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LAXintl
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UPDATED: AA drops ORD-PEK/PVG, reduces NRT

Wed May 02, 2018 3:51 pm

American discontinuing service from Chicago to Beijing effective October 20, 2018.

Per VP Vasu Raja:

"The current fare environment severely limits our ability to successfully compete between Chicago and Beijing. We remain committed to China and anticipate that moving to the new Beijing airport in the future will improve the viability of the route through the additional connectivity in conjunction with our codeshare relationship with China Southern in the long run.”

AA says they will seek to dormancy waiver to retain route rights, but other airlines obviously will be free to oppose the waiver and seek reallocation of the frequencies (eg DL LAX-PEK instead).

=


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SonaSounds
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Re: AA drops ORD-PEK

Wed May 02, 2018 3:52 pm

US carriers seem to be having a harder time in China this past year. The promise land of unlimited growth finally seems to be slowing.
 
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UPlog
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Re: AA drops ORD-PEK

Wed May 02, 2018 3:55 pm

Route must be doing so terrible that even with the new relationship with CZ its not worth hanging onto.

Yes I suspect other airlines will indeed oppose AA's request at DOT and try to win the slots themselves. Regardless of todays financial performance, gaining additional slots in a limited entry market like China is not something to be ignored.
 
jayunited
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Re: AA drops ORD-PEK

Wed May 02, 2018 3:56 pm

I think the biggest announcement that was missed but is tucked away in the article is AA will relaunch ORD-HNL seasonally (winter season) utilizing a 788.
 
avi8
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Re: AA drops ORD-PEK

Wed May 02, 2018 3:59 pm

Wonder where those two 777’s will be going to.
avi8

Medschool student
 
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diverdave
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:02 pm

LAXintl wrote:
AA says they will seek to dormancy waiver to retain route rights, but other airlines obviously will be free to oppose the waiver and seek reallocation of the frequencies (eg DL LAX-PEK instead).


Yep, I imagine DL's lawyers are already at work. :box:
 
CHI787ORD
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:02 pm

avi8 wrote:
Wonder where those two 777’s will be going to.


AA operates 787s on all ORD-Asia routes
 
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janders
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:12 pm

Yes I would hope DL or even UA oppose the dormancy and seek reallocation of the frequencies.

Gotta give AA credit though. They won't endlessly nurse a loss making route.
"We make war that we may live in peace." -- Aristotle
 
jetskipper
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:17 pm

What affect if any will this have on the United PEK non-stop? I’d imagine the One World passengers will connect but UA might see a slight bump in cargo.
 
jrkmsp
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:17 pm

I'd be shocked if the DOT allowed AA to sit on these frequencies after beating Delta for the LAX-PEK frequencies they both wanted. And then I'd be shocked if Delta didn't get them for its own LAX-PEK flight, which will make that route even more of a blood-bath.
 
glbltrvlr
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:22 pm

I don't think it's just Chicago - Asia. The West Coast - Asia fares I've looked at are about 1/2 of routes to Europe.
 
flyguy84
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:23 pm

jbs2886 wrote:
jayunited wrote:
I think the biggest announcement that was missed but is tucked away in the article is AA will relaunch ORD-HNL seasonally (winter season) utilizing a 788.


"Winter season" is a stretch, its basically a few weeks.

Yes. Christmas holidays and spring break. Doesn’t even qualify as seasonal.
SFO
 
mcogator
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:25 pm

SonaSounds wrote:
US carriers seem to be having a harder time in China this past year. The promise land of unlimited growth finally seems to be slowing.

I think it has much more to do with fares being rock bottom. I can fly from LAX to multiple cities in China TOMORROW for $500, or less, round trip. Heck, even HKG is under $500 on DL on same day travel. With fuel prices rising, no doubt the US3 are bleeding on these routes. Theres only so many paid J travelers for all the capacity. I decided to go to Tokyo for 5 days leaving tomorrow, and I was able to be upgraded to J with my certs quite easily. The fare was $671 rt.
“Traveling – it leaves you speechless, then turns you into a storyteller.” – Ibn Battuta
 
jbs2886
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:27 pm

jayunited wrote:
I think the biggest announcement that was missed but is tucked away in the article is AA will relaunch ORD-HNL seasonally (winter season) utilizing a 788.


"Winter season" is a stretch, its basically a few weeks.
 
Flighty
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:29 pm

janders wrote:
Yes I would hope DL or even UA oppose the dormancy and seek reallocation of the frequencies.

Gotta give AA credit though. They won't endlessly nurse a loss making route.


Okay... so then what?

Why are they in China? Why are any US airlines there?

Dropping ORD PEK has a lot of symbolism:
* We don't think ORD China is going to improve anytime soon
* We lose symbolically to UA and we accept it
* ORD to Cancun is more of a serious business opportunity than Beijing.
* We will lose the frequencies and we don't care
* Our strategy was based on a future that never came. Our strategy was wrong all along
 
MD80MKE
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:34 pm

This move is NOT surprising at all. I've taken AA186 for three of the past four years and the load and yield have been dropping significantly. Back when it was a 777-200ER in 2015, It was a 1000+ dollars plus economy in january and it was at least 85% full the flight I took. Now AA186 has been constantly at 500 RT price for at least 10 months a year and load has been horrendous even tho it's now on a 226 seat 787-8. And it looks like the bond with CZ didn't help much. I was also wondering how PEK-DFW is doing now, which could be better given AA is the only carrier on the route.
 
CHI787ORD
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:41 pm

Flighty wrote:
janders wrote:
Yes I would hope DL or even UA oppose the dormancy and seek reallocation of the frequencies.

Gotta give AA credit though. They won't endlessly nurse a loss making route.


Okay... so then what?

Why are they in China? Why are any US airlines there?

Dropping ORD PEK has a lot of symbolism:
* We don't think ORD China is going to improve anytime soon
* We lose symbolically to UA and we accept it
* ORD to Cancun is more of a serious business opportunity than Beijing.
* We will lose the frequencies and we don't care
* Our strategy was based on a future that never came. Our strategy was wrong all along


I wouldn't say the strategy was wrong at that time. Any major US airline would be a fool for ignoring China growth over the past 20 years. And AA will still fly ORD-PVG, which has always been a stronger business market than PEK.

Aside from ORD, AA's major hubs weren't seen as geographically suitable for a transpac hub for a long time. And AA always had the challenge of competing against UA on ORD-Asia, and UA has always been in a dominant position on these routes and invested heavily in transpac early on. Until the 787s arrived, they also didn't have the right sized aircraft for their market position in ORD on these routes.

Some routes fail and some succeed. It doesn't mean AA was wrong at that time to invest heavily in their China presence.
 
zakuivcustom
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Re: AA drops ORD-PEK

Wed May 02, 2018 4:44 pm

Definitely shocking. On the other hand, I guess UA is really beating them on this route (Helps that UA is stronger at ORD overall, has CA at PEK for connection, and I would say has a stronger brand recognition).

On a flip side, though, HU never increased their ORD-PEK flight to beyond 4/wk, so maybe the ORD-China market overall is not all that great? The connection (even with the CZ codeshare) is limited compare to CA-UA or even HU at PEK.

P.S. 100% sure DL will want that PEK frequency from AA.
 
Swadian
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:07 pm

CHI787ORD wrote:
Flighty wrote:
janders wrote:
Yes I would hope DL or even UA oppose the dormancy and seek reallocation of the frequencies.

Gotta give AA credit though. They won't endlessly nurse a loss making route.


Okay... so then what?

Why are they in China? Why are any US airlines there?

Dropping ORD PEK has a lot of symbolism:
* We don't think ORD China is going to improve anytime soon
* We lose symbolically to UA and we accept it
* ORD to Cancun is more of a serious business opportunity than Beijing.
* We will lose the frequencies and we don't care
* Our strategy was based on a future that never came. Our strategy was wrong all along


I wouldn't say the strategy was wrong at that time. Any major US airline would be a fool for ignoring China growth over the past 20 years. And AA will still fly ORD-PVG, which has always been a stronger business market than PEK.

Aside from ORD, AA's major hubs weren't seen as geographically suitable for a transpac hub for a long time. And AA always had the challenge of competing against UA on ORD-Asia, and UA has always been in a dominant position on these routes and invested heavily in transpac early on. Until the 787s arrived, they also didn't have the right sized aircraft for their market position in ORD on these routes.

Some routes fail and some succeed. It doesn't mean AA was wrong at that time to invest heavily in their China presence.


Didn't AA have LAX to use as a transpacific hub?
Inland Streamliner
 
c933103
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:10 pm

janders wrote:
Yes I would hope DL or even UA oppose the dormancy and seek reallocation of the frequencies.

Gotta give AA credit though. They won't endlessly nurse a loss making route.

I doubt they would as if I counted correctly, after UA terminate GUM-PVG and does not reuse it on another flight, there are now space in the bilateral that allow US carriers add service to PEK/PVG/CAN and none of them moved forward
 
Flighty
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:12 pm

It's definitely not "great" I mean people talk about Manila or Bangkok being low yielding. Where does Beijing fit into that analysis? Somehow a tempting business opportunity? The big growth and high yields were supposed to be here now.

At some point (after 15 years of this), people need to say the Emperor has no clothes. China is an important country, but this is not a worthwhile route at a yield O/W of 200 dollars over 7,000 miles. 2-3 cents per ASM.
 
MSPNWA
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:13 pm

Surprises me that it came down to this. It must be a very poor performer considering the risk of losing the slot. Even the 788 wasn't good enough for it. AA must not see any short-term resolution of the route either. Even though China is a tough market, I expect this slot to be contested heavily by DL and maybe UA.
 
RamblinMan
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:16 pm

Yields are trash. You can get business class on the Chinese carriers to various points in Asia for under $3k. Somebody was bound to cave.
 
tphuang
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:18 pm

I am surprised not more us to china have dropped. The vfr traffic is just so low yielding. Business traffic from China side isn’t purchasing j cabin for the most part. So outside of us originated business traffic, who else generates any kind of yield? And even they might pick Chinese carriers due to the lower cost. Whenever I looked at nyc to Asia fares, I can always find sub $4000 rt fares in business class. Air china is offering $500 upgrades to j on the less busy days. Not sure how any us carrier can survive this kind of environment.

And also I don’t think there is that much vfr traffic to Beijing from Chicago.
 
soflaflyer
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:24 pm

[quote="LAXintl"]American discontinuing service from Chicago to Beijing effective October 20, 2018.

AA says they will seek to dormancy waiver to retain route rights, but other airlines obviously will be free to oppose the waiver and seek reallocation of the frequencies (eg DL LAX-PEK instead).

Looks like DL may be operating a new route to PEK from LAX soon.....
Does AA have the option to continue operating ORD-PEK by withdrawing the dormancy waiver if not approved? Since they anticipate improved connection opportunities with CZ once the new airport opens, (planned for 2019), seems a bit premature to relinquish their rights and potentially allowing a competitor into LAX vs. holding on for another year.
 
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LAXintl
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:32 pm

c933103 wrote:
I doubt they would as if I counted correctly, after UA terminate GUM-PVG and does not reuse it on another flight, there are now space in the bilateral that allow US carriers add service to PEK/PVG/CAN and none of them moved forward


Those GUM frequencies are rather useless as there only 3 of them.
US carriers don't operate longhaul routes 3x per week, but instead, seek to run routes generally on a daily basis.

Now with 7 weekly frequencies coming into play, its much more attractive option for others to pursue.
From the desert to the sea, to all of Southern California
 
zakuivcustom
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:36 pm

LAXintl wrote:
c933103 wrote:
I doubt they would as if I counted correctly, after UA terminate GUM-PVG and does not reuse it on another flight, there are now space in the bilateral that allow US carriers add service to PEK/PVG/CAN and none of them moved forward


Those GUM frequencies are rather useless as there only 3 of them.
US carriers don't operate longhaul routes 3x per week, but instead, seek to run routes generally on a daily basis.

Now with 7 weekly frequencies coming into play, its much more attractive option for others to pursue.


The only uses for that 3x frequency, IMO, is to increase the frequencies of existing flight (i.e. 1/day -> 10x/week). With yield being depressed right now, though, I doubt that's going to happen.
 
UpNAWAy
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:40 pm

8 years the route never made money... Those days are over. Market share is a meaningless stat in the airline business. Prestige flying is also a thing of the past. As Vasu pointed out you degrade the entire network by flying to unprofitable places.
 
EarlyLateORD
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:49 pm

AA has tried, and tried and tried to make money in Asia outside of Japan and the yields just aren't there. Meanwhile they are printing money on their flights to Argentina/Chile...

Adam
 
CHI787ORD
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:51 pm

ADrum23 wrote:
What about AA’s ORD-PVG and NRT routes? Are those in danger as well?


NRT definitely not. They have a JV with JL.

PVG has more business traffic than PEK but I doubt AA is making money on it either with UA and MU also flying the route.
 
ADrum23
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Re: AA drops ORD-PEK

Wed May 02, 2018 5:56 pm

What about AA’s ORD-PVG and NRT routes? Are those in danger as well?
 
c933103
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Re: AA drops ORD-PEK

Wed May 02, 2018 6:02 pm

LAXintl wrote:
c933103 wrote:
I doubt they would as if I counted correctly, after UA terminate GUM-PVG and does not reuse it on another flight, there are now space in the bilateral that allow US carriers add service to PEK/PVG/CAN and none of them moved forward


Those GUM frequencies are rather useless as there only 3 of them.
US carriers don't operate longhaul routes 3x per week, but instead, seek to run routes generally on a daily basis.

Now with 7 weekly frequencies coming into play, its much more attractive option for others to pursue.

But wasn't there a 4x weekly unused authority even before UA drop the GUM flight? That would have add up to a 1x daily?
 
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janders
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Re: AA drops ORD-PEK

Wed May 02, 2018 6:23 pm

c933103 wrote:
But wasn't there a 4x weekly unused authority even before UA drop the GUM flight? That would have add up to a 1x daily?


Per DOT as of last August, only 1 weekly Zone-1 allocation remained (excluding the CAN only frequencies), after Delta moved some of its allocations around to allow for ATL-PVG relaunch this summer.
"We make war that we may live in peace." -- Aristotle
 
LAXdude1023
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Re: AA drops ORD-PEK

Wed May 02, 2018 6:24 pm

If only UA could get that for IAH-PVG...
Next flight: IAH-NRT-IAH on NH in J
 
LHUSA
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Re: AA drops ORD-PEK

Wed May 02, 2018 6:39 pm

LAXdude1023 wrote:
If only UA could get that for IAH-PVG...


I think UA is done exposing itself to more China at the moment. The US-China market is just too saturated to take a risk like IAH-PVG.
Last edited by LHUSA on Wed May 02, 2018 6:52 pm, edited 1 time in total.
 
zakuivcustom
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Re: AA drops ORD-PEK

Wed May 02, 2018 6:51 pm

LAXdude1023 wrote:
If only UA could get that for IAH-PVG...


I thought MU planned to operated that route for awhile. I don't see UA jumping on that route either way (Even CA can't make IAH-PEK work daily).

ADrum23 wrote:
What about AA’s ORD-PVG and NRT routes? Are those in danger as well?


The only path for AA dropping ORD-NRT, IMO, is if additional US slots open up for HND. There are definitely premium demand on that route anyway.

As for ORD-PVG, well, I guess the business market is still strong enough for AA to keep that flight around.

On a side note:
https://www.bizjournals.com/chicago/new ... icago.html

Basically AA never make any money on ORD-PEK. That was before the Chinese carriers flood the market with capacity also.
 
CHI787ORD
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Re: AA drops ORD-PEK

Wed May 02, 2018 6:52 pm

LHUSA wrote:
LAXdude1023 wrote:
If only UA could get that for IAH-PVG...


I think UA is done exposing itself to more China at the moment. The US-China market is just saturated to take a risk like IAH-PVG.


More likely we see something like EWR/SFO-BLR in the next few years from UA rather than another China route.
 
chicawgo
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Re: AA drops ORD-PEK

Wed May 02, 2018 8:01 pm

zakuivcustom wrote:
Definitely shocking. On the other hand, I guess UA is really beating them on this route (Helps that UA is stronger at ORD overall, has CA at PEK for connection, and I would say has a stronger brand recognition).

On a flip side, though, HU never increased their ORD-PEK flight to beyond 4/wk, so maybe the ORD-China market overall is not all that great? The connection (even with the CZ codeshare) is limited compare to CA-UA or even HU at PEK.

P.S. 100% sure DL will want that PEK frequency from AA.


I believe HU is upping to 789
 
zakuivcustom
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Re: AA drops ORD-PEK

Wed May 02, 2018 9:15 pm

chicawgo wrote:
I believe HU is upping to 789


Seems to me HU usually goes with 788 in Winter (Oct-Mar) and 789 in Summer (Mar-Oct). On the other hand, maybe AA is really the only loser in this route b/c they can't beat UA's network and brand recognition or HU's cost.
 
WingsOfLove
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Re: AA drops ORD-PEK

Wed May 02, 2018 9:20 pm

soflaflyer wrote:
Looks like DL may be operating a new route to PEK from LAX soon


AA obviously decided possible DL competition from LAX is preferable over continuing ORD.

This shouldn't take too long and we'll know how eager DL / UA are for more China flying. What about HA?
 
ADrum23
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Re: AA drops ORD-PEK

Wed May 02, 2018 9:48 pm

zakuivcustom wrote:
LAXdude1023 wrote:
If only UA could get that for IAH-PVG...


I thought MU planned to operated that route for awhile. I don't see UA jumping on that route either way (Even CA can't make IAH-PEK work daily).

ADrum23 wrote:
What about AA’s ORD-PVG and NRT routes? Are those in danger as well?


The only path for AA dropping ORD-NRT, IMO, is if additional US slots open up for HND. There are definitely premium demand on that route anyway.

As for ORD-PVG, well, I guess the business market is still strong enough for AA to keep that flight around.

On a side note:
https://www.bizjournals.com/chicago/new ... icago.html

Basically AA never make any money on ORD-PEK. That was before the Chinese carriers flood the market with capacity also.


Gotta love this statement.......

AA’s move to end Beijing service also raises the question of how much international traffic a market like Chicago can support, even as Chicago Mayor Rahm Emanuel moves forward with plans to build out a massive new international terminal as part of a $8.5 billion, multi-year redevelopment of O’Hare.

A little over dramatic eh? Most everything else is fine, AA just faced too much competition on this route. But that's what happens when you have two hubs in an airport and you are not the primary one.

I'm surprised AA even attempted this route and that it lasted as long as it did. It wouldn't surprise me at all if AA's ORD-PVG route was cut as well.
 
Rdh3e
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Re: AA drops ORD-PEK

Wed May 02, 2018 9:53 pm

LAXintl wrote:
c933103 wrote:
I doubt they would as if I counted correctly, after UA terminate GUM-PVG and does not reuse it on another flight, there are now space in the bilateral that allow US carriers add service to PEK/PVG/CAN and none of them moved forward


Those GUM frequencies are rather useless as there only 3 of them.
US carriers don't operate longhaul routes 3x per week, but instead, seek to run routes generally on a daily basis.

Now with 7 weekly frequencies coming into play, its much more attractive option for others to pursue.

Not only that, but it's also getting the right times of day for a mainland flight. The GUM landing / departure slot times were not feasible for a mainland flight IIRC.
 
zakuivcustom
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Re: AA drops ORD-PEK

Wed May 02, 2018 9:54 pm

ADrum23 wrote:
zakuivcustom wrote:
LAXdude1023 wrote:
If only UA could get that for IAH-PVG...


I thought MU planned to operated that route for awhile. I don't see UA jumping on that route either way (Even CA can't make IAH-PEK work daily).

ADrum23 wrote:
What about AA’s ORD-PVG and NRT routes? Are those in danger as well?


The only path for AA dropping ORD-NRT, IMO, is if additional US slots open up for HND. There are definitely premium demand on that route anyway.

As for ORD-PVG, well, I guess the business market is still strong enough for AA to keep that flight around.

On a side note:
https://www.bizjournals.com/chicago/new ... icago.html

Basically AA never make any money on ORD-PEK. That was before the Chinese carriers flood the market with capacity also.


Gotta love this statement.......

AA’s move to end Beijing service also raises the question of how much international traffic a market like Chicago can support, even as Chicago Mayor Rahm Emanuel moves forward with plans to build out a massive new international terminal as part of a $8.5 billion, multi-year redevelopment of O’Hare.

A little over dramatic eh? Most everything else is fine, AA just faced too much competition on this route. But that's what happens when you have two hubs in an airport and you are not the primary one.

I'm surprised AA even attempted this route and that it lasted as long as it did. It wouldn't surprise me at all if AA's ORD-PVG route was cut as well.


Indeed, especially when they literally write this a few paragraph after that:
"American’s move to end ORD-PEK service comes on the eve of the launch of the carrier’s new nonstop service starting this week between ORD and Venice, Italy and Vancouver, Canada, new destinations the carrier hopes will prove more profitable than ORD-PEK.

Last year, AA introduced nonstop service from Chicago to Barcelona, another popular tourist destination. That route has worked well for AA so far."

So, AA will end ORD-PEK, but started both BCN and VCE from ORD. Two destinations with more total weekly flight (it's 5/wk each to BCN and VCE) than that single PEK flight.

The fact that they lose money on the routes pretty much ever since they started it said it all. You can't really blame Chinese carriers when they were barely flying to any US cities back in, let say, 2012 or 2013.
 
mattnrsa
Posts: 404
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Re: AA drops ORD-PEK

Wed May 02, 2018 9:58 pm

What are the chances of the dormancy waiver being granted? DL’s was approved a couple of times for the SEA route before it was eventually discontinued. Does that mean AA will also get an approval or are chances less likely since DL is (presumably) wanting another shot at LAX-PEK?
 
CHI787ORD
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Re: AA drops ORD-PEK

Wed May 02, 2018 10:00 pm

ADrum23 wrote:
zakuivcustom wrote:
LAXdude1023 wrote:
If only UA could get that for IAH-PVG...


I thought MU planned to operated that route for awhile. I don't see UA jumping on that route either way (Even CA can't make IAH-PEK work daily).

ADrum23 wrote:
What about AA’s ORD-PVG and NRT routes? Are those in danger as well?


The only path for AA dropping ORD-NRT, IMO, is if additional US slots open up for HND. There are definitely premium demand on that route anyway.

As for ORD-PVG, well, I guess the business market is still strong enough for AA to keep that flight around.

On a side note:
https://www.bizjournals.com/chicago/new ... icago.html

Basically AA never make any money on ORD-PEK. That was before the Chinese carriers flood the market with capacity also.


Gotta love this statement.......

AA’s move to end Beijing service also raises the question of how much international traffic a market like Chicago can support, even as Chicago Mayor Rahm Emanuel moves forward with plans to build out a massive new international terminal as part of a $8.5 billion, multi-year redevelopment of O’Hare.

A little over dramatic eh? Most everything else is fine, AA just faced too much competition on this route. But that's what happens when you have two hubs in an airport and you are not the primary one.

I'm surprised AA even attempted this route and that it lasted as long as it did. It wouldn't surprise me at all if AA's ORD-PVG route was cut as well.


Completely overdramatic. Having up to three daily flights on ORD-PEK was always unsustainable.
 
jbs2886
Posts: 1844
Joined: Wed Apr 01, 2015 9:07 pm

Re: AA drops ORD-PEK

Wed May 02, 2018 10:07 pm

zakuivcustom wrote:
ADrum23 wrote:
zakuivcustom wrote:

I thought MU planned to operated that route for awhile. I don't see UA jumping on that route either way (Even CA can't make IAH-PEK work daily).



The only path for AA dropping ORD-NRT, IMO, is if additional US slots open up for HND. There are definitely premium demand on that route anyway.

As for ORD-PVG, well, I guess the business market is still strong enough for AA to keep that flight around.

On a side note:
https://www.bizjournals.com/chicago/new ... icago.html

Basically AA never make any money on ORD-PEK. That was before the Chinese carriers flood the market with capacity also.


Gotta love this statement.......

AA’s move to end Beijing service also raises the question of how much international traffic a market like Chicago can support, even as Chicago Mayor Rahm Emanuel moves forward with plans to build out a massive new international terminal as part of a $8.5 billion, multi-year redevelopment of O’Hare.

A little over dramatic eh? Most everything else is fine, AA just faced too much competition on this route. But that's what happens when you have two hubs in an airport and you are not the primary one.

I'm surprised AA even attempted this route and that it lasted as long as it did. It wouldn't surprise me at all if AA's ORD-PVG route was cut as well.


Indeed, especially when they literally write this a few paragraph after that:
"American’s move to end ORD-PEK service comes on the eve of the launch of the carrier’s new nonstop service starting this week between ORD and Venice, Italy and Vancouver, Canada, new destinations the carrier hopes will prove more profitable than ORD-PEK.

Last year, AA introduced nonstop service from Chicago to Barcelona, another popular tourist destination. That route has worked well for AA so far."

So, AA will end ORD-PEK, but started both BCN and VCE from ORD. Two destinations with more total weekly flight (it's 5/wk each to BCN and VCE) than that single PEK flight.

The fact that they lose money on the routes pretty much ever since they started it said it all. You can't really blame Chinese carriers when they were barely flying to any US cities back in, let say, 2012 or 2013.


This misses the point. For one, BCN and VCE are summer seasonal only. PEK was year round. So its not more weekly flights; in fact, on a year round basis, it would certainly be less.

Second, a lot, if not most, routes lose money when they start. US carriers planned to lose money when they started in order to hold the slots (see the LAX fights). But, after operating some time (at an expected loss), Chinese carriers flooded US markets with capacity. Thus, when US carriers hoped to make money / lose less money, the Chinese carriers made it very difficult.

That being said, Chicago actually hasn't been flooded with Chinese carriers. There is China Eastern and Hainan, both sub-daily. The growth in other cities has certainly decreased connections, etc. however.
 
ADrum23
Posts: 1789
Joined: Fri Jul 14, 2017 11:54 pm

Re: AA drops ORD-PEK

Wed May 02, 2018 10:10 pm

zakuivcustom wrote:
ADrum23 wrote:
zakuivcustom wrote:

I thought MU planned to operated that route for awhile. I don't see UA jumping on that route either way (Even CA can't make IAH-PEK work daily).



The only path for AA dropping ORD-NRT, IMO, is if additional US slots open up for HND. There are definitely premium demand on that route anyway.

As for ORD-PVG, well, I guess the business market is still strong enough for AA to keep that flight around.

On a side note:
https://www.bizjournals.com/chicago/new ... icago.html

Basically AA never make any money on ORD-PEK. That was before the Chinese carriers flood the market with capacity also.


Gotta love this statement.......

AA’s move to end Beijing service also raises the question of how much international traffic a market like Chicago can support, even as Chicago Mayor Rahm Emanuel moves forward with plans to build out a massive new international terminal as part of a $8.5 billion, multi-year redevelopment of O’Hare.

A little over dramatic eh? Most everything else is fine, AA just faced too much competition on this route. But that's what happens when you have two hubs in an airport and you are not the primary one.

I'm surprised AA even attempted this route and that it lasted as long as it did. It wouldn't surprise me at all if AA's ORD-PVG route was cut as well.


Indeed, especially when they literally write this a few paragraph after that:
"American’s move to end ORD-PEK service comes on the eve of the launch of the carrier’s new nonstop service starting this week between ORD and Venice, Italy and Vancouver, Canada, new destinations the carrier hopes will prove more profitable than ORD-PEK.

Last year, AA introduced nonstop service from Chicago to Barcelona, another popular tourist destination. That route has worked well for AA so far."

So, AA will end ORD-PEK, but started both BCN and VCE from ORD. Two destinations with more total weekly flight (it's 5/wk each to BCN and VCE) than that single PEK flight.

The fact that they lose money on the routes pretty much ever since they started it said it all. You can't really blame Chinese carriers when they were barely flying to any US cities back in, let say, 2012 or 2013.


With UA having their primary/dominant hub at ORD, and them having a much bigger Asian presence than AA, I never understood why AA flies ORD-BEK/PVG when it can't even do routes like ORD-CDG year round.

I do seriously wonder if PVG will be cut as well, and what the future of Asian flying on AA out of ORD will be.
 
jbs2886
Posts: 1844
Joined: Wed Apr 01, 2015 9:07 pm

Re: AA drops ORD-PEK

Wed May 02, 2018 10:11 pm

ADrum23 wrote:
zakuivcustom wrote:
ADrum23 wrote:

Gotta love this statement.......

AA’s move to end Beijing service also raises the question of how much international traffic a market like Chicago can support, even as Chicago Mayor Rahm Emanuel moves forward with plans to build out a massive new international terminal as part of a $8.5 billion, multi-year redevelopment of O’Hare.

A little over dramatic eh? Most everything else is fine, AA just faced too much competition on this route. But that's what happens when you have two hubs in an airport and you are not the primary one.

I'm surprised AA even attempted this route and that it lasted as long as it did. It wouldn't surprise me at all if AA's ORD-PVG route was cut as well.


Indeed, especially when they literally write this a few paragraph after that:
"American’s move to end ORD-PEK service comes on the eve of the launch of the carrier’s new nonstop service starting this week between ORD and Venice, Italy and Vancouver, Canada, new destinations the carrier hopes will prove more profitable than ORD-PEK.

Last year, AA introduced nonstop service from Chicago to Barcelona, another popular tourist destination. That route has worked well for AA so far."

So, AA will end ORD-PEK, but started both BCN and VCE from ORD. Two destinations with more total weekly flight (it's 5/wk each to BCN and VCE) than that single PEK flight.

The fact that they lose money on the routes pretty much ever since they started it said it all. You can't really blame Chinese carriers when they were barely flying to any US cities back in, let say, 2012 or 2013.


With UA having their primary/dominant hub at ORD, and them having a much bigger Asian presence than AA, I never understood why AA flies ORD-BEK/PVG when it can't even do routes like ORD-CDG year round.

I do seriously wonder if PVG will be cut as well, and what the future of Asian flying on AA out of ORD will be.


Lol talk about dramatic. Apparently PVG is doing fine; I suspect NRT is, too. I don't anticipate AA adding Asian destinations, but I would be surprised to see a cut back. AA just won't be competitive for corporate contracts if its Asian presence is so limited (other than Cathay and JAL).
 
ADrum23
Posts: 1789
Joined: Fri Jul 14, 2017 11:54 pm

Re: AA drops ORD-PEK

Wed May 02, 2018 10:15 pm

jbs2886 wrote:
ADrum23 wrote:
zakuivcustom wrote:

Indeed, especially when they literally write this a few paragraph after that:
"American’s move to end ORD-PEK service comes on the eve of the launch of the carrier’s new nonstop service starting this week between ORD and Venice, Italy and Vancouver, Canada, new destinations the carrier hopes will prove more profitable than ORD-PEK.

Last year, AA introduced nonstop service from Chicago to Barcelona, another popular tourist destination. That route has worked well for AA so far."

So, AA will end ORD-PEK, but started both BCN and VCE from ORD. Two destinations with more total weekly flight (it's 5/wk each to BCN and VCE) than that single PEK flight.

The fact that they lose money on the routes pretty much ever since they started it said it all. You can't really blame Chinese carriers when they were barely flying to any US cities back in, let say, 2012 or 2013.


With UA having their primary/dominant hub at ORD, and them having a much bigger Asian presence than AA, I never understood why AA flies ORD-BEK/PVG when it can't even do routes like ORD-CDG year round.

I do seriously wonder if PVG will be cut as well, and what the future of Asian flying on AA out of ORD will be.


Lol talk about dramatic. Apparently PVG is doing fine; I suspect NRT is, too. I don't anticipate AA adding Asian destinations, but I would be surprised to see a cut back. AA just won't be competitive for corporate contracts if its Asian presence is so limited (other than Cathay and JAL).


Does Cathay still fly out of ORD? I can't seem to book anything (maybe I'm reading the website wrong). Also, don't they have a JV with AA?
 
User avatar
psa1011
Posts: 471
Joined: Fri Jan 14, 2011 9:37 pm

Re: AA drops ORD-PEK

Wed May 02, 2018 10:19 pm

EarlyLateORD wrote:
AA has tried, and tried and tried to make money in Asia outside of Japan and the yields just aren't there. Meanwhile they are printing money on their flights to Argentina/Chile...

Adam


Any idea why AA hasn't tried ORD-EZE/GRU?
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