Yes, they squandered the VX acquisition.
No they didn't. They eliminated a competitor and B6 is still largely a non factor out west. Despite the talk, it was never about much more than that.
#1 I would argue they overpaid for that.
#2 If they had told the DOJ that was the purpose the deal would not have been approved.
#3 They squandered the route network they bought.
HU adding ORD-CTU...... well, subsidies at work.
This route will be gone in a year. The subsidies are huge, but not huge enough.
You have more faith in the Chinese airlines than I do when it comes to expecting them to drop loss-making international routes... We've seen HU plod along with JFK-CKG and JFK-CTU despite horrendous load factors and low fares. CA did drop their SJC-PVG route, but other than that I can't think of too many examples of the Chinese carriers backing off their crazy expansion into secondary/tertiary routes.
I have trouble thinking ORD is a prestige route like JFK or LAX worthy of losing tons of cash.
If there is one phase of the airline business that is generally extremely dynamic, it's schedules! So I'm to believe that AS issued their peak summer 2019 flight schedule in late 2018 and has not felt it necessary to make hardly any changes since? And just 4 months out, March, they are still completely satisfied with frequencies, equipment, and times of practically every route and flight in their system?
I think it's a fair point that this industry has evolved to become very much about optimization of capacity. Not changing isn't optimization, so I agree that is not in step with profit techniques the other airlines are utilizing. BUT, we know why they are doing this as I have posted, so the bigger question is how much pressure for change has built over this waiting period and will we see something dramatic when it pops? Probably not, LOL.
As far as I’m concerned, they have subsidies from local governments provided to cover all losses the airline have on the route until reaching a gap value of upwards of 20 million dollars per year, and these agreements are usually effective for 3 years.
Anybody know where the money or the subsidies come from? Is it from airport fees? or tax revenue? or printing money? or what? Is it a bottomless pit or are they thinking of it as a short term investment?