American and JetBlue announced yesterday that travelers flying on one airline can now earn miles in the other airline’s loyalty program. This is the expected, logical next step in the continuing rollout of their Northeast Alliance, but there is something in here that I think may be overlooked. The way that the mileage earning is being deployed means that these airlines will now share a lot of sensitive data with each other.
As announced, here’s how this will work. American AAdvantage members will earn 5x the fare paid when they fly on JetBlue and enter their AAdvantage numbers. Elite members earn bonus miles up to a total of 11x the fare paid for Executive Platinum at the top end. Meanwhile, JetBlue TrueBlue members will earn 1x the fare paid for Basic Economy and 3x for everything else. That doubles if travelers book direct, and there are bonuses for Mosaic members, those with the credit card, etc.
In other words, travelers will earn at the exact same rate in each program regardless of which airline they’re flying. That is an attractive proposition for the traveler.
Unlike other parts of the Northeast Alliance between the two airlines, mileage-earning is valid for all flights systemwide with just one carve-out — JetBlue’s Transatlantic flights cannot earn AAdvantage miles, as agreed upon with the Department of Transportation (DOT) previously. But hey, if you live in LA and buy a JetBlue ticket to San Francisco, you can earn American miles. And if you live in Flagstaff and buy an American ticket to Dallas/Fort Worth, you can earn TrueBlue points.
By now you’re likely wondering… what does this have to do with sharing sensitive data? Well, in order to award those points, the airlines need to know what travelers on the other airlines paid for their tickets. This is a novel concept.
Most partner mileage earning propositions still award points based on distance flown, because that’s easy to decipher. For example, American awards AAdvantage miles for travelers on Alaska like this:
And JetBlue awards TrueBlue points for travelers on Hawaiian this way:
The norm is to approximate fare contribution by awarding more miles to those in higher booking classes (RBDs). But American and JetBlue awarding each other’s passengers based directly on fare? That is something new, and that’s information that can be particularly valuable.
To use a blatant example, American flies from JFK to Paris today. Many New Yorkers may now prefer to earn TrueBlue points on those flights since they need to send the kids to visit the grandparents down in Sarasota, and everyone knows JetBlue is the way to go for that. If they do choose to earn TrueBlue points on that flight, then American will have to report the fare paid for each ticket to JetBlue. If I’m on JetBlue’s network planning team, I’m salivating at the prospect of getting that information as I evaluate where to send my planes next in Europe.
Sure, JetBlue and American have the ability to coordinate schedules in New York and Boston thanks to the DOT-approved agreement, but they don’t have the right to coordinate fares. Even if they did, remember that the alliance is only for those two cities, but the mileage earning is systemwide (or, almost so for JetBlue).
Let’s look at another example. American and JetBlue compete against each other in the Austin to LA market. Now they’ll have to share the fare data with each other if the traveler opts to earn on the other airline, and that could help inform future decisions in marketing, pricing, and network planning. This becomes even more interesting down in South Florida where both airlines have large customer bases and are supposed to be competing ferociously. The airlines could glean really helpful information by knowing more about the other’s passengers.
I spoke with American about this, and they really downplayed the significance of the data-sharing. Spokesperson Andrea Koos made sure I knew that they would only share the fare data if the passenger opted to earn miles on the other airline. It’s not just a blanket data dump. She also explained that the data will not be shared until after travel has completed, so this isn’t advance fare information which would be more concerning. Lastly, she said this:
This is a fully automated process, and the data is used only for purposes of administering the AAdvantage program.
If that’s a policy, it sounds like a policy that could be changed. I don’t imagine there’s anything explicitly illegal about sharing past fare data with the other airline. After all, there are sources out there where you can get some of this data, though none of it personally-identifiable like this will be. If I’m in network planning, marketing, or revenue management, I would love to have that data in my hands.
Of course, even if it doesn’t break laws, it may raise the interest of the Department of Justice (DOJ) as they continue to review the alliance. This is certainly an alliance in uncharted territory.
[Updated to reflect the incorrect assertion that there was any sort of antitrust immunity between American and JetBlue. They do not have antitrust immunity in any way, but DOT did bless them working together on schedules.]
44 comments on “American and JetBlue Will Begin Sharing Some Very Valuable Data”
Is there any possibility of this information being used by the AA/BA transatlantic joint venture, or would AA not be allowed to share these “market insights” with BA?
Daren – I would think that JetBlue would put some caveat in there saying that it can’t be shared with third parties, but it all gets so fuzzy. If AA has the data and it’s actionable, then it could certainly be used in some way in joint planning efforts with BA. All these relationships get so tangled up.
outstanding article, CF.
You couldn’t be more right.
Welcome back, Tim.
Welcome back!
Tim – Welcome back
Welcome back, Tim
I cannot see AA playing why these rules. Most pax, including me, if given a choice of flying B6 or AA would select B6. AA wouldn’t be pleased. What AA won’t or can’t realize is that B6 provides a superior product. So how is sharing of fare data going to help AA?
This should be rather alarming for those in the mileage/status-chasing game, as up until now one would usually choose to fly a partner and earn based on distance rather than fare.
The response from AA is very telling, because they’ll have to be carful not raise alarms at the DOT as to what this data is being used for. I’m curious as to how AA is able to make this sort of mileage crediting possible, because it would seem to be a VERY INVASIVE data feed that would be required between B6 & AA. When partner airlines exchange the FTL (Frequent Traveler List) message it only includes flight data and the FF number (no ticket number). So AA must be using another handback message (PFS/PRL) that includes the ticket number of the passenger, then cross-references it to call out and read the fare calculation line for this purpose. That is nuts!
It’s crazy (scary, really) to me that AA would invest the IT capital to make this happen, and only foreshadows what is probably to come with partner earnings, unfortunately.
Maybe I’m naive, but can’t airlines simply go to a number of online and proprietary sources to get competitors’ fare data? It’s not like the data is hidden in Fort Knox or the Pentagon. The public has to know what a ticket costs in order to book a flight, right? By the way, jetBlue doesn’t offer a superior product compared to American or any other airline for my money. It offers transportation in an airline seat, and those are, and have been, inherently uncomfortable regardless of which airline one flies. I’m in my 70s, and have been flying for well over 50 years, and I’ve never sat in a comfortable airline seat.
DesertGhost – Well, fare data is one thing, but actual ticketed fare data that’s tied to a specific customer is something else entirely. There’s no way to get that kind of information with personally-identifiable details.
Thanks for the clarification.
Yes, this is great for JetBlue. Probably good for AA since they also get some JetBlue fare data and also make their ffp more attractive to people in LAX and SFO and some other places where they have large presence but doesn’t fly everywhere. This level of integration is terrible for UA and DL.
I can see this going awry. Lets say I book a series of flights from A destination to Z destination and I am a lower tier elite on one of the two airlines. B6 or AA could then target me for a promotion, maybe a short cut to higher status or something like that causing me to drop airline one for the other permanently.
The other airlines must be thinking: How can we get into this game? Maybe Delta and Alaska begin a more meaningful relationship in Seattle, using the AA/JetBlue model (minus the give-away slots)? Maybe United and Hawaiian do the same in HNL/OGG? Or Alaska and Hawaiian? The point being the precedent being set here could really lead to a changing landscape across the industry. It’s obvious that AA and B6 are unconcerned about DOJ objections, as they keep tossing more wood on the fire. Perhaps this is the methodology of a coming wave of de facto “mergers”, as many industry observers have predicted for the past 10+ years? No one loses their name, but competition still shrinks over time. To date, DOJ’s reticence has been telling.
AA’s partnerships with both AS and B6 and the associated loyalty agreements make sense within the context of AA exec statements that AA has been losing money on its transatlantic and transpacific systems for years and they would not be replacing 50-60 widebody aircraft worth of capacity. No other airline has made a statement during the covid or covid recovery era about a portion or portions of its network.
Okay, but how is AA’s loss of 50-60 widebodies germane to their domestic O & D business? Yes, passengers connected to AA’s JFK international routes, but that has little, if any, relationship to its slot gifting in LGA.
Let me run this by you. In 2019, Alaska Airlines had a larger market share between two Delta hubs (SEA-MSP) than Delta had. This despite MSP being a simple spoke for Alaska. If Delta could stop bludgeoning Alaska and take a more “AA/B6” approach with the type of codeshare agreement that American and JetBlue have fashioned, wouldn’t that make Delta’s life a little easier. They could mine Alaska’s precise passenger fares, co-ordinate schedules and, for all intents and purposes (except for fare manipulation) operate as a single carrier under two names? And please know I’m not “picking” on Delta because it is your favorite airline. It’s just a Delta/Alaska tie-up in SEA is the first example that came to my mind.
First, I’m not sure what data source you use but DOT data shows that Delta carried 380 pax/day between MSP and SEA on a roundtrip basis for the year ended Dec 2019; I’m not sure how anyone would think that AS could be the dominant carrier even in the local market when Delta flew 3.5X more capacity. Alaska carried 170 pax/day and Sun Country carried 160 pax/day. I can’t think of a single Delta hub to hub route from Seattle or Minneapolis – or any other DL hub – where Delta is not the largest carrier based on DOT data. The strength of Delta’s presence from SEA just as it is from BOS is to DL’s other hubs as well as its international markets.
DOT data also shows that Delta carried 49% of the LOCAL SEA passengers that AS carried from the airport as a whole but 71% of the local market revenue. Delta has a significant fare premium to AS in SEA just as it does to B6 in BOS. But MSP and SEA are not the focus of this discussion.
The reason why giving B6 AA’s domestic data is because B6 is not just a domestic airline anymore. They are now selling seats to London and London just happens to be AA’s largest international market by revenue. Further, B6 has been aggressive in trying to expand outside of its core BOS, JFK and FLL “hubs.” B6 is out for B6’ interests and will use the information it gains to grow where it has the best chance of succeeding. As CF noted, there is no other way to get passenger specific fare class level O&D information except through internal ticket or FF data. That is incredibly rich information and no other airline is willing to share that with competitors – and AA is still a competitor to both AS and B6.
American did its deals with AS and B6 based on a multi-year decline on both the west coasts and in the NE. No other carrier including Delta needed to do that nor is willing to take the risk of sharing the level of data that AA will share. CF hit the nail on the head with this article.
One other tidbit on AS and DL since you think DL should get along better with AS. For 2019, DL was the 2nd largest carrier on the west coast (3 states) behind United. AA and AS were #3 and 4. For the last 2 quarters of 2020, DL was the largest west coast airline based on ASMs followed by AS; that was reversed in the first two quarters of 2021 based on schedules. AS and DL have both grown relative to AA, UA and WN on the west coast during the pandemic. It’s hard to know how the future will shake out but few people would have thought that AS and DL would be swapping places for #1 on the west coast or that UA and WN esp. would be so far down the list. The top 1 or 2 carriers in any market can’t and won’t make deals with other large domestic carriers.
I’ll have to dig up that SEA-MSP data. But, sometimes, data can be surprising. Such as Delta having more DOT Customer complaints than Allegiant last year. Or Delta’s repeated holiday cancellation snafus. People just don’t expect that stuff from Delta. Delta is a great airline. So that we don’t get sideways, which is unappreciated here, I will leave it at that. Have a good weekend, sir.
Data is funny. We can always skew it to make it say what we want. Or we can accept industry standard data. Most people can realize that DL is much larger than Allegiant and, more significantly, is in pretty much the same rankings for 2020 (verifiable from DOT data) as it was pre-covid. AA was near the bottom of most categories for 2020 – again as measured by the DOT, not me – while DL did better than AA, UA and WN on a combination of DOT metrics. Which is probably why they won the JD Power award.
Some people will struggle to accept easily verifiable data. DL does better than its big four peers (AA, UA WN) and does well compared to low cost carriers (AS and B6 specifically).
If customer service matters as part of the AA-B6 relationship, customers will choose B6 over AA. If customer service metrics matter in a B6-DL competition, DL comes out ahead based on DOT data. If customer service matters in an AA-AS competition, AS wins. See the problem? AA doesn’t compare well in terms of DOT metrics – which include on-time and cancellations – and yet AA is sharing customer data with B6 and AS.
Sideways is not a good place.
CF got it right. AA has engaged in a risky strategy of sharing valuable customer data with two very nimble, aggressive low cost carriers. Despite internet narratives, AS and B6 haven’t won against DL but they stand to gain a whole lot from their relationship with AA.
but, let’s be clear. There were people that didn’t want to hear that AA operated large portions of its transatlantic and transpacific networks at a loss – and yet AA’s execs just said that.
Nice to see the old Tim with invented data is back.
Your ability to manipulate anything is unparalleled.
Welcome back
I hope you go back to your passport plum candyland where you belong soon.
AA and AS are not earning miles based on revenue. It’s still based on mileage. In fact, a lot of AA ff would rather that they did the mileage earning based on mileage flown. If anything, AA and B6 is now more closely tied up than AA and AS. This network wide earning chart means it’s no longer just a northeast alliance. I assume AA must be seeing some promising signs in the partnership so far or else they won’t be doing this.
One thing is for sure, B6’s focus city flying helps out AA’s middle of the country strategy a lot more than AS. Having your most relevant focus cities at SEA/PDX just do not bring that much to a ff in middle of the country. Even AS’s LAX flying doesn’t help AA that much, since they are mostly flying to places AA already flies to or small west coast cities that don’t draw in the ff. AS is really not that competitive outside of PNW/AK.
Since you spend so much time talking about market share, here is data to consider now that DL has lifted its seat cap. Scheduled July capacity vs 2019.
UA down 31%
DL down 30%
AS down 18%
AA down 17%
WN down 5%
B6 flat
Nk up 6%
It doesn’t matter what DL’s market share is in Q4 of 2020 or Jan/Feb of 2021. Going forward, DL will be hampered by its decision to make 1700 pilots not current and getting over 2000 pilots to take early out. It’s mainline fleet will still be down 100 aircraft from end of 2019 by end of 2022. IIRC, it’s RJ is down a similar or even higher ratio. It’s probably going to take until 2024 until it will be able to fly similar level of block hours as 2019. During this time, it will lose out as the legacy of choice to AA in many airports in the middle of the country where UA is basically competitive.
Is AA giving too much to B6 here? Quite possibly. But the data AA will be sharing be B6 does not weaken AA. It simply strengthens B6, which is ultimately bad news for DL and UA in the northeast.
DL and UA execs have both said repeatedly that they do not intend to chase market share during the recovery. They exist to turn a profit for their shareholders. However, DL’s flown share and its forward scheduled capacity share is virtually unchanged in its hubs and focus cities while UA has lost share and will continue to lose share in multiple of its hubs due to B6’ and WN’s growth. UA had a weaker domestic network than AA or DL pre-covid and that relative weakness has grown.
In contrast, AA’s deals with B6 in the NE and with AS on the west coast – and the associated FF deals – are the result of a decade of market share losses in those major markets – and the FF deal will likely accelerate AA’s loss of share as AA tries to cobble together a “network” of routes operated by multiple carriers to compete with much more cohesive, single carrier networks in cities like NYC and the west coast.
After digesting the VS merger, AS is returning to its north-south west coast strength. B6 is spreading itself all over the country to try to diversify away from its core “hubs” but at the cost of market share in those key hubs. AS knows what it does well. B6 is still playing darts.
AA is aggressively discounting to maintain share including in its own strength markets such as NYC-MFL and to LAX and that is not sustainable.
AA does not have revenue sharing with either AS or B6 which means AA can buy seats on AS or B6 or vv but the capacity cannot be added together as if it were one unit – as happens with international joint ventures.
DL and UA likely have more to gain by being global carriers with strong hubs than the piecemeal domestic network that AA is building with what will be a smaller international network.
Covid provided an opportunity for AA to do a hard reset of its strategies. They are realizing what some of us have said for a long time – which is that they can’t afford to fly routes where they significantly underperform DL and UA in average fare performance.
AS and B6 are the beneficiaries and AA is taking one more swing at remaining relevant in markets where it has financially underperformed for years – and their execs are increasingly saying what many analysts have known. Allowing AS and B6 to gain passenger specific detailed itinerary info is a huge risk for AA. Ten years after the US merger and multiple execs admissions re: what is not sustainable financially, AA has no choice but to try something different; as the weakest carrier financially coming into covid, AA is the first to recognize the need to reboot and ditch strategies that don’t work. AA’s future depends on not trying to be a global competitor to DL and UA because that hasn’t worked but to have a network that is something of a hybrid between DL and UA and the low cost carriers.
First of all, welcome back. I do find our banters to be quite enjoyable, even if I disagree with a lot of your points.
Anyhow, I only brought up market share because you loved talking about it before.
DL – Their strategy to me is focusing on west part of the country. SEA is getting major main line additions based on their pilot bids. As in way out of proportion with the current base size. LAX will probably be a major focus once the terminal project is finished. SLC will get a lot of growth. ATL will be large like it always is. DTW/MSP seem to me like they will both be permanently smaller. They haven’t really done anything to counter B6’s additions out of NYC. Boston has recovered the slowest of any hubs. I don’t know what’s the point there. The focus cities will be much smaller. They said they were going to be down just 20% vs 2019. But then they saw the low fares coming in and now are running 30% less vs 2019.
AA – yes, they made these deals because they can’t afford to engage in market share battles and they can’t afford to completely walk away from them. AA has a real path to winning market share in all those middle of america markets that are sometimes very profitable to legacy airlines. The loser of that is DL.
AS – Yes, AS has accepted its weak transcon performance and retreated to the west coast. Nothing wrong with that. That’s just who they are. VX purchase was a giant waste of money. They did it to keep B6 out of west coast and that’s done. I keep reading AS fanboys saying how they have an aggressive growth strategy coming. All I see is a lot of shifting from transcon/midcon to intra-west coast.
B6 – It has actually been very focused on NYC if you look at their recent moves. They got 18 months to basically fully build out their JFK/LGA operation from the slots they are picking up. Sure, they are going to lose some market share to NK at FLL, but they can get that back as long as they have more gates than NK. Who cares about MCO. Boston is recovering more slowly. They will be able to refocus on Boston after their NYC buildup is done. With this AA deal, E90 fleet retirement has probably been pushed back for quite a few years. Aside from a couple of old A320 and E90s that are getting retired, they are really adding a lot to their fleet over the next few years that will allow them to finish building out NYC/Boston/FLL/LAX. Expect a lot of growth.
Keep in mind that there aren’t that many TrueBlue ff. Some of them will probably move to AA if they can get the same or better mileage earning on AA vs on TrueBlue. I actually don’t know how much fare data AA is risk sharing here. However, I do expect a lot of AA ff to be flying JetBlue after this on non-codeshares. Which will actually help JetBlue out in places like FLL, LAX and SFO.
To summarize, demand is down, esp. in business markets and in cities/states that have more aggressively locked down. Hubs are the most efficient way to distribute traffic. American said even before covid that certain of its hubs underperformed financially and, to no one’s surprise, those are also the markets that have seen the slowest return of capacity. Delta has returned capacity most equally across its hubs with DL’s capacity and share in SLC and LAX higher than pre-covid. NYC, BOS, PHL, WAS, CHI, and SFO have all had more aggressive lockdowns and/or lower business demand and hubs there have had much lower demand return. Delta’s focus cities cater predominantly to point to point traffic, heavily business-oriented, and so they have returned at a slower pace than Delta’s domestic system – but Delta has still not lost its relative capacity ranking in those cities, just as in its hubs.
Low cost airlines including WN and B6 built their networks pre-covid around point to point traffic with minimal connections; WN has increased its use of connecting traffic and has pulled down system capacity most in high frequency markets and longer mainland markets using that freed capacity to grow Hawaii. B6 has looked all over the map for growth because of the very slow return of capacity overall in the NE. B6 announced new routes equivalent to one-third of its total routes but has dropped large portions of that. They have succeeded at growing to the #2 carrier at EWR and will likely retain and grow that market but at the cost of their former #1 position at FLL. AS operated a largely hub-based network pre-covid and has retained that, further trimming transcon flights – but those flights were doing poorly pre-covid.
Bottom line is that covid is confirming what worked pre-covid and airlines are maintaining or strengthening those hubs/focus cities/routes while pulling back on what didn’t work – and those were known both by public fare performance data and exec statements. Low cost carriers have been more aggressive in trying out new routes but will keep a small percentage of them. AA’s weak hubs are still weak while it intentionally focuses on its stronger hubs, UA still has the weakest domestic position of the big 4 with the most locked down markets, DL has the best domestic/international and business/leisure balance as well as has the best market share position in its hubs and the nation’s largest markets. WN has the financial strength to do what it needs to do to restructure its network while AS learns from its mistakes and weaknesses.
AA’s partnerships are its attempt to “fix” what was broken pre-covid and the loyalty program terms are necessary to make the partnerships work – but very likely to the benefit of AS and B6 and at AA’s costs. We will see how it all plays out but it is doubtful that AA’s domestic patchwork will not allow it to globally compete any more effectively with DL and UA than it did pre-covid.
Cranky, have you been able to ask American or jetBlue if there are internal data protection policies in place, like prohibiting the fare information from leaving the AAdvantage/TrueBlue systems, as part of the agreement to do mileage earning this way?
I don’t know if their IT is even set up to do that, but I too am pretty surprised that they’re willing to share systemwide fare information with a competitor like this.
Alex – All American told me was what I quoted in the article.
In these situations, it’s usually the larger partner who has most to gain: but your cartoon implies that it’s JetBlue who will be, conceivably, misusing the data.
Julie,
before the conversation “goes sideways” as was expressed as a desire above, it is noteworthy that there I didn’t mention any other airline in my first two comments other than AA or B6. Instinctively, some people have to immediately drag DL into the discussion because, any critical commentary about AA has to be matched by an attack on DL, because, clearly no one could possibly say anything negative about AA unless they were some widget-tattooed DL loyalist.
I stopped posting on this blog because I am not interested in the incessant back and forth that happened on this site. CF produces a few thought-provoking articles per week, far less than other blogs. There is a place for spirited discussion. Trashing other people, organizations, and companies is what happens in the rest of America right now. We all want a place where we can escape and discuss aviation, not a place where the internet looks like the latest version of “another brawl fest at MIA.” CF’s articles aren’t the problem and I was wrong to think otherwise; it is the reaction of some people to what I write which seems to get out of control here far more than on other sites. I am not going to play to that again.
I never quit reading this blog. If for no other reason, I can’t stay away from CF’s graphics which are, hands down, best on the internet. Including for this article.
There are people that value my presence and that is indicated above.
just a few tips so that we can all get along.
The internet is not one super site where everything and any user gets discussed everywhere.
Intelligent people engage in conversation with those they disagree with rather than burning down and destroying what they don’t think works.
If you expect other people to disclose their own identity, then use your own full name and state where you work, have lived, etc.
And then recognize that the world is not necessarily what any of us want. AA’s merger with US has not turned out quite the way alot of people hoped – or it was sold 10 years ago.
AA has engaged in its partnership with AS and B6 because it has fallen so far from where it was in markets where those two airlines are strong – but it hardly means that other airlines have failed at their strategies.
DL and UA haven’t pursued partnerships like AA has done with AS and B6 because DL and UA don’t need to.
I have no idea what CF has planned for future articles or whether it is worth it to comment but can (or why can’t) we all just get along?
enjoy the weekend and come back ready to be part of creating the best part of global community.
And I don’t do purple. never have and never will.
UA I think actually made a huge mistake by not pursuing this type of partnership with B6. They could’ve gotten back a really good presence in JFK and a solid Florida station. But instead, their minimal JFK presence is a joke. It will hemorrhage cash for many years.
Of course, I don’t think UA could have given B6 as good of a deal as AA did.
Your comments are annoying because you make dogmatic statements as though they’re true when they are not then you defend even your most ludicrous claims with ten paragraph responses with even more fake facts or a small piece of data you’ve manipulated to look like it means something.
For instance: “DL and UA haven’t pursued partnerships like AA has done with AS and B6 because DL and UA don’t need to.”
Delta would love a partner in texas. Delta desperately wanted a partner in Seattle a few years ago, but there isn’t one to be had in texas and AS turned delta down.
With United, they’d love a SE partner or, one could argue, a partner that helps them flow traffic to the Caribbean better than Newark, but there really isn’t one.
You make a statement like “delta and United don’t need partner”, when delta actually tried to make AS a partner and got rejected and there simply aren’t partners where those two networks are deficient. AA doesn’t have that problem. There are two carriers with strong local strengths in the two areas of the country where the AA network was deficient.
I’m sure you’ll reply with 12 paragraphs but it was a lovely time when you just didn’t post your delta dogma in this site.
Julie,
when you dogmatically present your opinion, you do exactly what you accuse me of doing.
Delta and United HAVEN’T pursued partnerships.
No airline has coverage in every major market.
The real issue which you don’t want to accept is that AA had one of the most enviable route systems after the merger with US but couldn’t make it work financially.
AA’s position in NYC has continuously shrunk since the merger.
AA flew a bunch of “strategic routes” from LAX which made it look a lot bigger but now that is all stripped out, they are currently the same size as DL.
And DL would have like to have AS as a partner – but instead Delta built a hub in Seattle – and DL consistently gets 70% of the local market revenue that AS gets from SEA. The percentage of local market revenue DL gets in BOS is an even higher percentage compared to B6.
AA is the only one of the big 3 that has not closed any hubs post merger – but AA has continued to lose share in multiple hubs and is now trying to use its partnerships with AS and B6 to fill in the gaps which AA could clearly not do on its own in 10 years after the merger – a very different strategy than what DL and UA did with DL the most aggressive in pursuing new growth opportunities and succeeding at doing so based on verifiable revenue data.
AA hasn’t made the difficult choices in closing hubs and is now having to outsource flying to other carriers in order to try to remain relevant in key global markets. Only time will tell if they succeed – but they will have given away valuable passenger data to competitors before they find out if their gamble works.
Thank you for making my point.
Tim Dunn response playbook
1. Ignore what I responded to
2. Ignore what I said
3. Ignore and forget what you actually said initially: “they don’t ‘need’ partners”
4. Make another random dogmatic statement about dl and UA not pursuing partnerships even though delta certainly has with AS and UA with b6
5. Somehow turn it into something about AA financials that wasn’t even discussed or brought up by me and some unrelated statement about what I don’t want to accept
6. Add in some new Pro delta metric skewed to make delta look bigger than AS in Seattle — delta isn’t bigger — who’s even talking about AS vs DL in Seattle market share? That’s not even the point you brought up
It’s nice to see your tactics and style haven’t changed.
Julie,
ALL US airlines are for-profit companies. Nearly all are publicly traded which means they have a requirement to report data which privately held companies including those from other countries do not have to report. The US government still gathers enormous amounts of data on airlines that is eventually available to the public. That data provides enormous amounts of insight into how well airline strategies work.
American’s was the last of the big 4 mergers. They made a lofty goal of the merger to be able to compete with DL and UA as global carriers and yet AA’s profitability has been the lowest of the big 4 on a margin basis. AA’s network strategies have not worked to the degree of other airlines based on AA’s profitability. AA knows that cannot return; covid is a chance to fix what AA has not done since the merger.
Because of all of that publicly available data AND AA exec statements, it is pretty clear what parts of AA’s network generates the profits and what parts are financial drags. NYC and LAX and the NE and west coasts have been major financial drags on AA’s network. Asia has been an elusive dart board for AA.
DL and WN moved most aggressively after their mergers to cut out unproductive hubs and capacity. AA has done the least.
DL has also built two new hubs at SEA and BOS and, despite internet lore, there isn’t a shred of evidence that those or any other of those Delta hubs or focus cities lose money esp. since Delta has consistently had the lowest unit costs (CASM) of the big 3.
United has the lowest market share in its hubs and the lowest share of medium and small markets which is a strength of AA and DL’s networks but UA believes it can return to profitability based on its business travel rich pre-covid network.
Whether you want to accept it or not, DL and UA simply have not done large scale partnerships with low cost competitors. The fact that AA has to give away huge amounts of passenger specific data-rich data to make those partnerships work is a risk that AA is willing to take but DL and UA are not. AA will be a smaller international airline -its execs said so – and it is outsourcing domestic flying to two low cost competitors that are hungry to grow.
As hard as it is to accept, AA is finally admitting that it will not be a global competitor on the same scale as DL and UA and AA will rely on partnerships to remain relevant in key markets as DL and UA do not need or want to do.
Ahhh yes. The old Tim Dunn finisher: everyone must admit that the largest airline in the world just won’t be competitive with delta or they aren’t being realistic. Lol. Ok Tim. You must have extra whiskey in your coffee this morning.
A carrier with Joint ventures with British Airways, Iberia, Qantas, and JAL and the best Latin America hub in the US won’t be competitive globally…. The eye rolls toward you are always fun and how you even come up with the nonsense you say boggles the mind.
What happened to the Delta mini hub in Miami, Tim?
What happened to all the delta focus cities?
Where’s a single new Austin route from Delta?
It’s a competitive industry, AA is making moves, Delta seems to be in retreat trying to bulk up hubs like Boston, Seattle, and New York due to moves by AA that cost AA nothing (aside from Cranky’s interesting piece above) and where aa had no organic way to grow in those markets anyway.
No one needs to accept anything. Facts are facts. Delta wanted a deep partnership with AS and was rejected. AA was not rejected.
look up your facts. Up until 2019, AA margins were higher than United. But Using one year of data to extrapolate one of your untrue over the top statements is very very you. It shouldn’t be hard to imagine for anyone that any carrier will struggle financially immediately after a merger, delta sure did after their NW merger. United struggled financially after their merger as well.
Welcome back, Tim. Nice to see you haven’t changed a bit.
Julie,
AA execs, not me, said they will not replace 50-60 international aircraft that operated unprofitably on their international system for years.
AA execs, not me, signed partnership agreements with AS and B6 who are growth-hungry low cost competitors.
DL and UA both moved to close hubs and restructure their networks after their mergers. AA never did so.
DL has built 2 new hubs since their merger and are competing very well because DL’s strength in SEA and BOS is its global presence and the fact that it dominates service to its hubs. It doesn’t need to have the same amount of capacity to every city that AS serves; it has decided that it will have a large enough presence to serve the local markets. SEA and BOS are and will be relatively smaller parts of DL’s network because of SLC and LAX on the west coast and their east coast hubs relative to BOS.
AS and B6 do not have those advantages.
AA as well as AS and B6 are trying to combine their respective strengths with each other to create something that can compete with DL and UA.
DL and UA pre-covid were the top two airlines on the west coasts based on revenue and ASMs.
DL and UA were the top two airlines in NYC and DL is the 2nd largest airline in BOS.
There simply is no way either DL or UA could do a partnership with any other US carrier on the west coast or the NE – and there is no reason to believe they are willing to give away valuable passenger data to get a partnership.
Even though AA is the largest airline right now, it does not have the domestic/international balance that DL and UA have. AA has to figure out how to use all of the aircraft and staff it currently has to support all of its hubs at profitable fare levels. No airline is there yet but AA, not DL and UA, are cutting parts of its own network.
As for its focus cities, DL is still the largest airline at RDU and CVG, and is currently in third place at AUS based on ASMs, bypassing UA. It is also third place at BNA as it was pre-covid and is operating just one less route – BNA-RDU – than it did pre-covid. DL’s hubs and focus cities and its relative position in each of those cities are intact.
Time will tell.
But to the original point before you took this down a rabbit trail:
Tim Dunn: “DL and UA haven’t pursued partnerships like AA… because DL and UA don’t need to”
Yes, they have tried and both carriers have large holes in their networks just like AA, but UA and DL got rejected in their attempts. AA wasn’t rejected.
just to correct.
Delta CHOSE to build its own hub at Seattle. It wasn’t rejected but walked away from the AS codeshare.
And the US government made AA and AS step back from each other after the AA-US merger. They are now reigniting what the US government said they could not do because of size.
It is DL and UA’s size in markets that overlap AS and B6 that prevents them from having partnerships.
No airline can serve every market when there are 3 US global carriers and 4 nationwide multi-hub/focus city carriers.
There is no evidence that AA will succeed in covering every market even with its AS and B6 partnerships and might very well succeed at helping the latter two grow.
If your knowledge level of the AS-DL break up is that low, I don’t even know why you’re bothering to comment. That’s not what happened and it’s been talked about on any number of news articles or investor calls.
Google “Alaska delta break up”
Of course delta chose to build a SEA hub… after their exclusivity and partner offer to Alaska was turned down.
Julie – Correct. I rarely want to wade into these back and forths, but in this case, there was absolutely discussion about furthering the partnership. Delta wanted more feed capacity from Alaska and it couldn’t or wouldn’t provide what it wanted, so Delta walked away and built its own hub.
Thanks for confirming, Cranky.
“Widget-tattooed Delta loyalist” … ha! That is certainly what you come across as over all the various sites you post on. I never comment on blogs, but I had to drop in to say whenever I see your name on a post I know to expect the sort of brainwashed Delta-supremacist arguments many of their employees spew nonstop. It’s ok. It’s your brand. But it’s tired.
Is it really that hard to reverse engineer an approximate fare paid if the fare class/booking class and market is shared for loyalty program purposes? This makes it precise.
The real key here is whether that fare class/booking class data is shared between AA & B6. The precise fare paid is definitely valuable, but if the fare class is also shared, that same comparison back to historical fares along with the customer PII could yield corporate contract discount data.
Tim’s definitely back! LOL!