AA Down Under and Trans Pac?
- Thread starter Dont call me Shirley
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WorldTraveler
Corn Field
- Dec 5, 2003
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- #107
NYC isn't reported as a separate financial entity so there was no way for anyone to know how much DL made or loss until they said they would be profitable.
the Pacific is reported as a separate financial entity.
and since DL's average fares from NYC were comparable to AA's and AA was cutting service, it is highly likely that AA was also losing money.
If the market knew how much money DL was losing in NYC - which we still don't know - then they could have made that information public.
and DL had NO route that it operated from NYC that generated revenues that were comparably lower than AA or other carriers - as AA is doing from LAX or other routes to Asia.
Once again, if some people don't like the fact that AA's financial performance to Asia is highlighted, then they need to find another industry. that information does become public knowledge.
and those who think that personal attacks and threats will silence those who bring it to light should not be surprised that they find the long arm of US and international law enforcement reaching deeply into their own personal lives.
the Pacific is reported as a separate financial entity.
and since DL's average fares from NYC were comparable to AA's and AA was cutting service, it is highly likely that AA was also losing money.
If the market knew how much money DL was losing in NYC - which we still don't know - then they could have made that information public.
and DL had NO route that it operated from NYC that generated revenues that were comparably lower than AA or other carriers - as AA is doing from LAX or other routes to Asia.
Once again, if some people don't like the fact that AA's financial performance to Asia is highlighted, then they need to find another industry. that information does become public knowledge.
and those who think that personal attacks and threats will silence those who bring it to light should not be surprised that they find the long arm of US and international law enforcement reaching deeply into their own personal lives.
Once again - spin away - it's DL's own management that discussed the decade long lost - at the end of the day it's public information - whether you want to accept it or not
You need serious help
Investing for strategic gain is what you promote all the time so when someone else does it you should be able to understand it - however you demonstrate in almost every post your inability to be objective
You need serious help
Investing for strategic gain is what you promote all the time so when someone else does it you should be able to understand it - however you demonstrate in almost every post your inability to be objective
WorldTraveler
Corn Field
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- #110
Public information is good for employees and investors because it shows where money is being made and lost.
Once again, DL said AFTER it reached the point where it would be profitable in NYC that NYC was not profitable.
No one is arguing that DL didn't lose money in NYC.
The point is that 1. NYC just like MIA, DFW, or ATL are not separate DOT regions so profitability can't be known but TATL and TPAC and Latin are and 2. DL did not underperform any routes from NYC to the same degree that AA is underperforming from LAX to Asia.
What is good for the goose is transparency about business issues.
AA has yet to prove that it can be profitable on its two LAX TPAC routes that it has been operating for years; LAX-NRT has been operated for over a decade although with some breaks in service.
It is beyond ridiculous to think that AA can add more TPAC flying and suddenly make the routes which they are flying today profitable, esp. given that AA already is operating to the same or more cities as competitors at LAX. UA has stayed on top of AA's TPAC growth plans while AA has operated PVG while DL has not.
What other routes does AA think it can add that will give it a competitive advantage that it hasn't operated now - and how is that going to change when other carriers add their own routes to those same cities?
If AA can't obtain industry comparable revenues to the same cities now, how is adding a bunch more cities going to change anything?
If AA's buildout of DFW to Asia is working, then it should FIRST result in increased profitability for AA's existing ORD and LAX to Asia flights.
Once again, DL said AFTER it reached the point where it would be profitable in NYC that NYC was not profitable.
No one is arguing that DL didn't lose money in NYC.
The point is that 1. NYC just like MIA, DFW, or ATL are not separate DOT regions so profitability can't be known but TATL and TPAC and Latin are and 2. DL did not underperform any routes from NYC to the same degree that AA is underperforming from LAX to Asia.
What is good for the goose is transparency about business issues.
AA has yet to prove that it can be profitable on its two LAX TPAC routes that it has been operating for years; LAX-NRT has been operated for over a decade although with some breaks in service.
It is beyond ridiculous to think that AA can add more TPAC flying and suddenly make the routes which they are flying today profitable, esp. given that AA already is operating to the same or more cities as competitors at LAX. UA has stayed on top of AA's TPAC growth plans while AA has operated PVG while DL has not.
What other routes does AA think it can add that will give it a competitive advantage that it hasn't operated now - and how is that going to change when other carriers add their own routes to those same cities?
If AA can't obtain industry comparable revenues to the same cities now, how is adding a bunch more cities going to change anything?
If AA's buildout of DFW to Asia is working, then it should FIRST result in increased profitability for AA's existing ORD and LAX to Asia flights.
Kev3188
Veteran
It's a good question, and one that gets ignored or dismissed out of hand a lot. I don't have the answer -the best I can offer is anecdotal info from a friend that up 'til recently worked there- but hopefully, somewhere with actual knowledge of gate constraints at LAX will come along soon.Platinum Steve said:
P.S. Thanks for coming back to the site.
WorldTraveler
Corn Field
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- #112
in response to the question of where airplanes can come from, given that all of the big 3 have fleets of hundreds of planes and 150 or more int'l widebodies, there really is no practical limitation on what one airline can operate.
DL operates 777s across to Europe where they are not needed. DL has 330s coming on line that are capable of replacing 777s that operate the Pacific.
To assume that DL or any other airline is limited in what they can operate based on aircraft goes to the same type of argument that "if we have enough gates we can win in the marketplace"
UA didn't have any problem figuring out that it would find an airplane when it made the decision to start LAX-PVG service just hours after AA announced it.
neither airplanes or gates are going to change whether an airline succeeds financially in a market.
If AA can succeed, it can do it with its existing assets and if any of them view expansion as strategically important enough including to add a route which another carrier is also launching, they will find the assets to make the route possible.
as much as some people want to refuse to believe it, LAX is an important enough market and the west coast to Asia is a strategically enough market set that DL and UA are simply not going to allow AA to grow without adding their own service.
when AA grows unchecked by DL or UA, then you can prove me wrong. Every evidence right now says that any thoughts that AA will grow either at LAX or from LAX to Asia without a competitive response from DL or UA are not realistic.
DL operates 777s across to Europe where they are not needed. DL has 330s coming on line that are capable of replacing 777s that operate the Pacific.
To assume that DL or any other airline is limited in what they can operate based on aircraft goes to the same type of argument that "if we have enough gates we can win in the marketplace"
UA didn't have any problem figuring out that it would find an airplane when it made the decision to start LAX-PVG service just hours after AA announced it.
neither airplanes or gates are going to change whether an airline succeeds financially in a market.
If AA can succeed, it can do it with its existing assets and if any of them view expansion as strategically important enough including to add a route which another carrier is also launching, they will find the assets to make the route possible.
as much as some people want to refuse to believe it, LAX is an important enough market and the west coast to Asia is a strategically enough market set that DL and UA are simply not going to allow AA to grow without adding their own service.
when AA grows unchecked by DL or UA, then you can prove me wrong. Every evidence right now says that any thoughts that AA will grow either at LAX or from LAX to Asia without a competitive response from DL or UA are not realistic.
Platinum Steve
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- Aug 12, 2004
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Thanks, Kevin.
WT - my question was not where do the planes come from. I want to know where they are going to go when they land at LAX. And, when they get to those gates, which flights that are currently scheduled to use those gates will be cut to accommodate this new T-PAC flying?
WT - my question was not where do the planes come from. I want to know where they are going to go when they land at LAX. And, when they get to those gates, which flights that are currently scheduled to use those gates will be cut to accommodate this new T-PAC flying?
WorldTraveler
Corn Field
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- #114
thanks for clarifying.
given the vastly larger amount of revenue than an int'l aircraft generates, it is not hard to figure out which revenue is more important.
but look at the LAX-PVG flight. It is leaving early afternoon and returning early evening... that just happens to be when DL has plenty of terminal space available because most of DL's LAX route network is east coast/eastern time zone focused and those times don't work for many east coast departures.
In fact, adding LAX to Asia flights could be the best way that DL can push more revenue thru DL's facilities and do it a time when the facilities are less used and in markets which DL needs to add in order to gain greater position in the local market.
again, there doesn't appear anything that stands in the way of DL or UA adding the 2-3 more TPAC flights that will either prove for all time that AA either can or cannot compete in the LAX to Asia market.
but it is more than a stretch to believe that AA can make 2 or 3 new flights work when they are trailing DL and UA with just 2/3 of the revenue in 2 of the most largest markets in two different countries that AA has operated for a number of years.
given the vastly larger amount of revenue than an int'l aircraft generates, it is not hard to figure out which revenue is more important.
but look at the LAX-PVG flight. It is leaving early afternoon and returning early evening... that just happens to be when DL has plenty of terminal space available because most of DL's LAX route network is east coast/eastern time zone focused and those times don't work for many east coast departures.
In fact, adding LAX to Asia flights could be the best way that DL can push more revenue thru DL's facilities and do it a time when the facilities are less used and in markets which DL needs to add in order to gain greater position in the local market.
again, there doesn't appear anything that stands in the way of DL or UA adding the 2-3 more TPAC flights that will either prove for all time that AA either can or cannot compete in the LAX to Asia market.
but it is more than a stretch to believe that AA can make 2 or 3 new flights work when they are trailing DL and UA with just 2/3 of the revenue in 2 of the most largest markets in two different countries that AA has operated for a number of years.
Platinum Steve
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- Aug 12, 2004
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Getting closer to actually answering the question. I'm not asking about a couple of new flights, WT. Your assertion was that DL would step on every flight that AA launched to keep the status quo. Over the next two years, it is possible that AA could launch upwards of 5 new flights. Making room for one new T-PAC flight is easy; 5 is going to be less than easy. Given the limited number of gates under DL's control that can handle that type of aircraft, how are they going to match AA flight-for-flight?
So, I'll ask this again: where are those planes going to go? And what flights will have to get cut to accommodate these new flights? (Please - don't give me AA's failure on their flights or market share data or any other financial metric. I don't care. It's not my question.)
So, I'll ask this again: where are those planes going to go? And what flights will have to get cut to accommodate these new flights? (Please - don't give me AA's failure on their flights or market share data or any other financial metric. I don't care. It's not my question.)
WorldTraveler
Corn Field
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- #116
there is space. you an be assured there will be.
and it still doesn't change that if you are hoping for DL to run out of gate space so that AA can finally start making money on its LAX Asia flying, AA will never win that battle. four hours of gate time in LAX is far easier to obtain and pay for than tens of millions of dollars in losses flying a route.
and remember that UA, not DL, was the airline that announced its LAX-PVG route within hours of AA's announcement. UA outperforms AA on both of the two routes the two airlines operate from LAX.
Are you going to argue that UA will run out of gate space so that AA will at some point be free to add what it wants with no competitive response?
and it still doesn't change that if you are hoping for DL to run out of gate space so that AA can finally start making money on its LAX Asia flying, AA will never win that battle. four hours of gate time in LAX is far easier to obtain and pay for than tens of millions of dollars in losses flying a route.
and remember that UA, not DL, was the airline that announced its LAX-PVG route within hours of AA's announcement. UA outperforms AA on both of the two routes the two airlines operate from LAX.
Are you going to argue that UA will run out of gate space so that AA will at some point be free to add what it wants with no competitive response?
Platinum Steve
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- Aug 12, 2004
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I'm not hoping for anything. I'm trying to understand how DL can add upwards of 5-7 T-PAC flights given their current gate holdings.
You still didn't really answer my question, though. "there will be space" isn't an answer. What space? Where? Can they do it with what they have in T-5 and T-6 now? Or do they have to add more gates? And if they have to get more gates, where will those be? You asserted that DL would keep AA in check, but I don't see how they can do that with their limited gates. Help me understand how you see this happening operationally.
You still didn't really answer my question, though. "there will be space" isn't an answer. What space? Where? Can they do it with what they have in T-5 and T-6 now? Or do they have to add more gates? And if they have to get more gates, where will those be? You asserted that DL would keep AA in check, but I don't see how they can do that with their limited gates. Help me understand how you see this happening operationally.
WorldTraveler
Corn Field
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- #118
if DL wants to add TPAC flights, they can find the room.
and your argument is no different from the same argument we have listened to from commavia for years which is that AA will gain enough physical assets that they will eventually be able to win in the marketplace.
desist with your thinking because it doesn't make sense in the real world.
Do you have any idea that a TPAC airline for a US carrier can easily cost $200,000 EACH WAY.
given that AA is getting only about 2/3 of the revenue that DL and UA get for the same flights, either DL and UA are making tons of money - in which case they have deep war chests OR AA is losing tons of money... and the latter is far more likely.
based on even a 10% negative margin - and AA has posted much higher negative margins on the Pacific - AA could easily be losing tens of millions of dollars every year for every route they operate from LAX.
You can keep thinking they will just keep burning thru money until they get it right, but that simply won't happen.
Neither AA or any other airline can keep adding longhaul int'l flights while losing money on the ones they operate.
It is simply not economically viable, regardless of how many aircraft or gates they have.
and your argument is no different from the same argument we have listened to from commavia for years which is that AA will gain enough physical assets that they will eventually be able to win in the marketplace.
desist with your thinking because it doesn't make sense in the real world.
Do you have any idea that a TPAC airline for a US carrier can easily cost $200,000 EACH WAY.
given that AA is getting only about 2/3 of the revenue that DL and UA get for the same flights, either DL and UA are making tons of money - in which case they have deep war chests OR AA is losing tons of money... and the latter is far more likely.
based on even a 10% negative margin - and AA has posted much higher negative margins on the Pacific - AA could easily be losing tens of millions of dollars every year for every route they operate from LAX.
You can keep thinking they will just keep burning thru money until they get it right, but that simply won't happen.
Neither AA or any other airline can keep adding longhaul int'l flights while losing money on the ones they operate.
It is simply not economically viable, regardless of how many aircraft or gates they have.
Platinum Steve
Member
- Aug 12, 2004
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This is getting tiresome, WT. Why can't you answer my question?
Again, I don't care about load factors. I don't care about historical yield percentages. I don't care about JVs or code shares. I don't care about any of the metrics that you keep trotting out to avoid my question. I don't even give a whit about AA and their ability to make these flights work or not. (In fact, if you notice, I haven't mentioned AA at all in this - other than the base supposition that they will launch these flights. After that, nothing.). I don't have a dog in that fight at all.
So, what's the answer, WT? Where are the planes going when they land? It was your assertion, not mine, that DL would match AA. Now you've doubled down with "They can find room." Where? What gates? They all have numbers, so maybe that could be a good place to start.
Again, I don't care about load factors. I don't care about historical yield percentages. I don't care about JVs or code shares. I don't care about any of the metrics that you keep trotting out to avoid my question. I don't even give a whit about AA and their ability to make these flights work or not. (In fact, if you notice, I haven't mentioned AA at all in this - other than the base supposition that they will launch these flights. After that, nothing.). I don't have a dog in that fight at all.
So, what's the answer, WT? Where are the planes going when they land? It was your assertion, not mine, that DL would match AA. Now you've doubled down with "They can find room." Where? What gates? They all have numbers, so maybe that could be a good place to start.
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