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

[WorldTraveler]

FWAAA,
you might be interested in knowing that AA DFW-ICN carries more revenue proportionate to the distance than some of AA's more established transpac flights.

 

[eolesen]

The local market between Los Angeles and Fayetteville, Arkansas is around 130 daily passengers with AA controlling ~90% of the market an average fare ~25% higher than DFWLAX.

I have no doubt 130 ppd is what the public O&D data is showing, but I'd caution against believing that's the actual market demand...

When you start comparing ticketed O&D data against DCS data (which takes into account bags being thru-checked across split PNRs), you may start to see a slightly different result.

Part of the reason for that is refundability issues. Whenever I'd have a joint TUS-LAX-HKG routing in the past, having AA present on the itinerary would force a non-refundability provision onto the LAX-HKG sector, even though CX's fare rules would normally allow refundability on a standalone purchase.

It's also a way to work around O&D revenue management, where the sum of the parts is cheaper than the sum of the whole, even if I bought a walkup fare on arrival at LAX from WN, UA or AA (which I did about half the time, since WN and UA had earlier departures when my flights would come in early.

 

[MAH4546]

I have no doubt 130 ppd is what the public O&D data is showing, but I'd caution against believing that's the actual market demand...

 

 
The figure is MIDT and I don't doubt it is accurate. Fayetteville in general has really strong domestic O&D demand for a city of it's size - not only is there Wal Mart, but there's a wealthy population base. 
 
Word is MIAXNA is coming back soon, too. 

 

[WorldTraveler]

the whole issue of internal competition between AA/US hubs - an issue that AA needs to resolve in order to make Asia/Pacific work - also is present in AA/US' transatlantic system.

US' decision to reduce its summer seasonal flying is undoubtedly caused in part because the additional routes are causing weakness to other AA/US routes. As much as the merger proponents touted AA/US huge east coast presence, there is a huge amount of duplication and internal hub competition esp. on TATL routes.

Further, DOT data shows that AA's performance on several of its JFK-continental Europe routes is weaker not only than DL and UA from JFK/EWR but also weaker than US from PHL. MXP is a good case in point. I noted that the addition of MIA-MXP would weaken AA's performance on JFK-MXP and that is exactly what has happened. In addition, AA has been the carrier most impacted by EK's entrance into the market.

PHL is a viable HUB, even if NYC is a larger market. AA does not have the mass at JFK to compete with DL or UA in both the local market as well as the flows. Add in that PHL has more feed and very little competition and the chances that AA can continue to support a number of weak markets from NYC are slim.

AA will have to rationalize its network as a result of the merger or face the same problem that UA is facing with duplicate, competing hubs.

Even if AA can make LAX to Asia work, it cannot also do it while supporting multiple flights/day from ORD and DFW to many of the same destinations.

 

[eolesen]

Thanks for a long & rambling post about US-Europe flows and the viability of east coast hubs.

Unfortunately, it added nothing of any value to the topic, which is LAX as an Asia gateway.

 

[WorldTraveler]

whether you see it or not, new AA does indeed have internal hub competition which is precisely why they will have to rationalize their network.

DL had the same problem with CVG and MEM - both were predominantly domestic flow related - while UA has it with their domestic system as well as it is beginning to become apparent on their international system.

Do you realize that DL has passed UA as having the highest average fare among US carriers to PVG?

It is precisely because DL's network is highly focused and rationalized to what DL is doing that DL is getting the revenue premiums they are.

Although you want to see the issues as unrelated, AA doesn't have a viable Asia-Pacific network from ORD, it is still too early to tell from DFW but early results for new routes do not show the level of revenue that other carriers get to similar destinations.

it is exactly the same problem that AA/US face to Europe.

If AA makes LAX-Asia work, it will only be by pulling down other routes to push capacity over LAX.

 

[700UW]

Another topic on its way to being locked because of pollution.

 

[WorldTraveler]

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.

 

[700UW]

You are the first one to whine when someone takes a topic off thread, yet you get called out for the same behavior and you think you are justified to post what you want.

This is about LAX, AA and Asia, not DL, not JFK, not EWR, not UA.
 
Too hard to understand for you?

 

[traderjake]

Why some can't realize that the same thing will happen with Asia is beyond me.

 
When you've been an airline CEO more years than Doug I'll start to be concerned about what you say.
 
Until then I'll leave it to you to fret about your predictions of eminent doom. 

 

[WorldTraveler]

You are the first one to whine when someone takes a topic off thread, yet you get called out for the same behavior and you think you are justified to post what you want.
This is about LAX, AA and Asia, not DL, not JFK, not EWR, not UA.
 
Too hard to understand for you?

 
hardly.

You are the one that dragged out that hideous "off topic" picture... no one else gets as wound up as you do.

Again, you don't WANT to hear the business issues involved here.... you never have been capable of having an honest, truthful discussion because of your clear excessive sensitivity to anything negative.
 

When you've been an airline CEO more years than Doug I'll start to be concerned about what you say.
 
Until then I'll leave you to worry about your predictions of eminent doom.

Feel free to do what you want.... but I was the one who said AA had a hugely unprofitable Asia/Pacific system long before other people discussed it elsewhere.

Not sure where you work, but there will be cuts in AA's Asia/Pacific and transatlantic system.

 

[Kev3188]

Personally I love the CR7 in First. Smooth, comfortable ride.

I recognize all those words, but have never seen them in the same sentence as "CR7" before.

Guess I better go find some pics. 🙂

 

[700UW]

CRJ-700, it's larger than the CRJ-200 smaller than the CRJ-900.

 

[WorldTraveler]

I am pretty sure Kev is able to figure that out. I'm betting he just might have seen - maybe even touched one - today.

Funny that inclusion of CR7s is relevant to a discussion about AA's Asia Pacific growth but their performance using similar widebody jets crossing the other ocean is not.

 

[FWAAA]

Funny that inclusion of CR7s is relevant to a discussion about AA's Asia Pacific growth but their performance using similar widebody jets crossing the other ocean is not.

Probably because of the relevance of XNA-LAX to any LAX Asian hub.   XNA-LAX is currently operated with a CR7.   The ovewhelming dominance of Delta in every market and your dubious stats about AA's performance in other areas of the world are completely irrelevant to a discussion of whether AA should do in LAX what DL is doing in SEA:  build up a huge TPAC gateway.   
 
As I've said before,  AA's choices to build up its Asian presence are limited,   It's going to be some combination of the following:   LAX, ORD, DFW, JFK or PHL.   PHX and CLT will never feature Asian flights beyond,  perhaps,  TYO.