AAI masFlight Webinar on American and US Airways

March 14, 2013
10:30am EDT

American Airlines
and US Airways
Reviewing the impact
of the proposed merger

Darryl Jenkins
Joshua Marks

More information at
www.theairlinezone.com and
www.masflight.com

4833 RUGBY AVENUE SUITE 301 BETHESDA MD 20814

Background & Participants

SECTION 1
2
AMERICAN AVIATION INSTITUTE © 2011 ALL RIGHTS RESERVED
3 SLIDE 2

Study Participants
This study was conducted by the following organizations,
under the direction of Darryl Jenkins and Joshua Marks

The American Aviation Institute The Airline Zone is a website masFlight is an aviation data
is a commercial aviation think focused on airline economics analytics firm that aggregates
tank and research organization with contributors from across the terabytes of schedule, operations
based in Washington, D.C. aviation industry. It investigates and weather data from around
AAI works with airlines, airports, aviation economics at the airport the world. masFlight helps
and labor unions on the and route level, emphasizing airlines, airports, and vendors
development of commercial competition and pricing. worldwide optimize operations,
aviation regulatory policy, The Airline Zone offers a range find new opportunities and
operations, and safety initiatives. of analytics and metrics for the reduce cost. OAG provided flight
U.S. aviation industry. schedule data in this report.
www.aviationinstitute.org www.theairlinezone.com www.masflight.com

AMERICAN AVIATION INSTITUTE © 2013 ALL RIGHTS RESERVED SLIDE 3

Questions
• Is there a material change in competitive position?
• Is airport-level analysis the right focus?
• How much low-fare competition is there?
• What’s the small community impact?
• What about international alliance competition?
• What does this mean for travelers?

Our observations are based on a rigorous review
of schedule, operations and passenger revenue data
from public government and commercial sources.


Competition & Consolidation

SECTION 2
5
3 SLIDE 5

What we’ll be presenting
We examine the following to assess how the merger
changes overall competitive dynamics:
• Competition before and after US/AA
• US/AA overlap by routes and airports served
• Looking at competition by city, not just specific airport
• Low-cost carrier overlap
• Small community competition
We divide our analysis into nonstop and O&D competition


Big picture: Before the Mergers
Competition before US/AA and WN/FL Integration
Daily Mainline Regional Domestic Int’l Seats per Seat Seats
Flights Flights Flights Flights Flights Day Share % /Flight
United Airlines 5,023 1,735 3,289 4,277 747 447,953 18.7% 89.2

Delta Air Lines 4,684 2,149 2,535 4,244 440 502,791 21.0% 107.3

American Airlines 3,441 1,850 1,590 2,809 632 371,988 15.5% 108.1

US Airways 3,007 1,205 1,801 2,800 207 287,041 12.0% 95.5

Southwest Airlines 2,840 2,840 - 2,840 - 400,573 16.7% 141.1

Alaska Airlines 745 387 358 661 84 84,905 3.5% 113.9

JetBlue Airways 697 697 - 532 165 92,193 3.9% 132.2

AirTran Airways 528 528 - 472 56 63,936 2.7% 121.1

Frontier Airlines Inc. 230 207 23 210 20 31,923 1.3% 138.8

Spirit Airlines 220 220 - 189 31 35,288 1.5% 160.2

Hawaiian Airlines 206 206 - 193 13 31,181 1.3% 151.3

Virgin America 135 135 - 132 3 19,262 0.8% 142.8

Allegiant Air LLC 111 111 - 111 - 18,597 0.8% 167.5

Sun Country Airlines 47 47 - 35 12 6,961 0.3% 149.0

masFlight/OAG Schedules for February 1 to February 7 2013, operations by US major and national airlines with more than 29 seats per departure.
Excludes freight and mixed cargo flights. Nonstop flights, no code-shares included. Average flights per day during sample period.


Notes on current dynamics
• United and Delta have similar competitive positions
– Broad, multi-hub domestic and international networks
– Significant regional jet operations (almost 2:1 regional to mainline at United)
– Foundation members of respective alliances

• American and US Airways have similar scale
– American has a broad international network and flies larger aircraft
Average flight distance 1,121 miles (836 including regional operations)
– US Airways operates in smaller markets with smaller aircraft
Average flight distance 848 miles (573 including regional operations)
– #2 or #3 in several key markets (NYC, Los Angeles, San Francisco, etc.)

• Southwest has the highest number of mainline departures


Big Picture: After Mergers & Integration
Pro Forma After US/AA Merger and Southwest/AirTran Integration
Daily Mainline Regional Domestic Int’l Seats Flight Seat Seats
Flights Flights Flights Flights Flights per Day Share % Share % /Flight

American + US 6,448 3,055 3,391 5,609 839 659,029 29.4% 27.5% 102.2

United Airlines 5,023 1,735 3,289 4,277 747 447,953 22.9% 18.7% 89.2

Delta Air Lines 4,684 2,149 2,535 4,244 440 502,791 21.4% 21.0% 107.3

Southwest + AirTran 3,368 3,368 - 3,312 56 464,509 15.4% 19.4% 137.9

Alaska Airlines 745 387 358 661 84 84,905 3.4% 3.5% 113.9

JetBlue Airways 697 697 - 532 165 92,193 3.2% 3.9% 132.2

Frontier Airlines Inc. 230 207 23 210 20 31,923 1.0% 1.3% 138.8

Spirit Airlines 220 220 - 189 31 35,288 1.0% 1.5% 160.2

Hawaiian Airlines 206 206 - 193 13 31,181 0.9% 1.3% 151.3

Virgin America 135 135 - 132 3 19,262 0.6% 0.8% 142.8

Allegiant Air LLC 111 111 - 111 - 18,597 0.5% 0.8% 167.5

Sun Country Airlines 47 47 - 35 12 6,961 0.2% 0.3% 148.1

masFlight/OAG Schedules for February 1 to February 7 2013, operations by US major and national airlines with more than 29 seats per departure.
Excludes freight and mixed cargo flights. Nonstop flights, no code-shares included.


Shift in nonstop seat share
Coast to coast overlap between the three majors &
significant competition on almost all O&D markets inside the U.S.

Seat Share, Before Seat Share, After
US/AA and WN/FL US/AA and WN/FL

Others UA Others UA
18.7% 13.4% 18.7%
16.1%
US
12.0%
DL US/AA DL
21.0% 27.5% 21.0%
AA
15.5%
WN
16.7% WN/FL
19.4%

Source: masFlight/OAG, shares of major U.S. carriers and national airlines, nonstop systemwide seats including both mainline and regional operations.
Includes Delta, United, American, US Airways, Southwest, Alaska, JetBlue, AirTran, Hawaiian, Frontier, Spirit, Virgin America, Allegiant, and Sun Country.
Schedule sample from February 1, 2013 through February 7, 2013 for passenger services with 19 seats or greater.


DCA and LGA Post-Merger Shares
Washington Reagan (DCA) New York LaGuardia (LGA)
Departure Shares After Mergers Departure Shares After Mergers

Southwest/ Southwest/
AirTran, AirTran,
JetBlue, 3.6% JetBlue, 4.9%
4.3% 3.2%
Others,
4.8%
Others,
7.9%
United,
8.3% United, American/
7.3% US, 29.9%

Delta,
12.1%
American/
US, 66.9%
Delta,
46.7%

March 2013, Post-Merger Departure % Shares per Week, March 1, 2013 through March 7, 2013


US + AA Networks and Unique Cities
US Airways Airports Unique Cities Brought to Merger
February 2013 Unique US cities added (Black)
Unique AA cities added (Red)

61 unique airports
not served by AA

American Airlines Airports
February 2013

130 unique airports
not served by US Combined network fills geographic gaps
and adds nearly 8,000 new O&D pairs
Schedules for February 1 through 7, 2013
Graphics masFlight and gcmap.com


Airport, City and Metro Definition
Competition is regional, not airport-to-airport
You need a more nuanced definition of competition
than simply airport-to-airport service

Term Definition Example

Airport A specific airport Washington Reagan (DCA)

DOT-defined city with Washington, including both
City
multiple airports Reagan (DCA) and Dulles (IAD)

All regional airports that Baltimore/Washington,
Metro
compete for air service including BWI, IAD and DCA


Nonstop Overlap
Nonstop Airport, City Airports, Cities and Metros
and Metro Pairs Count of unique origins
(2 Directional Pairs = 1 Route) with nonstop service

Airport City Metro Unique Unique Unique
Feb 1-7 2013 Feb 1-7 2013
Pairs Pairs Pairs Airports Cities Metros

US serves, US serves,
772 754 558 61 60 45
but not AA but not AA

AA serves, AA serves,
1,021 981 620 130 128 70
but not US but not US

Overlap by Overlap by
24 30 34 134 131 87
US and AA US and AA

Total US 796 784 592 Total US 195 191 132

Total AA 1,045 1,011 654 Total AA 264 259 157

1,817 1,765 1,212 325 319 202
Combined Combined
airport city metro unique unique unique
Network Network
pairs pairs pairs airports cities metros

masFlight/OAG Schedules February 1-7 2013


Assessing overlap
• AA and US networks are highly complementary
• The American network has considerably more scope,
but US Airways has more departures on routes they serve
– Average of 4x daily per route for US vs. 3.4x daily for AA
• We now focus on the overlap markets for US and AA
– Who are the other competitors on the airport pair?
– Do low-cost carriers compete in the overall market?

How competitive are these markets?


Competition in Overlap Markets
Overlap Route Legacy @ Legacy @ Other LCCs in the same
Specific Airports City Airports metro area pair
Phoenix to Los Angeles DL (4x), UA (2x) - WN (29x)

Phoenix to Dallas/Ft. Worth - - WN (9x 1-stop)

Charlotte to NY LaGuardia DL (6x) DL (1x), UA (6x) B6 (2x)

Charlotte to O’Hare UA (4x) - -

Charlotte to Dallas/Ft. Worth - - -

Charlotte to Miami - - -

Chicago to Philadelphia UA (7x) - WN (6x)

Chicago to Phoenix UA (3x) - WN (7x)

DC Reagan to Raleigh - UA (5x), DL (3x) WN (6x)

DC Reagan to Nashville - UA (3x) WN (6x)

Philadelphia to Dallas/Ft. Worth - - WN (1x 1-stop)

Philadelphia to Miami - - WN/FL (6x), NK (3x)

masFlight/OAG Schedules February 1-7 2013


Positive change for small communities
The network’s small communities are already either US or AA
so combining networks doesn’t change competition.
Combining the networks does significantly enhance network connectivity
options in each of these small communities.
Small Airports where US/AA Small Airports with 50%+ Share
Code Code
will provide 100% of Service (% Given of Weekly Departures)
ABI Abilene, Texas (AA)
LAW Lawton, Texas (97% - AA)
HHH Hilton Head, South Carolina (US)
SBY Salisbury, Maryland (US) GGG Longview, Texas (93% - AA)
CMI Champaign, Illinois (AA) TOL Toledo, Ohio (87% - AA)
LYH Lynchburg, Kentucky (US) GRI Grand Island, Nebraska (87% - AA)
FLO Florence, South Carolina (US) HTS Huntington, West Virginia (81% - US)
MHK Manhattan, Kansas (AA) EWN New Bern, North Carolina (78% - US)
FLG Flagstaff, Arizona (US)
STX St. Croix (68% - US and AA)
PGV Greenville, North Carolina (US)
ACT Waco, Texas (AA) YUM Yuma, Arizona (66% - US)
HVN New Haven, Connecticut (US) OAJ Jacksonville, North Carolina (64% - US)
SJT San Angelo, Texas (AA) GRK Killeen, Texas (62% - AA)
SPS Wichita Falls, Kansas (AA) FSM Fort Smith, Arkansas (58% - FSM)
IPT Williamsport, Pennsylvania (US)
BGR Bangor, Maine (58% - US)
ROW Roswell, New Mexico (AA)
TXK Texarkana, Texas (AA) CLL College Station, Texas (57% - AA)
DBQ Dubuque, Iowa (AA) TYR Tyler, Texas (57% - AA)
GCK Garden City, Kansas (AA) LSE La Crosse, Wisconsin (55% - AA)
JLN Joplin, Missouri (AA) ITH Ithaca, New York (52% - US)
ALO Waterloo, Iowa (AA)
EGE Eagle, Colorado (51% - AA)
SUX Sioux City, Iowa (AA)
ART Watertown, New York (US) masFlight/OAG Schedules February 1-7 2013


Nonstop LCC Overlap
• Start with an aggregate review of all LCCs
• US has more direct LCC competition on airport pairs
• American has more competition at other city airports
• This understates true overlap – we need to consider O&D

Airport Pairs City Pairs Metro Area Pairs
Feb 1-7 2013
% LCC Overlap % LCC Overlap % LCC Overlap

US not AA 18.4% 19.2% 28.4%

AA not US 15.3% 24.3% 41.1%

AA and US Overlap 8.3% 53.3% 76.5%

System Nonstop
16.5% 22.6% 36.3%
Overlap (not O&D!)


So what about O&D?
• We’ve been looking at nonstop overlaps
• It’s really network competition that’s relevant
• This is particularly true for metro areas
• Reviewing O&D traffic helps us understand:
– Where there’s competition for passengers
– How US/AA stacks up against legacy and LCC peers
– How top 40 U.S. cities will be impacted by US/AA merger

Our analysis is based on Q3 2012 fare data released by DOT and available at the BTS website.
We did not utilize confidential information.


Metro Area O&D Network Overlap
Metro Area Pairs % Daily • What alternatives exist to flying
Served by US+AA O&D Pax US+AA domestically?

No overlap • Metro area O&D comparison
US+AA was the < 3% (NYC area, Balt/Wash, etc.)
only O&D option with nonstop + connect options

• Less than 3% of US+AA
LCC overlap
passengers will travel itineraries
Spirit, Southwest, AirTran,
JetBlue, Virgin, Frontier,
78% where US+AA is the only option
Allegiant, Sun Country O&D
• 78% of US+AA passengers
have a low-fare alternative
Legacy overlap
Delta, United, Alaska 96% • 96% have a legacy alternative
or Hawaiian O&D

Our analysis is based on Q3 2012 fare data released by DOT and available at the BTS website.


Top 20: Big 4 Shares of Departing Passengers
Southwest/AirTran will be the #1 or #2 airline in 17 of the top 20 markets,
and AA/US will be the #1 airline in 5 of the top 20 markets.
Ran Southwest + US Airways + Other
Metro Area (Airports) Delta United
k AirTran American Airlines
1 New York (EWR/LGA/JFK/HPN/ISP/SWF) 7.3% 22.9% 20.0% 19.7% 30.1%
2 Los Angeles (LAX/BUR/SNA/LGB/ONT) 28.2% 10.4% 14.1% 18.2% 29.1%
3 San Fran/Oakland/San Jose (SFO/SJC/OAK) 31.5% 7.6% 20.3% 10.9% 29.6%
4 Chicago Metro (ORD/MDW) 28.1% 6.7% 24.9% 28.7% 11.7%
5 Baltimore/Washington (BWI/IAD/DCA) 30.2% 12.2% 16.2% 24.8% 16.6%
6 Las Vegas, NV 40.3% 9.1% 7.8% 10.3% 32.5%
7 Boston Metro (BOS/PVD/MHT) 18.7% 12.5% 10.4% 21.3% 37.2%
8 Denver, CO 30.4% 7.2% 24.3% 8.5% 29.6%
9 South Florida (MIA/FLL/PBI) 15.9% 17.0% 7.5% 27.9% 31.7%
10 Dallas Metro (DAL/DFW) 19.4% 6.0% 4.7% 54.4% 15.6%
11 Atlanta, GA 24.8% 58.4% 3.0% 7.9% 5.9%
12 Orlando Metro (MCO/SFB) 32.7% 14.3% 8.0% 13.0% 32.0%
13 Seattle, WA 15.0% 10.4% 10.2% 9.5% 54.9%
14 Houston Metro (IAH/HOU) 33.3% 6.3% 41.0% 10.7% 8.6%
15 Phoenix Metro (PHX/IWA) 41.9% 8.6% 5.9% 31.6% 12.0%
16 San Diego, CA 38.6% 9.4% 11.2% 12.9% 28.0%
17 Minneapolis, MN 10.6% 52.4% 6.6% 11.5% 18.8%
18 Philadelphia, PA 17.3% 9.8% 8.1% 52.9% 11.9%
19 Tampa Metro (TPA/PIE) 36.2% 15.1% 8.9% 15.6% 24.1%
20 Detroit, MI 10.3% 54.4% 4.1% 11.9% 19.3%

Q2 2012 DB1B Data (DOT via masFlight) – Excludes bulk tickets and non-credible fares


Top 20: LCC Competition
LCC fares appear lower on average than legacy fares – but in most cases
it’s driven by shorter stage lengths and single-cabin configurations
Average % Legacy Average % Legacy Average
% Revenue
Rank Metro Area (Airports) Domestic Base Fare is Fare Per Mile is
by LCCs
Fare Higher than LCC Higher than LCC

1 New York (EWR/LGA/JFK/HPN/ISP/SWF) 28% $195 27% 25%
2 Los Angeles (LAX/BUR/SNA/LGB/ONT) 37% $181 44% -12%
3 San Fran/Oakland/San Jose (SFO/SJC/OAK) 40% $181 44% -14%
4 Chicago Metro (ORD/MDW) 30% $178 34% 32%
5 Baltimore/Washington (BWI/IAD/DCA) 34% $180 38% 14%
6 Las Vegas, NV 56% $154 38% -8%
7 Boston Metro (BOS/PVD/MHT) 43% $176 26% 23%
8 Denver, CO 49% $161 34% 18%
9 South Florida (MIA/FLL/PBI) 37% $154 35% 22%
10 Dallas Metro (DAL/DFW) 22% $190 59% 15%
11 Atlanta, GA 21% $171 45% 35%
12 Orlando Metro (MCO/SFB) 56% $142 23% 3%
13 Seattle, WA 23% $189 18% 6%
14 Houston Metro (IAH/HOU) 30% $206 39% 3%
15 Phoenix Metro (PHX/IWA) 41% $163 28% -11%
16 San Diego, CA 42% $164 50% -17%
17 Minneapolis, MN 18% $202 43% 44%
18 Philadelphia, PA 18% $190 29% 40%
19 Tampa Metro (TPA/PIE) 50% $147 27% 9%
20 Detroit, MI 16% $186 68% 69%



#21-40: Big 4 Shares of Departing Passengers
Charlotte is the smallest US/AA hub by O&D traffic, but it is a stronghold.
All other US/AA hubs are top 20 markets.
Ran Southwest + US Airways + Other
Metro Area Delta United
k AirTran American Airlines
21 Portland, OR 22.5% 9.7% 12.1% 7.2% 48.5%
22 St. Louis, MO 42.8% 14.1% 7.0% 22.2% 14.0%
23 Charlotte, NC 4.6% 13.3% 5.8% 65.9% 10.5%
24 Salt Lake City, UT 22.3% 46.8% 5.3% 8.4% 17.2%
25 Kansas City, MO 39.0% 15.0% 9.5% 16.3% 20.2%
26 Sacramento, CA 50.2% 7.2% 7.2% 9.1% 26.3%
27 Austin, TX 35.0% 10.1% 11.7% 22.1% 21.1%
28 Raleigh/Durham, NC 24.7% 23.4% 7.4% 26.3% 18.2%
29 Nashville, TN 46.9% 13.4% 5.7% 20.8% 13.2%
30 Pittsburgh, PA 26.5% 15.2% 12.9% 26.4% 19.0%
31 New Orleans, LA 35.1% 18.5% 13.3% 16.2% 17.0%
32 San Antonio, TX 39.3% 14.6% 12.2% 22.7% 11.1%
33 Milwaukee, WI 45.2% 19.6% 7.1% 9.8% 18.3%
34 Indianapolis, IN 29.3% 20.3% 9.1% 21.5% 19.7%
35 San Juan, PR 13.4% 12.0% 5.9% 23.3% 45.4%
36 Columbus, OH 32.6% 18.5% 9.4% 24.1% 15.4%
37 Buffalo, NY 30.5% 15.1% 7.6% 12.2% 34.5%
38 Cleveland, OH 19.0% 9.5% 45.7% 15.6% 10.3%
39 Hartford, CT 26.9% 17.2% 8.3% 21.3% 26.4%
40 Albuquerque, NM 50.2% 9.5% 8.6% 17.5% 14.3%



#21-40: LCC Competition
As you move to mid-tier U.S. cities, LCC competition intensifies.
Legacy airfare spread over LCCs drops significantly.
Average % Legacy Average % Legacy Average
% Revenue
Rank Metro Area Domestic Base Fare is Fare Per Mile is
by LCCs
Fare Higher than LCC Higher than LCC
21 Portland, OR 32% $167 34% 4%
22 St. Louis, MO 46% $163 16% 1%
23 Charlotte, NC 5% $193 47% 19%
24 Salt Lake City, UT 26% $182 41% 8%
25 Kansas City, MO 45% $161 28% 8%
26 Sacramento, CA 52% $156 49% -24%
27 Austin, TX 43% $176 22% 1%
28 Raleigh/Durham, NC 29% $153 25% 12%
29 Nashville, TN 49% $168 26% 16%
30 Pittsburgh, PA 29% $164 35% 32%
31 New Orleans, LA 40% $169 20% -7%
32 San Antonio, TX 38% $179 25% -5%
33 Milwaukee, WI 52% $156 31% 42%
34 Indianapolis, IN 32% $174 34% 43%
35 San Juan, PR 47% $170 32% 2%
36 Columbus, OH 30% $164 40% 29%
37 Buffalo, NY 53% $139 23% 19%
38 Cleveland, OH 16% $192 44% 12%
39 Hartford, CT 35% $173 36% 19%
40 Albuquerque, NM 52% $161 34% -11%


Global Alliances

SECTION 3
25
3 S L I D E 25

Alliances & Global Competition
• We have been focused on domestic competition
• Let’s turn to the international arena
• International competition is dominated by global
alliances and joint-venture agreements
• US shifting to oneworld will have a leveling impact
on alliance dynamics, particularly transatlantic


Alliance Mix: From the United States
US’ shift from Star to oneworld will reduce the gap with
Star Alliance – and should have a tangible competitive benefit
Before Realignment After Realignment

Oneworld
Unaligned, 19.9% Unaligned Oneworld
22.1%
, 22.1% 25.6%

SkyTeam,
16.2%
Star Star SkyTeam,
Alliance, Alliance, 16.2%
41.8% 36.0%

Schedule snapshot for first week of February 2013 (masFlight/OAG) – Share of Departures per Week


North Atlantic: Competitive Rebalance
US’ shift to oneworld will make a significant difference
in the competitive North Atlantic market
Before Realignment After Realignment

Unaligned, Unaligned,
8.9% 8.9%

Oneworld
19.9%
Oneworld
30.2%

Star
Star Alliance,
Alliance, 37.2%
41.7%

SkyTeam,
23.7% SkyTeam,
23.7%



What does it mean?
• US brings strength to Caribbean, Atlantic and Canada
• Star Alliance will be particularly impacted in Caribbean
• US shift improves competitive balance in key markets

oneworld % of weekly
Change in weekly departures:
Pickup departures
U.S. to Canada +257 flights per week 7.1%
U.S. to Caribbean +204 9.9%
U.S. to Central America +162 5.9%
U.S. to Europe +86 4.5%
U.S. to Israel +7 3.7%
U.S. to South America +7 0.8%
Weekly Shift, Star  oneworld +723 weekly flights +5.8%


Conclusions

SECTION 4
30
3 S L I D E 30

Conclusions: Network Combination
US Airways and American are highly complementary
1. There is low direct overlap on an airport-to-airport basis
2. Measured by city pairs, more overlap – and competition!
3. US strength on the coasts, in the Caribbean and to Europe
4. AA strength in the central U.S., Latin America and Asia
5. New O&D pairs result – new competition
6. There’s minimal hub overlap in catchment area


Conclusions: Competition
Still a very competitive industry after these mergers
1. United, Delta, American, Southwest, plus smaller airlines
2. Most traffic is between major cities, and that’s where both
legacy and LCC carriers compete intensively
3. Southwest has a strong position in the Top 20 markets
4. US + AA does not fundamentally change competition
5. Larger markets continue multi-hub trend
(e.g. DC – UA at IAD, Southwest at BWI, US/AA at DCA)
6. LCC overlap is significant on both nonstop and O&D basis


Conclusions: Small Communities
Small community forecast improves
1. Competitive change is minimal
2. Smaller markets gain O&D connectivity and viability
through combination of US+AA networks
3. We don’t buy the argument that the merger will cause
small community service reduction or higher fares


Conclusions: Alliances
Alliance competition increases
1. Minor shift in alliance share from Star  oneworld
Particularly relative to DL/NW and UA/CO shifts
2. Meaningful across Atlantic and Caribbean markets
3. Significantly increases oneworld network (O&D pair)
options from Central U.S. to Europe
4. We think this is good for competition and long-term viability
of three alliance model


Conclusions: Other Thoughts
Benefits for consumers
1. New O&D and routing options from the merged network
will benefit both business and leisure passengers
2. Stronger network  better local service options
3. Pricing pressure is alive and well. Southwest may not be
as aggressive as it used to be, but their competitive
footprint is wide and evident in fares and yields
4. There are just 2 city pairs with high impact
– Charlotte to South Florida – ripe for LCC entry

– Charlotte to Dallas – more complex forecast


Time for Questions and Answers

Darryl Jenkins Joshua Marks
The Airline Zone masFlight
(540) 364-6913 (703) 994-0000
djenkins@aviationinstitute.org josh@masflight.com

www.theairlinezone.com www.masflight.com

36
3 S L I D E 36

AAI masFlight Webinar on American and US Airways

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