This week’s featured link:
ANALYSIS: What to make of American’s local shift in Phoenix – FlightGlobal
Remember the back-and-forth I had with myself over American’s future in Phoenix? Ned Russell at FlightGlobal took it further and dug into some data. This doesn’t quite support the rosy “Mountains to the World” idea that American put forth, but it’s also not the death of the hub. Read for yourself.
Two for the road:
One runway shy of a plan – Crain’s New York Business
Here’s a good look at the new, expensive plan to rehab JFK Airport. The headline sums up the stance pretty well.
New year-round direct flights are set to connect Alaska and China in 2019 – Anchorage Daily News
It’s been a long time since airlines had regular, scheduled passenger service between Anchorage and Asia. Even then, it was mostly as a fuel stop because airplanes couldn’t fly nonstop. So this would be… something. I guess with enough subsidy, anything can work.
If AA insists on reducing my connection options in Phoenix, at least there are alternatives. The improvements at SLC will be coming online soon, It’s too bad Southwest isn’t actually competitive anymore, but I guess there are enough people who believe their propaganda about “low fares” (yeah, as low as they’re gonna give you) and “award-winning service” (the awards they give themselves). If AA backs down too much in Phoenix, I can foresee a repeat of what America West did there in the 1980s, which would be a bit ironic since the current version of AA essentially is HP in AA drag.
Ugh, this plan is just a band-aid on the problem. Just like at LGA, new terminals only mean a nicer experience for passengers before they sit on a taxiway for up to 3 hours waiting for departure (although almost every single terminal at JFK is far and above anything that LGA can provide). Demo all of the buildings on the north side of 13L/31R and build a third runway there, put the cargo area somewhere else. I like using JFK, but if it starts to end up like LGA, then New York is SOL for a functional, modern airport.
But hey, it creates jobs and spreads pork. It is not designed to solve problems, it is designed to create jobs!
It definitely seems true that politicians are more interested in showpiece airports than efficient airports. That’s really a shame, because while passengers obviously prefer better spaces to worse spaces, the main thing anyone wants out of an airport is to get in and out (both on the ground and in the air) as quickly as possible. I suppose runways are hard, and not sexy. Terminals make pretty monuments, and you can dole out concessions, too.
Cranky, a technical correction: Although it is only seasonal and not daily there has been scheduled service between ANC and Asia the last few years. Yakutia flies ANC-Siberia in the summer.
It is also a surprise to many that JL flies regular charters to FAI in the winter. (I think they also serve ANC with charters).
Aliqout – Thanks for that. I didn’t know that was scheduled. Of course, it doesn’t really help for beyond connections unless you’re staying within Russia.
I hate all these Phoenix death scenarios. It’s a market with strong midwestern draw, good mountain connections, a ballooning population, and a good hub facility. It can indeed support the level of service AA puts into it, possibly even more. Markets are cut all the time at hubs, and PHX is no exception. Heck, AA just gave it another LHR flight along BA. They wouldn’t do this if it were in serious decline. If it’s connecting people from the east to the west coast, that’s fine. It may not be “mountains to the world,” but it’s still a connecting flow. American can maintain a commitment to both LAX and PHX.
Agreed. Given the recent introduction of service to MSN and GRR, I think it emphasizes the importance of the snow bird traffic as a replacement for the connecting traffic. I would also guess that a non-stop fare from GRR will deliver a heck of a lot more revenue to AA than that same GRR flier connecting on to LAX where they will have a myriad of options.
One of the arguments I’ve seen for dehubbing PHX in the past was the lack of local traffic. Yet the referenced article mentions that local traffic is growing in Phoenix, which the current author cites as a reason why the airport will be dehubbed. Interesting logic. I noted on yesterday’s earnings call that Parker said Phoenix was performing well.
If American de-hubbed Phoenix, Southwest would backfill it so fast heads would spin. If anything, American should have learned its lesson from de-hubbing BNA.
Yes, I know AA is in Charlotte now. But with the way BNA has grown during the past 10 years and the projected growth for Middle Tennessee during the next decade, AA gave away an awful lot when it de-hubbed BNA. AA made the right decision about BNA at the time but probably regrets it today.
I question whether they face the same risk at PHX were they to de-hub.
That was a different management. Parker lived in Phoenix for a long time, so he knows the area well.
From the mountains to the world? It’s more like from the rust belt to the golf courses, especially given the new adds of GRR and MSN.
You apparently haven’t visited either in a LONG time. Not to mention the massive economic impact Amway has had on greater GRR. (note: I’m not from GRR).
According to reports by Headlight Data and Forbes, Grand Rapids is one of the fastest growing economies in the nation. Recently, the Bureau of Economic Analysis analyzed metros across the country to determine which ones had the fastest growing Gross Regional Product (GRP) between 2011 and 2016. The city of Grand Rapids came out in the top 10, ranking No. 7 overall.
Grand Rapids was also recognized as one of three cities with the highest growth rate in those 5 years. Headlight Data’s report states that Las Vegas grew 30 points, Grand Rapids 29, and San Francisco 28. This growth rate increase is high compared to the overall U.S. change, which is an increase of 9.5 points.
Ranking No. 7, Grand Rapids placed ahead of Raleigh, N.C. (8), Seattle (9), and Denver (10). To view the full rankings, as well as most improved large metros, see the images below.
All that may be true but it doesn’t change that the geographic area in which each city resides is commonly referred to as the rust belt.
Unless part of GRR’s exciting new economy comes from the development of a weather machine, that’s not changing anytime soon.
No one goes outside in Phoenix between June and September unless it is between midnight and 5 am.
There’s a definite West/East divide in Missouri and Michigan (and SW/NE divide in Ohio) in terms of what drives the politics and economies in the different parts of each state.
Focusing on Michigan, while GRR is technically in the Rust Belt, GRR / West Michigan is MUCH less reliant on the big automotive companies and automotive suppliers than the east side of Michigan is. Aerospace, healthcare, and other industries are significant contributors to the West Michigan economy, and without diving into the details I’m sure that the GRR economy is a bit more diverse and less cyclical than the eastern part of the state.
Finally, GRR is much more conservative, pro-business, and less union friendly than the DTW metro area, and I’m sure that’s helping GRR as well. With the growth of hospitals/med schools (and associated young professionals who work in / attend them) and the transition of GRR from “Church City” (lots of Dutch Reformed churches in GRR) to “Beer City” (lots of microbreweries in GRR now), GRR is one of the most vibrant and popular metro areas in Michigan for younger people, along with Ann Arbor and Traverse City.
I’m not trying to defend GRR at all, but it’s definitely **not** a prototypical “Rust Belt” metro area reliant on heavy industry and massive factories. That said, its relatively wet weather can be (still is?) an asset, to the point that the weather around GRR was supposedly similar enough to that of England that it drove the development of an avionics industry in the area during WWII, which still exists.
The Alaska/China article doesn’t mention an airline. How can they have the route without someone committed to flying it? Is that something AK would be interested in? Can their fleet even make it that far? Would seem odd for an AA/DL/UA to fly it since they have their own China flights from the mainland.
Not with the current fleet, but Alaska could make it with the 737 MAX?
Oh I forgot they have the A319 – looks like that could do it.
A – They can decide to fund a flight and then decide who to pay to do it down the road. I have no doubt this is a Chinese airline, and things in China are different.
1) I thought PHX is better for O/D than “mountains to the world”. SLC and DEN are in better geographic positions for traffic that goes both north and south from there. When AA went into BZN, their initial flight was DFW, which does nothing for those of us on the west coast. Taking DL through SLC still made for the most direct routing.
2) Both LGA and JFK are getting pretty terminals. I guess the good news is that with more space, there won’t be a need to free a gate for another plane. So, instead of sitting on the runway for three hours, you can enjoy the new terminal while your flight is delayed for three hours instead.
Seriously, even Chicago understood that it needed to increase the capacity and made plans for a bunch of parallel runways at ORD in order to have operations run more smoothly. ATL has improved a lot since they added 10/28. All three NYC airports have runway capacity issues and nothing is being done to solve this.
3) Who is going to to ANC – China? It certainly won’t be a US based airline.
Southbay, have you flown to ORD lately?
Yes, we have new parallel runways. Yes, takeoffs and landings are smoother. But someone forgot to figure out how to deal with taxiways. The way ORD is configured means that unless you land on the two closest runways to the terminals, you have about a 20 minute taxi. That’s ridiculous and an absurdity only the City of Chicago could dream up.
Sometimes when you solve one problem, you create four or five more. Everything planned for JFK is meaningless unless it becomes more efficient on both the air and land side.
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I tend to think that AA has a better overall business model than WN these days, but I would think PHX would be an exception to that rule, and that WN would tend to have a competitive advantage over AA there. Logic would suggest to me that WN’s heavier O/D traffic would work better there, as would its greater focus on the leisure traveller. Throw in the fact that AA doesn’t even “need” PHX as a nationwide hub (because of DFW), that there aren’t many nearby cities to feed (this is no CLT), and that it’s basically a zero as an int’l hub, and you might think AA would be looking at a PHX exit strategy.
The fact that AA seems committed to PHX — Parker even gave this fact a shout-out on this week’s conference call — indicates that things aren’t as simple as they might seem. WN’s much higher costs makes it less than a competitive threat than it would have been a decade ago. So even without a particularly logical place in AA’s overall route network, the hub seems to remain profitable. So I guess it stays for the forseeable future.