American Q3 Earnings Showing Similar Revenue (and Cost) Trends

The numbers largely speak for themselves. What you see is a good story. What you don’t see is that it’s not as good a story as American’s rivals. This brings to light several strong areas, but also some of concern. It is good to see domestic revenues continue to increase, however it is concerning to see the declining trend of Pacific and cargo revenues. This is consistent with the competition, and certainly not limited to American. The story remains: American’s revenues are increasing, however not at a pace to match Delta and United. Meanwhile, costs continue to increase at all airlines. As much as we experiment with different techniques to visualize earnings, sometimes the simple way is the best. The income statement is important, and the best way to show the absolute magnitude is to show the numbers. However, we also believe context is important. Included for each line item […]

The Great O’Hare Market Share Fight of 2019

The Titanic Shift in Chicago Nobody Noticed

Who controls the Chicago O’Hare domestic market? The answer is complicated. Until as recently as Q4 2018, the answer has surprisingly been American… not United. And it hasn’t even been close. In fact, American enjoyed a 7 point advantage over United as early as Q1 2016, in United’s own back yard. Things have changed. When asked how United has changed in the past two years with the new management, I often point to the ORD example. Most don’t realize two things: United was not the airline serving the most of the local Chicago market They are now Looking at capacity share, United has long held the crown at O’Hare. However, it isn’t until recently that United has begun adding smaller markets with regional jets from ORD to boost that point-of-sale presence. The end result is a new old battleground in Chicago. American will continue to compete fiercely, and we may […]

Delta’s Q3 Results in Two Words – Domestic Revenues

Delta was the first airline to post Q3 results, and they did not disappoint. Net income was up $173M compared with the same quarter in 2018, to almost $1.5b. Once again, we find visualizing the year-over-year results the best way to provide full context into how the airline is trending. For Delta, the trend is positive. Even though the lower fuel prices were a tailwind for Delta, the massive growth in domestic revenues is the story. Undoubtedly, some of these revenues came at the expense of United, American, and Southwest’s grounded 737 Max’s. Delta saw the opportunity to grab market share, and took it. The result is a 7.8% increase in domestic passenger revenues. Two numbers that warrant watching over the next few quarters are the Pacific passenger revenues, and the cargo revenues. These could be indicators of global economic challenges, or simply blips on the map from any number […]

LATAM’s Shift From American to Delta

LATAM is leaving American for Delta. Boom. Just like that. On Friday, it was announced that Delta would acquire 20% of LATAM and take assignment of 14 A350s originally destined for LATAM. In exchange, Delta will receive the best Latin American code-share partner U.S. dollars can buy. This week, we focus on LATAM, and how their U.S. network compares to both the incoming, and the out-going partner. LATAM’s network to the U.S. is built around American. With the vast majority of the capacity destined for Miami, the partnership is obvious: Miami dominates Latin America connectivity. American dominates Miami. The question at hand is whether LATAM has such a large presence in Miami because it is their partner’s hub, or if they have the partner because they have such a large presence in Miami. (Spoiler alert: Miami matters). LATAM cannot leave Miami, partner or no partner. It is far too large […]

The Evolution of Basic Economy – an Update

A Window into the Competitive Playbooks of the Airlines

Low Cost Carriers were a thorn in the side of the legacy carriers long before the industry felt the need to add the term “Ultra”. With networks built on maximizing revenue through connectivity, the legacy carriers became prime targets of low cost airlines who could fly point-to-point for low fares with their low cost structure. Starting with the original PSA and Southwest, low cost carriers required response from the legacy carriers. It is from these early responses that we first saw restrictions such as the Saturday night stay, and 14-day advanced purchase. As the first generations of LCCs age, the latest iterations required a designator to differentiate. The new LCCs that grew to presence in the 2010’s includes airlines such as Allegiant, Frontier, and Spirit, all with costs even lower than the traditional LCCs, and thereby earning the title Ultra Low Cost Carriers. The greatest impact has been felt by […]

Mapping Growth in the Metroplex

DFW Population Growth 2013-2017

A quick map this week showing some of the work we are doing combining census data with market sizes. The Dallas-Fort Worth metro area has been growing rapidly. Anyone who dodges new road orange barrels while counting tower cranes in north Dallas can tell you; things are growing. In a city served by multiple airports, it becomes important which airport has the better access to the growing areas. As a quick example, we’ve shared one map we looked at comparing population growth over time by zip code. Of course the true value of being able to drive meaningful analysis is to combine this data with various sources. This is what we are in the process of exploring. For now, however, enjoy the single-dimesional map of population grown in the DFW area. As always, if this sparks an idea, let us know. Chances are good we join you down the rabbit […]

What’s on a Trans-Atlantic Wide-Body?

A break-down of US to LHR Payloads

With the prospect of narrow-bodies entering the trans-Atlantic markets, the question of cargo arises. How much cargo is being moved in passenger aircraft? For that matter, how much weight is being carried in the form of passengers and bags, and how much is sold as freight or mail? This week, we try to provide some insights to the question of how important freight is on passenger flights, at least from a weight standpoint. Using the Traffic Pivot tool, we can separate how payloads are allocated, with an assumed 235 lbs per passenger (including bags). Fortunately, the tool also goes back to 1990, allowing us a fascinating view of how payload moved across the Atlantic in a U.S. to Heathrow example. Freight moves, and it moves only on wide-bodies. That is clear from the lack of freight and mail on the 757 compared to the wide-body alternatives. The question then becomes, […]

How We Find Intelligence through Alternative Data

An Example Visualizing America's Growing Skyline

Visual Approach Construction Index

A big part of what we do here at Visual Approach is to find meaning in alternative data. The word “alternative” has come to mean something different these days, however there is no better word to describe it. Information that is useful, but not directly related to aviation is alternative. Yet, this data can give us great insights into how the market is performing, and more importantly, how it will perform in the future. Finding these relationships is a big part of what we are doing at Visual Approach. The amount of aviation data available is staggering when compared to other industries. Especially in the U.S., we have detailed traffic, flight, and even origin & destination information with fares. We recently released a tool to dive into some of this data recently, which you can use for free at our Traffic Pivot Tool . Yet, while this plentiful data is […]

A Tribute to American’s MD-80s, Visual Approach Style

The end of an era is little more than a month away. The last MD-80 flight is scheduled for September 4th. The once work-horse of the American narrow-body fleet has been slowly reducing flying the past decade in preparation for its inevitable retirement. This week, we’ve built a moving map showing the past 28 years of MD-80 flying in American’s colors. Granted, our available data only went back to 1990, but you can clearly see the growth… and retirement of the venerable “Mad Dog”. The map is interactive, so feel free to pause, zoom, rotate, and explore the historical map of American’s MD-80s.