Three Themes From American’s 2020 Summer Schedule Announcement

American

American has gotten into a new routine of lumping summer schedule changes into one big release to try to garner buzz. This year, it tried to add mystery to the process with this… interesting… tweet.

That is Vasu Raja, American’s Vice President of Planning, and I spoke with him right before the 2020 Transatlantic package was rolled out to get some more color. Overall, the moves highlight how American views its hubs, particularly Chicago, Dallas/Fort Worth, and Philadelphia.

Chicago is a Transatlantic Hub, Not a Transpacific One

When American canceled its China flights from Chicago, leaving only a thrice weekly Tokyo flight as its sole Transpacific presence, people wrongly suggested that American was giving up on Chicago. The thing is, American just can’t get Asia to work from there. Those China flights were horrendously unprofitable, and the Tokyo flight probably only remains thanks to the joint venture with Japan Airlines. But while American has given up on Asia, it has not given up on Chicago at all.

Going over the other ocean from Chicago has done quite well for the airline with a very hefty schedule slated for next summer. American is adding all of these with 787-8 aircraft.

  • Chicago to Budapest 4x weekly from May 7 to October 24
  • Chicago to Krakow 5x weekly from May 7 to October 24
  • Chicago to Prague 5x weekly from May 8 to October 24

This really reflects two different things going on. The Budapest and Prague routes are going to be pure leisure. It’s for Americans going over to those hot spots in the summer. American experimented with those last year from Philly, and it worked. Those will remain, so Chicago is just new service.

Isn’t overflying the Philly hub bad? Not in this case. American has found that pairing Chicago and Philly to a destination actually strengthens the route. Consider Prague.

The Philly flight leaves at 6:50pm and gets to Prague at 9:15am. The return is at 11:20am getting back at 3:05pm. Chicago will leave at 6:50pm and get to Prague at 10:50am with a return at 1:05pm back at 4:05pm. This gives travelers around the US more options to work with. If you live in the Midwest, you can leave later and go via Chicago. Or if you’re returning, you can stay in Prague later before coming back home. It also opens up more single-stop opportunities.

Further, Chicago is only 5 days a week, but having Philly operate daily means travelers can mix and match and still get home easily every day of the week. This is what American has seen with other routes, so the pattern continues.

Second, we have Krakow. This is all about visiting friends and relatives. There is a huge ethnic Polish population Chicago. It’s big enough that LOT Polish already flies this route less than daily. American figures it can get a chunk of this traffic for itself.

This isn’t the only growth. American is lengthening the summer season for existing routes as well. Eventually some of those could go year-round. Chicago may not work for the airline over the Pacific, but over the Atlantic, it’s growing and working well.

Philly is for Transatlantic Experiments, But They Don’t All Work

Philadelphia remains a great testing ground for experimental routes. Last year Dubrovnik was a huge success story, and it will go daily next year. Berlin also gets bumped up to daily service. Bologna, on the other hand, was bad. That one isn’t coming back. Of course, if you don’t try a new route like this, you can’t really know if it’ll work regardless of how sophisticated the models are. Philly’s close proximity to a huge population as well as to Europe makes it an easy place to try new things.

Next summer, the big news is that American will start Africa flying with thrice weekly flights to Casablanca from Philly. The flight will operate from June 4 through September 8, so it’s a very short season. Oh, and it’s on a 757. Yep, Casablanca is that close — even closer than Paris.

This route has been rumored for some time, and it’s a great experiment. Royal Air Maroc will be joining oneworld, and while it doesn’t have much in the way of connecting banks into Africa yet, it will. And with a 757, American can pioneer the route with a good chance of finding local traffic going to that hot spot as well as testing the waters with connecting opportunities. This route is a pathfinder, and it’s a low risk one at that.

Similarly, American will move its Keflavik (Iceland) flight from DFW up to Philly. Consider that another experiment.

Almost Anything Works from Dallas/Fort Worth

As American marched toward 900 daily flights at DFW this summer, the mantra was that pretty much anything can work there. They throw in some routes that seem thin, and then they magically do well anyway. It’s the hub that keeps on giving.

There is a limit to this, however, as we’ve seen with American’s decision to move the DFW-Keflavik flight up to Philly. Granted, there were three airlines (American + WOW + Icelandair) in the past and all of them will be gone. DFW might have worked better this year. But what American realized is that much of the demand was in the east, and DFW was a lousy stopping point for that. This year, it expects to do better from Philly gathering all that traffic.

While that route goes away, DFW will be getting an important new flight to Tel Aviv. This marks the airline’s return to Tel Aviv after pulling out from Philly around the time of the US Airways merger. Whatever TWA debts were out there (as the rumor goes) have been settled, and service is ready to start 3 times a week on a 787-9 from next September 9. It’ll be a year-round route.

This seems like a stretch, but for the same reason American moved its Keflavik flight to Philly, it’s starting Tel Aviv from DFW. See, DFW is very well positioned for connecting traffic flows on this route. If you’re thinking about all the possibilities for connections from the western US, that is certainly a part of it since West Coast – Israel flights are few and far between. But don’t forget Latin America. This will be a really easy way for Latin Americans to get to Tel Aviv in a world where not many great options exist.

On top of that, there is a lot of local traffic in the market. I’m told this is the largest route that American hadn’t flown from DFW. If you’re thinking about Jewish traffic, that’s some of it. But it’s really more about Christian travelers. The Metroplex has a whole lot of Christians looking to go to the holy land.

Overall, this paints a picture of a planning team that is following its successes up with new routes that fit the right pattern. But there is also an element of risk in some of these routes that may or may not pay off. That sounds like the kind of place you want to be as an airline. Take a chance and see what works, then keep duplicating as much as you can based upon what rises to the top.

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53 comments on “Three Themes From American’s 2020 Summer Schedule Announcement

    1. Barbismike – No plans that I’m aware of beyond what’s already been announced. They upgauged the remaining long haul flights all to 777-200s, and they’ve been toying with a couple Latin routes. But I doubt there are big plans beyond that.

  1. AA’s network strategy: “Take a chance and see what works.” Sounds… sustainable. One year-round ORD route to Europe (LHR), then trying to cherrypick KRK, BUD and PRG over the summer (no MUC, no AMS, no FRA…).

    Hand it to AA, unlike the Norwegian dumpster fire, AA at least knows not to fly their crappy, peak-of-the-cycle routes in 4Q-2Q. Can’t wait for the peak of the cycle to end.

  2. The route announcements reflect American’s long standing, conservative approach to adding long haul intercontinental routes. This goes way back to the late 1980s when they began to add Europe beyond DFW-London. None of these routes are truly transformative. ORD-BUD/PRG does give travelers more options and these are popular destinations right now, but a downturn in the US Economy will see those routes become a burden rather than an opportunity as discretionary spending falls. Moving KEF to PHL makes a lot of sense. Demand for Iceland has softened somewhat, and with WOW out of the picture, and Icelandair’s growth hobbled by the MAX fiasco, it is a low risk route and an easy move. Amazing that AA can’t make TLV work daily, even from DFW. Israel’s tech sector makes it a high demand destination and even with 3 x weekly 789 service, AA is an also ran in this market unless it adds something from the East Coast. CMN is interesting in that RM has a pretty decent network from Casablanca to points across Africa and Europe but tourists go to RAK, not CMN and 3 times a week, seasonally is a low risk, low reward option. As for JFK, I just don’t see AA adding anything there as DL (JFK) and UA (EWR) have the majority of the big markets that AA is missing. Amazing that AA can’t make JFK-TLV work, or fly JFK-ATH seasonally, reviving the TWA route authority they acquired, or make better use of a world class terminal that is about to get a major overhaul.

    1. One thing about JFK-TLV is that New York to Tel Aviv already has a lot of service established with up to 2x daily by United, Delta, and El Al (2x from both EWR and JFK!!). On top of that there is a flood of single stop service through Europe. I would imagine that while that market is hot, it would be hard to stand out with anything less than 1x or more daily. Plus, their connectivity from JFK is not great. DFW makes sense in that it avoids saturated areas, and serves a lot of passengers who will save time vs flying all the way east or backtracking to LA or SFO.

        1. Alex – I believe American only puts its code on El Al flights from Europe to TLV and not on the US services. But either way, that’s money American doesn’t get to keep. The BA joint venture means it should be agnostic in that situation, but this does provide a lot of one stop options that don’t exist if it requires routing over London.

          1. I didn’t realize that – looks like you’re correct. Itineraries on aa.com from some random feeder cities to TLV all go Origin->AA hub in the US->European city->TLV, with only the final leg on El Al.

            I was surprised at the list of European cities to connect in – options include FCO, FRA, MUC, and CDG in addition to the obvious LHR and MAD options.

            1. Alex – I’m not aware of that being the case, but I suppose there could be a carve-out. I do know that Tel Aviv is part of the joint sales contracts, at least.

  3. Cranky,

    What do you think holds CLT back internationally? With it being AA’s second largest hub and their plan for 700+ flights per day, wouldn’t it support much more international traffic than the few flights they have? Is it a gate issue, lack of profitability, or what?

    1. I’m not an expert, but I suspect part of the reason has to do with O&D demand. The Charlotte metropolitan statistical area ranks 23rd in population, just ahead of San Antonio & Portland, while DFW is 4th and Philly is 8th. Yes, I know that CLT has some banks and big corporations, etc etc, but so do other metro areas with larger populations (STL, MSP, SEA, etc).

      For flights from CLT to Europe, the great circle routes and the routes to the start of the trans-Atlantic tracks for airliners pass right over the Northeast, with plenty of alternative connecting options (IAD, PHL, BOS, JFK/EWR), especially to non-hub and smaller cities (“small” being relative to London, Paris, etc) in Europe. While ATL is in the “wrong” direction, it is only 226 miles away, and also offers a lot of international destinations. For flights to Latin America, MIA isn’t too far off the direct path.

      I’m also not sure how well known Charlotte is outside of the US, relative to other (larger) metro areas mentioned.

      1. Good points. Having said that, a lot of cities would love to have hub network and international reach that CLT does (the ones you mention, plus Pittsburgh, and many others).

    2. I think Kilroy hit the nail on the head a lack of O&D and other hubs better placed to handle the connecting traffic. Denver has the same issue. A huge hub with a relative small amount of international connections. It just ales more sense as a regional/domestic hub. (Throw SLC into it as well.)

    3. Erik – I think Charlotte actually does pretty well for itself internationally, especially during the summer. But Miami is best for Latin and Philly is generally best for Europe. So Charlotte sort of lies in between. Still, I think it does better in Europe because Philly isn’t as strong of a hub as Miami is to Latin.

    1. The 757 is/was the right plane at the wrong time. I don’t understand why it’s so hard to restart production on it. It’s not like the blueprints are gone..

      1. My guess: If there were orders for it, they wouldn’t have stopped making them.

        I don’t think now, years after demand dried up, there would suddenly be sufficient demand for the (classic) 757.

        1. I’m sure Boeing had their reasons (737 may still be better for more missions, Cranky says the 757 wing is overbuilt for most missions), and hindsight is 20/20, but I remain perplexed why they haven’t re-engined the 757 instead of (or in addition to?) the 737MAX design.

  4. There will certainly be people that will get excited about AA’s announcement but it is nothing more than a bunch of seasonal service and flights from interior hubs to avoid competition w/ other airlines, providing service to distant markets by cutting off large portions of the US market. Most flights are not daily service which means their attraction to business passengers is limited.

    AA has been in a five year cycle of cutting their presence in key international business markets from their former top hubs including ORD and JFK and shifting to summer seasonal routes and/or shifting flights to DFW, one of the most distant US hubs from both major Atlantic and Pacific markets. They really have no idea where to make money w/ a large portion of their longhaul fleet and have been in an endless reshuffling of the deck to try and find something that will make money even if for a few months of the year.

    Let’s also not forget that American is moving forward w/ removing its 767s while replacing them w/ 787s. It simply is not economically viable to operate expensive 787s on a seasonal basis.

    The best years of American Airlines as a global airline are behind it. It will continue to shrink while its competitors grow in the markets that built American Airlines.
    Meanwhile, AA is pulling down capacity at both LAX and JFK even as other carriers are managing to expand there, including on their marquee LAX-JFK route.

    AA is simply retreating to its hubs ala America West even as its service levels deteriorate and passengers in the most competitive markets which also have some of the highest amounts of corporate travel.

    AAL’s profit margin was the lowest in the industry for large jet airlines in the most recent quarter and is expected to remain so.

    and HKG, one of AA”s former bright spots in Asia, will become less and less viable as a destination amidst political unrest which is already costing the city’s economy and shifting business to elsewhere in Asia.

  5. I live in DFW, and travel to PRG and KRK several times a year for business in J. I usually go to LHR then on.

    This might, and that is a big might, make sense. For me, the issues are connections. If I am late out of DFW, but getting to LHR, there are usually multiple connections to where I need to be.

    But, if I am late out of DFW going to ORD, there is only one flight that might not even operate the next day. I realize I would probably have to go to PHL or LHR at that point.

    For connections to these destinations, just not sure ORD makes sense for someone in DFW.

  6. I’m sorry cranky, but I need to say this… Philadelphia to Casablanca, frankly I don’t give a dam. LOL Seriously that’s an interesting route & one I never expected from AA. Dallas to Tel Aviv is most interesting for the reasons you stated.

    1. Sean – Unless I’m missing an obvious joke, I think you’re confusing Humphrey Bogart in Casablanca for Clark Gable in Gone With The Wind. But I must admit that I was shocked, shocked to learn that Casablanca was closer than Paris!

        1. I may have inadvertently crossed up those two films, but I saw an opportunity for a bit of humor & just went for it.

  7. So I know that AA has hubs in DFW and LAX. But I really wish PHX would get a little more love. I really think there is some untapped potential there that AA isn’t taking advantage of. Like being a western latin hub. Especially with the large latin population of the city. I know it wouldn’t happen but I would be interested to see if PHX could support a 787 to SYD.

    1. I reread my post and I realized that I sounded like I was saying SYD is a latin gateway. I know its not. SYD is a second thought.

    2. I absolutely agree. It makes no sense that PHX doesn’t get more international love. Even when AA expands service to Mexico now it seems to do so more out of DFW. I can’t wrap my brain around it.

    3. PHX is basically a western CLT, and for the same reasons – other hubs are closer to the international destinations than PHX is, so PHX ends up being a regional domestic hub.

      Re: “Like being a western latin hub” – the geography just doesn’t work. Central America and South America are way farther east than you might expect. SJO (Costa Rica) is at about the same longitude as Atlanta, and Guayaquil is at about the same longitude as Miami. Travelers from most origins would have a straighter shot connecting through MIA or DFW than through PHX.

      1. Alex – Agreed on Phoenix. If anything, it can serve as a good western gateway into Mexico. It’s remarkable that Aeromexico doesn’t even fly to Phoenix. There’s probably some room to expand there (and AA has done a little recently), but it’s ultimately not going to be all that much.
        Phoenix is destined to be largely domestic with international focusing on joint venture hubs. (I still expect one day we’ll see a 787 to Tokyo if there’s still a hub in PHX)

  8. American’s strategy can be summed by a quote from Jack Welch the retired CEO of General Electric who said, “If you don’t have a competitive advantage, don’t compete.” In a mature industry such as the airlines, trying to compete where one doesn’t have an edge is financial suicide.

    To amplify what was written in the piece, Chicago is the second-largest Polish-speaking city on the planet. Number one is obviously Warsaw. American has a large and long-standing presence in Chicago. LOT is part of Star Alliance, so Warsaw isn’t the place to go. But Krakow might work. Chicago also has a large number of people from other eastern European countries. I lived and went to college there.

    As for Tel Aviv, DFW makes sense (biggest hub, connections from the west, and Jack Welch). I read where Mr. Raja stated that American may have pulled out of Tel Aviv too soon. I also understand that it takes two aircraft to operate daily flights from the U.S. to Tel Aviv, as opposed to one to most of Europe. So going three times a week makes sense from an aircraft utilization perspective.

    As for Asia, It’ll be interesting to see if JAL begins service from Chicago to Haneda with one of its new authorities. It’s also interesting to note that Delta didn’t apply for a New York/Haneda route. I think its management listens to Mr. Welch too.

    1. Whether attributed to Jack Welch or not, the GE of Welch’s era lived by some very successful principles of business which other companies including Delta have also executed well. Delta’s strategies clearly are based on doing what they do well, being the top 1 or 2 competitors in the market, or leaving for other markets. Delta’s focus city and new hub strategy has proven that Delta can expand beyond its core strength markets but does so with all of the corporate resources focused on those developing markets.

      AA’s problem is that it is and will remain the 3rd largest US carrier to both Asia and Europe and it has picked alliance partners that reinforce that role. AA is a fraction of its partners to both Europe and Japan and it has no equally close partners outside of BA and JL which have market presence where AA needs it. The cancellation of year round routes and movement of them to other hubs to try to make them work and then adding second and third tier seasonal cities or where AA won’t be 1st or 2nd tier proves that AA is not fixing its core strategic problems.

      There is an active and recent CF article on Haneda so there is no need for a lengthy discussion on the issue of Delta to Haneda but: 1. Delta never flew more JFK to Asia than JFK-NRT 2. Delta dropped that route when NH said it would start JFK-HND and JL followed by doing the same thing because DL believed and statistics show that HND routes get higher revenues and DL wasn’t going to be 2nd fiddle in a market against 2 foreign competitors 3. DL has focused on restructuring its Pacific network away from Tokyo as a hub and that process will be complete next spring as Haneda becomes a spoke for Delta and Delta will be the largest foreign carrier there. Delta may well transfer one of its Haneda routes to JFK but if it starts JFK to Asia it will be very likely be as part of a series of new routes that will be part of DL’s focus to build a NE to Asia presence and not merely competing in a single route. Given that UA is well entrenched in the NE to Asia market, Delta better be prepared to work to make the NE to Asia nonstop work. UA also demonstrates a pretty high understanding of “sticking to its knitting” as the basis of its success.

      Jack Welch would be proud of Delta’s commitment to his principles and their execution of them. Sadly, it is hard to see any connection between AA’s route announcements and Welch’s principles.

      1. I made a simple observation that mentioned Delta and got a diatribe in response. I was simply making the point I’ve often made – that no airline can be everything to everybody. To that point, it’s really not a “problem” if American is number 3, 4, 5 or 50 from the U.S. to Europe or Asia, as long as those routes are margin accretive. It’s also not a “problem” if Delta is number 3, 4, 5 or 50 in Chicago as long as its operations there add to the bottom line. And the only people who know that are the accountants, management teams and boards at American and Delta.

        1. except that the airline industry is becoming more and more concentrated and the airlines that are the top 1 or 2 in a market are the ones that succeed while others shrink.

          AA held on to filing for BK and lost enormous market share in NYC to B6 and DL. There was a point of no return for AA was not able to develop critical mass to be able to win corporate contracts. the same thing has happened to Asia and to continental Europe where AA has never been strong.

          compound that reality with Parker’s style of retreating to strength markets while throwing in the towel in highly competitive markets and AA’s route announcement is all about finding relatively small and unserved markets (E. Europe) or trying to siphon off a piece of a larger market (such as TLV) while passing over the largest and most valuable part of that market – and likely will only be able to cater to a small part of the market – which DL and UA can also serve and will be aggressively courting.

          It is not possible long-term to be a distant #3 or beyond in the market and, no, Delta does not attempt to do that. Delta is solidly in the top position in markets it has served from CHI for years which is why it is adding new markets – where it builds from scratch, a strategy it has successfully used in RDU, SEA, BOS and other focus cities.
          No airline has to serve every market from every city but if you don’t rank highly in the markets you do serve, there is no way that you can expect to receive premium revenue.

          And Delta does get more revenue from the top markets than any other US airline whether you define that as the top 10 airport to airport markets or the top 10 US airports by local market revenue.

          And how does serving a bunch of Eastern Europe leisure markets help AA attract more business passengers which is what it needs to compete with DL and UA which do a very good job of serving business rich markets?.

          1. With all due respect, none of that matters. Alaska, jetBlue, Hawaiian, Spirit, Allegiant and Frontier are far smaller than Delta. None of them are in a dominant position to Europe, Asia or domestically. They all have a niche (an advantage, as Jack Welch would say) they serve, and all of them seem to be doing just fine financially. Is Delta an excellent airline? You bet. Is American struggling in many areas? Absolutely. But my overall point is still the same. No airline can be everything to everyone, and size, in and of itself, doesn’t always matter. the Union Pacific Railroad went through a terrible operational struggle after its merger with Southern Pacific. It was as bad or worse than American’s. UP survived. So will American, even though your comments suggest you’re rooting for it to be liquidated.

            1. AS B6 and HA have niche markets in which they are either 1 or 2. NK has a major price advantage.

              AA doesn’t have to be all things to be all people – but it is losing a lot of money trying to stay in markets that they have believed are “strategically necessary” but where they are not profitable and/or not the 1st or 2nd carrier. Chicago to Asia fell in that category for years and yet AA’s losses to Asia have not ended because they are still competing with DL and UA from LAX to Asia where AA does not get average fares near as high. And there are significant strategic implications if AA says that they will focus on just their DFW hub; Chicago, Charlotte and Phoenix domestically and a few international markets; downsize MIA to the size where it can be profitable again; and TYO and LHR as its primary international markets – with not a whole lot in Europe or Asia besides that.

              AA is strategically in the position of having to admit that large portions of their network are not viable long-term. AA came to the conclusion with ORD to Asia but there will be multiple other markets where they will have to make the same decision.

              Factor in that AA even now has a very bloated workforce and shrinking to profitability is a very difficult task to accomplish outside of bankruptcy.

              An announcement of a bunch of seasonal and second and third tier international markets belies much problems at AA.

              no, I am not rooting for liquidation. I am noting that the AA-US merger didn’t meet a lot of the same criteria that other mergers passed. Long-term viability requires dealing w them now.

              The railroads are nowhere near as competitive as airlines for very obvious reasons.

  9. “But it’s really more about Christian travelers. The Metroplex has a whole lot of Christians looking to go to the holy land.”

    It’s a lot more than that, really. There are a surprising number of Israeli biotech/pharma companies with ties to the DFW area. (A guy I used to work with recently took a job with one; I’m sure he’s elated that he’ll be able to take his twice monthly TLV trips nonstop instead of going through LHR.) I doubt there’s enough of that biz traffic to justify a daily flight, but 3x might make sense.

  10. The ‘urban legend’ has been that there are more Polish people in Chicago than there are in Warsaw.  Makes sense to me

  11. I’d be really interested in seeing some analysis on which routes are having their seasonal schedule extended (or shortened).

  12. i dunno what kind of weirdo travel agency or subsidy deal AA found when they chose to serve Bologna. Since FLR has a runway far too short for transatlantic, if AA really cared about serving Tuscany and such, Pisa is the airport one should’ve picked, as cheesy as that town might be.

    if you look at the map, MXP PSA VCE FCO would’ve provide a very balanced distribution of service points. BLQ is like the jack of all trades, master of none….. unless your only destination is something like San Marino.

    As for DFW-TLV, we’ll see if AA can make lemonade out of it. But it’s kinda amusing to see the route on GCMap and realize it perfectly overflies 3 major oneworld hubs – ORD, DUB, and LHR.

      1. yea seriously 6,980 mi to fly a bunch of religion tourists plus ultra-AA devotees willing to inefficiently route SJC-DFW-TLV instead of SFO-TLV nonstop on 2 airlines doesn’t make a winning proposition.

        DL and UA are so far ahead in the TLV game it isn’t even funny. I’m curious as to where DL’s next TLV expansion might be. I’d throw out an oddball and say SEA.

  13. Count me in as another who finds this announcement insipid. In the early 2000s AA was my primary carrier and I connected through ORD to LHR, BRU, CDG, ARN and MAN (just the flights I took) and all were year round services. Now they have just one year round long haul to Europe (LHR) and these less than daily seasonals aren’t going to make any big impression.

    DFW-TLV may work, but 3x weekly when DL flies 2x daily and UA 4x again isn’t going to make a huge dent.

    When their domestic competition is launching new service to India (DL) and South Africa (UA) and both launching new or expanding long haul business routes (BOM, DEL, AMS, MEL, ICN, HND, HKG, PVG) this release from AA looks more like a let out on parole.

    1. BRMM – I assume you mean ORD-VCE, not VIE? Both are returning. The only one that won’t come back is Philly – Bologna and DFW – Keflavik.

  14. Not sure adding 3 leisure summer routes is that massive an endorsement of AA’s ORD hub. As the saying goes, “Any idiot etc”

  15. Ahem: “testing the waters” with Casablanca? You really said that?

    Renault: And what in heaven’s name brought you to Casablanca?
    Rick: My health. I came to Casablanca for the waters.
    Renault: The waters? What waters? We’re in the desert.
    Rick: I was misinformed.

    My guess is that accurately predicts the future of this route.

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