American Airlines makes a move to dominate at LAX

[FWAAA]

You do wax on and on about the inferiority of DL's hubs and yet what you can't explain is how DL manages to get a higher yield on its network than any other US airline.

You somehow think that the world's largest markets are the best places to have hubs - because that is what Crandall believed - and many before him that built AA's network.

Yes, DL gets great yields in its second-tier market hubs but that's not the whole picture, is it? Recent growth by DL has not been in MSP or SLC or CVG, has it? No, recent DL growth has been in NYC, CHI and LAX. Anderson was able to trick Parker into giving away enough LGA slots that it is unlikely that AA can ever match DL in NYC in terms of frequencies, and DL began capitalizing on that deal. In NYC, not one of DL's second-tier hub cities.

So DL's current financial results are a combination of DL's dominant position in its lesser hubs plus impressive growth in NYC, CHI and LAX.

If LAX wasn't a superior place for a large operation, then DL would be slinking away and allowing AA free reign. So would UA. But they're not - both UA and DL continue to provide lots of flights at LAX. DL has been growing. Granted, UA has given up growing at LAX, but it hasn't cancelled its JFK, LHR, NRT, PVG and Australia flights just yet. UA is hanging around a bit longer.

feel free to argue your "DL's hubs are inferior and AA's are superior" nonsense because every bit of data argues against it.

Except for the pesky fact that Delta has been bulking up in NYC, CHI and LAX while downsizing CVG and MEM and not growing all that much in MSP or SLC or DTW. Yes, post-merger, DL did bulk up DTW somewhat, but it's pretty much topped out. DL has most of the local business, and there's not much left to take away from anybody else at DTW. DL apparently sees revenue in NYC, CHI and LAX that it can take away from competitors, and DL is doing just that - right? Isn't DL "winning" in NYC?

MSP, DTW and SLC are a little like CLT and PHL. Valuable hubs, sure, but not where the growth opportunities are.

If big, dominant operations in NYC, CHI and LAX didn't matter, then Anderson wouldn't be trying so hard to win in those three gigantic markets.

 

[JFK Fleet Service]

you said you have been a user for quite some time but you only 7 posts and most of them are .

are you using multiple IDs?

you do realize that is a violation of the TOS and you could have all of them cancelled?

 
You be sure to pass that information on to Spectator...

 

[WorldTraveler]

except DL's revenue growth in its hubs is just as impressive as it is in the big markets.

the reason why DL is focusing on the big major markets is because they matter in the industry and DL can't win the corporate contracts if it isn't a major competitor in those markets.

again, the difference is that AA's hubs were built around those markets where AAs share of the market was far lower than DL's in its hubs. AA's DFW and MIA hubs have the highest degrees of dominance and not surprisingly they are also AA's highest margin hubs - which is why competitors are focusing their growth on those markets.

DL has always had higher share in its medium sized hubs but DL gets more revenue from those hubs than AA does.

you do realize that DL gets more local revenue from DTW and MSP than AA does from MIA or ORD?

US, in contrast retreated to hubs it could dominate, but the problem is that their hubs have far less local traffic and revenue.

UA's network is like AA's - but they have even less dominance in large markets; you can probably attribute this principle of AA and UA"s networks to their history as dominant forces in the early part of the industry.

the reason why DL is able to successfully grow into NYC and LAX (I'm glad you thru CHI into the mix but DL isn't doing much more there other than NYC - but I suspect more is coming) is because DL dominates revenue at its hubs and is able to grow into competitive markets.

And as much as anyone wants to argue about LAX, it is simply not an airport that any carrier will dominate by a significant size over other carriers. AA probably will have several points of share advantage but it won't be the 10 point share difference that some want to think AA will have.

 

[robbedagain]

FWAA  or MAH   when AA had the BWI flight   how well did it do   compared to UA?  I know UA still has 1 or 2 bwi lax as well as one sfo

 

[WorldTraveler]

apparently Envoy is on the verge of further cutbacks due to a shortage of pilots. regardless of where those cuts are made, AA is in the crosshairs of being unable to expand its network using regional aircraft and the pilot shortage.

AA can reassign aircraft to other regional carriers but the RJ pilot shortage is not limited to one carrier which means that any mainline carrier that isn't adding more mainline flying than regional flying will be harder hit than carriers that are growing mainline while shrinking regional operations.

given that LAX is a heavy RJ focused city for AA and will continue to be so because of the Eagle's nest, AA will be forced to either reduce Eagle/RJ operations elsewhere on its system in order to maintain/grow LAX or move RJ capacity out of other parts of its network.

in the most recent month - continuing the same trend seen for several months, AA's domestic mainline capacity is growing slower than its regional capacity,

 

[commavia]

No, hysterics aside, AA is on the verge of eliminating a lot of uneconomic capacity that wasn't going to be around much longer, anyway.  This has been thoroughly discussed - on this forum, and others some of us are banned from - for months and years.  One way or another, tons of small RJ capacity was going to come out of the U.S. airline system in the next few years - the only question was whether the "forcing function" would be fuel or pilot availability.  In this case, Envoy is rapidly depopulating because of the compensation and negotiating situation, which will coincide well with AA's desire to draw down much of this flying, anyway.  Fewer pilots will mean fewer airplanes, but alas, that's exactly where AA - and every other major U.S. carrier - is going.  AA isn't replacing ER4s with CR9s on a 1-for-1 basis.
 
But yeah - AA is probably screwed, anyway.

 

[WorldTraveler]

yes, there have been a lot of us who have said that AA would eliminate a lot of uneconomic flying. The difference is that I have said it will have to involve closing some hubs because you can't just upgrade flights from RJs to mainline without significantly affecting schedules.

CVG and MEM closed AS HUBS because connecting traffic is being routed over other hubs that remained.

UA started the process with CLE>

AA has yet to start the process of getting rid of hubs.

And AA has a far bigger challenge in restructuring its network because of labor problems at both Envoy and mainline. AA can't add capacity to mainline without giving labor what it wants - which is more control over AA's fortunes at a time when mgmt. is trying to force its versions of contracts on labor. Meanwhile Envoy is losing pilots to big jet carriers at the very time that AA needs every regional pilot it has flying for it to stay put just to counter the loss of pilots that are happening because of retirements and growth in mainline fleets.

Whether AA is screwed or not remains to be seen but AA is battling far more fronts regarding labor issues at the same time that pilot availability to fly existing regional carrier networks continues to shrink.

 

[AdAstraPerAspera]

Brett Snyder has been on record saying that some inevitable right-sizing of hubs will occur but each has a geographic purpose at the new AA and will remain.

 

[WorldTraveler]

They've all tried to say that but you can't just snip a little here or there off the edges of hubs.

Once you start cutting a route here or there - which is what must happen with a downsizing of the RJ network - the rest of the hub cannot just continue to operate as it did before.

All hubs might have a purpose but if there have to be cuts made, what is left has to be restructured in order to work.

like every other issue, we can add this one to the follow-up list but the chances that AA can avoid hub closures is slim to none.

and the reality is that the execs know it but are not at the point to tell everyone

 

[700UW]

There is nothing thing preventing AA to add new flights due to labor issues.

 

[MAH4546]

FWAA  or MAH   when AA had the BWI flight   how well did it do   compared to UA?  I know UA still has 1 or 2 bwi lax as well as one sfo

 
Pretty sure AA has never flown LAX-BWI. I would not be surprised if AA enters that market, however, in the short term.
 
UA has one daily each BWI-LAX/SFO, but both are being seasonally suspended in January. Poor performers. 

 

[WorldTraveler]

There is nothing thing preventing AA to add new flights due to labor issues.

technically, no.

but when companies are having labor issues that could affect their ability to deliver what they have, they usually don't commit to growth.

And given that AA is facing it both with mainline and Envoy, the challenge is more significant for AA.

that is not to say that AA can't or won't overcome those issues but they are challenges that other carriers don't have.

 

[robbedagain]

thanks mah   I guess given UA SFO and LAX out of DCA probably affects BWI performance?

 

[zethya]

No, hysterics aside, AA is on the verge of eliminating a lot of uneconomic capacity that wasn't going to be around much longer, anyway.  This has been thoroughly discussed - on this forum, and others some of us are banned from - for months and years......... 

I find unbelievable that you would ever be banned from any of the major sites, including anet. Several others here - absolutely.

 

[LDVAviation]

I find unbelievable that you would ever be banned from any of the major sites, including anet. Several others here - absolutely.

 
Commavia was not banned from airliners.  
 
He is referring to the person whose post he is addressing.
 
That person was banned from airliners and it is a much better place for it.