AA Down Under and Trans Pac?

[WorldTraveler]

wonderful... we are talking about the Pacific and specifically from LAX.

I never doubted AA had the resources.

All the money in the world won't make AA profitable in the Pacific if revenues trail far behind DL and UA as they do now... it just means that AA will continue to subsidize their Pacific operation for a long time and, even if low fuel prices make AA's TPAC flying profitable, it will just make its peers that much more profitable.

and if AA's peers are making that much more on flying from LAX, then they won't bat an eye in deciding to add flights if they believe preserving their position in the west coast- Asia market is important, which is exactly what I believe they will decide.

Nobody is expecting AA to stop adding TPAC capacity and neither should AA expect that DL or UA will decide it isn't worth their while to do the same or that they won't have the resources to do so.

 

[lpbrian]

Does AA have a JV with QANTAS? Does this include Jetstar?

 

[FWAAA]

Does AA have a JV with QANTAS? Does this include Jetstar?

AA has a joint business agreement with QF, but don't know if it includes Jetstar. AA and QF did not request antitrust immunity:

http://www.regulations.gov/#!documentDetail;D=DOT-OST-2011-0111-0010

 

[commavia]

"I'm pretty sure that with fuel prices where they are, we expect all (our) Asia routes to be profitable in 2015."
-- Scott Kirby, President, American Airlines (January 27, 2015)
 
So apparently AA doesn't need "all the money in the world" to be "profitable in the Pacific" - just a competitive cost structure, appropriately-configured aircraft and lower fuel prices.  As time goes on, and AA keeps growing, and moving more Asia routes to lower-cost 787s, and establishing and building a more competitive sales force/presence in Asia POS, not to mention leveraging the heft of the combined U.S. network, this should only further improve.
 
Who would have thought?  Oh, that's right - many of us.
 

Does AA have a JV with QANTAS? Does this include Jetstar?

 
Don't think AA's QANTAS JBA includes Jetstar.  However, AA does codeshare with Jetstar in multiple places - including in New Zealand and Japan.  Indeed, this is one thing AA has going for it on any prospective LAX-AKL flight that Delta definitely would not - namely, domestic feed on the AKL end.

 

[WorldTraveler]

no, AA needs fuel costs that are nearly half what they were a year ago.

and again you miss the point that all airlines basically have the same costs - plus or minus 5 percent or so.

now, 5 percent can make a difference but in the scope of 33% differences in revenue, it is fairly insignificant.

AA's ability to succeed in the Pacific depends on getting revenues comparable to its peers.

As hard as it is for you to accept, AA"s revenue production trails DL and UA's esp. in the most competitive markets such as NYC, ORD, and LAX.

All of the cost advantage that AA gains thru lower fuel prices will also be available to AA's competitors.

I doubt very seriously that any of them will be willing to allow AA to add any route from LAX or any other west coast city to Asia without adding a flight of their own to the same city

doesn't stop AA from being profitable because of low fuel prices but also only decreases the risk that other carriers have in adding even more capacity to the market.

 

[eolesen]

Jetstar is outside the JBA, and also isn't part of oneworld, but they do have codewhoring and frequent flyer reciprocity with many of the oneworld carriers, as well as full reciprocity for QF marketed/JQ operated flights.

 

[Platinum Steve]

I've only written 8 posts, and I can barely keep all these positions/assertions/declarations/assurances straight. How do you do it over thousands of posts, WT? (Really, if the bullfighting prosecutor thing doesn't pan out, you should try your hand at writing soap operas.)

Let me see if I have this right:

DL will go flight-for-flight with AA to keep them in check. However, they don't currently have the facilities to do that, so they really only need to add a couple of flights to maintain some semblance of parity. Unfortunately, AA has unquestioned resources that they can throw at this Asian expansion, but it really is doomed to failure because even though the President of AA says that all of the airline's Asian flying is profitable it isn't as profitable as DL.

How'd I do? Did I get it?

Either way, I need a stiff drink now.

 

[robbedagain]

Stev congrats u did well in his mind of thinking DL can do no wrong makes all the strategic moves and no one else can do it right. The dude is a former dl revenue mgmt clown who is in very serious need of help he believes he is always right even when proven wrong.

I dont believe dl will be able to go head to head hence thats why theyre building n up SEA

 

[WorldTraveler]

the reason why you are so confused, Steve, is because you are believing what you want, haven't read a thing what I wrote - or allowed it to sink in, and continue with your own preconceived notions because that is the only way your or commavia's hopes that AA can succeed in LAX TPAC flying work.

let's recap for the hard of comprehension.

- I have NOT said that DL or UA would match AA flight for flight. I have said they would on key int'l or domestic flights where they deem it competitively necessary to do so.
- I have said that it is hard to imagine ANY TPAC flight from LAX that DL or UA don't serve that they would not find a reason to serve if AA announces service
- It is only in your mind and that of commavia and others that DL will run out of gate space to add int'l flights and in key domestic markets
- your ONLY reason to hope DL will run out of gate space is so that AA can add flights and not have to "deal with " a competitor which has clearly demonstrated its success in the marketplace where DL is the largest US airline in the LAX-Asia local market
- UA is the carrier that announced its own LAX-PVG flight within hours of AA; even by E's assessement, UA has no gate limitations
- NEITHER DL or UA have any interest in seeing AA succeed in west coast to Asia flights
- DOT data shows that AA trails DL and UA performance from the west coast and specifically LAX by more than 1/3.
- even if low fuel prices make AA's TPAC network profitable, it only increases the profits other carriers can make.
- AA has not demonstrated it can obtain revenue parity in ANY market it has flown nonstop competitive with DL or UA from JFK, ORD, or LAX.
- IN every market that AA could add to Asia, DL or UA is stronger than AA to that market. an additional flight for those carriers is relatively easy compared to whatever AA could do.


if you want to continue to believe that DL or UA will give up or run out of gates or equipment and not match AA's TPAC expansion from LAX, then I can't help you.

I will however continue to note that regardless of whatever user name you or your thoughts pop up with, I will challenge you with the most accurate and up to date information on market performance.

if it changes in AA's favor, I will let you know.

there are no indications whatsoever other than in the dreamy minds of you or commavia that anything has or will change.

 

[FrugalFlyerv2.0]

(Really, if the bullfighting prosecutor thing doesn't pan out, you should try your hand at writing soap operas.)

I can only imagine WT in a courtroom:
"Ladies and gentlemen of the jury, although Airbus states that the MTOW of the A330, an aircraft they manufacture, is xxxlbs, I assure you that they are mistaken"
"Ladies and gentlemen of the jury, although DOT data has been presented showing that on the JFK-LAX route AA has a 60% fare premium to DL, there is no way on God's green earth those numbers are correct. In fact, they are incorrect, DL's fare disadvantage is only a few percentage points."
"Ladies and gentlemen of the jury, although there is no data anywhere to support what I'm going to tell you, you just have to accept the fact that the DL-VS partnership has already generated more revenue than any other airline partnership. Ever."
"Ladies and gentlemen of the jury, although you have heard several current DL employees tell you how things are done operationally, I assure you that is not the case, as I have once worked at DL, in a totally different/unrelated department for a period that spanned 2 decades."
 

DL will go flight-for-flight with AA to keep them in check. However, they don't currently have the facilities to do that, so they really only need to add a couple of flights to maintain some semblance of parity. Unfortunately, AA has unquestioned resources that they can throw at this Asian expansion, but it really is doomed to failure because even though the President of AA says that all of the airline's Asian flying is profitable it isn't as profitable as DL.

How'd I do? Did I get it?

 
The first thing any rational person does when reading about World Fraudster's plans of grandeur for DL is ask:  does it make sense?
 
In terms of DL and the LAX-Asia market, one has to ask if the diatribes WT is spewing make any rationale sense.  Does what he is proposing sound like a valid business plan?
 
Imagine a meeting at DL headquarters where top management has gathered to discuss the plan for "winning" (for a lack of a better term) the LAX-Asia market.  As they look over the market analyses, crunch the numbers, it becomes clear that the winning LAX-Asia strategy is to be composed of the following 3 phases:
Phase 1:  establish a hub to Asia in SEA
Phase 2:  sit back and to nothing (in terms of adding LAX-Asia flights) at LAX
Phase 3:  only once a competitor such as AA starts a LAX-Asia route, then duplicate it and run with it and dominate that market.
The codename for this plan is "Operation Spectator".
 
DL is a formidable company, I have problems believing it that they would structure their business plan in a way that somebody that has been removed from DL for almost a decade and his only purpose in life is to write multiple posts about DL ruling the world wants them to in his fantasies.

 

[commavia]

It's funny how for years, we were treated to all these grand dreams - some panned out, others didn't - about all that Delta could accomplish once it leveraged bankruptcy and a merger to restructure.  But today, when AA is doing the exact same thing, in what is arguably a structurally less competitive environment, it's all hopeless.
 
The truth is that people who know far more about the actual economics of running AA - i.e., those charged by shareholders with actually acting as custodians of their capital - clearly are far less pessimistic than certain internet forum legends-in-their-own-minds.  And considering the track record so far, I'm going with the judgment of those who actually know what they're talking about, and not those motivated solely by the fear of accepting the reality that Delta faces a far, far larger competitive threat from its chief rivals than it did five years ago.
 

The first thing any rational person does when reading about World Fraudster's plans of grandeur for DL is ask:  does it make sense?
 
In terms of DL and the LAX-Asia market, one has to ask if the diatribes WT is spewing make any rationale sense.  Does what he is proposing sound like a valid business plan?
 
Imagine a meeting at DL headquarters where top management has gathered to discuss the plan for "winning" (for a lack of a better term) the LAX-Asia market.  As they look over the market analyses, crunch the numbers, it becomes clear that the winning LAX-Asia strategy is to be composed of the following 3 phases:
Phase 1:  establish a hub to Asia in SEA
Phase 2:  sit back and to nothing (in terms of adding LAX-Asia flights) at LAX
Phase 3:  only once a competitor such as AA starts a LAX-Asia route, then duplicate it and run with it and dominate that market.
The for this plan is "Operation: Spectator".
 
DL is a formidable company, I have problems believing it that they would structure their business plan in a way that somebody that has been removed from DL for almost a decade and his only purpose in life is to write multiple posts about DL ruling the world wants them to in his fantasies.

 
Exactly - Delta knows they will never "dominate" the LAX-Asia market, so they'd be pissing away money just to prove a point, and losing tons of money and diluting their successful SEA gateway in the process.  And that makes absolutely no rational sense whatsoever.  Doesn't mean it's impossible or won't happen - but it would be uncharacteristic of what is an otherwise typically quite rational and reasonable management team.

 

[WorldTraveler]

the only strategy that we have repeatedly seen on these boards regarding AA and Asia is every attempt to belittle the messenger and deny the message regarding both how poorly AA actually does in competitive markets and expectations that some miracle will come along which will give AA the room to expand because other carries quit choosing to do so or run out of room.

The only reason why AA does as poorly in LAX, ORD, and JFK to Asia is because they didn't buy one of the two US carrier route systems to Asia that are worth way more than a bunch of lines on a route map but which involve market relationships and presence that have clearly allowed DL and UA to profitably expand and grow while adapting to changes in the marketplace while AA has not.

there will be people here who will continue to refuse to accept that AA does not have what it takes to compete in Asia markets from compmetitive US carrier gateways and publicly available data clearly shows that.

and every bit of breathing room AA gets, whether it be lower fuel prices, or increased travel due to relaxed visa requirements also provide an opportunity for DL or UA to do the same

The complete irony is that the AA fankids have incessantly yelled about AA's dominance in Latin America - which came because of acquisition and internal building - and yet they cannot accept that DL and UA have the positions they have to Europe and Asia because they did the same thing.

the only thing that makes no rational sense is that AA fankids can't accept that AA will likely never succeed at building a viable, profitable, long-term Asia network from anyplace other than DFW or any other hub which AA chooses to fly from where DL or UA do not serve.

 

[commavia]

By all means - feel free to keep denying the reality that AA continues to grow in Asia and continues to dismantle Delta's network advantage there.  Fear, fear, fear.

 

[WorldTraveler]

except AA isn't dismantling anything.

the only place where they have shown they have been able to successfully compete against DL and UA is from DFW where neither DL or UA fly directly to Asia.

When the percentage of AA's average fares compared to DL and UA are virtually unchanged in more than a decade of direct DL/NW and UA competition from LAX, even after the JL JBA, it is only in your mind and not in reality that AA is closing the gap.

 

[eolesen]

I've only written 8 posts, and I can barely keep all these positions/assertions/declarations/assurances straight. How do you do it over thousands of posts, WT? (Really, if the bullfighting prosecutor thing doesn't pan out, you should try your hand at writing soap operas.)

Let me see if I have this right:

DL will go flight-for-flight with AA to keep them in check. However, they don't currently have the facilities to do that, so they really only need to add a couple of flights to maintain some semblance of parity. Unfortunately, AA has unquestioned resources that they can throw at this Asian expansion, but it really is doomed to failure because even though the President of AA says that all of the airline's Asian flying is profitable it isn't as profitable as DL.

How'd I do? Did I get it?

Nailed it. Congrats, and you're a welcome addition to the forums.

Either way, I need a stiff drink now.

Here's a more lasting option -- just dispense with his nonsense altogether: