Alliance Strength. Not Market Strength.
In airline strategic and tactical planning, the concepts of “market share” and “load factor” are no longer primary. Today, they’re busy re-engineering revenue streams. Just dominating a “route” isn’t the goal – securing and building traffic flows across nations and across intercontinental markets is the goal.

We are seeing it in airline market planning. We’re seeing it in fleet decisions. And, we’re seeing it at airports of all sizes across North America, as airlines shift resources from traditional and historical applications.

It's simple: carriers are re-deploying resources from airline strategies to global alliance objectives.

Let's look at just one example. American Airlines in the past three months has announced it’s yanking BOS-SFO nonstops, with near 90% load factors, deleting SFO-HNL, with near 80% load factors, and relegating ORD-HNL (clocking in at over 80%) to only seasonal service. Traditional, worn-out, rearview-mirror thinking would conclude that such actions are nuts. Traditional me-too financial “experts” will conclude that American is being run out of these markets. What needs to be run out are some of these battery-powered Wall Street analysts, who get their expertise reading the drivel each other writes.

The fact is that American – like Delta, like United, like Air France, like China Airlines, and so on – are shifting to alliance strategies instead of parochial market strategies.

At HNL, for example the domestic market oneworld Alliance has just a 7.6% share. Star has 20%. At SFO, oneworld grabs less than 12%, v Star's 42%. Boston is a similar situation: [fancy graphic showing AA and OneWorld has little market share in BOS, SFO, and HNL]

What’s the common thread? It’s the relative weakness of the oneworld alliance at BOS, SFO, and HNL. While these airports will continue to be spokes for American, a route like BOS-SFO simply doesn’t contribute corollary market strength to either AA or – more critically – to the oneworld Alliance. So, that routing for AA is toast.