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Thread: And AA keeps shrinking...

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    And AA keeps shrinking...


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    American Airlines, the dominant airline at the Philadelphia International Airport, in the new year will cancel flights between Philadelphia and Mexico City due to underperformance...

    While...
    United Continental (UAL) is one of the few leading airline companies that has been aggressively adding capacity...

    Doug Parker...ĒWhatís in your wallet?Ē
    Last edited by NoOtPilot; 11-14-2018 at 01:32 PM.

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    Quote Originally Posted by NoOtPilot View Post
    American Airlines, the dominant airline at the Philadelphia International Airport, in the new year will cancel flights between Philadelphia and Mexico City due to underperformance...

    While...
    United Continental (UAL) is one of the few leading airline companies that has been aggressively adding capacity...

    Doug Parker...ĒWhatís in your wallet?Ē

    14 Million a year base salary........

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    Source: OAG data for Thanksgiving travel, 11/21/2018:
    Total flights:
    AA: 7500
    DL: 6300
    UA: 5600

    Total Seats:
    AA: 2.10m,
    DL: 1.98m,
    UA: 1.74m

    Flight Concentration at Hubs for each airline:
    AA: DFW 21%, CLT 18%
    DL: ATL 32%, DTW 14%
    UA: ORD 23%, IAH 18%

    I¬ím pretty sure AA management know that they are way too exposed, hub cost wise, compared to its main competitors. Thus, they will do every thing to reduce cost, which will unfortunately mean some loss making flights canceled. But the plane will be repurposed to fly more out of DFW and CLT to save more on cost. 😀

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    Quote Originally Posted by DumbWithNumbers View Post
    Source: OAG data for Thanksgiving travel, 11/21/2018:
    Total flights:
    AA: 7500
    DL: 6300
    UA: 5600

    Total Seats:
    AA: 2.10m,
    DL: 1.98m,
    UA: 1.74m

    Flight Concentration at Hubs for each airline:
    AA: DFW 21%, CLT 18%
    DL: ATL 32%, DTW 14%
    UA: ORD 23%, IAH 18%

    I¬ím pretty sure AA management know that they are way too exposed, hub cost wise, compared to its main competitors. Thus, they will do every thing to reduce cost, which will unfortunately mean some loss making flights canceled. But the plane will be repurposed to fly more out of DFW and CLT to save more on cost. 😀
    100% agreed with you, but unfortunately only one day a year doesnít cut it for AAG, thatís why LGA and JFK is on course to close in the near future Mainline & Regional, the numbers are not there anymore so, they are going to save even more on cost. Go ahead, and post the numbers for all hubs and you will see how AAG will be out of New York. More to come.
    Last edited by NoOtPilot; 11-14-2018 at 10:16 PM.

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    Just because you requested it: 😀😀
    AA has 10 hub flying. On 11/21/2018:
    9th: LGA 173 flights
    10th: JFK 106 Flights

    Delta:
    @LGA 269 flights
    @JFK 216 flights

    Not sure about LGA, but JFK sure seems like ready to be pulled the plug on. The only problem is JFK-LAX is AAís highest revenue sector @$880m a year, and BAís LHR-JFK is $1B + revenue sector. AA is forced to stay there just to support those two operations and few business routes. Leisure travel is all shifting to PHL and if that makes no money, itís then getting chopped.

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    Quote Originally Posted by DumbWithNumbers View Post
    Just because you requested it: ����
    AA has 10 hub flying. On 11/21/2018:
    9th: LGA 173 flights
    10th: JFK 106 Flights

    Delta:
    @LGA 269 flights
    @JFK 216 flights

    Not sure about LGA, but JFK sure seems like ready to be pulled the plug on. The only problem is JFK-LAX is AAís highest revenue sector @$880m a year, and BAís LHR-JFK is $1B + revenue sector. AA is forced to stay there just to support those two operations and few business routes. Leisure travel is all shifting to PHL and if that makes no money, itís then getting chopped.
    Agree about JFK, but they can operate some flights as fly-through. Looking for another 1 Billion in revenue next year so dumping that critical transcon would hurt. I suppose they could staff them out of LAX. Sure sounds like their revenue hopes for next year are based on a lot of hope and mud thrown at the wall. Considering the past promises of Parker havenít panned out, I remain skeptical.

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    Quote Originally Posted by DumbWithNumbers View Post
    Just because you requested it: 😀😀
    AA has 10 hub flying. On 11/21/2018:
    9th: LGA 173 flights
    10th: JFK 106 Flights

    Delta:
    @LGA 269 flights
    @JFK 216 flights

    Not sure about LGA, but JFK sure seems like ready to be pulled the plug on. The only problem is JFK-LAX is AAís highest revenue sector @$880m a year, and BAís LHR-JFK is $1B + revenue sector. AA is forced to stay there just to support those two operations and few business routes. Leisure travel is all shifting to PHL and if that makes no money, itís then getting chopped.
    Excellent Job My Friend. Just one minor correction, I believe you are counting 10 hubs because of BOS, and Boston is no longer a Hub, however it is a Crew base. Other than that excellent job. Stay informed, stay smart, and you will always make good choices.👏🏼👏🏼👏🏼
    Now compare all 9 Hubs in terms of #of pax per day and departures per year, put them in order, and tell me if you had to cut hubs to save more, which hubs would you cut, then you will see something very interesting.
    Keep up the good work.

    A very small request.
    Just out of curiosity,
    What is revenue per year for each hub? And compare to 2017. That will be awsome.
    Thanks!
    Last edited by NoOtPilot; 11-15-2018 at 03:02 AM.

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    Quote Originally Posted by NoOtPilot View Post
    Excellent Job My Friend. Just one minor correction, I believe you are counting 10 hubs because of BOS, and Boston is no longer a Hub, however it is a Crew base
    My friend, that hurt ( lol not really).
    10 Hubs in order of number of daily total flights. (I already closed the database, so donít have the exact numbers on hand).
    1. DFW
    2. CLT
    3. ORD
    4. PHL
    5. MIA
    6. PHX
    7. DCA
    8. LAX
    9. LGA
    10. JFK
    (Out of curiousity myself, which one had you forgotten about?)
    As for the other requests, I might look at them when I get back from my few reserve days.
    Last edited by DumbWithNumbers; 11-15-2018 at 05:47 AM.

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    I had few mins to do one of your request. 😀 Please note that these numbers accounts for only departing passengers for 2017 per day average for AA passengers by hub. Numbers below are in 1000 passengers:
    DFW- 78
    CLT-57
    MIA-39
    ORD-38
    PHL-28
    PHX-27
    LAX-22
    DCA-16
    LGA-11
    JFK-9
    IMO, like I said,
    JFK will stay business oriented.
    LGA -mainline only flies to main hubs. Exception: MCO and BOS
    DCA- mainline flies only to hubs and other select destinations. Proximity to DC makes this hub a cash cow and most profitable one.
    LAX- Highest origination traffic market.

    So, the only places cuts can come without worrying investors too much will be from PHX,PHL and MIA.

    MIA and JFK currently are the money losing market.
    Before China route was cut from ORD, those flights, even when operated by the fuel efficient B787 were losing $21,000 per flight. 😀

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    Quote Originally Posted by DumbWithNumbers View Post
    I had few mins to do one of your request. 😀 Please note that these numbers accounts for only departing passengers for 2017 per day average for AA passengers by hub. Numbers below are in 1000 passengers:
    DFW- 78
    CLT-57
    MIA-39
    ORD-38
    PHL-28
    PHX-27
    LAX-22
    DCA-16
    LGA-11
    JFK-9
    IMO, like I said,
    JFK will stay business oriented.
    LGA -mainline only flies to main hubs. Exception: MCO and BOS
    DCA- mainline flies only to hubs and other select destinations. Proximity to DC makes this hub a cash cow and most profitable one.
    LAX- Highest origination traffic market.

    So, the only places cuts can come without worrying investors too much will be from PHX,PHL and MIA.

    MIA and JFK currently are the money losing market.
    Before China route was cut from ORD, those flights, even when operated by the fuel efficient B787 were losing $21,000 per flight. 😀
    Cool, I will PM you some numbers soon. And you are correct, on the 10 hubs, those are the same I have, but not in the same order. I have them in order by departures per year.

    DFW
    CLT
    ORD
    PHL
    MIA
    PHX
    DCA
    LAX
    LGA
    JFK

    Enjoy your days off.
    Last edited by NoOtPilot; 11-15-2018 at 08:14 AM.

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    While we’re at it, can anyone list the airlines that have successfully shrunk to profitability becoming long-term stand alone competitors to this day ?

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    Delta.
    When they merged with Northwest they initially shrunk from all other bases (Memphis and Cincinnati fared worst) to focus flying out of ATL.
    Yes, Delta has started growing its other hubs significantly past few years after starting to stagnate at ATL. But even then ATL accommodates 31% of all Delta and its regional flights.

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    Quote Originally Posted by DumbWithNumbers View Post
    Delta.
    When they merged with Northwest they initially shrunk from all other bases (Memphis and Cincinnati fared worst) to focus flying out of ATL.
    Yes, Delta has started growing its other hubs significantly past few years after starting to stagnate at ATL. But even then ATL accommodates 31% of all Delta and its regional flights.
    I said “stand alone”, not the result of a merger. Historically, airlines don’t shrink to profitability successfully. There’s a reason AA has deferred and/or will cancel orders of past fleet acquisitions and that it is slowly, but steadily outsourcing the AA product to others.

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    Iím sorry, I though we were still talking about AA and itís business model. But no Delta would not fit that ďStand AloneĒ bill. That belongs to Spirit.
    March, 2007, Spirit started to shrink both its fleet (to get rid of its old MD80s) and reduced its operations significantly from DTW to transition from low cost Hub and Spoke model to Point to Point Ultra Low Cost Model.
    Yes, they did shrink after they ordered 30 Airbus A320 in 2006 for delivery to begin in March 2010. So until that new order started delivering, they were on a shrinking phase for 3 years to reduce cost. And then they have grown up again, to now become the most profitable airline in US by profit margin of 15%.

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    Quote Originally Posted by DumbWithNumbers View Post
    I’m sorry, I though we were still talking about AA and it’s business model. But no Delta would not fit that “Stand Alone” bill. That belongs to Spirit.
    March, 2007, Spirit started to shrink both its fleet (to get rid of its old MD80s) and reduced its operations significantly from DTW to transition from low cost Hub and Spoke model to Point to Point Ultra Low Cost Model.
    Yes, they did shrink after they ordered 30 Airbus A320 in 2006 for delivery to begin in March 2010. So until that new order started delivering, they were on a shrinking phase for 3 years to reduce cost. And then they have grown up again, to now become the most profitable airline in US by profit margin of 15%.
    Airlines that successfully Shrink to profitability become profitable as a direct result of shrinking, immediately upon shrinking, not years later when they might become profitable through later expansion and market conditions. THAT was my question. I think you are muddying up that argument just a wee bit. Spirit as you point out shrank "to reduce cost" and that means they felt they needed to cut losses. I think history proves if that benefits at all, it's temporary. If they stop the bleeding and then re-expand years later and show a profit (as all carriers are right now), I assert those two situations although gradually consecutive were not inter-related. But for arguments sake, let's say they are in Spirit's case, OK ?

    In that situation, what pilots benefit ? Pilots at Spirit or pilots at other affiliated or non-affiliated carriers ? In Spirit's case, the pilots at Spirit benefit. If AA "shrinks" by outsourcing to regionals with expensive long-term investment (meaning those assets and jobs aren't going back to where they came from anytime soon), how does that benefit AA pilots or future Envoy flows ? Good for non-flows, sure. How about Domestic and International code-sharing ? Those jobs (and associated job security) go and likely long-term, if not permanently. Comparing Spirit to AA is apples and oranges in this way. My hats off to Spirit and their pilots though as they seem to be reversing their previous toxic labor relationship and in fact, the present Spirit CBA has critical areas superior to AA pilots CBA. As for business models, this is really a service industry that uses tools to provide a service and the most important part of that is people, so you cannot discuss an airlines "model" without including its primary asset.

    As for AA's business model ? Considering AA is morphing toward Spirits model, it's to be expected AA has to shuffle its product around to make best use of assets. But, AA doesn't have the liquidity, assets or flexibility to expand like Spirit can now or in the future as if they could, they would. Especially under these economic conditions. If they can't do it now, how could they when things get worse and maybe MUCH worse ? If Spirit merges with say..........Frontier, JetBlue or both, along with growth abilities they have AA doesn't or won't pursue, they could be even bigger then AA domestically and AA will no longer by the largest LCC in the U.S. Can AA merge or grow to compete in someone else's yard like the others can and/or will ? Doesn't look like it. As this latest "shuffle" shows, their penchant seems to be avoiding direct competition outside strongholds for the foreseeable future using outsourcing and the flexibility and resources of other non-AA affiliates and non-affiliates as the preferred transition. Again, maybe or maybe not good for AA, but not good for AA pilots.
    Last edited by Beagleboy; 11-15-2018 at 01:33 PM.

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    You lost me again with the long post. Try keeping it short for me if you donít mind.
    Iím lost mainly because you asked about shrinking at AA and I gave example of Delta. Then you re-emphasized Stand Alone and I gave example of Spirit. But then you come up with real long post with your as always pessimism. So to conclude this long back and forth, let me just say, you are right. Wherever you are working, Iím sure you made a great Choice since you seem to know it all. Cheers mate! 🍻

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    Quote Originally Posted by DumbWithNumbers View Post
    You lost me again with the long post. Try keeping it short for me if you don’t mind.
    I’m lost mainly because you asked about shrinking at AA and I gave example of Delta. Then you re-emphasized Stand Alone and I gave example of Spirit. But then you come up with real long post with your as always pessimism. So to conclude this long back and forth, let me just say, you are right. Wherever you are working, I’m sure you made a great Choice since you seem to know it all. Cheers mate! ��
    Well, my response was three paragraphs. But, I understand for some that's too much. I suppose we'll have to severely curtail our future discussions. I'll factor that in to my future comments and angle them to others to serve us both better. Anyhow, my apologies as you've said this before and I should have picked up on it. I could go into more detail on the subject, but clearly that would be pointless. Suffice it to say, we'll just have to disagree on what the true meaning of "shrinking to profitability" means in the airline industry and its historical results and as far as AA's success with its chosen business model, time will tell that story to all. Cheers back !

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    Quote Originally Posted by DumbWithNumbers View Post
    I had few mins to do one of your request. 😀 Please note that these numbers accounts for only departing passengers for 2017 per day average for AA passengers by hub. Numbers below are in 1000 passengers:
    DFW- 78
    CLT-57
    MIA-39
    ORD-38
    PHL-28
    PHX-27
    LAX-22
    DCA-16
    LGA-11
    JFK-9
    IMO, like I said,
    JFK will stay business oriented.
    LGA -mainline only flies to main hubs. Exception: MCO and BOS
    DCA- mainline flies only to hubs and other select destinations. Proximity to DC makes this hub a cash cow and most profitable one.
    LAX- Highest origination traffic market.

    So, the only places cuts can come without worrying investors too much will be from PHX,PHL and MIA.

    MIA and JFK currently are the money losing market.
    Before China route was cut from ORD, those flights, even when operated by the fuel efficient B787 were losing $21,000 per flight. 😀
    2018 per day average for Mainline & Regional passengers by hub.

    DFW. 62,692. 23%
    CLT. 48,522. 18%
    MIA. 35,335. 13%
    ORD. 30,931. 12%
    PHL. 26,881. 9%
    LAX. 21,643. 7%
    PHX. 18,745. 6%
    DCA. 10,373. 3%
    JFK. 9,997. 3%
    LGA. 7,222. 2%
    BOS. 5,985. 2%

    Letís compare 2017 vs 2018
    Why do we keep losing passengers to the competition?
    Last edited by NoOtPilot; 11-15-2018 at 05:28 PM.

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    Nice. I have no idea why. What date range are you looking at? Out of curiosity where did you get that data from?

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    Quote Originally Posted by DumbWithNumbers View Post
    Nice. I have no idea why. What date range are you looking at? Out of curiosity where did you get that data from?
    Born at night, but it wasn’t last nite. Don’t worry is 100% reliable
    (just facts), My Friend. That’s how we roll.
    Last edited by NoOtPilot; 11-15-2018 at 06:20 PM.
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