Originally Posted by
cerealmarketer
- ATL is the lowest cost major hub in the country - giving DL a cost advantage - also very convenient AirTran and Southwest merged, with Southwest gutting the ATL operation
- Its hubs are the most uncontested among the majors - more leverage when scaling up.
- Also for frequent flier program, DL/NW did not need to be as generous as legacy AA and UA were, which operated hubs in large, fragmented business centers like ORD, LAX. Customers were less likely to walk over frequent flier program issues than those at AA/UA. There weren't big third rails like going from 8 to 4 SWUs that send people in competitive cities packing.
You've been drinking deep of the UA cool-aid, rationalizing why DL consistently out-performs United.
ATL is a low-cost hub. CLT is a low-cost hub. DFW is a low-cost hub. Scale is part of what makes a hub low cost. Air carriers choose their hubs. Delta built hubs in LAX and SEA; UA departed a hub at CLE; DL departed MEM (and largely CVG).
Delta's hubs are not uncontested. ATL, MSP and DTW all have far above-average fractions of connecting passengers. While it gives them scale it shows Delta's restricted ability to gain outsize profits from locals. A route xxx-ATL-yyy competes with xxx-yyy non-stops as well as every other one-stop offering xxx-zzz-yyy. BTS data show that two of the top five operating carriers at DTW are Spirit (#3) and Southwest (#5). Delta fights B6 at JFK and with UA for the
#2 position overall in NYC. SLC fights with DEN for inter-Mountain traffic. LAX...
Southwest has (up to) 125 departures a day from ATL and a higher average gauge than AirTran ever had.
Your line of reasoning
No unions >>> product investment is a little tortured. AA and UA can afford stock buy-backs, $9 Billion for AA, $3 Billion for UA announced just a few months ago. They could have used the $$$ to refurb old planes (or, in UA's case, dump lousy single class E145s/CR2s). They've decided that customers aren't worth it.
That is the contempt for customers that Parker's statement reflected. There's nothing wrong with prioritizing assets for best markets but he didn't even have the sense to say that AA is making big investments in new aircraft to improve both cost efficiency and passenger experience but some routes see older products.