100K

I think AA is really hurting (relatively) on their JFK routes and it's probably due to the lack of connecting traffic. This has to be a catalyst for the NYDBL promotion.

My wife took LHR-JFK last Friday and JFK-LHR last night (Fri) and both flights were half full. I took CO EWR-LHR last night, and it was packed (granted it was a 757) with the kiosk asking for volunteers.

I also in the last 3 months have taken another CO roundtrip EWR-LHR-EWR and British Airways LHR-JFK and all 3 were full. Another American LHR-JFK return I took in June on a Sunday night was maybe 70% full.

Frankly, I'm surprised AA has not been the price leader on this route - at various times in the last 4 months I have seen the lowest prices out of CO, DL, and BA but never AA.

FWAAA

AA has been hurting on the LHR routes from BOS and JFK for almost a year now, ever since tens of thousands of bankers and investment bankers were fired on both sides of the ocean late last summer. Those bankers flew lots of J and F tickets; BA has had the same problem with its LHR routes to BOS and JFK.

100K

Yes and we should mention the transfer of all the LGW flights to LHR on CO, DL, etc.

elitetraveler

Lehman, Merrill Lynch and Bear Sterns were all significant NYC-LHR accounts that are now significantly smaller and part of Barclay's, BoA and Chase corporate programs. I do believe the reason BA is going forward with their LCY-JFK all J flights are they received some commitments from key corporate customers who wanted the service.

If BA/AA/IB immunity goes through there will be a number of significant changes on TATL schedules unless demand picks up pretty fast.

moyrani

OP- What was the departure time of your JFK-LHR flights? I have recently been on the 6:30p flight and it has been at least 95% full.

jkearns

One more reason that NYDBL makes no sense. If you want CONNECTING traffiffic, why create an inncentive for locals? Originating and terminating flights can't be connections (a tautology, yes.)

If it is indeed connecting traffic that matters, the proper thing to motivate is flights that actually connect. So, they could offer 3X miles on flights that transit through JFK and actally motivate the behavior they want to encourage. And, it would not incite the wave of fraudulent address changes.

Econ 101: Incentives matter.
Real World Management 101: That which gets measured gets done; that which gets measured and compensated gets done first.



I'm just a disappointed, LAX based economist,

Jim

100K

JFK-LHR flights I base my observation on were all post-630p:
820p or 915p. My wife and I tend to take the late flights both ways to maximize the day.

100K

Points well taken, jkearns, but
1) I don't know that my hypothesis on lack of connecting traffic is right;

2) Originating traffic is inherently more profitable than connective traffic;

I bet they want to fill it any way they can, and it's worth an added $50 subsidy or so one-way to do it for them.

3Cforme

I would be interested in an explanation of this point of view, if the OP will indulge.

martin33

The hypothesis that originating traffic is more profitable is complex.

Profits come from both revenues and costs. The overall costs for serving an originating passenger are lower than the costs for a connecting passenger since connecting passengers use more resources. The marginal costs of some connection spokes are higher than others, however.

The revenue side is trickier since some spokes can be charged higher fares than others. Overall, our impressions tend to be biased by media-reported evidence of a "hub premium": average fares from hubs tend to be higher than average fares from non-hubs. That, however, varies widely by how competitive the situation is at a given hub, and tells us little about the relative profitability of O&D traffic at hubs in general.

100K

I have no doubt that competing for connecting traffic, say STL-JFK-CDG yields less than trying to originate more JFK-CDG traffic simply because of higher competiton for the connecting traffic (STL-ORD-CDG, STL-IAD-CDG, whatever) and no perception of difference for most customers on those options.

There is no way that a hub's particular competitive situation (with multiple airports like New York and/or multiple carriers like DL/AA at JFK) can entirely offset the reality of the above.

The hub premium is real and stems from the price a carrier can extract from local residents for nonstop flights vs their alternative of taking connecting flights through another carrier's hub in another city.

TigerWould

I know for fact that traveling LGA/DFW/PDX roundtrip, is cheaper than a DFW/PDX roundtrip 90% of all the times we checked prices/fares.

martin33

I agree, not at New York for connecting to Europe, certainly. But substitute Miami for connecting to the Caribbean or Latin America, and the picture is quite different. There's no reality to offset, for many destinations lacking good connective access through other hubs.

RTW4

I have taken multiple JFK-LHR flights lately on AA 100 ( 6 PM ) as well as AA 132 ( 9 PM).. ALL flights in business and first were full.. I do not have the same experience as the OP.. ... My recent LHR-JFK was 100 percent full in all classes last week on the 4:35 PM departure from Heathrow....

3Cforme

Yes, and MKE/MSN/DSM - ORD- LHR is more expensive than ORD-LHR.

Another poster describes the situation as a hypothesis and noted that profit is a function of both revenue and cost. Hypotheses come to be accepted when supported by facts.