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commavia
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 12:48 pm

Excellent analysis from Swelbar. He makes good points. In particular:

Collaboration is critical. That doesn’t mean Tom Horton must be a part of the new American if the architects of any deal determine he’s not welcome. Nor does it mean that the entire American team in place today is necessarily the best choice. But if the leadership crown goes to Parker’s Phoenix posse, they would be making a grave error to impose the US Airways style on the new American without leveraging American’s successes and cultural assets.

American has proven adept at managing its regional affiliations, code share partners, joint ventures with British Airways and JAL and a loyalty program that arguably is more valuable than US Airways itself. Its marketing and IT capabilities exceed anything US Airways has ever tried. And American knows far better than its potential new partner how to treat the premium customer who wants warm nuts and lie-flat seats in first class.

I can only hope that the “best of the best” of the two companies will be a part of any new one, because that’s the only way the new airline will compete effectively with first movers Delta, United and Southwest.


Quoting IrishAyes (Reply 69):
The irony of the whole situation is that if PHX gets cut (although I doubt it will be reduced to spoke size entirely) then that basically scales down the last of the HP "hub" assets that US acquired in the merger.

Ironic, yes.

Quoting deltairlines (Reply 71):
Phoenix could likely become a CVG type operation - right sized from where it is now. Airways right now has about 260 flights a day, going up to 290 when the Flex Flight operation is in place. You have five banks in each direction; you'd likely see this cut down to three banks in each direction, peaking out at about 125-150 flights/day. I tend to think the flex flights would be gone post-merger, with redeyes left to Charlotte, Philadelphia, Miami, Kennedy, O'Hare and maybe Boston (which I doubt, as US can't even keep a year round redeye there).

Keep in mind that with a merger, a lot of the large RJ feed at PHX (CR9s are around 40 flights/day) would likely be cut down to help support ORD and LGA where those planes could be better used early on in the merger process (just as we saw post-HP merger with those CR9s quickly making their way into the CLT market).

Now, I expect a decent AA presence in PHX to remain. There is a market there that will value the First Class, lounges, frequent flyer perks, etc. that American offers and Southwest will not. It just becomes a matter of right-sizing the market to find the balance between keeping these benefits and finding profitability. Phoenix, at least unlike some of the midwestern cities such as CVG, PIT, and STL, has a lot more potential lying ahead of it - it's still struggling with the weight of the Great Recession, but I'd say the potential is there (and I'd love to see it - I loved my year living in Scottsdale).

  

I pretty much agree on all of the above. PHX is a huge market, with a both a large outbound and inbound demand component, and a respectable business market. But, all that being said, PHX does not require a hub the size of which US now operates there in order to cater to those markets. PHX is a hub of its size today because US, with its limited network, has little alternative. With a merger, several excellent alternatives instantly appear.

Quoting rwy04lga (Reply 75):
A lot of LGA passengers show up at 'terminal C' when they really want 'concourse C' at terminal B. So, to be clear, when you say 'C-D', what you mean is 'concourses C and D at terminal B', correct?

I was referring to Concourses C-D in the CTB.

Quoting Flighty (Reply 79):
AA's ORD situation is unknown and little discussed.

It's relatively known. It's a huge hub in one of America's largest population centers. Finally freed from union contract strictures, and thus with the right costs and the right fleet, ORD should be a thriving hub. Not to mention, if there is a merger, ORD's location means it may well stand to pick up some additional traffic as network gaps are filled in and hubs optimized.

Quoting Flighty (Reply 79):
LAX+JFK are, to put it mildly, question marks. If AA were making money there, we would have seen gigantic AA operations there similar to another DFW. But even when JFK had slots open, AA didn't use them. Didn't want them. Same at LAX - they could expand but they (eventually tire of losing money there).

I don't really see how they are question marks. For starters, it's not as easy as saying "if AA were making money, they'd have gigantic operations." Both JFK and LAX are capacity-constrained (for different reasons) and thus even if AA were making huge money, they couldn't have "gigantic" operations. But either way, the size and scope of AA's operations at both airports reflects their market realities. Both cater to massive local markets, but hyper-competitive ones. AA uses both to connect longhaul and shorthaul networks, and provide key connectivity for partners.

I don't see why any of that, in general, would change with a merger. I see LAX changing very little, as the role it serves is unique and cannot be replicated. JFK I see changing somewhat - lots of peak-time slots there are today being used for 1-per-day connections to international flights. Those I see being replaced with more longhaul (international and transcon) flights catering to the huge local NYC O&D market, while connections are shifted to some extent over PHL. But AA would still maintain a large presence in NYC (JFK and LGA).

Quoting STT757 (Reply 99):
They would be around 19.3 million passengers per year combined at EWR, JFK, LGA.

Like I said - a very respectable #3. Again - with a hub in PHL, AA need not duke it out for sheer seat/passenger count in NYC with UA and DL. Both of those carriers need to fight it out for volume in NYC because they both operate hubs of some form in NYC that require volume to drive frequency, and thus support their hubs. AA could focus its NYC presence on catering to O&D, a market AA knows quite well, and as such being #3 - with hundreds of daily departures out of EWR/LGA/JFK to the prime business markets - would be more than sufficient.

Quoting STT757 (Reply 101):
Since the surving company will be AA, and they've never shown any indication they were willing to settle in the past 13 years, I'm going to say TLV will not be on AA's route map.

If there's a merger, I expect the "new AA" to be flying to TLV, not only from PHL but possibly also from JFK. If the market is as lucrative as it seems, they'll figure out how to make it work.
 
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STT757
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 1:01 pm

Quoting commavia (Reply 101):
If there's a merger, I expect the "new AA" to be flying to TLV, not only from PHL but possibly also from JFK. If the market is as lucrative as it seems, they'll figure out how to make it work.



Is it worth it though? How much can TLV earn AA vs. what the settlement will cost. We had a good thread a year or two and it was brought up that with interest and such the settlement due to Israeli employees of TWA is over $20 million. How many years would AA need to fly to TLV before they made back the $20 Million? If they paid it back in 2001 they would have save themselves a fortune.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
usairways85
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 1:14 pm

Quoting commavia (Reply 65):
The second issue is what they use those slots for. Today, AA's utilization of its precious, prime-time NYC slots - particularly at JFK, but also to some extent LGA - is suboptimal because of the competitive position AA is in. If given the opportunity to use PHL as a true, omni-directional, domestic-and-international, all-day-long connecting hub, it would free AA up to use their NYC slots far better. (As a point of reference, the single only other hub in the northeast capable of serving as that kind of extensive a megahub is EWR - so AA with that kind of hub at PHL plus a huge presence in NYC and DCA would be quite a force.) Instantly AA could eliminate much of the 1-per-day JFK flights to places like BWI, CLE, CVG, etc. - those connections could be handled over PHL, and those prime slots put to better use. Similarly at LGA, AA flights to places like CLT could be eliminated in favor of US' extensive schedule, and the large pool of slots US still has parked on near-wingtip-to-wingtip schedules (mostly to PHL) could be better used. There is a lot of potential there.

Ok, the strategy you lined out makes complete sense. Many people have said they will rationalize PHL in favor of JFK. And while I agree they may rightsize certain PHL markets I don't see them drastically cutting PHL. Mainly because I don't see them building that megahub in JFK with 400-500 daily flts.
 
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 1:31 pm

Quoting usairways85 (Reply 62):
I'm not sure I understand how JFK & LGA will gain a lot in this. Aren't they both slot controlled? US has a fraction of the slots it used to after the DL deal and only has a handful at JFK. AA may have a decent domestic operation at LGA but hasn't the domestic operation at JFK struggled in recent years? They let B6 and DL take some of the market so they have shrunk to prime domestic and international markets. If JFK is slot controlled or at least during peak hours how does US help AA in JFK?

You're a smart man. See past a.net folklore to reality. The new AA at LGA/JFK/EWR will be AAs EWR slots+USs EWR slots+AAs LGA slots+USs LGA slots+AAs JFK slots (used and unused)+USs JFK slots.
Nothing more, nothing less...unless they get a deal to offload or gain more.

Quoting commavia (Reply 64):
Instantly AA could eliminate much of the 1-per-day JFK flights to places like BWI, CLE, CVG, etc. - those connections could be handled over PHL, and those prime slots put to better use.

Those aren't going anywhere and you know it. AA doesn't even know what to do with the JFK slots they have now. It is use or lose. You keep talking about these gold mine routes that could be started...what are they? where are they? They could start them right now. And if there is a pot of gold at the end of a rainbow, B6, DL or the 80 other airlines at the airport probably already serve it...alongside AA.

You also put the nix on Florida routes...dont know where you are from...but Florida is NYCs biggest market. And if you are not a player in that market, you are not a player in NYC. Because the guys flying to LHR in AAs high yielding business want to use their miles to get their kids to the Mouse House...plain and simple.
 
milesrich
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 2:24 pm

Quoting airliner371 (Reply 10):
Quoting FL787 (Reply 8):
By what measure are they basing this off of?

AA/US is largest if you go buy enplaned passengers.

Before deregulation, Eastern Air Lines was the largest carrier based on this criteria, but only Eastern trumpeted that fact. United was the largest in terms of ppms.
 
usairways85
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 2:53 pm

Quoting jfklganyc (Reply 103):
Those aren't going anywhere and you know it. AA doesn't even know what to do with the JFK slots they have now. It is use or lose. You keep talking about these gold mine routes that could be started...what are they? where are they? They could start them right now. And if there is a pot of gold at the end of a rainbow, B6, DL or the 80 other airlines at the airport probably already serve it...alongside AA.

Well the thought is they could route BWI, CLE, etc. through PHL as the connecting hub. But as you pointed out where are the prime routes, particularly O&D routes, out of JFK. You have LAX, SFO, MIA, LHR, and probably some caribbean markets. However, they have also cut JFK-caribbean, especially with the recent announcement of SDQ/STI receiving the axe and haven't they struggled with 2nd/3rd tier European airports like MUC, VCE, FRA, DUB, AMS, GLA. Many of which face stiff competition at JFK and practically none in PHL.
 
commavia
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:12 pm

Quoting jfklganyc (Reply 103):
Those aren't going anywhere and you know it.

Thank you for telling me what I do and don't "know." And for your information, no, I don't "know" any more or less than you do. I think the scenario I laid out is entirely plausible - indeed likely - if AA and US merge: PHL becomes the true connecting "hub" while JFK/LGA are optimized primarily for the huge NYC O&D market.

Quoting jfklganyc (Reply 103):
It is use or lose. You keep talking about these gold mine routes that could be started...what are they?

Internationally - TLV, FRA, GLA. There's three right there. With the right costs and right equipment, I think all 3 would work for AA out of JFK.

Quoting jfklganyc (Reply 103):
They could start them right now.

They don't have sufficient slots. That's my point. Today AA has to balance the slot utilization at JFK for both O&D and connections. If AA needed to rely on JFK less for connections, they could free up some slots for more O&D-oriented routes.

Quoting jfklganyc (Reply 103):
And if there is a pot of gold at the end of a rainbow, B6, DL or the 80 other airlines at the airport probably already serve it...alongside AA.

AA, B6 and DL can coexist at JFK (and in NYC in general).

Quoting jfklganyc (Reply 103):
You also put the nix on Florida routes...dont know where you are from...but Florida is NYCs biggest market. And if you are not a player in that market, you are not a player in NYC. Because the guys flying to LHR in AAs high yielding business want to use their miles to get their kids to the Mouse House...plain and simple.

I didn't say AA exits NYC-Florida. I simply said AA could let DL and B6 fight over it. AA can maintain a token presence in the main NYC-Florida markets (MCO, TPA and MIA/somewhere in South Florida). But AA doesn't need to spend resources fighting DL and B6 for market share on JFK-TPA. Let them have it.

Quoting usairways85 (Reply 105):
and haven't they struggled with 2nd/3rd tier European airports like MUC, VCE, FRA, DUB, AMS, GLA

Not really. AA hasn't really flown JFK-"secondary" Europe much if at all for years. For around the last decade, AA has remained relatively stable at JFK - the only JFK-Europe routes AA has cancelled in that time have been BRU and BUD. But AA has added several more, and all the rest have stayed around.
 
ckfred
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:32 pm

Quoting QANTASvJet (Reply 6):
Let's just hope this means the end to that terrible tail. (I don't need to explain, you know what I mean...)

Actually, the tail is starting to grow on me.

What US could do, post merger, is paint the planes in the US livery, replacing US Airways with American, but keep the new AA striped tail.

But, if the deal goes through, would the advertising change to the new new American, since it would be the new American with a new owner?

And, would Parker take out the first class cabins on the 773s and the trans-con A321s. After all, US doesn't have any 3-class cabins. US has managed to do well without the finicky corporate types and celebrities. So, why does the combined AA/US need those passengers.
 
usairways85
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:36 pm

Quoting commavia (Reply 106):
Not really. AA hasn't really flown JFK-"secondary" Europe much if at all for years. For around the last decade, AA has remained relatively stable at JFK - the only JFK-Europe routes AA has cancelled in that time have been BRU and BUD. But AA has added several more, and all the rest have stayed around.

I just looked at a AA's JFK-Europe schedule today. Yes it is a small subset and in the winter season.
Here are the destinations.
LHR
MAN
MAD
MXP
CDG

I know LHR is a huge market but the number of destinations is rather underwhelming. I don't know you can simply move US' PHL flts to JFK (AMS, DUB, VCE, etc) and just expect that they will thrive. Why hasn't AA started them in the past? PHL doesn't have nearly as much O&D as JFK but they cover the gap with a rather strong connection point that JFK currently does not have.

My point is that yes AA can probably adjust JFK and add some additional markets but PHL has a relatively strong European network that the combined carrier should leverage.
 
point2point
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:42 pm

Okay..... now that just about everyone and their Uncle Phil has chimed in about all the hubs here (and I know we're all waiting to hear from Granny Ida who'll be along soon with here pushing in her    ), I'm thinking along the lines of probably a smallish detail..... but would the current AA-B6 code share maybe continue if there were a merger? Would the new AA need to continue with B6 here? From the B6 website....

convenient connections between 26 domestic JetBlue markets and 15 international destinations served by American Airlines from New York's JFK and Boston's Logan airports.

So at present it seems that AA and B6 make each others life a bit smoother, especially at JFK and BOS.

But has BK or would any merger plans affect this? And didn't AA and AS just expand some code-sharing as well recently? If this were recent..... maybe these ex-OW code-shares will remain?


 
 
Bobloblaw
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:46 pm

Quoting mah4546 (Reply 50):
It's exactly how mergers work. Network optimization, and it will hurt CLT a bit, just like it hurt MSP.

Network optimization means you do less overflying of your hubs, not more. If anything longer haul RJ flights from DFW to cities in the SE will be cut in favor of CLT unless those routes have lots of local DFW traffic or lots of traffic to cities not served from CLT. I can use your argument against DFW as well. Saying that DFW will lose flights to ICT, OKC and TUL and that traffic will go to CLT instead. Makes no sense.
 
ckfred
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:46 pm

Here's one issue that the merger would have to deal with, BOS. I know that they are building a connection around the parking garage to connect the US and AA sides of Terminal B. But could you imagine connecting at B, if you had to switch sides? Or how about a gate change due to a delay, and having to walk from one side to the other.
 
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xaapb
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:46 pm

Quoting nutsaboutplanes (Reply 51):
There is demand here for CONNECTIONS. The vast majority of the US operation in PHX is conx pax moving East-West ......the local market is actually rather poor

Flying from MEX to LAS via PHX is what most of the time my family and I do, not to mention that normally US have the best fares to LAS via PHX. I've also seen many passengers going via PHX to other parts of the US and even Canada.

Greetings.
Jorge Meneses
 
AA787
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 3:57 pm

Quoting usairways85 (Reply 108):
I just looked at a AA's JFK-Europe schedule today. Yes it is a small subset and in the winter season.
Here are the destinations.
LHR
MAN
MAD
MXP
CDG

You are missing ZRH and BCN
 
deltairlines
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:00 pm

Quoting usairways85 (Reply 108):
Why hasn't AA started them in the past? PHL doesn't have nearly as much O&D as JFK but they cover the gap with a rather strong connection point that JFK currently does not have.

AA hasn't had the right size fleet for a lot of these markets. The 767-300ER fleet is stretched pretty thin as it is; the 777 is simply too much aircraft and it wasn't until recently they started using the 757 over the pond (and even there, that's a limited subfleet given that they also use them ex-MIA to South America). It most likely became a matter of picking the markets where they could earn the most revenues over upgauging markets that didn't need bigger aircraft to free up additional 767s.
 
rob2507
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:05 pm

Quoting ckfred (Reply 111):
Here's one issue that the merger would have to deal with, BOS. I know that they are building a connection around the parking garage to connect the US and AA sides of Terminal B. But could you imagine connecting at B, if you had to switch sides? Or how about a gate change due to a delay, and having to walk from one side to the other.

What about putting UA into the current AA or US gates, and AA or US into the new UA gates currently under construction? I have to think that Massport wouldn't want to split up airlines, and this would allow both airlines to have a contiguous presence.
 
flyinryan99
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:11 pm

Quoting bobloblaw (Reply 110):
Network optimization means you do less overflying of your hubs, not more. If anything longer haul RJ flights from DFW to cities in the SE will be cut in favor of CLT unless those routes have lots of local DFW traffic or lots of traffic to cities not served from CLT. I can use your argument against DFW as well. Saying that DFW will lose flights to ICT, OKC and TUL and that traffic will go to CLT instead. Makes no sense.

While it may make sense in theory about over flying hubs, look at what DL has done. They have cut almost all small cities that have nothing but connections. Only cities with a decent amount of O/D and connections are surviving. You will dilute your yield if you run too many connections with little to no O/D out of your hub. I am going to side with MAH as I could see CLT overall lower in flight frequencies however, they could easily pick up new destinations in which AA already flies but is not served by US. I'm thinking cities like GRR, FWA, TOL will gain a couple of daily flights. While these frequencies will not make up for the cuts they may have in their existing cities, the hub will be strengthened. IMO, having more hubs from a spoke helps the strength of network itself even if it's at lower frequencies.
 
sccutler
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:32 pm

1. US ain't acquiring AA.

2. I have it on excellent authority that, not only will the combined carrier's HQ be in Texas; the decision has been made that, in order to avoid excessive territoriality among the combined work forces, the new juggernaut airline is to be renamed, "Braniff International Airways."

Remember, you heard it here first!  
...three miles from BRONS, clear for the ILS one five approach...
 
southwest737500
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:33 pm

What are the chances of a daily AS flight to CLT
Next flight: TUL-ATL-CLT CRJ900 and MD88
 
YYZbound
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:34 pm

Quoting ckfred (Reply 107):
And, would Parker take out the first class cabins on the 773s and the trans-con A321s. After all, US doesn't have any 3-class cabins. US has managed to do well without the finicky corporate types and celebrities. So, why does the combined AA/US need those passengers.

There's HUGE amounts of money having contracts with where those premium passengers come from. The studios are required contractually through SAG for instance, to fly celebrities in First class.
 
panampaul
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:37 pm

Quoting skytony (Reply 95):
Maybe they will change the name back to American Airways?

If so, we need to watch this video!

http://www.youtube.com/watch?v=RCnWLR28pfE
 
ldvaviation
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:38 pm

Quoting PHLwok (Reply 74):
Less clear to me is the PHX situation, as much transcon traffic heading to California from points east can route via DFW, but AA at LAX also can't expand significantly without more terminal capacity, and PHX is a large and fast growing area that they shouldn't cede to WN for O&D traffic reasons. Maybe it becomes more like DCA without the perimeter rule - good connectivity to the rest of the country to support O&D and some regional connections so someone flying DEN-SAN on AA wouldn't have to route via DFW or a RJ on LAX-SAN.

At LAX? The solution may just have presented itself. With US's impending move to T3 and LAWA's recent decision to redevelop T3 as part of the LAX Specific Plan, the opportunity is there for the new AA to takeover and expand into the new T3. (T3 and T4 could be linked by an airside bus until the terminal tram is built.)

While we are speculating, the new AA could also strike a bargain with LAWA to takeover the east side of the South Concourse of the new TBIT. That is the concourse adjacent to T4. LAWA might be willing to consider this once the satellite to the new TBIT or the extension to the new TBIT north concourse are operational. (The satellite is in the planning phase. There will be a connector building between T4 and TBIT.)

Most of the terminal redevelopment at LAX will be taking place in space adjacent to the AA terminal. The new AA will have many options at LAX.

[Edited 2013-02-07 08:41:26]
 
sccutler
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 4:45 pm

Quoting ckfred (Reply 107):

But, if the deal goes through, would the advertising change to the new new American, since it would be the new American with a new owner?

Meh.

The "New Owner" of the combined entity will be, predominantly, the stakeholders of AA. When the dust settles, it will (from a shareholders' perspective) be more like AA acquired US/HP. Don't lose sight of which is the tail, and which is the dog.
...three miles from BRONS, clear for the ILS one five approach...
 
panamair
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:02 pm

Quoting deltairlines (Reply 114):
until recently they started using the 757 over the pond (and even there, that's a limited subfleet given that they also use them ex-MIA to South America

AA has 18 75Ls (configured for international premium flying) and to date, they have been underutilizing them for their intended missions...many of them end up on domestic and Caribbean runs (I was just on one the other day between JFK and SXM, for example); I don't think the number of frames is a reason for not starting more JFK-Europe flights...
 
EricR
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:07 pm

The post-merger viewpoints on the PHX hub are too optimistic. The main objective of airline mergers in the U.S. today is to reduce capacity so airlines have the pricing power to become / maintain profitability. This becomes especially important during high fuel prices or economic downturns.

This means removing capacity from the network and vastly reducing and/or eliminating weak hubs. I think the hub is eliminated over the course of time. There are very limited traffic flows that benefit from PHX's existence as a hub and as many have stated, the traffic is lower yield traffic that the combined carrier needs to purge from its network.

DL is in the process of eliminating MEM and slowly CVG. UA is still young in their integration process, but CLE will most likely see reductions and eventual elimination as a hub once UA gets further along in their network integration process and the older gas guzzling ERJs that primarily serve CLE are retired.

Keep in mind it takes time to draw down hubs and is usually done in a stair step format. It took years before AA officially eliminated STL as a hub. But the STL hub was redundant in the AA network back then as much as PHX will be redundant in the combined US/AA network.
 
Bobloblaw
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:11 pm

Quoting flyinryan99 (Reply 116):
While it may make sense in theory about over flying hubs, look at what DL has done.

There has actually been a reduction of that. Especially from UA. From DL there has been some like GRB losing ATL but that is coming back.

Quoting flyinryan99 (Reply 116):
You will dilute your yield if you run too many connections with little to no O/D out of your hub. I am going to side with MAH as I could see CLT overall lower in flight frequencies however, they could easily pick up new destinations in which AA already flies but is not served by US. I'm thinking cities like GRR, FWA, TOL will gain a couple of daily flights

I dont think TOL but I do think GRR could get CLT plus DCA. Your first point is weighed against the cost of the flight too. 50 seat RJs from DFW to SC, GA are not efficient. Unless there is lots of local traffic tp DFW, (which there very well may be), those routes would be candidates for cuts. This is exactly why UA dropped CID-IAH. Route the traffic thru ORD or DEN rather then a long thin RJ route to IAH.

I think it is possible there could be some ORD cuts to cities in the midwest in exchange for 1-2 daily flights to CLT in order to reduce ORD delays and congestion. GRR, FWA, are good candidates.

Also what is happening in ATL will have an impact on CLT.
1. There are only two SE hubs (ATL and CLT)
2. MIA is a NOT a substitute for CLT, plus carribbean LFs are high with decent yields
3. Closing CVG will help CLT a bit, though not that much
4. CLT is not STL in any way shape for form. CLT is a growing city with a vibrant finance industry, STL is not.

The idea that AA will substantially reduce the size of a profitable hub in a rapidly growing region of the country is wrong. I could see PHX lose service more than CLT. Even PHL, while it has international value, has domestic value that is no greater than CLT.


Remember this is A.net. Where a substantial number of posters insisted that DL was going to bid for all or pieces of AA. It never happened as I said it would never happen.
 
D L X
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:19 pm

The REAL question is...

if this merger happens, will there then be THREE American Airlines Arenas in the United States?

(Phoenix, Dallas, and Miami)
 
ckfred
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:27 pm

Quoting LDVAviation (Reply 121):
At LAX? The solution may just have presented itself. With US's impending move to T3 and LAWA's recent decision to redevelop T3 as part of the LAX Specific Plan, the opportunity is there for the new AA to takeover and expand into the new T3. (T3 and T4 could be linked by an airside bus until the terminal tram is built.)

Actually, AA did this, when the former Reno Air operation was in T3, and the rest of AA's operation was in T4. I once got bumped off an LAS-ORD non-stop and rerouted via LAX. Despite the assurance that the bus would come by every few minutes, I would up walking from T3 to T4 and never saw the shuttle bus.
 
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:28 pm

Quoting bobloblaw (Reply 125):
I dont think TOL but I do think GRR could get CLT plus DCA. Your first point is weighed against the cost of the flight too. 50 seat RJs from DFW to SC, GA are not efficient. Unless there is lots of local traffic tp DFW, (which there very well may be), those routes would be candidates for cuts. This is exactly why UA dropped CID-IAH. Route the traffic thru ORD or DEN rather then a long thin RJ route to IAH.

I agree, but pretty much every point that AA serves from DFW to the Southeast has enough O&D to make it work. Had AA still been serving FAY or AGS, I would totally agree that it makes no sense to serve those from DFW when they can be served from CLT since the local market is small. Places like GSO, TYS, CAE, CHS, etc. all have significant O&D to DFW where they can be served at least daily. Places like CHA or MGM may lose DFW service.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
commavia
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 5:37 pm

Quoting usairways85 (Reply 108):
I just looked at a AA's JFK-Europe schedule today. Yes it is a small subset and in the winter season.
Here are the destinations.
LHR
MAN
MAD
MXP
CDG

Plus BCN and ZRH, and during the summer FCO and DUB.

Quoting usairways85 (Reply 108):
I don't know you can simply move US' PHL flts to JFK (AMS, DUB, VCE, etc) and just expect that they will thrive.
Quoting usairways85 (Reply 108):
My point is that yes AA can probably adjust JFK and add some additional markets but PHL has a relatively strong European network that the combined carrier should leverage.

I wholeheartedly agree. You can't move US' PHL hub to JFK and make it work - no way. PHL is a viable hub - no question about it. I was simply stating that in my view there are several markets (again, specifically: FRA, GLA and TLV, and possibly even DME) that could work at JFK post-merger in addition to, not in replacement of, the existing US hub at PHL.

Quoting bobloblaw (Reply 110):
Network optimization means you do less overflying of your hubs, not more. If anything longer haul RJ flights from DFW to cities in the SE will be cut in favor of CLT unless those routes have lots of local DFW traffic or lots of traffic to cities not served from CLT. I can use your argument against DFW as well. Saying that DFW will lose flights to ICT, OKC and TUL and that traffic will go to CLT instead. Makes no sense.

Agree, although net-net I suspect network optimization is going to mean far more rationalization in CLT than DFW.

Quoting ckfred (Reply 111):
Here's one issue that the merger would have to deal with, BOS. I know that they are building a connection around the parking garage to connect the US and AA sides of Terminal B. But could you imagine connecting at B, if you had to switch sides? Or how about a gate change due to a delay, and having to walk from one side to the other.

My prediction is that AA and US would consolidate in the current US side of B. With some creative scheduling and reconfiguration, I suspect the combined operation could all fit over there.

Quoting panamair (Reply 123):
AA has 18 75Ls (configured for international premium flying) and to date, they have been underutilizing them for their intended missions...many of them end up on domestic and Caribbean runs (I was just on one the other day between JFK and SXM, for example); I don't think the number of frames is a reason for not starting more JFK-Europe flights...

I believe it's 20 now, not 18. And I think post-merge AA could easily use those 20 to operate the existing AA routes that really need those jets (out of JFK and MIA), but also to replace the longhaul 757 flying US currently does to Europe, since AA's 757s offer a better product than the US longhaul 757s, anyway.

Quoting LAXdude1023 (Reply 128):
I agree, but pretty much every point that AA serves from DFW to the Southeast has enough O&D to make it work. Had AA still been serving FAY or AGS, I would totally agree that it makes no sense to serve those from DFW when they can be served from CLT since the local market is small. Places like GSO, TYS, CAE, CHS, etc. all have significant O&D to DFW where they can be served at least daily. Places like CHA or MGM may lose DFW service.

  

I doubt DFW would lose service to any of the major southeast markets like the ones you listed - GSO, TYS, CAE, CHS, SAV, etc. All of those markets are big enough to support flying to both DFW and CLT. I could, however, see some of those markets losing some frequency in favor of larger, 2-class RJs.
 
apodino
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 6:04 pm

I think comparisons between PHX and either CVG or STL are apples to oranges. There are several other factors in play in PHX. One is that PHX is the 11th largest O and D market in the country. There is more O and D in PHX than there is PHL, CLT, DCA (and that includes IAD as well). People have always said the secret to a good hub is a combination of both O and D and connecting traffic. PHX provides that O and D. Also note that with AA, the AAdvantage program will give FF's a lot more options with a bigger network than Dividend Miles ever could, and a bigger network than WN. By comparison, PVD is a bigger O and D market than CVG, so its not hard to see why DL left CVG. Here is a link to a thread with a chart showing the stats, this is from 2009.

http://forum.skyscraperpage.com/showthread.php?t=176627

Of course what blows that up is the fact that LAS is a bigger O and D rlmarket than PHX and US blew that up too. Bottom line though is that no one on A.Net really has any clue how profitable PHX is because the yields are not public information. So it is pure speculation to say that PHX is not high yielding. Certainly its no ORD or DCA or LGA, but is it as low as say MCO or LAS? That may be a stretch. Plus PHX is growing at the moment as well. That bodes well.

One thing I did find interesting is that AA already has hubs in the four biggest O and D markets in the country. Had US kept LAS in tact, the merger would have given them the top five.
 
commavia
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 6:26 pm

Quoting apodino (Reply 130):
I think comparisons between PHX and either CVG or STL are apples to oranges.

Yes and no. Obviously every market is different, but on the flip side some of the issues that hurt CVG and STL would also hurt PHX if a merger takes place.

Quoting apodino (Reply 130):
One is that PHX is the 11th largest O and D market in the country. There is more O and D in PHX than there is PHL, CLT, DCA (and that includes IAD as well). People have always said the secret to a good hub is a combination of both O and D and connecting traffic. PHX provides that O and D.

True, PHX is a large O&D market, but a large portion of that O&D is PHX-destined, seasonal, and leisure. That in and of itself is not really the ideal traffic upon which to build a hub, at least not at the cost levels a new AA would be operating at.

Quoting apodino (Reply 130):
Also note that with AA, the AAdvantage program will give FF's a lot more options with a bigger network than Dividend Miles ever could, and a bigger network than WN.

That's true. AADV and the far broader scope of AA's network - both branded and partner - will definitely have a positive halo effect. Enough of a positive effect to spare PHX substantial reductions in flights and capacity? I doubt it.
 
futureorthopod
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:04 pm

wow...so now will airfares skyrocket?
 
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rangercarp
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:25 pm

Quoting futureorthopod (Reply 132):
wow...so now will airfares skyrocket?

I do not know if I would use the term skyrocket, but fares are most certainly going up.
iwgbtp!
 
IndustryInsider
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:38 pm

Point2point, I'd like to correct one of your statements/questions:

Quoting point2point (Reply 109):
I'm thinking along the lines of probably a smallish detail..... but would the current AA-B6 code share maybe continue if there were a merger?

AA and B6 do NOT have a codeshare agreement in place today.
 
UA787DEN
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:41 pm

Quoting DolphinAir747 (Reply 26):
If this happens, US wouldn't join; US would be absorbed into AA which is already part of 1W.

Actually, there is a chance it will be like the CO/UA merger, or the TWA/AA merger, in which the airline to die switched into the surviving airline's alliance before the merger finalized.
 
apodino
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:45 pm

Since AA still uses the Sabre Reservations system...how much do you think Doug Parker is shooting himself now for using SHARES instead of Sabre after the US/HP merger? And will the combined carrier go back to Sabre or use SHARES? Personally, since the existing QIK interface can be used with Sabre, and given UA's problems with SHARES, I think Sabre is a no brainer. But I am not DP either.
 
Bobloblaw
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:45 pm

Quoting commavia (Reply 129):

If markets in the SE can support CR7s to DFW, they will stay.
 
MAH4546
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:48 pm

Quoting panamair (Reply 123):
AA has 18 75Ls (configured for international premium flying) and to date, they have been underutilizing them for their intended missions...many of them end up on domestic and Caribbean runs (I was just on one the other day between JFK and SXM, for example); I don't think the number of frames is a reason for not starting more JFK-Europe flights...

Twenty. AA converted two more for some reason last year. Only ten frames are actively used on long-haul.

BOSCDG - 1

MIAUIO -2
MIABSB - 1
MIAASU - .6
MIASSA - .7
MIAREC - .7

JFKCDG - 1
JFKDUB - 1
JFKMAD - 1
JFKMAN - 1
a.
 
UA787DEN
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:54 pm

Has there been any actual confirmation from official dudes?
 
airtechy
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 7:55 pm

How is AA going to square away the problem of not being able to fly into TLV. I think US does. Will they just pony up the bucks and solve the problem?
 
HPRamper
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 8:15 pm

Quoting mah4546 (Reply 25):
They'll still be hubs. They won't stay intact. The fact is that all three US hubs will be hurt by the merger. I could see PHL reduced by maybe one-third at the least; CLT cut by 25%; and PHX, probably cut in half. MIA, JFK, LAX and DFW will be the winners in this merger.

If you cut capacity/flights at PHL, where will they go? Maybe a handful of connections to ORD, and maybe an even smaller handful of international flights to JFK. That would be a heck of a lot less than a third.

Quoting adamh8297 (Reply 28):
WN will be sitting pretty in the Valley of the Sun.

AA would only be cutting connecting capacity. There would still be plenty of flights to effectively compete with WN on an O&D basis.

Quoting Beardown91737 (Reply 31):
AA may have the lead in passengers at LAX, but they aren't that big, maybe 160 flights counting regional. I don't see LCC management adding a lot to LAX when they could have tried a LAX focus city.

LAX can not be an effective omnidirectional superhub just as JFK cannot. They are and will continue to be megafocus cities with a minimum of connecting flights.

Quoting Cubsrule (Reply 33):
Where is all that traffic going to go? In to the ether? CLT will doubtless get smaller, but STL is down something like 90 percent from its peak.

Exactly. There was an effective alternate to STL. There is not to CLT.

Quoting usairways85 (Reply 34):
Uh, I'd hardly call JFK and ORD AA fortresses. DFW and MIA yes but certainly not the first two

ORD will get stronger postmerger. JFK could never be a fortress due to the limitations, natural and artificial that are imposed upon it.

Quoting mah4546 (Reply 35):
Even MSP took a big hit after the merger; and that's the type of hit CLT will take - still large and relevant, but nonetheless a shrunken hub.

MSP took a very small hit. It's still mainly a domestic hub with a very strong O&D base.

Quoting tommy767 (Reply 38):
Labor issues will be complicated especially with US/HP not even fully integrated since the merger in 2005.

On the contrary I think labor issues will be resolved rather quickly.

Quoting XT6Wagon (Reply 43):
Lets merge two airlines with massive labor problems still suffering from their last mergers. IT MAKES SO MUCH SENSE.

US having massive labor problems is a gross exaggeration.

Quoting deltairlines (Reply 69):
Phoenix could likely become a CVG type operation - right sized from where it is now.
Quoting deltairlines (Reply 69):
Keep in mind that with a merger, a lot of the large RJ feed at PHX (CR9s are around 40 flights/day) would likely be cut down to help support ORD and LGA where those planes could be better used early on in the merger process (just as we saw post-HP merger with those CR9s quickly making their way into the CLT market).

Number of flights, yes, but PHX will have larger gauge of aircraft whereas CVG is heavily regional. PHX is simply a much larger market. Even CVG is overserved when you look at market size.

Quoting coairman (Reply 75):
I would love to see a AA-US merger hub optimization internal merger document. I bet CLT and PHX are hit the hardest. I think AA's MIA hub will hurt CLT as far as route duplication. PHX will shrink at the benefit of LAX and DFW.

PHX sure. CLT and MIA have very little route duplication. Some Caribbean traffic.

Quoting wn676 (Reply 91):
WN captures a better local traffic ratio and that has been the case for years. It believe it's in the range of 65/35 local to connecting with US having basically the opposite,

They have a better ratio because they don't connect nearly the percentage of passengers that the network carriers do. US and WN have been neck and neck in actual O&D capture in PHX for years.

Quoting ckfred (Reply 107):
What US could do, post merger, is paint the planes in the US livery, replacing US Airways with American, but keep the new AA striped tail.

I think if anything, any change would be small. Perhaps add the US flag logo after the American name on the side, or maybe even just on the sides of the engines.

Quoting ckfred (Reply 107):
And, would Parker take out the first class cabins on the 773s and the trans-con A321s. After all, US doesn't have any 3-class cabins. US has managed to do well without the finicky corporate types and celebrities. So, why does the combined AA/US need those passengers.

I think with the higher labor costs incoming, the new AA would need that revenue base.

Quoting point2point (Reply 109):
I'm thinking along the lines of probably a smallish detail..... but would the current AA-B6 code share maybe continue if there were a merger? Would the new AA need to continue with B6 here?

No. In fact with that new East Coast network, AA could try to squeeze B6.

Quoting apodino (Reply 130):
Of course what blows that up is the fact that LAS is a bigger O and D rlmarket than PHX and US blew that up too.

LAS was more suitable for a redeye hub than PHX and it really was only operated to utilize aircraft. After the merger there were far more profitable routes to use those planes on so LAS got the axe. There is also a lot more competition at LAS than at PHX, where US and WN are basically the whole show.
 
Maverick623
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 8:45 pm

Quoting mah4546 (Reply 25):
I could see PHL reduced by maybe one-third at the least; CLT cut by 25%; and PHX, probably cut in half. MIA, JFK, LAX and DFW will be the winners in this merger.

Interesting. So the 3 hubs that made record profits are going to be axed, in favor of hubs that lose a billion dollars a quarter?

Just when you think you've heard it all...
"PHX is Phoenix, PDX is the other city" -777Way
 
commavia
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 8:54 pm

Quoting Maverick623 (Reply 142):
Interesting. So the 3 hubs that made record profits are going to be axed, in favor of hubs that lose a billion dollars a quarter?

First, AA's hubs aren't losing a billion per quarter. Second, US hubs - and indeed the entire US network - is as profitable as it is today because of US' uniquely low costs (particularly labor). Those are gone day 1 of the merger.
 
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ER757
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 9:33 pm

Quoting Antoniemey (Reply 90):
The new AA livery and branding will stay. It MIGHT be tweaked, but I doubt it.

   From the moment I first saw it, I thought to myself that the livery was done with a US merger in mind. Sorry to all of you who hope the tail will go away. You'll have to learn to live with it. That's my   

As to the question about US' A350's, I agree with the person who thinks they'll get swapped for NEO's - too small a sub-fleet to keep on order with all the 787 firm and options that AA has.
 
AeroWesty
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 9:44 pm

Quoting mah4546 (Reply 138):
Only ten frames are actively used on long-haul.

ORD-MAN going back to daily 2/13/13 from 5x per week, too.
International Homo of Mystery
 
deltairlines
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 10:08 pm

Quoting HPRamper (Reply 141):
Number of flights, yes, but PHX will have larger gauge of aircraft whereas CVG is heavily regional. PHX is simply a much larger market. Even CVG is overserved when you look at market size.

I agree with this. Part of it will be the need to maintain more diligent CASM controls against Southwest, part of it will be customer preference (why take an RJ over a 737?) and part of it simply the way the networks work in that part of the country - a larger percentage of cities within 2.5 hours of cities can support mainline service than out East, where the population is more dense, but also has more airports to choose from.

Post-merger, I can still see A319s/A320s going to every destination that gets mainline service still; it'll just be 3-4 a day rather than 5-6. The fact that as it stands 70% of the US operation at PHX is still mainline helps it a lot there. Keep in mind that only about 18% of the operation is 50-seaters as well...
 
MAH4546
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 10:19 pm

Quoting AeroWesty (Reply 145):
Quoting mah4546 (Reply 138):
Only ten frames are actively used on long-haul.

ORD-MAN going back to daily 2/13/13 from 5x per week, too.

I was looking at the summer 13 schedule. ORDMAN becomes a 763 again shortly.
a.
 
LAXdude1023
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 10:33 pm

I dont understand the doom and gloom talk surround PHL nor CLT. Both of these hubs would be very good assets for AA/US.

CLT fills the role in the Southeast and has decent international demand given its realatively small metro area size. Comparing it to DFW or MIA simply isnt accurate. They dont fill the same roles nor would they for the combined airline. That said, is there a need for a 650 flight operation at CLT? Absolutely not. 400 flights a day, however, would be about the right size. CLT would keep the major Caribbean destinations (MBJ, CUN, AUA, STT, SJU, etc.) while losing the smaller ones along with GIG. CLT would have flights to LHR and FRA year round and probably CDG and MAD seasonally. I also dont see CLT losing service to any domestic destinations although there probably would be some frequency decreases.

PHL fills the role in the northeast. Lets face it, AA needs an answer to EWR. PHL isnt NYC and its never going to be, but for a connecting hub, PHL grabs the traffic ORD is too far west to have and that JFK/LGA cant really use. I dont see the point of downsizing PHL at all. The only thing I will say is that we could see some smaller European destinations (ATH, GLA, and LIS) either shifted to JFK or eliminated. Ive heard from reliable sources that PHL-TLV is a very good preformer and if AA can stay in Israel, it would be dumb to mess with it. I also see PHL-NRT being a viable JL or AA route. PHL-Asia could easily fill a 2-class 777 profitably. There is enough local traffic plus connections.

DCA is self explanitory. US and DL completed the slot swap and now US has a very strong footing at DCA. No one with a brain would touch that.

PHX is the big loser in this equation. Yes the market is large, but its terribly low yielding. I dont agree with the comparrisons to STL or PIT, but I can see PHX being similar in size to DL's SLC hub. I see 175-225 flights a day with about 1/3 being mainline. BA would be the link from the hub to Europe and PHX would maintain mainline flights to the major cities on the coasts and RJs to the cities in the Midwest and Southwest. I dont see PHX-Asia ever happening. Although the big loser in Phoenix isnt the airport, but the local economy when they start sending jobs left and right to Fort Worth.

Quoting mah4546 (Reply 138):
Twenty. AA converted two more for some reason last year. Only ten frames are actively used on long-haul.

I would imagine DFW-LIM will join that group.

Quoting Maverick623 (Reply 142):
Interesting. So the 3 hubs that made record profits are going to be axed, in favor of hubs that lose a billion dollars a quarter?

Thats oversimplifying way too much. Youre talking about two airlines with two entirely different cost structures. Remember, US already went through Chapter 11 previously in order to get its costs in line to where those hubs could be profitable. Simply put, the amount of high yielding traffic (both international and domestic) is much higher at AA's hubs than US'.

See my first paragraph. Im not one who says they will just shut out US' hub structure. That would be dumb because US has some great network assetts. I will say, however, that should this merger happen, PHX's best days are behind them.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
AeroWesty
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RE: WFAA: AA-US Merger Announced Next Week (sources)

Thu Feb 07, 2013 11:26 pm

Quoting LAXdude1023 (Reply 148):
PHX is the big loser in this equation. Yes the market is large, but its terribly low yielding. I dont agree with the comparrisons to STL or PIT, but I can see PHX being similar in size to DL's SLC hub.

I have to go along with this general line of thinking. The only thing PHX brings to the party that I can see is a hub within the west that isn't affected by weather the same way ORD and DFW can be. There've been times, not often, but at times, when both ORD and DFW were hit by weather closures at the same time.

Other than that, I don't really see the utility in PHX as a connection point. From the PNW, it adds 100-150 miles to destinations in the NE over the same connection at DFW. As an intermountain west connection point, it's too far out of the way from the main population centers to work efficiently. Even US' service to Hawaii can easily be handled at LAX and DFW.

As part of a combined AA/US, the strategic importance of PHX escapes me.
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