Many DEN/HOU flyers are going to be strongly UA loyal. They'd choose AA only if there's a significant price advantage.
That's true for plenty of those people but again all the people in Phoenix, Seattle and Portland are as loyal to AA and Alaska and lots of Denverites are loyal to BA already as it's one of our few European international flights. Plus even business class is price sensitive and if they have sales for anywhere close to 3k instead of 5k, people will fly it.
If it doesn't last AA has no one to blame but themselves. There makes absolutely no sense for anyone outside of Texas to take these flights. Any small jewish town in the mid-west can get their flights with LY through Chicago anyone on the west coast has their options already.
The only reason I can think they dont want to compete with the other airlines in the major cities is they are not ready to fly everyday and if they keep it at 3 times a week the competition will win.
I'm sorry but this statement is simply not true. I live in Denver and book flights all the time. LY in Chicago is also only 3 times a week and so far, I've never been able to figure out good connections on American which is the only airline I can fly to ORD if I don't want to buy two separate tickets. I do sometimes buy separate tickets but it is risky transit wise, especially with the weather in Chicago.
I think one of the most important things people aren't accounting for (and we don't have the info to know yet if AA does it correctly) is the timing of the flight. The most coveted flights right now in Denver, if at a reasonable price, are the British Airways and Lufthansa flights because they leave in the afternoon (although BA has a longer layover on the outbound). After that people will backtrack to SFO from Denver to be able to get a 6PM flight and leave out of SFO at 9:40 because it's often much cheaper and the timing and layover are perfect. BA almost never goes below $1200 (Lufthansa does more sales) and these prices often sit at $1500 from Denver.
If we fly through NY its a 2hr time difference and a 4 hour flight so people either waste a whole work day to not have bad layover in NY or take a horrific redeye (even first class is not lie-flat) and sit in JFK or Newark from 6AM to noon. If they put this flight around 10pm and people can leave Denver at 5pm to catch that flight, it will have huge appeal.