Whoa! AA-KE Codeshare

[robbedagain]

I wonder if at some point KE would leave SkyTeam and join OneWorld

 

[WorldTraveler]

the question is what contractual requirements KE or any carrier has to their existing alliances.

 

[FrugalFlyerv2.0]

I'm pretty sure that the cost-benefit analysis has been done by KE. 
 
While AA might be a better partner than DL for KE in the Americas (providing coverage for both North and South America), the question is would BA/IB/AY provide the same benefits to KE in Europe as AF/KL do now?
 
I would imagine JAL might be the loser if KE were to decide to join 1-world?

 

[WorldTraveler]

precisely regarding different values for different parts of the world


Cranky echoed the same thing I said regarding intra-alliance conflicting goals.

I honestly was surprised that DL doesn't carry any more traffic beyond ICN than it does, at least according to DOT information.

but we still have to consider the same contractual issues that AS-DL face. No one has said and I don't know when KE can leave Skyteam and how much overlap they can do with AA until they leave.

I am sure that if DL feels that KE will leave Skyteam, DL is making sure they are fully prepared for that reality including trying to lure any other carriers that DL needs in Asia as partners

 

[FrugalFlyerv2.0]

I honestly was surprised that DL doesn't carry any more traffic beyond ICN than it does, at least according to DOT information.

but we still have to consider the same contractual issues that AS-DL face. No one has said and I don't know when KE can leave Skyteam and how much overlap they can do with AA until they leave.

I am sure that if DL feels that KE will leave Skyteam, DL is making sure they are fully prepared for that reality including trying to lure any other carriers that DL needs in Asia as partners

 
I would argue leaving/switching an alliance is more of a cost thing than time.
 
US was able to fairly quickly and painlessly leave * for 1-world.
 
And perhaps KE can use the relationship with AA to get more long term leverage in skyteam.
 
Besides the Chinese carriers, what other Asian carriers would make sense for DL.  I assume there may be regulatory problems with DL-JAL.  Not sure about how adversely CX would be affected by KE joining 1-world.

 

[eolesen]

Dunno if you'd ever see KE in oneworld, but anything is possible.

This also should be an indicator of how fragile alliances and JV's can be in the long run, and why they shouldn't play a role in deciding which US carrier should get a given route authority, e.g. HND.

 

[FWAAA]

I'm not sure I agree with this part of Cranky's analysis:

Meanwhile for American, this is a great deal. I can only imagine just how much money those flights to Seoul are losing right now. Opening up the ability to sell to Korean loyalists in Korea will only help improve the profitability of that flight. The only concern for American: will its joint venture partner Japan Airlines be angry? According to American, JAL did give its blessing. But in the future, if the agreement expands further and includes American’s code on Korean flights beyond the hub into Asia, then the tension might ratchet up.

The AA DFW-ICN flight is part of the AA-JL joint venture, so why would JAL possibly be angry about improving the profitablity of this flight by selling more tickets via the KE-codeshare? What possible reason would JAL have for objecting?

I could see JAL becoming angry if AA were to place its code on numerous KE flights to ICN, because most of that revenue would flow to KE and away from the AA-JL joint venture. But in this case, the bulk of the revenue stays with AA, and in turn, with the AA-JL joint venture. KE will make a few dollars as the sales agent when it sells this flight with the KE code.

Cranky's last sentence is an obvious one - if AA adds its code to KE flights beyond ICN (or, as I mentioned above, on KE TPAC flights), then of course that could endanger the AA-JAL relationship.

 

[dfw gen]

 
however thought wt could beat a dead horse.......

 

[WorldTraveler]

I would argue leaving/switching an alliance is more of a cost thing than time.
 
US was able to fairly quickly and painlessly leave * for 1-world.
 
And perhaps KE can use the relationship with AA to get more long term leverage in skyteam.
 
Besides the Chinese carriers, what other Asian carriers would make sense for DL.  I assume there may be regulatory problems with DL-JAL.  Not sure about how adversely CX would be affected by KE joining 1-world.

 US was involved in a merger. AA is not.

CX is actually AA's best partner that covers China and SE Asia ... they serve it far better than JL does.
 

Dunno if you'd ever see KE in oneworld, but anything is possible.

This also should be an indicator of how fragile alliances and JV's can be in the long run, and why they shouldn't play a role in deciding which US carrier should get a given route authority, e.g. HND.

that is true.

nonetheless, alliances do exist and until alliances are disassembled, the legal structure is in place to maintain them until they are replaced.

and again, it is precisely the freedom that Skyteam and oneworld have in allowing carriers to pursue codeshares outside of the alliance that could just as much be a threat to AA in other markets as it is to DL in S. Korea.  
 

I'm not sure I agree with this part of Cranky's analysis:


The AA DFW-ICN flight is part of the AA-JL joint venture, so why would JAL possibly be angry about improving the profitablity of this flight by selling more tickets via the KE-codeshare? What possible reason would JAL have for objecting?

I could see JAL becoming angry if AA were to place its code on numerous KE flights to ICN, because most of that revenue would flow to KE and away from the AA-JL joint venture. But in this case, the bulk of the revenue stays with AA, and in turn, with the AA-JL joint venture. KE will make a few dollars as the sales agent when it sells this flight with the KE code.

Cranky's last sentence is an obvious one - if AA adds its code to KE flights beyond ICN (or, as I mentioned above, on KE TPAC flights), then of course that could endanger the AA-JAL relationship.

are you sure that DFW-ICN is part of the AA-JL JV? HKG is but I never read anything about ICN- but I might have missed it.... and if so, I'll be glad for you to show me.

btw, AA in the most recent quarter connected a significant amount of traffic from the US to ICN over NRT even after the DFW-ICN flight operated.... JL does absolutely risk losing some of that traffic

 

[FWAAA]

are you sure that DFW-ICN is part of the AA-JL JV? HKG is but I never read anything about ICN- but I might have missed it.... and if so, I'll be glad for you to show me.

btw, AA in the most recent quarter connected a significant amount of traffic from the US to ICN over NRT even after the DFW-ICN flight operated.... JL does absolutely risk losing some of that traffic

Yep, Horton said so:

The new service we announced today will further strengthen our network. We will connect our largest hub, DFW, to Seoul, a top global premium market. This service, which will be part of our transpacific joint business with Japan Airlines, will allow customers traveling from South Korea to access more than 200 destinations in the U.S. and Latin America.

http://aviationblog.dallasnews.com/2012/10/american-airlines-to-fly-to-seoul-and-lima-from-dallasfort-worth.html/

That connecting traffic you mentioned over NRT to ICN might mean that another AA nonstop from the USA to ICN is not out of the question.

 

[WorldTraveler]

thank you.

so 3 of the DFW routes are operated in a JV with JL.

as for new service to ICN, all of the traffic via NRT competes with existing KE routes, so the chances that AA will win friends with KE by adding new routes that compete with them are slim.

if AA starts codesharing beyond ICN, then, yes, there might be justification for new routes, but I seriously doubt that KE is going to be any less willing for AA to keep more revenue than what it has tried to offer DL - who has refused to be a Korean Air connection in N. America.

Everything KE has done with DL validates that they do not want to diminish their position as the final word on any US-ICN services and for them to keep a disproportionate amount of any revenue that flows over the Pacific.

and then if beyond ICN codesharing is announced, there is internal competition on AA's network with other codeshare partners.

as much as you and others would like KE to be a silver bullet, there is nothing about KE that solves AA's transpacific problems without creating yet other ones.

 

[MAH4546]

All AA trans-Pacific routes are part of the JBA, including China, not just ICN/HKG/TYO. 

 

[WorldTraveler]

ATI is not permitted with Chinese carriers or involving US-China routes.

AA could share revenues and JL can help sell them, however.

but your point highlights that JL is trying to get into where passengers want to go in Asia which will hurt them if AA cooperates on the same itineraries with carriers other than JL.

 

[commavia]

Well you better let AA know - because they apparently think their US-China routes do, indeed, involve their "ATI," and JBA, with Japan Airlines:
 
"This route [DFW-PEK] will be operated as part of American's joint business agreement with fellow oneworld® alliance member Japan Airlines."

 

[WorldTraveler]

JL can be part of the JBA without having ATI or revenue sharing for non Open Skies countries

Plz show me an approved DOT/DOJ application for ATI if you would like to convince me...you could be right but your cut and paste hasn't proven your point