nomorerjs
Topic Author
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New AA Plans For ORD

Mon Jun 09, 2014 12:54 am

We heard that DP wants to do something about PM AA's "neglect" of ORD. Half a year into the integration and we have Bismark and more E175's. Sure, I'll take the E175's any day, but UA seems to be adding more cities (seasonal and express, but adds none the less). AA seems to be happy to let JL, QR, IB, and others take the lead. AA had the chance to vacate / sell ORD during CH11, but chose not to. Is the re-banking the savior to ORD (back to the good old days of 10 banks with more jets)?
Also, I've heard the 787 will make an appearance at ORD (be it in the training rotation or on FA rumored routes to CDG and BCN next year - others here may know more about this, but FA rumors are just about that).
 
jcwr56
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:04 am

Quoting nomorerjs (Thread starter):
Also, I've heard the 787 will make an appearance at ORD (be it in the training rotation or on FA rumored routes to CDG and BCN next year - others here may know more about this, but FA rumors are just about that).

For once those FA rumors have some merit. Shocked I tell you, shocked.

I know QR won't be allowed to stay on L10 for 5-6 hours a day soon, so perhaps it's a baby step towards DP vision of what he desires ORD to be.
 
727LOVER
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:15 am

Quoting nomorerjs (Thread starter):
AA had the chance to vacate / sell ORD during CH11, but chose not to.

Well DUH....I don't think it ever even crossed their mind. They were not in a desperate cash position.
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
ORDJOE
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:34 am

Yeah AA had far more movements at ORD back in the 90s and 2000s then today. While UA keeps exapanding and getting more routes at ORD, it seems AA has not kept up at all. I do believe ORD is a market that can sustain UA and AA hubs. Time will tell.

As for the 787s, I bet they probably will be getting some. AA uses so many 767s here, would make sense that 787s might replace or sub those
 
OP3000
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:37 am

There are a few new things going for ORD now after the merger and post-BK:

-Lower operational costs to launch and sustain new routes.
-Newer aircraft that are right-sized for certain routes, especially the E175, A319 and B787 all of which vastly improve the passenger experience as compared to the aircraft used on the exact or similar routes before the merger.
-A strong network in the Northeast courtesy of the merger, with a big hub in PHL that can feed traffic east/west to/from ORD increasing passenger numbers for a lot of existing/potential routes.
-New management with a better track record in terms of an aggressive market mentality and better labor relations (which presumably will help service and performance).
-Improved product offerings throughout the network and locally such as Main Cabin Extra, refurbishing of business class on long-haul aircraft, new branding, a remodeled lounge in Concourse G.
-Not related to the merger, but the main competitors in Chicago (UA and WN) generally have not become any stronger since then. In UA's case their increased affection for using regional jets more extensively than other majors weakens their traditional strength with premium passengers, and WN's cost structure is no longer as low and they less frequently push fares down now as compared to a few short years ago.

There are probably more to the list but these are the ones that come to mind for me. In terms of the new AA network internationally, I think PHL may actually gain some AA capacity (be it in # of seats or flights) to Europe from ORD because they are further east. That said, the 787 does open up possibilities (such as an ORD-TLV, off the top of my head) that were otherwise difficult. I think the 787 plus the merger with a good amount of Northeast USA-India traffic may now make an AA ORD-India flight successful.



[Edited 2014-06-08 19:05:37]
 
OP3000
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:51 am

Quoting nomorerjs (Thread starter):
Half a year into the integration and we have Bismark and more E175's.

A lot of the benefits AA now has after the merger and exiting bankrupcy will take a couple of years to be felt, particularly when the merger is not consumed yet and a most of the new aircraft and product offerings are yet to make their way in.
 
CIDFlyer
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:02 am

One thing I would like to see them do is refreshen and update their terminal there (except for G that seems fairly open, bright and modern). The rest of the concourses have that late 80's/early 90's feel to it. Time for some updating of the ORD AA hub.
 
usairways85
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:18 am

Can we get a "?" at the end of the thread title?

Quoting nomorerjs (Thread starter):
Sure, I'll take the E175's any day, but UA seems to be adding more cities (seasonal and express, but adds none the less).

FWIW, per the Summer hub stats UA in ORD is 30.4% mainline with
ER4: 224
CR2: 81
CR7: 110
E70: 39
E75: 14

AA is 34.7% mainline
ERD: 54
ER4: 147
CR2: 14
CR7: 28
CR9: 2
E75: 94
 
ORDTLV2414
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:29 am

Post Merger will see AA expand obviously ORD-PHL,PHX,CLT flying. AA I think will never abandon ORD because of the size of Chicago is too big to ignore and it has excellent brand recgonition here. I believe AA is encountering a space problem at ORD and it may inhibit expansion. All though I do believe as said above that the addition of better size aircraft may bring about new destinations. I do not agree with the statement that more traffic will be routed through PHL. PHL is very congested as is. ORD should see expansion with the new AA, question is how much room will there be for it.
 
OP3000
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RE: New AA Plans For ORD

Mon Jun 09, 2014 4:07 am

Quoting ORDTLV2414 (Reply 8):
I do not agree with the statement that more traffic will be routed through PHL. PHL is very congested as is.

A couple of things:

-The statement was not that more traffic will be routed via PHL, but that PHL can syphon of a good amount of the European traffic from the midwest and west that AA would send via ORD absent the merger. The large Northeast market that PHL draws gives that hub additional scale for that purpose.
-Both airports have capacity constraints of different types. PHL will see some drawdowns and consolidations from which other capacity can be increased.
 
Bobloblaw
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RE: New AA Plans For ORD

Mon Jun 09, 2014 12:40 pm

Quoting ORDJOE (Reply 3):
Yeah AA had far more movements at ORD back in the 90s and 2000s then today. While UA keeps exapanding and getting more routes at ORD, it seems AA has not kept up at all.

In 1999, UA had something like 450 weekday mainline departures and only about 100 UAX departures.

I think UA in 1999 had more mainline than UA+AA do today.

Quoting ORDTLV2414 (Reply 8):
I believe AA is encountering a space problem at ORD and it may inhibit expansion.

Maybe for RJs, but overall AA's gate utilization at ORD is among the lowest in the industry.

Quoting OP3000 (Reply 4):
I think PHL may actually gain some AA capacity (be it in # of seats or flights) to Europe from ORD because they are further east.

Id like to know which routes you see moving from ORD to PHL. One thing people here are forgetting is that the US and AA hubs dont necessarily serve the same traffic flows. So moving capacity from one hub to another wont result in recapturing traffic and better unit revenues. That is why I have said and will continue to say that AA/US wasnt the same type of merger that DL/NW was or even UA/CO. It was not a merger that would lead to much capacity reduction overall. The biggest benefit will be gauge swaps. A330s in MIA and 767-300s in PHL and CLT. A319s and E190s in ORD.
 
FWAERJ
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RE: New AA Plans For ORD

Mon Jun 09, 2014 12:50 pm

Quoting OP3000 (Reply 9):
-The statement was not that more traffic will be routed via PHL, but that PHL can syphon of a good amount of the European traffic from the midwest and west that AA would send via ORD absent the merger. The large Northeast market that PHL draws gives that hub additional scale for that purpose.

PHL-FWA/GRR are two early examples of how that traffic can be rerouted. Expect more as integration continues.
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Bobloblaw
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:04 pm

Quoting OP3000 (Reply 9):
but that PHL can syphon of a good amount of the European traffic from the midwest and west that AA would send via ORD absent the merger.

Not when peak load factors are approaching 85-90%.
 
Sligo
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:33 pm

Quoting FWAERJ (Reply 11):
PHL-FWA/GRR are two early examples of how that traffic can be rerouted. Expect more as integration continues.

It was silly that GRR-PHL wasnt there pre-merger US. I'd say that was a correction of an oversight more than re-routing. If GRR people need TATL, AA was never really in the mix except for LHR. AA/US was an abnormal after-thought at GRR and will be until September. DL and UA offered the most access.

But I am not disagreeing with 100% of your thesis. As usual, it's a shade of gray:

(1) As we know PHL affects the future of JFK more than ORD. JFK TATL consolidates into even more O&D which is fine and dandy; though T8's potential will never be realized with AA alone. They're going to have to continue to get creative to have that terminal make financial sense.

(2) AA's domestic feed into PHL will be used as the primary TATL connecting point, but ORD was never meant to be that anyway...so it's not really a big loss for ORD. But dont expect PHL to turn into ATL or anything; ie dont expect PHL-FGO/MSN/DSM/etc (i.e. purely Midwest small-mid spoke service) anytime soon/if at all. ORD will still take in those customers as they always have and get them to markets like LHR and some ORD TATL future growth into the primary European/Asian markets. The failure of AA's ORD-DEL is an interesting case and one wonders if it might work post-merger.

And, on a related point, that last part of (2) above re ATL is DL's long-term advantage over AA and UA. ATL's catchment is powerful enough to reach deep into markets that no other UA/AA hub can keep up with. If there's a #2, it might be AA DFW.
 
PEK777
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:46 pm

I expect they will add some destinations and frequencies to compete with UA for local traffic and to offset the shuttering of the CLT hub
 
nwcoflyer
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RE: New AA Plans For ORD

Mon Jun 09, 2014 1:50 pm

Quoting PEK777 (Reply 14):
I expect they will add some destinations and frequencies to compete with UA for local traffic and to offset the shuttering of the CLT hub

Did I miss an announcement about CLT being closed? How will the enormous regional market around CLT (ROA, RDU, ILM, OAJ, PGV, GSP, SAV, HHH, LYH, TRI, just to name a few) be replaced by ORD/MIA? I suppose AA is just going to give an entire region to DL??
 
jcwr56
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:01 pm

The failure of AA's ORD-DEL is an interesting case and one wonders if it might work post-merger.

Yes and with the introduction of the 787's, you could see this one coming back to ORD. Matter of fact, I'm picking up strong rumors there's a push to make ORD the primary hub for them.
 
727LOVER
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:08 pm

Quoting PEK777 (Reply 14):
I expect they will add some destinations and frequencies to compete with UA for local traffic and to offset the shuttering of the CLT hub
Quoting nwcoflyer (Reply 15):
Did I miss an announcement about CLT being closed? How will the enormous regional market around CLT (ROA, RDU, ILM, OAJ, PGV, GSP, SAV, HHH, LYH, TRI, just to name a few) be replaced by ORD/MIA? I suppose AA is just going to give an entire region to DL??

No announcement, just speculation.....and "shuttering' is definitely the WRONG word. There is speculation that the hub will be slightly downsized.
"We must accept finite disappointment, but never lose infinite hope." - Martin Luther King, Jr.
 
Cubsrule
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:10 pm

Quoting bobloblaw (Reply 10):
Id like to know which routes you see moving from ORD to PHL.

It's probably telling that the only city we've seen so far is ART, a city that I'd hope we can all agree is much better served from PHL.

Quoting FWAERJ (Reply 11):
PHL-FWA/GRR are two early examples of how that traffic can be rerouted. Expect more as integration continues.

Sure, but a few adds east of ORD aren't really going to affect the balance of TATL flights or seats very much. There are still a lot of cities that will not see PHL service (both nearby, like MSN or SPI, and far away, like ABQ or COS) for the foreseeable future, and ORD will always have a fair bit of local demand.
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LAXdude1023
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:37 pm

Quoting jcwr56 (Reply 16):
The failure of AA's ORD-DEL is an interesting case and one wonders if it might work post-merger.

The failure of ORD-DEL is no mystery whatsoever.

The fares and yields were rock bottom to begin with when AA had the route to themselves. I remember hearing that the average fare on ORD-DEL was similar to the average fare of ORD-MAN. Then AI, a government proped up carrier with no real fear of losing money comes in and undercuts everything AA had in the market. AI turned a marginal preformer into a flight that had no chance of ever being profitable. Unless AI leaves ORD-DEL, we wont see another carrier there.
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OP3000
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:45 pm

Quoting Sligo (Reply 13):
(2) AA's domestic feed into PHL will be used as the primary TATL connecting point, but ORD was never meant to be that anyway...so it's not really a big loss for ORD. But dont expect PHL to turn into ATL or anything; ie dont expect PHL-FGO/MSN/DSM/etc (i.e. purely Midwest small-mid spoke service) anytime soon/if at all. ORD will still take in those customers as they always have and get them to markets like LHR and some ORD TATL future growth into the primary European/Asian markets. The failure of AA's ORD-DEL is an interesting case and one wonders if it might work post-merger.

I agree with that assessment. I would add that where PHL can syphon traffic from ORD in terms of merged AA network traffic and future flights to secondary European markets is not in terms of Midwest markets or Chicago O&D, but instead is from certain major markets for the airline further west/southwest like LAX, SFO, PHX and in some cases DFW. For the combined airline, PHL is a better place to fly to thinner European routes because it can draw those passengers but also those from the heavily populated Northeast region.
 
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enilria
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:53 pm

Quoting nomorerjs (Thread starter):

We heard that DP wants to do something about PM AA's "neglect" of ORD.

I may be totally off base, but I would not be surprised if AA has no hub in ORD in 5-7 years. I don't think it is their plan, but I knowing DP and seeing the growing tendency toward single carrier hubs, I think it is quite plausible.
 
spinzels
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RE: New AA Plans For ORD

Mon Jun 09, 2014 2:54 pm

Quoting LAXdude1023 (Reply 19):

Why were fares so low ORD - DEL? EWR-DEL/BOM are incredibly lucrative routes for UA. I can't believe it is just being undercut by AI, at lot of premium travelers in particular are going to avoid AI; UA prices business first from EWR as if AI isn't even there.

To me it seems the major competitor for any US-India route is going to be LH or BA (LH esp.) since they offer very convenient connections.
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OP3000
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:25 pm

Quoting spinzels (Reply 22):
Why were fares so low ORD - DEL? EWR-DEL/BOM are incredibly lucrative routes for UA. I can't believe it is just being undercut by AI, at lot of premium travelers in particular are going to avoid AI; UA prices business first from EWR as if AI isn't even there.

To me it seems the major competitor for any US-India route is going to be LH or BA (LH esp.) since they offer very convenient connections.

The fares are really low, probably even more so today. The entire ME3 contingent now flies to ORD, including OW partner QR. They would compete with anyone flying to India and as it is usually undercut AI on prices to DEL. In the case of BOM especially, the ME3, BA, VS and LH offer connections only 200-300 miles longer than AI via DEL. In the case of CCU, even CX is competitive in terms of flight length, total time and price usually. So even though volume is huge and it is a market everyone would like to say they have a presence in, an India flight from ORD would be difficult for any US carrier. Perhaps (or not) a 787 could sustain a flight profitably, depending on the economics of the plane and the cost basis of the airline (neither of which I am an expert on).
 
ORDJOE
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:26 pm

Quoting spinzels (Reply 22):
Why were fares so low ORD - DEL? EWR-DEL/BOM are incredibly lucrative routes for UA. I can't believe it is just being undercut by AI, at lot of premium travelers in particular are going to avoid AI; UA prices business first from EWR as if AI isn't even there.

Nature of the market, a lot of that flying is price sensitive VFR traffic that is not likely to pay much of a premium to save a couple hours vs connecting. When you are hauling the spouse and kids over to india, any bit of a fare difference can add up quickly. At the time I think that was AA's longest route, throughly ULH territory.

I am guessing that before AI went non stop AA probably made some money on this flight, but they saw the writing on the wall once AI went non stop and I think the BK happened around that time as well.

At this point I kind of doubt that flight will come back, you still have the AI non stop and now all the ME3 here. Granted the ME3 are 1 stop, but are enough to put overall price pressure on the route to make a non stop uneconomical.

Would their 77W or the 787s be able to do BOM, or perhaps BLR from ORD? Those might be an option as those would get more premium pax then DEL.
 
MaverickM11
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:35 pm

Quoting enilria (Reply 21):
I may be totally off base, but I would not be surprised if AA has no hub in ORD in 5-7 years.

It wouldn't shock me. AA has been shrinking ORD forever, as has UA, and its most recent add in a long time was BIS. At least UA has consistently added a handful of destinations. The only hub carrier growing in the CHI area is WN.
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jetblue1965
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:39 pm

Quoting spinzels (Reply 22):

Why were fares so low ORD - DEL? EWR-DEL/BOM are incredibly lucrative routes for UA. I can't believe it is just being undercut by AI, at lot of premium travelers in particular are going to avoid AI; UA prices business first from EWR as if AI isn't even there.

That's just a convenient excuse.

AI runs EWR-BOM, directly competing with UA, and JFK-DEL, indirectly competing with UA's EWR-BOM. It is a known fact that UA's India services have some of the hardest upgrade rates and saver business availability (along with the likes of TLV HKG SYD etc), so "competition from AI" is barely a contributor to the route performance.

A full scan of 4-8 night stays ORD-DEL in the entire month of Sept shows a lowest AI nonstop fare of $1426, which is a healthy 9.5cpm (for ULH), hardly a scenario of "no chance of ever being profitable" if a US carrier commands the same fares. The exact same search for QR shows $1022 and TK is as low as $920. If anyone is cannibalizing the chance of AA resuming the route, it's the ME3+1 not AI.
 
LAXdude1023
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:56 pm

Quoting ORDJOE (Reply 24):
Nature of the market, a lot of that flying is price sensitive VFR traffic that is not likely to pay much of a premium to save a couple hours vs connecting. When you are hauling the spouse and kids over to india, any bit of a fare difference can add up quickly. At the time I think that was AA's longest route, throughly ULH territory.

And thats pretty much it.

Quoting spinzels (Reply 22):
Why were fares so low ORD - DEL? EWR-DEL/BOM are incredibly lucrative routes for UA.

ORD-DEL isnt EWR-DEL/BOM. Dont get me wrong, ORD-India is a huge market but nothing can really be compared to the NYC-India market.

Quoting spinzels (Reply 22):
I can't believe it is just being undercut by AI, at lot of premium travelers in particular are going to avoid AI

True, but this:

Quoting OP3000 (Reply 23):
The entire ME3 contingent now flies to ORD, including OW partner QR. They would compete with anyone flying to India and as it is usually undercut AI on prices to DEL. In the case of BOM especially, the ME3, BA, VS and LH offer connections only 200-300 miles longer than AI via DEL.

The ME3 are highly sought after for business travel from the US to India. ORD has QR, EY, (soon to be) EK, as well as TK and RJ that offer connections to India. They arent short on options. Not to mention, the ME3 cover the other cities in India as well as AI does in most cases.
"I dance and laugh among the rotten"
 
silentbob
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RE: New AA Plans For ORD

Mon Jun 09, 2014 3:58 pm

Quoting Sligo (Reply 13):
(2) AA's domestic feed into PHL will be used as the primary TATL connecting point, but ORD was never meant to be that anyway...so it's not really a big loss for ORD. But dont expect PHL to turn into ATL or anything; ie dont expect PHL-FGO/MSN/DSM/etc (i.e. purely Midwest small-mid spoke service) anytime soon/if at all. ORD will still take in those customers as they always have and get them to markets like LHR and some ORD TATL future growth into the primary European/Asian markets. The failure of AA's ORD-DEL is an interesting case and one wonders if it might work post-merger.

If you are connecting passengers to international flights, why wouldn't you route as many as possible through CLT? Since connecting passengers are typically lower yielding, using a hub with an extremely low cost per enplaned passenger makes a lot of sense. Unless you need those connecting passengers to make the flight viable from ORD.
 
strfyr51
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RE: New AA Plans For ORD

Mon Jun 09, 2014 4:28 pm

Quoting ORDTLV2414 (Reply 8):
Post Merger will see AA expand obviously ORD-PHL,PHX,CLT flying. AA I think will never abandon ORD because of the size of Chicago is too big to ignore and it has excellent brand recgonition here.
I believe AA is encountering a space problem at ORD and it may inhibit expansion. All though I do believe as said above that the addition of better size aircraft may bring about new destinations.
I do not agree with the statement that more traffic will be routed through PHL. PHL is very congested as is. ORD should see expansion with the new AA, question is how much room will there be for it.

While I admit AA has a space problem at ORD? Where are going to GO to expand?? United took over the Old International terminal then they built Terminal 1.
What would you fo with Terminal 2 that wouldn't screw up terminal 3? Were they to build an updated Terminal 1 clone then one might eliminate termail 2 and 3 completely as there would be 2 complete concourses
The Utility building would have to be re-built on another part of the airport but that might require eliminating something else to allow terminal 4 to be built .
Or? Build a new Terminal accessed from Irving Park Road or from Elmhurst Road as that could have prime access to the East West Runways though it might have to be built in an Arc as that area looks like a Bowl shape.
I'd bet you could but 30-40 gates there and revamp Terminal 2 and 3 to over 100 Gates because as it stands now?
T2 and T3 have 90 gates and the section to the East of Terminal 3 could house another 30- 50 gates. However? We ALL alredy know if O'Hare were to ever expand the terminals?? All it would do is create even More chaos
as More Airlines would demand to Expand there and we'd be Back in the same old Hole We're in NOW..
That would ALSO be the END of O'Hare as there would be no where else to expand without taking out half of Bensenville. And?
You SAW what happened the last "go around" with Bensenville
 
OP3000
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RE: New AA Plans For ORD

Mon Jun 09, 2014 4:36 pm

Quoting LAXdude1023 (Reply 27):
Not to mention, the ME3 cover the other cities in India as well as AI does in most cases.

   India is not Spain, France or Argentina that you can cover pretty well with one flight to the capital or to the biggest city. Despite being a smaller landmass Its economy is even more spread out geographically than Brazil's, and the population spread is more balanced than China's. Though QR helps AA and BA (to a lesser extent) will want a local partner if they want to grow and not be insignificant there in the long term.

[Edited 2014-06-09 09:47:21]
 
jetblue1965
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RE: New AA Plans For ORD

Mon Jun 09, 2014 4:57 pm

Quoting OP3000 (Reply 30):
Though QR helps AA and BA (to a lesser extent) will want a local partner if they want to grow and not be insignificant there in the long term.

Kingfisher was the right plan until that carrier imploded.

The only local carriers left are all LCCs (and that SQ-Tata full service venture that won't be joining oneworld) But I guess LCCs are the next wave to join the major alliances, esp for the likes of Westjet, Volaris, Indigo etc (the pan-Asian or pan-European ones probably wont)
 
Sligo
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RE: New AA Plans For ORD

Mon Jun 09, 2014 5:35 pm

Quoting OP3000 (Reply 20):
For the combined airline, PHL is a better place to fly to thinner European routes because it can draw those passengers but also those from the heavily populated Northeast region.

Yes to all of that, plus they can make use of 757s at PHL to expand the network even more
 
Sligo
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RE: New AA Plans For ORD

Mon Jun 09, 2014 5:56 pm

Quoting silentbob (Reply 28):
If you are connecting passengers to international flights, why wouldn't you route as many as possible through CLT? Since connecting passengers are typically lower yielding, using a hub with an extremely low cost per enplaned passenger makes a lot of sense. Unless you need those connecting passengers to make the flight viable from ORD.

The last sentence above is right imo, but there's another way to look at it:
If you're in AA HQ and you're managing a limited fleet and a limited number of seats and you have a number of widely dispersed upper midwest customers (say 25-30% more PDEW OW than pre-merger) that wish to travel MSN-XXX-MXP or FAR-XXX-MXP, etc. and the same to a variety of primary European locations.

...do you (1) add a whole new airplane to/from CLT for all of these smaller markets allowing for adding the extra-benefit of the SE domestic catchment? ...keeping in mind that most (though not all) of the SE catchment is already available through DFW and/or PHL and/or DCA.
...do you (2) leverage existing service to ORD instead and add MXP there?
...do you (3) cancel ORD despite the fact that it has lower operating costs & also offers the broadest catchment opportunity...and then shift those butts to CLT?



-#2 is the default position; easiest to do in all respects

-I cant imagine ever doing #3 as you're killing *many* existing onward opportunities that are presumably viable and probably some decent O&D depending on the market.

-So the question is do you do #1 which would, in effect, turn CLT into an ATL-like operation that stretches into secondary/tertiary markets outside of its region. That would be a big, bold move by AA that I do not think is on their radar due to the fact that ATL is already doing it well so there's a strong direct competitor, there's near zilch O&D in most of these cases, it's NOT less expensive because the extra miles to fly these MW people to CLT adds up in fuel costs, and importantly...you'd be cannibalizing your existing ORD/DFW/PHL traffic that probably needs those butts in those seats.
 
Bobloblaw
Posts: 2406
Joined: Fri Jan 13, 2012 1:15 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 6:07 pm

Quoting Cubsrule (Reply 18):
It's probably telling that the only city we've seen so far is ART, a city that I'd hope we can all agree is much better served from PHL.

Definitely

Quoting jcwr56 (Reply 16):
The failure of AA's ORD-DEL is an interesting case and one wonders if it might work post-merger.

I dont think US brings anything to ORD-DEL. The problem is the market is price sensitive, low on C demand and middle eastern carriers trash the market and have good service. Sort of the same story about Australia-Europe.
 
jetblue1965
Posts: 5050
Joined: Wed Mar 19, 2014 1:28 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 6:15 pm

Quoting Sligo (Reply 33):

-I cant imagine ever doing #3 as you're killing *many* existing onward opportunities that are presumably viable and probably some decent O&D depending on the market.

I don't think he meant cancelling ORD and entirely move to CLT, but downgauge existing ORD/PHL services and add CLT thus increasing network connectivity.

e.g. going from 777+330 from 2 hubs to 763 from 3 hubs

obviously the MSP-based pax should still use ORD, but for some towns like MEM, they can route via CLT and relieve ORD capacity straining
 
Sligo
Posts: 152
Joined: Fri Jan 18, 2013 12:59 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 6:26 pm

Quoting Jetblue1965 (Reply 35):
I don't think he meant cancelling ORD and entirely move to CLT, but downgauge existing ORD/PHL services and add CLT thus increasing network connectivity.

Agree, though that's option #3.

The problem with #3 is that youre using an additional plane for MSN-CLT (not MSP) of which the super-majority of pax are going to places that they could have gotten to using a plane bound for ORD or DFW or PHL. In economic terms, it's killing your marginal costs because youre paying for a brand new asset and an additional set of operating costs. Given the cannibalization, what's the compelling reason to add the CLT non-stop from such a tertiary market?

The answer might be:
-There's more feed from CLT-only markets that demands the TATL route (think New Bern, Myrtle Beach, etc) than ORD. Doubtful, but possible I guess.
-The competition from ATL on DL is less problematic than UA at ORD or other competitors; also unlikely IMO
-There are numerous new, marginal connecting opportunities so cannibalization is small
-The other hubs are at capacity and need relief (as you mentioned); not true for ORD
 
deltal1011man
Posts: 5332
Joined: Mon Sep 19, 2005 9:17 am

RE: New AA Plans For ORD

Mon Jun 09, 2014 7:21 pm

Quoting PEK777 (Reply 14):
I expect they will add some destinations and frequencies to compete with UA for local traffic and to offset the shuttering of the CLT hub

wait what?

When did Chicago move to the southeast?
 
silentbob
Posts: 1578
Joined: Tue Aug 15, 2006 1:26 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 7:55 pm

Quoting Sligo (Reply 33):
...do you (3) cancel ORD despite the fact that it has lower operating costs & also offers the broadest catchment opportunity...and then shift those butts to CLT?

It was my understanding that CLT had the lowest costs, not ORD. I'm also not suggesting wholesale cancellations at ORD either, I'm just curious if the new AA management might do something similar to what they have said they plan to do with JFK. Focus more on the international and domestic O&D markets and route the bulk of the connections through other facilities in order to keep yields as high as possible.
 
User avatar
jfklganyc
Posts: 5468
Joined: Mon Jan 05, 2004 2:31 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:10 pm

Quoting ORDTLV2414 (Reply 8):
Post Merger will see AA expand obviously ORD-PHL,PHX,CLT flying.

I couldn't disagree more.

Mergers shrink hubs. They do not grow hubs. Mergers shrink airlines. They do not grow airlines.

Delta+NW > The New Delta

UA+CO > The New United

WN+Airtran > The New Southwest

US+AA > The New AA


> is greater than


That's how mergers work. They create synergies. They create overlap. They create duplicate hubs or portions of hubs that run in duplicate or triplicate with other hubs. The new American is NOT going to be the outlier in aviation history and be larger than the two separate airlines standing side by side pre merger. Just isn't going to happen.

So if you are in PHX, if you are in ORD, if you are in CLT, if you are in DFW...these are cities that have huge operations because of the CONNECTORS. Something will give. There may flights added here, flights taken there...but in general 5 years from now most of the hub cities will see fewer flights...not more.

Also this:

regional pilots going the way of the Dodo + hub that is 66% regional operated (which is pathetic) = reductions down the road.
 
Sligo
Posts: 152
Joined: Fri Jan 18, 2013 12:59 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:19 pm

Quoting silentbob (Reply 38):
t was my understanding that CLT had the lowest costs, not ORD.

Sure, I'll clarify that statement:
The all-in cost of flying someone from a market in ORD's regional catchment; let's say MSN...over to CLT and then connecting them through to point C entails not only the landing fees, PFCs, taxes, etc; but also the marginal operating cost of the flight from MSN to CLT vs that of MSN to ORD.
 
Cubsrule
Posts: 13993
Joined: Sat May 15, 2004 12:13 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:33 pm

Quoting jfklganyc (Reply 39):
Mergers shrink hubs. They do not grow hubs. Mergers shrink airlines. They do not grow airlines.

I will try to find the numbers, but I believe ATL has grown since the DL/NW merger. DTW may have too, at least by ASMs.
I can't decide whether I miss the tulip or the bowling shoe more
 
MAH4546
Posts: 25751
Joined: Wed Jan 24, 2001 1:44 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:39 pm

The hub isn't going anywhere. United has actually cut back O'Hare more in the past decade than AA, but people love to forget that fact.

Expect to continue to see AA upgauging regional flights to the ERJ1-75s and connect the dots with new O'Hare-Northeast markets thanks to US' Northeast presence.
a.
 
AADC10
Posts: 1511
Joined: Sat Nov 13, 2004 7:40 am

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:42 pm

Quoting ORDJOE (Reply 3):
Yeah AA had far more movements at ORD back in the 90s and 2000s then today. While UA keeps exapanding and getting more routes at ORD, it seems AA has not kept up at all.

It is not so easy to expand. Yes, AA used to have more flights, but so did UA and they did not have WN and MDW back then. If AA expanded and tried to take share from UA and WN, both would respond and kill yields. UA will make sure that AA is always in 2nd place at ORD. You better believe that UA knows what is going on at ORD from their offices at Big Willie.

Quoting PEK777 (Reply 14):
I expect they will add some destinations and frequencies to compete with UA for local traffic and to offset the shuttering of the CLT hub

AA does not have any specific plans to close CLT as a hub. However, UA is closing the much closer CLE hub and no doubt dividing the traffic among ORD, EWR and IAD. ORD will remain a major hub for AA but they will remain distinctly in 2nd place.
 
AAplat4life
Posts: 318
Joined: Thu Jun 23, 2011 11:14 am

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:53 pm

Gosh has this topic gone off track. Anyway, for the person who mentioned the possibility of ORD-BCN, that might have some possibilities.
 
jetblue1965
Posts: 5050
Joined: Wed Mar 19, 2014 1:28 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 8:56 pm

Quoting Mah4546 (Reply 42):
United has actually cut back O'Hare more in the past decade than AA, but people love to forget that fact.

UA has probably cut mainline as a % of total flights, but just counting departures, I see some growth :

UA +4.7%
2012 summer - 642 flights (35% mainline)
2014 summer - 672 flights (30.4% mainline)

AA +3.6%
2012 summer - 501 flights (excluding US)
2014 summer - 519 flights

If you include US into the AA 2012 figures (which I don't have), departures growth is probably zero. Based on the large gap between PHL-ORD-CLT-DFW, it looks like this rank won't be changing anytime soon.
 
uberflieger
Posts: 1573
Joined: Fri Jun 28, 2013 6:22 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 9:01 pm

Quoting Mah4546 (Reply 42):
Expect to continue to see AA upgauging regional flights to the ERJ1-75s and connect the dots with new O'Hare-Northeast markets thanks to US' Northeast presence

  
The new American carries more domestic O&D at ORD than United, and Parker & team have said more than once new US & selective international destinations will be added.
 
bigb
Posts: 896
Joined: Fri Nov 07, 2003 4:30 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 9:11 pm

Quoting Cubsrule (Reply 41):

I will try to find the numbers, but I believe ATL has grown since the DL/NW merger. DTW may have too, at least by ASMs.

At the expense of cuts at CVG and a dehub at MEM. Don't forget about those.
 
OP3000
Posts: 345
Joined: Thu Jun 25, 2009 5:45 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 9:35 pm

Quoting Jetblue1965 (Reply 31):
Kingfisher was the right plan until that carrier imploded.

The only local carriers left are all LCCs (and that SQ-Tata full service venture that won't be joining oneworld) But I guess LCCs are the next wave to join the major alliances, esp for the likes of Westjet, Volaris, Indigo etc (the pan-Asian or pan-European ones probably wont)

Westjet, Gol and Volaris are shoe-ins to join alliances at some point in time, and chances are the same will eventually happen in India. There is just too much feed coming in/out of these large countries with limited domestic competitors for the LCCs not to be able to more than offset the integration costs, and as alliances have grown larger and travel more commoditized the concept of service consistency between alliance members has gone to the toilet.
 
MAH4546
Posts: 25751
Joined: Wed Jan 24, 2001 1:44 pm

RE: New AA Plans For ORD

Mon Jun 09, 2014 9:36 pm

Quoting Jetblue1965 (Reply 45):
Quoting Mah4546 (Reply 42):United has actually cut back O'Hare more in the past decade than AA, but people love to forget that fact.
UA has probably cut mainline as a % of total flights, but just counting departures, I see some growth :

I said the past decade, not the past two years.
a.

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