AA Applies For LAX-GDL, MIA-MTY

[commavia]

Huh? UA is only as large as it is due to its merger with CO, and DL is as large as it is due to its merger with NW. AA+US is the largest carrier by market share at LAX.

 
Exactly.  Fun fact: Delta is the largest carrier at DTW and MSP only because of the Northwest merger.  Stunning insight, I know.  [rolls eyes]

 

[WorldTraveler]

I'm well aware of what the mergers have done for each carrier. and, unlike dawg, I consider AA and US one airline. When I read the financial statements, AA and US are part of the same holding company and AAL does NOT separate finances for the two- at least publically

Yet, the DOT says that based on local LAX revenue, UA, not AA is the largest revenue carrier because it gets $20 per passenger more than AA does, even though AA including US - carriers more

of course just like the labor activists, you'll saw that the DOT's data is flawed since it doesn't tell the story that you want to hear.

 

[eolesen]

Huh? UA is only as large as it is due to its merger with CO, and DL is as large as it is due to its merger with NW. AA+US is the largest carrier by market share at LAX.

I'm sure you'll counter with some made-up "statistics" that DL gets $100 more per passenger at LAX than AA, but the reality is that AA (including the soon-to-be folded in US) is already the largest airline at LAX.

Yep, and it's because they made a conscious effort to build up there over the past four years as part of the Cornerstone strategy that was never given a chance to be proven or disproven.

 

[WorldTraveler]

because again, AA has no other options on the west coast. and regardless of what AA does at LAX, they cannot be of a size large enough to make up for the additional hubs that DL and UA have at SEA and SFO.

AA has to make LAX work - but no one else is in the least obligated to accommodate AA's NEED to have a west coast hub and all the indications are that UA is not giving up anything in the local market while instead lopping off the connecting traffic and sending it thru SFO. DL, for its part, is growing LAX aggressively and has clearly demonstrated that there are very few advantages that any of the big 3 have relative to each other at LAX, including AA.

 

[commavia]

Nobody is obligated to accommodate AA's growth at LAX, but then again it also appears that nobody - including Delta - has the power to stop or slow it.  Delta doesn't get to decide what does or doesn't happen, or who does or doesn't make money.  Perhaps you didn't get the memo - it's not 2010 anymore, so while Delta can push, others can push back.
 
LAX has a hard cap on the number of gates, just as LGA has a hard cap on the number of slots.  As such, all else being equal, he who controls the most gates wins, just like how at LGA he who controls the most slots wins.  And, whether some want to accept it or not, AA today controls the most gates at LAX, and appears quite likely to do so well into the future.  It's not AA's fault that Delta is completely hemmed in on all sides by competitors at its LAX facility.
 
The truth hurts, and sometimes reality is difficult to accept.  We understand.

 

[WorldTraveler]

I have NEVER said that DL even in 2010 could or should stop anyone, including AA at LAX.

you and others have continually believed that dominating gates would equate to an advantage in the market. It has YET to be demonstrated that is the case. In fact, it is actually just the opposite in the Asia/Pacific markets - which is supposedly why AA needs a west coast gateway so bad.

and you also refuse to acknowledge that AA really does not hold the Holy Grail to adding gates at LAX and no one else can.

given you refuse to acknowledge that DL isn't interested in blocking AA but is very much interested in being of the size it believes it needs to be in the market, DL has ways to grow and those will be increasingly apparent to you in the future.


the truth is that you will come to realize that just because AA NEEDS to grow at LAX does not mean that others cannot or will not.

 

[LDVAviation]

Nobody is obligated to accommodate AA's growth at LAX, but then again it also appears that nobody - including Delta - has the power to stop or slow it.  Delta doesn't get to decide what does or doesn't happen, or who does or doesn't make money.  Perhaps you didn't get the memo - it's not 2010 anymore, so while Delta can push, others can push back.
 
LAX has a hard cap on the number of gates, just as LGA has a hard cap on the number of slots.  As such, all else being equal, he who controls the most gates wins, just like how at LGA he who controls the most slots wins.  And, whether some want to accept it or not, AA today controls the most gates at LAX, and appears quite likely to do so well into the future.  It's not AA's fault that Delta is completely hemmed in on all sides by competitors at its LAX facility.
 
The truth hurts, and sometimes reality is difficult to accept.  We understand.

 
Even with its current schedule, one of the reasons AA needs more gates than its competitors is that it runs more flights at peak times.  By peak times here, I mean those periods of activity at LAX where most of the international flights arrive and depart.  There are at least two such peaks.  For the record, according to CAPA, here are AA's and DL's percentage of peak aircraft movements, 29.8% to 4.4%.  That's quite a difference and more indicative of the real strategic advantage that AA has at LAX.  DL calls LAX a hub, but AA is actually operating one, connecting passengers to/from its own flights and those of partner airlines.
 
LAWA has been very accommodating with AA.  Of its three legacy peers, AA was the only one not to renege on its bond debt during bankruptcy.  As a result, AA still holds the master leases to T4 and all its hangar facilities.  As we have discussed before, this is another one of AA's structural advantages at LAX.
 
The gate cap will expire in the near future.  If it is renegotiated, it will increase.  LAWA has already proposed new terminal facilities that if built would exceed the cap.  The airlines most likely to benefit from the new terminal facilities are AA (with the MSC and a rebuilt T3) and Southwest (with the new Terminal 0).  
 
The Delta terminal is really in a bad place.  DL will not even benefit that much from the pedestrian walkway system that will effectively link the southside terminals with the northside terminals.  LAWA put the station serving T2 and T5 on the T2 side and as a result the walk to T5 will be the longest in the system and the link between T2 and T5 will not be as straightforward as the others.
 
Meanwhile, LAWA sited the station serving T3 and T4 in front of TBIT, between the parking garages, making it a short walk between all three terminals.  That station will also sit right above the underground station for the MSC APM, effectively linking four terminals (T3, T4, TBIT, and the MSC).  One could not have imagined a better setup for AA, especially if LAWA adds check-in counters/kiosks to the T3/TBIT/T4 APM station.

 

[topDawg]

and yet on the bottom line, DL has MORE ramp stations than AA or UA - regardless of where those stations came from, DL has closed fewer stations in the last 5 years and UA has closed multiple stations even after BK.

DL has been sending out AIRFRAME overhauls but bringing in engine and component work for other airlines.

only those who want to present a picture of being oppressed would fail to acknowledge that DL has brought in enough work from other airlines to make the NET LEVEL of OUTSOURCING at DL lower than even standalone AA.

as for pay/risk, the theory is right, commavia, but the reality is that DL has derisked the business such that DL employees have gained more than enough profit sharing to offset the gains that AA employees have made - and to grow DL employee compensation levels far faster than at any other airline.

and by the same argument, WN has used profit sharing as a major component of compensation for years but no one seems to think they will all of a sudden stop being profitable. and yet DL employees earned more than 16% of their salary in profit sharing compared to 10% for WN in 2014.


theory is great but when practice proves that theory is turned on its head, then it is clear that the preconceived notions that AA people hold onto don't work in reality. The risk is simply not there for DL employees that many people want to believe there is; when you consider that AA and US employees each have been thru two rounds of cuts since 9/11 and one of those rounds happened at AA outside of BK, the notion that a contract provides security is simply not realistic.

this all seems like an HR discussion instead of about LAX - but maybe some people are finally realizing that DL intends to be right there for any growth at LAX in major markets regardless of what any other carrier does.

lol so now your the kid sitting in the corner covering his ears yelling LA LA LA LA I CANT HEAR YOU! 
alrighty then. Good talk. 
 

Awwwww look at that. Somebody can no longer talk about Delta's market worst position at LAX, so it's time to ramble about useless facts. So cute!

Market worst position is 2nd place? 
So AA is a complete failure in New York and Chicago then right?  
 
So many WT's runnin round here its ridiculous. 

Haha such delusion.  Delta is the #2 airline (and U.S. airline!) at LAX.  Good for them.  AA is #1 by both counts.  And AA is also growing - a lot - and, unlike Delta, has a clear and firm growth path for the key limiting factor to expansion at the airport, which is gates.
 
AA does indeed have a "longhaul network route advantage" at LAX in the form of not only the only daily nonstop (and only nonstop by a U.S. airline!) to Brazil, soon double-daily 77Ws to LHR, plus nonstops to NRT and PVG, and indeed Australia (where the "own metal" caveat is rather meaningless) where AA already has ATI with by far the dominant carrier in the market, which has more seats than all the other competitors combined.

you guys keep saying this
Delta keeps finding ways to expand. 
 
So I am confused.....? (oh and your second post is very WTish. Lets not start comparing JVs in this game......or if your going to then apples to apples please) 
 

Thanks!

welcome. 
 

And as if having by far the most gates at LAX wasn't enough, word is AA continues to work out a plan where it will use AS' gates in second position, giving it access to an even more dominant amount of LAX gates.

sure they are. 
 
Keep saying it. 
 
You, LDV and WT are all the same. smh. 

 

[WorldTraveler]

no, dawg, you are the one that seems to be unable to appreciate that I have never said that there is anything wrong with AA's growth at LAX or anywhere else.

my beef has been and always will be those who try to childishly argue that AA can grow but others can't.

Asia/Pacific travel is a HUGE part of LAX operations and even though AA does a fairly good job at LAX in other markets, they are dramatically being pulled down by their underperformance at LAX to Asia/Pacific.

All of the additional domestic flights aren't going to fix that underperformance because the same fundamental reasons for AA's underperformance will always be there. AA's strategy is clearly now to try and build an presence to Asia via DFW which is working better than at any other hub they have used to Asia and then build at LAX - but the same reasons why DL and UA both decided not to build LAX as a hub to Asia still exist.
- far more competition with lower cost Asian rivals than any other US city.
- LAX is not as geographically well suited for connections from all of the US as other parts of the US west coast
- all 3 US carriers have shown that they are not going to give up anything in order for AA to build its gateway.

as of this summer, all 3 US airlines will be flying to the exact same two cities in Asia... with DL having the advantage of HND service - and perhaps AA will have it but if so will likely drop NRT.

finally, AA's largest route from LAX is DFW and they will be seeing fare erosion in that market because of the Wright Amendment - which will hurt AA"s overall LAX numbers.

And AA doesn't have near the size to Australia that DL and UA have because they simply do not put anywhere close to as many passengers on Qantas metal as DL and UA do on their own metal.

so, those who want to argue about what AA is doing at LAX are free to do so, but in terms of real market presence and fare advantage, it simply is not there.

and further, DL has yet to be stopped in its growth at LAX and given that there are more and more indications that DL is close to coming up with some strategic options to grow its physical presence at LAX, all of AA's talk about what they will accomplish at the expense of other carriers seems more than a bit premature.

again, I have never said that AA couldn't grow anywhere. I have noted that AA has made the decision to bail out of major strategic markets like NYC and they have yet to regain a position where they left.

the AA fankids here represent the exact same mindset that we have seen with AA in their strategy to dominate limited access markets like LHR, Latin America, and DFW and it is the very same strategy that WN has repeatedly used and is the issue regarding DAL.

AA and WN both want to dominate markets and gain a physical limitation that prevents competition while I have long desired to see as much competition as possible. and DL has repeatedly shown that it can compete very successfully when markets are open.

AA and WN have not.

there is a clear strategic difference in the approach AA and WN have taken compared to DL and their fans here mirror those differences.

 

[commavia]

The detachment from reality continues.
 
AA didn't "bail out" of NYC and indeed is still the third largest carrier in the region, and 70% the size of #2 Delta.  But by all means keep dreaming.
 
Back here in reality, AA today is employing pretty much the exact same strategy that Delta has in the last five years - most notably, of all places, in NYC.  AA is making calculated investments in markets, like Asia, that are strategically important to long-term growth and - again, as Delta did for years in NYC - accept some losses in the process.  But luckily for AA, the company is now extremely well-capitalized, and competitive, and has essentially closed all meaningful domestic network gaps versus its two main rivals, which is precisely why AA now has the freedom of motion to act so aggressively - in Asia, at LAX, or wherever.
 
And therein, yet again, lies the source of these diatribes - Delta is not nearly as special as it was five years ago, and possesses far less of a financial or strategic advantage than it did then.  Delta clearly no longer has the exclusive ability - as it arguably did have several years ago - to act aggressively without much fear of a response.  Today, AA - and United - are responding, big time.  All three are large, competitive and well-capitalized.  And thus the source of the fear.

 

[commavia]

On the subject of further AA growth at LAX ... following a previous press report out of Korea about AA exploring launching a second route "linking Incheon with another U.S. city, after Dallas" and AA's own executives being quoted publicly speculated about AA launching ICN, PEK and HKG from LAX - another press report about another Pacific route AA is apparently exploring from LAX - AKL.
 
http://www.stuff.co.nz/business/industries/66820757/air-new-zealand-faces-transpacific-competition
 

 
...and Qantas partner American Airlines, seeking to become the dominant US carrier in Los Angeles, was looking at the Auckland-Los Angeles route.

 

[topDawg]

On the subject of further AA growth at LAX ... following a previous press report out of Korea about AA exploring launching a second route "linking Incheon with another U.S. city, after Dallas" and AA's own executives being quoted publicly speculated about AA launching ICN, PEK and HKG from LAX - another press report about another Pacific route AA is apparently exploring from LAX - AKL.
 
http://www.stuff.co.nz/business/industries/66820757/air-new-zealand-faces-transpacific-competition
 

Jeesh If AA ever does half of this expansion they are looking at from LAX...... 
 
Is their any point in the world AA isn't going to add from LA? 
 

no, dawg, you are the one that seems to be unable to appreciate that I have never said that there is anything wrong with AA's growth at LAX or anywhere else.
 

Okay just one second here with all your pointless rambling. 
 
have i even said a word about Delta, United or American's growth in LAX? 
You tossed labor into this thread and I had to point out that you don't know what your talking about. 
 
Once i did so you put your fingers in your ears and then went on some random rant about something I have not said a word about. 
 
having said that, glad that you got back on-topic. Now you, MAH and LDV can't get back to your pissing contest about LAX. As i said before, I would love for you not to put my name in there again please. 

 

[commavia]

Jeesh If AA ever does half of this expansion they are looking at from LAX...... 
 
Is their any point in the world AA isn't going to add from LA? 

 
As said, there have now been published reports either with AA executives themselves or citing "industry" sources that have specifically named ICN, PEK, HKG and AKL.  Domestically, it's anybody's guess.  I agree that it will be interesting to see what comes of all this.

 

[topDawg]

 
As said, there have now been published reports either with AA executives themselves or citing "industry" sources that have specifically named ICN, PEK, HKG and AKL.  Domestically, it's anybody's guess.  I agree that it will be interesting to see what comes of all this.

I'm not saying some of these things wont happen
 
but I am also saying that sometimes it gets a little world traveler around here with all the promised growth coming from AA that has been happening for 10 years that hasn't really happened. 

 

[WorldTraveler]

first, AA is actually tied with B6 for #3 based on passengers and well below DL and UA in the NYC market. AA obviously carries more revenue than B6 but once again, were it not for the AA/US merger, standalone AA would be almost identical to B6 on a REVENUE basis in NYC and far smaller based on passenger numbers.

and before you say that AA has at NYC because of the merger just like DL and UA have elsewhere, DL is far larger in NYC because of its internal growth mostly since the merger in NYC.

further, DL has rationalized its own network including eliminating CVG and MEM - one PMDL and one PMNW hub - and still has the position it has in the US because it has successful redeployed that capacity elsewhere - and continued growing.

given that AA has yet to rationalize its network but will clearly have to if for no other reason because AA has the world's largest fleet of 50 seat jets that will start to leave within the next 5 years even if not today.

and NYC isn't reported as a separate DOT region but Asia/ Pacific is.

It is likely that a lot of carriers have significant losses in one part or another of their network but DL only admitted it when they were ready to turn a profit.

and despite what you want to believe, AA was losing money in NYC as well... if they didn't, they wouldn't have cut as much as they did.

and it is precisely because AA now finds itself as the #3 international carrier and the #3 across both the Atlantic and the Pacific that they will find it much more difficult to expand their network into other carriers' dominant areas than it was for either DL or UA which bought their way into Asia and built other parts of their network over long periods of time. DL and UA's strength and larger size to Europe is because they have JVs with far larger continental European carriers than AA will ever have and DL and UA both have decent sized LHR operations of their own.

and, again, the problem is not that AA couldn't grow organically into Asia but that they keep thinking they have to grow from LAX - which has repeatedly been shown to be unprofitable for US carriers outside of a few markets.

given that AA significantly underperforms DL and UA out of LAX to Asia and the competition is only heating up further with DL's addition of LAX-PVG where DL has a much larger alliance presence, there is little reason to believe that AA will be doing anything to change its strategic position.

I am glad that AA is making DFW to Asia work... given that it is the 2nd largest hub, it is not surprising.

but DFW is circuitous for connections to most of the US and results in some of the longest flights from the US to any city in Asia.

as for ICN, I'm sure AA will want to add another flight there... AA clearly is willing to continue pushing to build mass and they are going to use a window of low fuel prices to grow in Asia but fuel prices will go back up and the same strategic reality will still be there.
AA will have to compete in Asia with a weaker alliance position and smaller historical footprint while trying to push into markets which are dominated by much larger carriers. Further, a large part of AA's workable network will still be from DFW which will be a more costly way to serve Asia... and given that DL and UA have access to the same type of aircraft, AA will always be serving a significant portion of its Asian network in a more costly manner than DL or UA - which will always hurt profitability.

but I can also assure you that DL will match AA's growth to ICN one for one... if AA adds LAX, I can assure you that DL will as well.

and given that DL has codeshares on more than 20 KE markets beyond ICN but AA does not, DL will win in any ICN market compared to AA.

further, if AA's desire is to create a partnership with KE, they will be in exactly the same position that DL was in with AS (it's history now because DL made their decision). AA cannot expand into AS or KE's markets without stepping on their toes or taking market share. AA and DL's expansion at ICN is hurting KE equally and KE wouldn't at least have to put up with from DL if they had a JV... but KE wants a disproportionate share of the overall revenues, so they end up with more capacity.

yet they aren't willing to cut off DL's codesharing on intra-Asia flights and they do make money from DL because of it.

given that KE's load factors into US carrier hubs is below its average for major coastal markets, KE is absolutely hurt by AA and DL's expansion where AA and DL can feed their own flights very well but KE cannot. given that DL's LF is the highest of the Korean or US carriers as of last summer and more than 10 points higher than KE, DL can easily add more capacity.

so, if AA wants to add flights to ICN, go for it. DL will do it as well and it will be KE who will most likely be hurt.

further, the new 333s can easily operate from LAX and/or MSP to ICN and that 333 is by far the lowest CASM TPAC aircraft available.

and again, the principle is not that I don't believe that AA can grow and make its presence in Asia work but that they are doing exactly what other carriers have tried and didn't work before - growing at LAX - but DL and UA have also made it clear and I think it will be increasingly so that DL will give AA absolutely no room to grow either at LAX or across the Pacific.

and as for NYC, given that AA has left dozens of markets that DL has started, the chances are much, much lower that AA will ever regain that presence.

as much as some have argued for the benefit of AA not filing for BK earlier, it cost them dearly in terms of competitive balance and AA's position as #3 out of the 3 US carriers overall internationally as well as across both the Atlantic and Pacific is not only a result of that delay in AA's ability to compete but also resulted in US being the only merger partner and they brought very little to AA in terms of int'l presence.

now being the last merger and with a carrier that brought far less int'l presence than NW or CO brought to DL and UA, AA is in a very difficult place strategically and it is likely not realistic to think they will ever overcome it....

add in that AA's core and more profitable domestic markets in DFW and MIA are and will be increasingly under attack competitively and AA is not in a better position than DL or UA... they just have more mass but once again they are able to deal with it right now because fuel costs are low.

like it or not, those are realities and they will continue to play out just as I have suggested they would.

dawg,
if you want to take your name (or user ID) out of the conversation and keep the conversation away from you and your emotional issues with DL's closure of DFW, then you would be advised to refrain from dragging and paralleling me and others on this board.
shouldn't be too hard of a concept to grasp.