American Airlines makes a move to dominate at LAX

[commavia]

"No diatribes."  Priceless.
 
I love how AA making investments in expansion is summarily dismissed as "flush[ing] money down the drain," but when Delta flushes money down the train on NYC, a refinery, SEA-Asia, etc. it's brilliant.  Hysterical as ever.  Either way, I still think some are selectively drawing self-affirming conclusions about whether Delta and United "aren't willing" or "aren't able" to add additional LAX-Asia flying.  Whether based on feed (or lack thereof), growth potential (or lack thereof) or opportunity cost (given other hubs) - it is not at all clear to me that Delta and/or United would be able to make the business case work for substantial LAX-Asia growth even if they wanted to.  They have their own priorities at SFO and SEA - good for them.
 
One thing's for sure, though - Delta's "far larger [network] in Asia" certainly isn't nearly as "far" larger (compared to AA) as it used to be.  AA has closed the gap markedly as it has added nonstop route after nonstop route and secured and strengthened its JV with JAL, and as Delta has dismantled its NRT hub.  These days - incredibly - the gap between the AA/JAL JV and Delta in the nonstop U.S.-Asia market is largely gone.  And it looks as if AA is intent on shrinking the gap even further.
 
Which, yet again, brings us back to the fear and foreboding that's driving these "diatribes."  Never stops being enjoyable to watch ...

 

[700UW]

And AA's load factor to Asia is up 16%.

 

[WorldTraveler]

which goes to show how badly parts of AA's Asian network were doing.

again, DFW has been a great move for AA to Asia. the 2nd largest US hub is more than capable of pushing plenty of traffic onto flights... no one doubted that. the problem is that AA has to carry passengers far longer than do other carriers with more northerly hubs - including AA's from ORD.

but success at DFW will not translate into success at LAX, a far more competitive market.

and you are absolutely right that AA is cutting DL and UA's lead in Asia - but which of those networks have generated larger long term profits - AA's Latin system or DL or UA's networks to Asia? the answer on a margin basis is undoubtedly Latin America.

so perhaps AA came to the realization that its Latin America network would become highly competitive and that other carriers were moving in so they needed to add flights to Asia to attempt to offset the advantages other carriers were getting in AA's top markets.

IOW, AA mgmt. might have bought into the mindset that all carriers would end up the same size and with similar networks so we'll give up our strengths in order to get into other key markets.

the problem with that mindset is that LAX is still a highly competitive market to Asia. AA has yet to prove it can make money flying from LAX to Asia. when AA gets higher revenues on an 8 hour flight from MIA to Latin America than they do on a 12 hour flight from LAX to Asia, it doesn't take a rocket scientist to figure out the trade is not equal.

 

[jcw]

Translation:
 
See anything positive going on at AA can be rationalized away - they improved performance in Asia and it's see how bad things have been for AA - on the flip side DL can lose money for a decade in NYC and now that it's profitable its strategic - see - easy for anyone to rationalize away
 
DL is doing so well in Asia - it's having to dismantle a hub and move out of LA to focus on SEA where there is no competition

 

[UPNAWAY]

MODS you have got to reign in WT , restrict him to the Delta board, he is making this unreadable. Why would a moderated board refuse to moderate trolls?

 

[WorldTraveler]

sorry... but because someone talks about business issues that you don't want to discuss doesn't make them a troll or provide a basis for shutting down a discussion.

It was an AA exec who said that AA would dominate LAX. Someone chose to post it here.

I am simply asking how AA intends to succeed with a bunch of new Asian routes given that the ones that they do operate from LAX perform worse than their peers.

it is a GOOD thing that AA is making DFW to Asia work with higher revenues than they have seen in other markets to Asia; but LAX is not DFW.

There simply are not enough gates at LAX for any carrier to dominate anything and the notion that AA will gain gates but other carriers will not is fundamentally flawed.

I will be happy to add that prediction to the 5 and 10 year followup list.

I have repeatedly said that AA will do fine at LAX and will grow. fares are going up because there is a lack of gates compared to the growth in demand.

but AA will not dominate the market in any sense of the word - nor do they dominate anything at LAX now other than a few routes such as to DFW and MIA. LAX is and will be a highly divided competitive airport.

 

[commavia]

AA already has secured a "gain" in gates and Delta has very little realistic prospect of catching up.  AA has simply outmaneuvered Delta time and again at the airport when it comes to facilities - thus why AA already has more gates under its control than Delta, and that number will be going up in the coming months and years.
 
Much as some simply don't want to accept it, LAX has a finite gate cap that isn't going to be increased just because Delta fanboys aren't happy.  Sound familiar to anyone else?  I swear - some people just never learn.

 

[WorldTraveler]

what you obviously can't accept is that neither you or AA have any knowledge of what other carriers or LAWA can or will do.

you are stuck in the mindset that AA will gain some preferential ability to grow that no one else can touch.

that is SIMPLY not true.

I am glad AA is growing at LAX.

my only disagreement is with the statement that AA will grow and others will not.

again, if you are as certain that AA will gain and no one else will, then it shouldn't be too hard to come back and verify if you were correct down the road.

and it also doesn't change that even TODAY DL is carrying nearly identical - actually slightly more - LOCAL LAX passengers than native AA carried in the 2nd quarter.

so your whole theory that more gates translates into a greater share of the local market is simply not happening in reality.

again, let AA grow.

your notion that AA will grow and others will not be able to is patently false.

 

[commavia]

Jeez ... talk about being "stuck in a mindset."  I'm not suggesting that AA will gain some "preferential ability to grow" - I'm suggesting that they already have.  AA now has control, or commitments to soon have control, over substantially more gates than either United or Delta.  And in the context of LAX, which is an airport where facility access is pretty much the most precious currency, that is a pretty major differentiation with respect to "ability to grow" since no new gates are being added (especially on the south side where Delta operates) and any gates that do become available now will be in locations seriously disadvantageous to Delta's current operation.

 

[MAH4546]

Here, let me repeat since WorldTraveller is really having an incredibly difficult time understanding.
 
American currently holds leases on 34 gates at LAX. This isn't "maybe" or "hopes to" or "hypothetical." These are real leases it currently holds, albeit the TBIT gates don't become active for another ~14 months. 
 
United holds 20.
 
Delta holds 17. 
 
American is also working with Alaska Airlines to share AS' T6 gates, which are especially underutilized in the evening when AA is busy sending redeyes to just about every major U.S. city in the East as LA's number one trans-continental carrier, giving it even more gate space. The newly expanded lounge agreement between AA and AS that went into effect last week qualifies the Board Room in T6 under oneWorld lounge access rules, rather than AC access rules like ANC/SEA/PDX in anticipation of the role T6 will play for AA going forward at LAX.
 
Despite AA's operations being spread across at LAX, it's no more different than the spread of DL's operations at ATL or AA's own operations at MIA and DFW. A connection between T6 and T4 at LAX is no less quick than going from gate D4 to gate D44 at MIA, or gate C1 to C30 at DFW. 
 
In order for LAX to move forward with it's master plan, the demotion of the Eagle facility will be required. AA will be able to trade in these gates, 1 for 1 (for a total of 12) for gates in the Midfield terminal. And yes, it will absolutely have preference over Delta and United since these are replacement gates, and displaced tenants (not just AA, but those displaced from T2/T3) get preference for new gates 1 for 1. 
 
No, AA is not going to "dominate" LAX, but it is putting itself into position to carry around one-third of LAX's traffic within 3-4 years, and neither DL or UA will be able to surpass 1/5th individually. 
 
But then again, DL can "dominate" LaGuardia with ~42% while AA has ~33%. 

 

[IORFA]

I can't find the AmericanWay online, but there is a blurb about LAX expansion and the new flights. It does mention that we do fly LAX-Hong Kong. It may be a complete mistake by a terrible writer or a sneak peak at some new service soon. Anyone else see it? It's in the back by the aircraft pics.

 

[WorldTraveler]

you were doing so well with this
 

No, AA is not going to "dominate" LAX,

until you said this
 

but it is putting itself into position to carry around one-third of LAX's traffic within 3-4 years, and neither DL or UA will be able to surpass 1/5th individually. 
 
But then again, DL can "dominate" LaGuardia with ~42% while AA has ~33%.

because you in your arrogance can't accept that other carriers can and will expand and AA does not and will not have preferential access over other carriers.

and you still can't answer how native AA with twice the gates that DL has actually carried LESS local LAX passengers than DL

and you also can't explain how AA is going to be profitable flying to some of the most competitive destinations in Asia from LAX when they aren't profitable on the routes they do serve.

and your little buddy commavia might be surprised to find out how well DL and UA can multitask between developing their northern west coast hubs and LAX when the need arises.

I can absolutely assure you that DL or UA can make LAX-ICN work before AA can since those two actually have codeshare partners in Korea. but then AA thought the same thing about PVG and UA has carried more revenue than AA on LAX-PVG since the route started.

and you have also not been able to explain how AA will be better off with an operation to Asia from LAX that comes at the expense of losing their dominance to Latin America and MIA as well as from LAX to a number of key markets.

instead of repeating the number of gates AA has for the 33rd time - most of which they don't even operate from - how about you explain the strategic issues I have raised?

AA doesn't fly LAX-HKG. CX doesn't even want to do a joint venture with AA.

 

[Glenn Quagmire]

Here, let me repeat since WorldTraveller is really having an incredibly difficult time understanding.
 
American currently holds leases on 34 gates at LAX. This isn't "maybe" or "hopes to" or "hypothetical." These are real leases it currently holds, albeit the TBIT gates don't become active for another ~14 months. 
 
United holds 20.
 
Delta holds 17. 
 
American is also working with Alaska Airlines to share AS' T6 gates, which are especially underutilized in the evening when AA is busy sending redeyes to just about every major U.S. city in the East as LA's number one trans-continental carrier, giving it even more gate space. The newly expanded lounge agreement between AA and AS that went into effect last week qualifies the Board Room in T6 under oneWorld lounge access rules, rather than AC access rules like ANC/SEA/PDX in anticipation of the role T6 will play for AA going forward at LAX.
 
Despite AA's operations being spread across at LAX, it's no more different than the spread of DL's operations at ATL or AA's own operations at MIA and DFW. A connection between T6 and T4 at LAX is no less quick than going from gate D4 to gate D44 at MIA, or gate C1 to C30 at DFW. 
 
In order for LAX to move forward with it's master plan, the demotion of the Eagle facility will be required. AA will be able to trade in these gates, 1 for 1 (for a total of 12) for gates in the Midfield terminal. And yes, it will absolutely have preference over Delta and United since these are replacement gates, and displaced tenants (not just AA, but those displaced from T2/T3) get preference for new gates 1 for 1. 
 
No, AA is not going to "dominate" LAX, but it is putting itself into position to carry around one-third of LAX's traffic within 3-4 years, and neither DL or UA will be able to surpass 1/5th individually. 
 
But then again, DL can "dominate" LaGuardia with ~42% while AA has ~33%.

AA is definitely getting some great press coverage with the premier level of service and growth offered at LAX. This, coupled with a newly ratified F/A CBA, and the new overtures revealed today with the APA, point to good long term future for the New American. They will be a strong force in to the future, especially with the move to dominance at LAX in the premier service/happy high paying customer per available seat mile category...


"LOS ANGELES - American Airlines customers at Los Angeles International Airport (LAX) will enjoy an improved travel experience when the city's premier airline begins operations in Terminal 6, further expanding American's commitment to the greater Los Angeles area.

With the last departure of the night on Wednesday, Nov. 5, American flights operated by US Airways will end operations at Terminal 3. All US Airways ticketing and check-in, gates, baggage and customer service operations will begin at Terminal 6 the morning of Nov. 6. US Airways ticketing and check-in counters will be located on Level 2. US Airways flights will operate out of four dedicated gates - 60, 61, 62 and 63 - with convenient access to connections on flights operated by American Airlines at Terminal 4 through an underground connector. Shuttle service is also available to Terminal 4 and the Remote Terminal for American Eagle flights...

"Our expansion into Terminal 6 is the latest in our continued investment in the premier travel experience at LAX," said J.C Liscano, American's Managing Director of LAX. "Larger, updated facilities and closer, easier connections between terminals will improve our customers' experience and give us more room to grow. We've added some new destinations out of LAX, and we're proud of the exclusive services we provide our most loyal customers."

American's most elite and First Class customers can enjoy Flagship Check-In, the only private, dedicated VIP check-in facility at LAX. American also offers Five-Star Service, a customized meet-and-greet service with personalized airport experience from curb to aircraft or aircraft to curb. After checking in, customers can breeze through airport security with TSA PreCheck and head to one of American's three lounges for personalized service and exceptional amenities before their flights. The lounges include a new Admirals Club location at the American Eagle terminal that complements American's Admirals Club and Flagship Lounge in Terminal 4.

American's top customers at LAX with tight transfer times may be treated to a luxury airport transfer program that escorts customers to their next gate of departure in a Cadillac CTS, SRX or Escalade. American is the only airline partnering with Cadillac for luxury airport transfers.

American provides nearly 200 daily departures to 54 destinations in seven countries/territories from LAX."

- See more at: http://www.traveldailynews.com/news/article/63231/american-airlines-expands-its-service#sthash.VZFXmX1M.dpuf

 

[commavia]

Hahaha fear, fear, fear.  The level of sanctimony and vitriol tells us we're getting closer to reality.
 
Once again, much as some have a penchant for repeating things over and over again in the hopes that it makes them true, the reality is that AA already has secured control of more gate space than either Delta or United, to be phased in over the next several years, and that absent something extraordinarily radical and unusual occurring, said competitors have very little realistic prospect of matching this.  Contrary to popular belief, the world does not revolve around Delta, and various other constituencies - from airport boards, to city councils, to NIMBY neighborhood groups, to competitors - aren't going to throw out carefully-constructed promises and years worth of successive contractual agreements just because some Delta fanboys don't get their way.  Shocking, I know.
 
Beyond that, it is hysterical that we're once again being "assured" of Delta's superiority - how Delta can make markets work that AA can't.  It's hysterical, of course, since the actual people charged by shareholders and bound by legal fiduciary responsibility to run these publicly-traded corporations don't seem to have quite the same view.  Back in reality, multiple AA executives have spoken at length again and again about AA's plans for growth between the U.S. and Asia, and how they believe it is both a strategically and financial worthwhile investment.  Delta's executives, on the other hand, have made no such public pronouncements and appear more focused elsewhere.  Fascinating.
 
Finally, I think if anything sums up the level of disconnect from reality it is this: "explain how AA will be better off with an operation to Asia from LAX that comes at the expense of losing their dominance to Latin America and MIA."  How anybody could suggest with any level of seriousness, and without any level of comedic irony, that one (expansion in LAX-Asia) is any meaningful way connected to the other (dominance in Latin America in general and MIA specifically), let alone that one would somehow diminish or eliminate the other, is beyond telling.
 
This just once again goes to show that when the BS-meter spikes beyond its typical "high" level to going completely off the scales, that tells us that the level of fear has similarly spiked.  Delta is not winning at something, and therefore the need to start throwing out not only ridiculous, but also ridiculously unrelated, things like how somehow AA's dominance in Latin America and MIA is under threat.  Can't make this stuff up.  Still so funny (and fun) to read, though!

 

[robbedagain]

glenn  the FAs turned down the JCBA  just FYI bro...