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xcltflyboy
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AA's PHX Hub in Jeopardy?

Mon Mar 30, 2020 12:09 am

Anyone want to speculate if AA will keep PHX as hub during this downturn? It's only my opinion, but it seems PHX's connecting traffic could easily be handled over LAX and DFW. I would love to hear what others think (as long as you're civil about it!).
Last edited by atcsundevil on Sat Apr 04, 2020 8:14 pm, edited 1 time in total.
Reason: Edited spelling in title
 
MIflyer12
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:15 am

People have been saying that for years. PHX is a big and growing O&D market. IMHO there's room for big ops by both AA and WN.
 
xcltflyboy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:18 am

Yes, during a strong economy. But with huge cuts to flying, does PHX still make sense?
 
tphuang
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:21 am

Based on their cuts this week, it seems like LAX is going to be the big loser here
 
reednavy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:21 am

Yes, yes it does make sense.
 
xcltflyboy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:24 am

tphuang wrote:
Based on their cuts this week, it seems like LAX is going to be the big loser here

That's a good point. I guess if LAX is heavily reliant on TPAC connectivity, LAX could be more vulnerable.
 
PHXWRLD
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:30 am

xcltflyboy wrote:
Anyone want to speculate if AA will keep PHX as hub during this downturn? It's only my opinion, but it seems PHX's connecting traffic could easily be handled over LAX and DFW. I would love to hear what others think (as long as you're civil about it!).


AA's PHX is in no way in jeopardy, PHX is one of the fastest growing cities in the US and is already one of the largest and and the most tourism in the US outside of Florida and Vegas. PHX is also one of AA's most profitable hubs. Cutting PHX would be a terrible idea, even if a recession comes. However, Doug may choose to make the wrong decision, but he will be fired soon hopefully and somebody who understands PHX's potential will replace him.
 
joeblow10
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 12:52 am

PHXWRLD wrote:
xcltflyboy wrote:
Anyone want to speculate if AA will keep PHX as hub during this downturn? It's only my opinion, but it seems PHX's connecting traffic could easily be handled over LAX and DFW. I would love to hear what others think (as long as you're civil about it!).


AA's PHX is in no way in jeopardy, PHX is one of the fastest growing cities in the US and is already one of the largest and and the most tourism in the US outside of Florida and Vegas. PHX is also one of AA's most profitable hubs. Cutting PHX would be a terrible idea, even if a recession comes. However, Doug may choose to make the wrong decision, but he will be fired soon hopefully and somebody who understands PHX's potential will replace him.


Seeing as Dougie ran an entire airline based in a little city called Tempe, I highly doubt he would be a proponent of closing the PHX hub.

This question has been asked over and over again and it’s status as a hub never changes.
 
superjeff
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:16 am

AA won't retreat from Phoenix. the city serves a specific purpose that LAX can't. And they won't retreat at LAX either, that city is too important (and they're the market leader there, albeit in a highly fragmented market). LAX is not JFK for American.
 
SurfandSnow
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:30 am

xcltflyboy wrote:
Anyone want to speculate if AA will keep PHX as hub during this downturn?


I had my doubts about the PHX hub surviving in the merged AA/US network, but if anything, the hub was stronger than its ever been at the start of this year. In terms of AA finances, isn't PHX's performance somewhat middle of the pack? IIRC, CLT, DCA and DFW were recently described as the most profitable, whilst MIA, ORD, PHL and PHX were doing notably better than LAX and NYC operations. AA's first cuts probably won't be at hubs at all, but rather the recently announced focus city operations from places like AUS, BOS and SEA.

JFK appeared to be AA's weakest hub even before transatlantic travel was banned, and I would not be surprised if the huge drop in demand to NYC is the final nail in the coffin for the American Eagle feeder operation there. Transatlantic demand may take longer to rebound than domestic, after all. AA seems to have recently found a winning strategy for LGA targeting high end leisure travelers, so I suspect the next most vulnerable hub operation is LAX. LAX-NRT was already gone, and I would be surprised if LAX-CHC will now go ahead. Other long haul services like LAX-AKL/EZE/GRU/PEK/PVG could be in trouble too, let alone domestic routes like LAX-ATL/BDL/CMH/IND/SDF and even the whole American Eagle operation. Does it really make sense for AA to keep slogging it out on routes like LAX-ABQ/DEN/PDX/RNO/SLC/SMF/TUS, especially if there's less places to connect to beyond LAX?

xcltflyboy wrote:
It's only my opinion, but it seems PHX's connecting traffic could easily be handled over LAX and DFW. I would love to hear what others think (as long as you're civil about it!).


DFW and PHX are excellent places to connect. LAX is a nightmare, especially if you have to endure a long bus ride between the Eagle's Nest and the main terminal area. Like the NYC airports, I think people only connect via LAX if they absolutely have to. LAX has long been a gateway to places like Australia and Hawaii, but I would be surprised if people from either Australia or the United States are taking long haul vacations in great numbers anytime soon. Domestic and regional operations will likely hold up much stronger at PHX (and DFW) than a lot of seemingly precarious flights at LAX. Maybe AA could even shut the awful Eagle's Nest and just codeshare with AS E-175s on routes like LAX-EUG/YVR. Those two examples would be resumptions for AS anyhow!
Flying in the middle seat of coach is much better than not flying at all!
 
Transpac787
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:32 am

PHXWRLD wrote:
PHX is also one of AA's most profitable hubs.

PHX isn’t even in the top 3 of AA’s most profitable hubs.

“The best hubs we have are Dallas/Fort Worth, Charlotte and Washington National in terms of profitability, American CEO Doug Parker told investors earlier in November”

https://thepointsguy.com/news/how-ameri ... ights/amp/
 
slcdeltarumd11
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:35 am

PHX connects domestic traffic. I think that may be a long scary amount of time away,but that will renound way before international. PHX I think is safe, LAX alot of those flights feed AS and one world international flights.

All hubs will see a downsizing , but PHX won't be eliminated. LAX nearby will come back slower I think. Domestic traffic will come back much much sooner.
 
airzona11
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 2:32 am

xcltflyboy wrote:
Yes, during a strong economy. But with huge cuts to flying, does PHX still make sense?


PHX has been a hub in up and down economies. PHX is not a small O/D market. Flying has been reduced because of fear of the virus unknown, the economy did not structurally devolve into the current state. That is to say, how the economy comes back is unknown. That is not unique to PHX. Is your question randomly asking if PHX will be dehubbed or are there specific reasons why this Covid has PHX in jeopardy?
 
LAXdude1023
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 2:47 am

A.net sure has gone downhill over the years. :-I

No, PHX will not be dehubbed. It may not be the highest yielding market but it huge. Why give up a hub in a large economy with a large O&D base?

None of the hubs are going to be dehubbed from this. All will lose capacity.
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Midwestindy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:02 am

PHXWRLD wrote:
xcltflyboy wrote:
Anyone want to speculate if AA will keep PHX as hub during this downturn? It's only my opinion, but it seems PHX's connecting traffic could easily be handled over LAX and DFW. I would love to hear what others think (as long as you're civil about it!).


AA's PHX is in no way in jeopardy, PHX is one of the fastest growing cities in the US and is already one of the largest and and the most tourism in the US outside of Florida and Vegas. PHX is also one of AA's most profitable hubs. Cutting PHX would be a terrible idea, even if a recession comes. However, Doug may choose to make the wrong decision, but he will be fired soon hopefully and somebody who understands PHX's potential will replace him.


PHX is not one of AA's most profitable hubs, its above MIA but below or equal to ORD

Here is what he said in late 2018, the last time this was brought up:
https://www.bizjournals.com/phoenix/new ... ss-at.html

Doug essentially says in the article that the weakest hubs financially are MIA, NYC, & LA, with ORD & PHX above those. However, he goes on to say that LA & NYC are important pieces of their network as they allow AA the ability to serve the corporate travel market.

Therefore while I don't think AA is going to dehub PHX, it is hard to argue against it being the least important domestic hub (LGA/JFK are essentially focus cities):
MIA-Huge international market, and best gateway to Latin America
PHL-TATL Hub
ORD-Third largest O&D market in the US, serves valuable east-west flows
DCA-Speaks for itself, way too valuable of a position to give up
CLT-2nd most profitable hub
DFW-Speaks for itself
LAX-Largest O&D airport in the US, dehubbing would put AA at a significant disadvantage to WN, UA, & DL, and would eliminate its TPAC hub & waste the AS & AA partnership
Last edited by Midwestindy on Mon Mar 30, 2020 3:05 am, edited 1 time in total.
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KFTG
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:03 am

Transpac787 wrote:
PHX isn’t even in the top 3 of AA’s most profitable hubs.

Are there any profitable AA hubs right now?
Last edited by KFTG on Mon Mar 30, 2020 3:06 am, edited 1 time in total.
 
illinicmi
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:17 am

Why do people want this to happen so badly? If they were going to de-hub PHX after the merger, they certainly would have at least started by now.

PHX is a great airport. Who in their right mind would rather connect through LAX instead of PHX? Nobody, that's who.

LAX plays an obvious role, but it can't fill its current role plus taking over for PHX.

Let it go.
 
Boof02671
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:20 am

illinicmi wrote:
Why do people want this to happen so badly? If they were going to de-hub PHX after the merger, they certainly would have at least started by now.

PHX is a great airport. Who in their right mind would rather connect through LAX instead of PHX? Nobody, that's who.

LAX plays an obvious role, but it can't fill its current role plus taking over for PHX.

Let it go.

The merger agreement with the DOJ prevented them from dehubing for a certain time period.
 
slcdeltarumd11
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:29 am

AA has so much going on, they are not gonna dehub PHX! That would be a logistical nightmare they can't handle. They own the planes they have to use them somewhere. AA wants to get them back in the air to make money. Domestic travel will come back WAY before international. With PHX being an almost entirely domestic hub that puts it in a good postion. All hubs are gonna shrink here in April and even more in May and June. We will see them slowly come back as demand will.
 
evank516
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:43 am

I don't know crap about the airlines. I think I know crap, but I don't know crap. My opinion is that PHX is to AA like SLC is to DL. Yes, it's a popular O&D market, but it also allows AA to serve smaller cities while having a shot at capturing both O&D and connecting traffic where DFW won't work. I see it as a rather valuable hub for AA. But then again, I don't know crap.
 
illinicmi
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:43 am

Boof02671 wrote:
The merger agreement with the DOJ prevented them from dehubing for a certain time period.


The agreement ended in 2016.
Last edited by illinicmi on Mon Mar 30, 2020 3:43 am, edited 1 time in total.
 
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EA CO AS
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:43 am

Boof02671 wrote:
illinicmi wrote:
Why do people want this to happen so badly? If they were going to de-hub PHX after the merger, they certainly would have at least started by now.

PHX is a great airport. Who in their right mind would rather connect through LAX instead of PHX? Nobody, that's who.

LAX plays an obvious role, but it can't fill its current role plus taking over for PHX.

Let it go.

The merger agreement with the DOJ prevented them from dehubing for a certain time period.


That period has been over for some time.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
Karlsands
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:44 am

All these speculation based posts with a big question mark in this time are aimless. No one knows what will happen, not now at least. We have nothing like what’s currently affecting the industry in the history books to base it off. We can only wait and see what does play out
 
Byrdluvs747
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:04 am

Here we go again with the map-readers and the usual "PHX is between LAX and DFW... it should be dehubbed" nonsense. Any of us who have actually lived in the PHX metro area, and witnessed the tremendous growth over the past 20 years knows that PHX won't be dehubbed.

Maybe some routes are scaled back due to Corona but PHX as a whole will survive.
The 747: The hands who designed it were guided by god.
 
MrPeanut
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:15 am

The LAX hub will be gone. If the hub was unprofitable during good economic times, it’s gonna be bloody ugly financially as we come out of this virus mess. The buildup of LA centered around LAX being AA’s TPAC gateway. Considering half of their TPAC routes were to China, where demand won’t be there in the short to mid term, there will be no need for that TPAC gateway anymore. As a domestic hub, PHX is a significantly better than LAX. LAX was mired with problems. Gates were spread across multiple terminals, delays were common, battling market share with 3 other major carriers, and extremely high costs (airport rents and labor costs). Fortunately for PHX, they don’t have these types of issues.

It is 100% true that things will look much different when air travel starts back up again and that means significant changes to all airline networks.
 
mark787
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:23 am

I don't think that AA would drop JFK, especially once most the one world members move into terminal 8. The LHR-JFK route is too important for them to give up. I can see them maybe reducing domestic more than it is now, but international operations still have very good load factors prior to the virus. But I guess we won't know until we cross that bridge. Many things may change after this passes.
 
onwFan
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:30 am

MrPeanut wrote:
The LAX hub will be gone. If the hub was unprofitable during good economic times, it’s gonna be bloody ugly financially as we come out of this virus mess. The buildup of LA centered around LAX being AA’s TPAC gateway. Considering half of their TPAC routes were to China, where demand won’t be there in the short to mid term, there will be no need for that TPAC gateway anymore. As a domestic hub, PHX is a significantly better than LAX. LAX was mired with problems. Gates were spread across multiple terminals, delays were common, battling market share with 3 other major carriers, and extremely high costs (airport rents and labor costs). Fortunately for PHX, they don’t have these types of issues.

It is 100% true that things will look much different when air travel starts back up again and that means significant changes to all airline networks.

Yeah, ok - so UA and DL can make their LA hubs work even though it is not their TPAC gateway, but AA cannot? And being the largest carrier in LAX, they will just give up their only west coast presence over to UA and DL so they they can expand there?
 
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SLCUT2777
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:44 am

AA will retain PHX just as DL will SLC. Both metro areas are fast growing O&D markets that neither carrier wants to divest.
DELTA Air Lines; The Only Way To Fly from Salt Lake City; Let the Western Heritage always be with Delta!
 
Noise
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 5:04 am

Phoenix: a fast-growing city with a fast-growing economy in a business-friendly state. I don't see why anyone would want to de-hub a city like that.
 
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Midwestindy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:18 pm

mark787 wrote:
I don't think that AA would drop JFK, especially once most the one world members move into terminal 8. The LHR-JFK route is too important for them to give up. I can see them maybe reducing domestic more than it is now, but international operations still have very good load factors prior to the virus. But I guess we won't know until we cross that bridge. Many things may change after this passes.


Not much to reduce, they only have 70-80 flights per day, 10 of which are just JFK-LAX

SLCUT2777 wrote:
AA will retain PHX just as DL will SLC. Both metro areas are fast growing O&D markets that neither carrier wants to divest.

evank516 wrote:
I don't know crap about the airlines. I think I know crap, but I don't know crap. My opinion is that PHX is to AA like SLC is to DL. Yes, it's a popular O&D market, but it also allows AA to serve smaller cities while having a shot at capturing both O&D and connecting traffic where DFW won't work. I see it as a rather valuable hub for AA. But then again, I don't know crap.


SLC & PHX are not the same, SLC is a core hub for DL & significantly more profitable than PHX. Furthermore, SLC is a monopoly market for DL, while AA shares PHX with WN. SLC's operation cannot be replicated in any meaningful way by any of the other DL hubs.

Listen to Ed Bastain talk about SLC: "He assured Salt Lakers on Friday that Delta is now strong, and its hub here is vital. And plans for it include expanding international and domestic flights — including new nonstops to Asia." “We've grown here almost 25 percent in the last three and a half years, which is the second largest airport growth that we've had among any of our major cities” worldwide, and he sees more coming"


Then listen to Vasu Raja talk about PHX: "What Phoenix was and what Phoenix will be are absolutely different things. At US Airways it was the primary east-west hub, but you flip to American, [and] the best east-west hub is DFW. Phoenix is not an east-west hub anymore; it’s there connecting people from the mountains to the world first and foremost."

*Again not arguing for dehubbing, just pointing out the differences*

MrPeanut wrote:
The LAX hub will be gone. If the hub was unprofitable during good economic times, it’s gonna be bloody ugly financially as we come out of this virus mess. The buildup of LA centered around LAX being AA’s TPAC gateway. Considering half of their TPAC routes were to China, where demand won’t be there in the short to mid term, there will be no need for that TPAC gateway anymore. As a domestic hub, PHX is a significantly better than LAX. LAX was mired with problems. Gates were spread across multiple terminals, delays were common, battling market share with 3 other major carriers, and extremely high costs (airport rents and labor costs). Fortunately for PHX, they don’t have these types of issues.

It is 100% true that things will look much different when air travel starts back up again and that means significant changes to all airline networks.


So since China demand will be gone for the next 6 months, AA should exit LAX for the foreseeable future?? Did I read that correctly?

The same LAX where they are the largest carrier, and the same LAX which is the centerpiece of their partnership with AS?
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jfklganyc
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:25 pm

AA is in jeopardy...as is every other airline

This isnt about your local airport. It is much bigger than that.

Plain and simple this is an unprecedented fight for survival.
 
MIflyer12
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:34 pm

Midwestindy wrote:
SLC is a core hub for DL & significantly more profitable than PHX.


One might infer that random DL hub XXX is more profitable than random AA hub YYY just because DL is a lot more profitable than AA.

But I've never seen a U.S. carrier put out a press release ranking its hubs by profitability. I've never heard one say 'We make xx% before tax at XXX.' I've never heard them say 'We make XX% margins at XXX.' I've never seen a U.S. carrier do an SEC filing after telling analysts which are it most profitable hubs (material info shall be disclosed to the public, by law). I have heard carrier execs dodge analysts' questions when asked about margins or profitability at specific hubs. So, when people say XXX is more profitable than YYY, I call BS - share your sources.
 
lavalampluva
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 1:50 pm

Main hubs for AA, DL, and UA are not going away. They may be seriously cutback for the time being, but once this crisis is passed us service will start to be restored.
Remind me to send a thank you note to Mr. Boeing.
 
ucdtim17
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 2:03 pm

lavalampluva wrote:
Main hubs for AA, DL, and UA are not going away. They may be seriously cutback for the time being, but once this crisis is passed us service will start to be restored.


“Once the crisis is passed” could be a long time from now. All bets are off if we have 18-24 months of demand at 40-60% of what it was (potentially a “good” scenario)
 
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Midwestindy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 2:06 pm

MIflyer12 wrote:
Midwestindy wrote:
SLC is a core hub for DL & significantly more profitable than PHX.


One might infer that random DL hub XXX is more profitable than random AA hub YYY just because DL is a lot more profitable than AA.

But I've never seen a U.S. carrier put out a press release ranking its hubs by profitability. I've never heard one say 'We make xx% before tax at XXX.' I've never heard them say 'We make XX% margins at XXX.' I've never seen a U.S. carrier do an SEC filing after telling analysts which are it most profitable hubs (material info shall be disclosed to the public, by law). I have heard carrier execs dodge analysts' questions when asked about margins or profitability at specific hubs. So, when people say XXX is more profitable than YYY, I call BS - share your sources.


From 2019, although DFW margins are stronger now
Image
Image
https://www.dallasnews.com/opinion/comm ... ry-anymore

It's widely accepted that DL's core hubs produce the highest margins in the business, Doug Parker admits it here:
https://www.forbes.com/sites/tedreed/20 ... bb166a7a94

Given that DL's core hubs are higher margin than AA's highest performing hubs, it should be fair to say SLC is more profitable than PHX
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LAXdude1023
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 2:30 pm

ucdtim17 wrote:
lavalampluva wrote:
Main hubs for AA, DL, and UA are not going away. They may be seriously cutback for the time being, but once this crisis is passed us service will start to be restored.


“Once the crisis is passed” could be a long time from now. All bets are off if we have 18-24 months of demand at 40-60% of what it was (potentially a “good” scenario)


Its not going to be quite that long I dont think.

I personally think there are two things that need to occur in the short term (considering a vaccine is about a year away) for us to return to some sort of normal:

1) Testing needs to become so widely available that anyone for any reason can get tested. I think this should be the case by the end of April.
2) We need a solid treatment that shows scientific results. Basically something to do to COVID what Tamiflu does to the fly. It also needs to be widely available. Im hoping by summertime they have something.

Once these two things happen, the recovery will begin. If they happen by June (which may or may not be), Id say October is when wed see 60% capacity again. I dont think we will see 2019 levels until the end of 2021 though.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
flyingisthebest
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 2:40 pm

The reason why Delta is more profitable is that a lot of its flights connect at Atlanta which is really cheap compared to Miami which is really expensive. LAX should be kept but the PRC flights should be cut to help bring it into profitability.
 
slcdeltarumd11
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:16 pm

I agree airlines are fighting for survival. They are not going to dehub anything or make drastic changes to hubs. PHX is safe. They are going to scale down and try to ramp back up domestic flights hub operations. This is gonna be a fight for their own survival, airlines won't be fighting over LAX in 2020/2021.

A.net is under estimating how long it will take people to get on flights I think. Hubs will be very valuable assets to help them not burn money on o&d routes when demand is hard to predict. LAX I think will be much slower to come back than PHX for AA.
 
Miamiairport
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:24 pm

AA is planning on reducing capacity by a mind blowing 80% by May. I believe that the economic damage will be such that air travel won't rebound for years. Accordingly hubs will be rationalized and PHX might be one of the them. It matters 0% what PHX looked like back on 1/1/2020. All bets are off, we are in a new world order. I also think the ULCC business model will either collapse or be significantly scaled back. Few are going to have the money to go to Disney even on $39 fares.

BE fares will go away or the MC fare will now be a BE fare. Air travel and airlines by 1/2/2021 will not resemble anything they looked like on 1/1/2020.
 
chonetsao
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 3:37 pm

LAX will always be a hub. People needs to remember AA has two JV across the pacific, one with JAL and one with Qantas. LAX is an important getaway for above two airlines. LAX as a hub status with AA is safe even if AA will cut its transpacific flight to HKG, TYO and SYD only from LAX. There are still plenty of partners including JL, QF, CX, AS, CZ and even BA will provide feed in the long haul front and leave the higher yield domestic flight to AA.

PHX is different. It is growing but there is a ceiling to how much growth left in this place. I am not saying the ceiling is there. But with WN in town watching AA all over, it is not hard to see things can get bad before it turns good again in today's climate.

I think PHX will keep what it is now. But the aircraft downgrade may be in the cards. PHX may see mostly A319 and RJs in future with a smaller percentage of A321s. Maybe a regional hub instead of transcontinental hub could be more appropriate. Or a relief hub for DFW and LAX. WHo knows? But I have to say, among all AA hubs, PHX has a weaker case than others, except JFK.
 
BigPlaneGuy13
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:06 pm

I think Phoenix is a unique case. As a recent resident of PHX for 4 years, the economy there was booming. If we take a look at the socioeconomics of the region, I think it’s safe to assume Phoenix only looks better in the eyes of the consumer post-pandemic. The city has low taxes, large swaths of real estate, booming tourism, almost no natural disasters, and high quality of life. And thus far it hasn’t been overwhelmed with COVID cases. Given that the economy functions cyclically, it’s safe to assume PHX will come roaring back. ESPECIALLY because so many Phoenicians are transplants - which means a lot of O&D traffic.

Having watched the airport’s transformation and the slow transition from US to AA liveries in Terminal 4 North, AA has really grown into quite the large operation. It would be shortsighted of them to dehub this market. I echo the sentiments of past posters - this debate has raged on for years and despite the discourse the airline has only continued to grow up until now. Phoenix is a unique sleeping giant.

People oftentimes seem to look at PHX as autonomous of other hubs and don’t see the bigger picture. People argue about the importance of remaining at airports like LGA and LAX despite its lack of profitability because it paints a bigger picture of the airline’s entire network. Why is Phoenix never viewed the same way? The capacity is there in Phoenix. If AA loosened their grip, another airline would pounce and it would strengthen theirs. Somebody needs to serve the city’s capacity whether it makes sense or not.
 
ucdtim17
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 4:56 pm

slcdeltarumd11 wrote:
I agree airlines are fighting for survival. They are not going to dehub anything or make drastic changes to hubs. PHX is safe.


This is a little contradictory. If they're fighting for survival, everything is on the table, including hubs. If everything is hunky dory, as it was 3 months ago, PHX is safe. Now, no one knows.
 
Vctony
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 5:33 pm

chonetsao wrote:
LAX will always be a hub. People needs to remember AA has two JV across the pacific, one with JAL and one with Qantas. LAX is an important getaway for above two airlines. LAX as a hub status with AA is safe even if AA will cut its transpacific flight to HKG, TYO and SYD only from LAX. There are still plenty of partners including JL, QF, CX, AS, CZ and even BA will provide feed in the long haul front and leave the higher yield domestic flight to AA.

PHX is different. It is growing but there is a ceiling to how much growth left in this place. I am not saying the ceiling is there. But with WN in town watching AA all over, it is not hard to see things can get bad before it turns good again in today's climate.

I think PHX will keep what it is now. But the aircraft downgrade may be in the cards. PHX may see mostly A319 and RJs in future with a smaller percentage of A321s. Maybe a regional hub instead of transcontinental hub could be more appropriate. Or a relief hub for DFW and LAX. WHo knows? But I have to say, among all AA hubs, PHX has a weaker case than others, except JFK.


The WN argument made sense before WN decided that DEN was going to be their main East - West connecting complex. A lot of the connections that now flow through DEN used to flow through PHX. WN has ignored PHX for the greater part of the last 15 years or so while it grew DEN (and a lesser extent STL and BNA). WN has finally decided that PHX can support flights to PVR and SJD but that was announced within the first week of the COVID outbreak.

Whether or not AA dehubs or not, I don't see much growth in the WN operation (and that was before COVID). WN simply is focused elsewhere.

If AA were to dehub PHX I could see DL and/or AS setting up a focus city operation there (although I doubt AA would fully dehub so I can see it remaining an AA focus city). The airport administration didn't seem to be under the impression that the hub was in jeopardy because I believe the medium term plan was to move WN to a new West terminal and leave T4 as the AA hub + international gateway.
 
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einsteinboricua
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 5:42 pm

ucdtim17 wrote:
This is a little contradictory. If they're fighting for survival, everything is on the table, including hubs. If everything is hunky dory, as it was 3 months ago, PHX is safe. Now, no one knows.

If airlines are not flying at the moment, what difference does it make to eliminate a hub or keep it? If this slump goes on longer, and AA cuts PHX, how will that help the carrier in the short term and long term? In the short term, it MAY save the airline a bit of cash (though with demand down on the ground, what cash does it really save it?), but long term, what then? If the slump is over, AA loses a hub that was working just fine; if the slump continues, whereto next? If PHX doesn't allow AA to survive, which hub is next on the chopping block?
"You haven't seen a tree until you've seen its shadow from the sky."
 
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Midwestindy
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 5:49 pm

BigPlaneGuy13 wrote:
I think Phoenix is a unique case. As a recent resident of PHX for 4 years, the economy there was booming. If we take a look at the socioeconomics of the region, I think it’s safe to assume Phoenix only looks better in the eyes of the consumer post-pandemic. The city has low taxes, large swaths of real estate, booming tourism, almost no natural disasters, and high quality of life. And thus far it hasn’t been overwhelmed with COVID cases. Given that the economy functions cyclically, it’s safe to assume PHX will come roaring back. ESPECIALLY because so many Phoenicians are transplants - which means a lot of O&D traffic.

Having watched the airport’s transformation and the slow transition from US to AA liveries in Terminal 4 North, AA has really grown into quite the large operation. It would be shortsighted of them to dehub this market. I echo the sentiments of past posters - this debate has raged on for years and despite the discourse the airline has only continued to grow up until now. Phoenix is a unique sleeping giant.

People oftentimes seem to look at PHX as autonomous of other hubs and don’t see the bigger picture. People argue about the importance of remaining at airports like LGA and LAX despite its lack of profitability because it paints a bigger picture of the airline’s entire network. Why is Phoenix never viewed the same way? The capacity is there in Phoenix. If AA loosened their grip, another airline would pounce and it would strengthen theirs. Somebody needs to serve the city’s capacity whether it makes sense or not.


It's interesting to see the differing views of people who have lived or live in Phoenix, vs outsiders. While it is a sizable O&D center(thanks in part to inbound visitors) it does lag behind in terms of business, GDP wise it ranks behind MSP & DTW, and has half the GDP of similar sized metros like SFO & BOS.

LGA is not negotiable, airlines have slots at LGA (and JFK), & once you give them up it is extremely hard/expensive to get them back. UA has realized this since they left JFK.

Furthermore, LA & NYC are the most important air markets in the US, there is no two ways around it. Nearly every major corporation does at least some business in either metro, and thus it is imperative for the US3 to maintain sizable operations in both metros. PHX is not on the same tier as those markets, as it does not serve a large corporate base, and is a seasonal market.
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kavok
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 5:52 pm

Not that it could ever happen, but geographically speaking, it would almost make sense for DL and AA to swap their SLC and PHX hubs.

And yes, I fully realize practically it makes no sense for DL to give up SLC, given the (assumed) higher profits of the fortress hub and the quality of the soon to be opened brand new terminal. Factor in the long-standing relationships each airline has with their respective hub and frequent flyer bases, and I admit businesswise it could never happen.

That all being said, a PHX hub would fill in much of the Texas hole for DL, could still be used as a Mountain-west connection for cities south of I-80, and would leave MSP and SEA to to connect the Mountain-west north of I-80, depending on which direction the pax is going.

The more northern geography of SLC would allow better mountain-west connections for AA as well, as much of the redundancy in the DFW/LAX overlap with PHX would go away. It would never happen, but if there were ever two cities to be swapped as hubs, SLC and PHX make a lot of geographic sense, even if it doesn’t make business sense.
 
alasizon
Posts: 2597
Joined: Sat Apr 28, 2007 8:57 pm

Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 6:05 pm

Midwestindy wrote:
BigPlaneGuy13 wrote:
I think Phoenix is a unique case. As a recent resident of PHX for 4 years, the economy there was booming. If we take a look at the socioeconomics of the region, I think it’s safe to assume Phoenix only looks better in the eyes of the consumer post-pandemic. The city has low taxes, large swaths of real estate, booming tourism, almost no natural disasters, and high quality of life. And thus far it hasn’t been overwhelmed with COVID cases. Given that the economy functions cyclically, it’s safe to assume PHX will come roaring back. ESPECIALLY because so many Phoenicians are transplants - which means a lot of O&D traffic.

Having watched the airport’s transformation and the slow transition from US to AA liveries in Terminal 4 North, AA has really grown into quite the large operation. It would be shortsighted of them to dehub this market. I echo the sentiments of past posters - this debate has raged on for years and despite the discourse the airline has only continued to grow up until now. Phoenix is a unique sleeping giant.

People oftentimes seem to look at PHX as autonomous of other hubs and don’t see the bigger picture. People argue about the importance of remaining at airports like LGA and LAX despite its lack of profitability because it paints a bigger picture of the airline’s entire network. Why is Phoenix never viewed the same way? The capacity is there in Phoenix. If AA loosened their grip, another airline would pounce and it would strengthen theirs. Somebody needs to serve the city’s capacity whether it makes sense or not.


It's interesting to see the differing views of people who have lived or live in Phoenix, vs outsiders. While it is a sizable O&D center(thanks in part to inbound visitors) it does lag behind in terms of business, GDP wise it ranks behind MSP & DTW, and has half the GDP of similar sized metros like SFO & BOS.

LGA is not negotiable, airlines have slots at LGA (and JFK), & once you give them up it is extremely hard/expensive to get them back. UA has realized this since they left JFK.

Furthermore, LA & NYC are the most important air markets in the US, there is no two ways around it. Nearly every major corporation does at least some business in either metro, and thus it is imperative for the US3 to maintain sizable operations in both metros. PHX is not on the same tier as those markets, as it does not serve a large corporate base, and is a seasonal market.


Your comparison of GDP to SFO & BOS (Tech & Health centers) is a bit off though as PHX is not the center of a specific industry (other than snowbirds). DEN, SAN and MSP are good comparisons though and PHX is only $10B dollars behind MSP while being $8B ahead of SAN and about $34B ahead of DEN. PHX population wise is bigger, but a larger number of those are retirees so it would make sense that it's production would lag slightly behind.

For contrast, the GDP of PHX is more than twice that of LAS and is about the same as AUS and SAT combined (populations of the combined areas are similar too).
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N649DL
Posts: 965
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Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 6:19 pm

Arizona as a state actually has lower counts of the virus than expected. I would think PHX would rebound as far as traffic goes perhaps quicker than LAX. AA should want to keep a hub there for refuge over the mess that is happening in CA right now.

As a relatively new resident to Austin, TX: Phoenix could be my backup since we have an office there and it make sense to drop in there once my lease is up in July since it's on the way home to CA (and I was planning on heading back there anyway but won't if the virus doesn't clear out.) However, Travis County here in Texas turns out to also have lower than expected counts of the virus so I think I'm also safe out here (just released county by county virus counts late last week.)
 
BigPlaneGuy13
Posts: 56
Joined: Fri Nov 16, 2018 2:01 am

Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 7:07 pm

alasizon wrote:
Midwestindy wrote:
BigPlaneGuy13 wrote:
I think Phoenix is a unique case. As a recent resident of PHX for 4 years, the economy there was booming. If we take a look at the socioeconomics of the region, I think it’s safe to assume Phoenix only looks better in the eyes of the consumer post-pandemic. The city has low taxes, large swaths of real estate, booming tourism, almost no natural disasters, and high quality of life. And thus far it hasn’t been overwhelmed with COVID cases. Given that the economy functions cyclically, it’s safe to assume PHX will come roaring back. ESPECIALLY because so many Phoenicians are transplants - which means a lot of O&D traffic.

Having watched the airport’s transformation and the slow transition from US to AA liveries in Terminal 4 North, AA has really grown into quite the large operation. It would be shortsighted of them to dehub this market. I echo the sentiments of past posters - this debate has raged on for years and despite the discourse the airline has only continued to grow up until now. Phoenix is a unique sleeping giant.

People oftentimes seem to look at PHX as autonomous of other hubs and don’t see the bigger picture. People argue about the importance of remaining at airports like LGA and LAX despite its lack of profitability because it paints a bigger picture of the airline’s entire network. Why is Phoenix never viewed the same way? The capacity is there in Phoenix. If AA loosened their grip, another airline would pounce and it would strengthen theirs. Somebody needs to serve the city’s capacity whether it makes sense or not.


It's interesting to see the differing views of people who have lived or live in Phoenix, vs outsiders. While it is a sizable O&D center(thanks in part to inbound visitors) it does lag behind in terms of business, GDP wise it ranks behind MSP & DTW, and has half the GDP of similar sized metros like SFO & BOS.

LGA is not negotiable, airlines have slots at LGA (and JFK), & once you give them up it is extremely hard/expensive to get them back. UA has realized this since they left JFK.

Furthermore, LA & NYC are the most important air markets in the US, there is no two ways around it. Nearly every major corporation does at least some business in either metro, and thus it is imperative for the US3 to maintain sizable operations in both metros. PHX is not on the same tier as those markets, as it does not serve a large corporate base, and is a seasonal market.


Your comparison of GDP to SFO & BOS (Tech & Health centers) is a bit off though as PHX is not the center of a specific industry (other than snowbirds). DEN, SAN and MSP are good comparisons though and PHX is only $10B dollars behind MSP while being $8B ahead of SAN and about $34B ahead of DEN. PHX population wise is bigger, but a larger number of those are retirees so it would make sense that it's production would lag slightly behind.

For contrast, the GDP of PHX is more than twice that of LAS and is about the same as AUS and SAT combined (populations of the combined areas are similar too).


Thanks for expanding!

I think you’ve highlighted something with some of the airports you’ve mentioned. Because of constraints at all the west coast airports, PHX plays a great role in being the connector eastbound. SFO, LAS, SAN come to mind. Time and time again AA FF’s say how much they prefer connecting via PHX rather than LAX. Plus, if you look at destinations served, a large portion of LAX traffic is to Mexico, Hawaii, and to other core hubs. PHX connects everyone in the southwest to almost each and every metropolitan eastbound destination. There’s no room for that at LAX. And no flight connecting to Phoenix from LAS, SAN, SFO, LAX is more than an additional 90ish minutes or so.

And they don’t really have to cut back much international travel either because it was just budding. So that helps PHX’s case too.

Last thing I’ll tack on here: PHX is a great feeder for a lot of the inland empire, BUR, and coastal cities in Southern California like SBA albeit seasonally. It really gives AA the vast expanse of the west coast while sitting comfortably in a mild, delay-free (but hot!) climate.
 
dfwjim1
Posts: 2440
Joined: Fri Sep 09, 2011 8:46 pm

Re: AA's PHX Hub in Jeapordy?

Mon Mar 30, 2020 8:25 pm

PHXWRLD wrote:
xcltflyboy wrote:
Anyone want to speculate if AA will keep PHX as hub during this downturn? It's only my opinion, but it seems PHX's connecting traffic could easily be handled over LAX and DFW. I would love to hear what others think (as long as you're civil about it!).


AA's PHX is in no way in jeopardy, PHX is one of the fastest growing cities in the US and is already one of the largest and and the most tourism in the US outside of Florida and Vegas. PHX is also one of AA's most profitable hubs. Cutting PHX would be a terrible idea, even if a recession comes. However, Doug may choose to make the wrong decision, but he will be fired soon hopefully and somebody who understands PHX's potential will replace him.


Finding it difficult to believe that PHX lags only behind Las Vegas and Florida in tourism.

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