I know I just wrote about this last week, but the schedules for American’s new flying at New York/LaGuardia airport have been filed. It’s time to dive in a little deeper.
I realize this may seem like a relatively small addition to the schedule, but the network moves that the new American makes are going to be hugely important to the success of the airline. And this is the biggest move we have to analyze so far. So, what do they tell us? Well, first, all of these flights will be operated by American Eagle Airlines (soon to be Envoy) with single-class ERJ-145 aircraft. The lone exception is Little Rock which gets a CRJ-700. But aircraft type isn’t really the division between market types here. It’s all about frequency.
On the one hand, we have the larger markets with multiple daily flights. I’m talking about Dayton, Greensboro, Louisville, Norfolk, and Richmond. Each of those will have 3 a day during the business week except for Richmond which will have 4. These markets were, as I had thought, designed for the business traveler in the smaller city.
Dayton, for example, has flights out at 615a, 1055a, and 450p. The returns are at 830a, 229p, and 840p. In other words, if you want to do a day trip from Dayton to New York, you can. But if you’re trying to do a day trip from New York to Dayton, that won’t be nearly as easy. The only other nonstop in this market is Delta with a 740a flight out of Dayton and a 720p back, both on ERJ-145s as well. That’s clearly less preferable. And while American will use ERJ-145s without a premium cabin, the competition doesn’t have one either. Schedule should triumph here.
In Greensboro, Norfolk, and Richmond, it’s a different story. The schedule pattern is similar, but the competition is different. Delta has 4 daily flights to Greensboro, 3 to Norfolk, and 5 to Richmond, all on 2-cabin aircraft. I would imagine it will be a lot harder to pull people off Delta if you’re American.
In Louisville, the airlines have a similar schedule though US Airways has a 630p return and that’s an hour later than anything Delta has. Also, Delta has ERJ-145s on the route, so no premium cabin will be available on either airline. This one is something of a toss-up.
The other type of market here is the single-daily operation. That’s Charlottesville, Knoxville, Little Rock, Roanoke, and Wilmington.
In Charlottesville and Wilmington, Delta has a morning flight to New York with an evening return. But American will just have a mid-day flight down that turns back to New York in the early afternoon. In Knoxville, Delta has a morning and evening roundtrip but American will have only an afternoon roundtrip. American appears to be at a disadvantage here for a day trip, but the different schedule timing might end up making American the preferred carrier for at least some travelers.
Little Rock and Roanoke are different in that there is no nonstop competition. American should instantly become the preferred carrier on these routes. That’ll be especially true in Little Rock since a premium cabin will be on that airplane (even if it is a CRJ-700).
So in these moves, I see a mixed bag. There are some markets where the schedule is different enough that American should be able to make a real dent. But there are others where it would seem like it would be tough to pull people away from Delta. I’m curious to see what works and what doesn’t.
But there’s another piece to this story, and that involves slots at LaGuardia. American and US Airways combined had 183 slot pairs at LaGuardia. Each slot pair is good for a daily departure and arrival. Now, 5 of those were already leased out, and those had to be given up. In addition, American had to shed 12 slot pairs that it was using. That means it can run up to 166 daily flights when all is said and done.
Looking at Monday, February 24, the new American will run 177 daily flights, so that’s one less than it’s allowed. But when we look at a Monday in May, May 19 to be exact, American is still at 174. It needs to cut 8 more flights. Here are the markets that see changes between those dates so far:
|Market||Feb 24||May 19||Difference|
|Charlotte||17 US, 4 AA||13 US||-8|
|Miami||14 AA||11 AA||-3|
|Nashville||6 AA||4 AA||-2|
|West Palm Beach||2 AA||0||-2|
|Detroit||6 AA||5 AA||-1|
|Toronto||8 AA||9 AA||+1|
|St Louis||4 AA||6 AA||+2|
|Chicago/O’Hare||14 AA||17 AA||+3|
You’ll notice that Charlotte took a big cut, but that’s to be expected. That was the only market where both airlines flew against each other from LaGuardia. There was no need for the level of capacity in that market. And things like Miami could simply be a function of seasonality. But ultimately, there are 8 more flights that have to go. It might seem easy to cut one or two flights from every city with more than 10 daily flights, and you’d be good to go. Maybe that’s what we’ll see. Or maybe there will be some more strategic cutting.
Clearly this is all a work in progress, but it’s a very interesting piece of work, to say the least.
I agree with your perspective on LGA, but I’m still perplexed that ATL was cut completely. Seems like an important business market to remain a player, even at a minimum level.
agreed, ATL and MSP could both have been served 1x or 2x daily just to keep the loyal business travellers.
Im surprised ORD is gaining 3 flights. There is so much competition and capacity in that market, that its hard to believe those are the best use of slots.
Agreed. Seven nonstops to ATL could be seen as heavy especially considering the competition. So why not reduce to 2 or three timed for business needs?
DL makes DFW-LGA and ORD-LGA work, not sure why AA can’t in ATL!
DL/Noah – 1 or 2 daily isn’t going to keep any business traveler satisfied. They need a lot more than that to be competitive. But that would only make sense if American was really trying to serve every big business market from New York. I remain convinced that American’s plan is to serve New York from the cities that have the demand and not the other way around.
As for O’Hare, I imagine it’s just a seasonal thing. Not quite sure, but those kinds of things flex up and down between the hubs.
I am very surprised by the lack of 2 class cabin. A lot of Americans regionals getting bigger equipment I was expect a different plan of action. Maybe things will be different in the future. Why did the drop Atlanta I know delta has it locked down but to completely give it seems crazy?
Interesting that ATL and MSP get the goose egg but Detroit keeps 5 flights. I wouldn’t think that DTW is any less of a fortress hub so AA clearly isn’t opposed to some direct competition with Delta. Do you think it’s the way the airport terminals are set up? Delta’s McNamara terminal in Detroit is far more isolated from the other airlines terminal than either MSP or ATL is.
A – Good point on Detroit, but maybe American has contracts with the Big 3 automakers that mean keeping that route makes sense. A couple of huge corporate deals can make it worthwhile.
Plus, Detroit has no 1 stop option and high fares. >$1400 for less than 1 week business fares where MSP has strong flow through Chicago to keep things in check.
AA’s LGA-Detroit has been around since the 80’s. AA added it in retaliation for Northwest I believe and it may still be profitable after all these years. MSP and ATL were added only a new years ago so I doubt they ever came close to making money.
Some may think one flight a day isn’t worth it, but if you make money on one flight and no money on two flights a day, then you really don’t need two flights.
I find it bizarre that AA has chosen to use 45 seat regional aircraft at a substantial airport which has little or no spare slots, is heavily favoured by the business community in the wealthiest city in N America and whose slots are considered valuable. Says to me that AA are frankly abusing the slots and should be able to find something else which is more profitable andcarries more passengers.
Traditional corporate theory says that if a company can’t find a more profitable use for an asset than selling the asset, then they are doing something wrong. Short term, maybe AA want to plan more carefully as to how to use the LGA slots, but long term ERJ 145s at LGA is just lame.
David – Not sure how you can say that other options would be more profitable. Do you have any proof of that? Certainly bigger airplanes in bigger markets would serve more people, but it wouldn’t necessarily be profitable. If there’s enough demand for smaller jets in smaller markets, then I’m all for it.
As a Delta loyalist I hate this. It is already expensive to fly to ATL and MSP, this will just make it worse. The only hope is that exorbitant prices to DFW (and DAL) might fall.
Brett – you forgot about the dozen plus or so slots that are being used for the PHL flights!
PHLLAX – I didn’t forget about those at all. But there is no change in frequency between Feb and May so it, like many other markets, wasn’t listed.
Very good point on wasting slots on aircraft with fewer than 50 seats. If the marketplace will support full-size jets (as LGA certainly does), it might make sense to have a minimum-seating requirement to hold a slot, just as SNA requires a minimum noise profile to maintain a slot.
I have a feeling that will all the larger regionals on order for Envoy that these routes will be up-gauged over time.
The amswer to this, without annoying the neighbours with noise, is to change the schedule of airport charges for commercial passenger aircraft – in effect a form of economic rationing. If small 45 seaters cost almost as much as a B737 / A320, then airlines very quickly either sell the slots or upgauge aircraft size.
In essence this is what LHR does, as the fee structure is related to aircraft weight and noise. Given the cost of slots, you don’t see very many 50-seaters or even 2-cabin regional aircraft at LHR.
Could the same be done at LGA? Sure. Or AA/US could stop running Dash-8’s to PHL every 15 minutes and we’d be ok.
LHR doesn’t see anything smaller than a B737 / A320 unless it’s from a foreign Govt !
Even LGW has priced out anything smaller than 100 seats. Quite why LGA needs so many 40-50 seat aircraft I don’t know…
I am wondering how many passengers already take the routes that AA is adding. I fly DAY-NYC maybe about once every two months and never has it been more than 2/3rd full (on a Monday morning). I know Delta used to do 3 DAY-JFKs and there was never more than 10 people on the plane.
So let me follow this, Parker gets his hands on AA’s larger number of slots at LGA, and instead of competing with DL by adding service to secondary business markets like IND instead opts to restart service to these same tiny markets that were deemed unsustainable when US was operating them 2 years ago?
Sheer brilliance in action.
Whats next, giving LGA-DFW to Mesa ? LGA-ORD on Air Whisky CRJ-200’s?
I fear AA has come down with a terminal case of America Westitis…
But its a different company with a different situation. AA can capture more market share at the spokes because it has both a way to feed traffic west (ORD), east (LGA/PHL), and south (CLT).
Sideline_Observer – I agree with Nick’s point about it being a different airline, but more importantly, we don’t know that these were “unsustainable” as you say. On the whole, US Airways saw more profitable options by swapping for slots at National. But in the end, the LaGuardia operation was profitable overall, just not as profitable. I imagine these were the best markets in that group so they’re coming back.
In my opinion maybe cutting down on two flights a day would be a better option when there are like ten flights a day, as you stated.
You are forgetting the 80% slot rule. Slots need to be only used 80% of the time on an annual basis. AA doesn’t have to cut anything else. It has more slots than it actually uses right now.
Didn’t the DoJ require AA to relinquish LGA slots for the sake of fair competition? So AA gives up slots to hubs dominated by one airline–DL. Is DL happy now? And they call themselves the Department of Justice. Sigh.