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ARCHIVE: Routes (Flights) and Hubs (Speculation, News and Discussion)

ARCHIVE: Routes (Flights) and Hubs (Speculation, News and Discussion)

 

Old Dec 14, 13, 3:38 pm
  #166  
 
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Originally Posted by ty97 View Post
..........AA is a public company, so you can look at the financials for proof of profitability or lack thereof.
Please direct me to an official, publicly available document, which shows route or Hub profitability.
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Old Dec 14, 13, 3:49 pm
  #167  
 
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Originally Posted by perseus11 View Post
Please direct me to an official, publicly available document, which shows route or Hub profitability.
I have no interest in getting into an argument for the sake of arguing (there's enough of that in this young forum already) so I'll just explain what I read and replied to. If I misinterpeted, then disregard.

unless it can be proven that existing AA methodology, routes, hubs are producing a profit
It is quite easy to prove (or disprove) if AA's existing business methodology (which includes the cornerstone strategy, the routes and hubs currently served, and all other business decisions AA makes) is profitable by looking at the publicly available financial documents.

If you are interested in the profitability of specific routes or hubs, that information is of course proprietary and we won't have access to it.
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Old Dec 14, 13, 3:57 pm
  #168  
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Originally Posted by perseus11 View Post
Please direct me to an official, publicly available document, which shows route or Hub profitability.
Exactly. Which is why the public is just left with the comments made by the executives regarding the hubs. Parker explained publicly why PHL was kept over PIT. And why he was willing to invest more money into the operations at PHL. And you can go by the costs of fees at the airports. JFK and LAX (as well as ORD and MIA) have high operating costs. But the amount of O&D traffic at those airports (and the revenue that generates) helps offset those costs. But it is also a reason why JFK will not become an AA hub in the true sense of the word. I believe that the two airlines operate around 110 departures out of there. Which is about 400 less than what they have at PHL. As for CLT, it is the antithesis of how most cities and airport authorities handle their airline relations. Some act as though the airlines are an inconvenience for them. But Charlotte is extremely cooperative with US. And the new AA will still have to connect people going from point A to point B.
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Old Dec 14, 13, 4:06 pm
  #169  
 
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Originally Posted by Himeno View Post
Is there scope to tunnel under the JFK expressway and turn a rebuilt T7 into a new concourse of T8?
No, there is room to the east of the existing T8 for expansion. The wall as you enter the terminal to the right is not permanent.
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Old Dec 14, 13, 4:07 pm
  #170  
 
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Originally Posted by Microwave View Post
This was also mentioned upthread; I mentioned JL as they are in a JBV with AA and it would seem to make sense from a customer perspective to have such partners in one place.
Sorry, I did miss that.
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Old Dec 14, 13, 4:58 pm
  #171  
 
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Originally Posted by george 3 View Post
No, there is room to the east of the existing T8 for expansion. The wall as you enter the terminal to the right is not permanent.
I never said there wasn't.
Complete T8 to original plan allowing AA expansion and some partner moves, then tunnel under the expressway from the completed T8 (much like the current tunnel to the C concourse) to the existing T7 and redevelop into T8 concourse D for BA and remaining partners.

UA and JL could swap.
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Old Dec 14, 13, 7:24 pm
  #172  
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I'm hoping RDU will keep current service levels. Obviously RDU-DCA has some overlap so that will be reduced but I'm still hoping everything else stays where it's at.

I'd also like CLT to stay as it's so convenient for me. PHX I like strictly for nostalgia's sake (I'm an Arizona State Grad after all ) but I don't really see any future for it.
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Old Dec 14, 13, 8:12 pm
  #173  
 
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Originally Posted by chasgoose View Post
Exactly. Phoenix isn't a huge business center by any means, but it's not like some barren wasteland either. Freeport McMoran is one of the largest mining companies in the world to mention one. Also, even though it doesn't have the banking industry like CLT does, it's metro area is about twice the size and unlike CLT, people outside the PHX metro area have no real options for air travel outside of PHX (AZA doesn't really count given that its entirely leisure travelers and most flights from TUS connect through PHX anyways). Not to mention that PHX has a lot more O&D than CLT. Finally, even though PHX is a tourist destination, a lot of tourism comes from corporate conventions/retreats/meetings which are a different type of passenger.

I would compare PHX to DEN in terms of size/businesses/etc. If UA has managed to keep DEN going when its surrounded by SFO and LAX (with a similar amount of flights as AA) on one side and IAH and ORD (with almost 3x as many flights as AA) on the other, not to mention a rapidly expanding WN operation, certainly AA should be able to maintain the current level of service in PHX (which is a smaller operation than UA's in DEN) with only LAX (that can't really expand) on the west and ORD and DFW to the east.

I'm not saying PHX is going to expand or suddenly get a bunch of new flights and new international flights are pretty much a pipe dream (at most I could see an extra LHR flight, maybe a flight to SCL given the mining connections, and mayyyyybe a 787 to NRT on JL, but probably none of these are going to happen), but it's not going the way of STL/MEM/CVG/CLE. Shutting down PHX would essentially cede mountain west/west coast connections to UA and DL and cut needed service to a relatively large population.
A men well said..
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Old Dec 14, 13, 9:18 pm
  #174  
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Originally Posted by chasgoose View Post
Exactly. Phoenix isn't a huge business center by any means, but it's not like some barren wasteland either. Freeport McMoran is one of the largest mining companies in the world to mention one. Also, even though it doesn't have the banking industry like CLT does, it's metro area is about twice the size and unlike CLT, people outside the PHX metro area have no real options for air travel outside of PHX (AZA doesn't really count given that its entirely leisure travelers and most flights from TUS connect through PHX anyways). Not to mention that PHX has a lot more O&D than CLT. Finally, even though PHX is a tourist destination, a lot of tourism comes from corporate conventions/retreats/meetings which are a different type of passenger.

I would compare PHX to DEN in terms of size/businesses/etc. If UA has managed to keep DEN going when its surrounded by SFO and LAX (with a similar amount of flights as AA) on one side and IAH and ORD (with almost 3x as many flights as AA) on the other, not to mention a rapidly expanding WN operation, certainly AA should be able to maintain the current level of service in PHX (which is a smaller operation than UA's in DEN) with only LAX (that can't really expand) on the west and ORD and DFW to the east.

I'm not saying PHX is going to expand or suddenly get a bunch of new flights and new international flights are pretty much a pipe dream (at most I could see an extra LHR flight, maybe a flight to SCL given the mining connections, and mayyyyybe a 787 to NRT on JL, but probably none of these are going to happen), but it's not going the way of STL/MEM/CVG/CLE. Shutting down PHX would essentially cede mountain west/west coast connections to UA and DL and cut needed service to a relatively large population.
As true as this is, and it is very well written, US has done nothing with PHX since their merger with HP and they have nothing out west bumping into it. I think a few new destinations were tried and I don't think any have stuck, while a bunch of routes (IAD, COS, RDU, BDL etc.) have gone away. Everything you said about PHX is true, but WN has a big presence there and it's yet another hub for the new airline now surrounded by DFW and LAX.

For what it's worth, I hope you're right.
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Old Dec 14, 13, 10:24 pm
  #175  
 
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Originally Posted by CMK10 View Post
As true as this is, and it is very well written, US has done nothing with PHX since their merger with HP and they have nothing out west bumping into it. I think a few new destinations were tried and I don't think any have stuck, while a bunch of routes (IAD, COS, RDU, BDL etc.) have gone away. Everything you said about PHX is true, but WN has a big presence there and it's yet another hub for the new airline now surrounded by DFW and LAX.

For what it's worth, I hope you're right.
Thanks, I hope I'm right too lol, but my point about DEN still stands. I think people are forgetting that in this new era of mega-airlines, each airline can have and needs more hub operations than they previously did. Also WN has expanded so much at DEN that is presence there is about the same size as PHX (not to mention F9). Yet UA has still made it work. Both mountain West hubs (DEN and SLC) have survived the UA/CO and DL/NW mergers more or less intact and I doubt there is drastically more business traffic to either of those destinations than PHX.

PHX is much more like DEN/SLC than the operations that got dehubbed following recent mergers. PIT was dehubbed since it didn't really add anything PHL couldn't handle (it only barely made sense when US was almost solely an East Coast operation). STL was dehubbed because AA didn't need 3 midwest hubs (and STL really was the only major market between DFW and ORD). CLE similarly wasn't needed because ORD was less than an hour away and had a much bigger operation w/ way more O&D. CVG's traffic was almost entirely connecting traffic and obviously lost out to MSP/DTW. MEM wasn't needed because ATL could cover most of its destinations. With the exception of CVG-MSP, PHX is twice as far away from DFW as all of those airports were to the hubs they lost out to (even CVG-ATL is a lot closer than PHX-DFW). LAX is never going to be able to absorb all of PHX's domestic connecting traffic given its location and limitations on expansion and people who currently connect through PHX aren't going to be happy connecting through DFW for a lot of the routes they currently use PHX for. People who aren't from the West don't realize just how big it is, and while its far less densely populated than the East Coast, there is a need for hubs in the region as DEN and SLC demonstrate.

I know there are some delusional PHX fanboys out there who have delusions of AA expanding service or crazy things like QF starting flights or BA upgauging to the A380, but I think people are way too quick to dismiss PHX post-merger without asking how DEN/SLC survived their mergers while being somewhat similarly situated. I do believe that PHX will suffer some reduction of service post-merger, but I don't think its going to be a huge reduction to focus city or lower levels.
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Old Dec 14, 13, 10:46 pm
  #176  
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Again, all very good points and I see you've addressed STL but don't forget, AA also built up, and subsequently dismantled, BNA, RDU, SJC and to a lesser extent BOS. They don't have the best track record of digging in their heals and fighting competition. I could see the Cornerstone strategy coming to the new airline and AA deciding they don't need quite so many hubs.
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Old Dec 14, 13, 11:33 pm
  #177  
 
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Originally Posted by CMK10 View Post
Again, all very good points and I see you've addressed STL but don't forget, AA also built up, and subsequently dismantled, BNA, RDU, SJC and to a lesser extent BOS. They don't have the best track record of digging in their heals and fighting competition. I could see the Cornerstone strategy coming to the new airline and AA deciding they don't need quite so many hubs.
True, but those build ups and drawdowns also occurred under a different management team. Hopefully the new AA's team is less shortsighted.

BNA was too close to DFW and ORD (and STL) and too far west to be a true East Coast hub. SJC might have been a mistake though SFO still seems to be where most of the money is in the Bay Area. They should never have bought Reno Air, though that in part influenced maintaining a presence at SJC. Had they built up and stuck with RDU they might have had a viable East Coast hub, though CLT won out ultimately in the region.

The HP then US management teams have pretty effectively held off WN at PHX and later particularly at PHL,where WN has been downsizing. In the new airline, though, they'll have a lot more fronts to defend.
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Old Dec 14, 13, 11:34 pm
  #178  
 
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Hmm. Not sure how PHL with a CSA population of >7m (bigger than ATL, DFW, Houston, and 2x size of CLT CSA) qualifies as a "small local market". Also IMHO, NYC airports not even remotely viable for PHL-area frequent biz travelers except for maybe upper Bucks to EWR (on a really good day for traffic on the NJTP).

Originally Posted by jmr50 View Post
Here's my thoughts:

PHL

Solid marketplace but a small local market. Make this your connecting point for the northeast instead of LGA or JFK. Keep enough international but don't try and nail every B and C tier European market like they have now, but instead save that for...

Last edited by moxieflyer; Dec 14, 13 at 11:40 pm
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Old Dec 15, 13, 12:17 am
  #179  
 
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Originally Posted by gordo6 View Post
With the merger now happening, and with AA not being able to fly to TLV by court order, what do you think will happen with AA/US service to TLV?

According to this article: http://www.mako.co.il/news-money/eco...bacbc31004.htm AA owes $20-30 million to former TW employees. However it also says that TLV is one of US's most profitable markets.

I think that until AA and US will receive a single operating certificates they will continue flying to Israel, under US certificate. However, when the first AA certificated plane lands in TLV, the authorities will be able to confiscate it until the debt will be payed.

So, what do you think will happen? Will AA abandon the Israeli market once again, firing all employees in the US office, any maybe while firing them not compiling with the Israeli laws, which will require them to pay compensations to the current US employees, only increasing their debts in Israel?

Or will AA pay the debt, allowing PHL-TLV to continue, and probably starting JFK/ORD/MIA-TLV service?

I hope that they will pay the debt, and initiate the new routes, however I'm not optimistic. I do believe that if AA will cancel TLV service, LY will probably add another AA hub as a destination, expanding the AA/LY codeshare, or, if they won't be able to do it fast enough, I believe we will see UA flying from IAD/ORD or DL adding extra JFK flights. What do you think?
That's really interesting. I always wondered why AA doesn't serve TLV. I'd bet that due to bankruptcy restructuring, TLV should be back on the table. That would be awesome to have a JFK-TLV on AA metal.
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Old Dec 15, 13, 12:56 am
  #180  
 
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Originally Posted by kpowed View Post
That's really interesting. I always wondered why AA doesn't serve TLV. I'd bet that due to bankruptcy restructuring, TLV should be back on the table. That would be awesome to have a JFK-TLV on AA metal.
When TWA liquidated, AA purchased the assets it wanted. The TLV route wasn't one of them. When TWA left Israel, it owed its Israeli employees severance packages worth around $19 million total. It didn't pay (they offered something like $3000 per employee, when under Israeli law, they were due one months pay per year worked with TWA).
Israel considered the liquidation of TWA as a merger with AA and holds AA liable for what TWA owes.
If an AA owned jet lands in Israel, the local authorities are likely confiscate it.
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