Aa To Buy Ua

[Fly]

He's right....Delta is about to go out of business.

 

[Cosmo]

AA really could begin service to Seoul, Taipei, Singapore, and Bangkok today if they wanted. All of those cities can be served by US carriers at will.

So can Hong Kong, Osaka, Manila and Kuala Lumpur, to name only four other major Asian cities that fall into the same category.

HKG and China are the only markets that are not accessible to AA right now but that is changing in the near future.

As noted above, that's not correct with regard to the U.S.-HKG market, which American (or any other U.S. carrier) could enter tomorrow if it so desired. IIRC, the delay in American's start of ORD-HKG service has been related to pilot flight-time issues, not route authority issues.

So that begs the question -- if so much route authority is available for the taking, why haven't American, Continental or Delta started to develop their own Asian route networks to compete against those of Northwest and United (as well as numerous Asian carriers such as JAL, ANA, Korean, Cathay Pacific, Singapore, etc.)? I believe the question answers itself.

I will be very surprised if AA does not get the first new passenger carrier designation to China.

Then I think you might be surprised. With DOT's recent award of nonstop ORD-PVG authority to United, the rationale for giving American the authority to serve the same route (as the carrier has proposed in the past) has diminished significantly. So unless American decides to propose nonstop service from DFW or LAX to China, I believe that DOT will award the 2005 designation to either Continental (for service from EWR) or Hawaiian (for service from HNL), two other carriers which have indicated that they will apply for the China route rights that become available next year. Such a scenario would push American's entry into China back to no earlier than 2006, and possibly later. JMHO.

 

[WorldTraveler]

The US-HKG market is available on a codeshare basis to US airlines but is not completely open on a designated operating carrier basis. Not to denigrate anyone but MNL and KUL are not the prime markets that any carrier would 1st choose if they were building a Pacific route system (and apparently they aren't the greatest opportunities since UA doesn't serve them). KIX is available from a bilateral standpoint but is astronomically expensive for all airlines - and a classic case of "if you spend too much to build it, they won't come". Other carriers may well beat AA into China but I don't have any doubt that AA will be there very early in the process and will be very competitive and political if it makes economic sense to do so.

The reason why other airlines don't serve Asia are several fold:
1. Asian markets have grown to the point where there is a true opportunity for multiple carriers; this has happened only in the last couple years.
2. Bilateral progress in opening Asian markets has happened only in the last couple years.
3. The 777 (operated by 4 US airlines) has only been flying the Pacific for a few years; that plane (and possibly the A330-200 for NW) will do for the Pacific markets what the 767 did for the Atlantic - create many new routes that will bypass traditional gateways on both sides of the ocean. Look back at what twins have done over the Atlantic and you'll see the same thing happen over the Pacific - and it won't take near as long as the 10-15 years it has taken to Europe.
4. Partnerships and alliances allow non-incumbent carriers to compete in markets via codesharing.
And I'm sure there are more.

Either way, NW and UA will not maintain the privileged position over the Pacific they have had nor will the Pacific routes fetch near as much money if they were sold as they once did. In similar fashion, no one in their right mind would pay to acquire one of the US legacy carriers transatlantic gateways right now - because nearly all of the routes are available for just showing up and the rest are so competitive that their long term value cannot be established.