American Kills St Louis, Strengthens Other Hubs

Yesterday, American announced a massive change to its route strategy that will result in the death of the St Louis hub. At the same time, the rest of the hubs will be strengthened. I feel like the sleeping giant finally woke up from a long nap. So far, I like what I see.

Apparently, American has decided that it has four hubs these days. I knew about Miami, Dallas/Ft Worth, and Chicago/O’Hare, but now they are also calling New York/JFK a hub. As they say, “These four cities, along with Los Angeles, serve as the cornerstones of the Company’s network.” So that is where things will be strengthened. Meanwhile, St Louis gets gutted. Let’s start with the biggest news and then move on from there.

St Louis – Death of the Hub – The old TWA hub in St Louis will finally receive a stake in the heart. After this culling, there will be only 36 flights a day to nine cities. Talk about an empty airport. Instead of listing the massive number of cities losing service, I’ll just explain which ones keep it. There will be flights from St Louis to the five focus cities (four hubs plus LAX) as well as Boston, New York/LaGuardia, Seattle, and Washington/National. That’s it. If you’ve ever wanted to see a ghost airport that’s technically still in use, this is it.

St Louis Mayor Francis Slay thinks American is making a big mistake. Will any other airlines agree with him? We’ve seen Southwest recently add flights to Boston and Midwest just picked up the St Louis – Milwaukee run. I doubt we’ll ever see St Louis as a hub again, but this could open up some opportunities for limited additional flying for other airlines.

American Pulls Down St Louis, Fights United in Chicago

Chicago/O’Hare – Watch Out, United – O’Hare is the only other airport seeing significant changes, and these all appear to be aimed at United. The airline will add 57 new flights here, and I have to assume that these will be accommodated by taking over Delta’s old L concourse. New cities include Beijing, Vancouver, and Calgary internationally and Allentown, Anchorage, Charleston/WV, Dayton, Fargo, Harrisburg, Honolulu, Jacksonville, Lexington, Rapid City, Wilkes-Barre/Scranton, and Sioux Falls.

Nearly every one of these cities (with the exception of Anchorage and Rapid City) is served nonstop by United today. So United, watch out. American is gunning for you again. Anchorage is served by Alaska, and they seem to be moving closer to Delta, so this isn’t a huge surprise to see American distance itself further.

O’Hare will actually lose 11 daily mainline flights, but it will gain 41 small regional jet flights and 27 CRJ-700 flights. The CRJ-700 fleet will now be focused on O’Hare. American will order more of them for Eagle, and they will be getting First Class onboard. This is clearly meant to offer a more competitive product to United’s 70 seat jets with First Class.

Dallas/Ft Worth – Shuffling in Place – Dallas actually doesn’t see much of a route change here except for the addition of flights to San Salvador. The bigger change is around shuffling aircraft. Dallas will have 19 net new flights. Twenty three of those will be on small regional jets, five will be on props, and 17 will be on mainline jets. So how do we get to only 19? Well, 26 daily CRJ-700 flights will disappear as they refocus that plane in Chicago to compete with United.

Miami – Small Boost – New flights from Miami to a few cities in the Bahamas, Knoxville, and Charleston/SC have already been announced, so the only new cities to come online in this announcement will be Birmingham and Pensacola. There will be a net increase of 23 daily flights with 5 mainline jets, 10 small regional jets, and 8 props. Miami has seen a lot of shifting lately with the retirement of the A300s, so this is just more settling, I think.

New York/JFK – Hub It Up – I had never actually heard American call JFK a hub, but now it looks like they’re ready to do so. Does this mean they’re going to take on Delta for supremacy? Not exactly. The only changes so far involve adding 7 daily flights to Austin, Columbus, and St Louis domestically with Madrid, Manchester/UK, and San Jose/CR internationally. The Madrid and Manchester flights are in anticipation of the strengthening of the alliance with British Airways and Iberia. St Louis is just connecting the dots since it only goes to LaGuardia today.

Los Angeles – Not Much – LAX gets 1 new mainline flight, 1 new regional jet flight, and no new destinations. Pfffft.

Other Random Changes – There are also a couple other random changes as they try to reshape the network. Raleigh/Durham will lose St Louis (duh) along with Hartford and Columbus. Boston, meanwhile, will lose flights to Columbus and San Diego. San Juan will gain flights to Nevis, the little island paradise.

Whew, that’s a lot of changing. So far, I like what I see here. We knew the St Louis hub was in trouble as it continued to shrink, and really, this is the end of the TWA legacy from the acquisition. (TWA will still live on via the old London/Heathrow route authorities, I suppose.)

Getting more CRJ-700s and putting First Class on them is a big move as well. It’s clear that United is a big focus here. The death of St Louis has caused American to look at building its hubs up into stronger entities. I think that’s a smart move. American looks like it’s ready to fight, and now that they’ve raised a bunch of new cash, they’re well-positioned to do just that.

30 Responses to American Kills St Louis, Strengthens Other Hubs

  1. David SFeastbay says:

    The one big advantage to STL being a hub is just looking at a map and seeing its in the middle of the country. Makes for great connecting feeds from cities north, south, east, and west as TWA knew. Seems odd that AA would rather spend money fighting UA in ORD instead of keeping STL almost to themselves. Guess they figure they have a better chance of hurting UA in ORD then WN in STL.

  2. b757capt says:

    Not to mention the fact that STL added a new runway a few years ago to help with delays. Looks like that won’t be needed.

  3. TMOliver says:

    The death of STL should not have been unexpected, only the lengthy passage of time since AA picked up the fragments left from TWA. STL simply doesn’t generate the type/number of boardings which AA sees as contributory to long term revenue goals.

    At some point, the new DL should be expected to rethink continuing hub status for one or more of the NW hubs (or one of its own).

    In future corporate planning (and expecting that mergers/acquisitions will continue), “Hub” status will require more than a convenient, cost effective venue for connecting flights, but the local capacity to provide a solid corps of local passengers originating/arriving.

    Where will the next disestablishment occur?

  4. David says:

    With hindsight, what did American really gain in the long term when it took over TWA ?

  5. David SFeastbay says:

    Off topic but I just read where you were quoted in a yahoo travel story today called.

    8 Things an Airline Would Never Tell You

    Mister Cranky is popping up everywhere these days.

  6. Wonko Beeblebrox says:

    Did I read this correctly?

    AA restarts up flights Chicago->Anchorage just after the _end_ of the summer season?

    SmAArt thinking there, guys…

  7. Casey says:

    Wow the SAN-BOS flight was short lived….guess we’re back to just JetBlue for that non-stop

  8. Gary Leff says:

    TWA’s two big problems were

    (1) cost structure — they paid below average wages but had above average costs as a result of draconian work rules, American solves those by acquiring the carrier through bankruptcy

    (2) St Lous hub – a shrinking city with shrinking business base, they simply didn’t have the full fare traffic of other major hub cities.

    Hubbing in STL was simply not a good business model, just not enough high yielding O/D traffic.

    Chalk TWA up as another poor AA AAcuisition. It was high time they realized and killed it.

  9. SirWired says:

    One of the “rules” that makes hubs work is a fair amount of local traffic. STL can’t provide it. ORD can, end of story. Also, while STL is geographically in the center of the country, I think ORD is probably closer to the major population centers. The ones it is farther away from are acceptably covered by DFW.

    Though I suppose the “rule” isn’t real hard-and-fast… I have to say I am continually baffled as to why NW kept both MSP and DTW as hubs. Neither city is exactly a gigantic metropolis at the moment (and DTW getting less so by the day), and they aren’t terribly far from each other.

  10. gobluetwo says:

    @ David SFeastbay:

    Saw Cranky quoted in that article as well, along with Randy Petersen

  11. kaszeta says:

    I’m tempted to go back to STL just to take more photos. On my last trip there in 2007 I tried to catch an early SW flight, and didn’t make the early flight, so I had 4 hours to roam around STL. I took several pics (http://www.flickr.com/photos/kaszeta/787660804/ for example) of the “Concourse of Despair”, the empty except for one lone Midwest gate D concourse, from which they were starting to remove the furniture.

    Pretty soon the whole airport will look like that.

  12. JayB says:

    Perhaps this guy Cranky could put a litlle column to the right here, highlighting his upcoming appearances for us loyal readers?

    “Cranky will be throwing out the first pitch, dropping the ceremonial puck, appeaing on…this…discussing…! He’s sad to report his meeting with the President has been cancelled due to a conflict in his (Cranky’s) schedule. The dinner meeting with the Secretary of…is still on! He’s off next week tending to property matters in French Polynesia! Enjoy!”

    Oh, remember way back when!

  13. UT Flyer says:

    I realize it’s a small technicality, but it’s not really correct terminology to refer to UA’s Explus aircraft as “70 seaters.” In fact, UA operates Explus on two aircraft type: the ERJ 170 (70 seats including 6 F class) and the CRJ-700 (66 seats including 6 F class).

  14. David SFeastbay says:

    kaszeta wrote:

    e empty except for one lone Midwest gate D concourse, from which they were starting to remove the furniture.
    Pretty soon the whole airport will look like that.

    Ah for the good old says of every gate in concourses B,C,D filled with TWA planes coming and going. That people mover thing going back and forth between C and D. Nonstop flights to LGW, CDG, and FRA boarding. 747 to HNL, L10′s and 767′s jetting off around America.

    But like was said, there will be a lot of empty space and an airport ready to do what it can to lure other/new airlines. Who knows, maybe one day Family Airlines will dominate the midwest with an all 747 STL hub.

  15. Scott says:

    Perhaps they’ll buy QX(AS)’s old CRJ700s. QX want to move to all Q400

  16. Pingback: St. Louis loses Hub Status | Flight Wisdom

  17. Thomas Schellingerhout says:

    Yes it is dismal for STL. However, let me poise an alternative theory. American bought TWA to kill a competitor to their money-losing Chicago operation. This last action is just the final completion of that. Slowly SW is expanding routes in STL, up to 25 nonstop routes today and I am sure will pick up more now. SW has always been a better freind to St. Louis than American and now most St. Louisians will finally realize it. I predict in 3 years, American will only fly to Dallas, Miami and Chicago and SW will pick up all the rest. And to American’s reinforcing fortress hubs where the trend is an ever expanding point to point flying (one of the reasons SW is killing American in their markets) and not have the cost inefficiences of staffing large hub operations—good luck with that American. I will see you out of business in 5-7 years.

  18. Jacob says:

    My parents live in Springfield Il. My Dad flies often from there and used to, when it was an option, always connect thru STL. The reason was simple; ORD had too many weather and/or volume delays. When my Dad was due home in the evening, via STL, my mother could plan a warm dinner on the table for him. When Dad was due home in the evening, via ORD, my Mother learned to not even bother making dinner -his arrival time was to unpredictable. Gotta love O’Hell International. At least the Cards are putting the beat down on the Scrubs….er..I mean Cubs.

  19. Julian says:

    I live in St. Louis and have to disagree with the statment that St. Louis didn’t provide enough service to American. In fact, American spokeman themselves even stated that it wasn’t the market in St. Louis that contributed to this decision. I don’t hardly call a major metropolitan area with 2.8 million people a ghost town who doesn’t like to travel. But Compared to Chicago with a metro population of close to 9 million, I would have done the same thing. You’re looking at an Airline who’s on he verge of avoiding bankrupt. But St. Louis is a vilable market. If it were not so then Air China wouldn’t be strking a deal with city officials to make St. Louis their North American trading hub (check the news before you throw out bad information). We’ll never lose hub status. Just as sure as American leaves, someone else will come in……watch.

  20. RD says:

    My understanding with leaving St Louis has to do with AA needing to try and make the OneWorld alliance more competitive. None of its partners service St Louis and they need to look for more synergies with this airline grouping. I can assure you this decision was not taken in isolation as it is moving to strenghten the OneWorld alliance because that is where the battle lines are now being drawn. St Louis plays no part in this.

  21. CenILguy says:

    Kaszeta – the D concourse is now closed with the exception of the first and last gates (Frontier and USA3000). Aside from cost and complaints by airline management, I think the airport should have moved the A concourse carriers over to D as it should have saved money in the long run.

    AA didn’t want STL to begin with – even after the “merger” (their words until the papers were signed), all 3 concourses were packed and if you didn’t have a reserve seat, good luck getting one! Even their own employees in ORD/DFW were PO’d with the initial raping in 2003 because it put to much pressure on those 2 cities. ORD was bad enough with delays prior to 2003, but does anybody remember how much worse it got after the STL downsize? AA denies they caused it but those extra flights had to go somewhere.

  22. CF says:

    Ok guys – I’ve been busy with other things, so I’m just getting caught up on comments. Great discussion here.

    TMOliver wrote:

    Where will the next disestablishment occur?

    Good question – I tend to think that Cincinnati should be the next one, but that certainly doesn’t mean it’ll happen.

    David wrote:

    With hindsight, what did American really gain in the long term when it took over TWA ?

    Well they had this grand plan of focusing the locals in Chicago and then flowing all the cheap crap over St Louis. That plan failed from day 1. So effectively they just got rid of a competitor and did nothing with it – American has a great track record of doing that over and over again. (Air Cal? Reno Air?)

    David SFeastbay wrote:

    Off topic but I just read where you were quoted in a yahoo travel story today called.
    8 Things an Airline Would Never Tell You

    Ah yes, that was an interview I did with BudgetTravel, and I guess Yahoo picked it up. Cool.

    Wonko Beeblebrox wrote:

    Did I read this correctly?
    AA restarts up flights Chicago->Anchorage just after the _end_ of the summer season?
    SmAArt thinking there, guys…

    No, most of these new flights won’t take effect until March/April/May 2010. I think it’s probably a safe bet that the Anchorage flight will start toward the end of that time period.

    SirWired wrote:

    Though I suppose the “rule” isn’t real hard-and-fast… I have to say I am continually baffled as to why NW kept both MSP and DTW as hubs. Neither city is exactly a gigantic metropolis at the moment (and DTW getting less so by the day), and they aren’t terribly far from each other.

    These are surprisingly distinct markets, I agree. But it seems to have worked for the airline. Detroit covers all those smaller rust belt cities through the Ohio/Pennsylvania/New York State areas. Minneapolis covers the upper Midwest – the Dakotas, Minnesota, Wisconsin, etc. It seems like they wouldn’t be necessary, but they both do have strong corporate bases (despite the exodus from Detroit city – there is still business in the ‘burbs). Those American automakers bring a lot of travel, even when they’re perilously close to death.

    JayB wrote:

    Perhaps this guy Cranky could put a litlle column to the right here, highlighting his upcoming appearances for us loyal readers?

    Hah. I do put links to everything online in my Saturday post (I covered this one last week, I think). But I will be in London soon. Once I know my itinerary, I’ll see if I have to possibly meet anyone over there for a pint or two. (No promises, just keeping my fingers crossed I have time.)

    UT Flyer wrote:

    I realize it’s a small technicality, but it’s not really correct terminology to refer to UA’s Explus aircraft as “70 seaters.” In fact, UA operates Explus on two aircraft type: the ERJ 170 (70 seats including 6 F class) and the CRJ-700 (66 seats including 6 F class).

    So how would you refer to them? Those not quite 50 and not quite 90 seat airplanes? I’m not going to call them the Explus aircraft because nobody knows what that is. So if you have a better way of referring to them, I’m all ears.

    Thomas Schellingerhout wrote:

    And to American’s reinforcing fortress hubs where the trend is an ever expanding point to point flying (one of the reasons SW is killing American in their markets) and not have the cost inefficiences of staffing large hub operations—good luck with that American. I will see you out of business in 5-7 years.

    The death of the hub and spoke model has been predicted for years, but it will never happen. How can you get from Springfield to Bakersfield? You’ll never get point to point service everywhere so hubs are here to stay.

    Jacob wrote:

    When Dad was due home in the evening, via ORD, my Mother learned to not even bother making dinner -his arrival time was to unpredictable. Gotta love O’Hell International. At least the Cards are putting the beat down on the Scrubs….er..I mean Cubs.

    True, but O’Hare is actually much, much better now that they’ve opened their newest runway. Take a look at delays – O’Hare doesn’t really see very many anymore. The new runway combined with lower traffic has been great for that place.

    Julian wrote:

    I live in St. Louis and have to disagree with the statment that St. Louis didn’t provide enough service to American. In fact, American spokeman themselves even stated that it wasn’t the market in St. Louis that contributed to this decision. I don’t hardly call a major metropolitan area with 2.8 million people a ghost town who doesn’t like to travel. But Compared to Chicago with a metro population of close to 9 million, I would have done the same thing. You’re looking at an Airline who’s on he verge of avoiding bankrupt. But St. Louis is a vilable market. If it were not so then Air China wouldn’t be strking a deal with city officials to make St. Louis their North American trading hub (check the news before you throw out bad information). We’ll never lose hub status. Just as sure as American leaves, someone else will come in……watch.

    I would expect to see some other airlines step in to fill the void here with some flights, but I would be really surprised to see a full-fledged hub operation ever come back. St Louis is a declining city like many places in middle America. If American said that St Louis had nothing to do with the decision, they’re full of crap. You don’t just walk away from a profitable hub operation. They clearly didn’t like what they saw and didn’t see a way to make it work. I don’t know who else would step in to form a hub. Note, I’m not saying that St Louis doesn’t deserve service. There is still demand there. There’s just not enough to support a hub.

    RD wrote:

    My understanding with leaving St Louis has to do with AA needing to try and make the OneWorld alliance more competitive. None of its partners service St Louis and they need to look for more synergies with this airline grouping. I can assure you this decision was not taken in isolation as it is moving to strenghten the OneWorld alliance because that is where the battle lines are now being drawn. St Louis plays no part in this.

    These moves were definitely aimed at strengthening oneworld, but they could have kept St Louis around if it was a good market regardless of the alliance situation.

  23. A says:

    SirWired wrote:

    I have to say I am continually baffled as to why NW kept both MSP and DTW as hubs.

    I hear comments from out-of-towners all the time who are astonished at the size of the MSP hub. What most people don’t realize is that Minnesota actually is home to a broad base of Fortune 500 companies. Actually more than some larger states like Florida, for example. This brings in a lot of O/D traffic. Also a company like a Target or Cargill generates a lot of high profit international traffic.

    From what I’ve seen of STL, they just don’t have the business base to support a hub, even though metro population is about the same as MSP.

  24. I hate how AA uses NYC so much. it’s the worst place to fly out of….

  25. UT Flyer says:

    So how would you refer to them? Those not quite 50 and not quite 90 seat airplanes? I’m not going to call them the Explus aircraft because nobody knows what that is. So if you have a better way of referring to them, I’m all ears.

    **********
    I see your point. I suppose I just refer to them as what they are: CRJ700/ERJ170. I’ve never really understood referring to a type by the number of seats since it can vary from carrier to carrier. You don’t often hear anyone referring to CO’s 173 seaters. You hear them refer to the 737-900. Like I said, small technicality, but one that’s always confused me a little.

  26. Zack Rules, Albany, NY says:

    Cranky
    Did AA acquire Delta’s old gates in Concourse L in order to better facilitate this expansion? I believe there are/were six of them.
    VX wanted to get at least one of those in the worst way.

  27. CF says:

    Zack Rules, Albany, NY wrote:

    Cranky
    Did AA acquire Delta’s old gates in Concourse L in order to better facilitate this expansion? I believe there are/were six of them.
    VX wanted to get at least one of those in the worst way.

    I asked American for comment on this and they say the gates are still controlled by Delta. In other words, nothing has happened yet, but they are interested.

  28. Zack Rules, Albany, NY says:

    @ CF:
    Thanks CF!

  29. Allen says:

    I’m with CF + others in that I doubt we’ll ever see anything in Saint Louis approaching what TWA did there with a hub. It’s not that there won’t be hubs. The problem is that for too many markets, point to point carriers can cherry pick the money making routes.

    Is Fargo really big enough for another airline? Allegiant’s already picking off some connection traffic with some occasional direct flights. And then there’s Frontier, UAL, and Northwest. I realize Fargo has a huge Microsoft campus and that Hector International has the capacity but it seems like a bit much for a metro area of 200k.

  30. Julian says:

    @ A:
    I would disagree that St. Louis doesn’t have the company base to support a major hub. Again, do your homework before you start throwing out statistics. St. Louis is the world headquarters for Scottrade, Edward Jones, Emerson Electric, Monsanto, Engergizer, Enterprise Rent-A-Car, Express Scripts, Brown Shoe Co., and several companies with regional headquarters as well. Even with the buy out of Anheiser Bush, In Bev has positioned their North American headquarters at the old Brewery downtown St. Louis. While I equally agree that the days of TWA are long gone and will never been seen in St. Louis again, however there’s no reason it can’t be a hub airport. Sorry….but I gotta defend my hometown! People under estimate St. Louis. It’s not a ghost town, nor a bad place to live.

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