galaticos

So AA has pulled the plug on ORD-DEL nonstop.. last flight will leave DEL on Mar 2 at 0.55hrs

that leaves us with AI, CO with the only ones going non stop to US..

Will 9W step-in?? do they have a spare 77w for this? maybe CO will start another one to ORD...?? wishlist?

oliver2002

CO has no more 77Ws lying around, the 787 deliveries may free things up a bit but UA/CO has grand plans for those... AI will get some 787s but their plans have been kept guarded.

9W is working on a bare bones plan to get back on track so it will be the gulf carriers and european carriers doing the vulture job as usual picking the bones of the AA carcass.

Speaking of which, if AA pulled the plug on the ULH 777 flight, they probably didn't make much money on it. CO is also not super happy on that route.

A2A

they apparently made a 40 million loss on this. I did some more digging up, and if they are really serious on cutting their losses, the top 10 markets lost 450 million $. these include London, south america (B.Aires), California.... so, wait for more action.

you can read some more here on this cancellation:

http://boardingarea.com/blogs/livefr...-what-is-next/

Babu

Please...say it isn't so!!

oliver2002

Of course AA pulling out will mean that CO & AI will get additional pax...

A2A

Perhaps AI can already hike prices on the segment now.

cover point

Even though AI has kept the prices incredibly low (specially in business ... they were always about 50% the cost of AA ... around $4K ORD-DEL vs $8K) the load factor on AA was still very high. I have never seen too many empty seats in Business and from what I read on the AA forum most of these seats were paid (4-6 upgrades in J were SWU or miles ones).

It is incompetence of AA that they still could not make money on this route. An inferior product, crappy service and still with full loads with higher prices to boot and still you cant make money then there is something seriously wrong with them.

Honestly, I am now looking forward to AI joining the star alliance (assuming it happens). Having a non stop option is great. Saves atleast 4-6 hours on the travel time and the timing of the flight on both directions is great. Thats the only flight that would let you leave on monday and still get to work in Chicago.

This has to do with the poor negotiations that AA had with its labor groups including FAs and pilots. When an airline is selling more expensive tickets than its competition, flying full planes,has crappy service/product and STILL cant make any money then there is something seriously wrong.

Keyser

that's definitely a good sign for both....

i hope jet can get their act together soon & start a non-stop service....i'm ok with connecting through bru for now but non-stop would be great....

rathin100

I don't know about AI but the load on the CO is consistently very high, with J sold out well in advance. The thing is, these ULH Operations are apparently difficult to make money on due to high unit costs I am not fully aware as to why exactly this is so but apparently flights exceeding 12 hours only break-even at relatively high rev/seat. This is why a number of ops have been curtailed on these sector lengths eg TG. JFK BKK, and the SAA curtailments of non stops to the USA. Also why BA is reluctant to fly to ICN

avm2806

ULH's don't do well because after a certain point, the amount of fuel required to carry the additional fuel for a ULH is exponential - FUEL requirement is based on 2 factors - distance flown and weight of the aircraft (payload), the more fuel carried the more the weight increases and consequently the more fuel required in order to carry the extra fuel needed for the increased travel distance (complicated I know, but a captain on HKG-JFK explained this to me).
This was one of the reasons why the A340-500 which was built on the model of ULH travel wasn't succesful with either EK or SQ and why SQ changed the whole model to an ultra premium business class.

The other factor with ULH travel is that there has to be enough point to point traffic to justify a route. Take a BOM-NYC for example - if you were travelling to BOS/PHL/WAS ETC it would be much easier to transit one european point rather than fly a ULH and then have to clear immigration/customs etc and have to recheck in - so the premium of a ULH only really applies if one if flying from BOM to NYC (similarily the benefit wares off if one has to do an incoming domestic connection in India or VV). So for someone flying from say MAA, BLR, HYD etc to NYC going via europe or middle east again works better....


I guess that's why the number of ULH's from India to USA that will survive will be limited until business levels grow to sustain both ULH and hub/spoke operations (or the Indian infrastructure allows for better connections at Indian airports - which is likely to take a while).

SuperFlyBoy

CO is very full already.

+1 (*not* the BRU part!), but 9w is too smart to start one of these and lose money - they would require a 772-LR or one of the 787s.

Well, this is precisely why AI cannot make profits - underselling another carrier who is reportedly *losing* money on a US-India direct route??

Right - quite hard to get seats most times.

cover point

Not denying that AI might be underselling BUT AA losing money even at that load factors has very little to do with anyone else. Thats precisely an AA problem and reflects poor decisions on their end for costs and real poor union deals

galaticos

AA missed out a great opportunity here i feel... the Ch.11 should have given them opp to restructure these high labor contracts... they could have managed to get this route to be profitable... I'm on the last flight that is leaving chicago on 29th feb and was contacted by AA to see if I can meet their management person to talk about the route... so will post what I hear once I get to meet...

jasepl

I wouldn't get too excited about AI turning a profit on Chicago just yet!

Given AI don't need to worry about profitability, and AA in administration, saying AI (which should have been rejected by even BIFR a long time ago) beat AA is dubious at best.

For the first six months of 2011:

AA : 71,892 passengers = 81%
AI : 90,511 passengers = 72%

Bottom line is that the flight is very expensive to operate and the yields just aren't there. Fares are rather low even when booked last minute.

AA's withdrawal will help AI along, for sure. Just how much remains to be seen. In any event, the route was a mess, with AI undercutting AA, who were often underselling to start with. BA just might end up becoming one of the biggest beneficiaries, JV considerations aside.

AI do have a good schedule, with a mid-afternoon arrival in DEL, enabling connections to most of their domestic and neighbourhood network.

In any event, I fear AI long ago reached the point where no matter what they do and no matter how many bums they have in their seats, they're not going to make money.

By the way, except for CO, no one's numbers are all that wonderful on the other American routes:

EWR
AI : 62,087 passengers = 71%
CO : 87,393 passengers = 87% (BOM)
CO : 86,132 passengers = 85% (DEL)
9W: 65,308 passengers = 81%

JFK
AI : 85,657 passengers = 68%
9W : 60,534 passengers = 75%

The load factors are assuming:
1. all flights operated every day
2. AI used the W to ORD & JFK and the L to EWR
3. 9W numbers are to Brussels only

avm2806

BOM-EWR (or any NYC airport) is probably the most succesful and honestly the only feasible ULH from India to USA IMHO (possibly a west coast like SFO but the issue is too many points in India feed CX/SQ etc to SFO - it's not a single city demand).

The large gujarati community in New Jersey fills the back of the plane and the large business traffic between BOM and NYC both as commerical centers of their respective regions fills the middle and keeps a decent load on the front of the plane making it a seriously viable flight (surprised DL pulled it from NYC to ATL and then not surprisingly dropped it all together).

Honestly though, I wouldn't hold my breath for ULH's. They key is going to be hub development at a cost effective level (eg BRU for 9W - and conversely not FRA for AI where costs where too high).
Ofcourse DXB/AUH/DOH are going to dominate IMHO. Via middle east one can fly from MAA/BOM/BLR/HYD/DEL/AMD/COK/GOI/TRV/CCJ/CCU to NYC/IAD/IAH/YYZ/SFO/LAX/DFW/SEA and in some cases ORD (with EY points) - with only one middle eastern transit. While european airlines have been able to sustain metro flights in India (MAA/BOM/DEL/BLR/HYD/CCU), The regional traffic on Middle east to smaller Indian cities has enabled ME carriers to justify these routes year round and provide extreme convenience to PAX going further with far superior hub infra structure than on offer in India.

In terms of product, mileage schemes etc - I am not a fan of any of them (EK/QR/EY) but I have to admit that they provide a seriously convenient solution for many travelers and have access to cheaper fuel - giving them a serious competitive edge.