AA Down Under and Trans Pac?

[Kev3188]

 

Given that he is unable to generate a straight answer to my questions, can someone else provide me with the following:

1) How many gates at T5 or T6 does DL have that can handle a 777?
2) How many of those gates can handle 777s simultaneously?
3) If all of those 777 gates are occupied by 777s, how many adjoining gates will DL lose for other ops?

As I've mentioned before, this last question gets into a murkier area of guessing and prognostication:

4) assuming that DL does not have the ability to match AA to keep them in check due to a shortage of gates, where will they go to get those gates?

Thanks.

Again, these are good questions. I hope we get some clear answers, as I find these sorts of logisitcs issues particularly interesting.

 

[WorldTraveler]

DL can gate AT LEAST 3 777s or 330s simultaneously. Their schedule does not have anywhere close to that type of schedule.

but again, what Steve really wants to know is at what point DL runs out of space to expand so AA can expand unchecked.

the answer is very likely "never"

 

[diamondcutter]

DL can gate AT LEAST 3 777s or 330s simultaneously. Their schedule does not have anywhere close to that type of schedule.but again, what Steve really wants to know is at what point DL runs out of space to expand so AA can expand unchecked.the answer is very likely "never"

"Never" , ok since you say you deal in facts back that up with FACTS!!

 

[FrugalFlyerv2.0]

In addition to DL defying the laws of physics and "never" running out of gates at LAX, I think there might be one other thing to consider:  slots. 
 
Suppose AA does add 3-4 or whatever number of Asian destinations from LAX. 
Now suppose DL wants to duplicate service to those same 3-4 or whatever number of Asian destinations from LAX too. 
Where is DL going to get the needed slots?  Are they going to transfer them (say from DTW or other DL gateway) or is DL just assuming that the slots will always be available? 
 
Now, I don't know for sure, I think it has been mentioned that there still are several unused frequencies/slots to China, but how about the other Asian destinations? 

 

[WorldTraveler]

In addition to DL defying the laws of physics and "never" running out of gates at LAX, I think there might be one other thing to consider:  slots. 
 
Suppose AA does add 3-4 or whatever number of Asian destinations from LAX. 
Now suppose DL wants to duplicate service to those same 3-4 or whatever number of Asian destinations from LAX too. 
Where is DL going to get the needed slots?  Are they going to transfer them (say from DTW or other DL gateway) or is DL just assuming that the slots will always be available? 
 
Now, I don't know for sure, I think it has been mentioned that there still are several unused frequencies/slots to China, but how about the other Asian destinations?

 
there are unused frequencies to China and it is possible that AA could take the last ones...

but have you bothered to look at codeshares from China cities with the AA, DL, and UA code?

AA has virtually no codeshares on intra-China flights while DL and UA do... with China the most.

Long before AA gets the last slot to China, the battle will have been won in terms of DL and UA's ability to pull traffic off of AA.

The 744s aren't gone from either DL or UA and won't be for several years. Either DL or UA could use 744s to pull traffic off of AA and onto DL or UA flights if there is any demand at all.
 

"Never" , ok since you say you deal in facts back that up with FACTS!!

it is not at all uncommon to see 777s, 330s, or 744s on the "corner" gates of T5 plus at T6. DL has enough gates for triple simultaneous large widebody operations at LAX. HND and LHR don't even use large widebodies but 767s.

for the 33rd time, instead of worrying about when DL will run out of gates so AA can expand without competition, why don't you tell us how AA can increase its revenues on its EXISTING flights from LAX to Asia which have been operating for more than a decade on a combined basis.

 

[FrugalFlyerv2.0]

but have you bothered to look at codeshares from China cities with the AA, DL, and UA code?
 
 
Long before AA gets the last slot to China, the battle will have been won in terms of DL and UA's ability to pull traffic off of AA.

The 744s aren't gone from either DL or UA and won't be for several years. Either DL or UA could use 744s to pull traffic off of AA and onto DL or UA flights if there is any demand at all.
 

 
Could you clarify what you mean by the impact of codeshares scenario?  Are you suggesting that a DL or UA codeshare partner would duplicate the AA flight(s) to Asia from LAX?  Or are you suggesting that the DL codeshare partner would give slot(s) to DL?  If it is the latter, I have the feeling that the Chinese would get quite nice payday (ransom?) from DL for this favor.  If it is the former, I somewhat doubt USA-originating customers would chose a foreign carrier over a USA-based one.
 
Both UA and DL are planning on getting rid of their B747s (probably over the same time frame that AA is planning to build up LAX-Asia).
Wouldn't it be a stupid fleet planning decision to have a couple B747s just to use on duplicate AA routes from LAX?  Moreover, if DL (and UIA) dumped capacity and depressed prices to Asia from LAX, they could be encouraging their own customers to take the 1-stop via LAX instead of non-stop from SFO or SEA. 

 

[commavia]

Could you clarify what you mean by the impact of codeshares scenario?  Are you suggesting that a DL or UA codeshare partner would duplicate the AA flight(s) to Asia from LAX?  Or are you suggesting that the DL codeshare partner would give slot(s) to DL?  If it is the latter, I have the feeling that the Chinese would get quite nice payday (ransom?) from DL for this favor.  If it is the former, I somewhat doubt USA-originating customers would chose a foreign carrier over a USA-based one.
 
Both UA and DL are planning on getting rid of their B747s (probably over the same time frame that AA is planning to build up LAX-Asia).
Wouldn't it be a stupid fleet planning decision to have a couple B747s just to use on duplicate AA routes from LAX?  Moreover, if DL (and UIA) dumped capacity and depressed prices to Asia from LAX, they could be encouraging their own customers to take the 1-stop via LAX instead of non-stop from SFO or SEA. 

 
I think this latest Delta uber alles rumination was referring to Delta's and United's ability to fill their China flights, to some extent, with connecting passengers moving to internal Chinese points through their codeshare partners.
 
And, to a certain extent, this is likely true - both of AA's main rivals have far more extensive codeshare/online connecting feed into interior China than AA.
 
Nonetheless, I think this line of thinking - and certainly the predictable conclusion/implication that it spells doom for AA - falls down for several reasons.  First, while AA may lack the connecting feed of Delta or United on the Chinese side, it's rapidly reaching parity with at least Delta with respect to connecting feed on the U.S. side - as AA is now linking Chinese markets nonstop to some of AA's (and America's) largest hubs.  Second, the presumption in this line of thinking is that the alliance structure in place today will remain so in perpetuity, and while I'm not suggesting that AA will be able to peel off a Chinese carrier away from United and/or Delta, I don't think it's unthinkable (cough, China Eastern, cough).  Thirdly, realistically, the relative economic and strategic importance of internal Chinese cities to the global air transportation (and really broader economic) system is still rather small - internal China remains, for all the development in a few big cities like Chengdu and Chongqing, remarkably poor and underdeveloped, while the vast majority of the wealth and economic dynamism in Mainland China remains along the coast.  (And, of course, all of this rests on the underlying assumption that China's economic growth will continue at relatively stable and/or relatively steady levels, which I think is "questionable," at a minimum.)
 
And finally, having said all that, even accepting that AA likely will have a perpetually weaker position with internal Chinese connecting feed, and even accepting that this very well may lead to somewhat of an onboard revenue and/or yield discount to rivals, that still says nothing about whether AA's investment in developing its China presence in worth it or not.  Indeed, despite the analysis of our own resident Delta/AA/everything "expert" here, AA's own leaders believe growth in China is a worthwhile investment, despite a lack of internal Chinese feed.  That's telling.  And, ultimately, nobody is seriously talking about AA doubling its capacity to China - again, AA is never going to be United.  In my mind, despite chatter about JFK-PVG, I think AA adding LAX-PEK would pretty much round out the entirety of what AA needs to accomplish in terms of network competitiveness in Mainland China.  Beyond that, I don't really see much more opportunity for AA (or Delta, for that matter) in the rest of China (i.e., outside PEK/PVG/HKG).

 

[eolesen]

I somewhat doubt USA-originating customers would chose a foreign carrier over a USA-based one.

Depends on who it is.

On a paid ticket, I would always choose VA, SQ, CX or JL over any US-based carrier, but you couldn't pay me to fly GU, MU, CA, or CZ.

 

[eolesen]

Thirdly, realistically, the relative economic and strategic importance of internal Chinese cities to the global air transportation (and really broader economic) system is still rather small - internal China remains, for all the development in a few big cities like Chengdu and Chongqing, remarkably poor and underdeveloped, while the vast majority of the wealth and economic dynamism in Mainland China remains along the coast.  (And, of course, all of this rests on the underlying assumption that China's economic growth will continue at relatively stable and/or relatively steady levels, which I think is "questionable," at a minimum.)

Entirely agree. The bulk of the foreign traffic is currently to either PEK or PVG, plus HKG.

If there were serious demand into the interior, you'd see it from other foreign carriers with better access and closer cultural ties.

At the end of the day, China is still a relatively poor country with low disposable income.

 

[WorldTraveler]

commavia,
I have never doubted that AA will "invest in" its presence to Asia because it is strategically necessary to do so.

The only question is how long AA will continue to subsidize those losses, at what point AA has a large enough network to gain whatever parity they think they are supposed to get for being in the markets, and how many of those flights have to be from competitive gateways.

No one has doubted that AA could make DFW-Asia work - the question is the cost to carry a passenger via the southwest US to most of the US.

Further, EVERY company has to justify its investment and say that at some point they have to demonstrate that the investment is working.... if AA continues to significantly underperform its peers on routes where they compete, then it is hard to believe that AA's board can continue to believe there is value in continuing those flights.

further, when AA has had a JV and codeshare partnership with JL to NRT and has still failed to close the gap, it is very hard to believe they can do much to China where AA has virtually no alliance help.

and ALL alliance relationships are potentially up for grabs. It is just as possible that CX could decide that DL or UA make better partners.
and it is also likely that the US and China will have Open Skies at some point which will allow joint ventures - and create an even bigger gap between US carriers who have Chinese partners and those who do not.

and given that China is like the US with hundreds of medium and small cities, it is the additive effect of all of that traffic from multiple cities that make longhaul flights work. To say otherwise is to deny the power of hubs like DFW or ATL to support way more traffic than their local markets otherwise would support.

When you do that on both ends of the route - such as DTW to China or DFW to LHR - the effects are enormous and far larger than either single end of the route.

and btw do you all realize that DL serves the most destinations from LAX followed by UA and then AA?

a few heavily concentrated routes such as AA has with DFW and MIA does not necessarily offset the greater spread of passengers that DL has from more routes in feeding int'l flights.

a larger footprint on both

 

[commavia]

There is no rule that says AA will have to continue "subsidizing losses" to Asia going forward.
 
Delta fanboy thinking to the contrary, we can't necessarily draw straight-line projections and assume that because AA has underperformed in Asia to date, it will continue to do perpetually.  Indeed, again, there is plenty to suggest that the financial performance of this region may well continue to improve as AA further expands its presence and optimizes its fleet, thus making itself more relevant and competitive with customers on either side of the Pacific for whom U.S.-Asia connectivity is important.
 
Scott Kirby anticipates that AA's routes to Asia will be profitable this year, and that's before a lot of the major actions to meaningfully improve the region's financial performance - reconfiguring 777s, deploying more 787s, continuing to develop the foreign POS presence, fully leveraging the corporate business benefits of a combined U.S. network, etc. - even hit their run-rate.

 

[WorldTraveler]

I didn't say that AA couldn't generate profits... low fuel will dramatically improve every US carrier's results.

but cheaper fuel which is what is driving AA's turnaround in Asia also helps competitors and makes it easier for them to add more flights.

in order to gain an advantage on a sustained basis, AA has to fix its revenue shortfall problem to Asia.

otherwise, every move AA makes can be matched by a competitor that can do it with better bottom line financial results.

Unless AA generates comparable or better financial results, AA will eventually have to admit that it is not possible to continue to subsidize loss making routes unless they can demonstrate far larger results somewhere else that could not be obtained without those losses.
since no other US carrier is subsidizing losses to the degree AA is to Asia, they will make more money.

AA's strategy of subsidizing losses can work IF they can fix the revenue problem.

and only if.

 

[commavia]

And once again - there's nothing to say AA cannot fix its revenue, let alone cost, disadvantage in Asia.  Will AA ever grow to equal United across the Pacific?  Definitely not.  Be at relative parity with Delta overall in the region?  Probably not, but possible.  Be sustainably profitable on an overall network basis when considering the positive halo effect that a relevant, viable Asia franchise contributes to the rest of the network?  I think that is highly plausible, if not quite likely.

 

[LDVAviation]

and btw do you all realize that DL serves the most destinations from LAX followed by UA and then AA?

a few heavily concentrated routes such as AA has with DFW and MIA does not necessarily offset the greater spread of passengers that DL has from more routes in feeding int'l flights.

a larger footprint on both

 
...And, do you realize that DL does not serve DC or Chicago nonstop from LAX, not even once a day.  To ORD, AA and UA operate at least 9 flights a day.  So much for the "greater spread of passengers" when DL can't operate even a single flight on two of the largest business destinations from LAX.
 
Do you realize that that greater spread of passengers may be so spread out timewise that DL may not be feeding any flights?  Delta operates only 4% of the aircraft movements during the two peak periods at LAX.
 
Finally, do you realize that DL's shortage of gates at LAX shows up prominently relative to AA when you compare AA's peak aircraft movements to DL's and AA's daily frequencies to destinations other than DFW or MIA, for example ORD, PHL, and CLT, to DL's' frequencies to the same destinations.
 
The number of destinations is meaningless if DL can't serve all the large markets from LAX with any credible frequency.

 

[WorldTraveler]

and yet in the minds of AA people, the world revolves around NYC, ORD, and LAX because that is where AA's network is located.

problem is that AA ignored NYC for years and DL is now #1 in NYC, UA is #1 in CHI, and AA is desperately trying to hold onto #1 in LAX where they are the largest domestic carrier but DL is the largest int'l carrier and carries the most local passengers from LAX to Asia

and yes DL serves more destinations from LAX than either AA or UA.

AA funnels a higher percentage of its total traffic to its top 5 markets than DL does... which just says that AA is big in a smaller number of cities than DL or UA.

And once again - there's nothing to say AA cannot fix its revenue, let alone cost, disadvantage in Asia.  Will AA ever grow to equal United across the Pacific?  Definitely not.  Be at relative parity with Delta overall in the region?  Probably not, but possible.  Be sustainably profitable on an overall network basis when considering the positive halo effect that a relevant, viable Asia franchise contributes to the rest of the network?  I think that is highly plausible, if not quite likely.

I've never said AA can't fix its problem.

I've just repeatedly ask when they would fix the routes they do fly to reach revenue parity with DL and UA to NRT and PVG.

the notion that they can do it by adding a bunch more routes when they can't do it on 2 routes they have flown for years is more than highly suspicious