems to like the hub model as well. Doubt he would want Jet Blue.


Yes, but in this case keeping a lot of B6 routes would be like getting back routes AA dominated when he was CEO, and consolidating what was lost at LGA during the DL swap into a larger one airport hub at JFK.
 
Brickell305
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:07 pm

I swear A-Net won't be satisfied until there is only one US carrier that offers 15" pitch in economy and charges a fee for the air on board.
 
tphuang
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:23 pm

afcjets wrote:
I agree AA would likely reduce FLL to mainly spoke flying, however FLL is probably the most competitive and budget airport in the nation. Both WN and NK each fly to over 35 US airports nonstop from FLL in addition to more than 10 international destinations for WN and more than 25 for NK.

AA led by Parker, who only rivals Stephen Wolf when it comes to pursuing mergers. Getting rid of a low cost carrier with a huge presence in NYC could make flying from JFK very profitable again.

I think it would require the kind of divesture that would make this not worth it. Since it probably would mean allowing WN into JFK. At least at present time, B6 pricing pressure really prevents DL from making any money at JFK, which is something that helps both AA/UA. If DL can make more money at JFK, then it would have even more cash to fight for market share at LAX and RDU, which would not be good for AA.

afcjets wrote:
iyerhari wrote:
AA may not be the leader in JFK or BOS, but they have sizeable presence in both the airports (3rd in JFK and 2nd in BOS although it remains to be seen how long they maintain that standing in BOS)


AA is 3rd in BOS behind B6 and DL.

AA is definitely larger domestically at BOS and offers a much better business network out of BOS than DL. One could even argue, it offers a better business network out of BOS than B6 given that AA has major hubs in most of the top business markets out of BOS.
https://www.transtats.bts.gov/airports. ... irport=BOS


vadodara wrote:
If Crandall were around, he would have paid a premium for Jet Blue and shut it down. Parker seems to like the hub model as well. Doubt he would want Jet Blue.


Yes, but in this case keeping a lot of B6 routes would be like getting back routes AA dominated when he was CEO, and consolidating what was lost at LGA during the DL swap into a larger one airport hub at JFK.

With AA's cost, it's hard to imagine some of the routes where B6 dominates would continue to generate much profit.

I just really fail to see how buying B6 would make sense for either AA or DL.

fastmover wrote:
fastmover wrote:
tphuang wrote:

Except that the majority of airlines mergers in the recent years has been due to financial reasons. And by pure luck, they got outbid for vx and are now not saddled with 2.6 billion in debt and a loosing network.

An airline that has a lot of cash, makes money consistently and have plenty of expansion left still. And it has a network that makes money due to low cost. Which legacy would pay premium for that in the next 5 years? Which merger would not require a huge divestiture of slots and gates?

The most likely merger in the near future is as and nobody really knows who the surviving brand from that.




Not really luck. They knew there was a price that would work buying VA and not to go over it otherwise it wouldn’t work. Union issues aside the company is pretty smart on the financial side. Now ALK is stuck with VA and most likely won’t post a profit this Q.




As far as mergers go.

If it’s jetblue doing the buying I could see them buying Frontier just to bulk up the operation and give them a better route network. (I would not be shocked by this one)

If it’s Wall St pushing it, it would be ALK and they would say we need each other to survive against the big guys.

If it’s being bought most likely SWA or maybe United, which would give them a nice FLL operation as well as some JFK stuff assuming they would most likely have to divest slots.

Jetblue has been very quiet as to where it is going as a company I think we will know their direction soon.

I agree with everything here. VX was the most ideal acquisition for B6 by far, but the price didn't make sense.

F9 is the next most logical, but I'm not sure if JetBlue's higher costs would make some of those F9 routes work. I guess they will get a hub at DEN and maybe CVG. Frontier's frequent network changes make this hard though.
Last edited by tphuang on Tue Mar 13, 2018 3:28 pm, edited 1 time in total.
 
iyerhari
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 3:26 pm

afcjets wrote:
iyerhari wrote:
AA may not be the leader in JFK or BOS, but they have sizeable presence in both the airports (3rd in JFK and 2nd in BOS although it remains to be seen how long they maintain that standing in BOS)


AA is 3rd in BOS behind B6 and DL.


DL is aggressively getting to be a 2nd but they have ways ahead to get there. As of 2017, they were behind AA by a solid 7%. AA is not keen to expand much in BOS other than their hubs and some sprinkled AA Eagle flights to PIT, SYR, ROC and MDT. DL has a good chance to be 2 but they need addnl. gates which will happen only in Jun-2019 when WN moves to Terminal B AA side and DL gets all of Terminal A.
 
afcjets
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:05 pm

tphuang wrote:
I think it would require the kind of divesture that would make this not worth it. Since it probably would mean allowing WN into JFK. At least at present time, B6 pricing pressure really prevents DL from making any money at JFK, which is something that helps both AA/UA. If DL can make more money at JFK, then it would have even more cash to fight for market share at LAX and RDU, which would not be good for AA.


WN is already in EWR and LGA and giving them a comparable number of slots at JFK is nothing compared to B6's more than 200 daily flights from JFK. I don't think the US3 see WN as much of a threat anymore especially since in terms of passengers, they have been #1 for 15 years now. DL would still likely resist but not as much since they would benefit from higher fares from JFK too. DL made $5 billion last year, they have plenty of cash to expand RDU and LAX if they want.



tphuang wrote:
AA is definitely larger domestically at BOS and offers a much better business network out of BOS than DL. One could even argue, it offers a better business network out of BOS than B6 given that AA has major hubs in most of the top business markets out of BOS.
https://www.transtats.bts.gov/airports. ... irport=BOS



Still, the only non-hub flying from BOS on AA is CUN, a handful of AAE flights to NE cities, the Shuttle, and seasonal Saturday service to PLS, PUJ, and MBJ. DL has all of these (barring a couple of AAE NE markets) plus more Carribean, MEX, BDA, Canada, and Europe, and more than 20 non-hub US destinations from BOS including DL Connection.
 
iyerhari
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:11 pm

afcjets wrote:
tphuang wrote:
AA is definitely larger domestically at BOS and offers a much better business network out of BOS than DL. One could even argue, it offers a better business network out of BOS than B6 given that AA has major hubs in most of the top business markets out of BOS.
https://www.transtats.bts.gov/airports. ... irport=BOS



Still, the only non-hub flying from BOS on AA is CUN, a handful of AAE flights to NE cities, the Shuttle, and seasonal Saturday service to PLS, PUJ, and MBJ. DL has all of these (barring a couple of AAE NE markets) plus more Carribean, MEX, BDA, Canada, and Europe, and more than 20 non-hub US destinations from BOS including DL Connection.


DL has a seasonal flight to CUN. AA has very large hubs - ORD, DCA, PHL, DFW, MIA, PHX and CLT. Some of these are very large that DL does not fly to. AA also benefits with a good OW alliance network - BA, JL, CX, JJ, QR, and IB that DL does not have. At certain stage, DL will have to fly into fortress hubs to steal the passengers from AA.
 
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tlecam
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:22 pm

As tphuang notes, and as Commavia has stated more eloquently than me, the demise of AA in the northeast (specifically at BOS and JFK) is somewhat overstated. I completely understand the point that people make and it's valid. AA has definitely reduced the number of destinations from those stations. But they still fly a ton of mainline flights (300+ 738s) to some of the largest business destinations in the world.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
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NickolayAv
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 4:54 pm

afcjets wrote:
iyerhari wrote:
AA may not be the leader in JFK or BOS, but they have sizeable presence in both the airports (3rd in JFK and 2nd in BOS although it remains to be seen how long they maintain that standing in BOS)

AA is 3rd in BOS behind B6 and DL.

AA is 2nd in BOS. A little bit less than 2 times the capacity of DL.
https://www.transtats.bts.gov/airports. ... ame=Boston
"If you want to be a millionaire, start with a billion dollars and launch a new airline"-Richard Branson
 
afcjets
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 5:23 pm

edit
 
afcjets
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 5:59 pm

delete
 
boxeebox
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 9:41 pm

AS CEO is flying back to SEA from JFK this evening on B6. What might that allude to?
 
afcjets
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 10:11 pm

NickolayAv wrote:
afcjets wrote:
iyerhari wrote:
AA may not be the leader in JFK or BOS, but they have sizeable presence in both the airports (3rd in JFK and 2nd in BOS although it remains to be seen how long they maintain that standing in BOS)

AA is 3rd in BOS behind B6 and DL.

AA is 2nd in BOS. A little bit less than 2 times the capacity of DL.
https://www.transtats.bts.gov/airports. ... ame=Boston


More like 1.5x based on passengers in the link you provide of their most recent data which is 4 months old. AA is 3rd in BOS in number of departures.
 
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Re: AA downsizing NYC for future B6 takeover?

Tue Mar 13, 2018 10:17 pm

boxeebox wrote:
AS CEO is flying back to SEA from JFK this evening on B6. What might that allude to?


Probably that he wanted to get home tonight. His airline's one flight JFK-SEA leaves at 720a.
 
rj1385
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Re: AA downsizing NYC for future B6 takeover?

Wed Mar 14, 2018 1:34 am

boxeebox wrote:
AS CEO is flying back to SEA from JFK this evening on B6. What might that allude to?


B6 gets one A320 for every flight CEO takes?
Best thing about a CEO taking another's flight is to learn first hand what the competitor is doing.
 
flyguychi
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Re: AA downsizing NYC for future B6 takeover?

Wed Mar 14, 2018 3:14 am

usflyer msp wrote:

B6 actually has lower costs than WN - I would posit that if you took the B6 network up to WN cost structure it would not make any money, especially given the high costs and heavy competition in NYC area airports that would push WN's costs even higher...


Not According to Oliver Wyman’s 2017-2018 Airline Economic Analysis....

Domestic Stage Length Adjusted CASM (cents)

Southwest 9.7
Jetblue 11.1

While JetBlue’s RASM is just slightly higher:

Southwest 12.5
Jetblue 12.8

The whole report is a very interesting read :D
 
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enilria
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Re: AA downsizing NYC for future B6 takeover?

Wed Mar 14, 2018 5:06 am

afcjets wrote:
I wonder if Parker's long term goal is to purchase B6 and may in part explain the DCA swap with DL and why they have abandoned more than 15 mainline markets from JFK, including SJU, where at their peak they flew nine widebodies roundtrip daily from JFK. AA is only the 5th largest carrier in NYC and their overlap with B6 is shrinking, making a merger between the two more likely to be approved. AA has 22.8% of the US market share while B6 only has 4%. Before the merger with US, AA was focused on a four corners strategy MIA, NYC, LAX and ORD. It just seems odd AA is now totally comfortable with coming in last in NYC.

My first response was deleted so here's another try.

B6-AA Merger= I hope to god they would not allow this. AA would dominate PHL, BOS, most of JFK, and be strong at LGA. They can't let that happen if the DOJ is sane.

B6 Buys AA JFK slots= Possible, but AA doesn't need the cash. There are only three scenarios where an airline gets rid of valuable slots. A) They need cash. Not the case here. B) They are trading for something else nearly as valuable. This is nearly ever slot deal in good economic times. C) The routes they are flying with the slots are so god awful they have to stop them. I don't think AA's JFK is at that level. Also, another problem, B6 probably doesn't want more JFK slots. They have leased AA slots before and also to their Intl partners. Not something you do if you are desperate for slots. The only swap I can see AA really wanting to do is B6 LGA slots for AA JFK slots. I don't see B6 doing it. They just got the MAT and they have grand plans for LGA. I'd argue B6 values LGA slots well above JFK slots.

DL trades AA slots= I can imagine a deal where DL buys AA's JFK slots with a few going to B6 to satisfy regulators. The only question is what that DL has would they give AA? NRT slots? ORD gates? LHR slots? No idea...
 
ScottB
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Re: AA downsizing NYC for future B6 takeover?

Wed Mar 14, 2018 5:16 am

usflyer msp wrote:
B6 actually has lower costs than WN - I would posit that if you took the B6 network up to WN cost structure it would not make any money, especially given the high costs and heavy competition in NYC area airports that would push WN's costs even higher...


B6 has appreciably lower costs than WN in exactly one area: labor. A large portion of that comes from the fact that, on average, employee compensation at B6 is about 15% lower than at WN. With the B6 pilots already having chosen to unionize, and with other labor groups also likely to organize in the future, I expect the margin in unit labor cost between B6 and WN to narrow in the future. And in any event, B6 will likely have to pay pilot wages comparable to DL/AA/UA/WN to continue to attract new pilots as the labor pool becomes tighter.

If one adjusts B6's labor costs to assume the same compensation per employee as WN, B6's unit costs end up being slightly over 1% lower than WN. That's not so great when one considers B6's average stage length is about one-third higher than WN's. Part of the reason why B6 has been aiming its product upmarket is because they have no choice: with costs escalating, they must bring up yields. And as maligned as WN's product is on this site, they achieve nearly 15% higher yields than B6.

I don't exactly think WN is a stranger to heavy competition, either; all but one of their top ten airports (LAS) are in metro areas or at airports with one or more competing legacy carrier hubs. From the standpoint of competition, NYC is a cakewalk compared to L.A. or Chicago.

afcjets wrote:
WN has never flown any aircraft but a 737 in their almost 50 year history (except for a few leased Braniff 727s in the 1980s) and even when they bought FL, they got rid off most of their planes which were 717s. With B6 they would have to get rid of every airplane they have or fly a hybrid fleet. WN is also big into assett utilization / quick turns and a JFK hub would be disastrous on that front.


Even if WN were to dump all the B6 aircraft in a hypothetical merger, they have more than enough aircraft on order or option from 2019 through 2024 (233 aircraft with 40,025 seats) to more than replace all of B6's capacity (243 aircraft with 36,100 seats, even assuming all A321s are all-"Core") -- and that's if they didn't try to acquire used aircraft or place additional orders with Boeing.

But the biggest issue with the FL 717 fleet was the fact that the trip cost for a 717 was only modestly below that of a 73G on a similar mission -- so why not take the 20 extra seats which are virtually free? The A320 and A321 are far more competitive on unit costs than the 717.

tphuang wrote:
B6 is doing very well financially and has no reason to need to merge with anyone.


B6 management might not want to merge, but if the price offered is right, the shareholders will take it.

afcjets wrote:
I wonder if Parker's long term goal is to purchase B6 and may in part explain the DCA swap with DL and why they have abandoned more than 15 mainline markets from JFK, including SJU, where at their peak they flew nine widebodies roundtrip daily from JFK.


The DCA-LGA slot swap happened because US was losing its shirt at LGA. They had more slots than they knew what to do with, so they were doing crazy things like 12 daily round-trips on Dash-8s to PHL and routes with virtually no O&D like LGA-ITH 4x daily, LGA-ALB 5x daily, LGA-BWI 10x daily, and LGA-PVD 7x daily. And having a domestic connecting hub at LGA made zero sense with PHL 90 miles away. They didn't offer key O&D markets non-stop from LGA outside of BOS/DCA/CLT/PIT so they had no prayer of becoming the preferred carrier for business travelers (who probably weren't attracted to rattly old Dash-8s and Saab 340s in any event).

And coming from America West, DoUgIe and his team just weren't in the habit of attracting business customers with product & schedule. What works at PHX & LAS isn't necessarily what works in NYC.
 
WeatherPilot
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Re: AA downsizing NYC for future B6 takeover?

Wed Mar 14, 2018 5:00 pm

Prediction: B6, AA, AS, WN, DL and F9 all merge together into a new giant called "Up Yours"
 
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jfklganyc
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Re: AA downsizing NYC for future B6 takeover?

Sun Mar 18, 2018 1:34 am

isp2 wrote:
jfklganyc wrote:
Most of that shrinkage occurred before Parker. Just saying

Parker, to me, hates NYC for airline ops

He ran US at LGA into the ground. They had the nicest terminal and most slots and by the end (pre slot swap) the terminal had duct tape on the carpets and the signage still said USAir from 10 years earlier. Not to mention the fleet of props slot squatting on the ramp.

Mainline was down to BOS CLT and DCA at the end. That was with 120 or so slots.

That is the man running AA now. His NYC record is there for all to see


I am quite familiar with L-US Ops at LGA 2000-2015.

You are correct - there was duct tape on the carpets and the terminal did not have good upkeep in the end - but there was not a single USAir sign left anywhere in that terminal after the rebrand to US Airways in 1998. From 1998-2001, LGA was probably the nicest US Airways airport in the system. Gates 1-10 were mainline, 12 was Express, 14-22 were mainline / shuttle. After 9/11, Express took over the entire 1-10 wing (until 2005/2006 gates 8/9/10 were used for mainline RON), 12-22 were mainline / shuttle. Even after the HP/US merger, there was occasional mainline service to AUA/BDA/BUF/FLL/PHL/SJU as well. I believe in the very end gate 22 was given to Southwest for RON's and one of their planes had an incident there.


The TV monitors over the gates had USAir permanently etched in on the screens from years of use. They were the original 1992 screens until DL saved the terminal. The whole place was a 1992 time warp sadly
 
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neomax
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Re: AA downsizing NYC for future B6 takeover?

Sun Mar 18, 2018 1:58 am

WeatherPilot wrote:
Prediction: B6, AA, AS, WN, DL and F9 all merge together into a new giant called "Up Yours"


That leaves us with UA and NK.
 
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neomax
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Re: AA downsizing NYC for future B6 takeover?

Sun Mar 18, 2018 2:04 am

727200 wrote:
And they will NOT merge with AA because the Fed's are not going to allow it. Doesn't matter how much AA pulls down JFK, they would also have to pull down BOS and various other cities as well. The Feds would make them give up so much, it isn't worth it.


Yeah, but those were Feds from a very different place in time.
 
ahj2000
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Re: AA downsizing NYC for future B6 takeover?

Sun Mar 18, 2018 2:22 am

neomax wrote:
727200 wrote:
And they will NOT merge with AA because the Fed's are not going to allow it. Doesn't matter how much AA pulls down JFK, they would also have to pull down BOS and various other cities as well. The Feds would make them give up so much, it isn't worth it.


Yeah, but those were Feds from a very different place in time.

exactly. This is the to pro business administration in....ever? This is the one shot a mega-merger has to pass in my opinion
-Andrés Juánez

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