dirtyfrankd
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AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 2:21 am

Both DL and UA have hubs at NRT. What are the changes of the new AA opening up an Asian hub in order to beef up its very lacking presence in that continent?

[Edited 2013-02-17 18:46:41]
 
United1
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RE: AA/US - Changes Of Opening An Asia Hub?

Mon Feb 18, 2013 2:27 am

Quoting dirtyfrankd (Thread starter):

Both DL and UA have hubs at NRT. What are the changes of the new AA opening up an Asian hub in order to beef up its very lacking presence in that continent?

Very small chance...it's not really needed as they have a joint venture with JL which gives them a defacto hub at NRT and a strong codeshare partner with CX as well.
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dirtyfrankd
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 2:49 am

Quoting United1 (Reply 1):

Very small chance...it's not really needed as they have a joint venture with JL which gives them a defacto hub at NRT and a strong codeshare partner with CX as well.

UA has a partner at NRT in NH and DL has a partner at ICN in KE, yet both airlines have hubs in Asia? Is there a reason they do it successfully and the new AA shouldn't? What if AA were to open a hub at PEK or PVG or something, maybe that would be the answer to Oneworld's weak presence in China?
 
Cubsrule
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 2:52 am

Quoting dirtyfrankd (Reply 2):
Is there a reason they do it successfully and the new AA shouldn't?

Define successful. Certainly, both carriers are increasingly trying to overfly the NRT hubs, which are basically historical relics.
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LAXdude1023
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 2:56 am

Between zero and one percent.
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United1
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 2:58 am

Quoting dirtyfrankd (Reply 2):
UA has a partner at NRT in NH and DL has a partner at ICN in KE, yet both airlines have hubs in Asia? Is there a reason they do it successfully and the new AA shouldn't?

...both airlines had hubs at NRT before they formed alliances in the region. UA has been slowly shrinking its dependence on NRT and launching overflights and even DL has to an extent started doing the same thing. I am sure that AA will add more flights to Asia over the next few years but their is virtually no chance, as their is no need, for them to open a hub in Asia.

Quoting dirtyfrankd (Reply 2):
What if AA were to open a hub at PEK or PVG or something, maybe that would be the answer to Oneworld's weak presence in China?

They would not be able to open hubs in either cities as the US and China do not have open skies in place...AA can fly to both of those cities but not beyond as both UA and DL can from NRT.
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steex
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:00 am

Quoting dirtyfrankd (Reply 2):
UA has a partner at NRT in NH and DL has a partner at ICN in KE, yet both airlines have hubs in Asia? Is there a reason they do it successfully and the new AA shouldn't? What if AA were to open a hub at PEK or PVG or something, maybe that would be the answer to Oneworld's weak presence in China?
Quoting Cubsrule (Reply 3):
Define successful. Certainly, both carriers are increasingly trying to overfly the NRT hubs, which are basically historical relics.

As Cubsrule notes, the two hubs at NRT are there largely because of inertia at this point. Both airlines are attempting to reach a point where any routes commercially viable as non-stops from the USA are flown that way instead, only maintaining intra-Asia flying from NRT where it makes sense. UA is many years ahead of DL in this matter, owing largely to superior US hubs from which to overfly NRT (namely SFO).

Additionally, China would be a very undesirable place for such an operation. American wouldn't be allowed to fly intra-China routes or TPE. It would also be virtually impossible to get enough appropriately timed slots from the Chinese government at an airport like PEK to allow two banks similar to what UA/DL operate at NRT. Frankly, it would be hard just to get enough slots that would be commercially desirable from a scheduling perspective for USA-PEK flights (look at AA's struggles to get desirable times for even its existing portfolio), let alone the additional flights needed for beyond-PEK flights.
 
AeroWesty
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:01 am

The time for U.S. carriers to organically grow an Asian hub has truly passed. Being this late to the game in terms of Asia, AA has little left other than feeding the hubs of its partners, then codeshare to a wide and varied array of destinations which alone aren't able to support direct flights from any of AA's U.S. hubs yet.

AA should be putting its own metal into HKG, where CX may carry passengers onward as JL does at NRT, as has been discussed here many times before.
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roseflyer
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:08 am

The NRT hubs date back to post WWII reconstruction. NRT is so slot restricted that DL being the third largest airline cannot be surpassed by a regional domestic airline. If it weren't for the slot situation and historical routes, tere would be no UA OR DL hubs there.

Such a situation no longer would happen. AA could grow PHX into an international hub, but the local market is heavily biased towards domestic routes. Other than PHL and PHX gaining NRT or China service, I doubt there will be any Asian expansion. There is a small chance of DFW or PHX getting SYD but I have few hopes.
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commavia
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:10 am

Quoting AeroWesty (Reply 7):
The time for U.S. carriers to organically grow an Asian hub has truly passed.

I think the time for U.S. carriers to have Asian hubs - grown organically or otherwise - has passed in general.

Quoting AeroWesty (Reply 7):
Being this late to the game in terms of Asia, AA has little left other than feeding the hubs of its partners

AA may be late to the game, but that's got nothing to do with why an Asian hub makes little economic sense. Thus why the two airlines "early to the game" have both been actively deemphasizing their Asian hubs for years.

Quoting AeroWesty (Reply 7):
then codeshare to a wide and varied array of destinations which alone aren't able to support direct flights from any of AA's U.S. hubs yet

The places I think AA would struggle to fly their own metal nonstop from the U.S. are the markets that are either quite low-yielding (MNL, TPE) or too far to be flown profitably (SIN, BKK). As was already alluded to, UA can make some of these work nonstop because they control the single best U.S.-Asia hub - SFO. DL might - might - be able to make some of these work from SEA. In my mind, all 4 of these markets are inaccessible to AA.

The other key East Asia markets (TYO, ICN, PEK, PVG, HKG), however, is a different story. AA already flies to 4 of those 5 with a total of 8 flights per day. AA needs to add HKG, and then they will have what I think is a fairly competitive overall network to Asia when coupled with their JAL JBA, and the CX codeshare.
 
Cubsrule
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:13 am

Quoting steex (Reply 6):
Both airlines are attempting to reach a point where any routes commercially viable as non-stops from the USA are flown that way instead, only maintaining intra-Asia flying from NRT where it makes sense.

  

We've also seen some limited use of other stopping points, such as HKG for SGN on UA and NGO for MNL on DL (and NW before them).
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AeroWesty
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:34 am

Quoting commavia (Reply 9):
AA may be late to the game, but that's got nothing to do with why an Asian hub makes little economic sense. Thus why the two airlines "early to the game" have both been actively deemphasizing their Asian hubs for years.

I take a bit wider view of 'Asia' and include Guam. In my opinion, Guam will continue to grow as a successful outpost for UA, as the balance of military operations in the Pacific establishes itself on the island. It will make perfect sense for UA to continue to develop GUM to serve Asia and the U.S. territories in the region. I doubt at this point in time that AA or any other U.S. carrier would be able to take advantage of a similar hub, with the rich history CO and UA developed over the years in this particular region.
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infinit
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 3:47 am

As Commavia suggested, I think the US airlines have a good-enough presence in North Asia. But they're understandably poor in South East Asia/The 10-member ASEAN region which is now the fastest growing in Asia. Indonesia is expected to become the 8th largest economy by 2030, Vietnam and Myanmar are fast growing as well. Surely there should be enough of a demand to serve SIN or BKK.

I guess SQ's soon-to-be terminated ULH A345-served SIN-LAX and SIN-NYC routes aren't a good testament but is there a chance AA might be able to fly non-stop to SIN profittably?

Presently both Delta and United fly SIN-NRT.

About NRT not sufficing, note that many international airlines now fly to Haneda and it is significantly nearer to the city
 
PHX787
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 4:13 am

IMO if it happens, it won't be LAX, because LAX is overly-saturated with asian service, and as you can tell with UA, it's starting to have an impact on loads.

Thinking like this.....guess what airport i'm going to suggest  

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AeroWesty
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 4:19 am

Quoting PHX787 (Reply 13):
Thinking like this.....guess what airport i'm going to suggest

I believe general wisdom is going with that the OP was suggesting a hub situated on the other side of the Pacific. Not a U.S. gateway to Asia.
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 4:23 am

Quoting AeroWesty (Reply 14):
I believe general wisdom is going with that the OP was suggesting a hub situated on the other side of the Pacific. Not a U.S. gateway to Asia.

Ohhhhhh i see.

in that case, not gonna happen, unless this new airline makes some serious business deals with JL.
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LAXintl
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 4:32 am

The name of the game is to go nonstop.

The Narita hubs for DL and UA are primarily a thing of yesterday with both carriers (UA being faster) sheding such tag operations.

Its a bit like the olden days with US carriers having hubs in Europe with a cadre of 727s. As soon as small twins arrived which allowed nonstops, the 727 tag flying died.


Having said all this - AA does have a huge Pacific handicap. As of last summer it only had embarrassing 4.8% market share amongst US carriers in this hugely important and growing region.

Yes AA it does have its JAL JV, but who knows how much that can help plug the holes. Also seemingly CX is not much of a benefit choosing to do its own thing ignoring its OW partners.
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coronado
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 5:05 am

At $100+ fuel I have a hard time understanding this compulsion that in the future all flights from the US to Asia will all be point to point. If a compelling case could me made that fuel will in the future become only 10-15% of CASM I can buy this reasoning. If not simple geography dictates that a northeastern Asia point such as NRT or ICN will continue to be necessary and I will expect greater use of VLA's because their per pax CASM is so compelling.

related thought. The 787 when finally rolled out in decent numbers will be mostly deployed as a 767 replacement. If a 767 route is profitable think how much more profitable it can become with an aircraft with a 10-20% lower fuel burn per pax.
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steex
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 5:50 am

Quoting Coronado (Reply 17):
At $100+ fuel I have a hard time understanding this compulsion that in the future all flights from the US to Asia will all be point to point. If a compelling case could me made that fuel will in the future become only 10-15% of CASM I can buy this reasoning. If not simple geography dictates that a northeastern Asia point such as NRT or ICN will continue to be necessary and I will expect greater use of VLA's because their per pax CASM is so compelling.

I don't think people think flights will be point-to-point, but rather hub-to-point or hub-to-partner-hub. If an airline can fly USA hub to Asia spoke profitably, that's the place to be. If a market can't sustain a non-stop flight from the USA, the airline may well be better off leaving that market and shuttling passengers to a partner on the other side of the ocean. Some markets are commercially viable one-stop and not viable non-stop, for those markets you maintain stopping points. However, that need not always be the same city even - look at SQ and its use of many cities, both in Asia and Europe, as stopover points on the way to the USA.
 
ANA787
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 6:54 am

PDX would be a great choice as an Asian hub. Easily can use 767s and a330s to reach several Asian destinations nonstop.
PDX-PEK
PDX-NRT
PDX-ICN
PDX-KIX
PDX-PVG
PDX-TPE
PDX-HKG
 
BigGSFO
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 7:54 am

Quoting ANA787 (Reply 19):

PDX would be a great choice as an Asian hub. Easily can use 767s and a330s to reach several Asian destinations nonstop.
PDX-PEK
PDX-NRT
PDX-ICN
PDX-KIX
PDX-PVG
PDX-TPE
PDX-HKG

As much as I'd love to see all of this service from PDX, I can't see it happening. We already have NRT and it's my understanding that it performs well. I can see ICN at some point in the next few years, but other than that, we probably won't see much else for a long, long time.
 
Cubsrule
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 2:01 pm

Quoting steex (Reply 18):
Some markets are commercially viable one-stop and not viable non-stop, for those markets you maintain stopping points. However, that need not always be the same city even - look at SQ and its use of many cities, both in Asia and Europe, as stopover points on the way to the USA.

Agreed, but I'm not sure that, once the 787 and 350 are up and running, that will be true of many routes. SFO-SIN, for instance, is probably doable on a 787 with the full advertised 8200 nm range, as are SFO-MNL, SFO-BKK and SFO-CGK. I admit a couple of those will have yield issues, but the aircraft to fly them will exist.
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AAIL86
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 7:16 pm

Quoting Roseflyer (Reply 8):
There is a small chance of DFW or PHX getting SYD but I have few hopes.
DFW already has SYD service on QF.

Agreed that it would be almost impossible for PHX to get OZ service though.

[Edited 2013-02-18 11:19:08]
Next
 
MAS777
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 7:58 pm

Quoting United1 (Reply 1):

And AA starts their codeshare with Malaysia Airlines soon which opens up Southeast Asia to AA/US passengers...
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Mon Feb 18, 2013 11:01 pm

I know this is wishful thinking but I wish AA/US would open an Asia hub in TPE. Well, I mostly would like a 3rd airline to chose from when I do JFK to TPE or LAX to TPE A lot of Taiwanese I know are fed up with CI and BR but are stuck flying them for direct flights to LAX or JFK. The oligopoly (did I use the term correctly?) gives CI and BR to fix prices for their North American routes.   UA is doing SFO to TPE direct in April...maybe AA/US should start to enter the TPE market with LAX to TPE.
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 1:38 am

Quoting AeroWesty (Reply 7):
AA should be putting its own metal into HKG, where CX may carry passengers onward as JL does at NRT, as has been discussed here many times before.

Can 77W do this job from DFW?
 
LAXintl
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 1:53 am

Quoting foppishbum (Reply 24):
I know this is wishful thinking but I wish AA/US would open an Asia hub in TPE.

Without home carrier partnership it stands little chance. With BR headed to Star and CI in Skyteam, AA would be left by itself.

Sure it might one day again try Taipei (remember AA briefly flew SJC-TPE), but a hub forget it.

Anyhow - you surprisingly mentioned fares. Taiwan is known as a notoriously lower yielding market especially when compared to other Far East peers like Japan, Hong Kong, Singapore etc.
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ChazPilot
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 2:25 am

Quoting dirtyfrankd (Reply 2):
maybe that would be the answer to Oneworld's weak presence in China?

Certainly OW's China presence isn't that of *Alliance or Skyteam, but not sure it's "weak." Between CX's service to the major cities, plus KA's routes which both overlap the CX ones and add on many second and third tier cities, almost all the current destinations for biz and leisure travel in China are covered. And although its besides the point here, it's worth stating that what OW lacks in quantity currently in China, it makes up in quality.

Anyways, the real answer is to recruit a China carrier to join the OW ranks. I believe HU has been the most likely future prospect, according to the dicussions in the related forums.
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 2:37 am

As others have pointed out, you basically have a very strong UA in NRT (with ANA,) AA at NRT (through JL,) and a moderate DL with no partner at NRT but a decent hub. I see DL only reducing NRT (but keeping a strong presence, still) and increasing ICN a bit. AA will probably connect more cities to NRT but why hub it when you already have it hubbed, through JL?

And I'm not too sure about China... would China allow foreign airlines to establish hubs on their turf?
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PHX787
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 2:41 am

Quoting AAIL86 (Reply 22):
DFW already has SYD service on QF.

I wanna know how this flight is doing. IIRC this route is the loooooongest route QF flies and I'd assume it would require a lot of weight penalties for fuel.
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LAXintl
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 2:41 am

Quoting ChazPilot (Reply 27):
Between CX's service to the major cities, plus KA's routes

CX and KA might both indeed be great airlines, however neither does do too much cooperatively with its OW partners.

Also as a side note, for those coming from North America connecting via HKG is a backhaul to reach much of China.
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usflyer msp
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 2:56 am

Quoting MAS777 (Reply 23):
And AA starts their codeshare with Malaysia Airlines soon which opens up Southeast Asia to AA/US passengers.

I really don't see how MH helps AA. KUL is a useless hub for North Americans. It is at least 2-stops (usually 3) from anywhere in the US to SE Asia via KUL. That is not really competitive at all with the Chinese, Japanese, and Korean carriers.
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 3:00 am

Quoting LAXintl (Reply 16):
Its a bit like the olden days with US carriers having hubs in Europe with a cadre of 727s. As soon as small twins arrived which allowed nonstops, the 727 tag flying died.

I think the arrival of the alliances and code-sharing was even more important as it then made more sense to use your alliance partners for the tag sectors than to base your own aircraft and crews in Europe. Some of the points operated as tags from FRA by Pan Am using 727s and 737s, for example, have no nonstop service today. A few that come to mind:

Belgrade
Bucharest
Budapest
Dubrovnik
St. Petersburg
Zagreb

[Edited 2013-02-18 19:33:43]
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 3:17 am

DL noted in their earnings call for last quarter that the majority of its sagging transpac revenue performance recently hailed from its Japan routes. UA definitely has benefited from the inheritance of the Micronesia routes, although this is kind of out of scope for any future AA expansion, IMO.

Quoting commavia (Reply 9):

A HKG flight would be such a winner, and I do think it ought to go to DFW. However, I don't believe this necessarily satisfies the real missing equation: beefed up presence in mainland China. The CX codeshare, JAL JBA, and MH integration into OW can add value in the further-flung markets in Vietnam, Indonesia, Myanmar, etc.

Truthfully, in an ideal world, if AA could really get their hands on some sort of out-of-the-box strategy here by launching secondary Chinese routes from LAX/ORD/DFW (in that order of viability) then they would definitely have an edge over UA and DL. Lately, routes to cities like Nanjing, Qingdao, Chongqing, Chengdu, Shenyang, Xiamen, Hangzhou, Wuhan etc. on European and Chinese carriers (AF, KL, BA, AY, LH, CZ, CA) have become wildly popular.
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foppishbum
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 3:20 am

Quoting LAXintl (Reply 26):
Anyhow - you surprisingly mentioned fares. Taiwan is known as a notoriously lower yielding market especially when compared to other Far East peers like Japan, Hong Kong, Singapore etc.

HKG, NRT, and SIN has higher yields because the homebase airlines have more extensive routes than CI and BR. Unless one is travelling to a more rural place in China (e.g. Wuhan, Nanchang, Wenzhou, etc), most people chose to connect in NRT for PVG, PEK, or ICN and HKG for Southeast Asia. Anyway, it is frustrating because lower yield --> less frequencies --> increase in demand --> increase in fare. Maybe UA's 3x weekly SFO-TPE and (hopefully) AA's 3x weekly LAX-TPE would help bring the fares down and introduce healthier competition. A little off topic but TransAsia Airways is planning to greatly expend their medium-haul Asian routes, maybe AA would want to entice GE to join OneWorld. Again, wishful thinking... 
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usflyer msp
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 4:10 am

Quoting foppishbum (Reply 34):
HKG, NRT, and SIN has higher yields because the homebase airlines have more extensive routes than CI and BR. Unless one is travelling to a more rural place in China (e.g. Wuhan, Nanchang, Wenzhou, etc), most people chose to connect in NRT for PVG, PEK, or ICN and HKG for Southeast Asia. Anyway, it is frustrating because lower yield --> less frequencies --> increase in demand --> increase in fare. Maybe UA's 3x weekly SFO-TPE and (hopefully) AA's 3x weekly LAX-TPE would help bring the fares down and introduce healthier competition.

I am not following you here. HKG, NRT, and SIN have higher yields because they are global financial centres (banking = lots of C and F demand) while TPE is not. It has nothing to do with the size of the hub. I don't see how adding UA and AA into an already low yield market is going to help except to make fares even lower so that everyone looses alot of money. Remember when MH was flying LAX-TPE and you could regularly get tickets for $500 rt, I don't think any carrier wants that again.
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:09 am

Quoting foppishbum (Reply 34):
Maybe UA's 3x weekly SFO-TPE and (hopefully) AA's 3x weekly LAX-TPE would help bring the fares down and introduce healthier competition

I thought UA's SFO-TPE service was going to be daily?
 
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foppishbum
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:15 am

Quoting usflyer msp (Reply 35):
It has nothing to do with the size of the hub.

I'm sure most tourists visiting Asian destinations that cannot be reached with direct flights don't decide where to make the connection by the magnitude of the countries financial status. If TPE can become a bigger hub, making it more convenient to connect to inland China, South East Asia and even India with competitive fares than that of HKG, then yields to TPE would increase which would possibly lead to lowered fares.

Quoting usflyer msp (Reply 35):
Remember when MH was flying LAX-TPE and you could regularly get tickets for $500 rt, I don't think any carrier wants that again.

I knew a lot of Taiwanese who would rather fly on CI or BR than MH for TPE to LAX. I don't know why but I guess given the choice, many Taiwanese would chose to fly an airline with at least one Mandarin-speaking FA. I don't believe MH provided Mandarin-speaking FA on the TPE to LAX sector. UA already has Mandarin speaking FA working the Asian routes and I'm sure AA has Mandarin speaking FAs for the PVG route.



You're right that no carrier would want the fares to drop to $500 again but consumers usually would rather pay less and get more. If AA can figure out the balance (premium vs non-premium cabin ratio) and have TransAsia join OneWorld, I think there would be a huge potential for an AA hub in TPE. I would also caughtion you on underestimating the C demand for TPE. As far as I know, C class on CI and BR's TPE/LAX yield is usually pretty high to a point that upgrades are usually not possible.


[Edited 2013-02-18 21:27:06]
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:17 am

Quoting quiet1 (Reply 36):
I thought UA's SFO-TPE service was going to be daily?

I may have remembered the info incorrectly. Sorry!
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usflyer msp
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:26 am

Quoting foppishbum (Reply 37):
I'm sure most tourists visiting Asian destinations that cannot be reached with direct flights don't decide where to make the connection by the magnitude of the countries financial status. If TPE can become a bigger hub, making it more convenient to connect to inland China, South East Asia and even India with competitive fares than that of HKG, then yields to TPE would increase which would possibly lead to lowered fares.

I don't think we are agreeing on what yield means. In my mind, there is no way yields can increase and fares can decrease at the same time. Yield mainly has to do with the O/D traffic not connecting traffic (as connecting traffic is almost always low-yield). Tourist traffic is almost always low yield too. TPE needs more high-fare paying business passengers to be in the same echelon as NRT, HKG, SIN (and I would throw ICN in too).
 
steex
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:31 am

Quoting foppishbum (Reply 37):
I'm sure most tourists visiting Asian destinations that cannot be reached with direct flights don't decide where to make the connection by the magnitude of the countries financial status. If TPE can become a bigger hub, making it more convenient to connect to inland China, South East Asia and even India with competitive fares than that of HKG, then yields to TPE would increase which would possibly lead to lowered fares.

The point is that business traffic is high yielding, tourist traffic is traditionally lower yielding. HKG, NRT, SIN, etc, see a much larger proportion of high yielding business traffic, much of which is tied to the financial sector, compared to TPE. The flights are there because of the demand, not the other way around.

To say that yields would increase, thereby allowing lower fares, is an oxymoron. Yields are driven by fares, and you cannot extract greater yield with lower average fares without a significant change in your costs. Instead, flooding a market with seats just requires airlines to offer lower fares to fill the seats, which in turn dilutes yields significantly.
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:31 am

Quoting usflyer msp (Reply 39):

I edited and added some info regarding C cabin demands. It's actually pretty high. I can't say the same for F but C demand is pretty high.
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 5:39 am

Quoting steex (Reply 40):

Okay. That much I understand. I guess what I'm trying to say is that consumers always want to pay less regardless of business traffic or not. I'm no economist and my background is far from economics but I am 100% sure that the airline with the cheapest fare would fill their seats provided that it has acceptable services and convenience of making connections. How do airlines afford to lower the fare is up to their management team to figure out. I'm just saying that TPE could have a potential given that many Taiwanese are fed up with paying a limb and organ to go home for a visit.
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RE: AA/US - Chances Of Opening An Asia Hub?

Tue Feb 19, 2013 4:07 pm

I don't think AA will open an Asia hub Both DL and UA have slowly been flying by NRT choosing instead to offer nonstop flights from to select airports from the U.S. The problem AA has is where to launch these flights from DL is in the process of building an Asian gateway in SEA and UA has their gateway already built in SFO. Although someone suggested AA could go into PDX I don't really see that happening because they would first have to turn PDX into some sort of mini hub to start with and I think both DL and UA would do whatever they deemed necessary to keep AA out of PDX because it would probably siphon feed from both airlines operations in SEA and SFO. Which then leaves LAX and I don't think AA wants to get into the ring and fight all those Asian carriers for turf because it would delude yields in that market even further.

The biggest disappointment with this merger that I can see is the fact that US brings nothing to the table in the Asian market their small wide body fleet is already being fully utilized. Since AA probably won't be adding a lot of flights from the west coast to Asia that really leaves them with the midwest and flights to Asia from the midwest require 2 to 2.5 aircraft if AA intends to fly the route daily. So I don't see AA opening a hub but I think in the coming years as AA receives more wide bodies we will see add more non stops to major cities in Asia from either DFW or ORD
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Wed Feb 20, 2013 6:47 pm

Thanks for clearing up the viability (or lack thereof) of starting an Asia hub.

On a slightly different note, I was looking through the http://newamericanarriving.com/customers/international-benefits/ website which seems to suggest that the new AA will be flying to Hong Kong (and I don't think they're referring to service via CX). DFW seems like it would be the logical choice given that ORD already sees service through CX, or maybe even from PHL now that US is in the mix. DFW still seems like it would be the best choice...
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Wed Feb 20, 2013 6:54 pm

Quoting dirtyfrankd (Reply 44):
Thanks for clearing up the viability (or lack thereof) of starting an Asia hub.

On a slightly different note, I was looking through the http://newamericanarriving.com/customers/international-benefits/ website which seems to suggest that the new AA will be flying to Hong Kong (and I don't think they're referring to service via CX). DFW seems like it would be the logical choice given that ORD already sees service through CX, or maybe even from PHL now that US is in the mix. DFW still seems like it would be the best choice...

That is DEFINITELY bizarre, as it says:

Service to 5 destinations including Beijing, Seoul, Tokyo Narita, Tokyo Haneda, Hong Kong, and Shanghai

...and that list definitely does not count for code-shares or JBA partners.

Likely was a mistake that will be rectified soon. Nevertheless, one can dream!
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RE: AA/US - Chances Of Opening An Asia Hub?

Wed Feb 20, 2013 7:07 pm

Quoting IrishAyes (Reply 45):
Service to 5 destinations including Beijing, Seoul, Tokyo Narita, Tokyo Haneda, Hong Kong, and Shanghai

Odd, I don't see that text at all, neither is HKG on the "Where Can I Fly?" map.
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RE: AA/US - Chances Of Opening An Asia Hub?

Wed Feb 20, 2013 7:25 pm

Quoting Cubsrule (Reply 3):
Define successful. Certainly, both carriers are increasingly trying to overfly the NRT hubs, which are basically historical relics.

It is difficult to open a hub in a foreign country. Most countries have tight restrictions on flights to third countries, usually restricting them to only taking passengers brought in from the USA. Some do not allow any third country destinations. UA and DL have 5th freedom rights at NRT, allowing them to pick up passengers at NRT and carry them to third countries. I believe in exchange Japan was given the right to fly between SFO and New York. These rights were purchased by UA from PA and merged into DL from NW. The agreement has been modified and I do not know the current terms but I doubt that AA would be allowed to do something similar anywhere in Asia.

UA and to a lesser extent DL have been overflying NRT to get a non-stop premium and to reduce exposure to the decades long slump in the Japanese economy. Neither one will want to give up their position at NRT anytime soon however. AA will just have to add direct flight from the USA and continue to codeshare. There is really no place where they can build a hub in Asia.
 
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RE: AA/US - Chances Of Opening An Asia Hub?

Wed Feb 20, 2013 7:29 pm

Quoting LAXintl (Reply 26):
Anyhow - you surprisingly mentioned fares. Taiwan is known as a notoriously lower yielding market especially when compared to other Far East peers like Japan, Hong Kong, Singapore etc.

While this is true, fares from the Southern U.S. to Taiwan are surprisingly high - especially Houston and Miami.
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RE: AA/US - Chances Of Opening An Asia Hub?

Wed Feb 20, 2013 7:39 pm

Quoting AeroWesty (Reply 46):
Odd, I don't see that text at all, neither is HKG on the "Where Can I Fly?" map.

Go to the link and when the map populates click on Asia. You will see it under the first bullet point.