American Airlines makes a move to dominate at LAX

[eolesen]

Maybe AA will go ahead - but the notion that DL was out to destroy AS has to be tossed out the window by anyone that thinks that adding capacity into some of AS' top markets is a good idea for AA.

Yeah, not so sure I'd take it to that same illogical conclusion.

AS has added flights from SEA into AA hubs before, and it hasn't poisoned the relationship. This is no different, and certainly not on the same scale as DL setting up a competing hub in AS's hometown hub.

 

[Kev3188]

Last year when AA planned to enter the market PDX was going to be 4x CR7 and SEA was going to be 4x 738...

Thanks!

 

[WorldTraveler]

Yeah, not so sure I'd take it to that same illogical conclusion.

AS has added flights from SEA into AA hubs before, and it hasn't poisoned the relationship. This is no different, and certainly not on the same scale as DL setting up a competing hub in AS's hometown hub.

uh... that is PRECISELY the problem.

AS has treated SEA and PDX as THEIR hubs. They have believed they are free to add flights wherever they want, they can codeshare on whatever they want, and they can sell as few or as many seats to codeshare partners as they want - but they aren't willing to submit their desires to the strategic plans of any carrier.

we can track this like everything else but AA will either not expand into LAX-PDX or LAX-SEA, AS will decide after butting heads with DL that what AS will adapt to what other carriers need to do, or the relationship with AA will either move towards a merger or a breakup.

AS does not have any JVs or revenue sharing agreements with any carriers and cannot have them with other US airlines so AA and DL will be forced to do what is in their own financial best interests without respect to the impact on AS.

DL knew full well that DL's own growth on the west coast would force AA to catch up. AA has had a big red circle around some pretty key markets from LAX because of the AS relationship. AA and DL along with AC both increased service to YVR and AS blinked.

DL would likely be quite happy to see AA add flights in LAX-PDX and LAX-SEA because it would further reduce AS' market presence in one of its top markets.

We'll see if AA is serious about its own internal growth or in trying to protect a relationship with AS that, in order to be what AS wants to it to be limits AA's ability to do what it wants.

and it also is worth noting that as AA continues to rationalize its own network - and it will undoubtedly focus on cutting domestic and not just int'l growth, AA will be forced more and more to shift assets where it has the chance to grow - and LAX does prevent an opportunity to do that.

let's also be clear that based on definitions which comnavia has established regarding Tokyo service, AA cannot "dominate" LAX. They might be the largest carrier but they can't dominate the market.

 

[commavia]

Translation: if Delta can't control Alaska, then nobody can.
 
Kind of like how if Delta can't make a market work, no airline can, and if Delta can't get more gates at LAX, no airline can ... anyone else noticing a pattern?

 

[WorldTraveler]

no, it means either DL is the largest airline between the US and Japan or it doesn't matter than AA is the largest airline at LAX.

by your own definition, a few percent larger doesn't constitute dominance - and I could agree with you on that.

but "largest" does have some benefit in the marketplace.

either AA has it at LAX and DL also has it from Japan to the US or it doesn't matter.

the pattern that you should see but perhaps don't to is the need for consistent logic.

you can't apply it one place but not elsewhere.

so is it ok for AA to be the largest airline at LAX, DFW, and MIA while DL is the largest airline at multiple locations including NYC and US-Japan?


btw, this happens to be one topic - AA growth up and down the west coast in AS core markets - where I am with MAH.

I want to see AA grow there because it shows the peril to carriers that want to take a less than full-in commitment to partnerships - not unlike what KE has done with DL.

I support AA's growth in S. Korea and AA's growth north-south on the west coast because it highlights the dangers of developing half-baked partnerships - where at the end of the day, competition will do what partnerships wont'.

granted, AS has the benefit of saying they can't get a JV or full legal partnership with a US carrier - but then they should have considered that when they developed/refined their business model. KE can't say that, however.

BTW, I have a feeling that DL will talk about the west coast in its investor day presentation that starts in about an hour.

 

[robbedagain]

yes commavia  Ive long noticed his Pro DL BS Pattern    Im quite sure the rest of the board is well aware of his crap too.   He sure acts like he knows it all yet he knows jack crap and cant Grasp it

 

[WorldTraveler]

no, what I have noticed is that some people can't remove their own bias in order to think objectively.

either size matters - and DL has it in major markets that AA has defined including NYC and Japan - or it doesn't matter at all, in which case the basis of this thread is bogus.

I happen to think size does matter and have no problem with acknowledging that AA will grow at LAX - just that they can't dominate the market - if that means double or perhaps even 1 1/2 times the share of its direct network rivals.

 

[robbedagain]

yes that bias that you have for dl u seem to cant let go

 

[Overspeed]

Interesting set of pics on APFA twitter account. Shows DL #2 in Asia, #3 in Latin America, and a virtual tie in the domestic market.
 
https://twitter.com/APFAunity/status/478919623291572224/photo/1

 

[eolesen]

no, what I have noticed is that some people can't remove their own bias in order to think objectively.

Oh, been looking in the mirror? Maybe there is hope for you.

 

[WorldTraveler]

Interesting set of pics on APFA twitter account. Shows DL #2 in Asia, #3 in Latin America, and a virtual tie in the domestic market.
 
https://twitter.com/APFAunity/status/478919623291572224/photo/1

wonderful.


Did APFA also bother to note that AA had the highest RASM DECLINE in Latin America in the last quarter of any US airline in any region for a very long time?

Perhaps you can tell us why APFA cares about the size of their employer in a particular region. is it supposed to translate into higher pay?

It would seem that the biggest concern any union should have is whether they are delivering the highest pay and the greatest increases in it to their members. Are they doing that?

 

[commavia]

Interesting set of pics on APFA twitter account. Shows DL #2 in Asia, #3 in Latin America, and a virtual tie in the domestic market.
 
https://twitter.com/APFAunity/status/478919623291572224/photo/1

 
Interesting indeed.
 
Here's another that I found "interesting."  AA now has four absolutely massive (>400 daily departures) domestic U.S. megahubs - DFW, ORD, CLT and PHL - plus the envy of all international gateways at MIA, smaller connecting hubs at PHX and (arguably) DCA, and very large connecting and/or O&D-focused operations at both LAX and in NYC.  Put another way - AA now has a very large, competitive presence (>250 daily departures) in six of the nation's ten largest population centers (NYC, CHI, DFW, PHL, WAS and MIA/South Florida) and is quite possibly going to be there at a seventh (LAX) in the next few years.
 
Bottom line: as many of us have been saying for months, the consolidation that has now taken place has essentially eliminated any meaningful network competitive advantage that Delta had right after its merger.  There is no geographic region in which Delta has more than 38% share.  Now, to be sure, 38% in any region is nothing to sneeze at - unless, of course, it's AA, in which case that's merely an indication of Delta having them right where they want them and preparing for their strike.  But back in reality, AA, Delta and United now all have very large, very comprehensive networks to Europe, AA continues to handily dominate to Latin America, and United remains the 800 lb gorilla to Asia - albeit with AA now rapidly closing the network gap versus (distant) #2 Delta, and domestically AA and/or United now have a hub that near-perfectly overlays and replicates virtually every single traffic flow Delta can possibly cater to.

 

[WorldTraveler]

no, the bottom line is money.

How does DL even with fuel hedging losses and higher paid employees have a higher operating margin than AA?

no, AA does not dominate Latin America. not by your definition. because whatever definition you come up to say that AA wins in Latin America means that DL and UA dominate Asia.

and DL just noted on its investor conference that it is focusing growth on Latin America where it and UA are generating double digit growth while AA is shrinking capacity.

AA now has less than 50% of the capacity between the US and Latin America

 

[commavia]

Based on the last numbers I saw, I believe AA had more capacity from the U.S. to Latin America than all other U.S. carriers combined.  That's domination.
 
Again - hard truths, difficult for some to accept.  I understand.

 

[WorldTraveler]

no, by next June, AA will have just 37% of capacity operated just by AA, B6, DL, UA, and WN to Latin America.

sorry.

back to math class for you.