Rumor: AA LAX-SEA/PDX June 2014

[robbedagain]

Mah expect a mile long post from wt explaining how fll with dl being better than aa at mia
also expect to hear how the king of all airlines...dl.... will better provide service out of lax

 

[WorldTraveler]

 
MAH,
Thanks for your response. You clearly sat down with a computer and not a smartphone or tablet in order to write coherent sentences. Thanks for using appropriate punctuation. Not everyone does but then they go off on users that write full sentences with appropriate punctuation.
First, I am thrilled that AA is fighting it out to remain a force on the west coast, primarily in LAX. As you know AA has given up its leadership position in NYC and dropped to #3 and is #2 at ORD so they have no choice but to fight to stay in the game at LAX.
LAX is limted by gate space and is already a highly divided market so AA can stay #1 and I fully expect they will, but they will never gain a majority of the market. WN is gaining gate space and DL is aggressively growing and they do have about the same number of mainline gates as AA does.
AA and DL’s proverbial shootout at LAX is going to hurt other carriers including UA and VX but AA and DL’s relative share to each other will remain strong. If AA and DL can both succeed at growing their share relative to each other while taking it from other carriers including partner AS, that is ok w/ me and likely them.

The principle that you miss and so many don’t understand is that AA and UA’s route system from the beginning of the industry has been built around the largest cities in the US. AA and UA’s hubs are in those largest cities and markets. Either they are very competitive or in the case of DFW and MIA, they are highly protected which is a source of AA’s profits but they will be coming more competitive in the coming months.

In complete contrast, DL’s hubs are in medium sized markets but which are also highly competitive and have significant low cost carrier presences. For the past ten years, DL has been pushing into the largest markets while being able to fully defend its hubs against further low fare carrier growth.

AA flies ATL/DTW/MSP to LGA among other markets and gets rarely more than 15% of the market. DL flies markets like LGA/JFK to MIA and gets 33% of the market (+/-). DL already flies DFW and ORD to LGA and gets 20% of the market. DL is the largest carrier in the local market in nearly every one of the direct competitive routes that AA and DL fly between their hubs.
In order for AA to succeed in LAX-ATL, they will have to be competing with WN with whom AA has a poor track record of competing with precisely because AA has costs that are almost 10% higher than WN’s. DL competes against and retains the dominant position in part because DL’s costs are lower.

AA might launch ATL-LAX but DL has the potential to launch a half dozen more key DFW/DAL routes which will take far more from AA than AA can take from DL. Add in MIA-Latin America that is a monopoly among US carriers and DL has far more than it can take from AA than the other way around.

MIA and FLL are not the same market. Pricing is very different and levels of service are not the same.

FLL has been very competitive for many years; MIA has had very little direct competition domestically in key AA markets and no US carrier besides AA has flown MIA-Latin America for years.
 
The reason for talking about US carriers in MIA-Latin América is that any one of the US network carriers is far stronger than any of the Latin American carriers - and perhaps all of them combined. Further, AA has partnerships with most of them.  Hardly evidence of aggressive competition when your competitors are much smaller and are also partners.

Add in that WN and B6 will also be aggressively competing against AA and there is no way that AA can sustain the competitive incursions into its key markets near as much as DL can sustain what little AA can do to fight back.

The industry will be radically changed over the next few years and a big part of it will involve AA (and US) having to compete in markets where it has had a monopoly for years. DL hasn’t had monopolies in its largest market s for decades.

Bring on the competition. It is good for the consumer and despite what the DOJ thinks, the legacy carriers do aggressively compete with each other.

 

[robbedagain]

ON THE OTHER HAND WT SINCE YOU HAVE TO ATTACK PEOPLE BUT YOU CANNOT TAKE THE ATTACKS WELL... SO LET ME TELL YOU THIS MUCH MR DELTA CONQUERS THE WORLD.... DO NOT DISH OUT ATTACKS SINCE YOU CANNOT TAKE ANY IN RETURN. WE ALL KNEW YOU WOULD COME BACK AND SAY NEGATIVE CRAP ABOUT HOW AA THIS DL THAT FACE IT YOU HAVE NOT BEEN IN HE AIRLINES FOR QUITE A LONG TIME TIMMY

 

[AdAstraPerAspera]

Yet WN's average fare is 20% higher at SLC than it is at DEN.
 
WN used their profits from their fuel hedge gains 10 years ago to push their way into DEN. They were unsuccessful at growing their presence at SLC; 
 
WN has not had any success in growing its presence in DL hub markets.

 
Which is exactly why your claim that SLC is a "LCC hub" is so absurd

 

[Kev3188]

 

You clearly sat down with a computer and not a smartphone or tablet in order to write coherent sentences. Thanks for using appropriate punctuation. Not everyone does but then they go off on users that write full sentences with appropriate punctuation.

On this day, let us give thanks that we do not all feel the need to lower ourselves to such depths in order to feel better about ourselves.

 

[WorldTraveler]

Focusing on whether someone has been asked repeatedly by me and others to use proper punctuation and capitalization is only a feeble side show for some to use to try to cover because most of those who have chosen to belittle me do so because each of you have been proven wrong on one or more key basic business principle of the airline industry which I have highlighted. Those issues include but are not limited to the lack of unionization success at DL or the fact that AA and US have made major strategic mistakes that have allowed other carriers including DL to grow.

Belittling me because some people can’t intelligently participate in the conversation is not going to make this board any more friendly and it certainly won’t solve the real issues that some people want to discuss and are capable of doing so.

I get the loyalty that some people have to their employer and their ideals… but this is an open website that includes perspectives from all over the world and the industry. If some people can’t handle perspectives that shake their pride in their employer or their personal goals or beliefs, they quite frankly should not participate.

There are people on here who get it and talk about the issues that matter to the industry. I participate because of those people. When they are all gone, I will stop.

I am happy that AA and US employees and supporters have a new chance to compete. I wish each of you well. But it also doesn’t change that there are key strategic problems that AA and US each had and which the merger doesn’t solve.

AA/US not only have not resolved several key strategic errors that each made over the past decade but they also are not resolving some of the most fundamental factors that have shaped the airline industry since deregulation:
- AA and UA are higher cost airlines than the rest of the industry and they have also been higher cost airlines than DL. It doesn’t matter what business you are in'; it is very difficult for one company to sell a product at a higher cost than a competitor and be successful. US is giving up its cost advantage in order to merge with AA which is not the lowest cost network carrier even coming out of BK. The merger and merger related promises and pay raises will cost hundreds of millions of dollars that will take years to correct if that can even be done.
- AA and UA’s network has been focused on the largest markets in the US and the world. All of the other legacy airlines had/have route networks that are much less focused on the largest cities for hubs. Competition is strongest in the largest markets – that is exactly where low cost carriers have grown most aggressively. It is much harder to operate in a hub that has multiple competitors and where the hub carrier does not have a dominant position.
- DL has defended its core markets far better than AA and UA and DL maintains higher market shares in its markets than AA and UA. Nonetheless, DL’s markets have abundant direct low fare carrier competition which makes it very hard for AA or UA to push into DL’s markets with AA and UA’s higher costs than it does for DL to push into AA or UA’s markets which are both larger and where DL has lower costs than AA and UA.
- There are a significant number of key industry markets that DL doesn’t serve but AA and UA do. There are relatively few large markets which DL serves but which AA and UA can serve without also pushing against not only lower cost DL but also low cost carriers.

As much as some resist hearing it, the industry fundamentals continue to favor DL expanding its network into AA and UA’s key markets than it does for AA or UA to expand its network into DL markets.
History shows that is exactly what has happened since deregulation and the trend shows no sign of abating.
Those facts aren’t personal and they aren’t meant to offend anyone. But they are industry realities.

Those industry realities will come into play in every competitive challenge that takes place between the big three whether it be in LAX or Latin America or NYC or Dallas.

 

[robbedagain]

DL DL DL YOU TRULY THINK EVERY FLIPPIN THING CHANGE IN THE AVIATION ALWAYS FAVORS DELTA GUESS WHAT PAL NOT EVERY FLIPPIN THING GOES IN DL FAVOR PERIOD. YOURE THE ONLY ONE WHO RAILS ME FOR USING MY TABLET AND MY PUNCTUATION I DONT SEE SWAMT 700 KEV OR ANY OTHER PERSON RAILING ME FOR THAT.

U KEEP SAYING THAT AA AND US DONT COMPLIMENT EACH OTHER GUESS WHAT DID UA AND CO COMPLIMENT EACH OTHER. U NEVER ANSWERED THAT DID NWA AND DL WAITIN ON THAT. YOU TRULY THINK YOU KNOW IT ALL YET EACH TIME YOURE WRONG YOU COME UP WITH AN EXCUSE

 

[WorldTraveler]

hey robbed,


There are basic principles of the industry that you need to accept exist whether you understand them or not.

Do your job and do it well. But you shouldn't be surprised if your best efforts can't overcome some basic principles of the industry which leave AA/US at a disadvantage.

 

[robbedagain]

I do my job and I do my best at it... stop being a know it all man bec you have not been in the airline industry in yrs

 

[Kev3188]

Focusing on whether someone has been asked repeatedly by me and others to use proper punctuation and capitalization is only a feeble side show for some to use to try to cover because most of those who have chosen to belittle me do so because each of you have been proven wrong on one or more key basic business principle of the airline industry which I have highlighted. Those issues include but are not limited to the lack of unionization success at DL or the fact that AA and US have made major strategic mistakes that have allowed other carriers including DL to grow.

Belittling me because some people can’t intelligently participate in the conversation is not going to make this board any more friendly and it certainly won’t solve the real issues that some people want to discuss and are capable of doing so.

I get the loyalty that some people have to their employer and their ideals… but this is an open website that includes perspectives from all over the world and the industry. If some people can’t handle perspectives that shake their pride in their employer or their personal goals or beliefs, they quite frankly should not participate.

There are people on here who get it and talk about the issues that matter to the industry. I participate because of those people. When they are all gone, I will stop.

I am happy that AA and US employees and supporters have a new chance to compete. I wish each of you well. But it also doesn’t change that there are key strategic problems that AA and US each had and which the merger doesn’t solve.

AA/US not only have not resolved several key strategic errors that each made over the past decade but they also are not resolving some of the most fundamental factors that have shaped the airline industry since deregulation:
- AA and UA are higher cost airlines than the rest of the industry and they have also been higher cost airlines than DL. It doesn’t matter what business you are in'; it is very difficult for one company to sell a product at a higher cost than a competitor and be successful. US is giving up its cost advantage in order to merge with AA which is not the lowest cost network carrier even coming out of BK. The merger and merger related promises and pay raises will cost hundreds of millions of dollars that will take years to correct if that can even be done.
- AA and UA’s network has been focused on the largest markets in the US and the world. All of the other legacy airlines had/have route networks that are much less focused on the largest cities for hubs. Competition is strongest in the largest markets – that is exactly where low cost carriers have grown most aggressively. It is much harder to operate in a hub that has multiple competitors and where the hub carrier does not have a dominant position.
- DL has defended its core markets far better than AA and UA and DL maintains higher market shares in its markets than AA and UA. Nonetheless, DL’s markets have abundant direct low fare carrier competition which makes it very hard for AA or UA to push into DL’s markets with AA and UA’s higher costs than it does for DL to push into AA or UA’s markets which are both larger and where DL has lower costs than AA and UA.
- There are a significant number of key industry markets that DL doesn’t serve but AA and UA do. There are relatively few large markets which DL serves but which AA and UA can serve without also pushing against not only lower cost DL but also low cost carriers.

As much as some resist hearing it, the industry fundamentals continue to favor DL expanding its network into AA and UA’s key markets than it does for AA or UA to expand its network into DL markets.
History shows that is exactly what has happened since deregulation and the trend shows no sign of abating.
Those facts aren’t personal and they aren’t meant to offend anyone. But they are industry realities.

Those industry realities will come into play in every competitive challenge that takes place between the big three whether it be in LAX or Latin America or NYC or Dallas.

That's enough.

Your lack of character and whether or not someone "grasps" key industry metrics are two separate concepts. Your attempting to conflate them in order to rationalize your conduct is ridiculous. Stop it.

If Robbed (or anyone's) style bothers you that much, simply put them on ignore, or scroll on by.

 

[AdAstraPerAspera]

...

I am happy that AA and US employees and supporters have a new chance to compete. I wish each of you well. But it also doesn’t change that there are key strategic problems that AA and US each had and which the merger doesn’t solve.

...

- AA and UA are higher cost airlines than the rest of the industry and they have also been higher cost airlines than DL.
 
...

Those industry realities will come into play in every competitive challenge that takes place between the big three whether it be in LAX or Latin America or NYC or Dallas.

 
Dèja vu; It's getting harder and harder for me to tell one thread from another anymore because you post this old saw in
Every.
Single.
Thread.
Your reputation score is reflective of your broken recordism and for your sake, I hope you can learn to contribute something novel to these discussions or it's never going to get better.
 
If I have to read one more sentence about AA and UA's high costs, DL being the market leader in NYC, that the Wright Amendment is going to kill DFW, or that Latin America is about to be invaded by widgets, I am going to pour Thanksgiving candle wax into both my eyes and ear canals

 

[WorldTraveler]

reputation score has nothing to do with the accuracy of what is posted.

The reputation score is ä measure of how well liked the posts are.

I didn't come her to post what makes you or anyone else feel good. I post the truth. Cold and hard.

When people on here accept that others really do know what they are talking about and then quit trying to discredit everyone else that doesn't agree with them, then we might be able to have a cordial conversation.

I stand by my statements about where the industry is going and why the AA/US merger will not deliver anywhere near the success that many on here seem to think it will.

That is not a personal attack on anyone nor does it mean that I want anyone personally to suffer. It is based on solid principles of the business and airline world that have been proven time and time again.

 

[AdAstraPerAspera]

It doesn't matter if you post the most accurate statement on Earth; if you post it over and over again in every thread whether it is relevant to the discussion or not, you are either going to tune out your audience or irritate them. Is that all you hope to accomplish?

 

[WorldTraveler]

and what makes what I post different from what other people post? I have read pages and pages of arguments about stuff that I have no part in that say the same thing over and over again - for years.

And there are people who do understand what I say because I have repeated it and rephrased it.

It is also true that AA's best hope is for UA to falter since AA and UA compete directly in so many markets. As in nature itself, every animal has a natural predator; AA stands to benefit the most from UA's failures.

 

[AdAstraPerAspera]

It is also true that AA's best hope is for UA to falter since AA and UA compete directly in so many markets. As in nature itself, every animal has a natural predator; AA stands to benefit the most from UA's failures.

 
Who do you think will be the more shrewd CEO, Parker or Smisek?