eponymous_coward

Depends on where you are. WN is competing with AS in SEA (LAS, SJC, OAK), plus a motley assortment of others (US to PHX, UA to DEN, etc.), so their fares here are quite competitive.

If the intra-CA market really could use some competition, WN will surely get it. DL is starting some of that already; they fly LAX-SFO/SJC shuttles. I could see them or AA trying some additional routes if the money works for them... but running against WN is tough.

sombrachinesca

Agreed, competition should force suppliers to differentiate service in order to win customers - you can do that by having lower prices (I believe that was the strategy at US) or by offering amenities that competitors don't provide (I think this was the ultimate goal of Horton's "New American" initiative).

Now, post-merger, there will be absolutely no incentive for the "new-new-AA" to continue to enhance the onboard product. A consumer who shops solely on price often has minimal interest in other amenities. That is exacerbated by the spread of super-LCC like Spirit and the perpetual downgrading of the UA and DL offerings.

I do not see any business case to support Parker maintaining AA standards and raising US to those levels. On the contrary, he has proved that US could be profitable with reduced service levels - why should he do anything differently??

The only exceptions I can envision are the "AFS" transcon routes where AA commands a healthy fare premium and (hopefully) long-haul where the AA-BA-IB have spent a good amount of effort on standardizing their offerings.

I will be very happy if time proves me wrong - but my expectations going forward are at zero.


Bill

FlyerGoldII

What is the nature of this next legal action, and could it still block the merger?

http://aviationblog.dallasnews.com/2...st-trial.html/

MrAndy1369

Hmmm, hoping for the best is hoping AA's meal service will be retained all the way post-April and not degraded/watered down is what I meant in this specific scheme.

RDUpax

Thanks for the link! I was unaware (ignorance = bliss?) of the private antitrust suit filed in San Francisco federal court prior to the DOJ suit in DC. The plaintiffs are asking Judge Lane to not to allow AMR to exit bankruptcy prior to the resolution of the private antitrust suit just as he did for the DOJ antitrust suit. Lets hope that Judge Lane is consistent in his decisions and does the right thing.

Here is a link for the previous blog posting by Terry Maxon: http://aviationblog.dallasnews.com/2...-airways.html/

Jacobin777

<redacted>

WN certainly does dominate certian routes/sectors but if WN's prices get too high, there will always be competition to step in.

Lets take a look at SJC-one airport where WN "dominates". Since 2002, WN has only grown (in terms of total pax) a total of 12.7% and total market share has gone up about 10% to about 53%. In other words, there is a lot of "healty competiton". *

No pun intended, but I don't think that lawsuit is going to fly too much.


*-source: DOT Data.

FWAAA

I've kept up with this thread and I disagree with you. People in this thread have not opined that CLT is facing the fate of STL, PIT, RDU, BNA, DAY, MEM, etc.

Instead, reasonable people have commented that CLT is over-served by US (and that's quite an understatement).

One example: US flies well over 1,000 seats a day each way between CLT and MIA. That must be indicative of a large O&D market, right? Uh, nope. As it turns out, the average daily O&D is 133 passengers daily each way. In the second quarter, US flew 2/3 of them, or 89 PDEW. AA gets another quarter, leaving 8% of the O&D to other carriers (DL?).

So why the seven daily mainline 734s, A321s and A320s? Connecting traffic, of course. Are they all connecting to MIA from small NE cities and small VA, WV, NC and SC towns? Perhaps. How about if they're connecting to/from SEA, SFO, LAX, SAN, LAS, PHX, etc? Given the huge number of seats, it's clear that US has been selling those Advantage fares on connecting traffic to/from MIA where AA already flies nonstop.

Now that AA and US are merging, there will no need to sell those low-fare connecting tickets to "compete" against AA's higher nonstop fares. The merger economics relies on raising the average fares from the US-levels to the AA-levels so as to afford all the payraises promised to the employees. So what happens to some of that CLT-MIA capacity? Some of it just became redundant.

MIA has as much domestic O&D as CLT. So AA flies from numerous cities nonstop to MIA. And, of course, MIA has substantial international O&D, and thus is a perfect international gateway, just like BOS, JFK, LAX, SFO, SEA, etc. None of those cities can efficiently handle purely domestic connections given their geographical limitations.

CLT's role is secure, but that role isn't in connecting people from out west or from LGA or from BOS or DCA to MIA (there are lots of other examples, but you get the idea). CLT's safest role is to provide connections from small places in the NE to the SE and to connect small places in the SE to other small places in the SE. Just like ATL, it's got location, location, location going for it. But unlike ATL, the CLT metro area is very small and thus CLT has as much domestic O&D as STL or MIA (about 28th to 30th place in the country).

Jerry Orr is understandably very proud of what he helped accomplish in Charlotte. It's the cheapest big airport in the nation (and perhaps the whole world) on per-passenger enplanement cost. Businesses in CLT have enjoyed far more nonstops to far more places than most metro areas its size.

I agree with you - CLT got big because that's what US had. You play the hand that's been dealt. AA began slashing the RDU and BNA hubs during the losses of 1991-92, as Crandall was very quick to pull the plug on lower-fare domestic connecting traffic in small places (same with SJC). Before the "we must be all things to all people" era, AA abandoned the SE connecting market to DL and US, instead directing its focus on building a huge gateway at MIA.

That sounds like a strawman. Nobody, but nobody, has said that new AA would even think about cancelling 600+ flights at CLT. US even promised everyone that the hubs were safe for at least three years.

The point is that CLT doesn't need anywhere near 600+ daily flights to efficiently serve the major destinations for the CLT business community plus provide those efficient connections from the smaller places in the NE to the SE or to provide efficient connections within the SE. Right now, those Advantage Fares are pushing some passengers thru CLT (and, in some cases, double-connecting also thru PHX) on connecting itineraries at much lower fares than on the already-existing AA nonstops.

The goal in all mergers is to increase revenues and cut costs. This one will be no different. Nonsensical double-connects via the "Barbell" hub system will give way to nonstops (the ones AA already flies), which should cause fares to increase.

Exactly! As you point out - CLT is great for "intra-Southeast" flying. And NE to SE. But Chicago to Miami? Right now, that's a connection in CLT at lower fares than AA's nonstops. How long will new AA compete against itself in that market?

I think it's a safe bet that CLT will have 300+ flights in five years to handle the O&D and the key connection markets discussed above. I wouldn't bet any money that CLT has more than 400 flights five years from now.

canyonleo

This is what I am now - say 90% of my travel (in 2013 it's 100%) is purchased J on AA (well, there's a handful of purchased F when it's cheaper then J - yes I had one such trip in 2013, or purchased Y, probably O or W or M or whatever but not "Y", where the SWU to J could be confirmed at time of purchase).

I do it all on AA as JL has no sleeper seat to NRT (OK, I do purchase J on CX if I'm going nonstop to/from HKG).

My fears with the merger are not at all about hubs (I don't live in an AA hub anyway).

My fears are the following:
- devaluation (through decreased/impossible Saver redemption inventory)
- decreased J/F award inventory
- decreased perks (making F a lesser product, decreasing SWUs, etc.)

But my biggest fear of all is that they create the 125k level (which I hit anyway in 2012 but will miss by one trip - which I could have done if needed for that reason anway - in 2013). On the one had it could make EXP more exclusive (good for me) but I think it in general means a stingy program management attitude at hand.

MiamiAirport Formerly NY George

Well Spirit and Allegiant have taught airline management that price trumps decent service, indictive of our society. Legacy carriers will always continue to cater to the wants of premium flyers. For those sitting in Y it will continue to be degraded to a ride on a crowded E train. WiFi planes might make it a bit easier but won't take away from a cramped seat and horrible BOB.

FWAAA

That sounds depressingly binary.

Isn't there room for a slightly better Y product? I've long agreed with bernardd who has frequently posted that consumers come in all different stripes. Some won't pay anything more than Motel 6 rates and some will pay for The Plaza. And millions choose something in between.

Aren't there some infrequent travelers who value AAdvantage yet will never be EXP or even Platinum yet would gladly pay a little more for a humane economy experience? No need to make the entire economy cabin humane - just a portion of it and then figure out the right price to charge on an ala carte basis.

LovePrunes

Perhaps I confused the posters warning of CLTs demise like RDU and PIT with the same thread on the USAir forum but there have been quite a few saying it and where you have been participating as well, it's here in post 2163. We are in agreement, no need to lecture.

My point that you called a strawman, is valid. Unless AA starts nonstop flights to Chicago or Miami, for your example, from all these cities all over the Southeast that currently can get to Chicago or Miami only thru Charlotte on US, then AA will have to keep connecting them thru Charlotte, or have them connect elsewhere. Either way, Charlotte is safe as a hub, even if it is half as large eventually.

MAH4546

I don't disagree with your analysis.

However, MIA is an airport, not a market. The actual O&D between South Florida and Charlotte is significantly larger, because Miami has three airports serving the region. MIACLT is one of the most traveled market pairs in the Southeast.

84fiero

I agree that there is a spectrum of passengers and what they want out of air travel. And even differences with the same person, form one trip to the next.
If I need to fly cheaply, on a short non-stop hop, I may be willing to put up with a Spirit experience. Transcon or international, and I will want something better.

I'd like to think (and hope) that we continue to have some level of choice in between just two extremes. I always wonder, and maybe the data is out there somewhere, how much repeat business the Spirits and Allegiants get. And what the frequency is of those repeat customers, compared to the legacies (i.e., retirees flying Spirit once every couple of years to Florida, vs. more frequent travelers). It seems like if there is a lot of repeat business as the ultra-LCCs expand, that might be one indicator of how things might evolve for AA, DL, and UA (and WN).

MiamiAirport Formerly NY George

Part of the problem is that you can only do so much with a long metal tube. I would suppose MCE and some attempts at better pre ordered BOB have made a difference but so far airline managers tend to think price is the overriding factor for personal travel.

cbaral

Phoenix is one of the fastest growing big metropolitan area of the US. Its growing at about 1 million people per decade since 1980. (In 1980 it was a metro of about 2 million, in 1990 it was about 3 million, in 2000 it was about 4+ million, and now it is 4.3+ million.) With that kind of a growth I would be surprised if the new AA would reduce direct flights from PHX. If it does, others will jump-in.

The State of AZ and city of PHX have been trying hard to get more international connections outside of Canada and Mexico.

I think if Doug Parker finds extra metal he will deploy some from/to PHX.

See also a similar news item at http://www.azcentral.com/opinions/ar...-beauvais.html .