American could benefit from increasing Phoenix connections: Analyst

Washington DC
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American Airlines would see economic benefits from shifting some connections to US AirwaysPhoenix hub from Los Angeles, writes Imperial Capital analyst Bob McAdoo.

The Fort Worth, Texas-based Oneworld alliance carrier could boost revenue by between $4 million and $5 million annually if it were to cut its four daily flights from Santa Barbara Municipal airport to Los Angeles International (LAX) and shifted traffic to US Airways’ five daily flights to Phoenix Sky Harbor International, he says in a research report earlier in December.

“With code sharing, we believe American’s Santa Barbara passengers will get better service and AAL [American Airlines Group] will benefit, as well,” writes McAdoo.

American and US Airways merged on 9 December. They plan to begin codesharing in February 2014.

Scott Kirby, president of American following the merger, told Flightglobal earlier in December that all flights will operate with an American flight number by the end of February.

American could offer passengers more one-stop connections via Phoenix, and benefit from lower operating costs and higher yields if were to pull its Los Angeles-Santa Barbara service, writes McAdoo.

All but roughly 1.5 passengers per flight from Santa Barbara connect at LAX, according to his calculations.

American flies 50-seat Bombardier CRJ200 aircraft operated by SkyWest Airlines on the route, Innovata schedules show.

US Airways flies a combination of 50-seat CRJ200s and 86-seat Bombardier CRJ900s operated by SkyWest and Mesa Airlines between Phoenix and Santa Barbara, according to Innovata.

American could open up space at LAX for more high-yield, long-haul flights by cutting some short-haul feeder services. This would fit with chief executive Doug Parker’s characterisation of the airport as the carrier’s “gateway to Asia” and Phoenix as its western “connecting hub”.

“There is a lot of opportunity for American to streamline its operations at Los Angeles," Henry Harteveldt, a travel industry analyst for Hudson Crossing, told Flightglobal in March. "It's simply a matter of logistics. There is only so much ramp space and there are only so many gates."

American has 13 gates in terminal 4 and US Airways will soon use one gate in terminal 3 at LAX. The latter had planned to use three gates but will divest two as part of a settlement with the US Department of Justice in exchange for approval of their merger.

The airline declines to comment on whether it plans to pull out of the Los Angeles-Santa Barbara market.