Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR

  • 1
  • 3
  • 4
  • 5
  • 6
  • 7
 
NYCAAer
Posts: 786
Joined: Thu Jul 29, 2004 10:22 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 4:44 pm

airplaneboy wrote:
TYWoolman wrote:
Seems like Delta finally pushed American to its last resort: to rely on other brands in key markets. While this partnership (B6 and AA) can be a successs, it is certain admission that American can never go it alone again without digging itself out of a deeper hole. I think one scenario that can happen is B6 and Alaska merge (SEA, LA, Boston and NY) leaving that new entity needing Chicago, Dallas, Charlotte and Miami as hubs.


Great observation. American’s weaker financial position relative to DL & UA forced their hand as a result of the pandemic. I believe their CRO (Vasu Raja) is on record recently saying that 2019 was the first year AA was profitable on transatlantic out of JFK. The pandemic has revealed every carrier’s weaknesses based on their current cost cutting strategies. Because this operating environment is truly unprecedented and travel demand forecasts are no longer viable to rely on, we are seeing some carriers adding routes left and right to gauge where the *current* close-in demand lies (NK, F9, B6 - and even WN, which added new routes/city-pairs within a short window).


That is correct. The 777 was a money-maker out of JFK on transatlantic, once the subpar 757s and 767s were removed from the equation, the corporate clients came back. All this talk of AA being a bloodbath out of JFK is tiresome, it’s not all gloom and doom. Basically, you can say the JFK operation was downsized to profitability. All this talk that it’s an indication that AA is going to leave JFK completely, or downsize to just serve the hubs, is completely unfounded. I wish people would stop the narrative.
 
Ishrion
Posts: 2816
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 4:50 pm

airplaneboy wrote:

Great observation. American’s weaker financial position relative to DL & UA forced their hand as a result of the pandemic. I believe their CRO (Vasu Raja) is on record recently saying that 2019 was the first year AA was profitable on transatlantic out of JFK.


Not transatlantic. He said it was the first time they made money flying internationally, which includes some of those new Caribbean destinations they added. Not 100% sure, but I think someone earlier said JFK's TATL lost money overall?
 
flyby519
Posts: 1570
Joined: Tue Jul 24, 2007 3:31 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 5:51 pm

Miamiairport wrote:
Where this goes is dependent upon a number of factors. If successful it could lead to an actual CodeShare agreement. Hopefully B6 management realizes that a full blown merger (even assuming it gets DOJ approval) would be a disaster. This might also help to prevent B6 from mergering with another competitor or forming a close codeshare relationship with an AA competitor. As stated it also seems to be a way of digging out of the hole at JFK, an airport a legacy carrier just can't abandon.


Why would this prevent B6 from partnering with another carrier? What would stop say UA from a similar arrangement with access to the B6 FLL network while B6 gets access to UA SFO intl codeshare?
 
FSDan
Posts: 3313
Joined: Mon Jan 03, 2011 5:27 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 5:58 pm

Midwestindy wrote:
FSDan wrote:

I don't think JFK-PHL will come back (did it actually ever operate? ...this was one of the routes where AA kept rolling cuts forward month by month last year...), but I'd be surprised if JFK-ORD gets cut long term. If they cut that one, they lose the ability to efficiently connect most of their relatively vast Midwestern network with JFK, which is bound to be the preferred NY airport for a chunk of passengers. On the flip side, they also make it harder for whatever FF base they have on Long Island (which they presumably expect to grow due to this partnership with B6) to connect to the Midwest and Northwest. JFK-DCA I could also see AA keeping, as that wasn't a 50-seater route and they likely made money on it. Even if it's just something like 1x daily 319 timed to connect to international markets like TLV and GRU/EZE, I think it makes sense for AA to keep a presence there. I could see JFK-BOS getting dropped in favor of codesharing with B6, although I'm not confident enough that I'd put money on it.

I think the rest of the regional network makes sense for AA to drop. Their plans to update T8 as part of co-location with BA indicated they were planning on doing away with the regional gate complex in favor of additional widebody gates, so that seems inevitable.



Where do the E175s fit in here? Of which AA has said they will plug more into NYC at the expense of 50 seaters... "Additionally, American said beginning in 2021, it plans to shift more of its short-haul flying from single-class regional jets to ones outfitted with both first class and economy."
https://thepointsguy.co.uk/news/america ... -alliance/


Where I hope the E75s fit in is at LGA. AA should make sure routes like LGA-YYZ/YUL/DTW/CMH/RDU/PIT, etc. are all E75, with no more ERDs. I could also see AA potentially backing out of markets like LGA-CAK, LGA-ROA, LGA-CHO, etc. if they want to make a push to get all the 50-seaters out of New York (like what DL did at SEA, LAX, and BOS).

Midwestindy wrote:
Given onward int'l connections, it's basically impossible to get an accurate picture of financials on these domestic routes, unless you have the yield for the int'l leg.


True, but AA has made it pretty clear that they view NYC as a very O&D focused operation going forward. If they're able to supplement the O&D with some connecting traffic from B6 where needed, I don't see a real need for them to keep the RJ feeder destinations from JFK. Other than a handful of passengers bound for the few JFK-unique destinations like MXP or TLV, that traffic can be flowed over PHL more cost effectively anyway (RDU-XXX-LHR being an example).
This is my signature until I think of a better one.
 
FSDan
Posts: 3313
Joined: Mon Jan 03, 2011 5:27 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 6:05 pm

Ishrion wrote:
airplaneboy wrote:

Great observation. American’s weaker financial position relative to DL & UA forced their hand as a result of the pandemic. I believe their CRO (Vasu Raja) is on record recently saying that 2019 was the first year AA was profitable on transatlantic out of JFK.


Not transatlantic. He said it was the first time they made money flying internationally, which includes some of those new Caribbean destinations they added. Not 100% sure, but I think someone earlier said JFK's TATL lost money overall?


Hard to see how JFK international would make money overall if transatlantic lost money... Transatlantic is by far the biggest share of AA's JFK international network. Plus, several of the past comments about JFK international recently turning profitable for AA have made reference to the 777s replacing 767s. JFK-CDG and JFK-FCO have specifically been called out as being strong performers, IIRC (and obviously JFK-LHR). If MAD, BCN, and MXP were dragging down the rest of transatlantic so badly that it wasn't profitable overall, I think we would have seen AA letting them go along with CLT-BCN/CDG/FCO, etc.
This is my signature until I think of a better one.
 
Ishrion
Posts: 2816
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 6:11 pm

FSDan wrote:
Ishrion wrote:
airplaneboy wrote:

Great observation. American’s weaker financial position relative to DL & UA forced their hand as a result of the pandemic. I believe their CRO (Vasu Raja) is on record recently saying that 2019 was the first year AA was profitable on transatlantic out of JFK.


Not transatlantic. He said it was the first time they made money flying internationally, which includes some of those new Caribbean destinations they added. Not 100% sure, but I think someone earlier said JFK's TATL lost money overall?


Hard to see how JFK international would make money overall if transatlantic lost money... Transatlantic is by far the biggest share of AA's JFK international network. Plus, several of the past comments about JFK international recently turning profitable for AA have made reference to the 777s replacing 767s. JFK-CDG and JFK-FCO have specifically been called out as being strong performers, IIRC (and obviously JFK-LHR). If MAD, BCN, and MXP were dragging down the rest of transatlantic so badly that it wasn't profitable overall, I think we would have seen AA letting them go along with CLT-BCN/CDG/FCO, etc.


Minor profit margins? Who knows, AA could've lost just $1000 on JFK's TATL but was profitable with the other international routes. Of course, it's still unverified if AA actually lost money on JFK's TATL in 2019.
 
tphuang
Posts: 5174
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 6:13 pm

FSDan wrote:
Ishrion wrote:
airplaneboy wrote:

Great observation. American’s weaker financial position relative to DL & UA forced their hand as a result of the pandemic. I believe their CRO (Vasu Raja) is on record recently saying that 2019 was the first year AA was profitable on transatlantic out of JFK.


Not transatlantic. He said it was the first time they made money flying internationally, which includes some of those new Caribbean destinations they added. Not 100% sure, but I think someone earlier said JFK's TATL lost money overall?


Hard to see how JFK international would make money overall if transatlantic lost money... Transatlantic is by far the biggest share of AA's JFK international network. Plus, several of the past comments about JFK international recently turning profitable for AA have made reference to the 777s replacing 767s. JFK-CDG and JFK-FCO have specifically been called out as being strong performers, IIRC (and obviously JFK-LHR). If MAD, BCN, and MXP were dragging down the rest of transatlantic so badly that it wasn't profitable overall, I think we would have seen AA letting them go along with CLT-BCN/CDG/FCO, etc.


Keep in mind we don't know how much money they actually made. Is it just barely profitable or it is system average? Given that the JV with BA is immensely profitable, it's hard to fathom how bad the rest of TATL flying have to be for them to lose money overall.
 
Nicknuzzii
Posts: 1146
Joined: Sat Sep 15, 2018 5:57 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 6:22 pm

I can’t imagine MXP being too profitable with EK, DL, AZ, and UA all being in the mix. Furthermore, FCO and BCN are too leisure oriented for AA’s market. MAD should perform well but maybe they lose out from all the competition on this route?
 
gaystudpilot
Posts: 264
Joined: Sat Dec 08, 2007 10:55 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 6:24 pm

raylee67 wrote:
gaystudpilot wrote:

DL’s strategy seemed interesting with the potential for success. Their risk assessments obviously included regional and country geopolitical scenarios. I wonder if a global pandemic that would bring the global aviation sector to near collapse was a risk factor and how it was weighted. (Probably the same as most other airlines.)


I would think it is most likely not considered as a risk factor. Even if it was, it would be in the footnote and did not bear any significance in the financial assessment. I am responsible for the operational business continuity plan for my company, and we used SARS as a template scenario (i.e. severe disruption for about 3 months, with possibilities of paralysis of operations during the time due to workers getting sick or dying, and spread of illness within the office). That is a fairly dire scenario already and the belief is the risk is extremely low, close to zero. After all, it has only happened once in modern times, and only restricted to specific geography. Humanity has even successfully prevented the spread of Ebola, even it is very contagious and had spread to major cities such as Conakry and Lagos. No one would have planned for the current level of disruptions. If anyone had, the mitigation put in at the time to prepare for such would be prohibitively expensive.


Thanks for the helpful response.
 
User avatar
lesfalls
Posts: 3366
Joined: Fri Dec 06, 2013 11:58 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 6:50 pm

Nicknuzzii wrote:
I can’t imagine MXP being too profitable with EK, DL, AZ, and UA all being in the mix. Furthermore, FCO and BCN are too leisure oriented for AA’s market. MAD should perform well but maybe they lose out from all the competition on this route?


JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.
Lufthansa: Einfach ein bisschen besser.
 
NYCAAer
Posts: 786
Joined: Thu Jul 29, 2004 10:22 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 7:02 pm

Ishrion wrote:
FSDan wrote:
Ishrion wrote:

Not transatlantic. He said it was the first time they made money flying internationally, which includes some of those new Caribbean destinations they added. Not 100% sure, but I think someone earlier said JFK's TATL lost money overall?


Hard to see how JFK international would make money overall if transatlantic lost money... Transatlantic is by far the biggest share of AA's JFK international network. Plus, several of the past comments about JFK international recently turning profitable for AA have made reference to the 777s replacing 767s. JFK-CDG and JFK-FCO have specifically been called out as being strong performers, IIRC (and obviously JFK-LHR). If MAD, BCN, and MXP were dragging down the rest of transatlantic so badly that it wasn't profitable overall, I think we would have seen AA letting them go along with CLT-BCN/CDG/FCO, etc.


Minor profit margins? Who knows, AA could've lost just $1000 on JFK's TATL but was profitable with the other international routes. Of course, it's still unverified if AA actually lost money on JFK's TATL in 2019.


According to what Vasu Raja told employees at a town hall meeting in New York, and again in DFW, he reiterated that JFK international is profitable. I heard him say it myself. So I would go by what he says, if anyone would know, it would be him, not an outsider making a speculation.
 
FSDan
Posts: 3313
Joined: Mon Jan 03, 2011 5:27 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 7:27 pm

tphuang wrote:
FSDan wrote:
Ishrion wrote:

Not transatlantic. He said it was the first time they made money flying internationally, which includes some of those new Caribbean destinations they added. Not 100% sure, but I think someone earlier said JFK's TATL lost money overall?


Hard to see how JFK international would make money overall if transatlantic lost money... Transatlantic is by far the biggest share of AA's JFK international network. Plus, several of the past comments about JFK international recently turning profitable for AA have made reference to the 777s replacing 767s. JFK-CDG and JFK-FCO have specifically been called out as being strong performers, IIRC (and obviously JFK-LHR). If MAD, BCN, and MXP were dragging down the rest of transatlantic so badly that it wasn't profitable overall, I think we would have seen AA letting them go along with CLT-BCN/CDG/FCO, etc.


Keep in mind we don't know how much money they actually made. Is it just barely profitable or it is system average? Given that the JV with BA is immensely profitable, it's hard to fathom how bad the rest of TATL flying have to be for them to lose money overall.


Yeah, that second point is why I find it hard to believe transatlantic would lose money overall, along with Vasu's statement after last summer that multiple of the JFK transatlantic flights are among the most profitable in AA's network.
This is my signature until I think of a better one.
 
User avatar
Midwestindy
Topic Author
Posts: 5251
Joined: Sun Mar 12, 2017 3:56 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 7:42 pm

FSDan wrote:
Midwestindy wrote:
Given onward int'l connections, it's basically impossible to get an accurate picture of financials on these domestic routes, unless you have the yield for the int'l leg.


True, but AA has made it pretty clear that they view NYC as a very O&D focused operation going forward. If they're able to supplement the O&D with some connecting traffic from B6 where needed, I don't see a real need for them to keep the RJ feeder destinations from JFK. Other than a handful of passengers bound for the few JFK-unique destinations like MXP or TLV, that traffic can be flowed over PHL more cost effectively anyway (RDU-XXX-LHR being an example).


That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja

lesfalls wrote:
Nicknuzzii wrote:
I can’t imagine MXP being too profitable with EK, DL, AZ, and UA all being in the mix. Furthermore, FCO and BCN are too leisure oriented for AA’s market. MAD should perform well but maybe they lose out from all the competition on this route?


JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


MXP is a big fashion center, and the financial capital of Italy. It would make sense that this is a fairly sizable corporate route given New York's ties in both industries
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
B752OS
Posts: 1242
Joined: Thu Dec 22, 2005 4:05 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 7:50 pm

Someone should post a simple tl:dr of what this agreement actually means. A lot of confusion it seems.
 
trueblew
Posts: 147
Joined: Thu Nov 15, 2018 10:16 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 8:39 pm

B752OS wrote:
Someone should post a simple tl:dr of what this agreement actually means. A lot of confusion it seems.



B6 gains access to long-haul markets they couldn't serve themselves. This will help fill flights into JFK/BOS and appease their FF base.

AA sheds money-losing short haul markets but retains the feed for their long-haul via B6 flights.

Both B6 and AA become stronger competitors against DL/UA.

Did I miss anything?
 
usflyer msp
Posts: 3788
Joined: Tue May 23, 2000 11:50 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 8:53 pm

lesfalls wrote:
Nicknuzzii wrote:
I can’t imagine MXP being too profitable with EK, DL, AZ, and UA all being in the mix. Furthermore, FCO and BCN are too leisure oriented for AA’s market. MAD should perform well but maybe they lose out from all the competition on this route?


JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


AA has a strong following in Milan. They are the only carrier to consistently serve the two primary US destinations for Milan based business travelers - JFK (banking and design) and MIA (design). The business class cabins sell very well. I predict that MIA-MXP will be the first suspended route brought back.
 
gaystudpilot
Posts: 264
Joined: Sat Dec 08, 2007 10:55 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 8:54 pm

B752OS wrote:
Someone should post a simple tl:dr of what this agreement actually means. A lot of confusion it seems.


There is less confusion than speculation.
 
tphuang
Posts: 5174
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 9:13 pm

trueblew wrote:
B752OS wrote:
Someone should post a simple tl:dr of what this agreement actually means. A lot of confusion it seems.



B6 gains access to long-haul markets they couldn't serve themselves. This will help fill flights into JFK/BOS and appease their FF base.

AA sheds money-losing short haul markets but retains the feed for their long-haul via B6 flights.

Both B6 and AA become stronger competitors against DL/UA.

Did I miss anything?


Assuming they work out ff benefit similar to what they have with HA.

If you normally prefer to fly JetBlue from BOS:
- You can now fly AA to places they don't serve and earn TrueBlue points
- If you dreaded the experience of JetBlue delaying/canceling a flight after a big winter storm or something like that, now you will get put on an AA flight to get where you need to go if JetBlue can't get you there.
- You might be able to redeem trueblue points for AA flights
- If you are mosaic, you might be able to get economy+ seating

If you are an AA ff from BOS:
- You can now earn miles flying on JetBlue
- You might be able to earn qualifying miles on Jetblue.
- You can fly to more places on AA code share + metals than ever before
- You might be able to get EMS seating for very low cost
- You probably will be able to redeem AA miles for JetBlue flights

Basically, both of these airlines just got more attractive for their ff to stick around.
 
tphuang
Posts: 5174
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 9:38 pm

usflyer msp wrote:
lesfalls wrote:
Nicknuzzii wrote:
I can’t imagine MXP being too profitable with EK, DL, AZ, and UA all being in the mix. Furthermore, FCO and BCN are too leisure oriented for AA’s market. MAD should perform well but maybe they lose out from all the competition on this route?


JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


AA has a strong following in Milan. They are the only carrier to consistently serve the two primary US destinations for Milan based business travelers - JFK (banking and design) and MIA (design). The business class cabins sell very well. I predict that MIA-MXP will be the first suspended route brought back.


I don't know why people are so reluctant to admit certain routes are huge under performers. JFK-MXP is clearly a huge money loser for them. The Y class fares are always really low. After the upgrade to 777, they had real trouble selling out the J cabin even in peak summer season.

When I fly to Europe, I almost always fly AA on JFK-MAD or JFK-MXP, because the R/T Y fare were low and I can always guarantee easy upgrade to business class with SWU (if I had one) or miles + copay. A lot of times, the upgrade clears at time of booking.

JFK-FCO probably did well in summer time, because the Y fares were always higher (sometimes double what's on JFK-MXP). The problem here is that J cabin have just as hard time selling out as JFK-MXP. I've found the Delta J fare on this route to almost always be more expensive.

So when I go to Italy, I almost always start and end the trip at Milan even though it's always the most boring part of my trip.

JFK-MAD in off season is always snoozer. The Y fares are always low. The J fares often are pretty low too. And J Cabin is again wide open. Unless you are traveling in summer months, the upgrade request clears very easily.

JFK-BCN based on my experience does a little better, but J cabin fills up a little quicker. Still hard to imagine this route is profitable outside of peak summer months.

JFK-CDG is probably their best performer after LHR. Even for this one, you might be surprised at often J cabins are just not full.

For the south american flights, don't overestimate their performances here. There is a reason they made GIG seasonal. Does anyone really think JFK to Brazil/Argentina demand will come back this winter?

Midwestindy wrote:
That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja

The problem AA has in JFK is that it's the highest cost carrier by the lowest fared carrier.

Aside from what I mentioned above for TATL stuff, their transcon stuff is always facing declining performances. To give you an example, I fly JFK to SFO and am looking to try out mint. But I end up always picking AA at the end. Why is that? They always have the cheapest J fares, especially when I go through sales agent. They do a little better on LAX. But if you look at the fare numbers recently, it has seen a pretty big dip.

JFK used to be more profitable to them. Stuff like SAN/LAS/SEA were all doing well. And then mint came along and just killed them on these routes.
 
usflyer msp
Posts: 3788
Joined: Tue May 23, 2000 11:50 am

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 10:02 pm

tphuang wrote:
usflyer msp wrote:
lesfalls wrote:

JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


AA has a strong following in Milan. They are the only carrier to consistently serve the two primary US destinations for Milan based business travelers - JFK (banking and design) and MIA (design). The business class cabins sell very well. I predict that MIA-MXP will be the first suspended route brought back.


I don't know why people are so reluctant to admit certain routes are huge under performers. JFK-MXP is clearly a huge money loser for them. The Y class fares are always really low. After the upgrade to 777, they had real trouble selling out the J cabin even in peak summer season.

When I fly to Europe, I almost always fly AA on JFK-MAD or JFK-MXP, because the R/T Y fare were low and I can always guarantee easy upgrade to business class with SWU (if I had one) or miles + copay. A lot of times, the upgrade clears at time of booking.

JFK-FCO probably did well in summer time, because the Y fares were always higher (sometimes double what's on JFK-MXP). The problem here is that J cabin have just as hard time selling out as JFK-MXP. I've found the Delta J fare on this route to almost always be more expensive.

So when I go to Italy, I almost always start and end the trip at Milan even though it's always the most boring part of my trip.

JFK-MAD in off season is always snoozer. The Y fares are always low. The J fares often are pretty low too. And J Cabin is again wide open. Unless you are traveling in summer months, the upgrade request clears very easily.

JFK-BCN based on my experience does a little better, but J cabin fills up a little quicker. Still hard to imagine this route is profitable outside of peak summer months.

JFK-CDG is probably their best performer after LHR. Even for this one, you might be surprised at often J cabins are just not full.

For the south american flights, don't overestimate their performances here. There is a reason they made GIG seasonal. Does anyone really think JFK to Brazil/Argentina demand will come back this winter?

Midwestindy wrote:
That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja

The problem AA has in JFK is that it's the highest cost carrier by the lowest fared carrier.

Aside from what I mentioned above for TATL stuff, their transcon stuff is always facing declining performances. To give you an example, I fly JFK to SFO and am looking to try out mint. But I end up always picking AA at the end. Why is that? They always have the cheapest J fares, especially when I go through sales agent. They do a little better on LAX. But if you look at the fare numbers recently, it has seen a pretty big dip.

JFK used to be more profitable to them. Stuff like SAN/LAS/SEA were all doing well. And then mint came along and just killed them on these routes.


If JFK-MXP is such a poor performer why didn't they cut it? They had ample opportunity. We all admit the Y fares to MXP are trash, I paid less than $400 RT from MSP two years ago but I stand by my statement that AA does pretty well in C to MXP that is why it is being kept.
 
N649DL
Posts: 964
Joined: Sat Aug 25, 2018 10:21 pm

Re: AA & B6 announce Northeast Partnership

Sat Jul 18, 2020 10:12 pm

tphuang wrote:
usflyer msp wrote:
lesfalls wrote:

JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


AA has a strong following in Milan. They are the only carrier to consistently serve the two primary US destinations for Milan based business travelers - JFK (banking and design) and MIA (design). The business class cabins sell very well. I predict that MIA-MXP will be the first suspended route brought back.


I don't know why people are so reluctant to admit certain routes are huge under performers. JFK-MXP is clearly a huge money loser for them. The Y class fares are always really low. After the upgrade to 777, they had real trouble selling out the J cabin even in peak summer season.

When I fly to Europe, I almost always fly AA on JFK-MAD or JFK-MXP, because the R/T Y fare were low and I can always guarantee easy upgrade to business class with SWU (if I had one) or miles + copay. A lot of times, the upgrade clears at time of booking.

JFK-FCO probably did well in summer time, because the Y fares were always higher (sometimes double what's on JFK-MXP). The problem here is that J cabin have just as hard time selling out as JFK-MXP. I've found the Delta J fare on this route to almost always be more expensive.

So when I go to Italy, I almost always start and end the trip at Milan even though it's always the most boring part of my trip.

JFK-MAD in off season is always snoozer. The Y fares are always low. The J fares often are pretty low too. And J Cabin is again wide open. Unless you are traveling in summer months, the upgrade request clears very easily.

JFK-BCN based on my experience does a little better, but J cabin fills up a little quicker. Still hard to imagine this route is profitable outside of peak summer months.

JFK-CDG is probably their best performer after LHR. Even for this one, you might be surprised at often J cabins are just not full.

For the south american flights, don't overestimate their performances here. There is a reason they made GIG seasonal. Does anyone really think JFK to Brazil/Argentina demand will come back this winter?

Midwestindy wrote:
That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja

The problem AA has in JFK is that it's the highest cost carrier by the lowest fared carrier.

Aside from what I mentioned above for TATL stuff, their transcon stuff is always facing declining performances. To give you an example, I fly JFK to SFO and am looking to try out mint. But I end up always picking AA at the end. Why is that? They always have the cheapest J fares, especially when I go through sales agent. They do a little better on LAX. But if you look at the fare numbers recently, it has seen a pretty big dip.

JFK used to be more profitable to them. Stuff like SAN/LAS/SEA were all doing well. And then mint came along and just killed them on these routes.


If you read the whole interview with Vasu (one of the links posted in the thread), he says AA's only profitable TATL at JFK wasn't until 2019. Probably when they moved the 763s down to Philly and more 777s into JFK (likely when Corporate Contracts came back.)

For years, IIRC the main source of profitability for AA at JFK were routes to the Caribbean. Then B6 came in and essentially destroyed that. I'm assuming AA on JFK-LAX/SFO probably also became more profitable when the 3-Class A321s came in and UA pulled out of JFK entirely as well. I'm willing to bet that AA slugs it out on JFK-MXP because of Corporate Contracts for the Fashion industry between NYC and Italy.
 
NYCAAer
Posts: 786
Joined: Thu Jul 29, 2004 10:22 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 3:42 am

tphuang wrote:
usflyer msp wrote:
lesfalls wrote:

JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


AA has a strong following in Milan. They are the only carrier to consistently serve the two primary US destinations for Milan based business travelers - JFK (banking and design) and MIA (design). The business class cabins sell very well. I predict that MIA-MXP will be the first suspended route brought back.


I don't know why people are so reluctant to admit certain routes are huge under performers. JFK-MXP is clearly a huge money loser for them. The Y class fares are always really low. After the upgrade to 777, they had real trouble selling out the J cabin even in peak summer season.

When I fly to Europe, I almost always fly AA on JFK-MAD or JFK-MXP, because the R/T Y fare were low and I can always guarantee easy upgrade to business class with SWU (if I had one) or miles + copay. A lot of times, the upgrade clears at time of booking.

JFK-FCO probably did well in summer time, because the Y fares were always higher (sometimes double what's on JFK-MXP). The problem here is that J cabin have just as hard time selling out as JFK-MXP. I've found the Delta J fare on this route to almost always be more expensive.

So when I go to Italy, I almost always start and end the trip at Milan even though it's always the most boring part of my trip.

JFK-MAD in off season is always snoozer. The Y fares are always low. The J fares often are pretty low too. And J Cabin is again wide open. Unless you are traveling in summer months, the upgrade request clears very easily.

JFK-BCN based on my experience does a little better, but J cabin fills up a little quicker. Still hard to imagine this route is profitable outside of peak summer months.

JFK-CDG is probably their best performer after LHR. Even for this one, you might be surprised at often J cabins are just not full.

For the south american flights, don't overestimate their performances here. There is a reason they made GIG seasonal. Does anyone really think JFK to Brazil/Argentina demand will come back this winter?

Midwestindy wrote:
That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja

The problem AA has in JFK is that it's the highest cost carrier by the lowest fared carrier.

Aside from what I mentioned above for TATL stuff, their transcon stuff is always facing declining performances. To give you an example, I fly JFK to SFO and am looking to try out mint. But I end up always picking AA at the end. Why is that? They always have the cheapest J fares, especially when I go through sales agent. They do a little better on LAX. But if you look at the fare numbers recently, it has seen a pretty big dip.

JFK used to be more profitable to them. Stuff like SAN/LAS/SEA were all doing well. And then mint came along and just killed them on these routes.


I work JFK-CDG all the time as purser. The business class cabin is always full, and non-revs very, very rarely get a seat in J. In fact, a lot of the time, non-revs don’t get on the flight at all, it’s all revenue passengers.
 
GettingHigh38k
Posts: 5
Joined: Sun Aug 04, 2019 9:25 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 2:30 pm

What does this mean for PHL hub? B6 added a five cities to PHL recently, does that have any effect for future of PHL or not?
 
PHLspecial
Posts: 652
Joined: Sun Aug 12, 2018 4:11 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 3:13 pm

GettingHigh38k wrote:
What does this mean for PHL hub? B6 added a five cities to PHL recently, does that have any effect for future of PHL or not?

I don't think so, Notice it's to all leisure destinations. B6 is trying to grab some PA market with South Jersey. I personally welcome this for a finally have a better choice in product over AA.
 
NYCAAer
Posts: 786
Joined: Thu Jul 29, 2004 10:22 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 4:50 pm

AA’s share in the JV with BA is much lower, more like 35-40%. 50% is another assumption, all of this is pure speculation again without facts.
 
tphuang
Posts: 5174
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 4:58 pm

NYCAAer wrote:
AA’s share in the JV with BA is much lower, more like 35-40%. 50% is another assumption, all of this is pure speculation again without facts.

Even if it was lower, a really large % of their capacity and revenue out of jfk is to lhr. Would you dispute that jfk to lhr is a very profitable route? If not, then why is it so hard to admit that they were losing money on other routes if jfk widebody international was unprofitable all the way up until 2018? Stuff like mxp and fco were all switched to 777 by then.
 
NYC-air
Posts: 155
Joined: Wed Mar 08, 2000 6:59 am

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 5:50 pm

It's probably premature but I wonder if/when they'll start thinking about how to facilitate JFK connections. The connection experience is pretty good on Delta's "JFK Jitney" bus between terminals 2 and 3 . . . hint . . . hint.
 
trueblew
Posts: 147
Joined: Thu Nov 15, 2018 10:16 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 7:28 pm

NYC-air wrote:
It's probably premature but I wonder if/when they'll start thinking about how to facilitate JFK connections. The connection experience is pretty good on Delta's "JFK Jitney" bus between terminals 2 and 3 . . . hint . . . hint.


I am surprised there wasn't already an airside JetBlue shuttle to Terminals 1/4/7 during the afternoon and evening to facilitate shorter minimum connection times.
 
User avatar
lesfalls
Posts: 3366
Joined: Fri Dec 06, 2013 11:58 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 7:42 pm

Midwestindy wrote:
lesfalls wrote:
Nicknuzzii wrote:
I can’t imagine MXP being too profitable with EK, DL, AZ, and UA all being in the mix. Furthermore, FCO and BCN are too leisure oriented for AA’s market. MAD should perform well but maybe they lose out from all the competition on this route?


JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


MXP is a big fashion center, and the financial capital of Italy. It would make sense that this is a fairly sizable corporate route given New York's ties in both industries


I just can't believe it though. I have family in Milan and from my visits, conversations and connections the demand just seems to big for it to be possible. If someone could give a view of what exact italian companies have much travel to JFK and other long-haul destinations as this notion has always mistified me? In the recent years I know Milan has been growing in terms of interest for companies and growth (compared to the rest of Italy) but still I can't believe it, even with the recent opening of Wizz and other airlines operations to the region.

Would appreciate it.
Cheers,
Luca
Lufthansa: Einfach ein bisschen besser.
 
User avatar
Revelation
Posts: 24300
Joined: Wed Feb 09, 2005 9:37 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 8:40 pm

SUNCTRY738 wrote:
Seems like a real inconsistent product domestically for sure between B6 and AA. I wouldn't want to be the B6 flyer that ends up booked on an AA codeshare flight.

Oy, can you imagine booking B6 and finding yourself on the AA 738 misery machine?

tphuang wrote:
Let's be real here. DL clearly has better finances than AA. This is something AA got pushed into due to their lack of ability to continue to operate money losing routes in northeast.

Continuously losing money on certain routes should push you to try something else, no?
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
MIflyer12
Posts: 8017
Joined: Mon Feb 18, 2013 11:58 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 9:05 pm

Revelation wrote:
SUNCTRY738 wrote:
Seems like a real inconsistent product domestically for sure between B6 and AA. I wouldn't want to be the B6 flyer that ends up booked on an AA codeshare flight.

Oy, can you imagine booking B6 and finding yourself on the AA 738 misery machine?

tphuang wrote:
Let's be real here. DL clearly has better finances than AA. This is something AA got pushed into due to their lack of ability to continue to operate money losing routes in northeast.

Continuously losing money on certain routes should push you to try something else, no?


Well, it should, but one should reflect before doing.

Why won't people pay for AA's product, or, put a different way, why are AA's costs high relative to what people will pay? It's not as if AA lacked/lacks critical mass in the NE or Mid-Atlantic states. They've simply been losing ground in NYC and BOS for a decade. They can head right back to Cornerstones - retreating to hubs... and financial failure.

It will be interesting to see how AA fares map into B6 cabins and service bundles on interline fares. Basic Economy maps to Blue Basic? Main cabin to Blue? First to what? Even Blue Extra with EMS seats has fees for bags.
 
FSDan
Posts: 3313
Joined: Mon Jan 03, 2011 5:27 pm

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 9:17 pm

Midwestindy wrote:
FSDan wrote:
Midwestindy wrote:
Given onward int'l connections, it's basically impossible to get an accurate picture of financials on these domestic routes, unless you have the yield for the int'l leg.


True, but AA has made it pretty clear that they view NYC as a very O&D focused operation going forward. If they're able to supplement the O&D with some connecting traffic from B6 where needed, I don't see a real need for them to keep the RJ feeder destinations from JFK. Other than a handful of passengers bound for the few JFK-unique destinations like MXP or TLV, that traffic can be flowed over PHL more cost effectively anyway (RDU-XXX-LHR being an example).


That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja


I'd be surprised if the overall strategy of being O&D focused in NYC and more connection focused in PHL has changed because of COVID-19. Trying to operate connecting hubs in two markets so close to each other just results in diluting both hubs. In this case the two cities share essentially identical geography for connecting flows, and PHL is way less competitive and lower cost. Not to mention the constraints AA faces that limit their meaningful long term growth potential in NYC.

I think the main reason for doing the deal is to broaden AA's offering in NYC (which they can't do themselves because of their slot disadvantage).

Regarding JFK-LHR being only 60% O&D, I'd expect a lot of the connections are actually happening on the LHR end. People flying NYC-CPT/LOS/ABZ/NAP/BAH/HYD/BLR, etc. via LHR. I'd guess that some of the non-hub routes like JFK-CDG and JFK-MXP see a higher percentage of O&D since connections are only really available on the U.S. end.

Of course, you're absolutely correct that AA has no incentive to drop a route if it's making money. But with AA estimated as only barely profitable at JFK overall last year, and with the admission from network planning that international + LAX/SFO are money makers, that leaves hub routes, a few secondary transcons, and the regional network as the routes that have been dragging AA down. The fact that their T8 plans involve doing away with the 4-in-1 RJ gates seems ominous at the very least.
This is my signature until I think of a better one.
 
User avatar
Midwestindy
Topic Author
Posts: 5251
Joined: Sun Mar 12, 2017 3:56 am

Re: AA & B6 announce Northeast Partnership

Sun Jul 19, 2020 11:18 pm

lesfalls wrote:
Midwestindy wrote:
lesfalls wrote:

JFK-MXP more then likely has to do with the corporate travel from my years of flying the route. Once I flew JFK-MXP on AA in Y, for $350RT on their 767 in February. In economy there were only 30-40 passengers while business was full. The others are quite similar: EK (good access to the U.S and all of Asia for coporate + EK arrival lounge at MXP T1 which has people there), DL (Corporate) and UA (Corporate + Connections). AZ I believe has just always flown the route for national pride since the 70s. I've heard many times that flight has also barely flown out full. When IG operated the route it was mainly connections with very few corporate clients due to their continuous changing of flight dates which caused the Italian clients to choose other airlines.


MXP is a big fashion center, and the financial capital of Italy. It would make sense that this is a fairly sizable corporate route given New York's ties in both industries


I just can't believe it though. I have family in Milan and from my visits, conversations and connections the demand just seems to big for it to be possible. If someone could give a view of what exact italian companies have much travel to JFK and other long-haul destinations as this notion has always mistified me? In the recent years I know Milan has been growing in terms of interest for companies and growth (compared to the rest of Italy) but still I can't believe it, even with the recent opening of Wizz and other airlines operations to the region.

Would appreciate it.
Cheers,
Luca


This is what Emirates said about the route:

"Clark said that JFK-Milan A380 is incredibly popular with fashion industry leaders, some of whom fly between Milan and New York “once a week.”"
https://thepointsguy.com/news/emirates- ... dom-boost/

Given the size of the NYC & Milan fashion industries, all the Milan based fashion companies have their US/NA headquarters in NYC (Armani, Prada, Versace, e.t.c)

Not sure on banking travel between the two, but I'd imagine its there as well

FSDan wrote:
Midwestindy wrote:
FSDan wrote:


True, but AA has made it pretty clear that they view NYC as a very O&D focused operation going forward. If they're able to supplement the O&D with some connecting traffic from B6 where needed, I don't see a real need for them to keep the RJ feeder destinations from JFK. Other than a handful of passengers bound for the few JFK-unique destinations like MXP or TLV, that traffic can be flowed over PHL more cost effectively anyway (RDU-XXX-LHR being an example).


That was pre-COVID I believe, and pre-adding these additional long-haul routes. They wouldn't be doing this deal if they were O&D focussed, IMO.

Remember, JFK-LHR is only 60% O&D (not sure on the split for other routes), so you are going to need somewhere for these pax to connect to. B6 connections make sense if a route can't make money on its own, but if a route is profitable there isn't a strong point for dropping it, as there is no revenue sharing between AA & B6.

Diverting/cutting off flows is a slippery slope (unless a certain flow is unprofitable), as a key method for retaining pax is offering optionality.

Vasu mentions growing in vacated positions within JFK
https://player.fm/series/tell-me-why/s3 ... -vasu-raja


I'd be surprised if the overall strategy of being O&D focused in NYC and more connection focused in PHL has changed because of COVID-19. Trying to operate connecting hubs in two markets so close to each other just results in diluting both hubs. In this case the two cities share essentially identical geography for connecting flows, and PHL is way less competitive and lower cost. Not to mention the constraints AA faces that limit their meaningful long term growth potential in NYC.

I think the main reason for doing the deal is to broaden AA's offering in NYC (which they can't do themselves because of their slot disadvantage).

Regarding JFK-LHR being only 60% O&D, I'd expect a lot of the connections are actually happening on the LHR end. People flying NYC-CPT/LOS/ABZ/NAP/BAH/HYD/BLR, etc. via LHR. I'd guess that some of the non-hub routes like JFK-CDG and JFK-MXP see a higher percentage of O&D since connections are only really available on the U.S. end.

Of course, you're absolutely correct that AA has no incentive to drop a route if it's making money. But with AA estimated as only barely profitable at JFK overall last year, and with the admission from network planning that international + LAX/SFO are money makers, that leaves hub routes, a few secondary transcons, and the regional network as the routes that have been dragging AA down. The fact that their T8 plans involve doing away with the 4-in-1 RJ gates seems ominous at the very least.


Changed might the wrong word, but certainly you'd think they'd be more open to connections now than before. Especially if they follow through with additional TATL flights.

JFK-LHR is 61% O&D on US end, 59% O&D on LHR end. I'd agree on CDG/MXP.

It's difficult to comment on what likely did or didn't make money domestically for AA at JFK (given int'l/domestic split), but IMO I can't imagine them growing an int'l presence from JFK and cutting off that flying from the rest of the network.

We'll see, but cutting ORD/BOS/DCA/e.t.c-JFK long term seems far fetched, especially since they plan to make JFK a compliment to PHL with additional int'l to be announced (& existing partner flying already in place).
Status for 2019/2020: AAdvantage Platinum, Delta Gold, Southwest A-List
 
FSDan
Posts: 3313
Joined: Mon Jan 03, 2011 5:27 pm

Re: AA & B6 announce Northeast Partnership

Tue Jul 21, 2020 1:11 am

Midwestindy wrote:
We'll see, but cutting ORD/BOS/DCA/e.t.c-JFK long term seems far fetched, especially since they plan to make JFK a compliment to PHL with additional int'l to be announced (& existing partner flying already in place).


Agreed, especially re ORD and DCA.
This is my signature until I think of a better one.
 
dca1
Posts: 22
Joined: Sun Sep 01, 2019 7:39 pm

Re: AA & B6 announce Northeast Partnership

Tue Jul 21, 2020 4:46 pm

So I understand both airlines are currently saying this is NOT a merger. That is the logical thing to do to get closer and begin brand association while obtaining regulatory approval.

But for those of you who have been watching the industry for some time now... what probability would you put on AA & B6 merger long term? This could potentially make the NEW AA the largest NYC carrier. Thoughts?
 
Miamiairport
Posts: 665
Joined: Tue Apr 10, 2018 8:14 pm

Re: AA & B6 announce Northeast Partnership

Tue Jul 21, 2020 5:27 pm

dca1 wrote:
So I understand both airlines are currently saying this is NOT a merger. That is the logical thing to do to get closer and begin brand association while obtaining regulatory approval.

But for those of you who have been watching the industry for some time now... what probability would you put on AA & B6 merger long term? This could potentially make the NEW AA the largest NYC carrier. Thoughts?


Both airlines (in fact all airlines) will face challenges to grow in what may be a new day for air travel. Long term economic pain (which has been put at bay for now) will impact both leisure and business travel and a shift towards video conferencing for some business needs will also reduce demand for air travel. Wall Street will tear into any company that doesn't talk "growth" like a pack of wolves with prey. The way to grow is too combine with your competitor. B6 has taken away AA's position in NYC and has thrown competition to AA at MIA from FLL (along with numerous other low cost airlines operating out of FLL).

Now whether DOJ will approve such a (and others) mega, mega airline merger? I guess lot's will depend upon the state of the industry. But surely the brand Neeleman dreamed of more than 20 years ago would be toast.
 
kavok
Posts: 829
Joined: Wed May 11, 2016 10:12 pm

Re: AA & B6 announce Northeast Partnership

Tue Jul 21, 2020 6:31 pm

I think the bigger picture is to look at it temporarily. The B6/AA partnership may likely result in AA further reducing their domestic presence in both BOS and JFK. But that will take time. Further, the eventual rebound after Covid will likely result in other changes, but none of us know the degree or timeline of that systemwide rebound.

The point I am making is not to judge whether an AA or B6 merger makes sense today, but whether it makes sense in the coming years. In the coming years we will hopefully have an industry wide rebound of some sort post Covid. We may have a new president and thus a new head of the DOT, who may or may not look as favorable on mergers. There are too many unknowns for 2021 onward, and it’s probably safe to say any potential merger is not going to happen in 2020.
 
Ishrion
Posts: 2816
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 3:31 am

More info on AA's JFK plans:

"At JFK, American Plans Two Dozen New Transatlantic Flights" https://www.forbes.com/sites/tedreed/20 ... 344a9a4c0a

Main points:
- AA plans 20 to 25 international flights out of New York by 2025. While the title of the article says transatlantic, Vasu Raja's quote says 20 to 25 international flights.
- As noted before, JetBlue will compete against American's JFK to London flights.

"The deal also enables American to use JetBlue slots at JFK for international flights including Athens, Tel Aviv and added London service in 2021."

- More on the AA/B6 slot swaps and "added London service"? A fifth daily JFK-LHR flight or something?

"American will use five new Boeing 777s for the routes."

- JFK-ATH/TLV along with the "added" London service will be on the 777, exact variant unspecified

The new routes haven't been loaded, so I'm assuming they're waiting on regulatory approval or we'll hear something in AA's next schedule update.
 
Dieuwer
Posts: 2487
Joined: Tue Dec 26, 2017 6:27 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 1:00 pm

Ishrion wrote:
More info on AA's JFK plans:

"At JFK, American Plans Two Dozen New Transatlantic Flights" https://www.forbes.com/sites/tedreed/20 ... 344a9a4c0a

Main points:
- AA plans 20 to 25 international flights out of New York by 2025. While the title of the article says transatlantic, Vasu Raja's quote says 20 to 25 international flights.
- As noted before, JetBlue will compete against American's JFK to London flights.

"The deal also enables American to use JetBlue slots at JFK for international flights including Athens, Tel Aviv and added London service in 2021."

- More on the AA/B6 slot swaps and "added London service"? A fifth daily JFK-LHR flight or something?

"American will use five new Boeing 777s for the routes."

- JFK-ATH/TLV along with the "added" London service will be on the 777, exact variant unspecified

The new routes haven't been loaded, so I'm assuming they're waiting on regulatory approval or we'll hear something in AA's next schedule update.


Does this mean that AA will diminish the importance of PHL as TATL hub?
 
usflyer msp
Posts: 3788
Joined: Tue May 23, 2000 11:50 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 1:54 pm

Ishrion wrote:
More info on AA's JFK plans:

"At JFK, American Plans Two Dozen New Transatlantic Flights" https://www.forbes.com/sites/tedreed/20 ... 344a9a4c0a

Main points:
- AA plans 20 to 25 international flights out of New York by 2025. While the title of the article says transatlantic, Vasu Raja's quote says 20 to 25 international flights.
- As noted before, JetBlue will compete against American's JFK to London flights.

"The deal also enables American to use JetBlue slots at JFK for international flights including Athens, Tel Aviv and added London service in 2021."

- More on the AA/B6 slot swaps and "added London service"? A fifth daily JFK-LHR flight or something?

"American will use five new Boeing 777s for the routes."

- JFK-ATH/TLV along with the "added" London service will be on the 777, exact variant unspecified

The new routes haven't been loaded, so I'm assuming they're waiting on regulatory approval or we'll hear something in AA's next schedule update.


Im skeptical of this entire article. It does not make sense.

1) Why does AA need B6 slots to add more long haul flights when they have plenty of their own to use and will have even more after they rejigger their feeder routes from JFK as part of the partnership?

2) I'm going to speculate that the 20-25 flights includes their JV partners so it's only 2-3 more flights.

3) when did AA get new 777's?

This article is a mess.
 
Cointrin330
Posts: 1991
Joined: Sat Jul 16, 2016 12:23 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 2:07 pm

Ishrion wrote:
More info on AA's JFK plans:

"At JFK, American Plans Two Dozen New Transatlantic Flights" https://www.forbes.com/sites/tedreed/20 ... 344a9a4c0a

Main points:
- AA plans 20 to 25 international flights out of New York by 2025. While the title of the article says transatlantic, Vasu Raja's quote says 20 to 25 international flights.
- As noted before, JetBlue will compete against American's JFK to London flights.

"The deal also enables American to use JetBlue slots at JFK for international flights including Athens, Tel Aviv and added London service in 2021."

- More on the AA/B6 slot swaps and "added London service"? A fifth daily JFK-LHR flight or something?

"American will us
e five new Boeing 777s for the routes."

- JFK-ATH/TLV along with the "added" London service will be on the 777, exact variant unspecified

The new routes haven't been loaded, so I'm assuming they're waiting on regulatory approval or we'll hear something in AA's next schedule update.


This article is a complete mess, though it does point out the arrangement between B6 and AA is one of convenience, mainly for AA, to compensate for AA's perpetually weak position in the NYC Area and Northeast market generally and inability to build something out to best compete with DL and UA. I don't see AA operating "two dozen TATL routes" out of JFK, unless it were to simply move the entire TATL operation out of PHL and drop it at JFK. I do think a very small number of PHL TATL routes are better suited for the JFK market, and I could see a few changes (ZRH principally). AA has no new 777s on order, so this is factually wrong in the article. Maybe they meant 787s? The article assumes B6 will fly between JFK and LHR as well. B6 hasn't announced which airport in London it will serve, slots at LHR even if available now, are pricey. AA also has no need to add more LHR service. It is consolidating with BA at T8 in 2022 and will run a virtual shuttle between their two overlapping frequencies (up to 9 on BA and up to 4 on AA). That's likely enough.
 
Ishrion
Posts: 2816
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 2:09 pm

Dieuwer wrote:

Does this mean that AA will diminish the importance of PHL as TATL hub?


No, JFK will complement PHL unless they change their strategy.

From AA’s PR a few weeks ago:

The partnership between American and JetBlue enables sustainable international growth for customers in the Northeast from JFK, which will continue to complement the robust international service from Philadelphia (PHL), for even more options.


usflyer msp wrote:
Im skeptical of this entire article. It does not make sense.

1) Why does AA need B6 slots to add more long haul flights when they have plenty of their own to use and will have even more after they rejigger their feeder routes from JFK as part of the partnership?

2) I'm going to speculate that the 20-25 flights includes their JV partners so it's only 2-3 more flights.

3) when did AA get new 777's?

This article is a mess.


Gotta agree, it was confusing reading it last night. Someone was looking for the aircraft types for ATH/TLV, so I thought it was worth posting. Though, that raised more questions.

Looking at the author’s other articles... not so great. The one regarding AA’s plan to introduce 777s for CLT references “A330s” retiring but never specified it was only the A330-300s retiring and that the -200s would enter long-term storage.
 
Cointrin330
Posts: 1991
Joined: Sat Jul 16, 2016 12:23 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 2:34 pm

The JFK to ATH and JFK to TLV routes, if they actually materialize, would be flown most likely with 777s. The ATH route will likely be a 777-200ER, TLV is a candidate for the 77W. American opted in 2019 to standardize all long haul intercontinental routes at JFK around the 777 to assure a relatively consistent premium product, plus all aircraft have Premium Economy cabins, and significant cargo capacity. This all helped to make JFK finally profitable for AA for a time.
 
trueblew
Posts: 147
Joined: Thu Nov 15, 2018 10:16 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 3:02 pm

Dieuwer wrote:
Ishrion wrote:
More info on AA's JFK plans:

"At JFK, American Plans Two Dozen New Transatlantic Flights" https://www.forbes.com/sites/tedreed/20 ... 344a9a4c0a

Main points:
- AA plans 20 to 25 international flights out of New York by 2025. While the title of the article says transatlantic, Vasu Raja's quote says 20 to 25 international flights.
- As noted before, JetBlue will compete against American's JFK to London flights.

"The deal also enables American to use JetBlue slots at JFK for international flights including Athens, Tel Aviv and added London service in 2021."

- More on the AA/B6 slot swaps and "added London service"? A fifth daily JFK-LHR flight or something?

"American will use five new Boeing 777s for the routes."

- JFK-ATH/TLV along with the "added" London service will be on the 777, exact variant unspecified

The new routes haven't been loaded, so I'm assuming they're waiting on regulatory approval or we'll hear something in AA's next schedule update.


Does this mean that AA will diminish the importance of PHL as TATL hub?


The way I understand it, PHL will remain their TATL hub, and these JFK adds are focused on NYC O&D supplemented by JetBlue feed.

usflyer msp wrote:

Im skeptical of this entire article. It does not make sense.

1) Why does AA need B6 slots to add more long haul flights when they have plenty of their own to use and will have even more after they rejigger their feeder routes from JFK as part of the partnership?


My guess? The B6 slots they want are timed for the flights they want to add. AA may have plenty of slots, but if they're, say, midday slots they don't do much good for TATL flights. B6 can use those inconveniently-timed-for-AA for flights within the Americas.
 
USAirALB
Posts: 2299
Joined: Tue Sep 11, 2007 4:46 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 3:05 pm

The article is extremely vague. Honestly, I don't really see what else AA could add to JFK that would turn a profit.

TYO is been there/done that. US carriers have long struggled on JFK-TYO. I know AA switched to HND a while back from JFK, but was eventually discontinued and one of the reasons I remember is the HND slot times were terrible.

I know a while back AA has come out and said that they were exploring operating to DOH with their own metal, so I guess JFK would make sense for that. I remember a while back there was an article said that AA was interested in launching India service from one of its Eastern hubs, and the article made me think of JFK. With the future of SA always seemingly up in the air, JFK-JNB would be an interesting route as well, although I am not sure if AA's 772 could make the return trip with JNB without a significant penalty.

A couple weeks back I suggested moving ZRH to JFK, which I think makes sense.

I know AA wanted to have a uniform product on their JFK routes, but its interesting to consider the possibility of the A332s at JFK. They have a pretty decent amount of range, and once refurbished with a modern IFE system and new seats, I think would be fairly competitive.
RJ85, F70, E135, E140, E145, E70, E75, E90, CR2, CR7, CR9, 717, 732, 733, 734, 735, 73G, 738, 739, 744ER, 752, 753, 762, 772, 77E, 77W, 789, 319, 320, 321, 332, 333, 343, 359, 388
 
usflyer msp
Posts: 3788
Joined: Tue May 23, 2000 11:50 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 3:11 pm

trueblew wrote:
usflyer msp wrote:

Im skeptical of this entire article. It does not make sense.

1) Why does AA need B6 slots to add more long haul flights when they have plenty of their own to use and will have even more after they rejigger their feeder routes from JFK as part of the partnership?


My guess? The B6 slots they want are timed for the flights they want to add. AA may have plenty of slots, but if they're, say, midday slots they don't do much good for TATL flights. B6 can use those inconveniently-timed-for-AA for flights within the Americas.


AA has plenty of primetime slots that they are using on E40 flights to places like CLE and BWI. They don't need any of B6's.
 
User avatar
jfklganyc
Posts: 5952
Joined: Mon Jan 05, 2004 2:31 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 3:20 pm

Few points from article or vs article

1. Train not bus between terminals at JFK. And I would bet on a secure airside bus

2. AA does not need B6 slots for international flying. They have plenty of their own sitting unused. Remember all those European destinations a few years ago?
 
catiii
Posts: 3578
Joined: Mon Mar 31, 2008 1:18 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 3:56 pm

Also Bob Mann has never been a fan of JetBlue and is usually critical of everything that they do, so consider the source.
 
MrPeanut
Posts: 157
Joined: Fri Nov 23, 2018 8:36 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 4:36 pm

FSDan wrote:
tphuang wrote:
FSDan wrote:

Hard to see how JFK international would make money overall if transatlantic lost money... Transatlantic is by far the biggest share of AA's JFK international network. Plus, several of the past comments about JFK international recently turning profitable for AA have made reference to the 777s replacing 767s. JFK-CDG and JFK-FCO have specifically been called out as being strong performers, IIRC (and obviously JFK-LHR). If MAD, BCN, and MXP were dragging down the rest of transatlantic so badly that it wasn't profitable overall, I think we would have seen AA letting them go along with CLT-BCN/CDG/FCO, etc.


Keep in mind we don't know how much money they actually made. Is it just barely profitable or it is system average? Given that the JV with BA is immensely profitable, it's hard to fathom how bad the rest of TATL flying have to be for them to lose money overall.


Yeah, that second point is why I find it hard to believe transatlantic would lose money overall, along with Vasu's statement after last summer that multiple of the JFK transatlantic flights are among the most profitable in AA's network.


In 2019, AA’s TATL lost money while in previous years they made money TATL. This would appear to make sense given all the smaller routes AA added from the US to the interior of Europe. I’m sure a lot of those routes from ORD to interior Europe lost money. In fact, their profitability dropped significantly TATL starting in 2017, again coinciding with the additions of smaller destinations in Europe.

Considering most routes ex-JFK were to OW hubs and major cities in Europe, I wouldn’t be surprised if JFK was indeed profitable. The more adventurous routes were flown via PHL/ORD/DFW.

https://www.transtats.bts.gov/Data_Elem ... spx?Data=6
 
MrPeanut
Posts: 157
Joined: Fri Nov 23, 2018 8:36 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 4:50 pm

Ishrion wrote:
More info on AA's JFK plans:

"At JFK, American Plans Two Dozen New Transatlantic Flights" https://www.forbes.com/sites/tedreed/20 ... 344a9a4c0a

Main points:
- AA plans 20 to 25 international flights out of New York by 2025. While the title of the article says transatlantic, Vasu Raja's quote says 20 to 25 international flights.
- As noted before, JetBlue will compete against American's JFK to London flights.

"The deal also enables American to use JetBlue slots at JFK for international flights including Athens, Tel Aviv and added London service in 2021."

- More on the AA/B6 slot swaps and "added London service"? A fifth daily JFK-LHR flight or something?

"American will use five new Boeing 777s for the routes."

- JFK-ATH/TLV along with the "added" London service will be on the 777, exact variant unspecified

The new routes haven't been loaded, so I'm assuming they're waiting on regulatory approval or we'll hear something in AA's next schedule update.


Some misquotes above...Raja says the following: “ We envision a world in which there are as many as 20 to 25 [international] flights that are flying in New York by the middle of this decade”.

He doesn’t say new flights, but TOTAL flights. He also doesn’t say trans-Atlantic flights, but INTERNATIONAL flights (Europe, Canada, Caribbean, Mexico, Central America, South America).

This said, it doesn’t represent a massive buildup over what they had pre-Covid. How many international flights did AA operate out of JFK pre-Covid? 20 ish? In addition to the three new routes they already announced, it doesn’t sound like much more growth.
  • 1
  • 3
  • 4
  • 5
  • 6
  • 7

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos