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United States of America
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- Dallas/Fort Worth International Airport
- United States of America
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American Airlines is a wholly-owned airline subsidiary of American Airlines Group Incorporated. With hubs in Charlotte, Chicago, Dallas/Fort Worth, Los Angeles, Miami, New York, Philadelphia, Phoenix, Washington DC and Tokyo, American Airlines operate an extensive network including domestic and regional services within North America and international services to Europe, Asia Pacific, Central America and South America. The carrier was incorporated from The Aviation Corporation, formed into American Airlines in 1934. The carrier was the founding member of the oneworld Alliance, and introduced SABRE in 1959.
Following the merger of AMR Corporation and US Airways Group in 2013, US Airways integrated with American Airlines under a single Air Operators Certificate (AOC). The companies have already been using a single booking system and operating as a single brand since 17-Oct-2015. US Airways Group and US Airways ceased to exist as a separate entity effective 30-Dec-2015. As a result of the merger, all property, rights, privileges, powers and franchises of US Airways became American's, as well as all of US Airways' debts, liabilities and duties.
Location of American Airlines main hub (Dallas/Fort Worth International Airport)
American Airlines Group Inc. share price
6,483 total articles
US regulators deserve credit for their equal distribution of Havana rights among FSC, LCCs and ULCCs
573 total articles
Delta Air Lines believes that it will receive approval for its proposed immunised joint venture with Aeromexico in 4Q2016. But opponents of the tie-up – most notably Hawaiian Airlines and jetBlue – are ratcheting up their arguments that without a formal open skies agreement between Mexico and the US antitrust immunity is a non-starter.
jetBlue and the Mexican airlines Interjet and Volaris have also spoken out about the disproportionate number of slots that Aeromexico and Delta will hold at Mexico’s largest airport and gateway – Mexico City Juarez. jetBlue is urging regulators evaluating Aeromexico and Delta’s ATI request to require the divestment of 30 slot pairs at Juarez in order to ensure smaller airlines can compete effectively against the larger airlines dominating the Mexican transborder market.
Given the political uncertainty in the US, it is tough to predict whether the DoT will issue a decision on the joint venture before the Nov-2016 presidential elections. Whatever the outcome Delta will still exert considerable influence over Aeromexico, given its plans to up its stake in Mexico’s largest airline. ATI seems to be a cornerstone of Aeromexico’s transborder strategy, and without the benefits of joint venture Delta will assume the role of a vocal shareholder, rather than a full strategic partner.
jetBlue Airways appears to be making a major network move in 2017, with a potential return to Delta-dominated Atlanta after a short-lived stint at the airport in 2003. Both jetBlue and the US industry have undergone significant change during that thirteen-year time period. jetBlue has widened its passenger base to encompass business passengers along with VFR (visiting friends and relatives) customers, and has successfully introduced a premium cabin within the LCC business model. Changes in the US domestic market include sweeping consolidation and the rise of ultra-low cost airlines, which have arguably created permanent disruption in airfare pricing.
Dynamics have also shifted in Atlanta during that time period. Although Delta remains the dominant airline, Southwest has acquired AirTran and put less emphasis on Atlanta as a hub. Ultra-low cost airlines have also made moves in Atlanta during the past couple of years. Those changes could create an opening for an airline that offers a different product proposition in the market.
jetBlue’s return to Atlanta depends on the airport granting the airline’s request for specific gates. A launch of flights would be mutually beneficial for both jetBlue and Atlanta. jetBlue gains access to one of the largest US domestic markets and Atlanta would broaden its number of airlines spanning three distinct business models – full service airlines, medium frills LCCs and ULCCs.
Enter Qatar Airways. As Etihad Airways looks to bed down its investments in other airlines, Qatar is gradually expanding its airline investment portfolio. Qatar's 15% stake in IAG is now being followed with a 10% stake in LATAM for USD613 million – nearly 1.5 times Qatar's net profit of USD446 million, disclosed (for the first time) on the day prior to the LATAM equity announcement. It is a safe investment; LATAM group has a strong market position and its share price has remained strong even in the face of a brutal downturn in Latin American economies.
Qatar gives LATAM needed cash and a distant shareholder. Latin America is the smallest market by far for Gulf airlines, but while currently in the economic doldrums, has a longer term potential for growth. It is also a key future market for US airlines, albeit very small on the Gulf airlines' networks. Qatar is spending nearly EUR2.5 billion on equity investments, still smaller than Etihad's but illustrating a willingness to acquire airline assets, for investment and strategic reasons. In this case the immediate strategic purpose for Qatar is less apparent.
Star Alliance's privately owned Avianca is also considering a strategic shareholder; that would mean five of Latin America's eight largest airline groups could have an airline investor from outside the region.
Now that US regulators have made their decisions on service awards for Cuba, the airlines must now prepare to serve a country with unique challenges – ranging from airport infrastructure to hotel room availability. The significant hurdles have not quelled excitement over the re-establishment of scheduled airline services to Cuba, which will resume later in 2016.
Aside from the closely watched contest to win service to Havana, the US DoT also awarded service rights to nine other secondary Cuban cities and, not surprisingly, South Florida features prominently in those route assignments. Gauging accurate levels of demand in those markets could take some time to determine. With a 50-plus year absence of scheduled airline flights between the US and Cuba, there is no up-to-date data from which to measure demand patterns.
Although Cuba holds much promise, an ample level of guesswork will be necessary as airlines navigate dealing with the Cuban government in order to ensure a smooth service launch. Some level of passenger education is also necessary in order to create the right set of customer expectations for travel to Cuba.
(This is Part 2 in a series of reports examining route awards between the US and Cuba. Part 1 focused on awards rights from the US to Havana.)
US regulators have decided to spread Havana award rights among eight operators – a mix of global full service airlines, medium frills low cost carriers and ULCCs. Unsurprisingly, given the concentration of Cuban Americans residing in the region, South Florida features prominently in the tentative award approvals.
In theory, the DoT’s proposed route structure ensures that customers travelling to Havana have access to a wider range of fare prices and product offerings. In many respects the agency had little choice but to accommodate as many airlines as possible for service to Havana – in order to ensure that consumers had an array of service providers as scheduled air service resumes between the US and Cuba.
There may be some quibbles regarding the tentative route awards to Havana, but the route composition proposed by the DoT is not likely to change drastically. The agency’s route dispersal reflects certain expectations that the agency would institute a certain level of competitive diversity on new services to Havana.
(This is Part 1 in a series examining US-Cuba route awards. Part 2 will examine markets other than Havana)
Allegiant Air attacks United in New York, testing niche ULCC model in large competitive metro market
The US ULCC Allegiant Air is stepping outside its typical network framework during late 2016 when it adds service from Newark Liberty International airport, a major hub for United Airlines. Newark, which caters to business and leisure travellers in the New York metro area, is not the typical large city market that Allegiant usually enters. With a few exceptions, Allegiant’s larger markets are heavily weighted toward leisure travellers; its top bases are Orlando Sanford and Las Vegas McCarran.
Allegiant is breaking United’s monopoly on three of four routes that it is adding from Newark, challenging United to find ways to respond to the new competition. But Allegiant’s operating profile is different from that of typical ULCCs, which means that United may not be forced to craft any response to Allegiant’s small presence in Newark by YE2016.
Allegiant’s decision to enter the New York market was driven by an opportunity emerging after US regulators eased operating restrictions at Newark. It is an easy, low-risk way for Allegiant to test the waters in larger markets while largely sticking to its niche formula of linking small to medium-sized cities to large leisure destinations.