For those sick of talking about PHX
, I read a very interesting article
today on CAPA about Delta. In passing, it actually included some interesting - and surprising - data about AA
Specifically, the market share statistics for LGA
, according at least to CAPA's numbers, AA
-US today (pro forma) actually have slightly more
seats out of LGA
every day than DL
. This was highly surprising to me since DL
obviously has quite a few more departures, but since most are on RJs where as so many of AA
's are mainline, AA
-US actually today offers 33.8% of the total seats out of LGA
, compared to DL
's 33.1%. At JFK
are very close in share of seats, and AA
is not all that far behind. To me, this indicates yet again that AA
still today remains an extremely strong competitive force in the NYC market, and a merger will only strengthen that.
Similarly, at LAX
, it was interesting to see the pro forma AA
-US numbers compared with other key competitors. The LAX
market certainly remains distinctly fragmented, with four carriers (UA, AA
) all having greater than 10% seat share and no single carrier having greater than 20%. Nonetheless, that appears likely to change. AA
, which is already very close behind UA
today, once merged (again, before accounting for any rationalization, of course) will leapfrog past UA
to be the #1 carrier at LAX
by seats, at around 21%. I believe this is the first time in at least 3-4 decades, if not longer, that AA
has been the #1 carrier at LAX
. In addition, WN
are also extremely close in seat share, and with DL
's recent buildup is almost certain to jump past WN
as the #3 carrier at LAX
Finally, in BOS
, what's notable about the seat share statistics is how far all the legacies have fallen relative to B6
is now the undisputed market leader in BOS
with 29.5% seat share. The next larger carrier, US, is around half that, at 15.3%. However, AA
-US combined, pro forma, would jump into a relatively strong #2 position at around 26%, substantially larger than DL
at around 11-12% each.
|Quoting Caryjack (Reply 191):|
I understand that salaries at US will increase but does that necessarily mean that AA's cost will be higher than the current?
Parker has made absolutely no secret for years about the labor cost differential at US relative to legacy competitors, and what drove it. He has said it over and over again - US has a network that puts them at a revenue disadvantage, and therefore they require lower labor costs to compete. Well, those days are over.
The "new AA
" is now going to have labor costs much more on par with DL
. What this means for PHX
, however, is the real key. My suspicion is that PHX
is already US' lowest-yielding hub, and therefore the one most reliant on, and sensitive to changes in, the aforementioned below-market labor costs.
That does not make me optimistic about the economics of a hub in PHX
- or at least one of the same scale and scope as today - going forward.
|Quoting flyguy89 (Reply 194):|
Going off what Parker was offering the unions to get their support, the merged carrier's costs will be higher than what AA's would have been if it emerged from bankruptcy alone, the new carrier's costs will still however be significantly lower than what AA's were pre-bankruptcy. US on the other hand will see costs increasing across the board which is what's relevant here as PHX is a US hub operating under current US costs.
|Quoting Caryjack (Reply 196):|
I'm not either but I don't recall ever taking an MD 80 from SEA to ORD or DFW. A random mid week sample shows the following:
SEA - ORD 6 X B-738
SEA - ORD 6 X B-738 + 1 X B-757
SEA - MIA 1 X B-757
is all 737/757 in and out of SEA
right now, but for most of the last 30 years SEA
has been a primarily-MD80 station, outside of certain peak summer seasons when SEA
has in the past also seen lots of 757s. In that context, the 737s are a relatively new development, having arrived in SEA
pretty much within the last decade.