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muralir
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Joined: Mon May 27, 2013 3:44 pm

Where Does ORD fit in AA's Hub Strategy?

Wed Jun 16, 2021 5:41 pm

Chicago is my hometown (although I don't live there anymore, I fly back frequently to visit family), and I'm struggling to understand where ORD fits into AA's overall hub strategy.

Pre US-merger, and especially in the 80s/90s it was clearer: DFW was the main hub, ORD was somewhat smaller but with an emphasis on connecting international flows (both TATL and TPAC), and MIA was their LATAM hub.

Now, to the best I can gather, it seems that DFW is even more concentrated than before. MIA remains LATAM focused. And now PHL is their TATL gateway, and CLT is their secondary domestic / hub. That doesn't even include their PHX hub they inherited from US's previous merger with America West.

Where does that leave ORD? Having cut all their Asia flights and moved every TATL except LHR to seasonal, there is basically no int'l service to speak of (aside from codesharing with partners). There's still a strong and even growing regional hub operation, but it seems odd to build such a domestic hub without having international flights to feed into. And many of those places are getting flights to DFW anyway.

I'm not worried that AA will dehub ORD anytime soon. The O&D market is too big to let go of, and there are a decent number of OW alliance partners that probably provide enough connection. But clearly, it seems the focus is on building DFW all-around (both domestic and int'l), maintaining MIA's dominance in LATAM, and building PHL (I'm not entirely sure of CLT's strategy either :-), while opportunistically adding O&D flights where it might be profitable (like JFK, or SEA-BLR). Even Asia flights are being placed in DFW even though ORD is often several hundred miles closer (on the polar routes).

So in the end, I'm not sure where ORD fits, and whether AA has any strategy for it aside from milking its historical regional feed there while slowly losing ground to United as it concentrates on its other hubs. Anyone with better insight into it?
 
USAirALB
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Re: Where Does ORD fit in AA's Hub Strategy?

Wed Jun 16, 2021 6:42 pm

I would disagree and say that AA isn't necessarily concentrating solely on DFW, but rather they are using the combined synergies of both merged carriers and expanding from hubs to areas where the respective carrier pre-merger wasn't necessarily as strong. For example, we have seen AA launch DFW-ILM/AVL/PWM/BTV and relaunch DFW-SYR/ROC. AA also started a number of CLT-Midwest routes where they had a dominance pre-merger, like EVV/CMI. They also started a number of CLT-Caribbean routes where US was not present, like CLT-CUR/GND/MHH/ELH.

While it's easy to focus on the international cutbacks ex ORD, let's not forget that AA really didn't have a market presence on ORD-Northeastern routes outside of major cities once the F100s were retired. They exited a number of stations in the area completely, including ALB and PVD. Once the merger closed, they quickly relaunched ORD-ALB/PVD, and began ORD-PWM/BTV/MHT. They also began service to a number of cities in the Southeast that US had a presence in, including AVL.

Of course, DFW and CLT are the most profitable hubs, so it very-well appears that they are concentrating solely on those two connecting complexes, but I don't think that is the case. ORD provides AA with a solid East/West domestic connecting hub, and they have continuously added more leisure routes since the merger. I think AA's strategy in ORD is much clearer than their strategy in say PHL.
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PhilMcCrackin
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Re: Where Does ORD fit in AA's Hub Strategy?

Wed Jun 16, 2021 7:15 pm

I'm not convinced ORD is profitable for AA, or at least not as profitable as other hubs. They seem to get their lunch eaten on any longhaul route that's not LHR out of there, even the Hawaii routes. SVO, DEL, NRT, PVG, PEK, FRA, DUB, MAN, FCO, etc. It'll be interesting to see which of those, if any, come back post COVID.

ORD had a more defined role when DFW was largely a domestic hub and PHL didn't exist prior to the merger with US. Nowadays, DFW has largely stolen away the Asia traffic(as well as some Europe) and PHL has done the same with the European routes.
 
legend500
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Re: Where Does ORD fit in AA's Hub Strategy?

Wed Jun 16, 2021 8:21 pm

ORD is in an interesting place. It's pretty clear AA is staying, but it almost seems like TATL/TPAC, ORD and DFW have switched places for American. This kind of makes sense when looking at all of AA's international service with a focus on Oneworld connectivity. DFW offers superior connections to Central & South America, as well as the South Pacific, and for those few not served from DFW, MIA is a lot closer. Add to it the competition in ORD versus the fact the DFW will bake AA a cake every day for the rest of time, I can definitely see the reasons there.

As a domestic hub, ORD still works well for AA, and offers connections to areas that might not work from DFW (and definitely not from CLT). Plus, ORD offers a safety valve for transcontinental service when DFW gets giant tornadoes, severe storms, or - heavens forbid - a millimeter of snow. So I can see ORD having a place, but not any more than that.

I agree that the situation for PHL is the one that seems less comforting. With the B6 link and the resulting TATL service increase from JFK, there's going to be overcapacity on the East Coast. AA's never letting MIA or CLT go, so if JFK gets too big, or if CLT gains more TATL, or if AA continues adding more overflights to Helm's Deep (DFW)... one really has to start questioning PHL's future.
 
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jscottwomack
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Re: Where Does ORD fit in AA's Hub Strategy?

Wed Jun 16, 2021 9:28 pm

ORD serves a purpose for AA. Keeps UAL in check and helps cover the Midwest. AA needs a Hub in the North Central part of the country. Without it, there would be a HUGE hole in their route map. 2nd tier cities in the upper midwest would be stuck with service from UAL & Delta. If I am in Green Bay, Peoria, South Bend etc, the option on AA is worth it if I have to fly AA. Otherwise you would be on a 2+ hour ERJ145 flight to DFW and that would suck.
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UALFAson
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Re: Where Does ORD fit in AA's Hub Strategy?

Fri Jun 18, 2021 5:06 am

jscottwomack wrote:
ORD serves a purpose for AA. Keeps UAL in check and helps cover the Midwest. AA needs a Hub in the North Central part of the country. Without it, there would be a HUGE hole in their route map. 2nd tier cities in the upper midwest would be stuck with service from UAL & Delta. If I am in Green Bay, Peoria, South Bend etc, the option on AA is worth it if I have to fly AA. Otherwise you would be on a 2+ hour ERJ145 flight to DFW and that would suck.


The geographic part is indeed the correct answer. With PHL, DCA, and CLT so far to the east and DFW so far to the south, ORD provides for more practical X-shaped connections between the Upper Midwest/Great Plains and Florida and the Northeast and Midwest/Great Plains.

Pre-COVID, I took one of the short-lived 738 mainline flights on BNA-ORD. The plane also still had the seatback TVs, which listed connections at ORD. Tons of folks connecting to other Midwest/Plains destinations as well as DEN and the Pacific Northwest. Those connections through DFW or CLT don't make sense.
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FlyingHollander
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Re: Where Does ORD fit in AA's Hub Strategy?

Fri Jun 18, 2021 8:44 am

jscottwomack wrote:
ORD serves a purpose for AA. Keeps UAL in check and helps cover the Midwest. AA needs a Hub in the North Central part of the country. Without it, there would be a HUGE hole in their route map. 2nd tier cities in the upper midwest would be stuck with service from UAL & Delta. If I am in Green Bay, Peoria, South Bend etc, the option on AA is worth it if I have to fly AA. Otherwise you would be on a 2+ hour ERJ145 flight to DFW and that would suck.

AA doesn't serve SBN from ORD, only DFW and CLT. In general your point is still valid though.
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muralir
Topic Author
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Re: Where Does ORD fit in AA's Hub Strategy?

Fri Jun 18, 2021 5:20 pm

legend500 wrote:
ORD is in an interesting place. It's pretty clear AA is staying, but it almost seems like TATL/TPAC, ORD and DFW have switched places for American. This kind of makes sense when looking at all of AA's international service with a focus on Oneworld connectivity. DFW offers superior connections to Central & South America, as well as the South Pacific, and for those few not served from DFW, MIA is a lot closer. Add to it the competition in ORD versus the fact the DFW will bake AA a cake every day for the rest of time, I can definitely see the reasons there.

As a domestic hub, ORD still works well for AA, and offers connections to areas that might not work from DFW (and definitely not from CLT). Plus, ORD offers a safety valve for transcontinental service when DFW gets giant tornadoes, severe storms, or - heavens forbid - a millimeter of snow. So I can see ORD having a place, but not any more than that.

I agree that the situation for PHL is the one that seems less comforting. With the B6 link and the resulting TATL service increase from JFK, there's going to be overcapacity on the East Coast. AA's never letting MIA or CLT go, so if JFK gets too big, or if CLT gains more TATL, or if AA continues adding more overflights to Helm's Deep (DFW)... one really has to start questioning PHL's future.


This seems closest to my gut sense too. DFW and ORD have definitely switched in terms of domestic/international flows. The only service AA appears to be adding to ORD is regional and commuter routes to small towns. My hope is that this eventually builds up enough feed to launch some new international service (or transfer some services from other hubs).

I'm also willing to give AA the benefit of the doubt, in that the flight restrictions placed on ORD in the early 2000s forced AA and UA to shift a lot of flying to their other hubs. I don't blame them for not basing their growth strategy around an airport with flight caps and no immediate plans for expansion to relieve the congestion. Plus the whole T5 setup with towing of flights between terminals, re-clearing security, etc. means the international transit experience has been worse than at their other hubs.

But with the new terminal projects, once the new gates are built and capacity restrictions are gone and the transit experience is much more seamless, I'm hoping AA starts rebuilding at ORD. That said, those terminal improvements are about 10 years away and who knows how much their ORD service might whither during that time.

(I also agree PHL is a bit of an outlier. Anyone west of the Appalachians can be served from ORD/DFW with only a small backtrack. And the big cities on the Eastern seaboard from DC on north expect direct service to Europe (especially NYC). They're not going to connect in PHL. And most people south of DC can be served from CLT. While PHL is probably a bigger O&D market vs CLT, it's not that much bigger. So AA is stuck with the smallest O&D market of the big northeast cities, with no unique catchment area from which to draw feed that couldn't be at least as well served from one of their other hubs... Especially if they really start to rebuild at JFK, I can't see a role for PHL.)
 
MLIAA
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Re: Where Does ORD fit in AA's Hub Strategy?

Sat Jun 19, 2021 5:01 am

I wouldn’t call ORD a slouch for AA internationally. Yes it has a lot of seasonal routes but in 2019 and looking forward it had/would’ve had DUB LHR BCN CDG VCE FCO ATH PRG BUD KRK (correct me if I’m wrong on these), plus the partner airlines doing HKG HND NRT BNE LHR MAD and HEL.

Seasonal or not that seems like a pretty strong portfolio, and while it may not match UA at ORD, it seems much stronger than the likes of MSP or DTW trans-Atlantic.
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alo2yyz
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Re: Where Does ORD fit in AA's Hub Strategy?

Tue Jun 22, 2021 4:38 am

Tangentially related to this - I have never understood (beyond the obvious "because the plane/crew/hub gate space can generate more revenue elsewhere") why AA doesn't serve more of Canada (specifically, places like YXE, YWG, etc. + more frequency to the bigger markets) out of ORD. They may as well hang a "please give your money to DL at MSP" sign on the side of the terminal. I mean, I get that a YXE or YWG is never going to print money for a US carrier, but AA isn't even in the game and at the bigger hubs, they aren't competitive against WS/DL & AC/UA.

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