Rumor: AA LAX-SEA/PDX June 2014

[WorldTraveler]

If you can't grasp that it isn't Open Skies until the last major market is liberalized, then you doubtfully won't ever.

But your point in arguing Open Skies seems to be to make the case that DL can't compete because they haven't chosen to start MIA-Latin America service.

Again, DL's operation to Europe is profitable. Was in the first quarter of 2013 in the dead of winter. DL was the ONLY US airline that was profitable in 1Q2013 to Europe AND in all global regions.

Would you like to talk about all of the European routes that AA has cancelled and yet they still lost money to Europe?

Some day you'll grasp the concept that the motivation for airlines which are all for-profit businesses is profit, not size or adding routes just to keep competitors out.


It also doesn't change that there will be a whole lot more competition for AA in Latin America in the years to come and it will come at the same time as a bunch of new flights by competitors at DCA, the opening of DAL to longhaul domestic services, and the initiation of the DL-VS JV which is the largest competitive challenge to AA/BA at LHR.

Let me know how AA does after all of these major competitive changes take place at the same time which will also coincide with the AA/US merger's usual challenges including labor integration and increased costs including to labor that were promised to get support for the merger.

No other merger has faced as many challenges of such significant size all happening in such a short amount of time.

 

[eolesen]

Hmmm.  One airport in Brasil remains capacity controlled, and and you try to claim that various airline's Latin American networks suffer because of that?
 
Seriously?

It's like claiming nobody could make a go of a European network while LHR was "closed" to new entrants.  Seems to me that DL and CO did just fine working around that one airport and flying into other primary business centers.  
 
Flying to GRU is of no relevance to a guy doing business in Colombia, Chile, Honduras, Ecuador, Argentina, Panama, Belize, or any one of another dozen countries & cities in the region, or the other major cities in Brasil.

 

[WorldTraveler]

If you understood Europe, you would know that the advantage AA/BA has had is that the US-LHR market is Europe's largest. Other carriers most certainly competed to Europe but they were never on equal footing as long as they couldn't gain some size scale sufficient to compete at LHR. AA's premium revenue to Europe comes from LHR, esp. JFK-LHR, and AA/BA have so dominated that market that no other carrier was serious competition. The DL-VS JV intends to create enough mass to try to compete with AA/BA; even DL-VS is still half the size of AA/BA, they are still larger than either could be on their own.

The same principle applies to GRU which is the largest market in S. America. No carrier is going to take on AA in Latin America until they can compete in the biggest market.

If you don't understand that principle, you don't understand basic business strategy. It is hardly an airline industry specific principle. You don't pick a fight with someone 3X your size by stepping on their toes. You win and ensure you stay in the battle by having a plan to go for the jugular.

let's just check back in a couple years and see how much new competition new AA has to Latin America including to Brazil.
I fully expect to see plenty of new competition including from MIA and to Brazil.

 

[Thomas Paine]

If you don't understand that principle, you don't understand basic business strategy. It is hardly an airline industry specific principle. You don't pick a fight with someone 3X your size by stepping on their toes. You win and ensure you stay in the battle by having a plan to go for the jugular.

I always thought business was about making money, like SWA does, haven't seen them go for anyone's jugular. Sounds to me like you think business is just a game, win at any cost, even if the cost is not making profits. OK AA is dominant in Europe and South America, DL has more of a presence in Asia. Nobody seems to want to bother with Africa but surely there are other markets that can be served profitably besides GRU and LHR.

 

[robbedagain]

paine  i think youre right and thats why when u read his posts  its pretty much all dl wins  and everyone loses...  

 

[WorldTraveler]

Thomas,
you are getting the players confused but your basic principle is right.

Business is not a game. Flying to regions of the world where you lose money year after year to the same region doesn't say a whole lot about the desire to make money.

Let me reiterate that DL was the only carrier to make money in every global region in the 1st quarter of 2013. In the 2nd quarter, DL lost a small amount of money in Latin America as did UA. UA lost money in every global region in 1Q 2013. AA has lost money in the Pacific for years and continues to throw capacity into the region in an attempt to build a network, perhaps thinking this the best chance they have to try and pick up traffic from UA and knowing that US won't help to Asia regardless.

Even US which has been very profitable overall loses money flying to Europe in the winter.

The key difference between DL and nearly every other carrier including WN is that DL aggressively seeks out markets that it knows it needs to serve, adds them methodically including challenging the leadership of whatever carrier is in that market, and still manages to remain profitable as it picks off one key market after another regardless of the carrier that has been dominant in the market.

DL wouldn't be what it is now in NYC if it didn't aggressively challenge the leaders in the market. DL was #3 in NYC behind CO and AA only a few years ago. DL is now focusing on the west coast to Asia. DL will focus on a much more aggressive buildup of Latin America. In the meantime, DL is generating enormous profits from its domestic system and continues to pick off key domestic industry routes.

No other carrier including WN has been as willing or successful in challenging the dominance of other carriers in their key markets and winning those competitive battles time after time.

 

[MAH4546]

let's just check back in a couple years and see how much new competition new AA has to Latin America including to Brazil.
I fully expect to see plenty of new competition including from MIA and to Brazil.

 
Wow. You simply can't read.
 
American Airlines has competition on every single large Miami-South America market except Maracaibo. But let's continue to live off this myth you attempt to create that AA enjoys some sort of monopoly that is about implode because in your fantasy world there is no open skies between the United States and Latin America.
 
And in the mean time I welcome more competition. I hope to see another U.S. carrier enter Miami-Sao Paulo - a local market that is larger than all but three New York-Europe market, yet only has one U.S. flag carrier. There's room for United or Delta. AA will dwarf them like it does in JFKLHR, but there's certainly room for another U.S. carrier to turn a profit. 

 

[WorldTraveler]

AA has no US carrier competition in MIA-Latin America. Not one single market, Mark.

The closest has been UA's Star relationships but much of that is ending along with Gol's one stop presence in MIA-GRU via SDQ since DL owns part of Gol.

AA has a monopoly between MIA and Latin America among US carriers - the context I have repeatedly stated.

But that US carrier monopoly will be coming to an end and it is starting with B6 from FLL where they will mount a viable alternative to AA at MIA, something NK never really did.

DL or UA will add service from MIA to Latin America and they are going to start when AA already will have a million other strategic initiatives and defensive plans underway including trying to pull off a merger that already includes plenty of labor unrest.

Glad you are looking forward to the competition because it is coming.

And specific to this topic, even if AA does announce more LAX-Pac NW service which will step on AS' key markets, it will help thin the market by pushing on even weaker players and make it possible for DL to accomplish what it wants including for AS to feel even more pressure and face more competition in their key markets.

so when will these new flights be announced?

 

[FrugalFlyerv2.0]

AA has no US carrier competition in MIA-Latin America. Not one single market, Mark.

AA has a monopoly between MIA and Latin America among US carriers - the context I have repeatedly stated.
 

 
So does AA have a monopoly to South America or not?
Using your logic, one could make the case that DL has a monopoly to South America (in the context of ATL or DTW, ofcourse).
 
Why is it that when anyone points our an inaccuracy or a mistake in  your posts, you resort to qualifying statements then continue to insist that you were correct all along?

 

[WorldTraveler]

I have said from the beginning that AA has a monopoly among US carriers from MIA to Latin America and that is absolutely true.

The qualifications are there for a reason and they didn't just pop up because someone challenged what I wrote.

And yes DL does have a monopoly among US carriers from ATL to Latin America.... but ATL is not the largest Latin America market so it is hardly near the significance. Nor is it likely that AA will ever launch flights from ATL to Latin America - but it could happen.

it also doesn't change that AA will see substantially increased competition from MIA-Latin America, including from US carriers. you can call what exists today what you want and you can call the change what you want, but the change is coming and it is yet one more challenge that AA faces in the next few years.

 

[AdAstraPerAspera]

EAL and Delta operated concurrent hubs at ATL for years. After Eastern's demise, DL enjoyed having ATL to itself for a while, and grew its operations significantly, as well as its yield. This provided the perfect opportunity for a LCC to come in underneath that revenue umbrella Delta created, and so ValuJet was born.
 
The cycle is about to begin again. With the demise of the AirTran hub, Delta once again will have ATL to itself for a while. But who will swoop in from underneath to challenge DL again? Someone will, time will tell. And it doesn't even have to be someone with lower costs than DL this time, either. LOL.
 
-astra

 

[WorldTraveler]

hold on there, horsey

You do realize that WN is still the 2nd largest carrier at ATL by a pretty healthy margin and isn't pulling out? They may be shifting from a hub-based to a local market operation but they aren't pulling out.

Further, WN's costs are almost identical to DL's so they can't price at the ridiculously low levels that FL did - which is great for DL.

WN is just big enough in ATL but not too big.

Further, WN is eyeing bigger fish to fry right now.

 

[AdAstraPerAspera]

hold on there, horsey


Further, WN is eyeing bigger fish to fry right now.

Which is exactly why I don't think it will be WN; If it is some new entrant with lower costs, ATL will be ripe for the picking. Think what NK is doing in ORD and DFW right now, only this time in ATL. Just an example though, I'm not saying it will be Spirit.

 

[WorldTraveler]

The difference is that DL has been very aggressive in competing with even low fare carriers who extend beyond the single flight or so per day that has little impact on business travelers.

It is certainly possible but even the ULCCs have little impact on the total demand, even at DFW or ORD. They create a submarket but it is the B6s and WNs who can offer the mass to compete with the network carriers in their own hubs.

The biggest competitive changes in the industry over the next few yeas will be at DCA and DAL/DFW followed by an increasing number of flights to Latin America by LCCs.

 

[AdAstraPerAspera]

You know how ValuJet started out as an ULCC (though that term didn't exist yet) but as they evolved into AirTran, gradually grew to offer a more full-service product from ATL? That's what's gonna happen
 
If you look at the history of ATL, the market is too big and the geography too perfect to be left to any one airline
 
-astra