AA applies for Delta's Seattle-Haneda slot

[eolesen]

To be fair, DL thinks they'll be able to leverage domestic connections on the PVG side of things with the MU codesharing.

Reality is that they were already sending all of the traffic interested in flying on Skyteam via MU out of LAX, or on their own metal out of SEA, NRT, or DTW.

All this does is dilute some of the value that the MU/DL partnership provides to MU. If history proves to be an indicator, MU won't go quietly. They regularly price lower than DL (as do CZ and CA), and I'd expect both the price sensitive and the ethnic traffic to stick with MU.

Maybe this might even force the CNAC to reconsider allowing MU to remain in Skyteam... DL can't control that decision, and it wouldn't be out of the question for the Chinese to wake up and decide having MU positioned to join Skyteam may be in the better interests of China. MU already has codesharing in place with QF and JL.

 

[Kev3188]

What does DAL have to do with LAX to HND route?

Nothing, of course.
 
 

The double standard is, indeed, laughable.  Some are still stuck in the myopia that Delta is on the only airline that can come in and create financial challenges for competitors.  In this case, AA has been operating LAX-PVG now for several years, and Delta merely applies for authority and AA's days are numbered.  It would be completely hysterical if it weren't so detached from reality.

Do not let the cyber hubris of some posters fool you. On one of these threads, I mentioned your idea that AA is now in a position to aggressively compete with other carriers. From where I sit, that certainly seems the case, and I think most people at the Widget recognize that resting easy is simply not an option.

 

[commavia]

Do not let the cyber hubris of some posters fool you. On one of these threads, I mentioned your idea that AA is now in a position to aggressively compete with other carriers. From where I sit, that certainly seems the case, and I think most people at the Widget recognize that resting easy is simply not an option.

 
For sure.  I've long thought (known, really) that most people at Delta - especially including Delta management - aren't nearly as stupidly arrogant and myopic as certain airline forum legends-in-their-own-minds when it comes to the growing competitive threat Delta faces.
 
As I recently said elsewhere, I do not at all dispute that in the last ~5 years, owing to its smart management team, relative lack of unionization, advantages of bankruptcy and earlier merger - not necessarily in that order - Delta has had outsized freedom of motion with which to aggressively maneuver and challenge its chief rivals.  Delta's capable management team has taken full advantage of these strengths to go on the offensive and put both AA and United on the defensive.  But the reality that is becoming more and more clear - and that the ongoing HND affair and AA's and United's growing margins seem to affirm - is that these days are now largely over.  Delta is no longer the only one that is capable of acting aggressively and driving reactive moves by its competitors.
 
I fully recognize that actual Delta people get this and I have no doubt they'll respond in the way they think makes the most competitive sense.  In the long-run, I'm quite glad to see it - I think it's certainly good to see AA returning to its position as an aggressive competitor, and I'm happy to see the U.S. now have multiple carriers capable of checking each other on relatively equal competitive footing.

 

[eolesen]

For sure.  I've long thought (known, really) that most people at Delta - especially including Delta management - aren't nearly as stupidly arrogant and myopic as certain airline forum legends-in-their-own-minds when it comes to the growing competitive threat Delta faces.

On the front lines, you're correct, but I've met my fair share of We-Rule-The-World folks in DL management. Sadly, WT is not as much of an anomaly in that regard at HDQ -- I found no shortage of people who have Richard's photo framed in their office, and dutifully carry around their Little Red Book.

Success breeds cockiness. DL had a good run while WN, UA and AA were all distracted in one form or another.

Those days are indeed over. We saw hints of that in the 2014 financials (and will see more starting next week). It's only going to become more evident as we get into 2015.

 

[FWAAA]

I've always assumed that there are cities in the United States and throughout the world which attract enough O&D traffic to justify lots of nonstops even without lots of connection opportunities. In the USA, LAX, NYC, LAS, SFO and MCO are the easy examples. Sure, some airlines maintain hubs in those cities, but lots of airlines serve those cities and don't connect passengers at those airports. At LAX, featuring more domestic O&D than any other USA airport, connecting passengers are only about 20% of the total passengers.

Around the world, aren't there business/leisure destinations that are similar? Like London, Paris, Singapore, Tokyo, Hong Kong and maybe Shanghai? Yes, some airlines do feature online connections at those cities, but lots of other airlines serve those cities without connecting passengers. Does success at PVG require Chinese airline partners or are there enough passengers on their way to or from Shanghai to enable AA to make a go of it without connecting traffic?

The premise behind opening Haneda to long-haul international flights was that there was sufficient high-value Tokyo O&D to justify bypassing NRT. DL doesn't have any HND connections yet flies from LAX (lotsa O&D, of course) and insists that it be permitted to keep SEA.

If Delta can succeed at Haneda without connecting partners, then can't AA theoretically succeed at PVG and PEK without Chinese airline partners? What's different about those situations that ensures DL's success yet dooms AA to failure?

 

[LD3]

 

What's different about those situations that ensures DL's success yet dooms AA to failure?

 cuz WT says so....

 

[WorldTraveler]

On the front lines, you're correct, but I've met my fair share of We-Rule-The-World folks in DL management. Sadly, WT is not as much of an anomaly in that regard at HDQ -- I found no shortage of people who have Richard's photo framed in their office, and dutifully carry around their Little Red Book.

Success breeds cockiness. DL had a good run while WN, UA and AA were all distracted in one form or another.

Those days are indeed over. We saw hints of that in the 2014 financials (and will see more starting next week). It's only going to become more evident as we get into 2015.

The first part of that statement is one of the most accurate statements that E has ever made and also one which is validated on one site after another on which I don't even participate.

DL people are fiercely loyal to the company and believe that they are different than their competitors.

DL pilots have long been accused of being aloof to other pilot groups.

There is an aircraft sitting in a museum in ATL that was bought with voluntary employee payroll deductions. No other example exists at any other large airline in the world.

DL throws itself behind its people and its people throw themselves behind the company. It is a formula that has worked and continues to work.

the fact that DL has made the most dramatic post-BK turnaround of any US airline and is at the top of the industry in multiple measurements shows that DL people believe in their company. And the company is doing what it does very well.

The only change in finances that will indicate any other carrier's success over DL's will be because of fuel hedge losses. based on DL's filings, DL's total hedge losses will amount ot about 2/3 of its actual cost for fuel for the 4th quarter. That is a big hedge loss but DL still has a goal of having lower fuel prices than the industry for 2015. DL expects to overcome the fuel hedge losses fairly quickly.

And when it comes to revenue, which is far more significant when talking about the success of route expansion, DL simply has no real competition when it comes to winning the highest quality premium revenue.

To be fair, DL thinks they'll be able to leverage domestic connections on the PVG side of things with the MU codesharing.

Reality is that they were already sending all of the traffic interested in flying on Skyteam via MU out of LAX, or on their own metal out of SEA, NRT, or DTW.

All this does is dilute some of the value that the MU/DL partnership provides to MU. If history proves to be an indicator, MU won't go quietly. They regularly price lower than DL (as do CZ and CA), and I'd expect both the price sensitive and the ethnic traffic to stick with MU.

Maybe this might even force the CNAC to reconsider allowing MU to remain in Skyteam... DL can't control that decision, and it wouldn't be out of the question for the Chinese to wake up and decide having MU positioned to join Skyteam may be in the better interests of China. MU already has codesharing in place with QF and JL.

given that you have repeatedly said that premium US traffic doesn't fly on Chinese carriers - which is true but instead on US carrier, then your statement doesn't even make sense here.

the reason why the Chinese carriers price lower is because they do not offer the level of product the US carriers do.

and you might want to be careful about using that "they price lower" argument on TPAC flights. AA's fares including government contract fares to Tokyo are far, far lower than what other carriers offer or even what AA gets on its TATL flights.

The Chinese gov't is not going to pull a carrier out of Skyteam just because another Skyteam carrier wants to start a route competitive with it.

besides, where do you honestly think they are going to go given that AA and UA both already fly the same route?




 

The double standard is, indeed, laughable.  Some are still stuck in the myopia that Delta is on the only airline that can come in and create financial challenges for competitors.  In this case, AA has been operating LAX-PVG now for several years, and Delta merely applies for authority and AA's days are numbered.  It would be completely hysterical if it weren't so detached from reality.

 
you forgot to mention that AA's performance on LAX-PVG is well below DL's even on LAX-HND with its middle of the night operation, let alone what DL gets from LAX-NRT Or any of its PVG routes.

The reality, as hard as it is for you to accept, is that AA has been completely unable to compete in any TPAC market against DL or UA. IN every case where AA competes against DL or UA across the Pacific, AA's average fares are well below one or both of DL and UA.

It was true at JFK, is true at ORD, and is true at LAX.

The chances are very, very high that DL will very quickly surpass AA's performance on LAX-PVG and AA will once again be 3 out of the 3 US carriers in terms of financial performance on that route - just like on so many others.

 

Nothing, of course.
 
 

Do not let the cyber hubris of some posters fool you. On one of these threads, I mentioned your idea that AA is now in a position to aggressively compete with other carriers. From where I sit, that certainly seems the case, and I think most people at the Widget recognize that resting easy is simply not an option.

except that the financial results DO NOT show that, Kev.

US execs justified their merger by talking about the revenue benefits of the merger because US was targeting AA in its pricing strategies more aggressively than any other carrier.

AA should have had the best revenue performance of US carriers for the entire year after the merger.

We are into the 4th quarter and AA's RASM growth even in regions which have been strong has not been as strong as other carriers.

US was a low yield, high connecting volume carrier that acquired a carrier that had lost much of its marketing competitiveness over the past 10 years.

AA has improved its performance, esp. over the Pacific as it has repositioned money-losing routes such as to/from HND.

But AA CANNOT overcome the huge volume of low-yielding traffic that US carried and which AA now has to replace in order to generate revenue performance as good as or better than the best in the business.

 
 

I've always assumed that there are cities in the United States and throughout the world which attract enough O&D traffic to justify lots of nonstops even without lots of connection opportunities. In the USA, LAX, NYC, LAS, SFO and MCO are the easy examples. Sure, some airlines maintain hubs in those cities, but lots of airlines serve those cities and don't connect passengers at those airports. At LAX, featuring more domestic O&D than any other USA airport, connecting passengers are only about 20% of the total passengers.

Around the world, aren't there business/leisure destinations that are similar? Like London, Paris, Singapore, Tokyo, Hong Kong and maybe Shanghai? Yes, some airlines do feature online connections at those cities, but lots of other airlines serve those cities without connecting passengers. Does success at PVG require Chinese airline partners or are there enough passengers on their way to or from Shanghai to enable AA to make a go of it without connecting traffic?

The premise behind opening Haneda to long-haul international flights was that there was sufficient high-value Tokyo O&D to justify bypassing NRT. DL doesn't have any HND connections yet flies from LAX (lotsa O&D, of course) and insists that it be permitted to keep SEA.

If Delta can succeed at Haneda without connecting partners, then can't AA theoretically succeed at PVG and PEK without Chinese airline partners? What's different about those situations that ensures DL's success yet dooms AA to failure?

and the fault in your assumptions is that HND does not permit operations by all carriers at the best commercially viable times. PVG does.

When DL's performance on LAX-HND is better than AA's on LAX-PVG, then it is apparent that AA's ability to compete on the Pacific is nowhere in the same league as other carriers'.

 

[commavia]

The myopic detachment from reality continues ...

 

[Kev3188]

There is an aircraft sitting in a museum in ATL that was bought with voluntary employee payroll deductions. No other example exists at any other large airline in the world.

I'll just leave this here:
 

 

 

[WorldTraveler]

perhaps you can tell me the story of that aircraft, Kev.

Did TW employees buy that aircraft with their own payroll deductions. If I am wrong, I'll be happy to admit it.

oh, and where is that aircraft now? It sure won't be sitting in any AA museum.



DOT data for yet another quarter will be out soon, commavia.

I doubt very seriously that we will see anything that will change the trend that AA has had the lowest revenues on any TPAC route that competes with DL or UA - or that DL carries almost as much revenue on LAX-NRT alone than AA and UA COMBINED carry on either of their two LAX to Asia nonstop routes.

And DL still has HND on top of that.

as hard as it is for some to admit, DL is the largest US revenue airline from LAX to Asia.

 

[700UW]

And I will just leave this one here too.
 

 

[WorldTraveler]

tell me the story of that aircraft.

was it paid for by employee payroll deductions?

if so, I'll be happy to admit I was wrong... but I am pretty sure it was not.

 

[commavia]

Didn't AA have a plane back in the late 1990s that was supposedly paid for with IdeAAs in Action suggestions?
 
Either way - let us not deviate from the actual topic, which isn't how motivated Delta employees are to donate money to pay for a plane, but rather the fact that AA has convinced the DOT to examine whether or not Delta is worthy of keeping its route authority to fly between SEA and HND, and despite the protestations of Delta and its cheerleaders that such a proceeding is improper if not illegal, the DOT has essentially told Delta to quiet down.

 

[CMH_GSE]

Once the DOT awards the route to AA, I'll have to take WT off ignore just read the epic melt that will transpire here.

But I have to agree with E, the board is much more readable without a certain poster.

 

[robbedagain]

just a side note  yes WT the employees at TWA did buy that MD80 aircraft  hint the message on the fuselage.....