American Airlines makes a move to dominate at LAX

[jcw]

wait a minute - we just got an admission that AA will succeed in LA - mark this down
 
Yes we know the day DL merged with NW all the revenue synergies were achieved unlike any other airline that has done a merger
 
We know DL had it's reservation system merged in record time and has been driving their revenue growth unlike no other merger
 
Lastly, we know that DL out does AA on every measure - we get the drumb beat
 
Lastly, we know DL drove down operating margin better than any other airline they ranked #1 in this category
 
Hail to DL

 

[MAH4546]

It's no fantasy WorldTraveller.
 
AA has long-term leases on 34 gates (30 exclusive+4 shared in TBIT), on top of any others they may wish to acquire.
 
United has 20 and Delta has 17.
 
No fantasy. Move on. 

 

[WorldTraveler]

AA doesn't occupy those gates now and there is still no assurance that AA can obtain those gates and more significantly that no one else can.
 
You represent the same Crandall mindset that all we have to do is lock up gates and slots in limited access markets.
 
You and countless other AA fans on here have said it.
 
If AA is as good as they are, they can and will succeed in the midst of plenty of competition.
 
and you still haven't explained how DL actually boarded 1/10th of 1 percent more LAX local passengers than nAAtive AA despite having so many fewer gates.

 

[robbedagain]

DL this   DL that    btw  who gives a flip about DL achievements this  that etc     Its BS to keep hearing all of the accomplishments that DL has done all the while their cheerleader preacher slams AA UA and any other airline... 

 

[WorldTraveler]

that's what you get when you make statements about AA dominating the market.

If you don't want to see those kinds of responses, then tell people to keep comments about dominating this, being first place that off of the board.

 

[commavia]

Hahahaha once again Delta isn't winning and therefore nobody can succeed.  There's today's laugh!
 
Back here in reality, AA does have control, soon-to-be control, preferential use, and/or soon-to-be preferential use on those gates.  The ship has sailed for Delta - it's as simple as that.  Delta isn't getting four gates in T6.  Delta doesn't have Eagle satellite gates nor the ability to trade them in for larger, more flexible gates later.  Delta hasn't secured access to four gates in the new TBIT.  Delta doesn't have first right of refusal on any new gates that open up on the south side of LAX.  The only way for Delta (or, for that matter, United) to now have those things - with the possible (albeit highly unlikely) exception of comparable TBIT access - is for AA to willingly and voluntarily give them up.  I'm not holding my breath.
 
As for Crandall, it is indeed true that the aggressive, take-no-prisoners approach that Crandall mastered - to great success and the detriment of many a competitor - appears to be reappearing at AA these days.  And somebody appears jealous!  (Yet again reminding us why so many AAers long said, "he may be an *** but we're sure glad he's our ***.)  Delta enjoyed an artificial interlude for the last five years as it secured the gains of its merger while United and AA couldn't fully respond.  Those days are over.  AA is now an immense competitive force that is already showing itself fully capable of shaping the competitive environment, and Delta's strategic and financial lead is being steadily eroded.  And of course that's what all this fear-induced whining and all these temper tantrums are about.

 

[MAH4546]

AA doesn't occupy those gates now and there is still no assurance that AA can obtain those gates and more significantly that no one else can.
 
You represent the same Crandall mindset that all we have to do is lock up gates and slots in limited access markets.
 
You and countless other AA fans on here have said it.
 
If AA is as good as they are, they can and will succeed in the midst of plenty of competition.
 
and you still haven't explained how DL actually boarded 1/10th of 1 percent more LAX local passengers than nAAtive AA despite having so many fewer gates.

 
What part of "AA has long term leases on 34 gates" do you not understand? We aren't talking hypotheticals, those are long-term leaseholds that AA currently holds. 
 
 
As for how AA will get more gates over UA and DL with ease: in order for LAWA to continue with it's midfield expansion, it needs AA and US to give up the Eagle gates (which LAWA has already agreed will be treated as mainline gates, so AA can trade 1:1 for gates in the Midfield) and maintenance hangers. 
 
For the short term, AA is working on a plan to prepare the Eagle's Nest to accept larger ERJ-175s.
 
Another round of expansion will be announced later this earlier/early next, domestic focused but might include non-stop to Seoul. AA should be up to around 230-235 dailies at LAX in about a year. 

 

[WorldTraveler]

and yet you avoid answering the question of how other "lesser" carriers manage to get more LAX local revenue than AA with fewer flights. and that LAWA really has no ability to selectively favor AA over other carriers.

we've heard about that MIA-NRT route for going on a decade too.

you've also not told us how reducing capacity by 14% on JFKLAX even with more frequencies amounts to "domination"....

BTW< UA apparently didn't get the memo that they were supposed to roll over and play dead at LAX. looks like they are planning SEVEN LAX-HNL flights next summer; I believe other carriers including AA have added flights in that market as well.

 

[jcw]

As we continue to say and you can't comprehend is that AA is redoing it's route network and it will surpass DL in LA - we know basic logic is way over your head - we all know that AA flies more regional flights out of LA and therefore by definition would generate less revenue per aircraft when averaged together - just like you say we will see what DL does in DAL we will see what AA does in LA
 
Rest assured the facts are clear AA has access to more gates than any other airline and will use that to its advantage

 

[WorldTraveler]

but when?

AA has actually LOST ground relative to DL and UA at LAX in recent years. It took the merger but other carriers are overcoming the advantages that AA gained from the merger. DL and UA both have more seats from LAX than nAAtive.

how, oh how can smaller little DL at LAX manage to carry more LAX local passengers from LAX than AA native has? and how can they have more seats scheduled than nAAtive?

now the focus is to find enough gates so that AA won't have to compete with other carriers.

problem with your theory is that it hasn't worked in any other market - because as much as you want to believe otherwise, no government entity is beholden to AA at the expense of other carriers.

 

[FrugalFlyerv2.0]

you've also not told us how reducing capacity by 14% on JFKLAX even with more frequencies amounts to "domination"....
 

 
By having higher average JFK-LAX fares (than DL, UA, etc).
 
I thought you would be familiar with the average fare concept, especially since you bloviate about it every chance you get whenit comes to DL. 
Oh what's that?  You only mention it when you have a narrative to sell?  OK, got it.
 
Spin away!

 

[WorldTraveler]

you are free to describe domination any way you would like but I would hardly call AA's strategy on JFK-LAX to get higher average fares but lower total revenue as domination. seems like a premium niche strategy.

and AA's average fare advantage on JFK-LAX is more than offset by its average fare DISadvantage on JFK-SFO.

I'm not bloviating about anything. I am noting that other carriers are getting average fares for ALL of their LAX operations that are equal to or higher than AA and carrying more of the LAX local market.

It was AA's execs who made the statement about dominating the LAX market. the evidence is overwhelming that AA isn't doing that now and despite the hopes that AA will do it in the future, there really is no certainty that AA will get all of the gates that MAH thinks they will or that other carriers can't also add gates - and use the ones they do have to increase their share of the local market.

LAX is simply not an airport that any carrier can dominate. AA and DL are indeed growing. UA is holding its own very well... refocusing its LAX operation from a hub to a local market operation.

and AA's biggest flaw with thinking they will dominate LAX is that its greatest value in the int'l market is to Asia and AA has yet to demonstrate that it can generate average fares on par with DL or UA to Asia, esp. from LAX. AA's relative successes to Asia from DFW are completely different from what can be expected in a market like LAX where nearly every Asian carrier not only has far more capacity than AA could ever throw into the market but also has lower costs.

the domestic and European market from LAX is strong and DL and UA along with WN on the domestic market are growing. AA will enjoy the benefits of a strong local market in an airport where there is little growth room but they aren't going to turn it into a hub where they can dominate the market at the expense of other carriers. further, there just aren't that many major markets left from LAX that aren't already heavily competitive that AA could enter and where AA would have to either settle for a smaller share of the market - at a revenue disadvantage - or deploy enormous amounts of resources in order to become on parity with the dominant carrier in that market.

the E jets will absolutely help AA push its influence out further from LAX by adding small amounts of capacity but they will be operating those flights from a facility that for years will be far less desirable than what other carriers can offer.

further, DL and UA both have large operations north of LAX which are focused on connections, something AA does not do. Even if LAX maintains an advantage at LAX, it is and will be more than offset by a larger scale disadvantage on the west coast.

I am glad to see AA focused on growing at LAX and they will do well. but they will not dominate the market.

 

[commavia]

In related news, Chuck Schubert, VP-Network Planning, is quoted in an article in Aviation Week today talking about the upcoming growth at LAX.  A few of the highlights:
 
* AA is evaluating more nonstops from LAX to Asia, but "rather than fly to secondary cities in Asia," AA's first targets likely would be larger markets like ICN, HKG and PEK (although he acknowledged that HKG might be a challenge given Cathay's dominance)
 
* The 787 might make sense for LAX-Asia, but - as was well known here - the plan would likely be focused domestically soon after EIS, and likely wouldn't enter longhaul service until 2Q15 (with specific routes and schedules likely announced in the next few months)
 
* AA is still seeking to further expand domestic/North America connectivity from LAX
 
* While A319s may ultimately be the more appropriate aircraft given that it's a competitor's large hub, ATL is "a market that is very much demanded by [AA's] customers out of the Los Angeles area," and was "clearly a hole that [AA] had in [its] network.”
 
Let the diatribes commence ...

 

[AdAstraPerAspera]

Let's not forget which airline won the Samsung contract...

 

[WorldTraveler]

there are no diatribes.

AA is welcome to flush money down the drain trying to make more LAX-Asia flying work. the fact that DL and UA who have far larger networks in Asia aren't willing to add flying from LAX should tell anyone with half a brain that maybe they might be on to something.

The fact that they make money flying to Asia while AA does not should further confirm that they know what they are doing.

Asian carriers have new generation and lower CASM aircraft as well. the challenge for AA is getting revenues high enough... something they have yet to prove they can do in any competitive Asia market. I'm glad they are making progress from DFW to Asia but LAX to Asia is a totally different ballgame. and other carriers, including DL and UA, are simply not going to roll over and let AA push their way into key markets without putting up a key fight.

again, DL and UA are expanding aggressively in Latin America while AA is pulling capacity down against the industry's largest RASM losses in any region.
AA might well succeed at building an Asian network but if it comes at the cost of its dominance in Latin America - where it is absolutely accurate to say that AA still dominates the market - and at the cost of considerable subsidies in major competitive markets, is it really worth it?

I don't doubt that ATL is a top market that AA's LAX clients want. ATL-LAX is one of AA's top O&Ds on both the ATL-DFW and DFW-LAX segments.
but by the same token, there are undoubtedly a list of strong AA markets that DL and UA would like to add or increase at the request of their customers.

again, has AA really gained anything if they get a piece of ATL-LAX while allowing DL to have a similar if not larger portion of LAX-MIA and other key AA markets?

we can debate the strategy all day long but the results will become apparent in time... and I firmly believe that AA's perceived need to be in the top markets that other carriers serve at the expense of AA's dominance in its own key markets will prove to be financially very costly for AA.

let's remember that AA's domestic RASM growth is the lowest of the big 4 carriers right now.