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The Center of the Aviation Universe

New York holds a crucial spot for business travelers. And among airlines operating from the region’s airports, it's no surprise that the competition is ferocious, the expenditures extravagant, and the infighting brutal.

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First, an apology to you Middle Americans who live in flyover country, you average Americans who hate New York, you salt-of-the-earth folks who despise smug, self-righteous New Yorkers, and you red-state realists who detest how New Yorkers think they are the center of the universe.

But, like it or not, New York and New Yorkers matter more than you. At least as far as business travel is concerned. Everyone who puts metal tubes in the sky for profit knows it. They aren't ashamed to admit that New York is the center of the aviation universe. And they are spending billions of dollars to cater to the foibles of flyers in the New York metropolitan area.

Grin and bear it, America. Money talks, New Yorkers talk the loudest, and airlines are listening the hardest.

"The New York market is so large that I don't think one carrier can own it. That alone makes it unique," says Jim Carter, a vice president of American Airlines, one of four domestic airlines in a Texas Death Match for control of the Metropolitan area's travel market.

Large is actually an understatement when you consider the economic impact of New York, which in aviation terms is a "catchment" area that includes the five boroughs of New York City, Long Island, most of Connecticut, huge chunks of New Jersey, parts of northeast Pennsylvania, affluent Westchester County, and other suburban areas of New York State.

An estimated 130 million travelers annually use the region’s three major airports (Kennedy, LaGuardia, and Newark) as well as three secondary aerodromes (Islip on Long Island, Westchester County, and Stewart Airport in New York's Hudson Valley). New York generates $8 billion annually just in domestic revenue for airlines. A third of all transatlantic traffic flows through New York, four times more than the next largest U.S. market. Eighty international airlines service the area. The world's most important international route, New York-London, is part of the mix. New York is also on one end of eight of the 10 busiest domestic routes. And airline insiders say New York-Los Angeles, the nation's busiest domestic route with more than 4,000 passengers a day, accounts for more revenue than some smaller airline hubs.

Then there's the, um, "quality" of the New York travel market. Even with the rapid decompression of the city's financial markets, New Yorkers are willing to pay more to fly and represent a disproportionate percentage of travelers booking expensive full-fare coach, business-class, and first-class flights.

"The premium market is so large in New York, airlines fly all this premium capacity into and out of New York and the stakes are huge," says Robin Hayes. He should know. Hayes is currently chief commercial officer of Kennedy Airport's largest airline, JetBlue Airways, which has positioned itself as both a "premium" and "value-oriented" airline. Before that, he was the top U.S. executive at British Airways, the international airline with the largest presence in New York.

So it's no surprise that the competition is ferocious, the expenditures extravagant, and the infighting brutal. The airlines battle over airport facilities, publicity, routes, in-flight services, and even sponsorship of the city's cultural, sporting, and entertainment life.

One example: Delta Air Lines, which is headquartered in Atlanta. It is so intent on positioning itself as a native New Yorker that it has paid big dollars to sponsor both the New York Mets and the New York Yankees. It is also the sponsor of Madison Square Garden. That means Delta is also the brand involved with the city's basketball teams (the Knicks for men, the Liberty for women), its hockey team (the Rangers), and entertainment venues such as Radio City Music Hall and the Beacon Theater.

"Eighty-three percent of all entertainment tickets sold in New York go through the Garden," explains Gail Grimmett, a Chicago native who is now Delta's senior vice president for New York.

Other carriers have their own city sponsorships—American Airlines has its name on the marquee of a Broadway theater, for instance—but the real battle now is for airport facilities. To be charitable, New York's major airports have long been inferior, but that is changing, albeit it slowly and at great cost.

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