washingtonflyer
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 1:34 pm

Certain people are hypothesizing regarding reducing CLT to two or three flights a day between CLT and outlier stations. I guess they forget that this formula was attempted at not one, but two AA southeast hubs and met with utter and complete failure.

Passengers (especially those paying $$$ (i.e., business types)) will not accept 3x daily service when competitors (read - DL, UA or WN) offer 5x or 6x daily.
 
Bobloblaw
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 1:48 pm

Quoting Cubsrule (Reply 49):
SAV-CLT-LAX is also likely cheaper for the airline, between more miles on a low-CASM 321 and CLT's low costs.

Excellent point.
Better to fly the expensive RJ a 200 mile segment rather then a 1000 mile segment.

Quoting washingtonflyer (Reply 50):
I guess they forget that this formula was attempted at not one, but two AA southeast hubs and met with utter and complete failure.

  
 
point2point
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:25 pm

Quoting Cubsrule (Reply 47):
I can't quibble with this hypothesis

Yes, lot's of quibble, quibble and more quibble here.

Quoting bobloblaw (Reply 46):
Quoting Cubsrule (Reply 47):
Quoting washingtonflyer (Reply 48):
Quoting Cubsrule (Reply 49):
Quoting washingtonflyer (Reply 50):
Quoting bobloblaw (Reply 51):

Hey, it's no skin off my ass if the new AA/US keeps CLT at 675 daily flights or even adds more, or reduces it to 500 daily flights, or reduces it to 300 flights, or even dehubs it altogether (well, maybe if it dehubs CLT altogether, the next time that I fly I'll definitely see higher air fares, but otherwise.....). And I certainly wish all the best to CLT.

All I know is that a new AA/US exec went to CLT and pointed out that CLT has a 20% O&D rate (or 80% connect rate, same thing). Throw in with that the new AA/US exec saying that CLT gets the smallest “unit revenue,” or the revenue the airline gets from each passenger, of any East Coast hub.

Of all the things that this new AA/US exec could have said to the people of CLT........   

And that's all she wrote here folks.

edit added - may all of us even with a little bit of luck be here at the end or 2017 - and we can have an "I told you so" gathering, eh?

 

[Edited 2014-06-06 07:31:17]
 
Cubsrule
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:31 pm

Quoting point2point (Reply 52):
All I know is that a new AA/US exec went to CLT and pointed out that CLT has a 20% O&D rate (or 80% connect rate, same thing). Throw in with that the new AA/US exec saying that CLT gets the smallest “unit revenue,” or the revenue the airline gets from each passenger, of any East Coast hub.

If that's all you know, how do you get from there to 300 flights?
I can't decide whether I miss the tulip or the bowling shoe more
 
point2point
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:35 pm

Quoting Cubsrule (Reply 53):
If that's all you know, how do you get from there to 300 flights?

If one were to read all of my posts here, I've repeated said that I don't know........ and I got to 300 flights using simple numbers available to everyone.

I do like the idea of an "I told you so" gathering. Since maybe a lot of posters here think that maybe I'm dishing it out, I'll be the first one to take it if things turn out so.....

and I'll also edit added here that losers of the "I told you so" gathering get a cream pie thrown into their face. And since my neighbor has a peach tree and makes from it this most wonderful peach cream pie (has anyone even heard of that?), I would want to be on the losing side if that's the cream pie that I get into my face.....

 

[Edited 2014-06-06 07:46:05]
 
Cubsrule
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:43 pm

Quoting point2point (Reply 54):
If one were to read all of my posts here, I've repeated said that I don't know........ and I got to 300 flights using simple numbers available to everyone.

Let's assume that local passenger number stay the same with this hypothetical cut to 300 flights (I think that's a silly assumption, by the way, but it simplifies things). Then, if we cut half the seats, AA is at 40 percent O&D, which is well higher than other successful hubs like ATL and DFW. Why would CLT need to be at the level to succeed?

DL has shown that forcing most connections over a single hub even when it is less direct than some other hubs is a profit-maximizing strategy.
I can't decide whether I miss the tulip or the bowling shoe more
 
Bobloblaw
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:46 pm

Quoting point2point (Reply 52):
Hey, it's no skin off my ass if the new AA/US keeps CLT at 675 daily flights or even adds more, or reduces it to 500 daily flights,

I don't doubt that will happen but it will primarily be driven by larger aircraft. I can also see a reduction in International.
 
ckfred
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:51 pm

Quoting HPRamper (Reply 7):
CLT is clearly the weakest hub in the new AA system and within two years it will look like PIT. MIA is a much better hub for the Southeast and anything between Florida and JFK is basically flyover country anyway. Let DL have the region with ATL, maybe F9 can start a focus city at CLT after AA dehubs that waste of terminal space.
Quoting PEK777 (Reply 16):

As with any merger, the hubs will be right-sized. this unfortunately means the elimination of phx and the reduction of clt to a mere focus city based on limited o/d to leisure markets-no different than cvg or cle. You should note, both these former hubs also begin with the letter 'C'., which is the letter CLT begins with. As such, CLT is doomed. This is scientific fact.

CLT is not going anywhere. MIA is fine for connecting to TPA, RWS, and MCO, but it's lousy for connecting to BNA, ATL,or RDU. By the same token, ORD only makes sense for connecting to cities in the Southeast, when flying from cities in the upper Midwest. DFW is fine for connecting from points within or west of Texas. But, CLT is almost in the middle of the South, especially with the ideal location between the Northeast and Florida. The only other hub with a major Southeast focus that has survived is ATL. The others (CVG, MEM, BNA, and RDU) have either disappeared or ahve been in the slow death spiral for years.

By the same token, PHX isn't going anywhere. If LAX had room to expand, I would have a different opinion. But, the limited gate space means that PHX, while certainly subject to reductions, isn't going to become a spoke, especially when the Phoenix metro area is one of the fastest growing metro areas in the U.S. It's not all retirees and vacationers. I know a number of people who have to fly to Phoenix year round for business.

Quoting Mah4546 (Reply 26):
It will shrink to 450-500 daily departures within 5 years as AA, like all airlines, rationalizes capacity. As a hub that is heavily concentrated on connecting low-yield traffic and with little respective O&D, it's going to see the most rationalization.

It's the O&D that is the question. The metro areas that are seeing sustained growth are in the Sun Belt, which includes Charlotte. From what I understand, CLT has room to expand. ATL is now in the situation that airports like ORD and LAX face, no room for further expansion. The far south runway at ATL had to be built over I-285.

It seems to me that any business looking to expand, and needing access to a hub airport, might be more inclined to locate in and around Charlotte (either in North Carolina or South Carolina), rather than Atlanta/North Georgia.
 
point2point
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 2:51 pm

Quoting Cubsrule (Reply 55):
Let's assume that local passenger number stay the same with this hypothetical cut to 300 flights (I think that's a silly assumption, by the way, but it simplifies things). Then, if we cut half the seats, AA is at 40 percent O&D, which is well higher than other successful hubs like ATL and DFW. Why would CLT need to be at the level to succeed?

DL has shown that forcing most connections over a single hub even when it is less direct than some other hubs is a profit-maximizing strategy.

You have a good point here.

I'll get you my neighbors address, so that she can start making here peach cream pies, eh?

Take care all, I have to leave for a few hours.....

 
 
JDAirCEO
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 4:31 pm

Quoting point2point (Reply 52):
Hey, it's no skin off my ass if the new AA/US keeps CLT at 675 daily flights or even adds more, or reduces it to 500 daily flights, or reduces it to 300 flights, or even dehubs it altogether (well, maybe if it dehubs CLT altogether, the next time that I fly I'll definitely see higher air fares, but otherwise.....). And I certainly wish all the best to CLT.

All I know is that a new AA/US exec went to CLT and pointed out that CLT has a 20% O&D rate (or 80% connect rate, same thing). Throw in with that the new AA/US exec saying that CLT gets the smallest “unit revenue,” or the revenue the airline gets from each passenger, of any East Coast hub.

Of all the things that this new AA/US exec could have said to the people of CLT.......

I think this is a perfect response. Meet you at the rocking chairs!
I'm not sure why people believe in this mythical power of CLT. The comments from the airline itself indicate the reality of a right sized, smaller hub. Oh well, keep the blinders on like the folks at the Operations Center in Moon. Sad but true.

As for where the planes will go? A pretty decent amount of flying from CLT is regional from not owned regionals, as those contracts expire you don't renew and the planes go away.
An MD-80 is great... in first class
 
ckfred
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 6:26 pm

Quoting point2point (Reply 52):
Throw in with that the new AA/US exec saying that CLT gets the smallest “unit revenue,” or the revenue the airline gets from each passenger, of any East Coast hub.

I suspect that the unit revenue varies by destination. Unit revenue from passengers connecting to and from Florida is probably low, considering the number of competitors who fly to Florida, including UA, DL, B6, and WN.

Unit revenue for people traveling between points outside the Southeast and many points within the Southeast is problaby better, because you don't have WN, F9, B6, VX, and NK competing as much. The main competition wll be DL via ATL.

I would suspect that some of the reductions in international or east-west flying will be offset to some degree with flying that gets pushed from other hubs. For istance, I suspect that some of the smaller southern cities will see cuts in service from ORD, as that traffic flows through CLT.
 
EricR
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 9:40 pm

Quoting point2point (Reply 52):
All I know is that a new AA/US exec went to CLT and pointed out that CLT has a 20% O&D rate (or 80% connect rate, same thing). Throw in with that the new AA/US exec saying that CLT gets the smallest “unit revenue,” or the revenue the airline gets from each passenger, of any East Coast hub.

But this is the natural effect of a hub which has a large percentage of connecting traffic. It is no surprise that N/S flights generate higher unit revenues than connecting flights. I would expect a hub like ATL to have similar results for DL (unit revenues on the lower end) as CLT does for AA simply because ATL also has an extremely large percentage of connecting traffic like CLT does.

I am not sure why the discussion of % of connecting traffic at CLT keeps coming up. It is a meaningless statistic by itself and does not provide any forewarning on future outcome of the hub. Other legacy hubs that were cut in the past (ie. CVG, MEM, CLE, STL, LAS) were cut due to becoming redundant after mergers with other legacy airlines. In each case, the hub with the larger metro base became the hub that was retained and the hubs located in the smaller metro areas became redundant and eliminated.

In the case of this merger, AA has no hub in close proximity to CLT and CLT serves a unique purpose in a heavily populated/transited part of the United States.
 
ScottB
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RE: Charlotte Observer Article...

Fri Jun 06, 2014 10:03 pm

Quoting bobloblaw (Reply 40):
People miss the reason for the AA/US merger. It WAS NOT to cut capacity like DL and UA were. It was to create an airline large enough to compete with UA and DL.

If you actually believe this line, I have some real estate about 20 miles east of MIA to sell you. Like the UA & DL mergers, this one was done to gain greater pricing leverage, and that will be achieved by cutting capacity.

Quoting JDAirCEO (Thread starter):
The city also has the smallest “unit revenue,” or the revenue the airline gets from each passenger, of any East Coast hub

This is absolutely the most worrisome statement, as it means that CLT's hub economics will become more challenging with the combined airline's higher costs.

Quoting 727LOVER (Reply 27):
Can someone explain this to me. Wasn't the one of the main goals of AA's bankruptcy to lower labor costs?

Yes, but US management bribed the AA unions (key creditors in the bankruptcy) into supporting the merger by offering higher pay rates than AA management was trying to achieve through bankruptcy. In fact, the new pay rates are also an increase for the US labor groups -- so the costs of the pmUS operation go up, too. Wages & benefits, excluding the merger impact, were up by 10% year-over-year in Q1.

Quoting commavia (Reply 24):
I think the combination of post-merger economics and the gradual upgauging of 50-seat RJs to larger 2-class RJs will definitely necessitate a reduction in flights in some markets. But I don't think routes that today have 6-9 round trips will drop down to 2-3 - not that extreme.

I suspect it would be more like a drop to 4-6 round-trips from 6-9. But I'd also expect to see a lot of traffic shifted from connections at CLT to DFW, as pretty much all westbound traffic from the Southeast is more efficiently served via DFW. Also, I believe the need for two-class RJ's is most acute in markets like ORD, DFW, LAX, & NYC, and CLT may be lower priority for those aircraft given its lower unit revenue.
 
Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:04 am

Quoting ScottB (Reply 62):
If you actually believe this line, I have some real estate about 20 miles east of MIA to sell you. Like the UA & DL mergers, this one was done to gain greater pricing leverage, and that will be achieved by cutting capacity.

Youre going to be out of some real estate then. Go back and read Crandall's comments after DOJ rejected the AA/US merger. Everyone in favor of the merger said it was necessary for AA to grow to meet the revenue synergies that DL and UA had. No one said anything about cutting capacity as a solution to AA's problems. Problem with cutting capacity now is you spill high value passengers. This isnt 2008. When DL cut CVG and MEM, that went a long way to getting rid of excess capacity. CLE even more. WN cutting FL even more. By the time AA/US came along the needed capacity cuts had already happened. Cutting capacity in 2014 means cutting bone and muscle not fat.

Quoting ScottB (Reply 62):
But I'd also expect to see a lot of traffic shifted from connections at CLT to DFW, as pretty much all westbound traffic from the Southeast is more efficiently served via DFW.

As CubsRule correctly pointed out, it is not. What is more efficient? a CRJ from ILM to CLT then an A321 to LAX or a CRJ from ILM to DFW than a A321? Flying the high cost plane 1000 miles to DFW is much much less efficient than flying it 150 miles to CLT.
 
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:27 am

Quoting bobloblaw (Reply 63):
Youre going to be out of some real estate then. Go back and read Crandall's comments after DOJ rejected the AA/US merger. Everyone in favor of the merger said it was necessary for AA to grow to meet the revenue synergies that DL and UA had. No one said anything about cutting capacity as a solution to AA's problems. Problem with cutting capacity now is you spill high value passengers. This isnt 2008. When DL cut CVG and MEM, that went a long way to getting rid of excess capacity. CLE even more. WN cutting FL even more. By the time AA/US came along the needed capacity cuts had already happened. Cutting capacity in 2014 means cutting bone and muscle not fat.

You grow your revenues by adding local market orientated service in places like LAX, ORD, NYC, etc. You do not grow your revenues by undercutting your competition thereby chasing price-sensitive consumers through CLT, which is the strategy that US has employed for the past 5+ years. With labor costs set to swell, it'll likely be unprofitable, anyway, and undesirable. Simply no reason to put a 321 on CLT-CMH when you can move to equipment to DFW (and ORD).

CLT is way too big for the Charlotte market. One point that's lost on most people participating within this thread is that AA has the ability to re-flow capacity and equipment into ORD & DFW, where it should get greater unit revenue from both local and connecting passengers.

Anybody who thinks this merger was about expansion & bringing low fares to the market is smoking too much opium.
We don’t care what your next flight is.
 
jfk777
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:30 am

A great goal for AA to achieve would be to have as many flights to Europe as Delta has from Atlanta. Even if they had half as many that is a big number.
 
Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:37 am

Quoting compensateme (Reply 64):
You grow your revenues by adding local market orientated service in places like LAX, ORD, NYC, etc.

You grow unit revenues by flying full flights at high fares. In fact unit revenues stink to places like ORD and LAX.

There is no evidence that US carriers a bunch of price sensitive customers thru CLT. In fact Id bet US gets a revenue premium in the cities around CLT.

If you want to talk about the worst hub in the AA system. It is ORD by far. I would bet since 2001, AA has lost in excess of $3B in ORD. I am not saying ORD will be closed. A great opportunity exists there for refleeting. to A319s and E190s.

You don't make AA stronger by cancelling SAV-CLT service and rerouting traffic to Chicago. Talk about chasing price sensitive passengers. Those passengers will not be recaptured by AA but by DL via ATL.

Quoting compensateme (Reply 64):
where it should get greater unit revenue from both local and connecting passengers.

Connecting passengers aren't going to pay more for the privledge of flying thru DFW or ORD versus CLT. It is odd to say a connecting passenger going from the SE to the west will contribute more to unit revenue via ORD or DFW than via CLT.
 
Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:50 am

BTW I call shenanigans on this article. I would bet AA at ORD has much lower unit revenues than US at CLT.
 
HPRamper
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:00 am

Quoting ScottB (Reply 62):
If you actually believe this line, I have some real estate about 20 miles east of MIA to sell you. Like the UA & DL mergers, this one was done to gain greater pricing leverage, and that will be achieved by cutting capacity.

Then why merge at all? Everyone...EVERYONE...knew that US in particular wasn't going to be able to compete in the long-term with UA and DL. AA was also in an unenviable position. Growing organically wasn't going to work.

Quoting compensateme (Reply 64):
Anybody who thinks this merger was about expansion & bringing low fares to the market is smoking too much opium.

Maybe not low fares...but expansion has already been happening. And quite a bit of it.
 
Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:15 am

Quoting HPRamper (Reply 68):
.but expansion has already been happening

In fact so far there has been only expansion and not retrenchment thus far domestically. Lots of new markets have been announced and none of them have been from ORD or DFW.
 
727LOVER
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:20 am

Mods......PLEASE DELETE

[Edited 2014-06-06 19:35:01]
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:24 am

Quoting bobloblaw (Reply 67):
BTW I call shenanigans on this article. I would bet AA at ORD has much lower unit revenues than US at CLT.

LOL. It's confirmed by DOT data, nor is it any secret that US has been undercutting competition for 5+ years via CLT.

Quoting bobloblaw (Reply 66):
If you want to talk about the worst hub in the AA system. It is ORD by far. I would bet since 2001, AA has lost in excess of $3B in ORD. I am not saying ORD will be closed. A great opportunity exists there for refleeting. to A319s and E190s.

The whole AA network has lost billions since 2001.

The local CLT market poses virtually no growth opportunity for AA whereas the ORD market poses tremendous growth opportunity. You simply cannot compare CLT to ORD -- US had significantly lower labor costs and rebuilt CLT into a hub serviced by large, low CASM jets whereas nearly 2-of-3 flights at ORD has been serviced by a 50-seat regional jets. Rebuilding ORD with low CASM jets will enable to better compete in the market and gain signifcant market share.

CLT is simply unsustainable in the new AA as it is today. It'll take awhile to re-build AA's network, and in the interim it'll play with the deck of cards it has now.
We don’t care what your next flight is.
 
Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:32 am

Quoting compensateme (Reply 71):
LOL. It's confirmed by DOT data, nor is it any secret that US has been undercutting competition for 5+ years via CLT

Post it since I dont have access to govt data. CLT has been profitable for US, AA hasnt been profitable for AA since 1999 or 2000.

Quoting compensateme (Reply 71):

The local CLT market poses virtually no growth opportunity for AA whereas the ORD market poses tremendous growth opportunity

Complete opposite. If ORD had growth opportunity, why has AA shrunk there? There is nothing US brings to ORD that AA couldnt do before. CLT on the other hand can be linked to a dozen midwest cities once or twice per day in a way that would not have made sense before. Of course if CLT has no growth opportunity you have to explain; GRR, FWA, EVV, TUL and OKC. All announced since the merger. And from ORD....crickets.
 
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:48 am

Quoting bobloblaw (Reply 72):
Post it since I dont have access to govt data.

Sure you do, you just may not know how to source it. I'd to it for you, but it does take time to source, sort & present... and it's Friday night after a long week.

Quote:
CLT has been profitable for US, AA hasnt been profitable for AA since 1999 or 2000.

Logical fallacy.

US underwent TWO bankruptcies in the 2000s, ultimately providing low labor costs that enabled it to grow capacity & be profitable on low-yielding fares. AA struggled with high labor costs, cutting capacity so as to chase only high-yielding fares, before going through bankruptcy. You simply cannot compare the two in the manner that you are.

Quoting bobloblaw (Reply 72):
Complete opposite. If ORD had growth opportunity, why has AA shrunk there? There is nothing US brings to ORD that AA couldnt do before. CLT on the other hand can be linked to a dozen midwest cities once or twice per day in a way that would not have made sense before. Of course if CLT has no growth opportunity you have to explain; GRR, FWA, EVV, TUL and OKC. All announced since the merger. And from ORD....crickets.

#1) AA had high labor costs that forced it to cut capacity, shrink its fleet and focus solely on high-yielding fares. The domestic fare market has only turned around in the past four-five years and AA wasn't able to take advantage of it.

#2) As I mentioned in my above posting, the merger just closed; AA will play with the hand it's holding. It'll take awhile to re orchestrate & reflow the network. The a.net mentality is that if it didn't happen overnight, it's not going to happen.

That's not to say CLT will not gain (or keep) additional service... just that CLT is not going to peak at 74K daily seats in the future.
We don’t care what your next flight is.
 
Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 3:12 am

Quoting compensateme (Reply 73):
#1) AA had high labor costs that forced it to cut capacity

Problem is none of the new routes are being flown by mainline. So AA's labor costs arent relevant to the new markets from CLT. Fact is you have no answer to a half a dozen new routes from CLT. CLT domestic has grown not shrunk and the adds have happened after the merger not before.

Quoting compensateme (Reply 73):
Logical fallacy.

Well, I guess when you have no retort, you can scream Logical Fallacy. AA wasnt profitable in ORD even before they had the highest labor costs. Outside the boom years of 1995-2000 and the B-scale years of 1983-1989, ORD has probably been the most consistently unprofitable hub for AA.


I wouldnt want to argue your point. Youre agruing CLT will shrink and ORD will grow in the face of the opposite occurring. So far those of us who said CLT will be a valuable asset to AA and there are new dots to connect are right, not you. CLT will shrink over the next 10 years but all hubs will as 50 seat jets go away.

Would you rather add more markets to ORD where UA probably already serves or add more markets to CLT where youll have the nonstop market to yourself? Will GRR/EVV/FWA to CLT be more profitable or would ROA-ORD be more profitable? I think the answer is easy.
 
HPRamper
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 3:16 am

Quoting compensateme (Reply 71):
The local CLT market poses virtually no growth opportunity for AA whereas the ORD market poses tremendous growth opportunity. You simply cannot compare CLT to ORD

CLT as a HUB is what AA needed. The local market, such as it is, is just icing on the cake. I daresay that US without CLT would have been a far less attractive partner for AA.
 
flyguy89
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 4:02 am

Quoting bobloblaw (Reply 67):
BTW I call shenanigans on this article. I would bet AA at ORD has much lower unit revenues than US at CLT.

Oh ok, so AA is just flat out lying then because you don't like the facts  
Quoting bobloblaw (Reply 72):
Post it since I dont have access to govt data. CLT has been profitable for US, AA hasnt been profitable for AA since 1999 or 2000.


Yes you do, it's publicly available data. Source it yourself, you've already been presented with an article where AA went on record stating as such, if you think they're just lying about it then you go fact check it.

Quoting HPRamper (Reply 68):
Then why merge at all? Everyone...EVERYONE...knew that US in particular wasn't going to be able to compete in the long-term with UA and DL. AA was also in an unenviable position. Growing organically wasn't going to work.


Eliminate a competitor, decrease capacity, increase yields...etc. AA didn't need ALL of US to reach a size to be competitive with UA and DL, and now they can get away with decreasing network capacity while still leveraging their size to compete with the other two.

Quoting bobloblaw (Reply 69):
In fact so far there has been only expansion and not retrenchment thus far domestically. Lots of new markets have been announced and none of them have been from ORD or DFW.


Uh..how about all that CLT-Europe expansion that got yanked back? CLT-GIG? I think the key point in the article is that she said the network would be under review until 2015, that's when significant network changes will begin taking place.

CLT has a major role to serve in the new AA, however I agree with others that that likely won't be at a 650+ daily flight level. I thought MSP was a good comparison as to what we can expect CLT to look like after everything shakes out.
 
MAH4546
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 5:53 am

Quoting bobloblaw (Reply 74):
Will GRR/EVV/FWA to CLT be more profitable or would ROA-ORD be more profitable? I think the answer is easy.

The answer is easy - ORDROA will probably be more profitable because it actually can generate a decent local market. The first three can't and simply are there to feed Florida.
a.
 
Cubsrule
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:24 pm

Quoting Mah4546 (Reply 77):
The answer is easy - ORDROA will probably be more profitable because it actually can generate a decent local market. The first three can't and simply are there to feed Florida.

Yet, DL, whose financial performance is envious, has done a lot more connecting the midwest to ATL than connecting the southeast to DTW. Why?
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Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 1:38 pm

Quoting Mah4546 (Reply 77):
The answer is easy - ORDROA will probably be more profitable because it actually can generate a decent local market. The first three can't and simply are there to feed Florida.

No. AA on ROA-ORD will be the second carrier in the market. Watch what has been done. There has been expansion from CLT into the midwest. There has NOT been expansion from ORD into the SE. AA is #3 in the Chicago market. They arent the price leader and they arent the carrier of choice for Chicago passengers. Better to be #1 in CLT than #3 in CHI. The only thing ORD does for AA, it is probably creates "halo" on their other routes because Chicago is a large business market. If you dont fly LGA-ORD, you wont get the NYC pax on JFK-LAX etc. But AA loses a ton of cash in Chicago. Always has. AA could have added ROA-ORD. They didnt. They added CLT-GRR/EVV/FWA.

Quoting flyguy89 (Reply 76):
Eliminate a competitor, decrease capacity, increase yields...etc. AA didn't need ALL of US to reach a size to be competitive with UA and DL, and now they can get away with decreasing network capacity while still leveraging their size to compete with the other two.

AA didnt have a choice. It isnt like only parts of US were for sale. Plus Id say CLT is more valuable than PHX.
With industry wide 85% load factors the ability to do that has all but evaporated. Like I said, it isnt 2008 anymore. Cutting capacity now is cutting bone and muscle, not fat. If you think AA/DL/UA can be Tiffany Airlines and cater only to the highest yield passenger and drop everyone else and have a successful business model, youre mistaken.

Quoting flyguy89 (Reply 76):
Uh..how about all that CLT-Europe expansion that got yanked back? CLT-GIG?

GIG-CLT makes no sense for a carrier that already has access to Brazil. US didnt. CLT-GIG was the best they could do. The CLT Europe cuts would have been cut anyway even without AA. AA brings nothing to those routes, where they are just duplicates of PHL.

Quoting flyguy89 (Reply 76):
Oh ok, so AA is just flat out lying then because you don't like the facts

Wouldnt be the first time an airline mgmt has lied. Theyre probably looking fro concessions.


CLT will shrink due to larger planes, but every hub will. Any market that cant sustain 70 seat aircraft will be cut, whether the hub be ATL, ORD or CLT. But that is not unique to CLT or AA.

Here is the problem you "CLT will shrink or go away" advocates have: REALITY. CLT is the ONLY part of the new AA that is growing domestically. Some minor growth at PHL. But NONE at ORD or DFW.
 
commavia
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:31 pm

Quoting bobloblaw (Reply 79):
AA is #3 in the Chicago market.

Not in market share. AA is #2 behind United, but ahead of Southwest.

Quoting bobloblaw (Reply 79):
They arent the price leader and they arent the carrier of choice for Chicago passengers.

Huh? There are tons of Chicago passengers for whom AA absolutely is the "carrier of choice." AA may not have the same local marketing presence of Southwest or corporate penetration of United, but AA absolutely has lots of loyal customers in the Chicagoland region. In merger documents filed with the SEC, AA (really USAirways) indicated that, when combined with USAirways, AA actually carries a larger share of local Chicago customers than United, and the wording of the slide indicated that the merged airline anticipates that dynamic to continue. I am skeptical of that, but either way, the numbers are extremely close between AA and its largest network peer in the region, United.

Quoting bobloblaw (Reply 79):
Better to be #1 in CLT than #3 in CHI.

Perhaps. This is the classic debate that has now apparently reached the analyst community about whether it's better to split a massive, and high-premium, market multiple ways or dominate a smaller, overall less-premium, market and have it all to yourself. There are pros and cons to each, but of course it's really a false choice, as all three U.S. network carriers now have instances of both - at least to a certain extent.

Quoting bobloblaw (Reply 79):
But AA loses a ton of cash in Chicago. Always has.

I doubt that highly. I'm not saying ORD hasn't been unprofitable before, nor that it hasn't been for much of the last decade given the structural competitive disadvantages AA has faced, but Chicago has "always" lost "a ton of cash?" I'm not buying that without some form of evidence. And in any event, the past is just that - the past. The relative financial performance at ORD in the 2000s - when the confluence of pretty much "worst case scenario" factors all conspired simultaneously to really harm AA's position there - does not necessarily tell us what will happen going forward now that AA has either corrected or is in the process of correcting many of those problems.

Quoting bobloblaw (Reply 79):
AA could have added ROA-ORD. They didnt. They added CLT-GRR/EVV/FWA.

Not really sure that's indicative of the long-term trajectory of either ORD or CLT. I'm not commenting specifically on ROA-ORD, as I actually do agree that ROA is a relatively small market that probably does make more sense to concentrate more on existing connectivity over CLT/PHL. But the fact that AA is attacking some low hanging fruit by connecting CLT with Midwest markets on nonstop routes with no competition doesn't mean there aren't going to be adds the other way - from AA hubs to existing primarily-/entirely-US stations. Indeed, I think ORD is where we're going to see a lot of this. I think there are markets out of ORD - like PVD, ALB, BTV, PWM, etc. - that may well make sense now given the merger.

Quoting bobloblaw (Reply 79):
But NONE at ORD or DFW.

Again - not sure we can extrapolate future potential, at either ORD or DFW, or for that matter at CLT, based solely on what's happening right now. The growth trajectory for DFW - the metro area, not the airport - is upward. I feel quite confident DFW - the hub - will continue to see sustained growth, domestic and international, going forward. I would argue the fundamentals are stronger at DFW than at CLT, and arguably stronger than most other major U.S. airline hubs.
 
727LOVER
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:40 pm

Quoting commavia (Reply 80):
Not in market share. AA is #2 behind United, but ahead of Southwest.

Is that AA alone ....or AA with AE?

Quoting commavia (Reply 80):
Huh? There are tons of Chicago passengers for whom AA absolutely is the "carrier of choice."

He probably meant most preferred.
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
commavia
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 2:56 pm

Quoting 727LOVER (Reply 81):
Is that AA alone ....or AA with AE?

Believe that's AA branded (i.e., including Eagle).

Sourced from Chicago Department of Aviation, using March 2014 passenger traffic figures for O'Hare and Midway, and extrapolating market share based on airport's "Performance Data" from January 2012. This is imperfect, for sure, but I don't have access to the more comprehensive industry sources that could give us the more/most recent, and more precise, figures.

But the point is still the same: based on March 2014 traffic and January 2012 market shares, United is at 35.0% of the Chicagoland metro market, AA at 30.3% and Southwest 22.2%. Now of course the shares have changed since January of 2012, but not enough to change that 1-2-3 order. At least as measured by overall market share, AA is definitely #2 in Chicago, not #3.

Now, with respect specifically to local traffic and revenue - I'll defer to others for that data, but again, AA (USAirways) itself claimed in merger documents that, least as a of 2011, AA had a larger share of Chicago O&D passengers than United on a pro forma combined basis, so even if that is no longer the case, I doubt AA is far off from where United is.

Quoting 727LOVER (Reply 81):
He probably meant most preferred.

Okay. There are tons of Chicago passengers for whom AA absolutely is the "most preferred" "carrier of choice."

I fail to see how this is debatable. I don't think it would be possible to operate a hub with ~500 daily flights nonstop to >100 cities around the U.S. and the world without having some meaningful portion of the local market that deems you their "most preferred" carrier.
 
727LOVER
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 3:10 pm

My bad.

I meant to say.....when he said this:
Quoting bobloblaw (Reply 79):
They arent the price leader and they arent the carrier of choice for Chicago passengers.


He probably meant MOST Chicago passengers.

Anyway,

Has not gotten stronger or weaker in Chicago market share over the last 10 years?

Also, do they have a gate disadvantage?
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
ckfred
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 4:08 pm

Quoting bobloblaw (Reply 79):
AA is #3 in the Chicago market. They arent the price leader and they arent the carrier of choice for Chicago passengers. Better to be #1 in CLT than #3 in CHI. The only thing ORD does for AA, it is probably creates "halo" on their other routes because Chicago is a large business market. If you dont fly LGA-ORD, you wont get the NYC pax on JFK-LAX etc. But AA loses a ton of cash in Chicago.

Historically, AA has had a larger percentage of O&D traffic at ORD than UA. Further, I know a number of people in Chicago who, because of corporate contracts, must fly AA. Now, my understanding is that for companies who move more people in and out of Chicago than elsewhere, UA has made gains over the past 10 years. AA gave back what it gained after the 2000 pilot sick-out.

Further, there are people who won't fly Southwest, because they would have to drive past ORD to get to MDW. I have friends in the far northern suburbs who used to fly YX out of MKE, because it wasn't that much farther than ORD, and MKE didn't have the delays of ORD.

I also read in Crain's Chicago Business, probably back in 2012, that AA was going to agressively go after UA corporate contracts, since the bankruptcy filing was giving AA financial flexibility to offer better pricing. It would be interesting to see how that effort has worked.
 
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 4:36 pm

Quoting Cubsrule (Reply 78):
Yet, DL, whose financial performance is envious, has done a lot more connecting the midwest to ATL than connecting the southeast to DTW. Why?

Why doesn't DL build a hub in AUS that rivals DFW, since they both serve the same region? Or pump up SLC so it rivals DEN, since they both serve the same region? Because Austin isn't Dallas and Salt Lake isn't Denver, just as Charlotte isn't Atlanta. Delta has 2.5x the amount of local traffic as US, generating a significant revenue premium.

Quoting HPRamper (Reply 75):
CLT as a HUB is what AA needed. The local market, such as it is, is just icing on the cake. I daresay that US without CLT would have been a far less attractive partner for AA.

There's so much wrong with this I can't even respond. US acquired AA BTW (although not legally).

Quoting bobloblaw (Reply 74):
Well, I guess when you have no retort, you can scream Logical Fallacy. AA wasnt profitable in ORD even before they had the highest labor costs. Outside the boom years of 1995-2000 and the B-scale years of 1983-1989, ORD has probably been the most consistently unprofitable hub for AA.

I responded multiple times to your assertion but either you continue to ignore the benefits US's bankruptcy provided or you don't comprehend them. Either way, with labor costs now being equal and AA having the option of matching capacity to demand utilizing former US equipment (instead of its limited fleet), it's a totally different ball game.

Quoting bobloblaw (Reply 74):
Problem is none of the new routes are being flown by mainline. So AA's labor costs arent relevant to the new markets from CLT. Fact is you have no answer to a half a dozen new routes from CLT. CLT domestic has grown not shrunk and the adds have happened after the merger not before.

Eagle's high costs were a huge part of AA's struggles. Again, you don't comprehend much of what you're writing about.

Quoting bobloblaw (Reply 74):
I wouldnt want to argue your point. Youre agruing CLT will shrink and ORD will grow in the face of the opposite occurring. So far those of us who said CLT will be a valuable asset to AA and there are new dots to connect are right, not you. CLT will shrink over the next 10 years but all hubs will as 50 seat jets go away.

I've addressed my POV twice already: As with DL-NW and UA-CO, AA-US will spend its first year together by making minor adjustments to its network; these adjustments will be about taking advantage of short-term gains, not necessairly indicative of a long-term plan. Commiva shares a similar POV and describes it well in #80.

Secondly, I have never refuted CLT will gain new service, as that's a natural synergy of the merger. But while CLT may gain a pair of RJ each to places like GRR and TUL, it'll likely lose service to MEX (319) and markets like SFO (peaking at 7 daily 321) and DTW (peaking at 8 daily flights totaling nearly 1,000 seats) will see adjustments. AA may peak at 5 daily 738 (reconfigured to 160 seats) to SFO and 4-5 flights totally 500 seats into DTW. That lost capacity will far exceed the gains in 50 seat jets.

Quote:
Would you rather add more markets to ORD where UA probably already serves or add more markets to CLT where youll have the nonstop market to yourself? Will GRR/EVV/FWA to CLT be more profitable or would ROA-ORD be more profitable? I think the answer is easy.

Absolutely I'd rather be more competitive in ORD than CLT. There's HUGE amounts of local revenues up for grab at ORD, whereas US has hit maximum market share in CLT. Moving the 25% capacity that's been added in CLT over the past few years to ORD isn't going to hurt CLT's local market -- it's been stagnant. But operating a mix of larger regional jets and larger mainline Airbus jets instead of mostly 50-seat RJ and MD-82 will do wonders for AA's competitive position at ORD.

UA doesn't "own" ORD and is handicap by its fleet (too many 50-seaters, too few mainline jets). There's no better opportunity than now to compete.

You need to stop pretending it's the 2000s. The days of $99 fares from ORD-LAX are gone.
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flyguy89
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 4:58 pm

Quoting bobloblaw (Reply 79):
AA didnt have a choice. It isnt like only parts of US were for sale.


Right, now they do however since they control the whole network.

Quoting bobloblaw (Reply 79):
Plus Id say CLT is more valuable than PHX.


I would definitely agree.

Quoting bobloblaw (Reply 79):
Like I said, it isnt 2008 anymore. Cutting capacity now is cutting bone and muscle, not fat.


Sorry, but just because load factors are high is no indication whatsoever that there's no fat to cut, it's lesson 1 in airline economics: full planes do not equal profit. As I said above, now the combined carrier is able to trim capacity and increase yield and profit without conceding competitive advantage to UA and DL.

Quoting bobloblaw (Reply 79):
GIG-CLT makes no sense for a carrier that already has access to Brazil. US didnt. CLT-GIG was the best they could do. The CLT Europe cuts would have been cut anyway even without AA. AA brings nothing to those routes, where they are just duplicates of PHL.


You're cherry-picking then. You're trying to pull a larger, deeper meaning from US adding extra flights to OMA and SAT while ignoring what happened to GIG, BRU and LIS. Both cases are examples of network rationalization, however with AA saying that review of the network won't be complete for another year, it's hard to grasp for indications of the future CLT operation until that time.

Quoting bobloblaw (Reply 79):
Wouldnt be the first time an airline mgmt has lied.


They can't lie about things that would contradict their SEC or stock market filings, things such as unit revenue and network traffic.

Quoting bobloblaw (Reply 79):
Here is the problem you "CLT will shrink or go away" advocates have

I don't think there has literally been anyone on this thread who has suggested CLT will go away.
 
MAH4546
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 5:11 pm

Quoting bobloblaw (Reply 79):
AA is #3 in the Chicago market.

AA is #2 in the Chicago market by passenger volume and #1 in the Chicago market by local O&D, as it carriers more O&D traffic than United from Chicago. Has typically always been that way.

Quoting bobloblaw (Reply 79):
they arent the carrier of choice for Chicago passengers.

Well actually, yes, yes they are.
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 5:57 pm

Quoting Mah4546 (Reply 87):
Well actually, yes, yes they are.


By Oprah Winfrey maybe, and while she's large, she's not indicative of the Chicagoland market, which will fly whatever carrier offers the lowest fare at the moment.
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Cubsrule
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 8:23 pm

Quoting compensateme (Reply 85):
Because Austin isn't Dallas and Salt Lake isn't Denver, just as Charlotte isn't Atlanta. Delta has 2.5x the amount of local traffic as US, generating a significant revenue premium.

Sure, but there's no revenue premium involved with selling me IND-ATL-LAX cheaper than IND-DTW/MSP-LAX. The point is that hub bulk has value.
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Flighty
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 9:07 pm

CLT has done fine and will continue to do fine. It's yields are high. It connects this place called this USA to this other place called the rest of the USA, Florida and Carribbean, with some Europe mixed in.
 
LAXdude1023
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 9:19 pm

Quoting bobloblaw (Reply 69):
In fact so far there has been only expansion and not retrenchment thus far domestically. Lots of new markets have been announced and none of them have been from ORD or DFW.

DFW received a HUGE international boost just before the merger. BOG, LIM, ICN, PVG, HKG, and YEG came in a relatively short period of time. Not exactly like we've been abandoned. Ill be the first to say that I don't think DFW-PVG will last, but still lots of love has been given to DFW.

Quoting bobloblaw (Reply 79):
But NONE at ORD or DFW.

Not true. DFW-BIS was announced.

Look, I don't get the doom and gloom talk about CLT. Its going to be somewhat de-emphasized internationally, but not stripped of its international service. Its been getting new flights domestically which make since. Honestly, some of those should have been flying pre-merger US (especially CLT-OKC). I think CLT would be perfect as a hub roughly the size of MSP or DTW, maybe slightly larger. I think the statement below says it pretty well:

Quoting HPRamper (Reply 75):
CLT as a HUB is what AA needed. The local market, such as it is, is just icing on the cake. I daresay that US without CLT would have been a far less attractive partner for AA.

I don't want to dismiss the local market completely since there is a lot of lucrative banking traffic and some really good fares for the airline, but this is pretty well it.
"I dance and laugh among the rotten"
 
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 9:20 pm

Quoting Cubsrule (Reply 89):
Sure, but there's no revenue premium involved with selling me IND-ATL-LAX cheaper than IND-DTW/MSP-LAX. The point is that hub bulk has value.

There's six times the amount of traffic between IND-ATL there is to DTW, and twice the amount to MSP.

ATL's value is in the 'bulk' local market, which enables DL to fly large, low CASM jets (because a large portion of its seats will be filled with local travelers). This creates a cost advantage for DL in catering to the lower fare buckets, making it more attractive for the airline to flow traffic from say IND-LAX over ATL as opposed to MSP (or even DTW), which would otherwise be the natural choice.

US, OTOH, has built the bulk hub at CLT without the bulk local traffic. This was attractive when it was a LCC, since it enabled it to exploit its low costs in undercutting the competition ... but that will no longer be true.

Too many people on here seem to think that hubs are driven by pure geography, and don't recognize the value of a $600 IND-ATL ticket against a $300 IND-ATL-MCO ticket.
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compensateme
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 9:27 pm

Quoting LAXdude1023 (Reply 91):
I think the statement below says it pretty well:
Quoting LAXdude1023 (Reply 91):
I don't want to dismiss the local market completely since there is a lot of lucrative banking traffic and some really good fares for the airline, but this is pretty well it.

Local markets drive hubs; as I mentioned earlier, per an LAXIntl thread from a decade+ ago, four of the top 5 connecting hubs from the time have either been dismantled or torn apart. CLT, which occupied the top spot, is the sole exception. AA will never make money from CLT shuttling passengers from the NE to Florida nor is the SE going to support 74K daily seats; the local market has to contribute.
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Bobloblaw
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 10:56 pm

Quoting LAXdude1023 (Reply 91):
Not true. DFW-BIS was announced.

That has nothing to do with US, but with North Dakota booming. I should have been more clear. The AA/US merger has provided no new service to old AA hubs but has to old US hubs.

Quoting Mah4546 (Reply 87):
AA is #2 in the Chicago market by passenger volume and #1 in the Chicago market by local O&D, as it carriers more O&D traffic than United from Chicago. Has typically always been that way.

Yes, but it is divided by three carriers. # 1 in Chicago means you get 25% of the market.

Quoting Mah4546 (Reply 87):
AA is #2 in the Chicago market by passenger volume and #1 in the Chicago market by local O&D, as it carriers more O&D traffic than United from Chicago. Has typically always been that way.

AA has smaller total share when including connecting pax than WN or UA. AA also gets much lower yields than UA, which BTW doesn't do well in ORD either. When it comes to Revenue, UA is way ahead of AA.


Look I am not going to argue this anymore. There have been lots of new markets announced from CLT(and PHL) thanks to the merger and none from ORD or DFW. The" CLT and lesser extent PHL will shrink" have been wrong thus far. Closing CLT will NOT increase RASM at other AA hubs for two reasons;
1. industry load factor is 85%
2. Other AA hubs are NOT a substitute for CLT. Most traffic thru CLT isn't east-west, it is north-south. It is markets like TLH-CLT-BOS. Also flying 50 seat ERJs 1000 miles to DFW is NOT efficient and not a replacement for CLT service.

Quoting flyguy89 (Reply 86):
Sorry, but just because load factors are high is no indication whatsoever that there's no fat to cut, it's lesson 1 in airline economics: full planes do not equal profit

Yes, I hear that all the time but that is the case only if pricing and revenue mgmt. are incompetent. If Demand exceeds Supply and you cant make money, youre not managing your inventory properly.

Quoting flyguy89 (Reply 86):
You're cherry-picking then. You're trying to pull a larger, deeper meaning from US adding extra flights to OMA and SAT while ignoring what happened to GIG, BRU and LIS.

Because GIG makes no sense from CLT for an airline with lots of Brazil Frequency. BRU and LIS being rationalized having nothing to do with AA, as that traffic will be rereouted over PHL, not ORD or DFW or MIA.


So I am pulling a Senator Aiken here. Declare Victory and Get Out.
 
commavia
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 11:05 pm

Quoting bobloblaw (Reply 94):
AA has smaller total share when including connecting pax than WN or UA.

Again - please provide some evidence for that. If you are to "[include] connecting pax" to capture the "total share," is that not just market share? In which case - please provide evidence that AA has a smaller market share in Chicago metro than Southwest, because I'm fairly certain it doesn't.

Quoting bobloblaw (Reply 94):
There have been lots of new markets announced from CLT(and PHL) thanks to the merger and none from ORD or DFW.

The merger isn't even six months old yet. Give it time. Just because CLT and PHL are seeing some incremental growth now doesn't mean that other (pre-merger AA) hubs won't also, in the future. As I said - given the combined network, I think ORD arguably stands to gain more in this regard than any other hub.

Quoting bobloblaw (Reply 94):
The" CLT and lesser extent PHL will shrink" have been wrong thus far.

Again - give it time. The first six months of the merger isn't necessarily a complete reflection of the future. With the exception of PHX, I think each one of the combined airline's hubs have a very clearly defined and strategically important network role that cannot be replicated by any other hub, and I continue to believe that both CLT and PHL have very bright futures as huge hubs for the new AA. But I also think that the combination of higher unit operating costs and the trend towards somewhat lower frequency on somewhat larger RJs will mean a net reduction in flying in the future - particularly at CLT which was already particularly inflated, in my view, because of USAirways' below-legacy costs.
 
MAH4546
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RE: Charlotte Observer Article...

Sat Jun 07, 2014 11:11 pm

Quoting bobloblaw (Reply 94):
AA has smaller total share when including connecting pax than WN or UA.

AA has the largest share of O&D traffic in the Chicagoland area. Why is that so difficult to understand?

Quoting bobloblaw (Reply 94):
The AA/US merger has provided no new service to old AA hubs but has to old US hubs.

That just shows you how weak US' network was comparative to AA. There were a lot of gaps. If you think MIA, DFW and ORD won't be getting more links to strong US stations in the future, you're nuts.

But of course, we'll ignore the fact that AA added service from it's LaGuardia hub to a ton of strong US stations.

CLT and PHX will both be cut by at least 30% starting in three years. Bet on it.
a.
 
flyguy89
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RE: Charlotte Observer Article...

Sun Jun 08, 2014 12:57 am

Quoting bobloblaw (Reply 94):
Look I am not going to argue this anymore.
Quoting bobloblaw (Reply 94):
Closing CLT will NOT increase RASM at other AA hubs for two reasons;

Well that's a relief since literally no one in this thread has been arguing for such an outcome.

Quoting bobloblaw (Reply 94):
Yes, I hear that all the time but that is the case only if pricing and revenue mgmt. are incompetent. If Demand exceeds Supply and you cant make money, youre not managing your inventory properly.


...but demand is not exceeding supply, in fact airlines are squeezing demand to increase profits.

Quoting bobloblaw (Reply 94):
Because GIG makes no sense from CLT for an airline with lots of Brazil Frequency. BRU and LIS being rationalized having nothing to do with AA, as that traffic will be rereouted over PHL, not ORD or DFW or MIA.


But you don't really know that it had nothing to do with AA, that's just a guess on your part. So if it's an addition at CLT it's because of the merger, but if it's a subtraction the merger had nothing to do with it? Sounds like more cherry-picking to me.

Quoting Mah4546 (Reply 96):
AA has the largest share of O&D traffic in the Chicagoland area. Why is that so difficult to understand?


Hell hath no fury like Mark when someone makes blanket, inaccurate statements about AA  
Quoting LAXdude1023 (Reply 91):
I think CLT would be perfect as a hub roughly the size of MSP or DTW, maybe slightly larger.


Couldn't agree more.
 
727LOVER
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RE: Charlotte Observer Article...

Sun Jun 08, 2014 1:13 am

Quoting Mah4546 (Reply 96):
AA added service from it's LaGuardia hub

That's a hub?....meh



I seriously don't get this thread.....the new AA (read US mamagement) is not going to close the CLT hub. It would be pointless.There is a ton of real estate between Miami & Philadelphia that cannot be picked up by those airports.

CLE & MEM survived in their former networks (even if the were losing money) because they were essential. Once they became part of a new network, (MEM right down the road from ATL.....and CLE being squeezed by ORD & IAD), they were no longer essential and thus were dehubbed. Honestly IAH fills a lot of what DEN does, but has way more TATL traffic. If UA faced a major downsizing, don't be surprised........

Anyway, CLT is essential in this new network....downsized a bit, yes....but no CVG.
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
Cubsrule
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RE: Charlotte Observer Article...

Sun Jun 08, 2014 1:45 am

Quoting compensateme (Reply 92):
There's six times the amount of traffic between IND-ATL there is to DTW, and twice the amount to MSP.

IND-ATL has FL. Which LFC flies IND-DTW/MSP, please?

It's a silly comparison given the fare difference, particularly given that IND-DTW is drivable (~4 hours downtown to downtown).
I can't decide whether I miss the tulip or the bowling shoe more

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