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Bobloblaw
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 3:42 pm

Quoting mah4546 (Reply 45):
Long-haul will be cut. Probably double-daily to LHR, daily to Madrid, Paris and maybe Frankfurt. No way FCO and DUB survive. US actually relies heavily on Florida traffic for those routes, so if AA wants to keep the capacity, just move it to Miami.

MIA is not a substitute for midwest and northeast traffic flows going to MCO, TPA and FLL, which is where most Florida traffic goes.

GIG is the most likely route to be dropped and the frequencies moved to a MIA-Brazil city pair.
 
CIDFlyer
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 5:39 pm

Quoting bobloblaw (Reply 50):

MIA is not a substitute for midwest and northeast traffic flows going to MCO, TPA and FLL, which is where most Florida traffic goes.

GIG is the most likely route to be dropped and the frequencies moved to a MIA-Brazil city pair.

exactly...I could see some more midwestern markets actually being connected to CLT like CID/MSN/MLI/PIA etc. Allows for better connections to the southeast and smaller southeast markets not served directly from ORD. DFW is functioning as a gateway to the southeast from alot of this region. CLT would provide more access and less out of the way flying as well as compete with DL via ATL for those kind of traffic flows.
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 8:01 pm

Quoting flyguy89 (Reply 47):
Precisely. This is the area most vulnerable to any significant reduction at CLT.

Again, though, this is just not that large a piece of CLT's traffic. US' west coast schedule is 4x LAX, 4x SFO, 2x SEA, 1x SAN. That's it. And some of the flow traffic on those routes is undoubtedly coming from places like ILM or ROA and is better-served over CLT.
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CV880
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 8:14 pm

Quoting miller22 (Reply 39):

To put this into perspective, CLT carried 1/3 as many O&D passengers within the domestic U.S. as Denver. St. Louis and Salt Lake City both carried more domestic O&D passengers than CLT.

A worthless comparison as people in these markets drive hundreds of miles to originate their travel as there are NO competing airports or nearby limited service airports with much higher fares.
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 8:18 pm

Quoting cv880 (Reply 53):
A worthless comparison as people in these markets drive hundreds of miles to originate their travel as there are NO competing airports or nearby limited service airports with much higher fares.

Correct. Within 150 miles of STL, there are only two airports with scheduled jet service: SPI and BMI. Neither has any low fare service besides G4, and neither has any mainline besides G4.

Within 150 miles of CLT are GSP, GSO, AVL, CAE and RDU. Two of those have WN. GSO and CAE are comparable in service levels to BMI, but there's no airport comparable to GSP or RDU that close to STL.
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flyguy89
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 9:17 pm

Quoting bobloblaw (Reply 50):
MIA is not a substitute for midwest and northeast traffic flows going to MCO, TPA and FLL, which is where most Florida traffic goes.

He's not talking about that though, he's talking about Florida to Europe traffic flows.

Quoting Cubsrule (Reply 52):

Again, though, this is just not that large a piece of CLT's traffic.

It's not large, but it's a significant portion, and I'm not talking about just the West Coast here, but West of the Mississippi. US currently has a good amount of capacity being forced on sub-optimal routings from cities West of the Appalachians (think BNA, SDF, LEX, CVG, BHM, ATL, HSV, TYS) to markets West of the Mississippi (Texas, MCI, DEN, STL, SLC, in addition to the West Coast), with ORD and DFW being added to the mix, this changes things.
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 9:22 pm

Quoting flyguy89 (Reply 55):
US currently has a good amount of capacity being forced on sub-optimal routings from cities West of the Appalachians (think BNA, SDF, LEX, CVG, BHM, ATL, HSV, TYS) to markets West of the Mississippi (Texas, MCI, DEN, STL, SLC, in addition to the West Coast),

I know BNA's service patterns pretty well, and I'd be shocked if there is a single westbound market from BNA where US has more than a 10 percent market share. If you can find one, I'd love to be corrected. As you move east, to places like TYS and CHA, I'm not sure the distinction is as clear as you believe. If you take a route like CHA-LAX, going through CLT means many more miles covered on a low-CASM aircraft as opposed to long RJ flights to ORD or DFW. I don't know that it's better to route CHA-LAX traffic, for instance, through DFW or ORD. CLT is also lower-cost than either ORD or DFW.
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flyguy89
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 9:38 pm

Quoting Cubsrule (Reply 56):
I know BNA's service patterns pretty well, and I'd be shocked if there is a single westbound market from BNA where US has more than a 10 percent market share.

Sure, but a 10% market share in BNA, 15% market share in CHA, another 10% here, it all adds up.

Quoting Cubsrule (Reply 56):
If you take a route like CHA-LAX, going through CLT means many more miles covered on a low-CASM aircraft as opposed to long RJ flights to ORD or DFW.

But they're not going to directly replace capacity from CLT with capacity to ORD and DFW, and I doubt they care much to serve the low-yield travelers likely filling up much of a mainline low-CASM aircraft to CLT. Using RJ's and large RJ's, they'll probably rather skim from top of the revenue stream in those markets and route them through ORD or DFW.

Quoting Cubsrule (Reply 56):
CLT is also lower-cost than either ORD or DFW.

Kind of negated though with the longer routings out of CLT on mostly RJ aircraft. A CHA/BNA-ORD-MCI routing is shorter than CHA/BNA-CLT-MCI.
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 9:47 pm

Quoting flyguy89 (Reply 57):
Sure, but a 10% market share in BNA, 15% market share in CHA, another 10% here, it all adds up.

Can you find a single route ex-BNA with even more than 5 percent market share?

Quoting flyguy89 (Reply 57):
Kind of negated though with the longer routings out of CLT on mostly RJ aircraft. A CHA/BNA-ORD-MCI routing is shorter than CHA/BNA-CLT-MCI.

Shorter, but is CHA-ORD-MCI cheaper than CHA-CLT-MCI? That's the relevant inquiry.
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flyguy89
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 9:56 pm

Quoting Cubsrule (Reply 58):
Quoting flyguy89 (Reply 57):
Sure, but a 10% market share in BNA, 15% market share in CHA, another 10% here, it all adds up.

Can you find a single route ex-BNA with even more than 5 percent market share?

A question for RITA, I'll have to look into their databases and see what I can find.

Quoting Cubsrule (Reply 58):
Quoting flyguy89 (Reply 57):
Kind of negated though with the longer routings out of CLT on mostly RJ aircraft. A CHA/BNA-ORD-MCI routing is shorter than CHA/BNA-CLT-MCI.

Shorter, but is CHA-ORD-MCI cheaper than CHA-CLT-MCI? That's the relevant inquiry.

I think whether or not they can operate one routing more profitably than the other is the relevant inquiry. I'm hypothesizing (that's all we can really do since none of us are intimately familiar with either airlines' operating costs) that it will be more profitable for them to flow a smaller number of higher yield travelers over ORD or DFW verses flowing larger numbers of lower-yielding passenger over a longer routing through CLT.
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 9:59 pm

Quoting flyguy89 (Reply 59):
I'm hypothesizing (that's all we can really do since none of us are intimately familiar with either airlines' operating costs) that it will be more profitable for them to flow a smaller number of higher yield travelers over ORD or DFW verses flowing larger numbers of lower-yielding passenger over a longer routing through CLT.

I don't think there's any question that flowing higher yield traffic over DFW/ORD would be more profitable than flowing lower yield traffic over CLT. Similarly, there's no question that flowing higher yield traffic over CLT would be more profitable than flowing lower yield traffic over ORD/DFW. But why would shifting flow traffic to DFW/ORD magically improve yields?
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gigneil
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 10:08 pm

Everyone is thinking like the new AA is in fact the old AA.

The new AA will be the old US. CLT is a massive benefit to AA's nonexistent East Coast operations.

Also, I'd see JFK being cut at the benefit of PHL - PHL is the fourth largest metro this country has, and its practically unchallenged.

NS
 
flyguy89
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 10:10 pm

Quoting Cubsrule (Reply 60):
But why would shifting flow traffic to DFW/ORD magically improve yields?

1) Shorter itineraries on more optimal routings 2) Flights to the DFW/ORD hubs will be more buoyed by O&D than CLT 3) Reducing capacity increases pricing power.

Not that I don't mind the discussion, but I'm not really understanding the disagreement since we both believe that CLT will be between 400-500 flights post-merger. Where, in your opinion, do you think all that capacity reduction is going to come from?
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 10:26 pm

Quoting flyguy89 (Reply 62):
Where, in your opinion, do you think all that capacity reduction is going to come from?

Smaller caribbean cities and frequency cuts to just about everywhere else. I think the one region that will come through unscathed is, oddly, South America, as I think CLT can probably support GRU with better slot timings while GIG will go away. But that's only one flight.

Quoting flyguy89 (Reply 62):
Shorter itineraries on more optimal routings

Would the connecting times be longer at DFW/ORD? CLT is very banked, so many (not all) connections are very short. DFW/ORD aren't like that as much.

The other thing to keep in mind is that a city like CHA will probably see something like 5x CLT, 2x DFW, 2x ORD post-merger, so some folks on these westbound itineraries will wind up using CLT simply for scheduling reasons.
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LAXdude1023
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 10:34 pm

Alright, as promised I made a list of CLT's largest international markets. Ill do the top 10 plus Munich, Paris, Rome, and Dublin. These are number from 2011 and are passengers each way:

1) Toronto: 86
2) London: 83
3) Cancun: 56
4) Mexico City: 45
5) Aruba: 44
6) Frankfurt: 44
7) St. Maarten: 42
8) Montego Bay: 42
9) Nassau: 35
10) San Jose, CR: 35

Paris: 30
Munich: 30
Rome: 24
Dublin: 13

Total passengers per day from CLT to Europe: 412.

You have to hand it to CLT, for a metro that small, thats a pretty good number.

Quoting gigneil (Reply 61):
PHL is the fourth largest metro this country has

As of 2011, its the 6th. Dallas has been ahead of it for some time but Houston also recently passed it.

But I agree with the last point. I wouldnt mind seeing PHL being used to its fullest.

Quoting miller22 (Reply 39):
Ok. I'll bite.

According to PaxIS for the month of September, 2012, CLT had a total of 387,270 O&D passengers. This is #31 in the U.S. and they are the 33rd largest MSA. Pretty darn close. They fell behind some notable markets such as PHL, MDW, PDX, SAN, and STL. RDU is #36, for what it's worth.

DB1B domestic-only data from Q2 shows CLT at #28 in the U.S.

To put this into perspective, CLT carried 1/3 as many O&D passengers within the domestic U.S. as Denver. St. Louis and Salt Lake City both carried more domestic O&D passengers than CLT.

So this tells us two things:

1. As expected, CLT does much better domestically than internationally
2. Either way, the true economic clout of CLT as an O&D market is behind all other primary and secondary hubs.

Internationally, look at is this way. These are total international O&D numbers from last year:

DEN: 1,955,504
TPA: 1,274,049
CLT: 1,052,113
RDU: 799,703
STL: 763,491
SLC: 709,007
PIT: 624,445
IND: 587,629
CLE: 572,837
MCI: 557,716
SAT: 556,600
AUS: 527,373
CVG: 508,891
CMH: 459,266

I stand by my previous post 100% and the numbers prove it. CLT hits way above its belt for its metro area size and MSA size does not directly translate to O&D.

Quoting mah4546 (Reply 45):

CLT suffer because of DFW, not MIA. A lot of traffic flow that US must force via CLT (especially Southeast/Northeast-West) flows a lot better via DFW.

Im not sure about that. CLT strength is DFW's weakness. Look at AE's expansion from DFW over the last few years. Every city that has been opened from DFW to the Midwest has gone gangbusters (MHK and FSD for example). Every flight they opened from DFW-Southeast has floundered (FAY, AGS, etc.). Is CLT going to lose some traffic to DFW? I think its inevitable, but CLT is going to fill a role MIA and DFW cannot. Its an apples and oranges thing.

Quoting mah4546 (Reply 45):
Long-haul will be cut. Probably double-daily to LHR, daily to Madrid, Paris and maybe Frankfurt. No way FCO and DUB survive. US actually relies heavily on Florida traffic for those routes, so if AA wants to keep the capacity, just move it to Miami.

Agreed on FCO and DUB. Keeping those from CLT is pointless.

I think AA/US would be more wise to serve Germany from CLT even if it means cutting CDG. A seasonal CDG and MAD may be in order. Cant see those being year round.

As far as moving capacity to MIA, I think that is more likely for the GIG flight as well as Caribbean capacity. A seasonal MIA-Italy flight should have happened years ago. Maybe this will be the thing to do it?
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flyguy89
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 10:48 pm

Quoting Cubsrule (Reply 63):

Smaller caribbean cities and frequency cuts to just about everywhere else.

I agree, and that's what I was implying my above points will translate into, I was simply trying to lay out my rationale for why there will be frequency cuts as opposed to those who think CLT will remain as is or grow.

Quoting Cubsrule (Reply 63):
Would the connecting times be longer at DFW/ORD? CLT is very banked, so many (not all) connections are very short. DFW/ORD aren't like that as much.

I'm not aware of connection times being longer on aggregate at DFW or ORD, setting aside unexpected delays.

Quoting Cubsrule (Reply 63):
The other thing to keep in mind is that a city like CHA will probably see something like 5x CLT, 2x DFW, 2x ORD post-merger, so some folks on these westbound itineraries will wind up using CLT simply for scheduling reasons.

Absolutely, I wasn't implying that routes like CLT-CHA will be terminated, but rather reduced in frequency and re-sized to play into CLT's strength as a hub.
 
Cubsrule
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RE: US/AA Effects On CLT

Sun Dec 16, 2012 11:18 pm

Quoting flyguy89 (Reply 65):
I was simply trying to lay out my rationale for why there will be frequency cuts as opposed to those who think CLT will remain as is or grow.

I understand. I think most people are overestimating the effect of what I'll call "wrong direction" traffic and ignoring the traffic for which CLT makes geographic sense but which is low enough yielding that the combined carrier is going to have trouble making money on it with the inevitable increase in costs that will come with the merger. BUF-PBI might be a good example. US carries a lot of this type of traffic, and I don't know that Doug and friends are appropriately accounting for it in their merger forecasts.
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doug
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 12:39 am

For comparison use only

U.S Airways mainline CLT 253 daily flights and 348 regional daily
American Airlines mainline MIA 258 daily flights 71 regional daily
 
miller22
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 3:55 am

Quoting cv880 (Reply 53):
A worthless comparison as people in these markets drive hundreds of miles to originate their travel as there are NO competing airports or nearby limited service airports with much higher fares.

I've tried, but your point makes no sense to me.

DEN has a larger geographic catchment area than CLT. Good point. Not sure why you made it, since it just adds to the argument that CLT is not suited to be a hub it's size. It competes with so many neighboring cities that dilute what limited O&D it has. BOS suffers from the same infliction and still remains hub-less.

Quoting LAXdude1023 (Reply 64):


I stand by my previous post 100% and the numbers prove it. CLT hits way above its belt for its metro area size and MSA size does not directly translate to O&D.

You just pulled a classic marketing tactic. Only talk about the numbers that make your case and neglect the rest. We do it all the time and sometimes we even get away with it.

The question has never been whether or not CLT will be an international hub. Over half of CLT's international traffic is South-bound which will be wiped-out by MIA. Some direct service will still exist just as it does with all of the other former hubs, but not as a connection point.

Only 40% of CLTs international traffic heads East to Europe, Africa, or the Middle East. Good for a 777 to LHR (perhaps a 2nd) and the rest to be connected through PHL or JFK. That's over 500 seats for a market with 412. Nice end-state load factor right at average.

CLT has no future as an international hub for AA. It will maintain some international service as a spoke, but I think the best chance CLT has other than LHR is LH keeping a flight to FRA. Inevitably though, it'll be just LHR without the Star connections. MIA sucks away everything else besides some leisure O&D markets. There's just no reason for AA to split up so many international markets when ORD, JFK, PHL, and MIA are all superior. At that point, you also have to consider DFW as a competitor for international traffic from the West Coast that Airways routed through CLT. Just too many better hubs to be adding incremental airplanes, not only for the international markets, but also each of the domestic markets that have to connect. Waste of resources.

Think about it. For every 100 connecting seats internationally, you have to have 20-30 flights to support it assuming you get 3-5 PDEW per market. It's such a massively resource intensive operation to maintain a hub of that size, and now that every spoke from CLT has 3 better options through which to launch internationally, that's about 25 aircraft you don't need. At some point it becomes a question of too many hubs, not whether or not CLT is large enough to survive. It is smaller than MIA, ORD, JFK, and PHL. Why should American split it's international traffic a fifth way with CLT? The four cities listed are already cannibalizing traffic amongst each other.

Here's my prediction on CLT.

- Until the merger is finalized, nothing will change.

- Once it is finalized, there will be a period of trying to figure out what's going on in network planning and who's doing what. Management will be moving from PHX to DFW, and will be too preoccupied to harvest any significant synergies from the network. You're probably looking at 2014 before they take stock of what they have. Sometime in there, legacy Airways will switch from Star to OneWorld. LH will probably vacate shortly after all Dividend Miles are converted to AAdvantage.

- AA will make some sort of public commitment to CLT that they'll never intend on keeping (see UA in CLE).

- The first look at CLT will go after the low hanging fruit: Latin America. AA will be looking to consolidate as much as they can through MIA. If you think AA will allow CLT to cannibalize traffic from MIA, take a second to look at their Latin America connections from DFW. Almost non-existent outside of Mexico which isn't served well from MIA anyway.

- That will start the snowball rolling. Once CLT loses any significant Latin American feed, load factors will drop on domestic CLT flights. Slowly, those will be consolidated through PHL and ORD.

- 50-seaters will begin to be parked as the new 81-seaters arrive, and the natural target will be CLT. Just as Delta and United have done, the ability to consolidate two aircraft into one is too economical to ignore. CLT will start to lose it's regional service.

- Eventually CLT will settle into a nice narrow-body focus city to all major markets in the U.S., and a type of operating parking lot for the left-over 50-seaters. In other words, CLE but with 2 x daily LHR service.

But the most compelling argument for why CLT will be minimized... Where else is AA going to consolidate?
 
Bobloblaw
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 4:35 am

Quoting miller22 (Reply 68):
take a second to look at their Latin America connections from DFW. Almost non-existent outside of Mexico which isn't served well from MIA anyway.

GRU, EZE, SCL, LIM, SJO hardly nonexistent from DFW.

Quoting miller22 (Reply 68):
- AA will make some sort of public commitment to CLT that they'll never intend on keeping (see UA in CLE).

CLT is the third largest hub in the USA today, where as CLE barely registers. There is no comparison between the fate ot he two.No to mention CLE is 250 miles from one UA hub and 500 miles from another. CLT is 700 miles from the nearest AA/US hub.
The "latin" markets served from CLT are mostly leisure destinations that have significant feed from cities that MIA could never support nonstop service to. You think there will be DSM-MIA or OMA-MIA?

Quoting miller22 (Reply 68):
- That will start the snowball rolling. Once CLT loses any significant Latin American feed, load factors will drop on domestic CLT flights. Slowly, those will be consolidated through PHL and ORD.

CLT has more population, more catchment area and more buying power than CLE, CLT wont become CLE. What youre essentially sating is the third largest hub in the USA, is really infact a focus city. If this was true, US would be hemoraging money.

Quoting miller22 (Reply 68):
50-seaters will begin to be parked as the new 81-seaters arrive, and the natural target will be CLT. Just as Delta and United have done, the ability to consolidate two aircraft into one is too economical to ignore. CLT will start to lose it's regional service.

Tell me which cities are served from CLT with 50 seaters that cannot be served with larger RJs and will lose service all together.

What youre saying is that CLT is nothing more than CLE. Youre wrong, US would be hemmoraging $$$ if that were true.

Quoting gigneil (Reply 61):
The new AA will be the old US. CLT is a massive benefit to AA's nonexistent East Coast operations.

Youre correct

Quoting Cubsrule (Reply 54):
Correct. Within 150 miles of STL, there are only two airports with scheduled jet service: SPI and BMI. Neither has any low fare service besides G4, and neither has any mainline besides G4.

mmm...PIA, EVV, COU,
 
flyguy89
Posts: 3315
Joined: Tue Feb 24, 2009 6:43 pm

RE: US/AA Effects On CLT

Mon Dec 17, 2012 5:01 am

Quoting Cubsrule (Reply 66):
I understand. I think most people are overestimating the effect of what I'll call "wrong direction" traffic

Well certainly it's not the only aspect which would result in frequency reductions, but I do believe it makes up a decent portion of these potential reductions. I agree with the rest of your post, costs at the combined carrier will most definitely be a good amount higher than they are at US right now....

which leads me to this:

Quoting bobloblaw (Reply 69):
The "latin" markets served from CLT are mostly leisure destinations that have significant feed from cities that MIA could never support nonstop service to. You think there will be DSM-MIA or OMA-MIA?

Do you think with higher costs and capacity reduction the merged carrier would care about serving low-yield vacation traffic for some one going from DSM to AUA, or that they could even do so profitably?
 
goboeing
Posts: 2575
Joined: Mon Jun 05, 2000 5:31 am

RE: US/AA Effects On CLT

Mon Dec 17, 2012 5:11 am

Quoting bobloblaw (Reply 69):
the third largest hub in the USA

I am not refuting what you are saying, but third largest hub in terms of what, and could you post the list of say, the top ten?
 
Cubsrule
Posts: 14838
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 12:49 pm

Quoting miller22 (Reply 68):
There's just no reason for AA to split up so many international markets when ORD, JFK, PHL, and MIA are all superior.

How are any of those superior for connecting people on a route like IND-PUJ or PIT-MBJ?

Quoting bobloblaw (Reply 69):
mmm...PIA, EVV, COU,

EVV isn't, and the others sort of prove my point. COU supports fewer than five daily flights, and PIA is the size of GSO or CAE.

Quoting flyguy89 (Reply 70):
Do you think with higher costs and capacity reduction the merged carrier would care about serving low-yield vacation traffic for some one going from DSM to AUA, or that they could even do so profitably?

I don't know that the caribbean leisure traffic, at least, is all that low yield. I just pulled up some itineraries from BNA to places like PUJ and MBJ for spring break next year and found the lowest fares to be in the $0.25/mile range. Certainly, it is true that the types of southbound markets that are more likely to lose service - SKB, BGI, ANU, etc. - are higher-yielding, but that doesn't mean that some of the others are low yield.
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commavia
Posts: 11489
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 1:01 pm

I won't restate all of the good points others have made beyond just stating that I agree with those who say that CLT is completely safe as a hub if the two carriers merge, albeit it is almost certainly going to be smaller, and less international, hub than US has there now.

I see CLT settling at around 500 flights per day, and retaining just about all of the routes the hub currently serves domestically. Internationally, I see CLT retaining nonstop service to the largest Caribbean markets (as others have already mentioned - SJU, CUN, AUA, PUJ, NAS, STT, MBJ), plus BDA, LHR, FRA, MAD, and seasonally CDG. I see DUB, FCO and South America going away, and most of the smaller, 1-2/week Caribbean markets handed off to MIA.
 
Cubsrule
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 1:09 pm

Quoting commavia (Reply 73):
I see DUB, FCO and South America going away, and most of the smaller, 1-2/week Caribbean markets handed off to MIA.

Do you not think that GRU would work with overnight flights both directions and feed on both ends?

[Edited 2012-12-17 05:09:53]
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commavia
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 1:19 pm

Quoting Cubsrule (Reply 74):
Do you not think that GRU would work with overnight flights both directions and feed on both ends?

I'm still not sure if it would be worth it with higher-yielding MIA. CLT certainly offers far more domestic connectivity - in terms of routes and frequency - versus MIA, but most of those markets "better"-served over CLT have minimal demand to/from Brazil. The larger markets that drive much of the traffic to Brazil are all very well-served over MIA already. And as for the popularity of CLT for connections to/from MCO and other Florida points - those, too, can be quite well-served over MIA.
 
southwest737500
Topic Author
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 1:23 pm

I see CDG just operated seasonally. DUB will be eliminated. FCO will stay for the summer. Maybe downgraded to a A332.

Maybe a BER flight

LH will be interesting. They could even run a A343 in the summer and a A333 in the winter or they could just fly FRA
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Cubsrule
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 1:24 pm

Quoting commavia (Reply 75):
I'm still not sure if it would be worth it with higher-yielding MIA.

I don't think it's a slam dunk, but it seems to me that MIA needs a large number of GRU flights more for the bulk of connecting traffic for the frequency, so I don't see much harm to shifting some of the connecting traffic to CLT. The MIA local market is still well-served, and it's at least another option and in some cases (albeit smaller markets, as you point out) the only single-connect option offered by the merged carrier.
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stlgph
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 2:09 pm

Speaking of Charlotte, US Airways CLT to Heathrow service begins March 30 with A330. 28 in envoy and 263 main cabin.

CLT - LHR 7:05p arrival 8:05
LHR - CLT 10:05a arrival 2:10

Flight will originate in Miami.
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AAIL86
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 2:10 pm

Quoting miller22 (Reply 68):
You just pulled a classic marketing tactic. Only talk about the numbers that make your case and neglect the rest. We do it all the time and sometimes we even get away with it.
Quoting miller22 (Reply 68):
- The first look at CLT will go after the low hanging fruit: Latin America. AA will be looking to consolidate as much as they can through MIA. If you think AA will allow CLT to cannibalize traffic from MIA, take a second to look at their Latin America connections from DFW. Almost non-existent outside of Mexico which isn't served well from MIA anyway.

DFW-GRU is one of AA's most profitable routes, period. There is a a very good reason its the route that sees the first AA 77W. DFW also has service to EZE, SCL, GIG, CCS, SJO, LIR, GUA, SAL, PTY, SJU and MBJ. LIM is starting again.
You stated that LAXdude1023 was only using the data that supported his points, what gives there? Is travel to Latin America from DFW really that non-existent?

For the record, he is essentially right that CLT punches well above its weight in international O&D. Just because two random cities are the same size does mean that they have the same economic and cultural variables that drives people and businesses to purchase travel. For example - CMH is actually a larger MSA then CLT but its international O & D is far smaller (a couple AC RJs to YYZ make up all the international service there). The state of Ohio is heavily dependent on manufacturing with an emphasis on the auto industry - that means business travel domestically for the most part. CLT is home to Bank of America and Wells Fargo, among others - different industries with different travel needs.
So merely slapping down a MSA chart is not a scientific formula for determining how people in different cities far away from each other make travel decisions....
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LAXdude1023
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 4:29 pm

Quoting miller22 (Reply 68):
Only 40% of CLTs international traffic heads East to Europe, Africa, or the Middle East. Good for a 777 to LHR (perhaps a 2nd) and the rest to be connected through PHL or JFK. That's over 500 seats for a market with 412. Nice end-state load factor right at average.

But again, CLT is going to be (at the very least) a hub for the Southeastern US. By the time you throw in the connections from markets across the Southeast (not including ATL), that number could potentially double or greater.

Ive never argued that CLT was going to be a massive international hub. Ive also argued that it would lose GIG service no doubt. I have and will continue to maintain that CLT will be three things for the combined airline:

1) A regional hub in the Southeast serving all small to large markets in that region.
2) Service to LHR (probably 2x daily) and FRA (once daily)
3) Service to major market in the Caribbean

Beyond that, Im not saying what it will be. I do predict 400-450 in terms of total flights.

Quoting miller22 (Reply 68):
You just pulled a classic marketing tactic. Only talk about the numbers that make your case and neglect the rest. We do it all the time and sometimes we even get away with it.

Not even. I provided numbers to support my claim that CLT hits above the belt on international O&D (particularly to the UK and Germany). Im not hiding behind smoke and mirrors. You said MSA population directly translates to O&D, I provided proof it doesnt.

Quoting miller22 (Reply 68):
If you think AA will allow CLT to cannibalize traffic from MIA, take a second to look at their Latin America connections from DFW.

Well considering that they serve: GUA, SJO, LIR, SAL, PTY, EZE, SCL, GIG, GRU, CCS, and soon to be LIM and BOG, I think you are way off the mark with that statement.
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Bobloblaw
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 5:17 pm

Quoting incitatus (Reply 40):
The costs would be AA's, not US's. How does that factor into your logic?

AA has suffered from not just high costs but a lack of vision. US will likely have better vision.

Quoting flyguy89 (Reply 47):
Route rationalizations between all the new hubs and net capacity reductions system wide
Quoting CIDFlyer (Reply 51):

exactly...I could see some more midwestern markets actually being connected to CLT like CID/MSN/MLI/PIA etc

I acutally think these markets can support 1-2 flights per day to CLT with CRJs or ERJs. I also think GRR will get 2-3 flights to CLT.

Quoting flyguy89 (Reply 70):
Do you think with higher costs and capacity reduction the merged carrier would care about serving low-yield vacation traffic for some one going from DSM to AUA, or that they could even do so profitably?

Carribean is better yielding than Florida. If an airline cant serve AUA profitability, they shouldnt fly there at all. TO think that NYC-AUA traffic is higher yield than the dozens of smaller midwestern cities, is incorrect.

Quoting Cubsrule (Reply 72):
EVV isn't, and the others sort of prove my point. COU supports fewer than five daily flights, and PIA is the size of GSO or CAE.

You said there were only 3 jet markets withing 150 miles of STL, you mentioned one as SPI, which is the same sa COU. EVV does indeed have jet service.
 
Bobloblaw
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 5:23 pm

Quoting GoBoeing (Reply 71):
I am not refuting what you are saying, but third largest hub in terms of what, and could you post the list of say, the top ten?

Daily departures. Pax might not be so due to smaller average sets per departure

Quoting bobloblaw (Reply 81):
Quoting flyguy89 (Reply 70):

Do you think with higher costs and capacity reduction the merged carrier would care about serving low-yield vacation traffic for some one going from DSM to AUA, or that they could even do so profitably?

Youre basically on record now as saying AA will drop CLT-AUA. That's quite a prediction.
 
miller22
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 6:13 pm

Quoting bobloblaw (Reply 69):
GRU, EZE, SCL, LIM, SJO hardly nonexistent from DFW.

Ok, first things first. Your username is awesome! As an initiation for new analysts I hire, I send them around looking for Bob Loblaw. When you write it on a piece of paper they don't notice the joke until they ask the first person where Bob Loblaw is. Then they try to say it slower like that will fix it, but just makes it that much funnier! The second one we do is to tell them to find a form one-D-ten-T. When they finally write it down out of frustration, the result is hilarious "1D10T"

Now that that's out of the way:

DFW is the largest hub in the U.S. any way you look at it. The largest hub in the U.S. has fewer connections to Latin American markets than IAH, a hub half it's size and only 200 miles away. The reason for this is clear that AA doesn't want to cannibalize their money printing MIA operation. LIM and BOG are MASSIVE gaps which effectively eliminate the market when you are talking about Latin America connect points. PTY runs 3x a week. CCS runs once. SAL is less than weekly.

But you have to remember too, that DFW as an O&D market is 5 times the size of CLT. The 4th largest city in the U.S. warrants traffic to GRU, SCL, EZE, and GIG. But that you're missing BOG, in particular, signals it's not seen by American as a Latin America hub. What I'm saying is that American has already proven to be extremely protective of it's MIA hub (as they should be) to the point of keeping it's largest hub (DFW) from cannibalizing any true traffic from MIA. If they aren't willing to let DFW affect MIA which is 1150 miles apart, do you really think they're going to let CLT, which is only 650 miles away? Latin America for CLT is toast, outside of any warranted leisure O&D (CUN, PUJ, etc)

Quoting AAIL86 (Reply 79):
DFW-GRU is one of AA's most profitable routes, period.

Don't confuse profitability with network routing. DFW-GRU is so popular because of the local base, not the connecting base. O&D non-stop passengers are always preferred since you only divide the cost of their ticket by one flight.

In fact, what your suggesting further strengthens the point that AA is keeping DFW smaller than the market and hub it deserves to be. I don't question if DFW-GRU is extremely popular. But if it is, then why isn't AA adding to that route? The answer is clear: they don't want to cannibalize MIA. That's what it all comes down to. How much will AA route around CLT because it's not the preferred launching point? As you just pointed out, they seem to be willing to route a lot around DFW, even though it's such a large market. Just for grins, I took a look at markets into GRU. MCO is a larger GRU market than DFW.

Quoting Cubsrule (Reply 72):
How are any of those superior for connecting people on a route like IND-PUJ or PIT-MBJ?

Leisure markets that would probably stay, anyway, but to answer your question, MIA is a far superior hub for PUJ and MBJ. I've never heard anyone suggest otherwise until I read your post today.

Quoting bobloblaw (Reply 69):
CLT has more population, more catchment area and more buying power than CLE, CLT wont become CLE. What youre essentially sating is the third largest hub in the USA, is really infact a focus city. If this was true, US would be hemoraging money.

Yeah, it'll be bigger than CLE, but not structurally different. But lets make sure we're comparing apples to apples here. CLT is not the 3rd largest hub in the U.S. It's the 4th largest DOMESTIC hub. When you take into account international traffic, it drops significantly. In total hub size in terms of ASMs, CLT ranks 21st in the U.S., certainly not 3rd and not even 4th. (source OAG)

But I see where everyone's getting caught up on the CLE comment. I only use CLE as an example because it's the latest. The closest example in size is STL. STL is still the 32nd largest market in terms of ASMs in the U.S. Not small, but nobody could argue that it's a critical AA hub. In fact, it's quite difficult to find connections through STL. STL is about 1,000,000 people larger than CLT, to put it into perspective (Source 2010 Census). When it was a hub, it had a good international base as a result of TWA's operations. Where is STL now? American operates to 6 cities out of STL. 6! ORD, DCA, LGA, DFW, MIA, and LAX (outside of what Cape Air is doing with some props in EAS markets). But the overall STL domestic service offering has shrunk only about 25% from the other airlines that have picked up the slack.

STL, as an O&D market is doing just fine. STL as a hub is gone, yet it still commands about 20% more O&D traffic than CLT!

So you have a clear precedent set by American on consolidated hubs from a much larger market than CLT. I still think CLT will fare better than STL within the AA network. CLT will be a market the size of STL with the structure of CLE. Trust me, that's a good thing!

Quoting bobloblaw (Reply 69):
The "latin" markets served from CLT are mostly leisure destinations that have significant feed from cities that MIA could never support nonstop service to. You think there will be DSM-MIA or OMA-MIA?

Yes, actually. DSM in particular. This is in line with AA's four-corners plan (as ill-fated as that is). DSM is a prime market for MIA service, but AA has not had the aircraft to go after that market. Once the 81-seaters start flying en-masse, I would expect DSM-MIA to be a market added. OMA too, probably. This is not far fetched at all, when you consider some of the markets they hit from MIA today: IND, CMH, TUL, MSP, MEM. You could draw an E-140 range circle with those cities, and you start to see cities such as DSM, OMA, MKE, GRR, BUF, and MCI that just fall off the edge, and a 737-800 or MD-80 is just too big.

I think the more important question is, "what value does CLT bring to DSM?" AA can route any DSM Florida traffic through ORD. Circuity is about the same since CLT is so far East. Add in that there are only 2 flights a day on RJs DSM-CLT and you start to see that it's not even a market for CLT to serve. The majority of the flights offered are United code-shares through ORD anyway.

You could draw a circuity map of American's new hubs that show where CLT's new hub catchment area would be for Florida. South and East of Chicago, South of PHL, East of DFW, and only the leisure markets in Florida (North of Miami). That is a pretty small region that CLT finds itself smashed into. A region, btw, about the size CLE is currently serving. Market size, not O&D size. Some notable cities within CLT's future catchment area: IND, CVG, CMH, RIC, BNA, TYS, RDU, SDF, and CLE. Every one of those cities already has non-stop service to both MCO and TPA, by the way. How important is a hub that only connects people who had a cheaper non-stop alternative? Not much.

We all like to root for the small guy, and I'm certainly included in that. I want CLT to stay, but I'm also a realist with a lot of data. CLT will be larger than CLE, CVG, and MEM, but what AA did to their bigger market at STL shows just how sensitive they are to splitting traffic. Latin America is better served by MIA, and Europe is MUCH better served by JFK and PHL. That leaves domestic options only for CLT, for which it has a smaller O&D base than STL. Don't forget all of those inbound CLT aircraft will no longer have Latin America or European traffic, which will just start to unravel a lot of those markets. The effect of dropping markets in a hub is compounding, and CLT is extra sensitive with it's disproportionally high percentage of connecting traffic.

In the end, CLT will be about the market size of STL, but I think AA will still operate the majority of those flights where they let them go to the LCCs in STL. That means LHR, PUJ, CUN, MBJ?, plus all of the major markets in the U.S. O&D market will stay the same size, but seats and departures will drastically fall. 300 is my 5-year guess. (STL is currently 230, so I'm giving CLT the benefit of the doubt). From what I'm hearing, the over/under is about 450. Place your bets!
 
miller22
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 6:20 pm

Quoting LAXdude1023 (Reply 80):

1) A regional hub in the Southeast serving all small to large markets in that region.
2) Service to LHR (probably 2x daily) and FRA (once daily)
3) Service to major market in the Caribbean

Beyond that, Im not saying what it will be. I do predict 400-450 in terms of total flights.

Yup, sounds about right. We're arguing the same thing.

We both agree CLT will be MUCH smaller than it is now. We're just arguing the magnitude of the "MUCH." Looks to me that you think CLT will serve more markets with smaller aircraft in it's end state, and I believe they'll serve fewer markets with larger aircraft. Same thing, really, and I don't think your predictions are out of whack by any stretch.

But you're starting to see where the perception has shifted in this thread. We were arguing a range between 250 and 700 at the start, and now it's a range of 300-450. We're all starting to converge on a very realistic prediction.
 
brilondon
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 6:44 pm

Quoting rduddji (Reply 10):
That being said, CLT will remain a hub, it will just be pared down a bit like other post merger secondary hubs.

AA will treat CLT just like it treated STL and RDU in the previous mergers. Slowly close the hubs and make it a focus city at best, or just shut it down altogether.

Quoting flyby519 (Reply 18):
US has a limited hub network, and has to use CLT for non-optimal stuff that MIA will replace after the merge (S. America, Caribbean)

MIA will replace most of the hub activity that would once have used CLT. AA, if they wanted a hub in the Carolinas would have kept RDU as a major hub, but I just don't see your reasoning for another major hub in the SE United States.
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CV880
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 6:54 pm

Quoting brilondon (Reply 85):
MIA will replace most of the hub activity that would once have used CLT. AA, if they wanted a hub in the Carolinas would have kept RDU as a major hub, but I just don't see your reasoning for another major hub in the SE United States.
AA/US would be foolish to cede the Southeast to DL, as MIA will never be able to take the place of either ATL or CLT.

[Edited 2012-12-17 10:55:20]
 
USAirALB
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 6:58 pm

Quoting bobloblaw (Reply 69):
The "latin" markets served from CLT are mostly leisure destinations that have significant feed from cities that MIA could never support nonstop service to. You think there will be DSM-MIA or OMA-MIA?
Quoting bobloblaw (Reply 69):
Quoting gigneil (Reply 61):The new AA will be the old US. CLT is a massive benefit to AA's nonexistent East Coast operations.
Youre correct
Quoting brilondon (Reply 85):
MIA will replace most of the hub activity that would once have used CLT.

People keep saying "AA". You do know that if AA/US merge, "AA" will be US Airways, just with a different livery and name. Nothing will change except the name and the livery, US Airways will be running the airline, and US has been known to favor CLT.

To say MIA will replace CLT as a hub is absurd.
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flyguy89
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 8:56 pm

Quoting Cubsrule (Reply 72):

I don't know that the caribbean leisure traffic, at least, is all that low yield.

When spread across multiple connecting flights and competing with packaged tour operators, it can be for a lot of places. I'm not saying the combined carrier would completely abandon these markets, they would just jack up fares and carry a smaller number of people or, in extreme cases, leave those people to double-connect.

Quoting Cubsrule (Reply 77):
I don't think it's a slam dunk, but it seems to me that MIA needs a large number of GRU flights more for the bulk of connecting traffic for the frequency, so I don't see much harm to shifting some of the connecting traffic to CLT.

But which one will they see as being more profitable is the question at hand here.

Quoting AAIL86 (Reply 79):
For the record, he is essentially right that CLT punches well above its weight in international O&D.

It's a bit misleading, but we all know the presence of non-stops in the market stimulates demand so it's no surprise that CLT, being the last of the small-market major hubs, has higher O&D. A more apt comparison would be CLT now against the international O&D of STL in 1999/2000, PIT in the late 90's or CVG in 2007.

Quoting bobloblaw (Reply 81):
I acutally think these markets can support 1-2 flights per day to CLT with CRJs or ERJs.

Really? Because these are exactly the types of markets I see as most vulnerable from CLT. What destinations could be reached from these markets that aren't already better flowed over ORD?

Quoting bobloblaw (Reply 81):

Carribean is better yielding than Florida.

Only marginally so, and this the fact for almost all of the Caribbean markets with the most volume out of CLT.

Quoting bobloblaw (Reply 82):
Youre basically on record now as saying AA will drop CLT-AUA. That's quite a prediction.

...and that's quite the false statement.

Quoting USAirALB (Reply 87):
You do know that if AA/US merge, "AA" will be US Airways, just with a different livery and name.

Until the debate is settled on who exactly will be doing the acquiring, this cannot be stated with any certainty.
 
brilondon
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 9:23 pm

Quoting USAirALB (Reply 87):
People keep saying "AA". You do know that if AA/US merge, "AA" will be US Airways, just with a different livery and name. Nothing will change except the name and the livery, US Airways will be running the airline, and US has been known to favor CLT.

To say MIA will replace CLT as a hub is absurd.


Not as absurd, but it has been rumoured that AA will retain its headquarters and its name if a merger comes about. There fore it might be that CLT will not remain a hub in favour of MIA, being closer to the Central and South American markets.
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slcdeltarumd11
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 10:12 pm

Quoting USAirALB (Reply 87):
To say MIA will replace CLT as a hub is absurd.

ABSOLUTLEY. These people need to look at a map and see how awful a location MIA is for domestic connections.

AA would be fools to abandon CLT its a transfer hub and US prints money there.

Quoting cv880 (Reply 86):
AA/US would be foolish to cede the Southeast to DL, as MIA will never be able to take the place of either ATL or CLT.

Exactly. Delta would be the real winners if they killed CLT. It is very realistic to think CLT will suffer a rightsizing as with more hubs more connections can transfer but they would never dehub the place. To think we have a STL, RDU or SJC situation coming is rediculous.
 
LAXdude1023
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 10:16 pm

Quoting brilondon (Reply 89):
Not as absurd, but it has been rumoured that AA will retain its headquarters and its name if a merger comes about. There fore it might be that CLT will not remain a hub in favour of MIA, being closer to the Central and South American markets.

I suppose if AA/US did away with CLT, DL would send them a huge thank you card.
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MAH4546
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 10:21 pm

Quoting USAirALB (Reply 87):
People keep saying "AA". You do know that if AA/US merge, "AA" will be US Airways, just with a different livery and name.

That is far from certain. It is becoming very clear, especially through AA's revenue gains, that AA's BK plane to go it alone is working. And if AA emerges alone and then decides to go after US, which is looking more and more likely, it will be AA taking over US.
a.
 
brilondon
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 10:46 pm

Quoting LAXdude1023 (Reply 91):

I suppose if AA/US did away with CLT, DL would send them a huge thank you card.

I really don't see any other options here for the S.E. CLT is not exactly US's largest and strongest hub. I believe that if you want to see CLT's future, you would just look at PIT or STL.
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LAXdude1023
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 10:56 pm

Quoting brilondon (Reply 93):
I really don't see any other options here for the S.E. CLT is not exactly US's largest and strongest hub.

CLT is US' largest (and subjectively) strongest hub.
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AVLAirlineFreq
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 11:10 pm

Quoting brilondon (Reply 93):
I really don't see any other options here for the S.E. CLT is not exactly US's largest and strongest hub. I believe that if you want to see CLT's future, you would just look at PIT or STL.

So are you (and others) saying that US/AA would just write off the southeastern U.S.? Or that capacity would be increased from ORD, PHL, MIA, and DFW to provide lift into and out of the region from the West, Midwest and Northeast (but not necessarily within it, which is one of the roles now played by CLT)?

I see lots of predictions of CLT's demise, particularly citing the examples of past closed hubs, but few indications of what the consequences of that would be other than more traffic flowing through MIA into Latin America and the Caribbean.
 
gigneil
Posts: 14133
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RE: US/AA Effects On CLT

Mon Dec 17, 2012 11:39 pm

Quoting brilondon (Reply 93):
I really don't see any other options here for the S.E. CLT is not exactly US's largest and strongest hub.

CLT is by far and away US' largest and strongest hub.

Its the 3rd largest aviation hub in the US, period.

I think that people suggesting CLT can close have no idea the landscape of CLT.

NS
 
slcdeltarumd11
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RE: US/AA Effects On CLT

Tue Dec 18, 2012 12:02 am

Quoting USAirALB (Reply 87):
To say MIA will replace CLT as a hub is absurd.

ABSOLUTLEY. These people need to look at a map and see how awful a location MIA is for domestic connections.
 
milemaster
Posts: 1071
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RE: US/AA Effects On CLT

Tue Dec 18, 2012 1:35 am

Quoting miller22 (Reply 83):
But you have to remember too, that DFW as an O&D market is 5 times the size of CLT. The 4th largest city in the U.S. warrants traffic to GRU, SCL, EZE, and GIG. But that you're missing BOG, in particular, signals it's not seen by American as a Latin America hub. What I'm saying is that American has already proven to be extremely protective of it's MIA hub (as they should be) to the point of keeping it's largest hub (DFW) from cannibalizing any true traffic from MIA. If they aren't willing to let DFW affect MIA which is 1150 miles apart, do you really think they're going to let CLT, which is only 650 miles away? Latin America for CLT is toast, outside of any warranted leisure O&D (CUN, PUJ, etc)

This is spot on.
 
Flighty
Posts: 9963
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RE: US/AA Effects On CLT

Tue Dec 18, 2012 1:51 am

Quoting milemaster (Reply 98):
This is spot on.

Latin America/USA is a big market, to be certain. The domestic USA market dwarfs it. CLT pulls enough domestic traffic that things like CUN self-justify without even considering MIA. If AA/US were to cut say CLT-CUN, they would be giving up profitable flying. It's not necessary to analyze past that point.

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