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Cointrin330
Posts: 2067
Joined: Sat Jul 16, 2016 12:23 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 5:00 pm

MrPeanut 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.


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.


Pre-COVID, AA was operating long haul to LHR, CDG, MAD, BCN, MXP, FCO (seasonal), GIG (seasonal), EZE, and GRU. They also operated to BDA, CUN, a small (very) number of Caribbean destinations, plus YUL and YYZ. I doubt they would add much more.

As for MXP, they've likely benefited from Air Italy going bust (although that all happened just as COVID19 took hold) and I suspect EK will drop the JFK-MXP-DXB route entirely and simply put a 77W on MXP-DXB and call it a day.
 
Ishrion
Posts: 2937
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 5:04 pm

MrPeanut 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.


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).



Yes, we've well established that the title of the article, "At JFK, American Plans Two Dozen New Transatlantic Flights", is misleading an doesn't reflect Vasu Raja's quote.

I've e-mailed the author for clarification on the points noted in the posts above. Hopefully he responds.

MrPeanut wrote:

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.


This isn't the most accurate, but it's a base schedule during the peak season:
- 4x LHR
- 1x MXP
- 1x CDG
- 1x FCO
- 1x MAD
- 1x BCN
- New 1x TLV
- New 1x ATH
- 1x GEO
- 1x GRU
- 1x EZE
- 1x YYZ
- 1x YUL

Caribbean routes are somewhat all over the place, but it should be around or over 20 with the added TLV/ATH flights.
 
Ishrion
Posts: 2937
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 5:37 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.


The author responded to some questions for clarification:

With regards to the "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":
- Author: I extrapolated from the quote that about two dozen of the flights would be trans-Atlantic. He did not specify. I realize that AA has flown Japan from JFK in the past.

The "added London Service in 2021":
- Author: I will check with AA on this point, i thought i heard him say expanded LHR but i dont know if that was from pilot podcast or interview i did with him in july so i am checking.

The "new Boeing 777s for the routes":
- Author: There was some confusion on the podcast, at least for me, because first he talked about 777s and then he talked about 787s. So I am going to change it to "widebody" in the story.

The statements regarding added London service and 777s for ATH/TLV have been deleted from the article. Unsure if temporary at the moment.

So... take it from here... :scratchchin:
 
MrPeanut
Posts: 166
Joined: Fri Nov 23, 2018 8:36 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 6:25 pm

Ishrion 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.


The author responded to some questions for clarification:

With regards to the "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":
- Author: I extrapolated from the quote that about two dozen of the flights would be trans-Atlantic. He did not specify. I realize that AA has flown Japan from JFK in the past.

The "added London Service in 2021":
- Author: I will check with AA on this point, i thought i heard him say expanded LHR but i dont know if that was from pilot podcast or interview i did with him in july so i am checking.

The "new Boeing 777s for the routes":
- Author: There was some confusion on the podcast, at least for me, because first he talked about 777s and then he talked about 787s. So I am going to change it to "widebody" in the story.

The statements regarding added London service and 777s for ATH/TLV have been deleted from the article. Unsure if temporary at the moment.

So... take it from here... :scratchchin:


Interesting responses from the author. AA jumped on TLV once El Al shut down (although I think El Al comes back as soon as the virus calms down). I wouldn’t be surprised if AA jumps on other routes where something similar to this has taken place.
 
jbs2886
Posts: 2412
Joined: Wed Apr 01, 2015 9:07 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 7:08 pm

MrPeanut wrote:
Ishrion 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.


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


- 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.


The author responded to some questions for clarification:

With regards to the "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":
- Author: I extrapolated from the quote that about two dozen of the flights would be trans-Atlantic. He did not specify. I realize that AA has flown Japan from JFK in the past.

The "added London Service in 2021":
- Author: I will check with AA on this point, i thought i heard him say expanded LHR but i dont know if that was from pilot podcast or interview i did with him in july so i am checking.

The "new Boeing 777s for the routes":
- Author: There was some confusion on the podcast, at least for me, because first he talked about 777s and then he talked about 787s. So I am going to change it to "widebody" in the story.

The statements regarding added London service and 777s for ATH/TLV have been deleted from the article. Unsure if temporary at the moment.

So... take it from here... :scratchchin:


Interesting responses from the author. AA jumped on TLV once El Al shut down (although I think El Al comes back as soon as the virus calms down). I wouldn’t be surprised if AA jumps on other routes where something similar to this has taken place.


So Caribbean and Latin America are not international-both of which are huge for AA? Extrapolating to TATL is pretty sloppy.
 
TWA85
Posts: 359
Joined: Tue Feb 14, 2012 10:06 pm

Re: AA & B6 announce Northeast Partnership

Tue Aug 04, 2020 11:34 pm

How many widebody international gates does AA have a JFK? If my count from Google maps is correct, it is 15.
 
PSA727
Posts: 850
Joined: Mon Feb 06, 2006 7:49 am

Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 7:30 am

I'm calling it now.... AA will shrink PHL to around 250 daily departures (from the pre-COVID level of around 400). And it's not just because of this partnership with B6, but also because of DCA. Keep in mind that next year AA's new commuter terminal (with its own Admiral's Club and 14 gates) opens up; and all of AA's gates will be connected airside. This will make connecting at DCA much, much easier. I looked up the destinations AA flies to out of PHL and DCA, and there are about 10 airports served from DCA and not PHL. And there are about two dozen destinations flown out of PHL which are not flown by AA out of DCA (and about half of those are cities beyond DCA's perimeter-rule). Of course, I am excluding the international destinations out of PHL. But this is where JFK steps in...

AA has always wanted to make JFK its TATL gateway, as the O&D traffic is much greater there than it is at PHL. But the slot restrictions there make it impossible to operate a functional hub out of the airport. Enter the partnership with B6. Which helps both AA and B6 deal with its biggest problem at JFK... Delta. Prior to this deal, AA could potentially offer its NYC customer base several TATL flights (as well as Latin/South America), but not many domestic options. While B6 could offer its NYC customer base several domestic and Carribean options, but no long-haul international options. On the other hand, DL can do both. But now with this, there is no need for AA or B6's NYC customer base to migrate over to DL to meet their unmet travel needs. AA can slap its code on B6's flights into/out of JFK, B6 can slap its code on AA's international flights, and you've now added connection feed on both airlines' metal to complement their O&D traffic. And that's how PHL becomes redundant. I think PHL's focus will be on cities north of Charlotte and east of Chicago, and to the major cities outside of that geographic area. I also think that it will still have TATL service year-round, like LHR/MAN/CDG/MAD, and probably seasonal service to the high-demand tourist destinations like DUB/BCN/FCO. But cities like EDI/AMS/BUD/PRG? I doubt it. Those will go to JFK.
fly high, pay low...Germanwings!
 
Cointrin330
Posts: 2067
Joined: Sat Jul 16, 2016 12:23 pm

Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 12:12 pm

PSA727 wrote:
I'm calling it now.... AA will shrink PHL to around 250 daily departures (from the pre-COVID level of around 400). And it's not just because of this partnership with B6, but also because of DCA. Keep in mind that next year AA's new commuter terminal (with its own Admiral's Club and 14 gates) opens up; and all of AA's gates will be connected airside. This will make connecting at DCA much, much easier. I looked up the destinations AA flies to out of PHL and DCA, and there are about 10 airports served from DCA and not PHL. And there are about two dozen destinations flown out of PHL which are not flown by AA out of DCA (and about half of those are cities beyond DCA's perimeter-rule). Of course, I am excluding the international destinations out of PHL. But this is where JFK steps in...

AA has always wanted to make JFK its TATL gateway, as the O&D traffic is much greater there than it is at PHL. But the slot restrictions there make it impossible to operate a functional hub out of the airport. Enter the partnership with B6. Which helps both AA and B6 deal with its biggest problem at JFK... Delta. Prior to this deal, AA could potentially offer its NYC customer base several TATL flights (as well as Latin/South America), but not many domestic options. While B6 could offer its NYC customer base several domestic and Carribean options, but no long-haul international options. On the other hand, DL can do both. But now with this, there is no need for AA or B6's NYC customer base to migrate over to DL to meet their unmet travel needs. AA can slap its code on B6's flights into/out of JFK, B6 can slap its code on AA's international flights, and you've now added connection feed on both airlines' metal to complement their O&D traffic. And that's how PHL becomes redundant. I think PHL's focus will be on cities north of Charlotte and east of Chicago, and to the major cities outside of that geographic area. I also think that it will still have TATL service year-round, like LHR/MAN/CDG/MAD, and probably seasonal service to the high-demand tourist destinations like DUB/BCN/FCO. But cities like EDI/AMS/BUD/PRG? I doubt it. Those will go to JFK.


PHL will continue to see cuts due to COVID19 with planes and routes shifted to CLT and likely DCA, but the B6/AA partnership doesn't give AA something at JFK it didn't try previously. The two airlines interlined at JFK from 2006 until the AA/US merger. AA's problems at JFK are cost related and not slots. They had the slots (and still do have more than a handful) to feed TATL service and build out more capacity on AA metal at JFK if they really wanted to. AA suspended dozens of flights at JFK last year during the runway construction and obtained slot waivers from the PANYNJ to do so. They got those waivers extended well after the runway work was complete. AA was using inefficient, customer unfriendly ERJ-140 and ERJ-145 jets to do the bulk of its regional services, including YUL/YYZ and focused JFK on flying to its hubs and some markets like SAT and AUS, in addition to P2P routes designed to cater to its FF and corporate customer base in the NY area that uses JFK. Post-merger with US, AA had the challenge of two TATL gateways within 200 miles of each other, and at PHL, AA has plenty of feed and a lot less competition. In fact, to Europe, it just has LH to compete with. The PHL market, though very large, is not sufficiently balanced between high paying, premium paying passengers flying on business to Europe vs. leisure travel. NY is premium rich (if and when it recovers, post-COVID) and 2019 was a very good year for AA at JFK on the long haul front. It finally became profitable once a consistent product with good cargo lift was introduced. AA also has significant capital investments at JFK (Terminal 8, the expansion, the premium lounge) and benefits from having one of the best terminals at JFK and one of the least crowded. DL built up NYC and JFK in particular on the back of having slashed its costs in Bankruptcy from 2005 to 2007 and repositioning NW assets through the merger. It however took years for DL to turn JFK profitable. AA resisted BK for a decade post 9/11 and paid the price for it by having a high cost structure relative to DL and UA. A lot of AA's network at PHL overlaps with DL's at JFK to Europe. Some leisure markets served out of PHL to Europe could migrate to JFK, but I suspect the additional services AA will add at JFK will be business focused, and that leaves AMS and ZRH as open questions for AA at PHL and whether they are shifted to JFK (ZRH would be a shift back to JFK from where it operated almost continuously from 1987 to 2016). AMS is an even bigger business market now due to Brexit and can support additional service from NY even with DL/KL and UA firmly entrenched. I would not expect though that JFK breaks PHL and becomes the new AA TATL hub on the East Coast even with B6 feed. There are complexities in connecting between T5 and T8 (a jitney is the most you could expect, on the air side). It is still a hassle. AA has an uphill climb at JFK. A lot has not worked there. Hopefully though this time they get it right. AA's product is competitive and it has to retain and grow corporate sales to sustain any growth in NYC.
 
Nicknuzzii
Posts: 1233
Joined: Sat Sep 15, 2018 5:57 pm

Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 12:23 pm

PSA727 wrote:
I'm calling it now.... AA will shrink PHL to around 250 daily departures (from the pre-COVID level of around 400). And it's not just because of this partnership with B6, but also because of DCA. Keep in mind that next year AA's new commuter terminal (with its own Admiral's Club and 14 gates) opens up; and all of AA's gates will be connected airside. This will make connecting at DCA much, much easier. I looked up the destinations AA flies to out of PHL and DCA, and there are about 10 airports served from DCA and not PHL. And there are about two dozen destinations flown out of PHL which are not flown by AA out of DCA (and about half of those are cities beyond DCA's perimeter-rule). Of course, I am excluding the international destinations out of PHL. But this is where JFK steps in...

AA has always wanted to make JFK its TATL gateway, as the O&D traffic is much greater there than it is at PHL. But the slot restrictions there make it impossible to operate a functional hub out of the airport. Enter the partnership with B6. Which helps both AA and B6 deal with its biggest problem at JFK... Delta. Prior to this deal, AA could potentially offer its NYC customer base several TATL flights (as well as Latin/South America), but not many domestic options. While B6 could offer its NYC customer base several domestic and Carribean options, but no long-haul international options. On the other hand, DL can do both. But now with this, there is no need for AA or B6's NYC customer base to migrate over to DL to meet their unmet travel needs. AA can slap its code on B6's flights into/out of JFK, B6 can slap its code on AA's international flights, and you've now added connection feed on both airlines' metal to complement their O&D traffic. And that's how PHL becomes redundant. I think PHL's focus will be on cities north of Charlotte and east of Chicago, and to the major cities outside of that geographic area. I also think that it will still have TATL service year-round, like LHR/MAN/CDG/MAD, and probably seasonal service to the high-demand tourist destinations like DUB/BCN/FCO. But cities like EDI/AMS/BUD/PRG? I doubt it. Those will go to JFK.


DCA is significantly more expensive to operate from than PHL. Why would AA want to send connecting traffic through a more expensive station when PHL is already an option. In addition, how many of the connections are within the perimeter at PHL that aren’t sent to CLT? DCA O&D will always be prioritized but PHL’s traffic isn’t going anywhere.
 
chonetsao
Posts: 674
Joined: Sun Nov 06, 2005 3:55 pm

Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 2:53 pm

Nicknuzzii wrote:
DCA is significantly more expensive to operate from than PHL. Why would AA want to send connecting traffic through a more expensive station when PHL is already an option. In addition, how many of the connections are within the perimeter at PHL that aren’t sent to CLT? DCA O&D will always be prioritized but PHL’s traffic isn’t going anywhere.


What you said is absolutely correct in theory. And it makes perfect sense. However, in reality, airlines needs to consider a host of factors and minimise exposures.

Put it simply, DCA is an airport that ideally rely on O&D, but there is a limit to how many O&D traffic you can attract, and such traffic varies greatly by season and even time of the day. Even if the O&D is super efficient and maximises, there is a ceiling that airlines need to address.

I can't quote you any real numbers, but let us say overall the O&D traffic in DCA can meet 60% of the capacity in peak months and 45% in shoulder months. The airline has a system average of 80% seats occupied. However this airline work hard to improve yield on the O&D traffic, it still needs to address the missing seat holders of the 20% capacity in peak season and 35% of the shoulder season.

Airlines have ways to achieve this, the basic tools are: 1, downgauge the aircraft; 2, merge the frequencies or, 3, utilise the current network to sell connecting tickets.

To downgauge the aircrafts could work. But the said airline may already use regional heavy on the network from DCA. And further downgauge aircraft may compromise the cost structure and make profitable routes unprofitable. Merge the frequencies may make the schedule unattractive so that the O&D travellers may choose other airlines.

So the best tool left in hand is to utilise the network and sell as many connecting tickets as possible to reduce unsold seats and improve overall profitability even the tickets itself is loss making.

However, when you start to sell those connecting tickets, consider the overall passenger volume does not change greatly as the market is mature and the traffic volume is highly predictable, airlines realise that some other hubs may suffer as the would-be passengers would choose DCA instead of the other hub. Let us say the other hub PHL is cheaper to operate, multiple flights to many other stations DCA also serve. Maybe in the market you have 4 daily flights via PHL but only 2 daily via DCA. And if you are the airline executives, and your prime goal is to defend DCA market share as you know PHL is firmly in your hand, after considering all the points I made above, the obvious choice would be to cancel one frequency in PHL to make it 3 daily so that the traffic is maintained via DCA and improve the revenue for DCA routes.
 
MrPeanut
Posts: 166
Joined: Fri Nov 23, 2018 8:36 pm

Re: AA & B6 announce Northeast Partnershi

Wed Aug 05, 2020 3:25 pm

PSA727 wrote:
I'm calling it now.... AA will shrink PHL to around 250 daily departures (from the pre-COVID level of around 400). And it's not just because of this partnership with B6, but also because of DCA. Keep in mind that next year AA's new commuter terminal (with its own Admiral's Club and 14 gates) opens up; and all of AA's gates will be connected airside. This will make connecting at DCA much, much easier. I looked up the destinations AA flies to out of PHL and DCA, and there are about 10 airports served from DCA and not PHL. And there are about two dozen destinations flown out of PHL which are not flown by AA out of DCA (and about half of those are cities beyond DCA's perimeter-rule). Of course, I am excluding the international destinations out of PHL. But this is where JFK steps in...

AA has always wanted to make JFK its TATL gateway, as the O&D traffic is much greater there than it is at PHL. But the slot restrictions there make it impossible to operate a functional hub out of the airport. Enter the partnership with B6. Which helps both AA and B6 deal with its biggest problem at JFK... Delta. Prior to this deal, AA could potentially offer its NYC customer base several TATL flights (as well as Latin/South America), but not many domestic options. While B6 could offer its NYC customer base several domestic and Carribean options, but no long-haul international options. On the other hand, DL can do both. But now with this, there is no need for AA or B6's NYC customer base to migrate over to DL to meet their unmet travel needs. AA can slap its code on B6's flights into/out of JFK, B6 can slap its code on AA's international flights, and you've now added connection feed on both airlines' metal to complement their O&D traffic. And that's how PHL becomes redundant. I think PHL's focus will be on cities north of Charlotte and east of Chicago, and to the major cities outside of that geographic area. I also think that it will still have TATL service year-round, like LHR/MAN/CDG/MAD, and probably seasonal service to the high-demand tourist destinations like DUB/BCN/FCO. But cities like EDI/AMS/BUD/PRG? I doubt it. Those will go to JFK.


That philosophy is part of the reason why AA is in such a bad situation today. AA has FOUR hubs within 200 miles of each other. That is extremely inefficient and does not provide AA the scale they need at any one airport within that 200 miles radius. That is not how a profitable hub and spoke carrier operates. Compare that to UA and DL. Neither of those two carriers have that type of concentration as it relates to their hub structure, and hence, part of the reason their margins are better than AA.

Those four hubs cannibalize on each other. Yes, each of those four hubs may have unique niches or strengths to them, but the overall cannibalization and lack of scale hurts them. Because of this AA will not downsize PHL in favor of NYC. You will see the reductions come out of NYC, hence the reason for the partnership. It doesn’t mean AA won’t announce new routes out of JFK, but overall AA will shrink in NYC. AA is at a premium disadvantage at LGA and JFK lacks scale necessary for success. For further public evidence, I recommend reading the JetBlue earnings call transcript where it discusses the transferring of slots / gates from AA to B6 at LGA.

As a side note, AA faces that exact same situation out west as it relates to LAX & PHX. PHX is probably the better overall option financially but AA doesn’t want to let a market the size of LA go, so they struggled with the decision and opted to keep both.
 
DMPHL
Posts: 32
Joined: Sat Nov 04, 2017 6:33 pm

Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 3:36 pm

PSA727 wrote:
I'm calling it now.... AA will shrink PHL to around 250 daily departures (from the pre-COVID level of around 400). And it's not just because of this partnership with B6, but also because of DCA. Keep in mind that next year AA's new commuter terminal (with its own Admiral's Club and 14 gates) opens up; and all of AA's gates will be connected airside. This will make connecting at DCA much, much easier. I looked up the destinations AA flies to out of PHL and DCA, and there are about 10 airports served from DCA and not PHL. And there are about two dozen destinations flown out of PHL which are not flown by AA out of DCA (and about half of those are cities beyond DCA's perimeter-rule). Of course, I am excluding the international destinations out of PHL. But this is where JFK steps in...

AA has always wanted to make JFK its TATL gateway, as the O&D traffic is much greater there than it is at PHL. But the slot restrictions there make it impossible to operate a functional hub out of the airport. Enter the partnership with B6. Which helps both AA and B6 deal with its biggest problem at JFK... Delta. Prior to this deal, AA could potentially offer its NYC customer base several TATL flights (as well as Latin/South America), but not many domestic options. While B6 could offer its NYC customer base several domestic and Carribean options, but no long-haul international options. On the other hand, DL can do both. But now with this, there is no need for AA or B6's NYC customer base to migrate over to DL to meet their unmet travel needs. AA can slap its code on B6's flights into/out of JFK, B6 can slap its code on AA's international flights, and you've now added connection feed on both airlines' metal to complement their O&D traffic. And that's how PHL becomes redundant. I think PHL's focus will be on cities north of Charlotte and east of Chicago, and to the major cities outside of that geographic area. I also think that it will still have TATL service year-round, like LHR/MAN/CDG/MAD, and probably seasonal service to the high-demand tourist destinations like DUB/BCN/FCO. But cities like EDI/AMS/BUD/PRG? I doubt it. Those will go to JFK.


Aside from what others have said above re: operating costs and competition in the NYC market that can drive down yields in a way that makes connecting traffic unprofitable (a problem AA does not have in PHL), you're assuming that B6 is essentially turning itself wholesale into AA's regional feeder operation, which I imagine is certainly not going to be the case. B6 will probably agree to certain capacity that they will sell for connections to AA longhaul, but there is not a world in which the capacity B6 gives to feed AA flights is going to be able to turn JFK into a big TA gateway, especially for seasonal leisure destinations. That would make zero sense for B6.

The value to AA is some connecting feed to supplement O&D-heavy, high-yielding business-driven routes (LHR, GRU, the prospective TLV route), high-yielding premium seasonal routes (ATH, GIG, etc.), and a domestic network/earn-and-burn to offer its NY-based FFs, because it cannot cost-effectively replicate B6's or DL's regional/Caribbean/leisure network from NYC or BOS.
Last edited by DMPHL on Wed Aug 05, 2020 3:42 pm, edited 1 time in total.
 
Miamiairport
Posts: 694
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Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 3:41 pm

Even hubs focused on O&D traffic such as DCA and JFK need a certain amount of connections to fill planes, particularly on non peak business travel days. An seat empty is revenue foregone that will never be recovered. Running connecting flights into JFK was a money loser for AA hence the tie up with B6, which has sizable lower costs makes sense.
 
tphuang
Posts: 5325
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Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 3:49 pm

There are some legitimate reasons for questioning how well PHL will do the next couple of years. Right now, you basically have 2 domestic hubs along the East coast, because PHL is not an approved international gateway. Once slot waiver ends, they will have to end up flying as much out of DCA as possible or risk losing some very valuable slots. Given that PHL is not a constrained airport, the logical thing to do for AA would be running as many connections through DCA as possible. Clearly, CLT isn't going to lose any connections. So now, PHL is going to lose a portion of domestic connection, still have minimal international connection due to low TATL demands. On top of all of this, business demand in northeast will be minimal for a while.

Which means, they are going to have to fight off ULCC pressures to Florida from PHL with pure O&D. That's going to be a painful experience. And all of this assumes AA leases a decent chunk of its LGA slots/gates to B6, so won't need to fill those flights wiith connection traffic.
 
MLIAA
Posts: 157
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Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 4:48 pm

Even with the new regional terminal opening, DCA is still perimeter restricted AND is limited in capacity due to its single runway and the airport infrastructure itself. Profit margins at DCA are said to be among the best, probably better than PHL, but the airport wasn’t built to be a major connecting hub like PHL & CLT.

As for JFK, the B6 agreement has less to do with connections and more to do with JetBlue FFs in NYC. AA would rather sell TATL connections to a city like CLE or BUF and route it through PHL than split the revenue with B6 and route it through JFK. AA just wants the B6 loyals to earn and burn B6 miles on AA internationally, and that combined FF base gives them the edge over DL.
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MrPeanut
Posts: 166
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Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 5:38 pm

MLIAA wrote:
Even with the new regional terminal opening, DCA is still perimeter restricted AND is limited in capacity due to its single runway and the airport infrastructure itself. Profit margins at DCA are said to be among the best, probably better than PHL, but the airport wasn’t built to be a major connecting hub like PHL & CLT.


You hit the nail on the head. I don’t think people realize how much those perimeter restrictions hurt. In terms of margin, sure DCA is good, but limited.

Fun fact that will shock a lot of people.....SLC generates more local O&D revenue for DL than DCA generates for AA. Why? Well first and foremost, DL’s market share at SLC helps support relatively high fares in the market and garners the vast majority of the local O&D revenues. AA’s market share at DCA is only about 50% AND the market is further fragmented by BWI and IAD. The second reason is because there are no perimeter restrictions at SLC and therefore longer domestic routes and international routes can be supported at SLC but can’t at DCA.

It is easy to get lured into the trap of “a big metro area automatically prints money”. But it can be very deceiving until you drill into the details.
 
Cointrin330
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Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 8:27 pm

tphuang wrote:
There are some legitimate reasons for questioning how well PHL will do the next couple of years. Right now, you basically have 2 domestic hubs along the East coast, because PHL is not an approved international gateway. Once slot waiver ends, they will have to end up flying as much out of DCA as possible or risk losing some very valuable slots. Given that PHL is not a constrained airport, the logical thing to do for AA would be running as many connections through DCA as possible. Clearly, CLT isn't going to lose any connections. So now, PHL is going to lose a portion of domestic connection, still have minimal international connection due to low TATL demands. On top of all of this, business demand in northeast will be minimal for a while.

Which means, they are going to have to fight off ULCC pressures to Florida from PHL with pure O&D. That's going to be a painful experience. And all of this assumes AA leases a decent chunk of its LGA slots/gates to B6, so won't need to fill those flights wiith connection traffic.


You constantly bring up slot waivers, but at the moment, slots are plentiful everywhere and waivers are a non issue for the long foreseeable future. It could be years before slot waivers are an issue. PHL is absolutely an international gateway (BA for example operates several weekly flights right now to LHR). The issue is simply that, as others have said, AA has clusters of hubs in relative close proximity along the East Coast (PHL, DCA, CLT) and focus operations nearby (LGA, JFK, BOS, the latter sort of), a higher cost structure than B6. I would agree PHL will see further cuts for now, mainly due to the reduced demand for flying, and AA will only grow CLT and DFW at the moment, but slot waivers aren't the issue. B6 is in as much financial trouble as the Big 4. It needs AA less than AA needs B6 in these markets, but it is not immune to the tremendous strain the industry faces and its Q2 results illustrate it clearly.
 
tphuang
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Re: AA & B6 announce Northeast Partnership

Wed Aug 05, 2020 9:26 pm

Cointrin330 wrote:
tphuang wrote:
There are some legitimate reasons for questioning how well PHL will do the next couple of years. Right now, you basically have 2 domestic hubs along the East coast, because PHL is not an approved international gateway. Once slot waiver ends, they will have to end up flying as much out of DCA as possible or risk losing some very valuable slots. Given that PHL is not a constrained airport, the logical thing to do for AA would be running as many connections through DCA as possible. Clearly, CLT isn't going to lose any connections. So now, PHL is going to lose a portion of domestic connection, still have minimal international connection due to low TATL demands. On top of all of this, business demand in northeast will be minimal for a while.

Which means, they are going to have to fight off ULCC pressures to Florida from PHL with pure O&D. That's going to be a painful experience. And all of this assumes AA leases a decent chunk of its LGA slots/gates to B6, so won't need to fill those flights wiith connection traffic.


You constantly bring up slot waivers, but at the moment, slots are plentiful everywhere and waivers are a non issue for the long foreseeable future. It could be years before slot waivers are an issue. PHL is absolutely an international gateway (BA for example operates several weekly flights right now to LHR). The issue is simply that, as others have said, AA has clusters of hubs in relative close proximity along the East Coast (PHL, DCA, CLT) and focus operations nearby (LGA, JFK, BOS, the latter sort of), a higher cost structure than B6. I would agree PHL will see further cuts for now, mainly due to the reduced demand for flying, and AA will only grow CLT and DFW at the moment, but slot waivers aren't the issue. B6 is in as much financial trouble as the Big 4. It needs AA less than AA needs B6 in these markets, but it is not immune to the tremendous strain the industry faces and its Q2 results illustrate it clearly.


What I said there really has very little to do with B6. WN will be very hungry for DCA slots next year. And DOT loves WN. AA need to get themselves ready to operate a lot of flight out of DCA next year. I don't see any reason why DOT will allow slot waivers to last for years if there are carriers that want to operate more than what their slots allow for.

Back to the issue at hand, PHl is battling both DCA and CLT for connection flow down south. AA is prioritizing CLT ahead of the other 2. there is only so much total traffic heading in that direction. If PHL gets less connection flow, it will have to rely a lot more on O&D on price sensitive traffic to Florida.
 
PSA727
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Re: AA & B6 announce Northeast Partnership

Thu Aug 06, 2020 5:31 am

Cointrin330 wrote:

PHL will continue to see cuts due to COVID19 with planes and routes shifted to CLT and likely DCA, but the B6/AA partnership doesn't give AA something at JFK it didn't try previously. The two airlines interlined at JFK from 2006 until the AA/US merger.

What B6 and AA had a decade ago was nothing like what they are now proposing. There were only a select number of city pairs you could purchase on AA's website (and not all had to do with JFK, like DCA-BOS). They were all sold as B6 flights. And you earned a flat 500 miles per flight. There was no award redemption. No elite qualifying. And no code-sharing.


Some leisure markets served out of PHL to Europe could migrate to JFK, but I suspect the additional services AA will add at JFK will be business focused, and that leaves AMS and ZRH as open questions for AA at PHL and whether they are shifted to JFK (ZRH would be a shift back to JFK from where it operated almost continuously from 1987 to 2016). AMS is an even bigger business market now due to Brexit and can support additional service from NY even with DL/KL and UA firmly entrenched. I would not expect though that JFK breaks PHL and becomes the new AA TATL hub on the East Coast even with B6 feed. There are complexities in connecting between T5 and T8 (a jitney is the most you could expect, on the air side). It is still a hassle. AA has an uphill climb at JFK. A lot has not worked there. Hopefully though this time they get it right. AA's product is competitive and it has to retain and grow corporate sales to sustain any growth in NYC.

But doesn't shifting ZRH and AMS over to JFK reduce the viability of PHL being AA's main TATL gateway? Look at AA's announcement of JFK-ATH. Does it operate PHL-ATH as well? They were planning to operate ORD-ATH this summer, and I doubt they would have JFK/ORD/PHL-ATH. So which one would be cut, PHL or ORD? The main difference between PHL and JFK is the O&D traffic. It's much less at PHL, which is why they need so much connection feed for their TATL flights. But O&D traffic isn't just on the U.S.-side, it's also on the European-side. Who in Europe talks about going on holiday to Philly? As for the inonvenience of T5 and T8 at JFK. I would be shocked if there wasn't an airside connection shuttle between the two terminals. Which is exactly what AA does for its passengers coming off a regional flight at PHL's Terminal F and need to connect to a TATL flight out of Terminal A.
fly high, pay low...Germanwings!
 
PSA727
Posts: 850
Joined: Mon Feb 06, 2006 7:49 am

Re: AA & B6 announce Northeast Partnership

Thu Aug 06, 2020 6:16 am

DMPHL wrote:
PSA727 wrote:
Aside from what others have said above re: operating costs and competition in the NYC market that can drive down yields in a way that makes connecting traffic unprofitable (a problem AA does not have in PHL), you're assuming that B6 is essentially turning itself wholesale into AA's regional feeder operation, which I imagine is certainly not going to be the case. B6 will probably agree to certain capacity that they will sell for connections to AA longhaul, but there is not a world in which the capacity B6 gives to feed AA flights is going to be able to turn JFK into a big TA gateway, especially for seasonal leisure destinations. That would make zero sense for B6.

The value to AA is some connecting feed to supplement O&D-heavy, high-yielding business-driven routes (LHR, GRU, the prospective TLV route), high-yielding premium seasonal routes (ATH, GIG, etc.), and a domestic network/earn-and-burn to offer its NY-based FFs, because it cannot cost-effectively replicate B6's or DL's regional/Caribbean/leisure network from NYC or BOS.


From their press statement, I never got the impression that AA wants B6 to facilitate domestic connections for AA at JFK. But rather, to offer more domestic flight options for its NYC customer base, and to provide domestic feed for its intl long-haul flights (which it needs less of than a TATL flight into/out of PHL). Moreover, AA was nevr going to add South American or Asian flights out of PHL. IIRC, AA traditionally operates about 150 more departures out of PHL than at PHX. However, both stations handle the same amount of passengers. And that's because PHL had one of the highest regional-to-mainline flights ratio in AA's hub network, while PHX had one of the lowest. When I looked at AA's North American destinations out of PHL, only 4 of those airports had flights solely to PHL: ISP/ART/SWF/YOW. Every other one had service to CLT and/or ORD. And almost 70 of those stations also had service to DCA.

Now, I'm not saying PHL doesn't have relevance in AA's network. It does. Philly is one of the most populous metro areas in the U.S., and is bigger than Phoenix's metro area. And to connect people on AA between PMT/MHT/PVD - RIC/PHF/LEX, for example, PHL is the only functional option as CLT is too out of the way; and DCA is not an option. However, there is nothing unique about PHL when trying to connect people between PMT/MHT/PVD and ORF/CHS/SDF/IND/STL/ATL/MCI. So, maintaining 400+ flights out of PHL going forward? I'm not seeing it. Moreover, domestic flight reductions at PHL also means less connection feed for a bunch of TATL flights.
fly high, pay low...Germanwings!
 
Cointrin330
Posts: 2067
Joined: Sat Jul 16, 2016 12:23 pm

Re: AA & B6 announce Northeast Partnership

Thu Aug 06, 2020 12:00 pm

PSA727 wrote:
Cointrin330 wrote:

PHL will continue to see cuts due to COVID19 with planes and routes shifted to CLT and likely DCA, but the B6/AA partnership doesn't give AA something at JFK it didn't try previously. The two airlines interlined at JFK from 2006 until the AA/US merger.

What B6 and AA had a decade ago was nothing like what they are now proposing. There were only a select number of city pairs you could purchase on AA's website (and not all had to do with JFK, like DCA-BOS). They were all sold as B6 flights. And you earned a flat 500 miles per flight. There was no award redemption. No elite qualifying. And no code-sharing.


Some leisure markets served out of PHL to Europe could migrate to JFK, but I suspect the additional services AA will add at JFK will be business focused, and that leaves AMS and ZRH as open questions for AA at PHL and whether they are shifted to JFK (ZRH would be a shift back to JFK from where it operated almost continuously from 1987 to 2016). AMS is an even bigger business market now due to Brexit and can support additional service from NY even with DL/KL and UA firmly entrenched. I would not expect though that JFK breaks PHL and becomes the new AA TATL hub on the East Coast even with B6 feed. There are complexities in connecting between T5 and T8 (a jitney is the most you could expect, on the air side). It is still a hassle. AA has an uphill climb at JFK. A lot has not worked there. Hopefully though this time they get it right. AA's product is competitive and it has to retain and grow corporate sales to sustain any growth in NYC.

But doesn't shifting ZRH and AMS over to JFK reduce the viability of PHL being AA's main TATL gateway? Look at AA's announcement of JFK-ATH. Does it operate PHL-ATH as well? They were planning to operate ORD-ATH this summer, and I doubt they would have JFK/ORD/PHL-ATH. So which one would be cut, PHL or ORD? The main difference between PHL and JFK is the O&D traffic. It's much less at PHL, which is why they need so much connection feed for their TATL flights. But O&D traffic isn't just on the U.S.-side, it's also on the European-side. Who in Europe talks about going on holiday to Philly? As for the inonvenience of T5 and T8 at JFK. I would be shocked if there wasn't an airside connection shuttle between the two terminals. Which is exactly what AA does for its passengers coming off a regional flight at PHL's Terminal F and need to connect to a TATL flight out of Terminal A.


I would guess that AA will cut PHL-ATH if they really do launch JFK-ATH, but will retain ORD-ATH as it performed very well pre-COVID19. Rumor is that the ZRH route was not doing well out of PHL at all, as this is primarily a business route and so positioning it back to JFK makes a lot of sense, particularly now that AA has a much more competitive product to offer to ZRH out of NYC than it did when it pulled the flight and shifted it to PHL. The question though is whether AA will recapture the Credit Suisse and UBS contracts it had on the JFK-ZRH flight that helped to sustain it. AMS is also a business (and leisure in summer) destination, of course all outside COVID19. May be helpful for corporate contracts, assuming they recover, to also move it to JFK. PHL to Europe is likely over 60% leisure and the rest business. If AA is to shrink by 20% by 2022, PHL is a candidate for big cuts. DCA commands a higher premium, even though it is not a great connecting point, but AA can further use it the way DL does LGA. The TATL business out of PHL can still exist, with a lot of seasonal services, core Europe maintained (LHR, CDG, MAD) and more capacity shifted to CLT. The A332s are parked in long term storage and the A333s are retired. 787s were not yet the dominant aircraft at PHL for TATL before COVID19 hit. The AA and B6 partnership is indeed a much more evolved one than what existed previously and it is precisely that which puts PHL at risk of further cuts as some routes and flow will be rendered duplicative.
 
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lesfalls
Posts: 3374
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Re: AA & B6 announce Northeast Partnership

Thu Aug 06, 2020 5:34 pm

Cointrin330 wrote:
PSA727 wrote:
Cointrin330 wrote:

PHL will continue to see cuts due to COVID19 with planes and routes shifted to CLT and likely DCA, but the B6/AA partnership doesn't give AA something at JFK it didn't try previously. The two airlines interlined at JFK from 2006 until the AA/US merger.

What B6 and AA had a decade ago was nothing like what they are now proposing. There were only a select number of city pairs you could purchase on AA's website (and not all had to do with JFK, like DCA-BOS). They were all sold as B6 flights. And you earned a flat 500 miles per flight. There was no award redemption. No elite qualifying. And no code-sharing.


Some leisure markets served out of PHL to Europe could migrate to JFK, but I suspect the additional services AA will add at JFK will be business focused, and that leaves AMS and ZRH as open questions for AA at PHL and whether they are shifted to JFK (ZRH would be a shift back to JFK from where it operated almost continuously from 1987 to 2016). AMS is an even bigger business market now due to Brexit and can support additional service from NY even with DL/KL and UA firmly entrenched. I would not expect though that JFK breaks PHL and becomes the new AA TATL hub on the East Coast even with B6 feed. There are complexities in connecting between T5 and T8 (a jitney is the most you could expect, on the air side). It is still a hassle. AA has an uphill climb at JFK. A lot has not worked there. Hopefully though this time they get it right. AA's product is competitive and it has to retain and grow corporate sales to sustain any growth in NYC.

But doesn't shifting ZRH and AMS over to JFK reduce the viability of PHL being AA's main TATL gateway? Look at AA's announcement of JFK-ATH. Does it operate PHL-ATH as well? They were planning to operate ORD-ATH this summer, and I doubt they would have JFK/ORD/PHL-ATH. So which one would be cut, PHL or ORD? The main difference between PHL and JFK is the O&D traffic. It's much less at PHL, which is why they need so much connection feed for their TATL flights. But O&D traffic isn't just on the U.S.-side, it's also on the European-side. Who in Europe talks about going on holiday to Philly? As for the inonvenience of T5 and T8 at JFK. I would be shocked if there wasn't an airside connection shuttle between the two terminals. Which is exactly what AA does for its passengers coming off a regional flight at PHL's Terminal F and need to connect to a TATL flight out of Terminal A.


I would guess that AA will cut PHL-ATH if they really do launch JFK-ATH, but will retain ORD-ATH as it performed very well pre-COVID19. Rumor is that the ZRH route was not doing well out of PHL at all, as this is primarily a business route and so positioning it back to JFK makes a lot of sense, particularly now that AA has a much more competitive product to offer to ZRH out of NYC than it did when it pulled the flight and shifted it to PHL. The question though is whether AA will recapture the Credit Suisse and UBS contracts it had on the JFK-ZRH flight that helped to sustain it. AMS is also a business (and leisure in summer) destination, of course all outside COVID19. May be helpful for corporate contracts, assuming they recover, to also move it to JFK. PHL to Europe is likely over 60% leisure and the rest business. If AA is to shrink by 20% by 2022, PHL is a candidate for big cuts. DCA commands a higher premium, even though it is not a great connecting point, but AA can further use it the way DL does LGA. The TATL business out of PHL can still exist, with a lot of seasonal services, core Europe maintained (LHR, CDG, MAD) and more capacity shifted to CLT. The A332s are parked in long term storage and the A333s are retired. 787s were not yet the dominant aircraft at PHL for TATL before COVID19 hit. The AA and B6 partnership is indeed a much more evolved one than what existed previously and it is precisely that which puts PHL at risk of further cuts as some routes and flow will be rendered duplicative.



Off topic but how come did AA hold the Credit Suisse and UBS contracts or even DL? I would have expected LX to hold the contract as wouldn't it make sense since there base is ZRH and wouldn't solely require travel to JFK but many other UBS/Credit Suisse offices all over the world.
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Cointrin330
Posts: 2067
Joined: Sat Jul 16, 2016 12:23 pm

Re: AA & B6 announce Northeast Partnership

Thu Aug 06, 2020 5:41 pm

lesfalls wrote:
Cointrin330 wrote:
PSA727 wrote:
What B6 and AA had a decade ago was nothing like what they are now proposing. There were only a select number of city pairs you could purchase on AA's website (and not all had to do with JFK, like DCA-BOS). They were all sold as B6 flights. And you earned a flat 500 miles per flight. There was no award redemption. No elite qualifying. And no code-sharing.
But doesn't shifting ZRH and AMS over to JFK reduce the viability of PHL being AA's main TATL gateway? Look at AA's announcement of JFK-ATH. Does it operate PHL-ATH as well? They were planning to operate ORD-ATH this summer, and I doubt they would have JFK/ORD/PHL-ATH. So which one would be cut, PHL or ORD? The main difference between PHL and JFK is the O&D traffic. It's much less at PHL, which is why they need so much connection feed for their TATL flights. But O&D traffic isn't just on the U.S.-side, it's also on the European-side. Who in Europe talks about going on holiday to Philly? As for the inonvenience of T5 and T8 at JFK. I would be shocked if there wasn't an airside connection shuttle between the two terminals. Which is exactly what AA does for its passengers coming off a regional flight at PHL's Terminal F and need to connect to a TATL flight out of Terminal A.


I would guess that AA will cut PHL-ATH if they really do launch JFK-ATH, but will retain ORD-ATH as it performed very well pre-COVID19. Rumor is that the ZRH route was not doing well out of PHL at all, as this is primarily a business route and so positioning it back to JFK makes a lot of sense, particularly now that AA has a much more competitive product to offer to ZRH out of NYC than it did when it pulled the flight and shifted it to PHL. The question though is whether AA will recapture the Credit Suisse and UBS contracts it had on the JFK-ZRH flight that helped to sustain it. AMS is also a business (and leisure in summer) destination, of course all outside COVID19. May be helpful for corporate contracts, assuming they recover, to also move it to JFK. PHL to Europe is likely over 60% leisure and the rest business. If AA is to shrink by 20% by 2022, PHL is a candidate for big cuts. DCA commands a higher premium, even though it is not a great connecting point, but AA can further use it the way DL does LGA. The TATL business out of PHL can still exist, with a lot of seasonal services, core Europe maintained (LHR, CDG, MAD) and more capacity shifted to CLT. The A332s are parked in long term storage and the A333s are retired. 787s were not yet the dominant aircraft at PHL for TATL before COVID19 hit. The AA and B6 partnership is indeed a much more evolved one than what existed previously and it is precisely that which puts PHL at risk of further cuts as some routes and flow will be rendered duplicative.



Off topic but how come did AA hold the Credit Suisse and UBS contracts or even DL? I would have expected LX to hold the contract as wouldn't it make sense since there base is ZRH and wouldn't solely require travel to JFK but many other UBS/Credit Suisse offices all over the world.


For originating US travel likely. The CEO of Credit Suisse at the time was an American and in the early to mid-2000s, as Swissair failed and was resurrected as Swiss, contracts may have been changed. UBS (not sure about CS) were left holding some of the bag as it related to the Swissair collapse so travel credits and discounts were likely not going to help them recoup. Also, UBS and CS had (and still do) massive footprints in London and probably selected AA/BA as their carriers of choice then to maximize the benefits so it would stand to reason that the AA 64/65 JFK-ZRH-JFK flight was a factor in them giving AA the biz. AA/BA are the biggest operator between NY and London in terms of seats, frequency, etc..
 
panamair
Posts: 4343
Joined: Fri Oct 12, 2001 2:24 am

Re: AA & B6 announce Northeast Partnership

Thu Aug 06, 2020 5:57 pm

lesfalls wrote:
Cointrin330 wrote:
PSA727 wrote:
What B6 and AA had a decade ago was nothing like what they are now proposing. There were only a select number of city pairs you could purchase on AA's website (and not all had to do with JFK, like DCA-BOS). They were all sold as B6 flights. And you earned a flat 500 miles per flight. There was no award redemption. No elite qualifying. And no code-sharing.
But doesn't shifting ZRH and AMS over to JFK reduce the viability of PHL being AA's main TATL gateway? Look at AA's announcement of JFK-ATH. Does it operate PHL-ATH as well? They were planning to operate ORD-ATH this summer, and I doubt they would have JFK/ORD/PHL-ATH. So which one would be cut, PHL or ORD? The main difference between PHL and JFK is the O&D traffic. It's much less at PHL, which is why they need so much connection feed for their TATL flights. But O&D traffic isn't just on the U.S.-side, it's also on the European-side. Who in Europe talks about going on holiday to Philly? As for the inonvenience of T5 and T8 at JFK. I would be shocked if there wasn't an airside connection shuttle between the two terminals. Which is exactly what AA does for its passengers coming off a regional flight at PHL's Terminal F and need to connect to a TATL flight out of Terminal A.


I would guess that AA will cut PHL-ATH if they really do launch JFK-ATH, but will retain ORD-ATH as it performed very well pre-COVID19. Rumor is that the ZRH route was not doing well out of PHL at all, as this is primarily a business route and so positioning it back to JFK makes a lot of sense, particularly now that AA has a much more competitive product to offer to ZRH out of NYC than it did when it pulled the flight and shifted it to PHL. The question though is whether AA will recapture the Credit Suisse and UBS contracts it had on the JFK-ZRH flight that helped to sustain it. AMS is also a business (and leisure in summer) destination, of course all outside COVID19. May be helpful for corporate contracts, assuming they recover, to also move it to JFK. PHL to Europe is likely over 60% leisure and the rest business. If AA is to shrink by 20% by 2022, PHL is a candidate for big cuts. DCA commands a higher premium, even though it is not a great connecting point, but AA can further use it the way DL does LGA. The TATL business out of PHL can still exist, with a lot of seasonal services, core Europe maintained (LHR, CDG, MAD) and more capacity shifted to CLT. The A332s are parked in long term storage and the A333s are retired. 787s were not yet the dominant aircraft at PHL for TATL before COVID19 hit. The AA and B6 partnership is indeed a much more evolved one than what existed previously and it is precisely that which puts PHL at risk of further cuts as some routes and flow will be rendered duplicative.



Off topic but how come did AA hold the Credit Suisse and UBS contracts or even DL? I would have expected LX to hold the contract as wouldn't it make sense since there base is ZRH and wouldn't solely require travel to JFK but many other UBS/Credit Suisse offices all over the world.


Large banks like UBS don’t have an exclusive contract with just one carrier. Right now, LX and DL both have contracts with UBS for example. The Swiss-based guys usually fly Swiss while a lot of the US-based UBS staff would also fly Delta etc.
 
Ishrion
Posts: 2937
Joined: Mon Feb 04, 2019 6:17 am

Re: AA & B6 announce Northeast Partnership

Sat Sep 19, 2020 7:27 pm

Delta's obviously unhappy with this partnership. In a document filed yesterday responding to JetBlue's statement for four daily London Heathrow slots (which was in response to Aer Lingus' application for joining the AA/IB/BA/AY TATL JV), Delta bashed JetBlue's London plans and American/JetBlue's partnership:

In JetBlue's first response to Aer Lingus' request to join the TATL JV, JetBlue ended up discussing about allocating four daily London Heathrow slot pairs to them.

However, Delta noted this response and said if the American/JetBlue partnership receives approval, JetBlue should not be allowed to receive any Heathrow remedy slots.

Delta's key points of reasoning:
- "JetBlue Will No Longer Be a Competitor to American and the oneworld JV"
- "JetBlue’s Answer Itself Reveals JetBlue’s Lack of Independence from American/oneworld"
- "Because JetBlue Will No Longer Be a Competitor to American, It Should Be Disqualified from Receiving Any Heathrow Remedy Slots"

Delta also referenced JetBlue's recent announcement of 24 new routes, stating " JetBlue does not intend to exert competitive discipline on its new ally, American"

The prospective alliance partners’ formation of an “integrated network” is already underway. JetBlue’s recent schedule loads for new service from JFK and Boston indicate that JetBlue is already designing its network to complement rather than compete with American’s. On September 10, JetBlue announced that it will launch 24 new routes later this year in markets with “strengthened demand potential.”13 Of those 24 routes, nine overlap with service provided by United in 2019, and seven overlap with Delta. Remarkably, only one of those 24 new routes overlap with service that was offered by American.14 This is hardly a coincidence. JetBlue’s recent network moves offer strong evidence that JetBlue does not intend to exert competitive discipline on its new ally, American. Instead, pursuant to their alliance, JetBlue and American will tacitly divide up the domestic beyond markets that they will serve from the Boston and New York JFK transatlantic gateways.


In Delta's conclusion paragraph, they called this partnership "JetBlue’s de facto merger with American"

Document OST-2008-0252-3449
 
JoseSalazar
Posts: 252
Joined: Mon Oct 14, 2019 3:18 am

Re: AA & B6 announce Northeast Partnership

Sat Sep 19, 2020 7:57 pm

Ishrion wrote:
Delta's obviously unhappy with this partnership. In a document filed yesterday responding to JetBlue's statement for four daily London Heathrow slots (which was in response to Aer Lingus' application for joining the AA/IB/BA/AY TATL JV), Delta bashed JetBlue's London plans and American/JetBlue's partnership:

In JetBlue's first response to Aer Lingus' request to join the TATL JV, JetBlue ended up discussing about allocating four daily London Heathrow slot pairs to them.

However, Delta noted this response and said if the American/JetBlue partnership receives approval, JetBlue should not be allowed to receive any Heathrow remedy slots.

Delta's key points of reasoning:
- "JetBlue Will No Longer Be a Competitor to American and the oneworld JV"
- "JetBlue’s Answer Itself Reveals JetBlue’s Lack of Independence from American/oneworld"
- "Because JetBlue Will No Longer Be a Competitor to American, It Should Be Disqualified from Receiving Any Heathrow Remedy Slots"

Delta also referenced JetBlue's recent announcement of 24 new routes, stating " JetBlue does not intend to exert competitive discipline on its new ally, American"

The prospective alliance partners’ formation of an “integrated network” is already underway. JetBlue’s recent schedule loads for new service from JFK and Boston indicate that JetBlue is already designing its network to complement rather than compete with American’s. On September 10, JetBlue announced that it will launch 24 new routes later this year in markets with “strengthened demand potential.”13 Of those 24 routes, nine overlap with service provided by United in 2019, and seven overlap with Delta. Remarkably, only one of those 24 new routes overlap with service that was offered by American.14 This is hardly a coincidence. JetBlue’s recent network moves offer strong evidence that JetBlue does not intend to exert competitive discipline on its new ally, American. Instead, pursuant to their alliance, JetBlue and American will tacitly divide up the domestic beyond markets that they will serve from the Boston and New York JFK transatlantic gateways.


In Delta's conclusion paragraph, they called this partnership "JetBlue’s de facto merger with American"

Document OST-2008-0252-3449

I don't think that argument is gonna hold up very well. AA/B6 continue to compete on a lot of routes despite the partnership, and the transatlantic routes are specifically excluded from the codeshare. Furthermore, the partnership is limited to a codeshare, and therefore is neither a revenue sharing nor price/schedule collaborating/colluding partnership. I think that has been made pretty clear, and LHR slots have nothing to do with the AA/B6 partnership. I think Delta is really reaching here, especially with as big as their delta centric JVs and foreign airline ownership have become, in which there is actual revenue sharing and price/schedule collaboration. But they have a problem with AA/B6 as it relates to LHR when they aren't even in a simple codeshare on that route? Yeah, good luck with that.
 
tphuang
Posts: 5325
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sat Sep 19, 2020 10:03 pm

Ishrion wrote:
Delta's obviously unhappy with this partnership. In a document filed yesterday responding to JetBlue's statement for four daily London Heathrow slots (which was in response to Aer Lingus' application for joining the AA/IB/BA/AY TATL JV), Delta bashed JetBlue's London plans and American/JetBlue's partnership:

In JetBlue's first response to Aer Lingus' request to join the TATL JV, JetBlue ended up discussing about allocating four daily London Heathrow slot pairs to them.

However, Delta noted this response and said if the American/JetBlue partnership receives approval, JetBlue should not be allowed to receive any Heathrow remedy slots.

Delta's key points of reasoning:
- "JetBlue Will No Longer Be a Competitor to American and the oneworld JV"
- "JetBlue’s Answer Itself Reveals JetBlue’s Lack of Independence from American/oneworld"
- "Because JetBlue Will No Longer Be a Competitor to American, It Should Be Disqualified from Receiving Any Heathrow Remedy Slots"

Delta also referenced JetBlue's recent announcement of 24 new routes, stating " JetBlue does not intend to exert competitive discipline on its new ally, American"

The prospective alliance partners’ formation of an “integrated network” is already underway. JetBlue’s recent schedule loads for new service from JFK and Boston indicate that JetBlue is already designing its network to complement rather than compete with American’s. On September 10, JetBlue announced that it will launch 24 new routes later this year in markets with “strengthened demand potential.”13 Of those 24 routes, nine overlap with service provided by United in 2019, and seven overlap with Delta. Remarkably, only one of those 24 new routes overlap with service that was offered by American.14 This is hardly a coincidence. JetBlue’s recent network moves offer strong evidence that JetBlue does not intend to exert competitive discipline on its new ally, American. Instead, pursuant to their alliance, JetBlue and American will tacitly divide up the domestic beyond markets that they will serve from the Boston and New York JFK transatlantic gateways.


In Delta's conclusion paragraph, they called this partnership "JetBlue’s de facto merger with American"

Document OST-2008-0252-3449


DL's argument here is quite weak. The fact that JetBlue is looking to add LHR service to compete against AA supports additional competition here. The "de facto merger" part is laughable when the partnership only includes NYC/Boston. And conveniently forgets to mention all the routes JetBlue added in their earliest expansion announcement that competed with AA.

Not a surprise DL is pissed off here, but they could've avoided all these AA partnership if they didn't make their own aggressive moves teaming up with Latam, invading Seattle and Boston. I doubt JetBlue would have been getting in partnership with AA if DL didn't make such an aggressive push in Boston. And now, DL is going to face a lot more pressure in NYC. You reap what you sow.

I think this is a first look at DL and UA's objections to the B6 and AA partnership fling. Expect both carriers and others to ask for slots to be made available. Imo, UA is getting hurt even more by this partnership given the B6 buildup in EWR. There will be a lot of people in NJ and Eastern/Central PA who will now have more reason to switch allegiance from UA to AA if they can fly out of both EWR and PHL.
 
N649DL
Posts: 987
Joined: Sat Aug 25, 2018 10:21 pm

Re: AA & B6 announce Northeast Partnership

Sat Sep 19, 2020 10:37 pm

I don't have a dog in this fight, but I will say this could be AA trying to make the most of it's extremely underrated terminal (and relatively new) in the NYC market. It's about time. IMHO, T8 at JFK makes UA's at EWR look like a dogs*it in terms of design. IMHO, I just don't like Terminal C in general by comparison. DL is gonna be fine at JFK/LGA/EWR no matter what.
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sat Sep 19, 2020 11:33 pm

tphuang wrote:
Ishrion wrote:
Delta's obviously unhappy with this partnership. In a document filed yesterday responding to JetBlue's statement for four daily London Heathrow slots (which was in response to Aer Lingus' application for joining the AA/IB/BA/AY TATL JV), Delta bashed JetBlue's London plans and American/JetBlue's partnership:

In JetBlue's first response to Aer Lingus' request to join the TATL JV, JetBlue ended up discussing about allocating four daily London Heathrow slot pairs to them.

However, Delta noted this response and said if the American/JetBlue partnership receives approval, JetBlue should not be allowed to receive any Heathrow remedy slots.

Delta's key points of reasoning:
- "JetBlue Will No Longer Be a Competitor to American and the oneworld JV"
- "JetBlue’s Answer Itself Reveals JetBlue’s Lack of Independence from American/oneworld"
- "Because JetBlue Will No Longer Be a Competitor to American, It Should Be Disqualified from Receiving Any Heathrow Remedy Slots"

Delta also referenced JetBlue's recent announcement of 24 new routes, stating " JetBlue does not intend to exert competitive discipline on its new ally, American"

The prospective alliance partners’ formation of an “integrated network” is already underway. JetBlue’s recent schedule loads for new service from JFK and Boston indicate that JetBlue is already designing its network to complement rather than compete with American’s. On September 10, JetBlue announced that it will launch 24 new routes later this year in markets with “strengthened demand potential.”13 Of those 24 routes, nine overlap with service provided by United in 2019, and seven overlap with Delta. Remarkably, only one of those 24 new routes overlap with service that was offered by American.14 This is hardly a coincidence. JetBlue’s recent network moves offer strong evidence that JetBlue does not intend to exert competitive discipline on its new ally, American. Instead, pursuant to their alliance, JetBlue and American will tacitly divide up the domestic beyond markets that they will serve from the Boston and New York JFK transatlantic gateways.


In Delta's conclusion paragraph, they called this partnership "JetBlue’s de facto merger with American"

Document OST-2008-0252-3449


DL's argument here is quite weak. The fact that JetBlue is looking to add LHR service to compete against AA supports additional competition here. The "de facto merger" part is laughable when the partnership only includes NYC/Boston. And conveniently forgets to mention all the routes JetBlue added in their earliest expansion announcement that competed with AA.

Not a surprise DL is pissed off here, but they could've avoided all these AA partnership if they didn't make their own aggressive moves teaming up with Latam, invading Seattle and Boston. I doubt JetBlue would have been getting in partnership with AA if DL didn't make such an aggressive push in Boston. And now, DL is going to face a lot more pressure in NYC. You reap what you sow.

I think this is a first look at DL and UA's objections to the B6 and AA partnership fling. Expect both carriers and others to ask for slots to be made available. Imo, UA is getting hurt even more by this partnership given the B6 buildup in EWR. There will be a lot of people in NJ and Eastern/Central PA who will now have more reason to switch allegiance from UA to AA if they can fly out of both EWR and PHL.



Delta's expansion in Boston and NY has been under its own volition, responding to competitive pressure. Never did they forge an alliance with another carrier to gain dominance in those markets. Delta's argument here is strong, given the fact that the majority of JetBlue IS Boston and NY. American and JetBlue are skillfully using the pandemic backdrop of the alliance to tame capacity, expand where they each do not fly, while then considering themselves as separate entities in the international arena. (?)
 
tphuang
Posts: 5325
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:09 am

TYWoolman wrote:
tphuang wrote:
Ishrion wrote:
Delta's obviously unhappy with this partnership. In a document filed yesterday responding to JetBlue's statement for four daily London Heathrow slots (which was in response to Aer Lingus' application for joining the AA/IB/BA/AY TATL JV), Delta bashed JetBlue's London plans and American/JetBlue's partnership:

In JetBlue's first response to Aer Lingus' request to join the TATL JV, JetBlue ended up discussing about allocating four daily London Heathrow slot pairs to them.

However, Delta noted this response and said if the American/JetBlue partnership receives approval, JetBlue should not be allowed to receive any Heathrow remedy slots.

Delta's key points of reasoning:
- "JetBlue Will No Longer Be a Competitor to American and the oneworld JV"
- "JetBlue’s Answer Itself Reveals JetBlue’s Lack of Independence from American/oneworld"
- "Because JetBlue Will No Longer Be a Competitor to American, It Should Be Disqualified from Receiving Any Heathrow Remedy Slots"

Delta also referenced JetBlue's recent announcement of 24 new routes, stating " JetBlue does not intend to exert competitive discipline on its new ally, American"



In Delta's conclusion paragraph, they called this partnership "JetBlue’s de facto merger with American"

Document OST-2008-0252-3449


DL's argument here is quite weak. The fact that JetBlue is looking to add LHR service to compete against AA supports additional competition here. The "de facto merger" part is laughable when the partnership only includes NYC/Boston. And conveniently forgets to mention all the routes JetBlue added in their earliest expansion announcement that competed with AA.

Not a surprise DL is pissed off here, but they could've avoided all these AA partnership if they didn't make their own aggressive moves teaming up with Latam, invading Seattle and Boston. I doubt JetBlue would have been getting in partnership with AA if DL didn't make such an aggressive push in Boston. And now, DL is going to face a lot more pressure in NYC. You reap what you sow.

I think this is a first look at DL and UA's objections to the B6 and AA partnership fling. Expect both carriers and others to ask for slots to be made available. Imo, UA is getting hurt even more by this partnership given the B6 buildup in EWR. There will be a lot of people in NJ and Eastern/Central PA who will now have more reason to switch allegiance from UA to AA if they can fly out of both EWR and PHL.



Delta's expansion in Boston and NY has been under its own volition, responding to competitive pressure. Never did they forge an alliance with another carrier to gain dominance in those markets. Delta's argument here is strong, given the fact that the majority of JetBlue IS Boston and NY. American and JetBlue are skillfully using the pandemic backdrop of the alliance to tame capacity, expand where they each do not fly, while then considering themselves as separate entities in the international arena. (?)

DL didn't have to expand in Boston or Miami or Seattle. It did it because it likes to invade other airlines' backyard. Now those airlines are teaming up to fight back and it's complaining. Maybe it shouldn't have been bullying weaker airlines?

Jetblue has added around 60 routes since pandemic started. Do you want to guess how many of them passes through Boston? Do you want to look at how many of those routes competes with AA? Do you want to see how many of those completely skips both New York and LA. Calling it de facto merger is complete bs.

Even if we ignore the fact that code sharing and JVs are completely different things and that AS/AA have a far more integrated relationship. The very fact that LGA/JFK slots will be operated JetBlue mainline instead of AA 50 seaters means that capacity will be increased and not tamed. Delta knows this. It knows its yield at LGA and JFK are going to crash. That's great for competition and consumers.

So if AA and B6 have de facto merger? What's AA and AS relationship then? Is B6 and AS also in a merger?
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:29 am

Anyone with link to Delta's objection?
Last edited by TYWoolman on Sun Sep 20, 2020 12:30 am, edited 1 time in total.
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:30 am

tphuang wrote:
TYWoolman wrote:
tphuang wrote:

DL's argument here is quite weak. The fact that JetBlue is looking to add LHR service to compete against AA supports additional competition here. The "de facto merger" part is laughable when the partnership only includes NYC/Boston. And conveniently forgets to mention all the routes JetBlue added in their earliest expansion announcement that competed with AA.

Not a surprise DL is pissed off here, but they could've avoided all these AA partnership if they didn't make their own aggressive moves teaming up with Latam, invading Seattle and Boston. I doubt JetBlue would have been getting in partnership with AA if DL didn't make such an aggressive push in Boston. And now, DL is going to face a lot more pressure in NYC. You reap what you sow.

I think this is a first look at DL and UA's objections to the B6 and AA partnership fling. Expect both carriers and others to ask for slots to be made available. Imo, UA is getting hurt even more by this partnership given the B6 buildup in EWR. There will be a lot of people in NJ and Eastern/Central PA who will now have more reason to switch allegiance from UA to AA if they can fly out of both EWR and PHL.



Delta's expansion in Boston and NY has been under its own volition, responding to competitive pressure. Never did they forge an alliance with another carrier to gain dominance in those markets. Delta's argument here is strong, given the fact that the majority of JetBlue IS Boston and NY. American and JetBlue are skillfully using the pandemic backdrop of the alliance to tame capacity, expand where they each do not fly, while then considering themselves as separate entities in the international arena. (?)

DL didn't have to expand in Boston or Miami or Seattle. It did it because it likes to invade other airlines' backyard. Now those airlines are teaming up to fight back and it's complaining. Maybe it shouldn't have been bullying weaker airlines?

Jetblue has added around 60 routes since pandemic started. Do you want to guess how many of them passes through Boston? Do you want to look at how many of those routes competes with AA? Do you want to see how many of those completely skips both New York and LA. Calling it de facto merger is complete bs.

Even if we ignore the fact that code sharing and JVs are completely different things and that AS/AA have a far more integrated relationship. The very fact that LGA/JFK slots will be operated JetBlue mainline instead of AA 50 seaters means that capacity will be increased and not tamed. Delta knows this. It knows its yield at LGA and JFK are going to crash. That's great for competition and consumers.

So if AA and B6 have de facto merger? What's AA and AS relationship then? Is B6 and AS also in a merger?


On a level-playing field American couldn't compete in Boston or NYC. This alliance (while not necessarily prohibitive) is a dirty move amid the pandemic to leverage itself where normally it could not. Delta has and will be using all of its own domestic resources to compete in the domestic cities you mentioned. With a dwindling industry landscape on top of the pandemic, this IS a de facto merger, especially when no shareholder or union would ever contemplate a merger when survival itself is so paramount.
 
tphuang
Posts: 5325
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:40 am

TYWoolman wrote:
tphuang wrote:
TYWoolman wrote:


Delta's expansion in Boston and NY has been under its own volition, responding to competitive pressure. Never did they forge an alliance with another carrier to gain dominance in those markets. Delta's argument here is strong, given the fact that the majority of JetBlue IS Boston and NY. American and JetBlue are skillfully using the pandemic backdrop of the alliance to tame capacity, expand where they each do not fly, while then considering themselves as separate entities in the international arena. (?)

DL didn't have to expand in Boston or Miami or Seattle. It did it because it likes to invade other airlines' backyard. Now those airlines are teaming up to fight back and it's complaining. Maybe it shouldn't have been bullying weaker airlines?

Jetblue has added around 60 routes since pandemic started. Do you want to guess how many of them passes through Boston? Do you want to look at how many of those routes competes with AA? Do you want to see how many of those completely skips both New York and LA. Calling it de facto merger is complete bs.

Even if we ignore the fact that code sharing and JVs are completely different things and that AS/AA have a far more integrated relationship. The very fact that LGA/JFK slots will be operated JetBlue mainline instead of AA 50 seaters means that capacity will be increased and not tamed. Delta knows this. It knows its yield at LGA and JFK are going to crash. That's great for competition and consumers.

So if AA and B6 have de facto merger? What's AA and AS relationship then? Is B6 and AS also in a merger?


On a level-playing field American couldn't compete in Boston or NYC. This alliance (while not necessarily prohibitive) is a dirty move amid the pandemic to leverage itself where normally it could not. Delta has and will be using all of its own domestic resources to compete in the domestic cities you mentioned. With a dwindling industry landscape on top of the pandemic, this IS a de facto merger, especially when no shareholder or union would even contemplate a merger when survival is paramount.


This partnership is supposed to last at least 7 years. So why don't you stop using pandemic as an excuse to call this a de facto merger. Is any major airline on the verge of collapsing? No.

In de fact mergers, JetBlue would not be competing this much against AA in its 3rd and 4th more important focus city. In de facto mergers, JetBlue would not be competing against AA on so many routes even out of JFK/BOS, including JFK-LAX, it's far and away the most important route.

Do you want to count how many of those 60 new routes they announced are not covered under this partnership?

For an airline that relies so much on its JV partners for its international stuff, which is a big part of its flying out of SEA/LAX/BOS/JFK, you and Delta sure are complaining a lot about other airlines cooperating a little bit that don't even involve JV.

Again, if AA and B6 is in a de facto merger, what is AA and AS's relationship then? Their partnership are not limited to 2 cities. Are they in a full merger then? So by that logic, AS and B6 with zero partnership are in a de facto merger?
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:48 am

tphuang wrote:
TYWoolman wrote:
tphuang wrote:
DL didn't have to expand in Boston or Miami or Seattle. It did it because it likes to invade other airlines' backyard. Now those airlines are teaming up to fight back and it's complaining. Maybe it shouldn't have been bullying weaker airlines?

Jetblue has added around 60 routes since pandemic started. Do you want to guess how many of them passes through Boston? Do you want to look at how many of those routes competes with AA? Do you want to see how many of those completely skips both New York and LA. Calling it de facto merger is complete bs.

Even if we ignore the fact that code sharing and JVs are completely different things and that AS/AA have a far more integrated relationship. The very fact that LGA/JFK slots will be operated JetBlue mainline instead of AA 50 seaters means that capacity will be increased and not tamed. Delta knows this. It knows its yield at LGA and JFK are going to crash. That's great for competition and consumers.

So if AA and B6 have de facto merger? What's AA and AS relationship then? Is B6 and AS also in a merger?


On a level-playing field American couldn't compete in Boston or NYC. This alliance (while not necessarily prohibitive) is a dirty move amid the pandemic to leverage itself where normally it could not. Delta has and will be using all of its own domestic resources to compete in the domestic cities you mentioned. With a dwindling industry landscape on top of the pandemic, this IS a de facto merger, especially when no shareholder or union would even contemplate a merger when survival is paramount.


This partnership is supposed to last at least 7 years. So why don't you stop using pandemic as an excuse to call this a de facto merger. Is any major airline on the verge of collapsing? No.

In de fact mergers, JetBlue would not be competing this much against AA in its 3rd and 4th more important focus city. In de facto mergers, JetBlue would not be competing against AA on so many routes even out of JFK/BOS, including JFK-LAX, it's far and away the most important route.

Do you want to count how many of those 60 new routes they announced are not covered under this partnership?

For an airline that relies so much on its JV partners for its international stuff, which is a big part of its flying out of SEA/LAX/BOS/JFK, you and Delta sure are complaining a lot about other airlines cooperating a little bit that don't even involve JV.

Again, if AA and B6 is in a de facto merger, what is AA and AS's relationship then? Their partnership are not limited to 2 cities. Are they in a full merger then? So by that logic, AS and B6 with zero partnership are in a de facto merger?


It's not an excuse. The pandemic plays a key part in this only because the consequences of the partnership for approval cannot be fully realized until demand returns. Any alliance under that premise IMO is a de factor merger. Again, its not a prohibitive alliance per se as I mentioned, but sure is dirty. American knows it. And, of course, so does Delta. Furthermore, American has wedged itself between B6 and AS toward any potential natural progression in consolidation. This is a de facto merger under the current pandemic landscape on both sides of the coast.
 
tphuang
Posts: 5325
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 1:05 am

TYWoolman wrote:
tphuang wrote:
TYWoolman wrote:

On a level-playing field American couldn't compete in Boston or NYC. This alliance (while not necessarily prohibitive) is a dirty move amid the pandemic to leverage itself where normally it could not. Delta has and will be using all of its own domestic resources to compete in the domestic cities you mentioned. With a dwindling industry landscape on top of the pandemic, this IS a de facto merger, especially when no shareholder or union would even contemplate a merger when survival is paramount.


This partnership is supposed to last at least 7 years. So why don't you stop using pandemic as an excuse to call this a de facto merger. Is any major airline on the verge of collapsing? No.

In de fact mergers, JetBlue would not be competing this much against AA in its 3rd and 4th more important focus city. In de facto mergers, JetBlue would not be competing against AA on so many routes even out of JFK/BOS, including JFK-LAX, it's far and away the most important route.

Do you want to count how many of those 60 new routes they announced are not covered under this partnership?

For an airline that relies so much on its JV partners for its international stuff, which is a big part of its flying out of SEA/LAX/BOS/JFK, you and Delta sure are complaining a lot about other airlines cooperating a little bit that don't even involve JV.

Again, if AA and B6 is in a de facto merger, what is AA and AS's relationship then? Their partnership are not limited to 2 cities. Are they in a full merger then? So by that logic, AS and B6 with zero partnership are in a de facto merger?


It's not an excuse. The pandemic plays a key part in this only because the consequences of the partnership for approval cannot be fully realized until demand returns. Any alliance under that premise IMO is a de factor merger. Again, its not a prohibitive alliance per se as I mentioned, but sure is dirty. American knows it. And, of course, so does Delta. Furthermore, American has wedged itself between B6 and AS toward any potential natural progression in consolidation. This is a de facto merger under the current pandemic landscape on both sides of the coast.


Have you forgotten that DL and AS had their own code share and partnership even after DL had invaded SEA? Were they in a de facto merger? Based on your logic, since SEA is majority of AS's flying, DL and AS must have been in a de facto merger already right? Your other argument makes absolutely no sense.

If you want call it dirty move and alliance, that's your opinion, but at least it's arguable. Calling it a de facto merger is simply not accurate.

You know what's dirty? Invading profitable hubs off weaker airline, killing their margins by dumping capacity in markets that can't handle them and making them vulnerable to mergers. Do you think AS and B6 would be partnership up with AA if DL didn't push them to the brinks?
 
User avatar
FLL2go
Posts: 9
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 1:42 am

TYWoolman wrote:
Anyone with link to Delta's objection?


Delta's objection:
https://www.regulations.gov/document?D= ... -0252-3449

Jetblue's response:
https://www.regulations.gov/document?D= ... -0252-3448

Hope this helps
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 1:52 am

tphuang wrote:
TYWoolman wrote:
tphuang wrote:

This partnership is supposed to last at least 7 years. So why don't you stop using pandemic as an excuse to call this a de facto merger. Is any major airline on the verge of collapsing? No.

In de fact mergers, JetBlue would not be competing this much against AA in its 3rd and 4th more important focus city. In de facto mergers, JetBlue would not be competing against AA on so many routes even out of JFK/BOS, including JFK-LAX, it's far and away the most important route.

Do you want to count how many of those 60 new routes they announced are not covered under this partnership?

For an airline that relies so much on its JV partners for its international stuff, which is a big part of its flying out of SEA/LAX/BOS/JFK, you and Delta sure are complaining a lot about other airlines cooperating a little bit that don't even involve JV.

Again, if AA and B6 is in a de facto merger, what is AA and AS's relationship then? Their partnership are not limited to 2 cities. Are they in a full merger then? So by that logic, AS and B6 with zero partnership are in a de facto merger?


It's not an excuse. The pandemic plays a key part in this only because the consequences of the partnership for approval cannot be fully realized until demand returns. Any alliance under that premise IMO is a de factor merger. Again, its not a prohibitive alliance per se as I mentioned, but sure is dirty. American knows it. And, of course, so does Delta. Furthermore, American has wedged itself between B6 and AS toward any potential natural progression in consolidation. This is a de facto merger under the current pandemic landscape on both sides of the coast.


Have you forgotten that DL and AS had their own code share and partnership even after DL had invaded SEA? Were they in a de facto merger? Based on your logic, since SEA is majority of AS's flying, DL and AS must have been in a de facto merger already right? Your other argument makes absolutely no sense.

If you want call it dirty move and alliance, that's your opinion, but at least it's arguable. Calling it a de facto merger is simply not accurate.

You know what's dirty? Invading profitable hubs off weaker airline, killing their margins by dumping capacity in markets that can't handle them and making them vulnerable to mergers. Do you think AS and B6 would be partnership up with AA if DL didn't push them to the brinks?


AS has and is a strong viable airline. Furthermore, AA was pushed to the brinks and benefits more than AS and B6 in these partnerships. Each airline will leverage the alliance to expand further into markets where they do not compete against each other, especially given each other virtual domestic feed (codeshares) into new international markets when Delta and United must rely on their own resources. It's the nature of the partnership to do this in order to compete against Delta who built a system organically all the way, which is why as you've stated in the case of AA and B6 there is a 7 year limit (?) to appease the regulators. Guess how long many think the industry will need to recover? About that 7 year range. De facto merger taking into consideration the present climate. I hear your arguments, and all airlines play dirty, but leveraging the pandemic is as dirty as it gets, but fair game nonetheless.
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 1:53 am

FLL2go wrote:
TYWoolman wrote:
Anyone with link to Delta's objection?


Delta's objection:
https://www.regulations.gov/document?D= ... -0252-3449

Jetblue's response:
https://www.regulations.gov/document?D= ... -0252-3448

Hope this helps



Helps! Thank you!
 
MKIAZ
Posts: 279
Joined: Thu May 01, 2014 5:24 am

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 2:05 am

tphuang wrote:
You know what's dirty? Invading profitable hubs off weaker airline, killing their margins by dumping capacity in markets that can't handle them and making them vulnerable to mergers. Do you think AS and B6 would be partnership up with AA if DL didn't push them to the brinks?


I wouldn't say DL pushed them to the "brink". They were both profitable and respectable. DL was just doing with all the majors realize they have to do against the LCC's. They did it to NK/F9 by making basic economy. They have to keep them at a set growth rate and profit. If they allow them to be super profitable, they will grow faster and take more market share.

I firmly believe B6 took the deal because it was an amazing opportunity. B6 is WAAAAAY better positioned coming out of this because they rely mostly on leisure routes and more nonstops than the others and they have a significantly lower cost structure. AA needs them, not the other way around. In exchange for helping feed AA's international routes out of JFK, (A win) they're going to get to start poaching AA customers on all the other routes (another win) and it sounds like AA is going to start playing nice with them at LAX (another win).
 
TYWoolman
Posts: 617
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 3:19 am

FLL2go wrote:
TYWoolman wrote:
Anyone with link to Delta's objection?


Delta's objection:
https://www.regulations.gov/document?D= ... -0252-3449

Jetblue's response:
https://www.regulations.gov/document?D= ... -0252-3448

Hope this helps


Fascinating reads. Both with strong arguments, though JetBlue IMO failed to argue Delta's main contention that it's proposed "de facto" merger agreement with American truly passes the "independence" test. Furthermore, JetBlue wanting the 2010 slot allocation negated due to changing industry dynamics is just a distraction to the new current changing dynamic now on the table, specifically its own partnership with American. IMO Delta holds the winning argument because changing dynamics must take into account the latest dynamic which is the partnership itself. And even furthermore, as Delta argued, JetBlue is not requesting any Heathrow allocation from any ow member (as that would be going against JetBlue's new allies).
 
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RyanairGuru
Posts: 8420
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 4:57 am

TYWoolman wrote:
FLL2go wrote:
TYWoolman wrote:
Anyone with link to Delta's objection?


Delta's objection:
https://www.regulations.gov/document?D= ... -0252-3449

Jetblue's response:
https://www.regulations.gov/document?D= ... -0252-3448

Hope this helps


Fascinating reads. Both with strong arguments, though JetBlue IMO failed to argue Delta's main contention that it's proposed "de facto" merger agreement with American truly passes the "independence" test. Furthermore, JetBlue wanting the 2010 slot allocation negated due to changing industry dynamics is just a distraction to the new current changing dynamic now on the table, specifically its own partnership with American. IMO Delta holds the winning argument because changing dynamics must take into account the latest dynamic which is the partnership itself. And even furthermore, as Delta argued, JetBlue is not requesting any Heathrow allocation from any ow member (as that would be going against JetBlue's new allies).


Delta does not have a "winning" argument because this proceeding has precisely nothing to do with the AA-B6 codeshare. I acknowledge that B6 started this by requesting remedy slots at LHR, but this is about whether an airline based in Dublin should be allowed to join an established JV. That has zero relevance to the US domestic market in NYC and BOS, and hasn't got much more relevance to the competitive environment at LHR. Both airlines petitions will be largely disregarded by the DOT are they are irrelevant to the matter in hand.

That said, I personally don't think B6 have much to respond to with the "de facto merger" comment. Just because an attorney for Delta thought it sounded cute, doesn't mean that is reflects the reality of the partnership. When B6 and AA apply for a domestic JV, that will be the time to discuss whether it is a "de facto merger", but that's never going to happen so forget it. UA-US and NW-CO are previous domestic codeshares that, while emerging on the back of previous merger discussions, were clearly two very independent airlines that ultimately went their own ways. AA-B6 isn't really any more significant than that.
Worked Hard, Flew Right
 
usflyer msp
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 4:58 am

TYWoolman wrote:
FLL2go wrote:
TYWoolman wrote:
Anyone with link to Delta's objection?


Delta's objection:
https://www.regulations.gov/document?D= ... -0252-3449

Jetblue's response:
https://www.regulations.gov/document?D= ... -0252-3448

Hope this helps


Fascinating reads. Both with strong arguments, though JetBlue IMO failed to argue Delta's main contention that it's proposed "de facto" merger agreement with American truly passes the "independence" test. Furthermore, JetBlue wanting the 2010 slot allocation negated due to changing industry dynamics is just a distraction to the new current changing dynamic now on the table, specifically its own partnership with American. IMO Delta holds the winning argument because changing dynamics must take into account the latest dynamic which is the partnership itself. And even furthermore, as Delta argued, JetBlue is not requesting any Heathrow allocation from any ow member (as that would be going against JetBlue's new allies).


Deltas argument is BS. They are essentially accusing AA/B6 of something illegal (collusion) without any evidence. B6 can ignore it becaise regulators will not consider unsubstantiated accusations of criminal behaviour in the decision making.
 
onwFan
Posts: 468
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 4:58 am

tphuang wrote:
TYWoolman wrote:
tphuang wrote:

DL's argument here is quite weak. The fact that JetBlue is looking to add LHR service to compete against AA supports additional competition here. The "de facto merger" part is laughable when the partnership only includes NYC/Boston. And conveniently forgets to mention all the routes JetBlue added in their earliest expansion announcement that competed with AA.

Not a surprise DL is pissed off here, but they could've avoided all these AA partnership if they didn't make their own aggressive moves teaming up with Latam, invading Seattle and Boston. I doubt JetBlue would have been getting in partnership with AA if DL didn't make such an aggressive push in Boston. And now, DL is going to face a lot more pressure in NYC. You reap what you sow.

I think this is a first look at DL and UA's objections to the B6 and AA partnership fling. Expect both carriers and others to ask for slots to be made available. Imo, UA is getting hurt even more by this partnership given the B6 buildup in EWR. There will be a lot of people in NJ and Eastern/Central PA who will now have more reason to switch allegiance from UA to AA if they can fly out of both EWR and PHL.



Delta's expansion in Boston and NY has been under its own volition, responding to competitive pressure. Never did they forge an alliance with another carrier to gain dominance in those markets. Delta's argument here is strong, given the fact that the majority of JetBlue IS Boston and NY. American and JetBlue are skillfully using the pandemic backdrop of the alliance to tame capacity, expand where they each do not fly, while then considering themselves as separate entities in the international arena. (?)

DL didn't have to expand in Boston or Miami or Seattle. It did it because it likes to invade other airlines' backyard. Now those airlines are teaming up to fight back and it's complaining. Maybe it shouldn't have been bullying weaker airlines?

Jetblue has added around 60 routes since pandemic started. Do you want to guess how many of them passes through Boston? Do you want to look at how many of those routes competes with AA? Do you want to see how many of those completely skips both New York and LA. Calling it de facto merger is complete bs.

Even if we ignore the fact that code sharing and JVs are completely different things and that AS/AA have a far more integrated relationship. The very fact that LGA/JFK slots will be operated JetBlue mainline instead of AA 50 seaters means that capacity will be increased and not tamed. Delta knows this. It knows its yield at LGA and JFK are going to crash. That's great for competition and consumers.

So if AA and B6 have de facto merger? What's AA and AS relationship then? Is B6 and AS also in a merger?

Exactly. Another fundamental pillar of DL’s ‘bullying’ strategy is forcing various partner airlines to terminate partnerships with those smaller airlines leaving them at a disadvantage to compete with DL. The exact same thing happened with AS. Nothing new here, they are simply continuing that trend, trying to prevent both B6 and AA from competing effectively at JFK or BOS.
 
ocracoke
Posts: 159
Joined: Wed Jan 02, 2008 3:15 am

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 5:29 am

tphuang wrote:
... if they didn't make their own aggressive moves teaming up with Latam, invading Seattle and Boston. I doubt JetBlue would have been getting in partnership with AA if DL didn't make such an aggressive push in Boston.... You reap what you sow.




DL has had, in one form or another, sometimes weak, sometimes strong, a hub in BOS since at least 1972, when they merged with Northeast Airlines. (I'm not quite sure how long before 1972 Northeast had a hub in BOS.)

The main reason B6 has a large presence in BOS is because of DL. Before 9/11, DL was in various stages of building out new terminals in both BOS and JFK. After 9/11, they didn't have the money to do both, and BOS was chosen. Thus, the new terminal A came into being. DL moved out of C, leaving C wide open for B6 to move in and set up a new hub operation.

Had DL decided to build out JFK instead, and remained in C in BOS, B6 at that time, just a few years old, wouldn't have had the resources to build their own terminal. BOS would have remained a spoke for B6, and not the hub it has now become.

I'm failing to understand how DL "invaded" BOS, when they have had a hub set up there, again...sometimes strong (when BizEx was flying), and sometimes weak, since at least 1972. On the contrary, it was B6 that marched in and "invaded" what was then a hub for AA, US, and DL.

DL adding more flights to whatever they already had is certainly not "invading". Or are we also to argue, that since DL is adding LAX-RNO, or LAX-FAT, that they are now invading LAX. Or if they add a SEA-ONT flight, they are "invading" an airport that they have been flying to longer than AS has?? I don't understand the argument. As a member of the flying public, wouldn't you want the competition?

DL didn't have to expand in Boston or Miami or Seattle. It did it because it likes to invade other airlines' backyard.


This is really a silly arguement, and one that reeks of protectionism. Thats like sayting that now that B6 and AS has gotten what they believe "rightly belongs" to them, everyone else stay out? Using that argument, AS should have never expanded in SEA in the 1980s, because SEA was UA's backyard. B6 should have never expanded in BOS, because that was AA/US/DL backyard. AA should have never expanded in DFW in the 1970s, because that was BN territory. WN should have stayed out of California (PSA territory), AA out of MIA (PanAM)...and so on, and so forth.

Unlike the protectionist attitude you seem to espouse, I say...let the airlines fight it out. To the winner go the spoils. If B6 is able to grab a bunch of LHR slots, and successfully defend what they have built in BOS, then great. But don't act like BOS is somehow B6's birthright, (and the same thing for AS in SEA),and everyone else best stay out.
 
tphuang
Posts: 5325
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 10:32 am

TYWoolman wrote:
tphuang wrote:
TYWoolman wrote:

It's not an excuse. The pandemic plays a key part in this only because the consequences of the partnership for approval cannot be fully realized until demand returns. Any alliance under that premise IMO is a de factor merger. Again, its not a prohibitive alliance per se as I mentioned, but sure is dirty. American knows it. And, of course, so does Delta. Furthermore, American has wedged itself between B6 and AS toward any potential natural progression in consolidation. This is a de facto merger under the current pandemic landscape on both sides of the coast.


Have you forgotten that DL and AS had their own code share and partnership even after DL had invaded SEA? Were they in a de facto merger? Based on your logic, since SEA is majority of AS's flying, DL and AS must have been in a de facto merger already right? Your other argument makes absolutely no sense.

If you want call it dirty move and alliance, that's your opinion, but at least it's arguable. Calling it a de facto merger is simply not accurate.

You know what's dirty? Invading profitable hubs off weaker airline, killing their margins by dumping capacity in markets that can't handle them and making them vulnerable to mergers. Do you think AS and B6 would be partnership up with AA if DL didn't push them to the brinks?


AS has and is a strong viable airline. Furthermore, AA was pushed to the brinks and benefits more than AS and B6 in these partnerships. Each airline will leverage the alliance to expand further into markets where they do not compete against each other, especially given each other virtual domestic feed (codeshares) into new international markets when Delta and United must rely on their own resources. It's the nature of the partnership to do this in order to compete against Delta who built a system organically all the way, which is why as you've stated in the case of AA and B6 there is a 7 year limit (?) to appease the regulators. Guess how long many think the industry will need to recover? About that 7 year range. De facto merger taking into consideration the present climate. I hear your arguments, and all airlines play dirty, but leveraging the pandemic is as dirty as it gets, but fair game nonetheless.


I can tell you that B6 was treating DL's move into Boston as an existential threat pre-pandemic. So it was definitely getting pushed to the brinks. And despite AS' margin being better, they had effectively stopped growth everywhere else to double down in SEA pre-pandemic, because there is no AS without being dominant carrier in SEA. These are all just counter moves from weaker airlines against DL encroaching into their backayard.

Once AA and AS alliance was announced, DL and UA should've been talking to B6 about a partnership. It was quite clear B6 had to make a move. The pandemic forced AA into giving them a move that's much better than they could've gotten pre-pandemic. DL could've kept B6 from partnership up with AA if it used pandemic to scale back on BOS and announced some type of reprotection with JetBlue. UA could've partnered up with B6 by offering the same ff program benefits, code sharing and interline reproection and slot trade of LGA with JFK. It did none of that and UA is now facing major competition in EWR.

This is the best way for JetBlue to stay independent. Having those additional slots/gates in NYC + ff benefits + interline reprotection will allow JetBlue to be 2019 size by the end of next year or early 2022. It will allow them to grow for several years while legacies are weakened.

DL has grown to its size through mergers just like the other big 3s. Calling its growth organic is quite far fetched. This downturn won't last 7 years. Most LCCs/ULCCs will be back to 2019 size by end of 2021 if not before.
 
bluecrew
Posts: 40
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 11:30 am

tphuang wrote:
TYWoolman wrote:
tphuang wrote:

Have you forgotten that DL and AS had their own code share and partnership even after DL had invaded SEA? Were they in a de facto merger? Based on your logic, since SEA is majority of AS's flying, DL and AS must have been in a de facto merger already right? Your other argument makes absolutely no sense.

If you want call it dirty move and alliance, that's your opinion, but at least it's arguable. Calling it a de facto merger is simply not accurate.

You know what's dirty? Invading profitable hubs off weaker airline, killing their margins by dumping capacity in markets that can't handle them and making them vulnerable to mergers. Do you think AS and B6 would be partnership up with AA if DL didn't push them to the brinks?


AS has and is a strong viable airline. Furthermore, AA was pushed to the brinks and benefits more than AS and B6 in these partnerships. Each airline will leverage the alliance to expand further into markets where they do not compete against each other, especially given each other virtual domestic feed (codeshares) into new international markets when Delta and United must rely on their own resources. It's the nature of the partnership to do this in order to compete against Delta who built a system organically all the way, which is why as you've stated in the case of AA and B6 there is a 7 year limit (?) to appease the regulators. Guess how long many think the industry will need to recover? About that 7 year range. De facto merger taking into consideration the present climate. I hear your arguments, and all airlines play dirty, but leveraging the pandemic is as dirty as it gets, but fair game nonetheless.


I can tell you that B6 was treating DL's move into Boston as an existential threat pre-pandemic. So it was definitely getting pushed to the brinks. And despite AS' margin being better, they had effectively stopped growth everywhere else to double down in SEA pre-pandemic, because there is no AS without being dominant carrier in SEA. These are all just counter moves from weaker airlines against DL encroaching into their backayard.

Once AA and AS alliance was announced, DL and UA should've been talking to B6 about a partnership. It was quite clear B6 had to make a move. The pandemic forced AA into giving them a move that's much better than they could've gotten pre-pandemic. DL could've kept B6 from partnership up with AA if it used pandemic to scale back on BOS and announced some type of reprotection with JetBlue. UA could've partnered up with B6 by offering the same ff program benefits, code sharing and interline reproection and slot trade of LGA with JFK. It did none of that and UA is now facing major competition in EWR.

This is the best way for JetBlue to stay independent. Having those additional slots/gates in NYC + ff benefits + interline reprotection will allow JetBlue to be 2019 size by the end of next year or early 2022. It will allow them to grow for several years while legacies are weakened.

DL has grown to its size through mergers just like the other big 3s. Calling its growth organic is quite far fetched. This downturn won't last 7 years. Most LCCs/ULCCs will be back to 2019 size by end of 2021 if not before.

All of this is correct.
B6 has been treating DL's expanded Boston presence as an existential threat since... 2009? Basically as soon as the merger between DL/NW finalized. BOS became a big big market for DL right as AA was scaling down operations and killing Eagle flights there, B6 was steadily growing a "point to point" strategy and trying to take over abandoned AA markets, as well as developing new ones. And Delta came in with a big presence, a brand new terminal, aggressively good branding and advertising, the typical Delta fare maneuver, and more and more service.
DL and B6 have been at each others throats in JFK and BOS for well over a decade now. BOS was a bigggg poorly served market around 2009, and both B6 and DL happened to pick up on that at the same time. JFK... a little more complex... but let's be honest, for the most populous city in the country, the service that NYC has to major business markets in the US is laughable, mainly due to slots/gate space/cost of operation.

I get this partnership and I like, don't get it at the same time. AA gets free feed... by giving up slots they were essentially squatting with regionals flying to nowhere, especially at LGA. B6 gets a handful of connection markets (why have this London fantasy anymore), but also gets to fly a whole bunch of feed routes out of expensive, competitive airports, and I think it's an open question if any of these new flights out of LGA are going to make any money. B6 has a great domestic network out of JFK... I just don't know how many of these people are going to be continuing from Richmond to Milan, or how B6 is going to add a whole bunch of dots to the LGA map. Perhaps this is just move one in a larger strategy. I'm waiting to see.
 
TYWoolman
Posts: 617
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:34 pm

AA and AS are the latest/last unaligned major airlines to forge an alliance in JFK and Boston. Against that backdrop when capacity will no doubt be carved between them for maximum coverage ( de facto merger) Delta is argueing they be seen more or less as one entity when JetBlue asks for Heathrow slots, as JetBlue winning authority can be interpreted as ow authority in the grand scheme of things. Would it not? Delta's argument is with merit. They can't fool all of the people all of the time in regards to what this crafty partnership is, as the saying goes.
 
JoseSalazar
Posts: 252
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Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:42 pm

TYWoolman wrote:
AA and AS are the latest unaligned major airlines to forge an alliance in JFK and Boston. Against that backdrop when capacity will no doubt be carved between them for maximum coverage ( de facto merger) Delta is argueing they be seen more or less as one entity when JetBlue asks for Heathrow slots, as JetBlue winning authority can be interpreted as ow authority in the grand scheme of things. Would it not? Delta's argument is with merit.

When AA and B6 have been clear that the TATL flying will not be codeshared, and when B6 is not a OW member, it is quite the stretch to say that somehow B6 flights to LHR are somehow “one entity” or “de facto merger” with AA/OW, when they aren’t JV’d, much less even codeshared, on that route. They are directly competing against each other. There is no revenue sharing or coordination of schedules. B6 is still a David going up against the one world, skyteam, and star alliance trans Atlantic goliaths.
 
tphuang
Posts: 5325
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:45 pm

bluecrew wrote:
tphuang wrote:
TYWoolman wrote:

AS has and is a strong viable airline. Furthermore, AA was pushed to the brinks and benefits more than AS and B6 in these partnerships. Each airline will leverage the alliance to expand further into markets where they do not compete against each other, especially given each other virtual domestic feed (codeshares) into new international markets when Delta and United must rely on their own resources. It's the nature of the partnership to do this in order to compete against Delta who built a system organically all the way, which is why as you've stated in the case of AA and B6 there is a 7 year limit (?) to appease the regulators. Guess how long many think the industry will need to recover? About that 7 year range. De facto merger taking into consideration the present climate. I hear your arguments, and all airlines play dirty, but leveraging the pandemic is as dirty as it gets, but fair game nonetheless.


I can tell you that B6 was treating DL's move into Boston as an existential threat pre-pandemic. So it was definitely getting pushed to the brinks. And despite AS' margin being better, they had effectively stopped growth everywhere else to double down in SEA pre-pandemic, because there is no AS without being dominant carrier in SEA. These are all just counter moves from weaker airlines against DL encroaching into their backayard.

Once AA and AS alliance was announced, DL and UA should've been talking to B6 about a partnership. It was quite clear B6 had to make a move. The pandemic forced AA into giving them a move that's much better than they could've gotten pre-pandemic. DL could've kept B6 from partnership up with AA if it used pandemic to scale back on BOS and announced some type of reprotection with JetBlue. UA could've partnered up with B6 by offering the same ff program benefits, code sharing and interline reproection and slot trade of LGA with JFK. It did none of that and UA is now facing major competition in EWR.

This is the best way for JetBlue to stay independent. Having those additional slots/gates in NYC + ff benefits + interline reprotection will allow JetBlue to be 2019 size by the end of next year or early 2022. It will allow them to grow for several years while legacies are weakened.

DL has grown to its size through mergers just like the other big 3s. Calling its growth organic is quite far fetched. This downturn won't last 7 years. Most LCCs/ULCCs will be back to 2019 size by end of 2021 if not before.

All of this is correct.
B6 has been treating DL's expanded Boston presence as an existential threat since... 2009? Basically as soon as the merger between DL/NW finalized. BOS became a big big market for DL right as AA was scaling down operations and killing Eagle flights there, B6 was steadily growing a "point to point" strategy and trying to take over abandoned AA markets, as well as developing new ones. And Delta came in with a big presence, a brand new terminal, aggressively good branding and advertising, the typical Delta fare maneuver, and more and more service.
DL and B6 have been at each others throats in JFK and BOS for well over a decade now. BOS was a bigggg poorly served market around 2009, and both B6 and DL happened to pick up on that at the same time. JFK... a little more complex... but let's be honest, for the most populous city in the country, the service that NYC has to major business markets in the US is laughable, mainly due to slots/gate space/cost of operation.

I get this partnership and I like, don't get it at the same time. AA gets free feed... by giving up slots they were essentially squatting with regionals flying to nowhere, especially at LGA. B6 gets a handful of connection markets (why have this London fantasy anymore), but also gets to fly a whole bunch of feed routes out of expensive, competitive airports, and I think it's an open question if any of these new flights out of LGA are going to make any money. B6 has a great domestic network out of JFK... I just don't know how many of these people are going to be continuing from Richmond to Milan, or how B6 is going to add a whole bunch of dots to the LGA map. Perhaps this is just move one in a larger strategy. I'm waiting to see.


Keep in mind that JetBlue strategy at BOS was quite a success until 2016 when DL announced their most recent buildup there. Mostly due to JetBlue entering ATL and BOS-LGA. Everything that has happened is the effect of choices an airline makes. If this pandemic had happened 4 years ago and AA had decided to do the deal back then, I don't know if JetBlue would've entered ATL and caused DL to do their BOS buildup. I think every airline would've been content with a fragmented BOS market and battling it out in NYC.

With this partnership, JetBlue suddenly has so many opportunity in NY/NJ area that BOS is in the backburners while precious real estate suddenly opened up. The Europe strategy needs to continue. JetBlue can't count on AA partnership working out. These type of code share arrangement often do not work out. That's why I find this "de facto merger" talk to be quite laughable. By 2025, we can easily reach a point where JetBlue is larger than DL in JFK, comfortable #3 in LGA with over 50 flights, comfortable #2 in EWR with over 100 flights, dominant position in BOS, fully built hub in south Florida that competes against AA and a nice operation in LAX with access for even more gates. And AA could find itself losing a lot of its ff to JetBlue in northeast and having to battle JetBlue on many corporate accounts. After all, if you can fly everywhere out of NYC/Boston on JetBlue, why stick around as an AA ff? If AA emerges out of pandemic in a better position, does it keep relying on JetBlue in northeast or does it look at JetBlue as an emerging national carrier and a threat to its bottom line?

I can so easily see the 2 airlines butting heads in a few years and dissolve the relationship. It has already happened once before. This one seems to be aiming for a tighter relationship, but they have so many areas of natural competition. I always thought UA was a better partner for JetBlue because they had fewer areas of competition with JetBlue.

So JetBlue really can't stop its TATL and South America expansion, because it has to plan on retaining all its ff and corporate account in the very possible event that its relationship with AA breaks up in a few years. What this deal will allow them to do is connect more dots and access more customers from other parts of the country.
 
TYWoolman
Posts: 617
Joined: Sat Jun 24, 2017 8:24 pm

Re: AA & B6 announce Northeast Partnership

Sun Sep 20, 2020 12:51 pm

JoseSalazar wrote:
TYWoolman wrote:
AA and AS are the latest unaligned major airlines to forge an alliance in JFK and Boston. Against that backdrop when capacity will no doubt be carved between them for maximum coverage ( de facto merger) Delta is argueing they be seen more or less as one entity when JetBlue asks for Heathrow slots, as JetBlue winning authority can be interpreted as ow authority in the grand scheme of things. Would it not? Delta's argument is with merit.

When AA and B6 have been clear that the TATL flying will not be codeshared, and when B6 is not a OW member, it is quite the stretch to say that somehow B6 flights to LHR are somehow “one entity” or “de facto merger” with AA/OW, when they aren’t JV’d, much less even codeshared, on that route. They are directly competing against each other. There is no revenue sharing or coordination of schedules. B6 is still a David going up against the one world, skyteam, and star alliance trans Atlantic goliaths.


When JetBlue takes LHR passengers on crafty carveout domestic runs corroborated with American's domestic rationalization intentions brought about by the alliance, this is one entity. American is hiding behind the pandemic to pass the collusion test. Can't fool me, for one.
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