FlightGlobal: United seeks return to New York JFK
Jun 3, 2018, 5:55 pm
#91
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Jun 3, 2018, 6:42 pm
#92
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Location: SFO
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Connecting traffic is important, but so is point-to-point and transport links on the NYC side are important to the conversation. But I agree the horse is long dead and should be buried. Like most discussions, I doubt anyone will be swayed by any argument on an Internet forum.
Jun 3, 2018, 7:48 pm
#93
Join Date: Dec 2016
Posts: 1,485
I’m not disagreeing with you that the average NYer may be unfamiliar with options to EWR but you’re the one who challenged the idea. I personally find it easier and quicker to/from EWR (actually in a car/UBER as well). I don’t have any perceived superiority of JFK just because it is in the state of NY. I actually like public transport. And frankly I’d rather deal with PATH and NJ transit than have to sit on the E train through all of NYC.
It really isn't rocket science. Like just about every train station in the world, the ticket windows (and machines) are in the waiting area (look for people sitting behind glass above the waiting area). Screens show the departure times and platforms (mounted on walls in the waiting area). The entry to the platforms are labeled (look for signs above the doorways). I ride PATH/NJtransit once or twice a year. I have the app and can buy a ticket sitting on a beach on Maui.
Jun 3, 2018, 8:21 pm
#94
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Average fares from DOT data give some ideas about why Kirby said what he said. Here is a comparison of average LAX/SFO-JFK/EWR oneway fares before and after UA left JFK:
LAX
(Airline / 2015-3Q / 2017-4Q)
AA / $535 / $561
UA / $354 / - -
VX / $348 / $289
B6 / $337 / $327
DL / $334 / $370
VX* / $332 / $289
UA* / $309 / $323
(* denotes EWR, all others JFK)
SFO
(Airline / 2015-3Q / 2017-4Q)
AA / $485 / $517
UA / $439 / - -
VX / $338 / $277
VX* / $338 / $278
DL / $334 / $346
UA* / $334 / $373
B6 / $328 / $302
(* EWR)
UA's position at LAX has weakened substantially. LAX-EWR ($323 oneway today) trails LAX-JFK on the other airlines, despite the capacity and competition among them. UA has a stronger position at SFO, which has kept some premiums away from SFO-JFK on the competitors. However, UA is now generating lower yields on SFO-EWR ($373) than it did on SFO-JFK ($439) just prior to the shift. UA's decision to leave JFK appears to be a colossal mistake.
In general, I agree with some people that JFK has a premium over EWR. Profitability is a bigger unknown, but Kirby has firsthand knowledge of how AA benefitted from UA's original decision to abandon 3-class ps service, and then pull out of JFK completely. There are good reasons why Kirby believes that UA should return to JFK, but IMO the game has changed and it's now too late.
Source: USDOT O&D Survey
LAX
(Airline / 2015-3Q / 2017-4Q)
AA / $535 / $561
UA / $354 / - -
VX / $348 / $289
B6 / $337 / $327
DL / $334 / $370
VX* / $332 / $289
UA* / $309 / $323
(* denotes EWR, all others JFK)
SFO
(Airline / 2015-3Q / 2017-4Q)
AA / $485 / $517
UA / $439 / - -
VX / $338 / $277
VX* / $338 / $278
DL / $334 / $346
UA* / $334 / $373
B6 / $328 / $302
(* EWR)
UA's position at LAX has weakened substantially. LAX-EWR ($323 oneway today) trails LAX-JFK on the other airlines, despite the capacity and competition among them. UA has a stronger position at SFO, which has kept some premiums away from SFO-JFK on the competitors. However, UA is now generating lower yields on SFO-EWR ($373) than it did on SFO-JFK ($439) just prior to the shift. UA's decision to leave JFK appears to be a colossal mistake.
In general, I agree with some people that JFK has a premium over EWR. Profitability is a bigger unknown, but Kirby has firsthand knowledge of how AA benefitted from UA's original decision to abandon 3-class ps service, and then pull out of JFK completely. There are good reasons why Kirby believes that UA should return to JFK, but IMO the game has changed and it's now too late.
Source: USDOT O&D Survey
Jun 3, 2018, 8:29 pm
#95
Join Date: Oct 2010
Location: Santa Barbara, CA
Posts: 1,277
I think the smarter move for UA to capture the Long Island traffic is to have a few daily flights to ISP to ORD/IAD/IAH. LGA and JFK are so close together that there is no need to operate out of both airports, especially since LGA is closer to Manhattan and going to be much nicer in a few years. ISP would allow UA to capture passengers who live farther out on the island who would fly out of JFK because it's just much closer than EWR. Plus, ISP is uncrowded and there is no need to secure slots.
Jun 3, 2018, 8:40 pm
#96
Join Date: Oct 2017
Programs: SPG, Marriott, UA, AA, CX, SQ
Posts: 165
the Disney contract lost is definitely manifesting itself in some other form other than to JFK (sorry this is the best I can find because I don’t have access to paid datasets for a more meaningful 12m analysis)
this chart also makes it crystal clear why AA is putting all eggs into the PHL basket (3rd from top) over JFK (5th from bottom)
this chart also makes it crystal clear why AA is putting all eggs into the PHL basket (3rd from top) over JFK (5th from bottom)
Jun 3, 2018, 9:24 pm
#97
Join Date: Oct 2017
Programs: SPG, Marriott, UA, AA, CX, SQ
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Average fares from DOT data give some ideas about why Kirby said what he said. Here is a comparison of average LAX/SFO-JFK/EWR oneway fares before and after UA left JFK:
LAX
(Airline / 2015-3Q / 2017-4Q)
AA / $535 / $561
UA / $354 / - -
VX / $348 / $289
B6 / $337 / $327
DL / $334 / $370
VX* / $332 / $289
UA* / $309 / $323
(* denotes EWR, all others JFK)
SFO
(Airline / 2015-3Q / 2017-4Q)
AA / $485 / $517
UA / $439 / - -
VX / $338 / $277
VX* / $338 / $278
DL / $334 / $346
UA* / $334 / $373
B6 / $328 / $302
(* EWR)
UA's position at LAX has weakened substantially. LAX-EWR ($323 oneway today) trails LAX-JFK on the other airlines, despite the capacity and competition among them. UA has a stronger position at SFO, which has kept some premiums away from SFO-JFK on the competitors. However, UA is now generating lower yields on SFO-EWR ($373) than it did on SFO-JFK ($439) just prior to the shift. UA's decision to leave JFK appears to be a colossal mistake.
In general, I agree with some people that JFK has a premium over EWR. Profitability is a bigger unknown, but Kirby has firsthand knowledge of how AA benefitted from UA's original decision to abandon 3-class ps service, and then pull out of JFK completely. There are good reasons why Kirby believes that UA should return to JFK, but IMO the game has changed and it's now too late.
Source: USDOT O&D Survey
LAX
(Airline / 2015-3Q / 2017-4Q)
AA / $535 / $561
UA / $354 / - -
VX / $348 / $289
B6 / $337 / $327
DL / $334 / $370
VX* / $332 / $289
UA* / $309 / $323
(* denotes EWR, all others JFK)
SFO
(Airline / 2015-3Q / 2017-4Q)
AA / $485 / $517
UA / $439 / - -
VX / $338 / $277
VX* / $338 / $278
DL / $334 / $346
UA* / $334 / $373
B6 / $328 / $302
(* EWR)
UA's position at LAX has weakened substantially. LAX-EWR ($323 oneway today) trails LAX-JFK on the other airlines, despite the capacity and competition among them. UA has a stronger position at SFO, which has kept some premiums away from SFO-JFK on the competitors. However, UA is now generating lower yields on SFO-EWR ($373) than it did on SFO-JFK ($439) just prior to the shift. UA's decision to leave JFK appears to be a colossal mistake.
In general, I agree with some people that JFK has a premium over EWR. Profitability is a bigger unknown, but Kirby has firsthand knowledge of how AA benefitted from UA's original decision to abandon 3-class ps service, and then pull out of JFK completely. There are good reasons why Kirby believes that UA should return to JFK, but IMO the game has changed and it's now too late.
Source: USDOT O&D Survey
UA increased absolute flat bed counts to both SFO and LAX, but they’ve also increased Econ seats at a higher rate, so the %premium cabin appear lower even when absolute seats offered went up.
in most markets the paid F % is minuscule to begin with so that hardly matters, but on these 2 pairs, a straight up read of the numbers is very misleading at best. obviously per cabin fares would be hard to obtain, but at the very minimum, a proper read requires data point weighting, with certain assumptions on the fare dynamic for AA’s F premium over J and VX’s recliner discount. There’s no guarantee the post-weighted figures will paint a rosy picture for UA at all, but at least it’s a lot closer to Apples to apples.
finally there’s another hidden behavior driver not shown here - load factors. If one showed 10% avg fare increase but 20% LF decrease, are they actually succeeding ?
Jun 3, 2018, 9:50 pm
#98
Join Date: Oct 2017
Programs: SPG, Marriott, UA, AA, CX, SQ
Posts: 165
not accessible by unlimited monthly, which is what most people use. And then you get to NJ and have to figure out bus system over there.
From WTC area, EWR is actually more convenient in most cases, especially with car. But as I said, PATH + NJ transit is a pain to deal with on weekends and late night. Not issues you have to worry about with subway + Airtrain
From WTC area, EWR is actually more convenient in most cases, especially with car. But as I said, PATH + NJ transit is a pain to deal with on weekends and late night. Not issues you have to worry about with subway + Airtrain
and I don’t know what “bus” system you need for EWR after PATH. From Newark Penn you can pay roughly $8.50 for 1-stop NJT+AirTrain, or pay $12-15 for quick uber hop.
My usual public transport methods, assuming NY PENN as starting point, for the 3 airports would be 30 min NJT + 7-8 min AirTrain for EWR, 25 min E to 74/Rsvlt + 12 min Q70 for LGA, or 20 min LIRR to Jamaica + 11-18min AirTrain, depending on terminal.
Total travel time is roughly equal all 3 aides, but LGA side is cheapest while also having highest delay downside risk. JFK side has highest cost variation - LIRR is a steal whenever weekend CityTicket kicks in
Jun 3, 2018, 10:17 pm
#99
Join Date: Oct 2017
Programs: SPG, Marriott, UA, AA, CX, SQ
Posts: 165
2017 full year, PANYNJ official figures
UA EWR 28.5m
DL JFK 15.9m
DL LGA 9.9m
AA LGA 7.6m
AA JFK 6.9m
or if you prefer just by Carrier (PANYNJ includes Stewart but it’s a rounding error)
2017 full year, JFK LGA EWR SWF
UA 31.1m
DL 27.7m
AA 16.7m
so PANYNJ reports UA highest total pax and home to busiest terminal, UA PR says they have highest O&D absolute out of NYC compared to other 6 hubs, Kirby mentioned UA has highest NYC margin among US3, and the chart I posted earlier showed UA EWR at highest yield, but we’re still being told JFK is the holy grail and EWR is wholly hell.
Jun 3, 2018, 10:40 pm
#100
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Sorry. This is why decision making using only financial modeling and analysis without understanding what's driving the markets is what got UA in to trouble in the first place - and is keeping them there.
David
David
Jun 3, 2018, 10:51 pm
#101
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I found it pretty surprising that Kirby actually mentioned two exclusive corporate contracts UA lost to AA by name - Disney and Time Warner. Obviously that was a big deal, which the models did not predict.
Jun 3, 2018, 10:57 pm
#102
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Either way, these and other decisions continue to confound UA's management and their inability to develop and execute a strategy that allows the company to grow without continuing to destroy any remaining value keeps eluding them.
David
Jun 4, 2018, 2:13 am
#104
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... on top of the minor confounding variation of 3Q versus 4Q, the difference observed here, both for UA’s switch and against other airlines, is very heavy influenced by the weighted distribution of premium seats with the introduction of first sCO 752 then 777HD.
I chose to compare 2015-3Q with 2017-4Q because 2017-4Q is the most current data. Since the O&D survey is based on a random 10% sample rather than all lifted coupons, I don't feel that a same-quarter year-over-year comparison would be significantly more meaningful. Also, the survey provides only a general snapshot of what the market bears. It's certainly valid to argue that UA's drop in average fares it attributable to its lower premium-to-economy seat ratio; however, it's just as valid to assume that demand drives supply, and that UA would have scheduled aircraft with more premium seats had it consistently sold them out. Overall, only the airlines themselves know what their own yields are. They too have to guesstimate about their competitors just as we do here.
The chart shows yields across all domestic markets, which don't necessarily correspond with specific yields on the LAX/SFO-JFK/EWR routes, the topic of this thread. Besides, I take Kirby at his word when he said some time ago that UA enjoys something like a 15% margin at EWR versus DL's 4% (IIRC) at JFK, so I don't doubt the accuracy of the chart.
Last edited by sinoflyer; Jun 4, 2018 at 2:20 am Reason: besides
Jun 4, 2018, 3:16 am
#105
Join Date: Oct 2017
Programs: SPG, Marriott, UA, AA, CX, SQ
Posts: 165
maybe my mindset is too millennial to be clamoring the nostalgia of the old days of 7xSFO 196J 6xLAX 168J when the current offering is far better with 15-17xSFO ~350J 11-12xLAX ~240J, sacrificing both J seat count AND frequency for the sake of an airport
So we’re told business passengers want the flat beds and want frequency, and when UA finally is actually far ahead at the SFO route and roughly matching the competition at LAX, then all of a sudden airport choice trumps both ?
The “fly both DL AA and bank miles at Alaska argument” is no longer applicable today, so for those insisting on SFO-JFK, their choices must be either low J count on DL or low frequency on AA (5x Su-Fri, 3x Sat)
so disney and time warner (combined market cap $221B) flies AA while Apple (market cap $935B) flies UA ... which one should i follow @:-)
*** to answer your other point, the chart is simply to illustrate my point that claims of both LGA and JFK being the preferred airport are not materializing into observable yield premiums for either DL or AA.
