AA can finally compete in China without buying NW

[StraaightTaalk]

XNA would be a good choice -- then Walmart would have a nonstop for all their buyers to check out the slave labor factories producing the crap they line their shelves with....

Off topic but anybody ever notice how cheaply made is the Walmsrt equivalent of name-brand products.

I have shopped at a Walmart once, while on layover. I needed some athletic socks and purchased a package of Hanes white athletic socks. I got them back to the hotel and tried them on, and realized how thin and cheap they were. Back home, I had a pair of the same brand socks, Hanes, "same" product, but purchased from Target and and the socks were thick and durable.

Supposedly the same product, same branding, same style, same description on the package, but the Walmart version was definitely made more cheaply.

You get what you pay for.

 

[DLFlyer31]

Where should AA next apply? LAX. UA said that its request for 2009 LAX-PEK would provide one-stop connectivity to 36 domestic cities behind LAX. AA's current LAX schedule would permit AA to offer one-stop connections to 31 domestic cities behind LAX (including its Alaska/Horizon codeshares). DOT's recent denial of the proposed UA PAX-PEK was a huge gift to AA; it permits AA to go head to head with UA in the next round of frequency allocations.

I agree that LAX-China is probably AA's next best bet. They'll have a good chance at winning it, even if UA applies for it. Since UA is the largest holder of Chinese route authorities, not to mentiona their SFO gateway to China, I could definitely see AA winning LAX-China.

However, the only problem for AA is how to build-up more feed at LAX. AA really doesn't have a lot of surplus gate space at LAX and they certainly don't have a lot of surplus aircraft either....nor will they in the near future. The other problem could be DL which has been aggressively building up LAX. With JFK/ATL reaching some saturation, don't be surprised to see DL aggressively go after LAX-China in the 2010-12 time period.

 

[donttouchthebeauty]

I agree that LAX-China is probably AA's next best bet. They'll have a good chance at winning it, even if UA applies for it. Since UA is the largest holder of Chinese route authorities, not to mentiona their SFO gateway to China, I could definitely see AA winning LAX-China.

However, the only problem for AA is how to build-up more feed at LAX. AA really doesn't have a lot of surplus gate space at LAX and they certainly don't have a lot of surplus aircraft either....nor will they in the near future. The other problem could be DL which has been aggressively building up LAX. With JFK/ATL reaching some saturation, don't be surprised to see DL aggressively go after LAX-China in the 2010-12 time period.

You also have this factor, UAL will offer service with a newly configured 747-400, more seats and more cargo with 3 class service, and more O&D traffic, with more connections to U.S., Europe, Latin America and Canada. UAL is definitely the best contender for LAX - China.

 

[FWAAA]

You also have this factor, UAL will offer service with a newly configured 747-400, more seats and more cargo with 3 class service, and more O&D traffic, with more connections to U.S., Europe, Latin America and Canada. UAL is definitely the best contender for LAX - China.

DOT ascribes zero weight to international connectivity when awarding USA-China frequencies. None.

AA's 777s will almost certainly offer more cargo capability than UA's 744s. Fewer pax for sure but more cargo. Look it up.

Certain that UA still flies 744s in 2010? How 'bout 2012? What if oil goes to $100 or $120/bbl? We'll see.

 

[Cosmo]

In trying to guess who will apply for what in 2010, I think we need to first consider whether the DOT is going to award only that year's frequencies in one of a succession of route cases (assuming no open skies) or combine the 2010 frequencies (21 weekly) with the 2011 frequencies (14 weekly) and maybe even the 2012 frequencies (another 14 weekly). I haven't a clue how the DOT will set up the route case(s) -- and I don't think the DOT does either at this point -- but we should realize that it's very unlikely that any carrier would receive more than seven frequencies if the 2010 award is considered in isolation. Thus, it's likely that each carrier would apply for only one route to operate a daily flight, which I think would be as follows:

AA: JFK-PVG
CO: IAH-PVG
DL: ATL-PEK
NW: DTW-PEK
UA: LAX-PVG
US: PHL-PVG

For some of the carriers (DL, NW and UA), it would amount to requesting again for 2010 what they didn't get in 2009. For CO, I believe that is the next China route on their list, it would open up another region of the country (Texas), and it would be a perfect route for the new 787s which should be in their fleet by then. For US, it's a chance to get lucky again. And for AA, I think it's a close call between JFK-PVG and LAX-PVG. But on balance, IMHO, JFK is the more important of the two airports for AA in terms of both the amount of long-haul international flights and destinations offered as well as the stiffer competitive and strategic challenge presented by DL (and CO at EWR) for dominance of international travel in New York. And regarding flight times, remember that the flights would go north from JFK, not west, keeping them well below the 16 hour maximum duty time limitation (and only 30-40 minutes more than ORD-PVG).

That said, and assuming that the applications are as stated above, I believe that the winners would be CO, UA and either AA or DL. First, the easy ones: (1) CO because it is the only application that would open up a new area of the country for nonstop China service (hey, it worked for DL/ATL this year with a much smaller local market); and (2) UA because the DOT will belatedly and probably grudgingly realize that nearly half of all U.S.-China traffic goes to or from the West Coast (LAX-PVG is the largest U.S.-China route by far without U.S. carrier nonstop service), which makes connections at hubs in the eastern half of the country fairly circuitous. And the losers are easy, too: (3) NW will again be told to stop catering to the Japan-China local market on its one-stop flights via NRT (as it was admonished in the previous China route case); and (4) US -- you're joking, right? As for AA vs. DL, I think it will come down to whether or not DL can show that it attracts significant domestic connections on its new ATL-PVG route because the local market is rather small and the DOT ignores international flow traffic over the hub in its decision-making. While I think DL will be successful on the ATL-PVG route, I suspect it will be due to large numbers of Latin American, Caribbean and perhaps even African connections, which will make it very difficult to show the DOT that the even smaller ATL-PEK route can succeed on local traffic and domestic connections alone. In that case, I think the award would go to AA for JFK-PVG due to the much, much larger local traffic base (even with MU already flying JFK-PVG and CO flying EWR-PVG) combined with some domestic connections to major markets like BOS, DCA, RDU and MIA. Of course, although less likely IMHO, both AA and DL could get the award if the DOT simply can't bring themselves to award UA a seventh daily flight to China and/or believes that no city west of Texas deserves more U.S. carrier nonstop service to China despite what the traffic figures say.

One last thing -- I think the idea of an eventual MIA-China nonstop service is a good one, and it could really threaten the viability of DL's service over ATL given the large amount of international connections available at MIA. But such service will need to wait for AA to finally make its long-anticipated 787 order and come to some sort of an agreement with its pilots regarding flights with more than 16 hours of duty time.

I'm sorry that this has rambled on a bit, but it's tough to give short answers to some of these issues. And that's without even trying to guess what might happen if frequencies from two or more years are at stake in a single route case. Of course, this is JMHO and it's worth every penny you paid for it!

 

[NewHampshire Black Bears]

Cosmo,
Your's is NEVER a Ramble !!

I obviously agree with all your points about the viability of JFK/PVG or PEK.

As for Mia(Mark in Mia), AA could possibly get the MIA/China on the first round of the "next" awards, BUT won't for the following reason............AA does'nt want to spend another "dime" on WB A/C until the 787 is available. ~~~ In other words..."NO 777-200LR's" :angry: :angry:

 

[NewHampshire Black Bears]

Bears,

Give me your take on the following:

Primary: The problem with an origination to China from BOS is the JFK multibillion terminal. There is no way that AMR Senior Executives are not going to make the new JFK terminal appear profitable, even if they have to rape the flights from the whole northeast to accomplish it.

Second, the continued pressure on yields out of BOS from JetBlue and LUV (PVD and Manchester) is going to require some sort of response that will most likely reduce the markets serviced directly from BOS.

Third, rumor has it that in response to FAA threats to ration the number of flights in the NY market to reduce congestion and delays, AA will take over some of the AE flying into the NY market from BOS: fewer frequencies through the use of the MD-80, B-737.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Boomer,
Your "dead on" , on "part A" !!!

For International gateways, ORD/JFK and MIA(not DFW of LAX) are AA's big "3".
(FYI..AA looked at BOS/NRT very closely)

For part B, if AA does go JFK/China, They could run whatever BOS/JFK they needed to feed it(I'm talking MAINLINE flights)(757's ??)

Part 3.....PRAY the Feds do that, because it would "play right into AA hands", and cause DL a MASSIVE CORONARY !!!

One could EASILY see a scaled back JFK, with AA flying (only) International flights with JFK-PVG/NRT/LHR, perhaps DEL at the "TOP" of the list(save-LAX.SFO/SEA/MIA/SJU/SAN) even if it meant a scale back of A/E flights.

NY is a "strange market", in that there are so MANY people, that at times EWR "NJ" sometimes becomes a given/no factor.

 

[NewHampshire Black Bears]

Congestion at JFK had better be solved by 2010 as well...

I'm sure AA can resolve the contractual issue, but then again, the number of markets where a 16+ duty day is really required is fairly small, so is it worth solving? I would say no. I also think the profitability of JFK-China would be questionable with three or four carriers in the NYC market. Far better to exploit LAX, where there's a bunch of one-stop opportunities, rather than expect people to backtrack to JFK (something DL had hopes will work out for them at ATL).

If AA decided to make LAX into a real international gateway... NHBB might finally get his wish. A new US-Australia open skies agreement is likely to be in place by next year, which would open the door for AA to start up LAX-SYD to combat Virgin Blue (QF probably has to be a little more restrained than AA would have to be).

XNA-China would be a good choice -- then Walmart would have a nonstop for all their buyers to check out the slave labor factories producing the crap they line their shelves with....

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"E",

The main reason AA WON'T go to SYD is because they DON'T want to spend any $$ on the 777-200LR !

 

[eolesen]

They don't need the LR, Bears. LAX-SYD is essentially the same mileage as ORD-DEL (6507nm vs. 6503nm).

They'd need the waiver from APA or a new agreement on 16+, but it's not going to be a range issue, even with ETOPS.

 

[MAH4546]

Cosmo,
Your's is NEVER a Ramble !!

I obviously agree with all your points about the viability of JFK/PVG or PEK.

As for Mia(Mark in Mia), AA could possibly get the MIA/China on the first round of the "next" awards, BUT won't for the following reason............AA does'nt want to spend another "dime" on WB A/C until the 787 is available. ~~~ In other words..."NO 777-200LR's" :angry: :angry:

AA will have 787s by 2011, or they will be in serious trouble.

I think AA could really use some 777-200LRs, although Miami-China is only viable with 787s.

 

[aafsc]

Why doesn't AA use the SJC-NRT slot they had and run MIA-NRT? The route is almost as long as ORD-DEL and the connections with Latin America would be good.

 

[eolesen]

US-Japan authorities aren't switchable like that unless you're NWA or UAL. AA's frequencies went back into the pool for other carriers to request in markets already approved for service. I don't think US carriers can operate from MIA to Japan, even though Japanese carriers can.

 

[NYCDelta]

If NW and DL appear to be pairing up, however, I still want AA to get in the middle; if only to make it more expensive for the newlyweds.

The talk about UA being broken up and sold in pieces is just that: talk. Ain't happening.

If, or when, consolidaton does occur-I doubt you will see DL and NW merging. For the same reasons you seem to think AA doesn't need NW anymore. Delta flies to NRT, ICN, and Shanghai (in 2008). Although small, it's a good start. Our focus lately has been on Africa & the Middle East,as well. NW gives us nothing we can't get ourselves, and in fact, a merger,as you state, would just be expensive and slow down the tremendous progress we've made. I think there was one "expert" analyst who had it right, in that future mergers would involve legacy's with smaller carriers-or airlines being sold in pieces.

As for AA, I don't think they are worrying about mergers or expansion right now. I think they're probably more concerned with the fact that their 3 major unions are wanting ALOT of their "sacrifices" back-and don't seem too intent on settling for anything less.

 

[FA Mikey]

US-Japan authorities aren't switchable like that unless you're NWA or UAL. AA's frequencies went back into the pool for other carriers to request in markets already approved for service. I don't think US carriers can operate from MIA to Japan, even though Japanese carriers can.

Any idea whay we never started the BOS-NRT?

 

[FA Mikey]

As for AA, I don't think they are worrying about mergers or expansion right now. I think they're probably more concerned with the fact that their 3 major unions are wanting ALOT of their "sacrifices" back-and don't seem too intent on settling for anything less.

I doubt AA has much of a concern that way. The unions dont have the strength or stomach to take it to the wall, nor does AA have the funds to give them there hearts desire.