AA president Scott Kirby says the carrier seeks to make LAX its "primary Asia-Pacific gateway".

Status
Not open for further replies.
I hate to break it to you and MAH but XNA to East Asia is just not a big enough market to make any kind of difference and AA already carries a fairly decent chunk of the revenue between XNA and East Asia via ORD as well as DFW.

this is precisely the kind of internal network competition that I am talking about.

The statistics are dubious because they aren't what you want to see... but somehow they were the same types of numbers that we saw with BRU from JFK and, well, you know....

Given the continued weakness to Japan, it is doubtful that even Japan has viability. AA is pulling back capacity while DL notes revenue weakness even though DOT stats show that DL is not giving up local market share.

PVG is the strongest performing city in Asia from a revenue perspective and AA is dividing it between 3 gateways and in two of them they are behind other players in the market.

It's not just about gateways on this side of the Pacific but also about markets on the other side as well.
 
WT  Im not sure what your saying regarding hub issues for AA but I do think Phl alone has what it takes to make PHL Asia as well as PHL-LAX-to connect to ASIA work   Phl alone can draw from a large large area   probably more so than say JFK-LGA-EWR can bec of the geographic location.   But LAX can draw a large area just from LA itself plus other areas and thus that why LAX to ASIA can and most likely will work a lot better than SEA to ASIA
 
robbed,
I am saying that AA has duplicate routes to some of the same cities.

When MIA-MXP was announced, many people on here touted how great it would be for the MIA hub. I said it would hurt AA at JFK. JFK-MXP is an "old" AA route and one of the few in continental Europe where AA has done well.

IN fact, in the first quarter of operation of MIA-MXP, AA's performance on JFK-MXP took a big hit. Part of it might be related to EK who also entered the market but DL and UA both managed to hold their own.

AA now flies ORD, DFW, and LAX to PVG and NRT. They aren't strong on any of those routes. As AA continues to build one hub to Asia, they are hurting their revenues from another hub to the same city. AA just does not have the strength to successfully operate multiple flights a day to multiple destinations in Asia. They have the same problem to Europe but it is far more severe to Asia.

As much as people here want to think that AA is going to grow LAX without cutting ORD or DFW to Asia, their financial performance is just not there to believe they can sustain not 1 but 3 weak gateways to Asia.
 
That's it. AA should just give up and stop being an airline. WorldTraveller is always right guys.
 
Nevermind the fact that a lot of what AA is doing now is exactly what Delta started doing a decade ago - throwing a lot of capacity,, some of it money for long-term network growth.
 
It bothers some, none more than WorldTraveller, that AA is doing the same, but so be it. 
 
American+US Airways is a major threat. It will build a decent Asia network but its unlikely to match Delta or United. However it's Latin American network will continue to be unmatched (and Latin America, not Europe or Asia, is the crown jewel of profits for international flying) and it likely will overtake Delta as the largest U.S. airline to Europe by decade's end, probably sooner. Two out of three isn't bad. 
 
And regarding my comment on LAXXNA, all I said was that it is a strong performing local market for AA and that it would work with or without Asia feed. Nothing more. 
 
the difference is that DL is MAKING money. Lots of it.

And the capacity they are adding is RASM positive to the entities where they are adding it.

The only region where DL's RASM went down was Asia Pacific and they noted that Japan is the reason. We'll see what UA and AA have to say about Asia but the chances are very high based on traffic reports that Japan is and will be a drag on their performance as well.

AA wouldn't be operating ORD-NRT on a less than daily basis if Japan wasn't a drag to AA.

DL added 18% more capacity to Latin America and absorbed all of it.

DL isn't just adding capacity willy nilly. DL also pulled back a lot of capacity during its BK and in the years post merger while nAAtive AA continued to add capacity in order to avoid dealing with its overstaffed situation.

UA and US both cut capacity. US has been growing at a faster rate than DL. and guess what? US is now pulling back on some of its aggressive growth plans as well.

No, AA shouldn't just pull up stakes and run.

They should recognize that there remain major parts of their network which don't perform well and haven't for years. The battle for NYC was determined years ago when AA dropped to almost half the size of DL and B6 at JFK.

The LGA situation might give AA a little more time but given that AA isn't even willing to serve some of the top DL and UA competitor hubs using the slots it now has, it is doubtful they can make a case for winning contracts that DL and UA have picked up.

AA's biggest strategic challenge right now is in its hometown, not in Asia/Pacific. The next year will be absolutely crucial to AA's future with WN and a host of new competitive flights being added from N. Texas. After years of adding behind artificial restraints to trade, AA now has a big price to pay. Add in DCA which has been one of US' highest margin hubs and AA has a full-time job just holding onto the markets which were a key part of its network.

strategic focus #2 is now Latin America and LHR, markets where AA has printed its cash. AA's virtual monopoly in those markets is ending.

And in the midst of all of this, AA has to figure out something to do with its money-losing Asian operations and its duplicated hubs at JFK and PHL.

I hate to break it to you but AA will never overtake DL to Asia. Perhaps UA if they continue to stumble bad enough - but if they stumble that badly, UA is finished.

AA has to figure out how to make JFK to continental Europe work. They haven't done it before and continue to hold onto a number of routes that generate more revenue by US from PHL than AA gets from JFK, not to speak of how AA does compared to DL and UA in the NYC local market.

AA's European network looks quite a bit thinner if you start taking out underperforming JFK-continental Europe routes.


The euphoria that marked the merger will soon give way to the reality that mergers are hard work and no airline has ever faced as many strategic challenges going into a merger as AA does.
 
WorldTraveler said:
make up your mind. Does AA have the ability to park RJs at its T4 gates or not?

If they do then they don't have any disadvantage.

No cake and spoon too, bud.
Click to expand...
 
 
YES, AA has the ability to park RJ's at T4.  
 
It doesn't because it would rather use those gates for mainline.  
 
On the contrary, Delta does not have a regional jet terminal and LAWA would not play along with Delta's attempt to turn ramp space into one.  Therefore, Delta must park RJ's at T5.  
 
(-713 and counting.  How high can that number go?)
 
I'm sorry but if you or anyone else thought that you pushing red buttons would stop me from speaking to the business realities of the industry, you are sorely mistaken.

I get the whole concept that AA has more gates. They can't - whether legally or realistically - park MAINLINE aircraft at their RJ facility which means their mainline gate capacity at LAX is not appreciably better than anyone else's.

I don't think I ever said that DL intended to permanently add RJ pad gates; if they do, so be it but they are growing using their current T5 and 6 gates.

And as much as you or others want to tell us how many new gates AA MIGHT be getting in the future, the competitive environment is changing. NOW.

And all of the gate size claims only matter as far as this discussion is concerned if AA can build a viable Asia - Pacific route system.

AA still has the weakest performance of the big 3 on its LAX-Asia routes although it is improving and it very well may be that UA's continued poor performance will provide just the opportunity AA needs in order to grow on the west coast.

But as I have also noted, DL's growth on the west coast including from SEA-Asia will likely be the catalyst that triggers gate rearrangement at LAX driven by the fact that UA and VX, both of whom hold larger numbers of gates, will find that their current assets cannot be fully used without losing money.

At some point, both airlines will either be forced to give back gates or more likely sell or sublease them.
 
WorldTraveler said:
it is only pollution because you can't or won't see the business issues involved.You and others touted the huge size of AA's network esp. in the eastern US. The first pulldown of int'l flights from CLT - first GIG and now Europe - shows that it was a myth all along that new AA could support all of the flying that the combined networks had. I said that AA's addition of MIA-MXP would pull traffic off of JFK-MXP and that is exactly what has happened.You can choose to threaten to lock threads all you want but it won't change that AA's Asia/Pacific network doesn't work now. Thinking that adding a bunch of new capacity to a highly competitive city where AA is the bottom feeder among US carriers to Asia not only defies any sort of market based logic but also ignores exactly what is happening across the Atlantic.Don't start topics about business issues or contribute to them if you don't want to hear other perspectives, even they aren't so comfortable for you to listen to.
Click to expand...
WT, please tell me what Europen flts were pulled down , you make it sound as if it was major!!! Your many rambling post shows you are just scared. You really have no idea of what this new managements plans are, nor should you!! Instead of just discussing the topic you make rambling posts of what if's and conjecture. Most us on here really get a kick out of you pretending to know our future when in fact you using a crystal ball.
 
So many slivers of a qualification attached to all those statements, so little time.

LAX can't increase the total number of gates. If DL wants to add RJ gates, they have to be subtracted from someone else's lease, and that ain't gonna happen without a lot of money changing hands.

Neither UA or VX seem to concerned about the excess gates they have, since they know the City will have interest in taking them when the MSC starts to open up for business.

AA "operating ORD-NRT on less than a daily basis" totally ignores the daily services offered by JV partner JL. But hey, maybe WT doesn't understand how a JV is supposed to work (that was a NW thing).
 
E  do you think LAX-Asia will do a lot better than say NY to Asia     the way WT puts it is that DL is tops no matter what but given the population of LAX vs NYC  or SEA for that matter I think LAX makes a lot better sense given its location      Just as MIA is for Latin America I think LAX-Asia etx
 
first, the combined AA/JL services in multiple markets are less than what they were before. Good for JL for providing backup - but AA's overall presence in the market is less than it was when the JV was announced.

And as much as you want to think otherwise, AA does not have an automatic right to gain whatever gates MIGHT become available.

And none of this gate speculation changes that AA is operating 2 LAX-Asia routes that are underperforming both DL and UA TODAY. if the gates they have don't provide an advantage, then how are a few more gates going to make a difference with even more flights?

It also doesn't change that based on current schedules, DL is growing its seat count at LAX by double digit percent this summer; AA/US are not.

And it is precisely because nearly every one of those large RJ flights that DL operates can be upgraded to mainline aircraft, that DL still has a lot of growth potential not just to add more seats to its existing flights but also to add more flights - as DL is doing with new/increased AUS, BOS, and RDU service - among others including key routes like JFK, HNL, and SFO where DL now offers more seats than AA.

no robbed,
DL knows what it is doing in Asia and doesn't bite off more than it can chew and also knows where to cut and where not to cut.

DL didn't cut Asia capacity and ended up with a 5% yield hit. AA cut 5% of its Asia capacity and got a positive RASM. UA added capacity to Asia and had the biggest RASM drop of the 3. DL knows where it needs to hold onto capacity and justify the investment.
 
so delta knows what its doing but no other airline does   ok got it  now we all know 
 
some how  some way  I think the leadership at AA know what the hell their doing otherwise  I seriously doubt the BOD would keep them going
 
Status
Not open for further replies.

Similar threads

700UW
AA's Looks to its future in Asia
Replies
1
Views
964
MetalMover
M
WorldTraveler
An extensive analysis of Delta
2
Replies
20
Views
8K
WorldTraveler
WorldTraveler

Latest posts

Back
Top