PWMTrav

The honest answer? It's a thinly veiled reason to complain for more options

Loads PWM-PHL are high right now, and fares are up accordingly, even with US adding mainline E90 service to PHL. That's 6x a day, was previously 5x. DCA is still 4x and CLT is still 1X.

With that much connectivity and the fares staying high, I'll often just drive down to BOS to fly the AA BOS-LAX or AS BOS-SAN, but I'd often rather take a connection out of PWM. I'm guessing now, but adding ORD might ease fares because it's an unserved hub from this location, meaning a lot of us will not be competing for the same seats at PHL.

FriendlySkies

Naturally to compete with UA..

+1

Indeed. CR7s used to be year-round and now they're only running in the summer (though you even get the random E145 or CR2 during the summer )

Technically speaking, it was pulled down by CO mgmt at UA, so you could count it as pulled down by CO.

DCdeacon

I guess your point with additional capacity being absorbed by the system is where I start to have trouble with the CLT argument. CLE could be absorbed because it was small and close to multiple other hubs. But at some point, I have to believe there's some sort of equilibrium in terms of the number of hubs and number of passengers. I'm not sure if we're there yet, or if further hub consolidation can occur, but I just have trouble picturing where 45 million passengers/year would go if CLT were no longer a hub, because that's a lot of capacity for the system to absorb, especially when your next closest hub (PHL) is almost 500 miles away, the closest one after that (JFK) isn't going to be a connecting hub, so on and so forth.

Look, I'm not trying to be a US hub or CLT apologist. I recognize that there are certain challenges/shortcomings. CLT has a relatively small O&D base, which usually doesn't go hand-in-hand with a hub. I get that. And I wouldn't be surprised if much of the TATL service from CLT goes away. But I just don't see the place disappearing.

I've said it before, but I ultimately see CLT as analagous to MSP for Delta - serves as a collection point for a specific geographic region, has a couple international flights, but overall serves as a decent sized, but not huge, domestic hub for the airline.

formeraa

I see CLT to the new AA as far more important than MSP is to DL. AA has been searching for a SE hub for 3 decades...they tried RDU/BNA and that didn't work. MIA is too far south to be a major connecting point to cities within the US.

Remember Dougie worked at AA before he worked at HP/US. The CLT fortress hub is one of the most important assets that US brought to the table. CLT simply isn't going anywhere!

Indelaware

In all this speculation about hubs being either safe or in peril, the discussion seems to focus entirely on direct effect on AA/US. But, it is a competitive place and only a foolish enterprise (gee, with sarcasm, there are no foolish managers in the aviation industry, right?) would not realize that there are indirect consequences to actions.

At this point the US aviation largely industry consists of AA/US, DL, WN, UA in the main followed by AS, B6, FL, HA, & VX in an important second tier plus and handful of really minor airlines. While a profit-based airline wishes to operate where it can make the most, it also wants to operate in such a way as to not empower its competitors.

If AA/US were to significantly pull out of CLT who would it benefit most? DL. In fact, it would be a godsend for DL.

Right now many UA flyers are frustrated with the network loss resulting from US' departure form *A. How will they get to points in the southeast, long ignored by UA? For many, their choices are to split their traffic between two plans -- viz. between UA and either US or DL -- or to leave UA altogether.

But, if CLT was to be dehubed what would passengers do who have to travel to southern points. IAD, IAH, & DFW are just too removed to get a significant chunk of the intraregional business in the southeast and for many passengers. DL's bottom line would skyrocket. Routes which haven't seen mainline service for years (traffic being split between DL & US) might get upguaged, but ticket prices would soar. While WN would benefit some as well, they don't have sufficient equipment to be as strong a check on DL/ATL as US/CLT is presently. With all the cash coming in, what would DL do? Already owning the whole of the southeast (with the exception of Florida) - in much the same way that the Braves own the region already - they would battle AA and UA in other parts of the country.

Abandoning PHX, as I speculated above, would likewise give WN a cash machine there. Cash that they might very well invest elsewhere. Can AA/US afford to have a much stronger WN any more than it can afford to have a much stronger DL?

FlightNurse

Simple bring E-175 in... Keep the same amount of flights but upside the plane. BUT,US/AA can compete against UA, but who is left that fly's UA these days, people who are die heart fans or people who are stuck having to fly them because of corp contracts. I'm sure the smart people have moved from UA long ago.

Air Houston

Seems like there are so many good arguments for all the other hubs that by default it will be ORD that sees the majority of the cuts. The midwest region has been trailing economically for years.

FWAAA

I agree. Despite being the third largest metro area in the country, Chicago is a nowheres-ville that should be abandoned to UA.

The same UA that's been shedding customers and revenue to AA for more than 27 months running. UA could use a break, and this would be a good one for UA.

AA should build up CLT even further, even though more than 80% of the passengers boarding US planes there are connecting passengers (who, by definition, almost always pay lower fares). Even though an executive at AA pointed out the other day that the CLT hub had the lowest unit revenue of any of the US (or AA) hubs.

AA should focus the majority of its cuts at ORD despite AA dominating the O&D traffic there; only half of the passengers are connecting at ORD, compared to more than 80% at CLT.

Yes, ORD should be downsized, even though international visitors actually want to visit Chicago. Charlotte isn't on the radar for visitors from Europe, South America or Asia. That's why CLT sees no foreign airlines serving the airport to Europe, South America or Asia (other than former Star Alliance partner LH). Chicago, on the other hand, sees lots of foreign airlines, as it's an actual destination for worldwide visitors.

Yes, the Midwest is economically depressed, as is Chicago, and AA would be better off handing off its lucrative O&D traffic there to UA, which could sure use the money.

ubernostrum

Giving up a cheap-to-use fortress hub in your primary competitor's backyard (because, really, UA is out of the picture right now) seems like a great plan.

As I've said before, if the experienced airline executives of FT were in charge, AA would shutter everything except JFK, LAX and one gate at SFO, and operate nothing but paid F between them. Passengers who want to go somewhere else, or -- gasp, fetch me the smelling salts! -- who would need to connect to get where they're going just aren't worth as much as chasing the big bags of money on the most contested routes in the country.

Speedracer2

You are being sarcastic, right?

CMK10

Let me check my scientific instruments

https://www.youtube.com/watch?v=mSy5mEcmgwU

austin_res

I assume you're being sarcastic, however I can see AA cutting ORD flights in the next few years. AA has been cutting ORD for the past decade - reducing frequencies and moving mainline flights to regional. AA is also losing share in international traffic - AA cut many flights to Europe and on ORD-NRT UA flies a 747 daily while AA flies a 777 less than daily. How does AA dominate O&D traffic at ORD? UA has always been bigger than AA in ORD and UA shows no signs of giving up ORD.

At CLT, US/AA dominate the market, which helps them maintain pricing power and in turn helps with profits. CLT also has low operating costs and better weather than ORD. At ORD, the competition is huge, not to mention it is congested and prone to weather delays. I would not be surprised if CLT is more profitable for AA than ORD. Since the merger, CLT has seen several new flights added, none for ORD.

As I have said before, Parker (through his past actions) made it clear he prefers to dominate a smaller market over competing with others in a bigger market.

Here is a wild idea: AA moves its ORD hub to CLE. AA gets a midwest hub it can dominate, UA gets ORD to itself, Cleveland keeps a hub - everyone's a winner

FWAAA

Yes, high-cost pre-bankruptcy AA made numerous cuts, and thus it logically follows that lower-cost post-bankruptcy AA will continue to make the same sort of cuts it made before it bit the bullet and filed for bankruptcy.

Pre-bankruptcy AA's recalcitrant pilots refused to permit AA to fly more than 47 2-class large RJs, while UA and DL had permission from their pilots to fly hundreds of them. Now that bankruptcy has forced the AA pilots to get on board, AA has added numerous 76-seaters on many routes from ORD. AA may not be adding routes at ORD, but it's adding seats to take even more O&D traffic.

AA dominates the higher-fare O&D traffic at ORD, while UA is larger in the lower-fare connecting traffic market.

UA "shows no signs of giving up ORD?" UA lost almost half a billion dollars in the first quarter, while AA earned almost half a billion dollars. UA doesn't have to give up its business - its stronger competitors can simply waltz in and take it away. If AA doesn't move in and take away revenue from UA, I'm certain that Delta will.

Yes, US dominates the very small O&D market at CLT, which causes high O&D fares. The hub that AA said recently featured the lowest unit revenues of any of its hubs. Now that CLT's pilots and FAs make significantly more money (now that they're on AA's much higher post-bankruptcy payscales), it's unlikely that CLT will produce any profits.

It's unlikely that US has ever made any money flying to Europe from PHL and CLT, and with the much higher payscales in effect now, it's a certainty that AA will not profit from the pmUS flights to Europe this year. The US yields and unit revenues across the Atlantic have always lagged the rest of the industry, generally by large margins. Changing the name on the planes to "AA" from "US" isn't going to magically produce profitable amounts of European O&D in CLT or PHL. More connecting traffic is the answer? That will just lower the yields and unit revenues even further.

New flights added to CLT? Oh, yes, the once or twice a day CRJs to GRR, FWA and a couple other mid-size cities that pmUS could have added at will at any time prior to the merger? The seasonal money-losing flights to secondary European vacation destinations that were announced in October, after the DoJ threatened to derail the merger? They've already been trimmed, as will other international flights at CLT once the three year maintain historic levels of service "promises" expire.

Yes, Parker lusted after his former employer so that he could abandon AA's large positions in the three largest aviation markets in the country: NYC, CHI and LAX.

Yes, the world's largest airline will refuse to feature enough service from NYC, CHI or LAX to attract or retain the so-important corporate contracts, relegating new AA to second-tier status (sort of like a giant US Air).

If you're correct, and Parker is afraid (or too smart) to compete where the money is (NYC, CHI and LAX), then which airline will he buy that gives him the confidence to make money in those markets? IIRC, this acquisition was the last one, as AA is unlikely to be permitted to buy UA. Delta is on target to earn over $3 billion this year, and it's not running away from NYC or DTW or MSP.

CLT will not be de-hubbed. It will not get the PIT or STL treatments.

But it will never resemble ATL, and it is likely to be smaller in the future. Last week, CLT featured the same number of mainline US departures as AA at MIA. Strip out the Dash8 and CRJ flights, and CLT isn't as large as its fan base constantly repeats.

ccengct

I think most people would say that the "very small" is appropriate language for O&D at Amarillo or Burlington, Vt. Charlotte O&D is somewhere around #20-25 nationwide, depending on how you slice and dice markets and how you aggregate airports in metro areas that have more than one. That's low-end for a sustainable hub, although the O&D figure for CLT has not enjoyed the boost from WN that some other markets have.

But the flip side is that if AA+US walks away from CLT, the biggest winner will be DL -- and it's all about connecting traffic in the southeast, not O&D at CLT. I don't think Doug Parker wants to give that kind of birthday present to Richard Anderson.

BoeingBoy

Given my friend FWAAA's comments re: CLT in the past, I think (and certainly hope) he's being sarcastic of those so in a hurry to start closing hubs - CLT, ORD, or whichever.

At least partially, CLT can be competitive with bigger airports because it's cost is so low - $10 or more less in PFC per enplaned passenger. That's the equivalent to getting $10 or higher fares since that money goes to the airline instead of the airport - not a huge amount when figured per mile to compare to yield but it makes a difference.

Jim