hillrider

There's no history of any U.S. airline having 8 hubs. History of U.S. airline mergers shows none keeping 8 hubs around, and that the hubs that remain are those that have significant local originating traffic; the rest become focus cities or spokes. You can quibble as to which HPdbaUS will hub will be drawn down the most, and over what time, but they all will be as they draw smaller originating traffic than the 5 AA hubs.

HPdbaAA will have a different cost base (higher) and a different opportunity set of routes than HPdbaUS did. What was most profitable under HPdbaUS will not necessarily be the most profitable under HPdbaAA.

As far as CLT goes, only 25% of HPdbaUS traffic is local, and don't forget that AA's similarly located RDU hub is long gone as a hub, even though there still is an AA LHR flight out of there (for corporate contracts reasons).

eponymous_coward

Actually, it's pretty easy. LAS doesn't have service anywhere but to US hubs. PHX will continue to have service to non-US hubs. There is probably service in the US network (PHX, CLT, whatever) that makes more sense out of an AA hub, but it's not a case of "let's turn a bunch of planes into beer cans and kill off hubs" ala TW/STL or OO/SJC.

PHX can work for US like SLC does for DL or DEN does for UA. UA has reduced traffic/RJ'ed some at DEN, but they haven't been killing it off.

WN isn't an LCC any more, really- their costs for a 737 aren't that much lower than anyone else's. I guess G4 and NK would jump on PHX like crazy.

There are also ways that AA could reconfigure the PMUS fleet to help with costs/revenue- the PMAA A319 is 8/120. US's A319? 12/112. I'll lay money that that config flies out of PHX once they have sufficient numbers and can shuffle planes around. Anyone want to take the other side of that bet?

If you figure that you can configure the rest of the PMUS Airbus fleet in a similar fashion, you may be able to help out some. That may be some of what reducing MCE in the MD80's is all about.

There's no history of the US having three large legacy carriers like this either. This is all uncharted territory.

Hubs serving metro areas of 4.5 million or more (PHX/PHL/DCA) meet the first category. The problem with de-hubbing CLT is moving connecting service to MIA is nuts- the only thing you're connecting there is to South America, and MIA's enplanement charges are big. CLT makes sense as an interior connecting hub for the SE United States, similar to SLC or DEN for the West (and I might note DL and UA haven't de-hubbed either of those cities, and those cities are comparable in population to CLT).

AAExPlat

I don't know that we understand each other. I am not saying AA will kill PHX for the sake of killing PHX and turning planes into beer cans. I agree with your assessment that the assets will be redeployed to more economic use.

But I do stand by my position that PHX will be the airport that will see the greatest service cuts. And I also stand by my comment that Parker saying PHX will be untouched for at least three years is a bold faced lie.

eponymous_coward

OK, if you are arguing something like "PHX will see some service rationalization on the order of what UA has done to DEN post-merger", yeah, I can buy that. (I might note that UA is now flying DEN-NRT, though).

Won't be de-hubbed, though, not even close. Still bigtime operations out of there.

MiamiAirport Formerly NY George

The entire integration will probably take 2 or 3 years. So no dehubbing for 3 years is no real biggie. Eventually I see PHX dehubbed unless AA runs out of room at LAX. CLT will be an East Coast domestic hub, PHL a TATL hub.

The MD80s will probably be gone in 2 to 3 years. F cabins on 738s might lose a row. F domestic service will probably resemble more like DL/UA.

austin_res

All of US and AA hubs have sufficient O/D traffic. Another factor is proximity to the airline's other hubs. In previous mergers, when 2 hubs are close together, the smaller hub (by size of the airline's ops, not local market size) is downsized, if not closed. Recall LAS vs PHX for US - LAS has lots of O/D traffic yet US closed that hub in favor of its bigger hub at PHX.

nkedel

For the old interior, they weren't much different, and United had E+ long before AA had MCE. New interior makes a BIG difference on the 738s; I hope the 752s get something similar if they aren't retired.

hillrider

Agree, but it doesn't change the economics of hubbing, which is all about lowering unit costs (bigger planes vs. smaller ones) while increasing the number origin & destinations served (a geometric function).

The latter one is driven by the hub's capacity in flights/hour and its efficient operation (see DXB before the local boom), while the former is driven by the size of the local market: serving a hubbing operation with 100 connecting people + 150 local (total 250 passengers, 60% local traffic) will always be far cheaper than serving it with 100 connecting people + 33 local (total 133 passengers, 25% local traffic).

Incidentally, Europe, which has a bigger population and GDP than the US, is down to 6 hubs (LHR, FRA, CDG plus AMS, MAD, MUC) and a smattering of really tiny hubs in name only, that exist mostly because of politics, including the political artifact of a history of bilateral route rights (DUB, ARN, VIE, FCO, BRU, ZRH, HEL etc.). That's across all airlines; no airline group has more than 2 hubs each (IAG: LHR + MAD; AFKL: CDG + AMS; LH: FRA + MUC). Data: https://en.wikipedia.org/wiki/World'...senger_traffic

FWAAA

I'm not sure I agree. Delta has hubs at LGA, JFK, ATL, CVG, DTW, MSP, SLC and LAX (it's as much a Delta hub as it's an AA hub). And now, DL is building another at SEA. That's a lot of hubs.

Completely agree. New AA will be almost three times the size of current US.

Thanks for reminding me; Delta has been adding more and more flights to RDU - building quite a focus city there. Not quite a hub, but rather large.

Europe has a lot of high speed rail that helps reduce the need for airline hubs, but good point about the hub rationalization that has occurred there.

Jacobin777

+1. Not too many people here are stating "PHX will be completely dismantled".

We are talking about the NewAA@PHX. Not B6 or anyother carrier "stepping in".

PHX for its "catchement size" can't even get more than 1 European carrier-what a "strong" O&D market that is.

Which as happened with AA before. BOS and SJU come to mind.

+1

GUWonder

The "new" AA keep 8 hubs? Doubt it.

AAExPlat

Ok. Now I see your position. But I actually think PHX will not go the way of DEN. I think it will go the way of CVG or MEM.

Thunderroad

Late to the latest round of this discussion, so let me just vent and rant for a moment...

The DOJ caved! I haven't read through all of the post-settlement posts, but is there any other way of seeing what the DOJ did? It seems that it had lots of cards to play, not least Parker's own statements about the effects of the merger. Yet it agreed to a merger that reduces competition and that hurts consumers in myriad ways. Is there any other way of seeing this?

Did the judge signal the two sides that she was inclined to rule in favor of US? Is that why the DOJ caved?

+1 on all counts. Except I've shifted most of my flying over to AA as UA has gone down the tubes. I don't at all regret doing so, given how bad UA has become in so many ways and given the fact that it continues to find new ways of going downhill.

I retain a faint hope that the newly merged AA won't be as bad UA. It's likely, for example, to avoid duplicating the IT disaster that is the SHARES reservation system CO imposed on UA. And the combined airlines seem to both be dedicated to shirting to the all-aisle-access international J class, which is far superior to UA.

Nevertheless, the fact is that we now have a real oligopoly, with the usual benefits of competition (incentives to improve service and battling over prices) out the door. It's largely a race to the bottom.

Ok. Rant over. I feel a tiny bit better, which isn't saying much.

FWAAA

I was rooting for the merger to fail, but one thing that can't be ignored is that blocking the merger would mean that WN, B6, VX, etc. would get no slots at LGA or DCA. Only by permitting the merger does the government get to force new AA to transfer (sell) slots to low-fare carriers. In some ways, the Department of Justice faced a Hobson's Choice. By settling the action, fares should come down at DCA and LGA, benefitting lots of consumers.

Notta chance. Federal judges keep the cards a lot closer to the vest than that. She hadn't heard any evidence and thus wasn't going to signal anything to the parties.

Why did the DoJ cave? They'll deny it forever, but when nearly 100 members of Congress, mostly Democrats, plead with the President to call off the dogs and let two companies merge, and when the unions representing almost 90,000 employees at the combined airline lobby and plead for the merger, it was bound to happen.

dtremit

OK, sure -- there may well be a difference between models of the Cirrus seat. But the previous poster's claim was that "not all lie-flat seats are the same," not that "not all Cirrus seats are the same." I would wager that the difference between any two Cirrus seats is a lot smaller than between the Cirrus seat and the Vantage seat that DL, LX, and others are fitting, or the Solstys seat IB is adopting.

Obviously a seat selected in 2013 is going to have some tweaks (and hopefully a much better IFE system) than one selected in 2009. A seat fitted to a 773 may be outfitted slightly differently than one fitted to an A330, due to dimensional differences and such. But fundamentally, the point stands: US and AA are offering an awfully similar hard product in J. I don't see any convincing evidence believe that the merger is going to lead to a big change in direction in that area. (Certainly not one warranting caps lock.)