AA Down Under and Trans Pac?

[commavia]

I have flown Air New Zealand.  Unless, AA is ready to step up its game--particularly in coach-- or, NZ has seriously cut their services and cabin ambience, NZ is t an airline to have to go up against.

 
While I don't necessarily disagree with you about Air NZ being a strong competitor and offering a generally solid product in both the premium and economy cabins, I think some perspective is important.  If service alone was truly the critical differentiator, then AA would have been getting killed for the last decade flying 767s across the Atlantic with a grossly uncompetitive product - in Business and for sure in Coach - up against far, far better offerings from European and U.S. rivals.  In this case, while it's true that Air NZ is and always naturally ought to be the dominant player between the U.S. and AKL, AA may just have an opening given its growing hub at LAX and the QANTAS/JetStar connectivity at AKL.  And besides, lest we forget, as good an airline as Air NZ is, AA (presumably be flying a brand new 787) would be up against Air NZ's 777s in this market which are, alas, mostly (if not by then all) equipped with the dreaded 10-abrest Coach configuration that we're all constantly assured around here is a disastrous competitive disadvantage for AA.  So there's that ...

 

[FWAAA]

AKL is the latest rumour, right? A publication in Australia wrote about the rumour the other day.

I can see AA starting LAX to AKL, ICN, PEK and maybe even TPE. And if AA wants to go up against CX, there's always HKG from LAX. Sure, those routes might bleed billions and billions of dollars initially, but eventually, fares might stabilize in the profitable range.

 

[WorldTraveler]

wow... you really believe that AA can sustain anything that amounts to even hundreds of millions of losses annually?

no, Jim, it isn't that DL can redeploy capacity but AA cannot.

My issue with AA in the Pacific has NEVER been that they were not redeploying capacity but that they have been throwing a lot of additional capacity into the market that stood no chance of being profitable for a very long time, if ever.

It has been about AA's willingness to lose money and to enter markets where it has little chance of profitability or market success - industry comparable fares.

There is actually a better case for AA REDEPLOYING assets from S. America to Asia in a low fuel environment than there was when AA was adding capacity in a high fuel environment.

let's be very clear, though.

in nearly all of the expansion markets that have been mentioned, DL and UA have stronger alliance relationships and stronger market presence than AA does.

starting a route from LAX - the most competitive market to Asia - to markets where competitors are far stronger and are far more likely to add their own service is indeed the recipe to lose billions.

if AA really has to be in Asia, do it from DFW and then when it can show that the market it serves from LAX make money and generate revenues comparable to other carriers, then there is a financial, and not just a "we've got to serve more of the Asian market" basis for expansion.

 

[FWAAA]

My issue with AA in the Pacific has NEVER been that they were not redeploying capacity but that they have been throwing a lot of additional capacity into the market that stood no chance of being profitable for a very long time, if ever.

I am not a member of the Doug Parker/Scott Kirby fan club, but it's their company, not yours or mine, and if they want to spend money like drunken sailors at LAX in an expensive attempt to take some business away from UA, DL and the foreign carriers, then so what? It's not like they're spending YOUR money.

It has been about AA's willingness to lose money and to enter markets where it has little chance of profitability or market success - industry comparable fares.

Yes, AA will lose money while it "invests" in LAX-Asia. That's been conceded. Will AA attract new corporate accounts because of its much broader Asian network? Dunno.

in nearly all of the expansion markets that have been mentioned, DL and UA have stronger alliance relationships and stronger market presence than AA does.

starting a route from LAX - the most competitive market to Asia - to markets where competitors are far stronger and are far more likely to add their own service is indeed the recipe to lose billions.

I already posted about the billions in losses, so do you have anything new and original to add or is your MO to simply reword and repost what I posted earlier?

if AA really has to be in Asia, do it from DFW and then when it can show that the market it serves from LAX make money and generate revenues comparable to other carriers, then there is a financial, and not just a "we've got to serve more of the Asian market" basis for expansion.

Know thy place, AA. That's freakin' hilarious.

The world's largest airline can never ever successfully compete with the almighty DL and UA and the foreign carriers at LAX. Why? Because UA bought the Pan Am routes and because DL merged with NW and so it is written. AA can add industry-leading J seats to its existing widebodies and add new widebodies with industry-leading J seats and yet because it didn't buy Pan Am or merge with NW, it can never match its peers.

Funny thing about that. AA has already added a bunch of Asia from DFW, and although I predicted failure for that strategy, I may have been wrong. UA has long had Asian flights from LAX and SFO and DL has long had Asian flights from LAX and its NW hubs. Recently, DL has been "investing" piles of DL shareholder money in an attempt to build a profitable SEA hub to Asia. So by your logic, DL and UA own the west coast to Asia and there's nothing that AA can do about that. GMAFB.

DL flies which ATL routes to Asia? NRT? That's it? You'd think the ATL mega-hub could produce some profits to Asia just like AA's DFW-Asia buildup. Don't get me wrong - I understand perfectly why DL focuses more on DTW and MSP and SEA and LAX to Asia than ATL to Asia. But little ole AA shouldn't dirty her dainty hands trying to compete with the big boys on the west coast. Instead, it should stick to just its Texas hub and its smaller CHI hub to Asia.

Know thy place, AA.

 

[commavia]

Know thy place, AA. That's freakin' hilarious.

The world's largest airline can never ever successfully compete with the almighty DL and UA and the foreign carriers at LAX. Why? Because UA bought the Pan Am routes and because DL merged with NW and so it is written. AA can add industry-leading J seats to its existing widebodies and add new widebodies with industry-leading J seats and yet because it didn't buy Pan Am or merge with NW, it can never match its peers.

 
So, so true - it's just the same ridiculous B.S. repeated over and over even though everyone stopped listening after the last website permanently banned it.
 
Contrary to the completely distorted workings of the Delta fanboy mind, Delta doesn't get a veto on AA growth to Asia - from LAX or anywhere else.  As said - the only way Delta could "punish" AA for expanding into Delta's allegedly sovereign "turf" would be to dump even more capacity on top of AA as it continues to grow, and thus forcing even greater losses not just on AA but also Delta, and everybody else.  And for sure, Delta could do that - financially, operationally, etc.  But it would effectively be starting a war of attrition with a rival that has multiple times more cash, in a market where that competitor is larger and stronger than Delta.  And, of course, Delta would then have to explain to their shareholders why, when they supposedly have such a great thing going up at SEA and have "gotten religion" on "capacity discipline," they felt the need to deploy (burn) shareholder capital fighting AA in a market where - I think most would agree - AA has the greater "need" and therefore focus, and is likely to fight to the death until it outlasts Delta.  It would be a highly irrational move - which would be uncharacteristic for the otherwise quite rational and reasonable Delta management team.
 
Long story short - the recent Delta foray into LAX-PVG notwithstanding, I don't see it happening.  If - hypothetically - AA truly follows through on what it or news sources have said/implied it would do, and adds LAX-ICN/PEK/HKG/AKL, I think Delta will let them have it.  Delta knows it can't truly "win" at LAX, and as such I think Delta management will - smartly - conclude that it's better to focus on the gateway where it can win, which is SEA.
 
But the bottom line in all of this B.S. is this: back here in reality, regardless of whatever Delta fanboys on the internet think, AA's own management has made no secret of the fact that it believes AA can, and will, be competitive and profitable in Asia.  They, too, apparently have tuned out the best that internet airline industry discussion forums have to offer.  As I said - I'm taking them at their word when they say that the "investment" in Asia is worth it long-term, that AA's routes to Asia will be profitable this year, and that more growth in that region is coming.

 

[commavia]

Oh, and while we're on the subject of highly speculative thinking about what could potentially unfold vis-a-vis AA and Asia in the next few years ... apparently not everybody thinks that everything is inevitably going to go Delta's way.
 
blogs.barrons.com/stockstowatchtoday/2015/03/06/could-american-airlines-buy-alaska-air/
 
I'm not saying I necessarily buy some, or even most, of Hunter Keay's premises, but regardless, the response to this should be hilarious to read.
 
Enjoy.

 

[WorldTraveler]

that it the most CONVOLUTED and factually inaccurate assessment of what is happening on the west coast and to Asia.

and the fact that you hang on to such a convoluted and factually inaccurate article to hope that AA will be something in Asia shows how desperate - wait, wait, afraid and paranoid, that they AA might get left behind.

let's start with the basics
DL hasn't said it intends to grow Asia - AT ALL. They said that SEA and LAX are part of their two hub strategy for the west coast.... they have made no statements it includes TPAC growth. AA is in the one that is talking about all of that TPAC growth from LAX. Maybe DL will do it but they sure haven't said they will and are not putting their hopes on it.

Second, DL doesn't need AS anymore and AS isn't going to make or break DL's growth on the west coast anymore. DL made the decision to grow its own domestic network to feed its own flights.

AS does nothing for either AA or DL in LAX anyway.

as much as you or some ignorant "analyst" want to believe that KE will help AA, they will not unless AA is willing to give up its own network or be nothing more than a whore for KE. KE is no solution for JL either.... KE is lower cost and will dominate the relationship based on its size.

and speaking of lower costs, the reason why any merger between AS and legacies won't work is because AS' costs are so low relative to the legacies. Any analyst and the government can recognize that.

and the chances of a merger between any of the big 3 is next to NIL.


and finally, AA is a PUBLIC company. It is not Parker's or anyone else's.

Public companies are indeed open to criticism. and that criticism includes noting that AA cannot succeed at a strategy that involves adding capacity in the number 1 market for every Asian carrier and where it, whether you like it or not, is LAST out of THREE US carriers to Asia.

It isn't about losing money that will eventually be recovered. AA will never have a profitable operation in LAX if it depends on starting one route after another where it is consistently beat by stronger competitors.

If AA is so good in LAX, then they should be able to generate industry comparable revenues on the flights to PVG and NRT that they have operated for years.

if they can't do that in those markets, it is simply ludicrous to think they will do it in a half dozen other markets.

if you two clowns can't handle it, you need to stay off the internet.

 

[commavia]

Hahaha - such transparent fear and delusion, just as I would have expected - nice to see that some of my expectations/predictions are still proven correct, and sometimes literally within a matter of minutes!
 
Until the next diatribe, this is the "clown" signing off ...

 

[WorldTraveler]

uh, did you read that the FAA is planning to cap operations at LAX.

so much for all of that growth.

the fear that AA might not ever be able to build its presence to Asia is palpable.

 

[commavia]

So much delusion.  So much fear.  So much enjoyment for the rest of us.
 
Please provide a source for the assertion that the FAA is planning to "cap operations" at LAX.  Because what I read was that FAA was planning to designate LAX a Level 2 airport, instituting schedule coordination which - if I'm reading IATA's own guidelines correctly - requires airlines merely to, "provide and update details of their planned operations."  In essence, airlines have to tell the "facilitator" what they plan to schedule.  That's it.  Not slots.  Not "capping" of flights.  Again - please provide a source that says differently.

 

[FWAAA]

if you two clowns can't handle it, you need to stay off the internet.

When all else fails, start with the name-calling.

 

[WorldTraveler]

feel free to continue to believe that AA will be free to build this massive hub that you say they NEED to be competitive with DL and UA.

Are you willing to admit that AA is a public company and not Parker's little pet production?

or yours?

 

[jcw]

Wait who is blocking AA from building a hub - let's say someone wanted to build a hub let's say SEA as a public company would an airline be allowed to build a hub there - if a public company can build a hub there would AA be allowed to build a hub where it wants to?

 

[WorldTraveler]

no, you don't get it.

I'm not blocking AA from doing anything.

I am simply saying the chances of financial success are slim... and if they are so good, why hasn't made two different routes to two different countries produce financial results any better than they are.

why, oh why?

Btw, DL's revenues on its routes from SEA and DL to Asia far outperform AA's from LAX. that's why it is very hard to not realize that AA is losing bucketloads of money flying LAX to Asia.

believing that they can do with 5 routes that they can't do now with 2 is more than a little delusional.

 

[commavia]

When all else fails, start with the name-calling.

 
Seriously.  Where is that awesome "unhinged" graphic when you need it?  In the face of facts and/or logic-based opinion (most normal people call it "reality"), the reply is this mindless babbling about how AA is a publicly-traded company and "Parker's little pet production."  Huh?  I constantly find myself asking why the rest of us must be subjected to this endless stupidity but then I remember - the comic relief.