flightrisk

Antarius

ORD is not going away as a hub. AA may stop trying to compete on losing routes, but it is absolutely not going away.They just launched ORD-HNL and ORD-ATH, which no one would do if they wanted to shut it down.

To the original topic, MIA may not be the #1 focus, but it is hugely important to AA as well. It is their primary Caribbean, latin America and south America hub, a region in which they are undisputed leaders. It doesn't need a ton of attention, but it is very important.

ashill

I think US management prefers hubs where they have a clear competitive advantage, so three of the four pmUS hubs are in that situation. That's why the love for DFW and less love for PHX, ORD, and especially NYC. (I don't know much about the economics of MIA, where they have a very dominant position.) But they also have spent considerable resources in LAX, where they may not dominate but they are at least a roughly co-equal player, unlike NYC or ORD. And the fact that they prioritize the hubs they dominate doesn't mean they're abandoning ORD or PHX.

Revenue, cost, and operational efficiency are AA's concerns. They only care about passenger experience to the extent that it effects their actual concerns, mainly revenue. My understanding is that the profitability of CLT is largely due to low costs.

perseus11

IMO, CLT will jump through hoops (financially), as it did during merger negotiations, to keep the level of AA traffic and related labor base that it has. North Carolina/Charlotte would likely even today offer near zero fees and other incentives to retain the Hub. CLT's cheapness and associated profit level, relative to most other AA Hubs, may shield it during the next severe economic downturn. AA/US has been super smart in the way its used CLT as a reliever Hub, both domestically and internationally, particularly against PHL. It's a lot cheaper to route connecting international traffic through CLT than pay for the construction of additional PHL gates, or the labor/network scheduling costs associated with adding additional PHL departure/arrival Banks - if that's even feasible. However, CLT's low User costs and profit level may be in jeopardy if the $3+B expansion/improvement projects go forward over the next several years (AA can't even get PHL to start construction of the Flagship Lounge!!) - particularly if there's a 2020-2021 Recession. It'd be interesting to witness AA today if it had not been required by Texas to retain DFW as the principal US/AA merged Hub and instead designated CLT. Oh well, it's the weekend

bdhaliwa

Agree, CLT-west coast flights tend to be on there crappiest 321's.

atbPy

After dealing with weather and CLT this past weekend, I feel like it is a completely inadequate airport for the kind of traffic AA tries to push through it.

GunsOfNavarone

ORD-ATH is a seasonal route, just like ORD-ANC was not too long ago. AA is just using excess aircraft for a seasonal route, quite possibly a one time wonder. I suspect the same with HNL, if memory serves me right, AA often schedules a ORD HNL around the winter holiday season. When you show me a OCONUS regular scheduled new widebody by AA out of ORD I may look to adjust my critical thinking on the subject.

I have not seen a single sign that indicated AA keeps ORD open as a hub, except only out of immediate necessity. ORD has a high cost of operation, has to pay politicians to play, has competition, and an unhappy work base. AA had owned O&D at ORD since the 1990s. After Chairman Parker took over, I have heard United took back the ORD O&D market-share it lost 20+ years ago.

AA at ORD has been migrating to a regional aircraft center of gravity operation for the past few years. AA opened new gates in L, all for regional aircraft, and it has converted some of its mainline aircraft capacity for regional aircraft. Post merger AA has reduced flights from ORD close locations like Champaign Urbana and Peoria, while adding numerous flights from CLT to Champaign and Peoria.

One has to remember, AA can't compete head on with any airline. Its monthly debt payments are so much higher than Delta and United, but AA labor costs are at like levels. AA has to focus on basic economy, extreme high density seating, and non-competitive hubs. Don't let AAs near term profits fool you. An increase in fuel costs and/or a slowdown in the economy will put bubble bursting pressure on a already deeply debt laded AA.

I wish I could say something positive for AA at ORD. It is a very strategic location, and a motivated leader would find a way to be the best and number one carrier at ORD. Be number one carrier at ORD, and you can compete anywhere in CONUS, and maybe beyond. By choosing not to compete at ORD, Chairman Parker is demonstrating that the airline is profitable based on limited competition, not product or service.

FlyerTalker688786

CLT international arrival area is so dull and torn out that I refuse to fly via CLT again. Seriously, CLT international arrivals is way behind other airports, I can think of non-hub airport like TPA, RDU and LAS has better international arrivals experience.

MiamiAirport Formerly NY George

SouthernCross

LINDEGR

Higher profile? GAG

Uncle Nonny

Try clearing an UG DFW>DCA on a Monday morning. I dare ya.

Antarius

why is AA part of the new global terminal or whatever? They are heavily involved (as is UA), both for their own needs and to block the other.

I'm not a fan of AA's financials either, they are basically riding Citi and Barclays for profits, but the goal of an airline is to make money, not hold imaginary trophies like "largest O&D arline in xyz". ORD-PEK was a disaster that shows no chance of getting better. Let UA bleed profusely, no reason to keep flying a loss leader when you have coverage at other hubs.

I'm not arguing that ORD may be less important than it was previously. That's wildly different than closing a hub.

GunsOfNavarone

I see AA at ORD duplicating what DL did at DFW. It is not an overnight, lights off transition. I knew things were going off the rails when a route I often flew, MDT-ORD-LSE, was no longer bookable through our organization's travel agency, but I now had to fly MDT-CLT-ORD-LSE, which made zero sense. You could still book MDT-ORD-LSE, but at a considerably higher fare. We can all say what we want, but when our travel agency told me how I had to route to LSE, I knew that was the beginning of what will be the end of AA as a major hub at ORD.

Delta closed its hub at DFW, even though DFW region has been on a massive growth trajectory. ORD is a great location for a main hub, has awesome IRROPS infrastructure, new runways. ORD has everything a major airline would want, less the pay to play politicians, corruption, some late night takeoff/ landing restrictions, and a state with huge debt and unfunded liabilities and seems a major airline could be held hostage for additional fees. And a very strong union base of employees and supporting contractors.

AA had no option but to go along with the new terminal at ORD. What is not talked about, is the lawyer for the city of Chicago that negotiated the deal, in less than 30 days after the deal closed, became a very senior executive at United. I could speculate how all of that worked..... and it is not pretty..... And Chairman Parker having worked hand in hand with Kirby for many years before Kirby became the leader of United, it may not be collusion but I am quite confident Kirby knows Chairman Parker's exposure and game plan. Chairman Parker is running away from ORD.

Although AA at DFW is now short gates and bursting at the seems, it is seeing unwanted competition. Will be interesting how Chairman Parker addresses it. All the more reason that CLT is Chairman Parker's golden goose and the hub that keeps giving. CLT may not be passenger friendly at any level, and is a disaster for IRROPS because of the lack of infrastructure, but it is the strategy that Chairman Parker is betting on, everything else is just a "throw it at the wall and see if it sticks". I will be surprised if AKL and SYD survive the next downturn, but what I have heard is AA makes its money on cargo to SYD and AKL, so that may be enough to keep the routes.

I will not shed a tear for Chairman Parker, as (speculation only) Chairman Parker worth was in the low seven figures right before the merger, and I think he likely has a very low nine figure net worth today. He pulled off the ugly duckling marriage and was rewarded very well. Seems he followed the RSH and SHLD executive game plan, buyback stock at its highs, pile on debt, and sell personal options.

joeyE