American Airlines has announced a major initiative to increase its presence in New York. David Cush, American’s Senior Vice President of Global Sales, put it this way:
“We want to make it crystal clear that American Airlines and American Eagle are the airlines of choice for the greater New York area. It’s no secret that New York is a critical market for all major airlines, especially American, and we intend to be New York’s favorite airline through some of the actions we have begun taking, as well as those coming in the months ahead. For more than 80 years, we have offered convenient service from the New York market to locations throughout the U.S. and the world. We offer competitive pricing on all of our routes. We are the largest U.S. airline flying out of New York to London and the Caribbean, as well as from JFK and LaGuardia to Canada. Our 8,300 New York-area employees are among the largest airline workforce in this region, and they are proud of our legacy. We want to be No. 1 — the preferred airline — in New York.”
Effective April 10th, American Eagle will add new service from LaGuardia to Cincinnati with four daily flights. Service to Cincinnatti is currenty dominated by Delta, who maintains a hub at that airport. That American is willing to take on Delta there indicates it thinks it can break the fortress of high prices Delta has built there.
For those who say it is impossible, American has done it before. When American started its regional service to Atlanta, many said that it would be unable to compete with Delta. Now it will be offering all mainline service, with four flights daily. American has a perfect and safe way to grow its New York service. It starts with the inauguration of regional jet service. If the route is a success, it can replace the Eagle flights with mainline service.
American will be adding a sixth daily flight to San Francisco, as well as new service to Las Vegas, which will comepte with the frequent US Airways and Jetblue service on that route. Unlike those carriers, American will be able to connect its international traffic to the flight. Internationally, American plans to increase frequencies on flights to Port-au-Prince and Caracas.
American has been working on its new JFK $1.1 billion dollar megaterminal for years now, and it set to complete the work this summer, and will have 36 gates, 101 ticketing positions(the most at JFK), and 10 security checkpoints.
We are always in favor of new airline service, although like many airline analysts…we worry about flooding the market and the resultant trends…essentially, as we’ve mentioned before…Airline A inaugurates service to compete with Airline B. Airline A offers much lower fares that Airline B is forced to match. Airline B is the established carrier on the route, and thus gets more business with their new lower fares, driving Airline A to reduce or terminate its service, after which Airline B increases fares now that it isn’t competing, causing less people to want to fly the route, which causes Airline B to scale back or discontinue its service. Now Airline A isn’t going to try another disaster on the route, and the public suffers. We much prefer American’s cautious stance with using Eagle to dip into markets.