3 Links I Love: Long Haul PR Stunt, Tiny Plane Across the Ocean, Brewing Chicago Fight

This week’s featured link:

I Just Took the World’s First 20-Hour Flight. Here’s What It Did to Me – Bloomberg
This is quite the PR stunt Qantas has put on. How much do you really learn from having only a few passengers on an airplane all flying in business? Besides, this is only a couple hours longer than the Perth-London flight which operates daily. I just assume this is all about the crews which need to agree to fly these ultra long haul flights. Oh, and if they can get a ton of good PR along the way… that can’t hurt.

*Image of the Week*: While I was in DC this week, I had the chance to swing by Gravelly Point just north of National airport. I spend countless hours here back in college, but back then it was a lot more fun with 727s rolling in all day. Now the most exotic airplane is an occasional 757. Times change, but it’s still a great spot to watch airplanes.

Two for the road:

How a Cape Air prop made the ‘water jump’ from Europe to the U.S. – TPG
If you ever wondered how those tiny props made their way across the ocean, well, here you go.

The Great O’Hare Market Share Fight of 2019 – VisualApproach.io
This dovetails nicely with the introduction of the CRJ-550. United is stepping up the fight in Chicago.

Brett

31 responses to “3 Links I Love: Long Haul PR Stunt, Tiny Plane Across the Ocean, Brewing Chicago Fight”

Godzilla

Oct 25, 2019

Glass cockpit on a fixed gear recap light twin engine – welcome to the 21st century.

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1. Greg Mermel
  
  Oct 31, 2019
  
  Yes – reporting on engines (Lycoming TEO540C1A), the latest iteration of an engine design first built (as the O540) in 1957. And that six-cylinder engine was just a stretch of the four-cylinder O360.
  
  The basic design for the Continental engine used on the Cessnas is actually a touch newer, first produced in 1963.
  
  Reply
andersoncd

Oct 25, 2019

We took the Dreamliner, nonstop, from Houston to Sydney; approx. 17 1/2 hours, United business class. It wasn’t bad. Several Baileys helped!?!

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Oliver

Oct 25, 2019

They should have put the airline top management and all board members into coach seats and required them to remain seated except for a few bathroom breaks. Now that would have been a meaningful experiment.

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southbay flier

Oct 25, 2019

To me, the experiment would be to pack in a bunch of people into Y and see what happens. I would not want to fly JFK – SYD or any of these other long hauls in those super narrow Y seats in a 787. Having only 17.2″ of seat width that long sounds like torture.

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Tim Dunn

Oct 25, 2019

Yes, QF’s flight was a publicity stunt. There are plenty of flights above 16 hours right now. Sure, 3 more hours is significant but there are plenty of people that have survived 16+ hour flights already. And if aircraft are capable of doing 19 hour flights on a regular basis, QF will hardly be the only carrier offering them. There is a small subset of routes that need to be that long -and Australia’s remote location makes it a strong candidate for the longest flights – but there are and will be carriers that can justify even longer ultra long haul flights than what is operated today. Independent research, not just from an airline, needs to document the impact on humans from being on planes that long.
——————————

As for Chicago, it is noteworthy that the share chart starts AFTER the AA-US merger which is when AA got a huge domestic share boost across the US. US was a predominantly domestic airline and even though the premerger US international network has been reworked over and over, their domestic hubs have largely been retained. Other than JFK, the same is also true of AA’s domestic hubs – and JFK is fairly small as a domestic/non-transcon hub. The AA-US merger created a large domestic airline even if its international footprint has not improved much.

AA has long had a higher domestic share at ORD because it is generally stronger from Chicago-East while UA is stronger from Chicago-West, although AA is also stronger from Chicago to LAX, which is a big part of the total Chicago market. UA’s plans to use the CRJ550 are heavily to markets east of Chicago where it has a share deficit, even if that is a high CASM solution.

AA also noted on its earnings call yesterday that ending Chicago to Asia frees up a lot of domestic seats that were carried at low yields so AA automatically gets more seats to compete in the domestic market but they also will be adding more A319s to Chicago as upgrades from large RJs, presumably with some of the large RJs moving to other markets with small RJs.

ORD is a unique market in that it is the only US airport left where two legacies have hubs which gives AA and UA substantially more seats than any other carrier. UA is clearly banking on AA’s pulldown of its Asia network from Chicago as well as the fact that LHR is the only year-round longhaul international market left from Chicago for AA to help pull high value passengers from AA.
The latest DOT data shows that UA has gained domestic share; it has long been the largest carrier by revenue because of its international network but UA is making strong gains domestically.

The real surprise to a lot of people is probably that DL is actually the fastest growing of the 3 legacies at ORD based on percentage of revenue and share growth. DL has long been the dominant airline from ORD to ATL, DTW, MSP, and SLC – and gets similar local ORD revenue as AA and UA but dominates the revenue from its hubs. However, few people realize that DL now gets about 75% of the local market revenue in ORD-LGA, one of the largest ORD markets. This quarter, industry capacity from ORD to LGA is down by double digits but DL is still increasing its capacity – so it is very likely that ORD-LGA will become one of the few US markets that are fairly equally divided between AA, DL and UA.

DL also has surpassed AA in the ORD-SEA market based on local market revenue, again based on DOT data, a market DL started just a couple years ago. DL’s entrance into ORD-RDU has almost entirely come at AA’s expense; it was a market in which AA had more than 2/3 of the share. DL’s addition of ORD-BOS will likely lead to share coming from AA as well; AA is the only carrier that has reduced capacity in the market which is served by AA, DL, UA and also by NK and B6. DL’s growth from ORD is coming largely at AA’s expense.

Finally, ORD-LAX is one of the largest markets that DL doesn’t serve. If I were a betting man, I would put a decent wad of cash on the table betting that DL will deploy some of its A220s in the ORD-LAX market before too long. The A220-300 will be by far the lowest CASM aircraft operated by any US carrier and it is the right size for DL to push into a 4 hour plus market with enough but not too much capacity at the right CASM. Of course, there are gate issues for DL at both ORD and LAX but DL moves – I think as soon as next year – to terminal 5 where it is supposed to get more gates, leading to further point to point markets from ORD.

Thus, based on trends that are taking place, UA is indeed improving its revenue position at ORD but so also, at a faster pace, is DL. Given that DL is now using its focus city/new hub strategy to connect more of ORD to its network and also has the A220 coming, there is a really good chance that DL will become a much larger player at ORD.

DL’s growth at ORD coupled with a shift of revenues from AA to UA will create yet another strategic crisis for AA that they have to face.

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1. Eric Morris
  
  Oct 25, 2019
  
  Have you ever thought of starting your own blog?
  
  Reply
2. Alex
  
  Oct 25, 2019
  
  > ORD is a unique market in that it is the only US airport left where two legacies have hubs which gives AA and UA substantially more seats than any other carrier.
  
  Other than LGA and JFK? Also LAX if “hub for 3 legacies” counts.
  
  Reply
  1. Tim Dunn
    
    Oct 25, 2019
    
    LGA is largely a point to point airport; more than 95% of passengers make no connection so it would be hard to call it a hub in the sense that ORD is. Similar for LAX.
    
    AA is the 3rd largest carrier at JFK, far smaller than DL so I’m not sure you can call it competitive legacy carrier hubs.
    
    You are free to come to your own conclusion but considering that ATL, DEN, Dallas, and other hubs hosted two similar sized hubs which connected passengers, ORD is different from other US airports.
    
    I’ll think about it, Eric.
    
    Reply
    1. Alex
      
      Oct 25, 2019
      
      Those are great points, and important distinctions for your analysis. Your posts are consistently very nuanced and well-researched.
      
      Reply
      1. Tim Dunn
        
        Oct 25, 2019
        
        Thanks, Alex.
        
        The beauty of Cranky Flier is that Brett has created a very interactive discussion forum that addresses many of the most interesting and controversial things that are going on in the airline industry – as well as other reader favorites like his in-depth trip reports. Nobody else does quite the same thing.
        
        Each of us that reply to his blog bring our unique perspectives and insights – and Brett has managed to create an environment that fosters dialogue from people from around the world.
        
        He deserves all of the credit for the success of his blog and I am happy to do my part to contribute to his success and of the blog.
        
        One day I’ll get to shake his hand. ?
        
        Reply
        
        Tim Dunn
        
        Oct 25, 2019
        
        the question mark was a smiley emoticon when I pushed the enter key
        
        CF
        
        Oct 26, 2019
        
        Thanks Tim… Cranky Dorkfest 2020?
        
        Tim Dunn
        
        Oct 26, 2019
        
        @CF
        I will be Dorkfest if my schedule allows. It is not like I haven’t been trying for years.
        
        @joey
        I can only go what DOT data shows…. Delta connects more on some routes but overall the airport is a high local O&D airport.
        
        ORD is still the only airport left where two legacy carriers connect a high percentage of traffic and have similarly sized operations.
        
        And as for LAX, each of the big 4 is in relatively similar positions in terms of number of seats offered- certainly not like AA or UA in ATL relative to DL or DL or UA in DFW or AA and DL in DEN.
    2. Joey Jaidee
      
      Oct 25, 2019
      
      Tim I would strongly dispute your comment that 95% of fliers are point to point from lga. On personal experience it’s quite a bit les than that.
      
      Reply
    3. Eric Morris
      
      Oct 26, 2019
      
      I’d read it.
      
      Reply
3. Davey
  
  Oct 26, 2019
  
  As an ORD regular, I find it hard to believe that Delta is anywhere near market leadership on the LGA route. No doubt it is possible but if United and American “allowed” that to happen, shame on them.
  
  Back in the late 1970s, what is now the “L” Concourse was built as a mini-hub for Delta. As was the case at DFW in the 1980s, the competition was so intense that Delta bailed on ORD to focus on Atlanta. For Delta to compete in Chicago in a meaningful way in Chicago would require focus away from fortress hubs in MSP and DTW, both less than an hour’s flying time away.
  
  I can see Delta becoming aggressive in hub to spoke flying into Chicago, which is why they dominate to Detroit, Minneapolis, Atlanta etc. But the Delta brand was not built by being suicidal, which is what a significant move into Chicago would be.
  
  Reply
  1. Tim Dunn
    
    Oct 27, 2019
    
    Davey,
    Delta is the product of a merger in the 50s with Chicago and Southern. There were days when Delta flew L1011s to places like Houston and Atlanta from Chicago.
    
    Delta’s growth in Chicago other than to its hubs is on a point to point basis (ie passengers that end or begin their trip at both ends of the flight.) Delta’s Chicago growth doesn’t and won’t affect its Detroit and Minneapolis hubs because Delta has not competed in many of the big local markets from Chicago other than to its hubs. Boston and Seattle are both hubs that have been grown over the past 5 years and so it makes sense for Delta to fly to those markets from Chicago.
    
    I didn’t say Delta is the market leader on the ORD-LGA market. I said and data shows that DL has double digit share that with average fares as good as American or United in the LOCAL MARKET (ie passengers starting and ending in the Chicago to New York market) and DL continues to grow capacity so that it is very possible at the current growth rates that DL could end up with similar LOCAL market share as AA and UA. AA and UA both carry many connections from LGA to ORD and that is what requires them to use larger aircraft to carry connections above the local passengers.
    
    Delta flew ORD-BOS years ago; I’m not certain but I believe NW flew ORD-SEA.
    
    And Delta is gaining gates at T5. ORD’s high costs which will grow as the huge T2 rebuild is completed mean that ORD becomes less and less economical as a connecting airport (because AA and UA have to pay much higher costs to connect passengers there than DL or WN does at other Midwest hubs).
    
    DL has a solid track record of growing into other of AA and UA’s top markets and that trend will continue at ORD, which is one of the top markets in the US – but where DL pulled back to its core hubs for years.
    
    Reply
4. Ian L
  
  Oct 26, 2019
  
  Nitpick: LAX, JFK, and LGA all have two legacy hubs, though in all three cases you’re looking at primarily O&D traffic.
  
  Reply
  1. Extra Points
    
    Oct 27, 2019
    
    If you want to truly nitpick, SEA is also a dual-legacy hub, based on the true definition of Legacy Carrier.
    
    Reply
  2. Tim Dunn
    
    Oct 27, 2019
    
    and as noted, none of the hubs you or extra points noted have similarly sized legacy carrier hubs that are heavily connecting in nature. ORD is the only remaining US airport that has two similarly sized hubs by two legacy carrier hubs.
    
    There was a day when Atlanta, Dallas and Denver all had similarly sized legacy carrier hubs.
    
    Reply
Ann Wilkerson

Oct 25, 2019

I’m not a pilot but this about sums it up for me as well:

“In modern history, 100 billion human beings have lived and [only] seven billion live today,” he said. “If you think about the number of that 100 billion that have been privileged to get into an airplane and actually have the experience to fly over this beautiful planet, it is a very small number. It is a privilege and a blessing to be a pilot.”

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gander01

Oct 25, 2019

Hi Brett I thought you’d get a kick out of this. Back in the day when you were in college at Gravelly point watching the aircraft coming down the river into DCA I was flying Continental 727s into the airport. I remember working one Fourth of July and flying through people firing off fireworks and bottle rockets at Gravelly. If I memory serves the ATIS after giving all the pertinent information finished with “use caution for fireworks off the approach end of runway 18”. Back then it was runway 18. In enjoy your blogs and look forward to them good information and entertaining Bill Gander. Retired UAL captain

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1. CF
  
  Oct 26, 2019
  
  gander – Well, I probably watched you flying in many a time! (But I wasn’t lighting off fireworks…)
  
  Reply
Oliver

Oct 25, 2019

> but back then it was a lot more fun with 727s rolling in all day. Now the most exotic airplane is an occasional 757.

Aren’t today’s Airbus and 737 as “exotic” as the 727s that were rolling in all day? I mean, from today’s perspective a 727 might be interesting, but was it unusual back then?

(AFAIK, I only flew one flight on a 727 – on AA into the SJU hub from MIA)

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1. CF
  
  Oct 26, 2019
  
  Oliver – They weren’t quite as prevalent as the airplanes today, because there was more variety. We had Airbuses and 737s and 757s and MD-80s and… you get the point. But the 727 was just so much fun to watch. It was loud as hell, and with those majestic flaps extended, there was just nothing quite like it, no matter how many came in.
  
  Reply
LAXandLGBandSNAFlyer

Oct 25, 2019

With regards to commentary directed at the folks who post on this blog, I would like to suggest the concept of “one should be as rapid with praise as they are with criticism, as this is perceived as fairness”.

There is a way to criticize with civility too, with “yes, but…..” or “good point, but…..”.

I am very happy to see Tim Dunn get some praise for his well researched, and thus strong conclusioned, blog posts.

I am even happier to see Tim Dunn give Brett full credit for creating a Forum with these topics, and I encourage him NOT to establish his own forum as he brings much to this forum.

Here are some topics I’d like to see deeper dives on

1. AA vs UA vs DL employee count difference. Is this due to a difference in Outsourcing vs Insourcing? It would seem to me that a BOD would jump all over this as a Top3 priority, so I believe their must be some “subtle nuance here”

2. Facts-&-Figures behind CASM comments, including today’s that Delta A220-300 would be lowest CASM plane operated ORD-LAX. Is this plane vs plane or instead (plane + airline) vs (plane + airline)?

3. More Figures and I encourage compare to http://www.calculatedriskblog.com as Bill McBride is The King of Facts into Figures. The old adage that “a picture is worth 1,000 words” is true.

4. More facts and figures into US3 vs ME3, if possible.

5. Discussion of AA’s comment today that “Boeing shareholders should pay for 737-MAX not AA shareholders”.

6. Deeper dive into BYOD vs IFE on User Experience

7. Deeper dive into Mobile Apps from Airlines as IMHO there is a HUGE difference across the globe.

8. Deeper dive into Seating (width, etc) on User Experience

Keep up the good work to all, but especially Brett for what he does!

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1. Tim Dunn
  
  Oct 25, 2019
  
  thanks for your comments. I agree w/ your list of suggestions.
  
  Since I mentioned the A220 fuel burn, I’ll pass along this page for you to look at….
  
  https://en.wikipedia.org/wiki/Fuel_economy_in_aircraft
  
  It shows the A220-100 has the lowest absolute fuel burn of any mainline (non-RJ) aircraft at 1000 miles. Based on this data, it also shows for the 1000 mile range that the A220-300 has the lowest fuel burn per seat. (I know ORD-LAX is longer than 1000 nm but that is as close as they get)
  
  The promise of the A220 was that it would deliver the best fuel economy in a smaller airframe than the 150-160 seat “normal size” or larger aircraft and it appears to be delivering that.
  
  If Airbus goes ahead with the A220-500 it will decimate sales of the A320NEO and the 737 MAX8; right now Airbus simply doesn’t have the production capacity but it does show that the A220 is an engineering and performance success.
  
  Delta is very happy with the A220s they have so far. I expect as soon as B6 gets theirs, they will be just as happy.
  
  On a side note, you might have read that there is evidence that the engine problems on Swiss A220s are due to software issues; they apparently use higher thrust settings than Delta.
  
  There is a lot of data on that page; I presume it is all correct.
  A couple of people asked about the fuel burn for the CRJ550-which can be calculated wiht the data here.
  
  Note also that the 757 still compares fairly well with new generation aircraft. It isn’t a surprise that DL is holding onto as many 757s as they can.
  
  Hope this helps give you a little data to chew on before CF starts working on the to-do list you send him.
  
  Reply
DesertGhost

Oct 27, 2019

Frankly, I was a bit surprised that American had overtaken United in Chicago domestically. I lived in Chicago for a number of my formative years (the late 1960s, early 1970s). I went to my later years of grade school, high school and college in the Chicago area. I’m still a Cubs and Bears fan (along with supporting my local Arizona teams of course). When I moved to Arizona in 1976, I flew. Back then, United didn’t even serve Phonix (this was two years before deregulation). My choices were TWA and American. Obviously, things have changes=d a wee bit since then. But United was always the top dog in Chicago. Maybe its growth to where it was historically was what Scott Kirby was talking about when he referred to United reclaiming its “natural share.”

Phoenix is similar to Chicago with regard to two large carriers that compete for the vast majority of the market, even though one of thise airlines, Southwest, isn’t a “legacy” carrier. It’s still very a formidable competitor. I’d like to have a dollar for every “expert” who said that American couldn’t compete with Southwest in Phoenix; that American was going to automatically dehub Sky Harbor by now. Why has American been able to compete with Southwest in Phoenix? It’s because the service each offers is a bit different. America West started in Phoenix after Southwest moved in. And Republic largely pulled out of the airport. Ed Beauvais came in and started America West – the only carrier that began after deregulation to survive. My point is that airlines can be different and thrive in the long run, even they go through trying times. America West went through a bankruptcy, as have virtually all of the major airlines in this country. History can be informative. Even “ancient” history. Southwest has very little international exposure, yet it’s been the most consistently profitable airline in the U. S. for the last 40 plus years. It doesn’t have in-seat TV? How can it be so profitable? (I’m being a bit facetious, not sarcastic).

The airline industry is mature. It’s not going to enjoy 20% growth each year. In mature industries, individual companies have to find what works for them. They can’t simply add capacity willy-nilly. American will probably always be number three to Asia. It can’t simply snap its corporate fingers and change that tomorrow. It has to deal with the realities of what it has and make the best of it. American just lost its dominance to South America. It can’t wish that fact away. It has to deal with it. But American didn’t go from dominance to having only 5% of the market, as some have implied (on other forums). I’m not given to hyperbole. Every change in the market isn’t a catastrophe that’s going to contribute to an airline’s eventual decline into bankruptcy.

The airlines are making money. Some not as much as others, but they’re all able to generate enough cash flow to keep afloat and invest in the business. It really isn’t the same industry it was 10 years ago. Companies are being much more selective about where and how they grow. In spite of the dire predictions of competition evaporating, the airline industry is still highly competitive.

One of my favorite sayings comes from Mark Twain, who wryly observed, “There are three kinds of lies – lies, damned lies, and statistics.” Airlines collect a massive amount of data on their customers’ habits. They do this in real-time. They know what people are buying and what they aren’t through hard data, not speculation. ADOT numbers, like all statistics, are limited. They can’t tell you the margin an airline makes on every route, or how that route contributes to the profitability of the entire network. They’re also a reflection of a point in the past, not the present or the future (as are financial statements and earnings reports of all companies). I’ve seen speculation that Delta loses money in New York. I seriously tend to doubt that, but even if it’s true, I doubt Delta is going to pull down New York. It contributes far too much to the whole airline’s bottom line.

Thanks for all the interesting conversation. All of you make great points. None of us has the same perspective as others. It’s always interesting to get other points of view. It keeps the thinking juices going, and that’s good.

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1. DesertGhost
  
  Oct 27, 2019
  
  “ADOT” shows my Arizona roots. LOL
  
  Reply
2. Tim Dunn
  
  Oct 27, 2019
  
  “It keeps the thinking juices going, and that’s good.”
  very well said, Ghost, as always.
  Again, a strength of this forum is that CF tees up topics and then lets lots of people throw their 2 cents worth in, some of whom have very accurate insights, including yourself.
  
  and ultimately how anyone wishes to think about competition in the top hubs is fine with me including whether ORD is really unique or not.
  
  just a few comments on issues that you addressed…
  
  it is precisely because some websites foster discussion that is devoid of and actually counter to fact that places like CF have a solid niche. I don’t really pay much attention to what people say anywhere on the internet if it isn’t based on fact.
  
  As for WN and AA in PHX, AA either doesn’t have seatback IFE or is ripping it out on domestic aircraft – so that isn’t exactly a product differentiator. For now, the biggest distinctive might be that AA flies to Hawaii and Europe, has first class seats, and other legacy features.
  
  Regarding who makes what kind of profits and where, the DOT reports system profitability and then at the global region level (domestic, transatlantic, transpacific, and Latin America). The DOT gets its data directly from the airlines; it is the airline and only the airline that determines what they want to report as profitable or not.
  Neither airlines nor the DOT reports hub or specific route profitability – and those who try to argue that line are speculating.
  Further, no company is required to have the same margin in every market or line of business. Even if an airline loses money in one market, they clearly have someplace that is making money to be able to be profitable on a system basis – which describes every US airline right now. Those people that think that DL loses money in NYC or elsewhere and DL subsidizes those losses from its other hubs should be asking themselves why their airline hasn’t been able to grow hubs that are as profitable as some say ATL or DTW or MSP must be to carry DL’s dead weight elsewhere. Some arguments just don’t make logical sense.
  
  And finally, regarding Chicago, Kirby’s comments about growing to get its natural share might be precisely part of the motivation that Delta has to grow its presence in UA markets like ORD. AA and UA both used examples of Delta strength markets as to where they intended to regain share. Given that Delta was the 6th largest airline in 1978 when the domestic airline industry was deregulated and is now the largest by revenue, Delta has clearly grown faster than American and United. Delta has also grown more in American and United markets than the other way around. Add in that Delta has grown beyond its hub network with more point to point and focus city service than either AA or UA,so it isn’t a surprise that DL is growing as fast as it is in ORD.
  Just like the city of Detroit, Chicago has its issues as a city but it is still a strong and vibrant business travel market which Delta believes it needs to serve more of than it has for a number of years. AA and UA will clearly fight it out with each other for the largest airline title (perhaps just domestically) but there is plenty of room for other carriers – including NK and DL – to aggressively grow to get a bigger piece of Chicago. It is also worth noting that there are unique antitrust issues involved when two carriers have similar shares of a market when another competitor tries to grow there.
  
  again, good, thought-provoking discussion.
  
  Reply