American Airlines establishing a hub in Austin? (Houston, West: credit card, airport)

[atxcio]

This could have no other purpose than to thwart DL’s focus city plans. But we’ll get cheaper fares on redundant routes for a while at least.

[Trainwreck20]

My wife just said that all it means is more flights to cancel.....

[ParaguaneroSwag]

Originally Posted by Trainwreck20

My wife just said that all it means is more flights to cancel.....

This is my main concern with American Airlines. They grow way too fast without fixing their internal issues first. This is why they got acquired by US Airways previously.

[As Above So Below...]

Originally Posted by ParaguaneroSwag

This is my main concern with American Airlines. They grow way too fast without fixing their internal issues first. This is why they got acquired by US Airways previously.

Well that was more complex.

We have to first understand that AA has the WORST relations between management and labor of all airlines. A lot of it stemmed from Don Carty negotiating pay cuts for everyone and then giving himself a bonus after 9/11. After that, labor was often happy to cut off their nose to spite their face. Even when Gerard Arpey came in and tried to play nice with everyone, the labor unions (especially the pilots) wanted none of it.

Fast forward to Doug Parker and the constant search of a merger partner. They first tried with UA and DL. UA was open to it and DL definitely was not (see Keep Delta my Delta). So Parker and Scott Kirby (now the CEO of United) decided to try a different tactic with AA. They waited for AA to file for Chapter 11 which was inevitable considering their insanely high operating costs and money losses. They knew that AA had horrible labor relations. So instead of going directly to the shareholders like they had previously, they went to the labor unions and got them on board. The unions were all too happy to oblige to stick it to management and the merger sailed through.

Fast forward a couple of years to 2015 and the unions are about as happy with the new management group as they were with the old one. To this day they have all the same issues they did. The merger actually did a lot for the AA flyer, but solved literally zero of the labor/management issues.

But here is the deal, they will never be solved. Never. So the idea of getting its internal issues in order before expanding is never going to happen. That said, the expansion is a separate issue all together. Even with the labor issues they can still look for ways to make money. For years AA was super conservative and now they are expanding faster than I knew they could. UA is now the conservative airline.

[ParaguaneroSwag]

Rapid growth isn’t a problem when done correctly. The problem is as you mentioned, “faster than I knew they could”. Things may look good and then be a problem in the long run. United posted significantly larger profits than American in 2019. Conservative growth pays off in the long run in most cases. United is even investing in supersonic jets (not saying they will work, but is a better gamble than establishing a base that may work in the short trrm). Delta in my opinion balances their growth the best of the three. Them holding out on Austin may or may not benefit them.

[As Above So Below...]

Originally Posted by ParaguaneroSwag

Rapid growth isn’t a problem when done correctly. The problem is as you mentioned, “faster than I knew they could”. Things may look good and then be a problem in the long run. United posted significantly larger profits than American in 2019. Conservative growth pays off in the long run in most cases. United is even investing in supersonic jets (not saying they will work, but is a better gamble than establishing a base that may work in the short trrm). Delta in my opinion balances their growth the best of the three. Them holding out on Austin may or may not benefit them.

Well, I tend to view the investment in those jets as a PR stunt. They may pan out and they may not. But its so far into the future that no one will remember.

United has definitely done themselves a favor by sitting out the Austin pissing match. I doubt anyone is going to make money there in the short term. They are just hoping they can outlast the competition.

[eqshadimar]

Delta has announced plans to make Austin a focus city but has also said that those plans have been delayed due to the pandemic.


I love this site for everything related to flying:


https://simpleflying.com/american-ai...austin-growth/


https://simpleflying.com/delta-american-austin/

[Ice_Major]

Great the more competition the better. Hopefully it materializes into lower fares. Recently took a trip to Accra Ghana. Saved $650 by flying out of DFW as opposed to Austin. I'm rooting for Delta. If they can establish a strong foothold, having the big 4 carriers (Southwest, Delta, American, United) operating at a significant level is good for the state and the city. Delta has much more room to grow. Also focusing on Austin gives them some elbow room from the competitors, at least until AA announced their expansion.

[whereiend]

Originally Posted by ParaguaneroSwag

This comes as a surprise to me because with American having their largest passenger hub in DFW, it would seem unreasonable to establish this so close. Would be interesting to see if it all works out and how much they can grow it. But if they can sustain this so called mini hub/focus city, good for Austin!

I think that this is irrelevant, because all of these flights are for O/D traffic. I can't remember the last time I connected through DFW on a flight. I'll always choose a direct flight over that. And even for international flights I've connected through places like Charlotte, Atlanta, LA instead of DFW.

For AA they either offer more direct flights for AUS or they let other airlines get the AUS business instead. AUS certainly won't be a hub anytime soon if ever. The airport is already at capacity just with O/D traffic.

[DMChicago]

What is O/D traffic ?