trvlr70

Does anyone care to speculate what will be the future of the AA's ORD hub post-merger? I heard rumblings that the hub might poach flights from both PHL and CLT.

FWAAA

This thread (and its twin on the AA forum have hundreds of posts speculating on the future of the various hubs; admittedly, you have to wade thru thousands of posts to find them.

Short opinion: PHL may eventually get a flight to NRT (AA or JAL). All other Asia will be ORD or DFW. Depending on the UA situation, it's possible that someday IAD may get a flight to NRT on AA or JAL metal. CLT may not keep all of its assorted European flights and maybe some European flights from PHL end up at JFK (where the O&D is substantially higher). But PHL and CLT will likely continue to connect lots and lots of passengers, especially domestic, for whom ORD or DFW would be inefficient.

bkafrick

Things I'll miss on AC:

- Awesome Mobile iPhone App
- Being able to use IFE and earbuds from gate to gate
- Hearing french spoken in the cabin
- Incredible vast route network in Canada (though I'll probably still have to fly AC to get to places like Timmons, ON)
- EnRoute magazine (one of the best, IMO)
- Maple Leaf lounges... gosh, I love that Quinoa Salad
- Maple Leaf lounges in every major city, not just hubs...

nova08

There will certainly be optimization between all of the hubs. For one with the influx of the US CR9, CR7, 175, 170, 190, and 319s along with AA's new 175 and 319 the new AA will be able to optimize ORD much better than they have in the past with only CR7s and 738s/MD80s at their disposal.

dtremit

I should clarify that I'm suggesting something they could use fare classes for; it correlates reasonably well today, but I'm not sure that's the actual logic behind it. That said, there's a chart here with a list of US' fare classes; I can't vouch for its accuracy, but it's good enough to illustrate the point. In short, the set of classes available ends up being the same across all flights, but not all classes are marketed on every route.

I'd contrast two similar routes with different profitability. US is the only carrier flying CLT-DCA, which is presumably has a high percentage of business travelers. The cheapest fare I can find on that route is a Q fare, at $424 o/w and a 7 day advance purchase. The same-day fare seems to be an M fare at $624 o/w.

In contrast, three carriers currently fly CLT-LGA. The cheapest fare there is a K fare at $91, again, requiring a 7 day advance. The last-minute fare is a V fare at $373.

I can easily imagine a scenario where the K fare offers some minimal credit, the V and Q are in between, and the M fare offers a higher multiplier.

I think it's a very different environment -- and it's frankly not one I entirely understand. I don't think the US market has really been affected by the ULCCs like RyanAir and EasyJet in nearly the same way that the European market has. Oddly, RDMs seem to have been hit harder than elite qualification; BA still lets you get to mid-tier status with any 50 segments.

I think the only comparable step in that direction in the US market is the new "basic economy" E fares on DL, which are aimed at airlines like Spirit and Sun Country. For the time being, they seem to have maintained full EQMs and RDMs for everything booked through normal channels.

For better or worse, "partial credit" seems to be a third rail for US frequent flyer programs. I think that means we just end up with more devaluations, in the end -- but psychologically it seems to be impossible to cross that line.

GNRMatt

To me, this is one of the BIGGEST losses with the switch to OneWorld. AA/US themselves only fly to the biggest cities in Canada (I think 8 or 9 of them). The rest of the country doesn't have any OneWorld presence. I know WestJet is a partner of AA's, but does using them earn PQM's on AA?

gglave

No - This is what keeps a lot of unhappy Air Canada Aeroplan Members from moving their business to WestJet.

serfty

Of course, as per the agreement with the DOJ, the new airline can simply turn it's back on it 'if it feels that there has been a material adverse change, "in demand, the competitive environment, or New American's cost to comply." '.

Much can trigger this... higher fuel prices ... another airline starts a new route to CLT ... really almost anything in relation to operating an airline.

The biggest loser in US Airways-American Deal? You!

perseus11

In my (short) opinion, any significant future trans-Atlantic growth from the NE (Northeast) will be primarily from PHL. JFK will be right sized to concentrate on high premium/O&D routes, such as LHR, to maximize domestic slots for O&D traffic, rather than lower yielding international connections. Regarding TLV, I believe that PHL-TLV will remain even if JFK-TLV is started. There is no competition for the route out of PHL (of course this also applies to many other routes), which also carries substantial O&D cargo. JFK/EWR produces significant competition to TLV, especially from the preferred carrier, LY. If the AA/LY code share was extended to PHL and if LY started PHL-TLV, my bet is that the O&D would increase substantially as the PHL-JFK/EWR bleed would be reduced - especially for seasonal tour groups. Although half of South Florida's Jewish population and tiny compared to metro NYC, PHL has the 10th largest Jewish population in the world and is currently pushing for more active business relationships with Israel.

As I've harped to the AA fan boys here and elsewhere, AA has a new leader and to expect the same ole same ole AA route structure and philosophy that got the company into trouble in the first place is, well IMO a bit naïve. I think we can already see evidence (e.g., the LGA, DCA, DAL merger divestitures) as to how competitively aggressive DL is going to become. Consequently, I really doubt (based on history), that Parker is going to support lower yielding connecting growth out of supremely expensive/competitive JFK - compared to PHL. Parker has made statements regarding preserving AA's premium services and I bet he will, but he'll narrow that focus to very selective, consistently proven candidate routes, such as NYC/LAX-LHR.
I can only hope that he spends a few bucks of the premium profits to get rid of that Mickey Mouse tail (paint job).

It should be interesting to watch what the new AA does with next Summer's worldwide scheduling.

McFlyPHL

It seems awfully complicated to try to come up with a proxy based on fare classes, which in theory correlate to spend/margin. No matter how you slice it, someone dropping $10-15k+ each year is highly likely to be a profitable customer. The more layers and proxies introduced into the system the greater the opportunities to "game" the system.


To go back to Jim's original contention about cost... take a look at the benefits at each BA tier... never upgrades. That makes status quite cheap to give out. Free tickets, in theory, have a cost... though if they're valued at the marginal cost of putting a butt in a seat that would have been empty anyway, it's quite small.

AA_EXP09

I have heard French spoken in the cabin on LX...
Besides, the FFP and the fare structure ruin all of this for me (except the lounges.)

burlax

Yes, yes. . . Also, on 747s in F they'd set up a small skating rink and require that one of FAs would be in CFSA. She'd wear blades and a mini and figure skate to entertain pax in F . . .

dtremit

There's also the wrinkle of European carriers not really having any cabin to upgrade people to -- the "J" cabin on intra-EU flights is barely better than Y+ on US carriers. Lounge access is the tradeoff, purportedly.

Michael El

I hope LAX and/or SFO ends up with a Narita route or two.

BoeingBoy

But it could be marginally so - 100 segments = $100-150 per segment. Call them 400-500 miles on a CRJ-200 and it's barely breakeven to marginally profitable. From the airline's POV, is that the passenger you want to upgrade? Is that the passenger you want redeeming miles for business/first class to/from Asia (where the award ticket would wipe out any profitability and maybe cause that passenger to be a money loser).

The ideal would be to have the systems to give the actual cost per seat and revenue per seat for flights on an individual basis and for passengers on an individual basis. Then the carriers would know with decent accuracy what a passenger cost to transport vs revenue provided. Status could be by profit margin - passenger A supplies 3% profit margin and gets no status, passenger B supplies 10% margin and is Silver. Etc. The reward would match each passenger's profitability to US. But systems to do that are a ways off.

Except for one thing - alliance award flights. You're right that a US FF using an award ticket on US metal adds very little cost - the flight is operating anyway so the cost of flying the plane, employee costs, catering cost, etc is already being spent. The only difference is the extra fuel burn the extra passenger causes and catering expense for that one passenger. The big cost for "free" award tickets is when they're on alliance partners. And that's no theory. I suppose you could eliminate upgrades and offline award tickets but that'd really upset the FF's that are profitable. Alternatively you could limit upgrades and alliance award tickets to the upper tiers, as long as the system of earning upper tier status provides enough of a profit from those achieving those upper tiers.

This is an industry that will never be as simple as "I spent $X last year so I should be top tier" at least till Star Treks transporters are perfected. There's too many moving parts - i.e. factors affecting whether a passenger is profitable or not. Heck, passenger A could take the exact same flights two weeks in a row and provide a profit to US one week but a loss the next.

Jim