HPAEAA
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 1:34 pm

Ionosphere wrote:
apodino wrote:
HPAEAA wrote:

Was surprised by a few of these as well but it’s impossible to tell the reasoning, Max is likely part of it, but aa could have issues on a few fronts- deferred maintenance schedules from this summer could be catching up with them on the 738 fleet, MD80s are exiting in early September and there’s also the contract issues with the maintenance unions... given the pain of being an AA customer this summer, they probably could use a few more spares....


The MAX issues is definitely 100 percent the reason behind both the MIA and the well documented JFK pulldowns. A couple of points on why these stations are getting picked on. First, according to Doug Parker, MIA and NYC in general, along with LAX, are the least profitable hubs/cornerstones in the AA network. Naturally when other hubs like CLT and DFW are more profitable, they are more likely to retain service in the event of something like this. Secondly, by going after longer stage length flights, it lessens the impact to the entire operation so the fewest number of passengers possible are affected. Just about all of the 737 cancels in JFK, save for possibly DCA and CLT, have stage lengths over three hours, and save for the Texas markets, over 5 hours. DCA is an easy pull back as well because NYC-WAS is just as easily served from LGA. (Which I know also saw a reduction in frequency, but someone may want to check to see if there was an equipment upgauge with the 190 fleet starting to be pulled back. Also, most of the affected MIA flights are also very long stage lengths as well. VVI is concerning because AA went to just a round trip here because the 757 is being migrated away from MIA and there is no other airplane that can reasonably serve LPB (Which now appears to have had more passengers than VVI)

The bottom line is NYC is always going to be a battle, and Doug Parker decided to give all the slots away to Delta years ago, so AA is just having a hard time making anything stick, and the MAX outages combined with the JFK runway issues are not helping. MIA right now is concerning. This is one of AA's bread and butter hubs historically, and for management to say its profitability is comparable to NYC and LAX is scary. But right now, AA's focus is clearly on CLT and DFW, and you can bet money they would love more DCA slots as well.


I'm surprised MIA isn't more profitable. Wasn't MIA one of the most profitable hubs about 10 years ago?

It was, but several south American/Latam countries have had economic issues the past few years, I think they’re back in growth mode now but stagnation & recessions were an issue for a while..
1.4mm and counting...
 
Sightseer
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 2:17 pm

A belated thanks. Enilria!
EvanWSFO wrote:
Aliqiout wrote:
EvanWSFO wrote:

SFO has always been a seasonal airport. As enilria points out further down, these numbers are similar to last year.

Last years numbers are in the original post. You quoted them.


I think you misquoted me. I didn't post the numbers.

Just FYI, last year's numbers are the ones in brackets in the original post.
EvanWSFO wrote:
AirFiero wrote:
AS LAS-SFO SEP 6>5[6]
AS PDX-SFO SEP 8>6[7]
AS SAN-SFO SEP 5>4[5]
AS SEA-SFO SEP 13>12[11]


So how’s that SFO hub going for AS? ;)


SFO has always been a seasonal airport. As enilria points out further down, these numbers are similar to last year.

So last year there were 6 flights to LAS, 7 to PDX, 5 to SAN, and 11 to SEA.
 
EvanWSFO
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 2:29 pm

Sightseer wrote:
A belated thanks. Enilria!
EvanWSFO wrote:
Aliqiout wrote:
Last years numbers are in the original post. You quoted them.


I think you misquoted me. I didn't post the numbers.

Just FYI, last year's numbers are the ones in brackets in the original post.
EvanWSFO wrote:
AirFiero wrote:

So how’s that SFO hub going for AS? ;)


SFO has always been a seasonal airport. As enilria points out further down, these numbers are similar to last year.

So last year there were 6 flights to LAS, 7 to PDX, 5 to SAN, and 11 to SEA.


Yes, I am aware how to read the postings. My original reply was to someone who has dissed AS at SFO before. These cuts may or not be seasonal, but they are for the most part consistent with last year.
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
UpNAWAy
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 2:31 pm

Ionosphere wrote:
apodino wrote:
HPAEAA wrote:

Was surprised by a few of these as well but it’s impossible to tell the reasoning, Max is likely part of it, but aa could have issues on a few fronts- deferred maintenance schedules from this summer could be catching up with them on the 738 fleet, MD80s are exiting in early September and there’s also the contract issues with the maintenance unions... given the pain of being an AA customer this summer, they probably could use a few more spares....


The MAX issues is definitely 100 percent the reason behind both the MIA and the well documented JFK pulldowns. A couple of points on why these stations are getting picked on. First, according to Doug Parker, MIA and NYC in general, along with LAX, are the least profitable hubs/cornerstones in the AA network. Naturally when other hubs like CLT and DFW are more profitable, they are more likely to retain service in the event of something like this. Secondly, by going after longer stage length flights, it lessens the impact to the entire operation so the fewest number of passengers possible are affected. Just about all of the 737 cancels in JFK, save for possibly DCA and CLT, have stage lengths over three hours, and save for the Texas markets, over 5 hours. DCA is an easy pull back as well because NYC-WAS is just as easily served from LGA. (Which I know also saw a reduction in frequency, but someone may want to check to see if there was an equipment upgauge with the 190 fleet starting to be pulled back. Also, most of the affected MIA flights are also very long stage lengths as well. VVI is concerning because AA went to just a round trip here because the 757 is being migrated away from MIA and there is no other airplane that can reasonably serve LPB (Which now appears to have had more passengers than VVI)

The bottom line is NYC is always going to be a battle, and Doug Parker decided to give all the slots away to Delta years ago, so AA is just having a hard time making anything stick, and the MAX outages combined with the JFK runway issues are not helping. MIA right now is concerning. This is one of AA's bread and butter hubs historically, and for management to say its profitability is comparable to NYC and LAX is scary. But right now, AA's focus is clearly on CLT and DFW, and you can bet money they would love more DCA slots as well.


I'm surprised MIA isn't more profitable. Wasn't MIA one of the most profitable hubs about 10 years ago?



Latin America has essentially been in a recession for about 2+ years.
 
AirFiero
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 2:50 pm

Aliqiout wrote:
AirFiero wrote:
Aliqiout wrote:
The last few OAG's had adjustments beyond September.


THANK YOU. Seems some people know how to answer a question. Were there other reductions at other airports? Seasonal, or otherwise?

There were cuts at DAL and adds to SEA and Florida, but you look at the threads to see the details.


Right, but the question I’m getting to is, were there a significant number of seasonal cuts elsewhere? I read the enilria thread every week, like many do, and I don’t recall seeing many other seasonal cuts and not as many at one airport. But I guess we will see.
 
Aliqiout
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 2:53 pm

EvanWSFO wrote:
Aliqiout wrote:
EvanWSFO wrote:

SFO has always been a seasonal airport. As enilria points out further down, these numbers are similar to last year.

Last years numbers are in the original post. You quoted them.


I think you misquoted me. I didn't post the numbers.

You aren't the original poster.
 
AirFiero
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 2:54 pm

EvanWSFO wrote:
Sightseer wrote:
A belated thanks. Enilria!
EvanWSFO wrote:

I think you misquoted me. I didn't post the numbers.

Just FYI, last year's numbers are the ones in brackets in the original post.
EvanWSFO wrote:

SFO has always been a seasonal airport. As enilria points out further down, these numbers are similar to last year.

So last year there were 6 flights to LAS, 7 to PDX, 5 to SAN, and 11 to SEA.


Yes, I am aware how to read the postings. My original reply was to someone who has dissed AS at SFO before. These cuts may or not be seasonal, but they are for the most part consistent with last year.


3 o the 4 routes are *reductions* from last year. Other cuts have been made at SFO, at least hinting at a pattern.
 
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enilria
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 4:10 pm

Ionosphere wrote:
I'm surprised MIA isn't more profitable. Wasn't MIA one of the most profitable hubs about 10 years ago?

It was extremely profitable 10 years ago. From what I hear, the multi-carrier battle at FLL has dramatically hurt MIA. IMHO, AA has chosen to generally not match FLL fares which has caused a huge traffic migration from MIA to FLL. I don't have the numbers, but it seems like the cruise lines have also followed the lower fares and moved a lot of ships to FLL from MIA. Now even if AA started matching FLL aggressively at MIA, it is probably too late to put the genie back in the bottle.
Sightseer wrote:
A belated thanks. Enilria!

:)
EvanWSFO wrote:
Sightseer wrote:
A belated thanks. Enilria!
EvanWSFO wrote:

I think you misquoted me. I didn't post the numbers.

Just FYI, last year's numbers are the ones in brackets in the original post.
EvanWSFO wrote:

SFO has always been a seasonal airport. As enilria points out further down, these numbers are similar to last year.

So last year there were 6 flights to LAS, 7 to PDX, 5 to SAN, and 11 to SEA.


Yes, I am aware how to read the postings. My original reply was to someone who has dissed AS at SFO before. These cuts may or not be seasonal, but they are for the most part consistent with last year.

Since everybody is weighing in on [email protected] Here's my current take:

I think they bought VX with great network enthusiasm, rushed in with a bunch of new mid-haul routes which basically failed. I think they retrenched that stuff while trying to occupy the real estate to keep it from being taken by UA or others. I think after the planning group changed in Fall 2018 they have been basically on cruise control and I don't think the new team has shown much of an indication of which way they will go. IMHO, it's unlikely they will grow there. I think SAN/LAX/SFO/SJC/PDX/SEA/ANC are too many West Coast focus cities for an airline of AS size. Of that whole list I would argue that SFO is the most superfluous. It's gate constrained, they can't get any traction against UA, it is the most geographically overlapping (SJC/SFO/PDX), and it is likely at best mediocre now. I could see AS and UA doing a transaction where they trade gates at SFO and LAX, although not sure DOJ would agree to it. Not sure anybody else wants SFO gates except UA, and such a trade would make sense as UA seems to be moving toward SFO and away from LAX just as AS seems to be more serious about LAX and less about SFO. The argument would be that they can be one of 3 big players in LAX, but are a sad also-ran in SFO and that is really unsolvable. SFO would be become like EWR for the Bay with OAK providing the region's competition. My 2 cents.
 
Brickell305
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 4:23 pm

Regarding profitability at MIA, yes there have been issues in Latin America recently but that doesn't tell the full story. There has also been significant pressure put on AA domestically from the (U)LCCs at FLL. And that hasn't just come from competition for economy class travelers. B6's Mint product has also helped lure away premium travelers on a prime route like LAX. As AA continues to devalue its FF program and its hard prodcuct, passengers have less incentive to remain loyal and B6 will only continue to grow to places like NYC, LAX, WAS at their expense. WN and NK have also grown significantly over the years and have also added significantly to the competitive pressure AA faces. DL has also shown itself willing to take on AA directly on certain routes out of MIA as well. AA is getting it from all ends on the domestic front and also to the Caribbean to some extent with B6, NK and now WN as well all in the fray. To Latin America, they face increased competition from foreign flag carriers as CM is probably as strong as its ever been to MIA and AV is as well. It's hard to maintain profitability in highly competitive environments like NYC, LA and MIA. It's even harder when your FF program and product are in an obvious decline.

The other issue that AA has is that since its merger with US, it's become extremely East coast centric and cannibalizes a lot of its traffic. Prior to the merger, US used to offer relatively cheap flights out of and into So. Fla to/from Europe through the hubs in Charlotte and to a lesser extent Philadelphia. The issue for AA is that hasn't entirely changed since the merger and a lot of those low fare connections still exist. Whereas prior to the merger, an AA loyalist would have had to consider both the trade off between a nonstop and not getting their preferred FF program points, now the only trade off is a more expensive nonstop versus a less expensive connection (either way you're getting your miles). With that, many more will choose a cheaper one stop which hurts AA on its nonstops out of MIA.
 
Brickell305
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 4:27 pm

enilria wrote:
Ionosphere wrote:
I'm surprised MIA isn't more profitable. Wasn't MIA one of the most profitable hubs about 10 years ago?

It was extremely profitable 10 years ago. From what I hear, the multi-carrier battle at FLL has dramatically hurt MIA. IMHO, AA has chosen to generally not match FLL fares which has caused a huge traffic migration from MIA to FLL. I don't have the numbers, but it seems like the cruise lines have also followed the lower fares and moved a lot of ships to FLL from MIA. Now even if AA started matching FLL aggressively at MIA, it is probably too late to put the genie back in the bottle.

Anecdotally, I do think they match (and often try to beat) B6's and WN's fares out of FLL where necessary. And part of their reasoning for adding Basic Economy fares was to be able to compete with NK.
 
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enilria
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 4:27 pm

Brickell305 wrote:
Regarding profitability at MIA, yes there have been issues in Latin America recently but that doesn't tell the full story. There has also been significant pressure put on AA domestically from the (U)LCCs at FLL. And that hasn't just come from competition for economy class travelers. B6's Mint product has also helped lure away premium travelers on a prime route like LAX. As AA continues to devalue its FF program and its hard prodcuct, passengers have less incentive to remain loyal and B6 will only continue to grow to places like NYC, LAX, WAS at their expense. WN and NK have also grown significantly over the years and have also added significantly to the competitive pressure AA faces. DL has also shown itself willing to take on AA directly on certain routes out of MIA as well. AA is getting it from all ends on the domestic front and also to the Caribbean to some extent with B6, NK and now WN as well all in the fray. To Latin America, they face increased competition from foreign flag carriers as CM is probably as strong as its ever been to MIA and AV is as well. It's hard to maintain profitability in highly competitive environments like NYC, LA and MIA. It's even harder when your FF program and product are in an obvious decline.

The other issue that AA has is that since its merger with US, it's become extremely East coast centric and cannibalizes a lot of its traffic. Prior to the merger, US used to offer relatively cheap flights out of and into So. Fla to/from Europe through the hubs in Charlotte and to a lesser extent Philadelphia. The issue for AA is that hasn't entirely changed since the merger and a lot of those low fare connections still exist. Whereas prior to the merger, an AA loyalist would have had to consider both the trade off between a nonstop and not getting their preferred FF program points, now the only trade off is a more expensive nonstop versus a less expensive connection (either way you're getting your miles). With that, many more will choose a cheaper one stop which hurts AA on its nonstops out of MIA.

I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".
 
apodino
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 4:41 pm

The other thing to note about AA at MIA is MIA is also very Caribbean heavy as well. This has not been helped by hurricanes last year which dampened travel to Puerto Rico and SXM among other places. Also, the mysterious PUJ deaths cant be helping either.
 
Brickell305
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 4:42 pm

enilria wrote:
Brickell305 wrote:
Regarding profitability at MIA, yes there have been issues in Latin America recently but that doesn't tell the full story. There has also been significant pressure put on AA domestically from the (U)LCCs at FLL. And that hasn't just come from competition for economy class travelers. B6's Mint product has also helped lure away premium travelers on a prime route like LAX. As AA continues to devalue its FF program and its hard prodcuct, passengers have less incentive to remain loyal and B6 will only continue to grow to places like NYC, LAX, WAS at their expense. WN and NK have also grown significantly over the years and have also added significantly to the competitive pressure AA faces. DL has also shown itself willing to take on AA directly on certain routes out of MIA as well. AA is getting it from all ends on the domestic front and also to the Caribbean to some extent with B6, NK and now WN as well all in the fray. To Latin America, they face increased competition from foreign flag carriers as CM is probably as strong as its ever been to MIA and AV is as well. It's hard to maintain profitability in highly competitive environments like NYC, LA and MIA. It's even harder when your FF program and product are in an obvious decline.

The other issue that AA has is that since its merger with US, it's become extremely East coast centric and cannibalizes a lot of its traffic. Prior to the merger, US used to offer relatively cheap flights out of and into So. Fla to/from Europe through the hubs in Charlotte and to a lesser extent Philadelphia. The issue for AA is that hasn't entirely changed since the merger and a lot of those low fare connections still exist. Whereas prior to the merger, an AA loyalist would have had to consider both the trade off between a nonstop and not getting their preferred FF program points, now the only trade off is a more expensive nonstop versus a less expensive connection (either way you're getting your miles). With that, many more will choose a cheaper one stop which hurts AA on its nonstops out of MIA.

I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.
 
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enilria
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 5:49 pm

Brickell305 wrote:
enilria wrote:
Brickell305 wrote:
Regarding profitability at MIA, yes there have been issues in Latin America recently but that doesn't tell the full story. There has also been significant pressure put on AA domestically from the (U)LCCs at FLL. And that hasn't just come from competition for economy class travelers. B6's Mint product has also helped lure away premium travelers on a prime route like LAX. As AA continues to devalue its FF program and its hard prodcuct, passengers have less incentive to remain loyal and B6 will only continue to grow to places like NYC, LAX, WAS at their expense. WN and NK have also grown significantly over the years and have also added significantly to the competitive pressure AA faces. DL has also shown itself willing to take on AA directly on certain routes out of MIA as well. AA is getting it from all ends on the domestic front and also to the Caribbean to some extent with B6, NK and now WN as well all in the fray. To Latin America, they face increased competition from foreign flag carriers as CM is probably as strong as its ever been to MIA and AV is as well. It's hard to maintain profitability in highly competitive environments like NYC, LA and MIA. It's even harder when your FF program and product are in an obvious decline.

The other issue that AA has is that since its merger with US, it's become extremely East coast centric and cannibalizes a lot of its traffic. Prior to the merger, US used to offer relatively cheap flights out of and into So. Fla to/from Europe through the hubs in Charlotte and to a lesser extent Philadelphia. The issue for AA is that hasn't entirely changed since the merger and a lot of those low fare connections still exist. Whereas prior to the merger, an AA loyalist would have had to consider both the trade off between a nonstop and not getting their preferred FF program points, now the only trade off is a more expensive nonstop versus a less expensive connection (either way you're getting your miles). With that, many more will choose a cheaper one stop which hurts AA on its nonstops out of MIA.

I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.

DL is not afraid of LCCs. In LAX and NYC they have gone up against other legacies, so it would not be too out of character. If AA is weakening as much as people think I could see it.
 
tphuang
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 8:13 pm

Brickell305 wrote:
enilria wrote:
Brickell305 wrote:
Regarding profitability at MIA, yes there have been issues in Latin America recently but that doesn't tell the full story. There has also been significant pressure put on AA domestically from the (U)LCCs at FLL. And that hasn't just come from competition for economy class travelers. B6's Mint product has also helped lure away premium travelers on a prime route like LAX. As AA continues to devalue its FF program and its hard prodcuct, passengers have less incentive to remain loyal and B6 will only continue to grow to places like NYC, LAX, WAS at their expense. WN and NK have also grown significantly over the years and have also added significantly to the competitive pressure AA faces. DL has also shown itself willing to take on AA directly on certain routes out of MIA as well. AA is getting it from all ends on the domestic front and also to the Caribbean to some extent with B6, NK and now WN as well all in the fray. To Latin America, they face increased competition from foreign flag carriers as CM is probably as strong as its ever been to MIA and AV is as well. It's hard to maintain profitability in highly competitive environments like NYC, LA and MIA. It's even harder when your FF program and product are in an obvious decline.

The other issue that AA has is that since its merger with US, it's become extremely East coast centric and cannibalizes a lot of its traffic. Prior to the merger, US used to offer relatively cheap flights out of and into So. Fla to/from Europe through the hubs in Charlotte and to a lesser extent Philadelphia. The issue for AA is that hasn't entirely changed since the merger and a lot of those low fare connections still exist. Whereas prior to the merger, an AA loyalist would have had to consider both the trade off between a nonstop and not getting their preferred FF program points, now the only trade off is a more expensive nonstop versus a less expensive connection (either way you're getting your miles). With that, many more will choose a cheaper one stop which hurts AA on its nonstops out of MIA.

I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 8:19 pm

enilria wrote:
I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".


Fully agree. Ripe for competition and the gates are there.

apodino wrote:
The other thing to note about AA at MIA is MIA is also very Caribbean heavy as well. This has not been helped by hurricanes last year which dampened travel to Puerto Rico and SXM among other places. Also, the mysterious PUJ deaths cant be helping either.


Not sure what you mean by "Caribbean heavy." Yes, there is a large Caribbean network but it is no the bulk of AA's MIA operation by any means. Miami also benefits from having large local VFR and business markets to these places, that are more immune to tourism downturns. A market like MIA-BGI or MIA-SJU is just as much a VFR/business route as it is a tourism route.
a.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 8:26 pm

tphuang wrote:
Brickell305 wrote:
enilria wrote:
I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.

So, using the DOT data I have a fairly sophisticated method for determining route profitability. It looks like SEA has dragged itself up from the basement to match network average margin, at least for domestic. I don't have the data to do international. They are a lot worse than AS, but it has been a steady climb and now it's really fine. LAX is actually better than that, although the hub routes really pull it up. BOS has fallen from one of their top stations to fairly deep in the lower half, but that's to be expected when you open the capacity spigot. Capacity + time = decent results it appears if you are Delta. I think MIA would be harder than any of those were in that you have an entrenched legacy hub and none of those were, but DL will keep marching forward. I'm sure of it. It's the next logical place for them. They are weak in Latin and MIA is key.
 
Brickell305
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 8:35 pm

tphuang wrote:
Brickell305 wrote:
enilria wrote:
I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them.


It would be tougher in the sense that unlike LAX, BOS and SEA, there is a dominant legacy carrier at MIA. AA accounts for around two thirds of capacity at MIA. The level of investment they’d have to make to match AA would be immense. All the while, not only would they have to battle AA with its entrenched FF base, network and global alliance carriers, they’d also have to compete with foreign flag carriers, LCCs in FLL (mainly) and also avoid cannibalizing their own traffic that they push through ATL.

Also, apart from any hypothetical, we also have actual evidence of what has happened when DL has tried to build up in MIA. When they attempted LHR and a regional build up out of MIA, it all fared extremely poorly and they subsequently cut everything. What would happen if they attempted a full scale build up at MIA?
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 8:38 pm

enilria wrote:
tphuang wrote:
Brickell305 wrote:
As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.

So, using the DOT data I have a fairly sophisticated method for determining route profitability. It looks like SEA has dragged itself up from the basement to match network average margin, at least for domestic. I don't have the data to do international. They are a lot worse than AS, but it has been a steady climb and now it's really fine. LAX is actually better than that, although the hub routes really pull it up. BOS has fallen from one of their top stations to fairly deep in the lower half, but that's to be expected when you open the capacity spigot. Capacity + time = decent results it appears if you are Delta. I think MIA would be harder than any of those were in that you have an entrenched legacy hub and none of those were, but DL will keep marching forward. I'm sure of it. It's the next logical place for them. They are weak in Latin and MIA is key.


A comparison between SEA and MIA isnt a good one. At SEA, they were up against AS which has no long haul network. To compete at MIA, they need a long haul network and that requires a much greater investment. That would require diverting my resources from a profitable long haul network to a place that would be a money pit for years before it ever has hope of turning around. I suppose they could try running just a few flights to GRU, EZE, GIG and the like, but I think it would end up like UA's MIA hub.

DL has a formula that works. They are profitable in every single region even if their Latin numbers are sub par. AA is very profitable to Latin America but its Asia network is a money pit. DL has a balanced formula. Why mess it up by doing something like that?
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 8:53 pm

enilria wrote:
tphuang wrote:
Brickell305 wrote:
As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.

So, using the DOT data I have a fairly sophisticated method for determining route profitability. It looks like SEA has dragged itself up from the basement to match network average margin, at least for domestic. I don't have the data to do international. They are a lot worse than AS, but it has been a steady climb and now it's really fine. LAX is actually better than that, although the hub routes really pull it up. BOS has fallen from one of their top stations to fairly deep in the lower half, but that's to be expected when you open the capacity spigot. Capacity + time = decent results it appears if you are Delta. I think MIA would be harder than any of those were in that you have an entrenched legacy hub and none of those were, but DL will keep marching forward. I'm sure of it. It's the next logical place for them. They are weak in Latin and MIA is key.


We are going to have to disagree on that then. When I see them getting lower fares than as on regional vs mainline out of sea, I don't see how that can be system average station. As does well at sea, but it's not a printing press. And on the routes I have followed, they haven't gained any pricing power vs as. And same with lax, it doesn't seem like their investment is resulting in greater pricing power. Marginal improvement at best. And obviously Boston has been a huge black hole which is unlikely to see any improvement now that they finally started to add other airline hubs.

And for Mia, they would have to start getting people to connect through mia instead of Atlanta on those Latin America itineraries to get it to work. That's going to negatively affect ATL performance.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 9:43 pm

Brickell305 wrote:
It would be tougher in the sense that unlike LAX, BOS and SEA, there is a dominant legacy carrier at MIA. AA accounts for around two thirds of capacity at MIA.

Alaska was dominant at SEA before DL. Going into MIA would not be the first time they have tried a legacy hub as they have tried MIA twice before and failed to gain a foothold. I'm sure they will try again. Whether they succeed who knows.
tphuang wrote:
enilria wrote:
tphuang wrote:

DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.

So, using the DOT data I have a fairly sophisticated method for determining route profitability. It looks like SEA has dragged itself up from the basement to match network average margin, at least for domestic. I don't have the data to do international. They are a lot worse than AS, but it has been a steady climb and now it's really fine. LAX is actually better than that, although the hub routes really pull it up. BOS has fallen from one of their top stations to fairly deep in the lower half, but that's to be expected when you open the capacity spigot. Capacity + time = decent results it appears if you are Delta. I think MIA would be harder than any of those were in that you have an entrenched legacy hub and none of those were, but DL will keep marching forward. I'm sure of it. It's the next logical place for them. They are weak in Latin and MIA is key.


We are going to have to disagree on that then. When I see them getting lower fares than as on regional vs mainline out of sea, I don't see how that can be system average station. As does well at sea, but it's not a printing press. And on the routes I have followed, they haven't gained any pricing power vs as. And same with lax, it doesn't seem like their investment is resulting in greater pricing power. Marginal improvement at best. And obviously Boston has been a huge black hole which is unlikely to see any improvement now that they finally started to add other airline hubs.

And for Mia, they would have to start getting people to connect through mia instead of Atlanta on those Latin America itineraries to get it to work. That's going to negatively affect ATL performance.

I respect your opinion a lot, but once you prorate the connect revenue DL is doing fine. It may not be so obvious on the local fares. Also, I didn't say they are matching AS performance, I'm just saying SEA has crawled back up to system average margin...although for Delta that is quite good. Here are some of the routes that have improved a lot. SEA-BOS, BZN, DEN, GEG, HNL, KOA, LAS, LAX, LIH, MCO, OGG, ORD, PDX, PHX, SAN, SFO, SJC, and SNA. Basically all of those are around network average margins. The rest is awful or a very profitable hub route they've had forever. You average it all out and they are doing pretty well.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 11:26 pm

AirFiero wrote:
Aliqiout wrote:
AirFiero wrote:

THANK YOU. Seems some people know how to answer a question. Were there other reductions at other airports? Seasonal, or otherwise?

There were cuts at DAL and adds to SEA and Florida, but you look at the threads to see the details.


Right, but the question I’m getting to is, were there a significant number of seasonal cuts elsewhere? I read the enilria thread every week, like many do, and I don’t recall seeing many other seasonal cuts and not as many at one airport. But I guess we will see.


As mentioned before, SFO is doing a runway reconstruction project in September and is asking all airlines for significant flight reductions during this period in domestic flight ops hence while you will see a lot of dips from airlines this September at SFO: https://www.flysfo.com/28l-reconstruction-faqs
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Mon Jul 15, 2019 11:45 pm

tphuang wrote:
Brickell305 wrote:
enilria wrote:
I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.


This article this afternoon disagrees with your comment: https://atwonline.com/airports-routes/d ... cc4785daaa
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 12:24 am

EvanWSFO wrote:
tphuang wrote:
Brickell305 wrote:
As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.


This article this afternoon disagrees with your comment: https://atwonline.com/airports-routes/d ... cc4785daaa

I think the logic is also that if LAX/SEA/BOS were all as awful as people think Delta could not be turning in results that whipping the rest of the industry. Here's what is happening in SEA.

Phase 1: New "hub" makes money and everything else sucks
Phase 2: DL's corporate contracts mean DL eventually starts doing well enough in all the major markets to the new "hub" because DL has enough market power with these mega-companies to get a chunk in all the big cities.
Phase 3: DL slowly uses the strong performance from the hubs and the major markets to prop up the regional markets (like GEG) using connections to offset poor local performance
Phase 4: DL gets to profitability in the regional markets by building sufficient regional loyalty
Phase 5: DL either co-exists or pushes out the existing hub carrier

SEA is at Phase 2.75, maybe even 3. I think they will get to Phase 4, but it may take 10 more years.Phase 5, who knows.
BOS is at Phase 1.
LAX is at Phase 3 already because nobody has control of the corporates in LAX.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 12:27 am

Brickell305 wrote:
tphuang wrote:
Brickell305 wrote:
As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.


DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them.


It would be tougher in the sense that unlike LAX, BOS and SEA, there is a dominant legacy carrier at MIA. AA accounts for around two thirds of capacity at MIA. The level of investment they’d have to make to match AA would be immense. All the while, not only would they have to battle AA with its entrenched FF base, network and global alliance carriers, they’d also have to compete with foreign flag carriers, LCCs in FLL (mainly) and also avoid cannibalizing their own traffic that they push through ATL.

Also, apart from any hypothetical, we also have actual evidence of what has happened when DL has tried to build up in MIA. When they attempted LHR and a regional build up out of MIA, it all fared extremely poorly and they subsequently cut everything. What would happen if they attempted a full scale build up at MIA?


DL wasn't entirely serious about the MIA buildup. They received the slot in the BA/AA divestiture. HAA rules were they had to start a new destination for DL for a period of time. They started the regional flying to MCO, JAX and I forget the third station to "support" it. I think it was widely known the slot was allocated for Atlanta once the initial time restriction was over.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 3:03 am

enilria wrote:
EvanWSFO wrote:
tphuang wrote:

DL is basically throwing money at sea, Boston and lax with little to show for it right now. I don't see how Mia will be substantially tougher for them. The bigger question is how they are going to get the gates.

Remember, they have plenty of money and these places are really gate constrained. So there is going to be somewhere for them to dump those capacity adds post 2021 and Austin isn't large enough to take all of that.


This article this afternoon disagrees with your comment: https://atwonline.com/airports-routes/d ... cc4785daaa


When you are a building a new hub, you typically do try to sound as optimistic as possible to not spook the investors. And they are not getting to 200 departures with the 5 additional gates. Boston is quite gate constrained and not easy to add more gates. It's been discussed quite a bit in the Boston thread.

I think the logic is also that if LAX/SEA/BOS were all as awful as people think Delta could not be turning in results that whipping the rest of the industry.

That's possible, but the amount of ASM they have at ATL is probably 2 or 3 times what they have at LAX/SEA/BOS combined. So If ATL is a few points above system average (let's say 18 to 20% margin vs 12 to 14% margin as a whole), that would average out pretty nicely with the growth hubs at 0 to 2% margin. Also, NYC has gotten a lot more profitable for them in the past year due to AA's downsizing. It remains to be seen if their NYC hub can continue to grow to above system average performer, but it's possible if AA gives up even more than what it does not. Watch out AA, you don't fight in NYC, DL will come after you elsewhere.

Here's what is happening in SEA.
Phase 1: New "hub" makes money and everything else sucks
Phase 2: DL's corporate contracts mean DL eventually starts doing well enough in all the major markets to the new "hub" because DL has enough market power with these mega-companies to get a chunk in all the big cities.
Phase 3: DL slowly uses the strong performance from the hubs and the major markets to prop up the regional markets (like GEG) using connections to offset poor local performance
Phase 4: DL gets to profitability in the regional markets by building sufficient regional loyalty
Phase 5: DL either co-exists or pushes out the existing hub carrier

SEA is at Phase 2.75, maybe even 3. I think they will get to Phase 4, but it may take 10 more years.Phase 5, who knows.
BOS is at Phase 1.
LAX is at Phase 3 already because nobody has control of the corporates in LAX.


I really find it surprising that you say BOS-SEA is going well for them. B6 gets about the same yield on that route as DL and I'm pretty sure it's a route they lose money on. I can't imagine DL with its higher cost being profitable at that fare level.

When you list BOS at phase 1, I'm not sure it's exactly true. They've had very strong presence in BOS in the past and many of the routes they have added recently were actually operated on a while back. They are not exactly building from scratch. In fact, they had quite a few P2P routes out of BOS even a while back before this expansion started. And many of the new routes are really old routes brought back. They still operate with monopoly type of pricing on a few BOS routes like CVG/IND/CMH because B6 hasn't entered them. And B6 themselves are still building it up. So they should be further along in this process than phase 1. Yet, even ATL/MSP are now losing money. I haven't seen results really improve on the few routes they've added (with B6 competition) early on in the process.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 1:00 pm

tphuang wrote:
enilria wrote:
EvanWSFO wrote:

This article this afternoon disagrees with your comment: https://atwonline.com/airports-routes/d ... cc4785daaa


When you are a building a new hub, you typically do try to sound as optimistic as possible to not spook the investors. And they are not getting to 200 departures with the 5 additional gates. Boston is quite gate constrained and not easy to add more gates. It's been discussed quite a bit in the Boston thread.



I am only showing you the ATW article. If they are at 140 flights now, 60 more isn't that big of a stretch with better gate utilization and flight timing. And the article stays by 2021, so it's not going to be an all ot one thing.
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 3:31 pm

tphuang wrote:
I think the logic is also that if LAX/SEA/BOS were all as awful as people think Delta could not be turning in results that whipping the rest of the industry.

That's possible, but the amount of ASM they have at ATL is probably 2 or 3 times what they have at LAX/SEA/BOS combined. So If ATL is a few points above system average (let's say 18 to 20% margin vs 12 to 14% margin as a whole), that would average out pretty nicely with the growth hubs at 0 to 2% margin. Also, NYC has gotten a lot more profitable for them in the past year due to AA's downsizing. It remains to be seen if their NYC hub can continue to grow to above system average performer, but it's possible if AA gives up even more than what it does not. Watch out AA, you don't fight in NYC, DL will come after you elsewhere.

DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so. I didn't calculate the network average for the last 12 months, but let's say it was 12% as a discussion point. SEA to all the hubs is going to be REALLY good because it is now strength to strength with a hub on both ends and the ability to revenue manage out anything that isn't gold. That stuff is probably 25-30% margins. Then you have the stuff that is bleeding like a SEA-GEG that is probably -30%. Plus the stuff that sucks tends to be regional and shorter haul which means the ASMs of a SEA-ATL and it's huge profits dwarf the losses on GEG-SEA.

Having said that, if SEA was really bleeding it would be visible on the margins. Delta and Wall Street are fighting over 2 point variances in revenue and capacity growth. At that sort of level, the effects of something that was truly bleeding would not be something you could hide. Even 1% of ASMs with a 50% negative margin is a noticeable impact on earnings.
Here's what is happening in SEA.
Phase 1: New "hub" makes money and everything else sucks
Phase 2: DL's corporate contracts mean DL eventually starts doing well enough in all the major markets to the new "hub" because DL has enough market power with these mega-companies to get a chunk in all the big cities.
Phase 3: DL slowly uses the strong performance from the hubs and the major markets to prop up the regional markets (like GEG) using connections to offset poor local performance
Phase 4: DL gets to profitability in the regional markets by building sufficient regional loyalty
Phase 5: DL either co-exists or pushes out the existing hub carrier

SEA is at Phase 2.75, maybe even 3. I think they will get to Phase 4, but it may take 10 more years.Phase 5, who knows.
BOS is at Phase 1.
LAX is at Phase 3 already because nobody has control of the corporates in LAX.


I really find it surprising that you say BOS-SEA is going well for them. B6 gets about the same yield on that route as DL and I'm pretty sure it's a route they lose money on. I can't imagine DL with its higher cost being profitable at that fare level.
tphuang wrote:
When you list BOS at phase 1, I'm not sure it's exactly true.

Sorry, I didn't word Phase 1 correctly. I meant that BOS to "hubs" makes money in Phase 1 and all the new spokes lose their butts. I'm sure we agree on that. I would call something like BOS-CVG hub to hub as both are focus cities or hubs. So that's probably at or above network average as a starting point.

In all of these there's also the point of sale angle. DL probably had negative point of sale gaps in BOS when this started. Not terrible, but negative. If they add service to places where they are neutral or better on the other end they will advance more quickly. I think that is what you are seeing on the list of improved markets from SEA. Something like DEN or PHX or ORF or BNA or STL works more quickly because of the national corporates DL can corral. Frankly, what I took even more from that SEA list is that DL does well in WN "hub" markets probably because if you are road warrior business traveler you are not that loyal to WN because their elite FFP structure offers you pretty little. You probably only are loyal to WN in markets where they have a big frequency advantage and otherwise Delta is tugging at your wallet.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 3:58 pm

I see B6 adding a 3rd flight from LGB-OAK. Does JetBlue have extra slots at Long Beach Airport since scaled back last year.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 5:22 pm

enilria wrote:
tphuang wrote:

I have nothing to contribute to this conversation about DL's expansion other than to say discussions like this are why I love a-net :yes:
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Tue Jul 16, 2019 9:07 pm

Sightseer wrote:
enilria wrote:
tphuang wrote:

I have nothing to contribute to this conversation about DL's expansion other than to say discussions like this are why I love a-net :yes:

:) Me too
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 2:12 am

EvanWSFO wrote:
I am only showing you the ATW article. If they are at 140 flights now, 60 more isn't that big of a stretch with better gate utilization and flight timing. And the article stays by 2021, so it's not going to be an all ot one thing.

They are at 128 to 130 flights on weekdays in peak summer schedule. If you look at flightstats, it's pretty constant at that number. And it's already have impact on their OTP, especially on the bad weather days. Given that they pushed back start of ORD/EWR/DCA from the less busy month of September until those 5 gates are ready, it looks like 130 is already at limit of what they are willing to push.

MDW22L31C wrote:
I see B6 adding a 3rd flight from LGB-OAK. Does JetBlue have extra slots at Long Beach Airport since scaled back last year.

They do have 2 spare slots, but this is probably shifting from elsewhere. They are trying to find the best way to utilize existing slots without losing a lot of money. If they can get away with running fewer flights, they would.

enilria wrote:

DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so. I didn't calculate the network average for the last 12 months, but let's say it was 12% as a discussion point. SEA to all the hubs is going to be REALLY good because it is now strength to strength with a hub on both ends and the ability to revenue manage out anything that isn't gold. That stuff is probably 25-30% margins. Then you have the stuff that is bleeding like a SEA-GEG that is probably -30%. Plus the stuff that sucks tends to be regional and shorter haul which means the ASMs of a SEA-ATL and it's huge profits dwarf the losses on GEG-SEA.

Having said that, if SEA was really bleeding it would be visible on the margins. Delta and Wall Street are fighting over 2 point variances in revenue and capacity growth. At that sort of level, the effects of something that was truly bleeding would not be something you could hide. Even 1% of ASMs with a 50% negative margin is a noticeable impact on earnings.

SEA to at least JFK/BOS/LAX don't make money. JFK was a solid route until mint entered. Then they switched half the capacity to D1 and still saw fares drop 20%.

This is how I see DL system.
JFK/LGA - no longer a drag on margin and could even become system average to above system average in the next 5 years.
ATL - at least a couple of points above system average in margin. They have a lot of monopolies. 1000 flights and high mainline % means they carry outsized affect on system margin. So if they were even 2 or 3 points above margin and have 8 to 10 times combined capacity of SEA and LAX. Then that alone would neutralize 0 to 2% margin in those stations.
MSP/DTW - really above system average in margins. And each are more than twice as larges as SEA/BOS/LAX. If they were 5 to 10% above system average in margin. Each could offset a station that's 20% below system margin and less than half of its size.
SLC - another above system average station. This could offset other projects they have going on like RDU or AUS in the future.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 4:14 am

enilria wrote:
[
DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so

ATL is the highest margin DL hub. Any modeling of the public data that suggests counter to that is simply erroneous.
 
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 12:44 pm

tphuang wrote:
EvanWSFO wrote:
I am only showing you the ATW article. If they are at 140 flights now, 60 more isn't that big of a stretch with better gate utilization and flight timing. And the article stays by 2021, so it's not going to be an all ot one thing.

They are at 128 to 130 flights on weekdays in peak summer schedule. If you look at flightstats, it's pretty constant at that number. And it's already have impact on their OTP, especially on the bad weather days. Given that they pushed back start of ORD/EWR/DCA from the less busy month of September until those 5 gates are ready, it looks like 130 is already at limit of what they are willing to push.

MDW22L31C wrote:
I see B6 adding a 3rd flight from LGB-OAK. Does JetBlue have extra slots at Long Beach Airport since scaled back last year.

They do have 2 spare slots, but this is probably shifting from elsewhere. They are trying to find the best way to utilize existing slots without losing a lot of money. If they can get away with running fewer flights, they would.

enilria wrote:

DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so. I didn't calculate the network average for the last 12 months, but let's say it was 12% as a discussion point. SEA to all the hubs is going to be REALLY good because it is now strength to strength with a hub on both ends and the ability to revenue manage out anything that isn't gold. That stuff is probably 25-30% margins. Then you have the stuff that is bleeding like a SEA-GEG that is probably -30%. Plus the stuff that sucks tends to be regional and shorter haul which means the ASMs of a SEA-ATL and it's huge profits dwarf the losses on GEG-SEA.

Having said that, if SEA was really bleeding it would be visible on the margins. Delta and Wall Street are fighting over 2 point variances in revenue and capacity growth. At that sort of level, the effects of something that was truly bleeding would not be something you could hide. Even 1% of ASMs with a 50% negative margin is a noticeable impact on earnings.

SEA to at least JFK/BOS/LAX don't make money. JFK was a solid route until mint entered. Then they switched half the capacity to D1 and still saw fares drop 20%.

This is how I see DL system.
JFK/LGA - no longer a drag on margin and could even become system average to above system average in the next 5 years.
ATL - at least a couple of points above system average in margin. They have a lot of monopolies. 1000 flights and high mainline % means they carry outsized affect on system margin. So if they were even 2 or 3 points above margin and have 8 to 10 times combined capacity of SEA and LAX. Then that alone would neutralize 0 to 2% margin in those stations.
MSP/DTW - really above system average in margins. And each are more than twice as larges as SEA/BOS/LAX. If they were 5 to 10% above system average in margin. Each could offset a station that's 20% below system margin and less than half of its size.
SLC - another above system average station. This could offset other projects they have going on like RDU or AUS in the future.


Re: DL at BOS. I posted the article. Take up the substance of the article with ATW. It's no secret on a.net you are a foe of Delta, so I take your comments with a grain of salt. Have a great day.
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
LAXdude1023
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 1:08 pm

Rdh3e wrote:
enilria wrote:
[
DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so

ATL is the highest margin DL hub. Any modeling of the public data that suggests counter to that is simply erroneous.


I have a hard time believing ATL is higher margin than MSP which has much higher average paid fares.
Religion is the root of evil...
 
Rdh3e
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 3:30 pm

LAXdude1023 wrote:
I have a hard time believing ATL is higher margin than MSP which has much higher average paid fares.

MSP has *marginally* higher average paid fares, but it's average length of haul is longer, so when you adjust for that it is a minimal variance. However, ATL has considerably lower average costs due to lower overhead / flight and significantly larger average aircraft size which further dilutes the operating costs there.
 
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enilria
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 4:18 pm

tphuang wrote:
SEA to at least JFK/BOS/LAX don't make money. JFK was a solid route until mint entered. Then they switched half the capacity to D1 and still saw fares drop 20%.

This is how I see DL system.
JFK/LGA - no longer a drag on margin and could even become system average to above system average in the next 5 years.
ATL - at least a couple of points above system average in margin. They have a lot of monopolies. 1000 flights and high mainline % means they carry outsized affect on system margin. So if they were even 2 or 3 points above margin and have 8 to 10 times combined capacity of SEA and LAX. Then that alone would neutralize 0 to 2% margin in those stations.
MSP/DTW - really above system average in margins. And each are more than twice as larges as SEA/BOS/LAX. If they were 5 to 10% above system average in margin. Each could offset a station that's 20% below system margin and less than half of its size.
SLC - another above system average station. This could offset other projects they have going on like RDU or AUS in the future.

Local Fares for DL
YE 1Q19 DB1B
SEA-BOS $220
SEA-JFK $242
SEA-LAX $136

YE 1Q19 LFs T100
SEA-BOS 88%
SEA-JFK 90%
SEA-LAX 82%

Local Traffic % DB1B/T100 YE1Q19
SEA-BOS 83%
SEA-JFK 80%
SEA-LAX 77%

That all looks great to me. What are you basing your opinion on that these routes suck? The filed data shows they are good.

Basically agree on your system analysis, but again from an earnings point of view it's not about how everything does, it is about how it changes. If you drop in a ton of poorly performing capacity into SEA and BOS everything else is basically staying the same. Yes, perhaps NYC has improved a lot, but DTW/MSP are great but static. ATL might be getting a little better from average. The point is that if you drop in 1% of new capacity into BOS and it's terrible then it will noticeably impact earnings on the margin. Same with SEA. This is why Wall Street cares so much about another 1% capacity increase.

Individual new routes may suck, but they have found enough goodness so that these experiments have worked up until now. Again, the counter macro argument is this: Delta is basically whipping AA and UA quarter after quarter in financial performance long before the MAX. AA/UA aren't building new hubs are they? I don't think so. They are adding in their existing hubs, much lower risk. If the stuff Delta is adding were that bad and yet they are still whipping AA/UA on margin when they aren't doing anything remotely as aggressive as DL, what would that say about how poor the performance of AA and UA is? The more likely explanation is that AA and UA aren't performing too much worse than DL, but that the adds DL are doing are not that bad.
Rdh3e wrote:
enilria wrote:
[
DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so

ATL is the highest margin DL hub. Any modeling of the public data that suggests counter to that is simply erroneous.

It is definitely not. You are smarter than all the Wall Street analysts if you think so. You also can point to nothing that proves that. You are confusing profits and margins. ATL is highest hub in total profits because it is the largest. Here are some simplistic statistics that make clear it is lower margin.

ATL has only the 2nd highest stage adjusted average local fare
DB1B YE1Q2019
ATL $470 RT
DTW $504 RT
MSP $458 RT

Connecting traffic is lower margin than local traffic, pretty much by definition because the longer distance and additional stop add cost.
% local Traffic YE1Q2019 DB1B/T100
ATL 28%
DTW 45%
MSP 47%

You couple those two together than it is impossible ATL could have a higher margin. Feel free to post anything from a credible source showing anything different.
 
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enilria
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 4:28 pm

Rdh3e wrote:
LAXdude1023 wrote:
I have a hard time believing ATL is higher margin than MSP which has much higher average paid fares.

MSP has *marginally* higher average paid fares, but it's average length of haul is longer, so when you adjust for that it is a minimal variance. However, ATL has considerably lower average costs due to lower overhead / flight and significantly larger average aircraft size which further dilutes the operating costs there.

ATL has gotten a lot more expensive with the new terminals, remodeling, and the enormous number of gates DL now has there. Also, big chunks of the infrastructure debt in ATL or on the Delta balance sheet rather than the airport balance sheet so they do not appear in the airport CPE. LGA will also be like that going forward with the financing of the new terminal upgrade there. In fact, that is a rapidly growing phenomena at airports doing major new construction.

Delta has about 165 gates in Atlanta depending how you count the intl. That's about 5.65 flights per gate. That is not that high. Average seats are now only about 20% higher than the other hubs at 144 since the CRJ-200s have basically gone away.
 
tphuang
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 6:33 pm

enilria wrote:
tphuang wrote:
SEA to at least JFK/BOS/LAX don't make money. JFK was a solid route until mint entered. Then they switched half the capacity to D1 and still saw fares drop 20%.

This is how I see DL system.
JFK/LGA - no longer a drag on margin and could even become system average to above system average in the next 5 years.
ATL - at least a couple of points above system average in margin. They have a lot of monopolies. 1000 flights and high mainline % means they carry outsized affect on system margin. So if they were even 2 or 3 points above margin and have 8 to 10 times combined capacity of SEA and LAX. Then that alone would neutralize 0 to 2% margin in those stations.
MSP/DTW - really above system average in margins. And each are more than twice as larges as SEA/BOS/LAX. If they were 5 to 10% above system average in margin. Each could offset a station that's 20% below system margin and less than half of its size.
SLC - another above system average station. This could offset other projects they have going on like RDU or AUS in the future.

Local Fares for DL
YE 1Q19 DB1B
SEA-BOS $220
SEA-JFK $242
SEA-LAX $136

YE 1Q19 LFs T100
SEA-BOS 88%
SEA-JFK 90%
SEA-LAX 82%

Local Traffic % DB1B/T100 YE1Q19
SEA-BOS 83%
SEA-JFK 80%
SEA-LAX 77%

That all looks great to me. What are you basing your opinion on that these routes suck? The filed data shows they are good.

Basically agree on your system analysis, but again from an earnings point of view it's not about how everything does, it is about how it changes. If you drop in a ton of poorly performing capacity into SEA and BOS everything else is basically staying the same. Yes, perhaps NYC has improved a lot, but DTW/MSP are great but static. ATL might be getting a little better from average. The point is that if you drop in 1% of new capacity into BOS and it's terrible then it will noticeably impact earnings on the margin. Same with SEA. This is why Wall Street cares so much about another 1% capacity increase.

Individual new routes may suck, but they have found enough goodness so that these experiments have worked up until now. Again, the counter macro argument is this: Delta is basically whipping AA and UA quarter after quarter in financial performance long before the MAX. AA/UA aren't building new hubs are they? I don't think so. They are adding in their existing hubs, much lower risk. If the stuff Delta is adding were that bad and yet they are still whipping AA/UA on margin when they aren't doing anything remotely as aggressive as DL, what would that say about how poor the performance of AA and UA is? The more likely explanation is that AA and UA aren't performing too much worse than DL, but that the adds DL are doing are not that bad.
Rdh3e wrote:
enilria wrote:
[
DTW/MSP are way above system average. Wall Street says 20+ margins full year. ATL is probably 15 or so

ATL is the highest margin DL hub. Any modeling of the public data that suggests counter to that is simply erroneous.

It is definitely not. You are smarter than all the Wall Street analysts if you think so. You also can point to nothing that proves that. You are confusing profits and margins. ATL is highest hub in total profits because it is the largest. Here are some simplistic statistics that make clear it is lower margin.

ATL has only the 2nd highest stage adjusted average local fare
DB1B YE1Q2019
ATL $470 RT
DTW $504 RT
MSP $458 RT

Connecting traffic is lower margin than local traffic, pretty much by definition because the longer distance and additional stop add cost.
% local Traffic YE1Q2019 DB1B/T100
ATL 28%
DTW 45%
MSP 47%

You couple those two together than it is impossible ATL could have a higher margin. Feel free to post anything from a credible source showing anything different.


Those are pretty low fares. I have a model which calculates what is appropriate yield level for a route to be system average in b6 network after adjusting for aircraft used. And based on that, I know their sea to JFK, Bos and lgb are all below average performers. Using that and what I think the cost of delta relative to jetblue, it would seem to me those are really negative performers.

Keep in mind the average fares for delta on JFK lax is usually over $400. It's just $240 on JFK sea when a little less than half of their flight are on d1 service. And with Bo's sea, that's a lower fare level than what I typically see for a healthy Transcon route for Delta which is typically over $300.

There is a lot more regional stuff out of msp and dtw. That bumps up fares. When I see delta go from 76 seater to b717, the yield drops by around 10 to 20%.
 
Rdh3e
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 6:49 pm

enilria wrote:
You couple those two together than it is impossible ATL could have a higher margin. Feel free to post anything from a credible source showing anything different.

You constantly berate people on here for not accounting for "prorating the flow fare" and now you fail to do so yourself. Once you prorate the fares ATL's PRASM is within ~5% of MSP and much higher than DTW. I am willing to bet lots of money that ATL's CASM is more than 5% better than MSP.

You keep saying
"
enilria wrote:
It is definitely not. You are smarter than all the Wall Street analysts if you think so.

without providing any "proof" or citations which you keep insisting I provide to counter your lack of evidence.
 
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enilria
Topic Author
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 7:16 pm

Rdh3e wrote:
enilria wrote:
You couple those two together than it is impossible ATL could have a higher margin. Feel free to post anything from a credible source showing anything different.

You constantly berate people on here for not accounting for "prorating the flow fare" and now you fail to do so yourself. Once you prorate the fares ATL's PRASM is within ~5% of MSP and much higher than DTW. I am willing to bet lots of money that ATL's CASM is more than 5% better than MSP.

You keep saying
"
enilria wrote:
It is definitely not. You are smarter than all the Wall Street analysts if you think so.

without providing any "proof" or citations which you keep insisting I provide to counter your lack of evidence.

I guess you are just trolling. These letters and numbers are sources.
enilria wrote:
Local Fares for DL
YE 1Q19 DB1B
enilria wrote:
YE 1Q19 LFs T100
enilria wrote:
Local Traffic % DB1B/T100 YE1Q19

Whereas what you provided was just your opinion based upon nothing referenced elsewhere. I guess there is not much more to talk about.
 
capitalflyer
Posts: 544
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Wed Jul 17, 2019 8:03 pm

AA DCA-JFK SEP 3>0.8[4] OCT 4>1.0[4]
AA BOS-DCA SEP 13>11[13] OCT 14>12[14]
AA DCA-LGA SEP 10>8[10] OCT 11>8[11]

Pretty deep cuts to the DCA Shuttle. What gives? Is this upgauging from E190 as they leave the fleet? JFK less than daily in Sep. is very surprising, even though that isn't a shuttle.

If it is equipment related, what will replace current planes? 319? B1900?
 
Rdh3e
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Thu Jul 18, 2019 12:55 am

enilria wrote:
I guess you are just trolling. These letters and numbers are sources.
enilria wrote:
Local Fares for DL
YE 1Q19 DB1B
enilria wrote:
YE 1Q19 LFs T100
enilria wrote:
Local Traffic % DB1B/T100 YE1Q19

Whereas what you provided was just your opinion based upon nothing referenced elsewhere. I guess there is not much more to talk about.

Those numbers are you intentionally taking pieces of information that you know are not representative and telling people they are the end all of proof

I'm asking you to link or cite which "Wall Street" analysts you're citing when you say I am disagreeing with them. You mentioned them twice with no backup to your statement.
 
PHLCVGAMTK
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Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Fri Jul 19, 2019 11:24 am

enilria wrote:
Brickell305 wrote:
enilria wrote:
I'm going to predict that once DL finishes with BOS expansion they will once again try MIA. It's the final part of their "4 corners strategy".

As someone who lives in Miami, I'd love to see it. I think AA would make it hell for them though and it'd be a much tougher fight than either AS in SEA or B6 in BOS. I'm not sure DL would see it as being worth the fight but who knows.

DL is not afraid of LCCs. In LAX and NYC they have gone up against other legacies, so it would not be too out of character. If AA is weakening as much as people think I could see it.


As much as I respect the analysis that went into this, may I suggest an alternative. DL already has as much Caribbean/LatAm connectivity power as they need at ATL, and is at no real risk of running out of capacity there. BOS, SEA, and LAX were historically the weak corners for DL, and all three have lucrative international markets beyond them; In the Southeast, ATL is still the king, and the Florida market behaves much more like the Caribbean than the rest of the Mainland. So going hard into MIA would be for South Florida O&D, as well as to put a specific squeeze on AA, and B6, and WN. That doesn't seem like the risk-reward typical of DL; the BOS and SEA initiatives built on old legacy DL+NW and NW positions, respectively, from the pre-merger era, even if long-dormant.

Instead, to fight back more directly against WN and the ULCCs, DL can build up nonstops to MCO again. DL has a much longer and stronger history at MCO, and it's already in a decent #2 position by just flying there from every hub and focus city it has in the US, plus AMS, while still maintaining the 757 conga line from ATL. Adding nonstops from non-focus cities with strong DL presence and strong MCO travel (BDL, CMH, MCI, MEM) will be child's play for an airline that has extensive customer data, and a mainline fleet that scales down all the way to 100 seats, to match demand.

And to strengthen those routes, and to put the knife in in South Florida at very low cost to itself, DL can through-ticket on Virgin Trains US, straight from the MCO South Terminal to downtown West Palm Beach, Fort Lauderdale, and Miami, hourly or better, starting in 2022. JV partner VS is already looking to codeshare on VTUS, so the air-rail ticketing infrastructure will already be there. For a market like CMH, CMH-MCO-MIA/FLL will not be appreciably slower than CMH-ATL-MIA/FLL, even though the train has a much lower top speed, since a passenger can get landside and to the intermodal terminal and on a train in less time than the MCT at ATL, much less whatever the layover is actually scheduled for. It might never compete with NK on price, but DL can expand greatly into the segments of the market that want better than a ULCC can provide.

One more advantage of fighting for Florida from MCO over MIA, is that MCO has plenty of room to build new gates, while MIA is landlocked and needs reconfiguration if a second major hub is going in.
 
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enilria
Topic Author
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Joined: Fri Feb 22, 2008 7:15 pm

Re: OAG Changes 7/14/2019:AA Extends JFK Cuts,Adds DFW-GYE/UIO;FI Makes PHL Seasonal;EK Reduces EWR

Fri Jul 19, 2019 1:14 pm

PHLCVGAMTK wrote:
As much as I respect the analysis that went into this, may I suggest an alternative. DL already has as much Caribbean/LatAm connectivity power as they need at ATL, and is at no real risk of running out of capacity there. BOS, SEA, and LAX were historically the weak corners for DL, and all three have lucrative international markets beyond them; In the Southeast, ATL is still the king, and the Florida market behaves much more like the Caribbean than the rest of the Mainland. So going hard into MIA would be for South Florida O&D, as well as to put a specific squeeze on AA, and B6, and WN. That doesn't seem like the risk-reward typical of DL; the BOS and SEA initiatives built on old legacy DL+NW and NW positions, respectively, from the pre-merger era, even if long-dormant.

I hear you, but they have tried to build a focus city in MIA twice already, so it's not a if I am inventing anything here. What do you think their next conquest would be after BOS is complete? IAD? Doubtful. ORD? Very doubtful. DFW? Also very doubtful. It makes more sense to back and try again in MIA since it preceded their effort in LAX/SEA/BOS. Also, the leadership has repeatedly referred to the 4 corners strategy. It's not going to be MCO. There's no real corporate market. That's their target. MIA has that to Latin America...and is perhaps the only city that really has that to Latin America. NYC is a distant second and LAX is a shadow of MIA. This is also why ATL isn't a suitable substitute. For example, ATL has 1/5th MIA's local revenue to South America despite being further.

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