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Sun, Jun 17, 2012

New Report Suggests Strategy For American Airlines

Cornerstone Network Strategy Necessary For Post-Chapter 11 Success

A new report published Thursday assesses the American Airlines cornerstone network strategy through both domestic and international lenses. The domestic route structures of oneworld, Star, Skyteam and the unaligned airlines are reviewed.  In addition, connectivity to international networks is assessed.

Darryl Jenkins, Founder and President of Theairlinezone.com, published the report. He says in combination with oneworld and immunized joint ventures with IAG and others, the cornerstone model is well suited to industry conditions. oneworld is well positioned in the cornerstone markets for the following reasons:
They are number two overall in the largest markets.
Cornerstone markets have plentiful O&D (origin and destination) traffic and lucrative corporate traffic. American's key gateway hubs – including New York JFK, Los Angeles, Dallas/Ft. Worth, and Miami – have advantages for global traffic relative to Delta's and United's major hubs.
There are several key reasons why American Airlines finds itself uncompetitive in cost.  These include its late entry into immunized alliances, its fleet imbalance, and the competitive impact of industry consolidation. 

In order for American's cornerstone network strategy to be fully realized, however, the breadth of international service from these cornerstone hubs must be complemented and fed by regional feed with aircraft better suited to market sizes and yields. The combination of smaller mainline aircraft and regional scope relief should further unlock the value in the cornerstone markets.

Jones says the cornerstones are an important and necessary part of American's network. The report also includes an analysis of the competitive landscape in each of the cornerstones and other important US markets.

FMI: www.theairlinezone.com

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