Sightseer
Posts: 982
Joined: Mon Jan 12, 2015 6:04 am

Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 12:54 am

atl100million wrote:
We have indeed made progress in this discussion as the reality has sunk it that the definition of commercially viable slot times is highly subjective since AA and UA both operate China/HKG flights that are significantly outside of the window that AA seems to be pushing for.

Yet it was established upthread that AA has yet to receive any slots, let alone commercially viable ones.

atl100million wrote:
As far as the whole alliance issue, rather than attempt to argue that DL doesn't have sway over the decision, people who minimize the impact of an alliance change of allowing CZ to have joint commercial relationships with AA and DL or CZ moving to oneworld should instead be answering the question of who really wants AA to have a commercial relationship with CZ. I strongly suspect that there are a whole lot fewer parties that are interested in seeing AA join the mainland Chinese alliance party.

I strongly suspect that those parties have the most influence over a hypothetical CZ alliance switch, a switch that doesn't even need to occur for AA and CZ to partner up.
atl100million wrote:
I have no idea how all of this will play out but it is grossly naïve to think that AA can walk into CZ’s offices and negotiate a commercial arrangement that involves breaking alliance exclusivity or a move

You seem to be forgetting that AA has already spent it's own money to invest in CZ. It didn't do that for sh*ts and giggles. There would be little to no point if AA couldnt partner with CZ at the end of it all. And luckily for them, there's no need for an alliance switch.
 
commavia
Topic Author
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 12:59 am

Sightseer wrote:
I strongly suspect that those parties have the most influence over a hypothetical CZ alliance switch, a switch that doesn't even need to occur for AA and CZ to partner up.


Precisely.

I just checked the list of parties whose opinions on the AA-China Southern alliance ultimately matter to the outcome. Ed Bastian's name isn't on it. :roll:
 
atl100million
Posts: 445
Joined: Tue May 23, 2017 1:28 am

Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 1:43 am

Some people can't accept that the LAX-PEK case has little to do with gaining PEK airport slots that fit AA's definition of what is commercially viable and a whole lot more to do with AA trying to redefine alliance and commercial relationships in China which is a much bigger issue but one which ultimately determines whether LAX-PEK becomes "commercially viable in the long-term.

Add in that the route case has taken over a year so far, and AA is marching closer and closer to the opening of Daxing which will dramatically increase DL's ability to add competition to the market, something AA didn't want to happen in LAX - even though DL has repeatedly been portrayed in this thread as the party that was trying to suppress competition.

This case has little to do with DL. It has everything to do with AA trying to upend the status quo because LAX is the only one of the big 3 airports where it is still the largest carrier and Asia is the largest international region from LAX. Problem for AA is that DL and UA never said they were no longer interested in LAX to Asia and both have far greater market strength which they AND THEIR CHINESE ALLIANCE PARTNERS are willing to exercise to protect their market positions.

Just because AA suddenly decided that HKG isn't the greatest hub to serve China doesn't really matter nor does the fact that China Southern is part of Skyteam which justifiably does have limitations on codesharing outside of the alliance. Heads would blow up on a.net if people suggested that DL could walk into CX's offices and be able to codeshare alongside AA and yet that is exactly what people want to believe is realistic here.

Further, AA thinks it can overturn in the LAX market what other carriers have been unwilling or unable to achieve in other markets, including Latin America where AA is dominant and has enjoyed alliance consolidation to AA's benefit.

This case IS extraordinarily complicated and gaining actual slots is only part of AA's challenge. Few other parties have any interest in seeing AA achieve its goals with the LAX-PEK route and those goals involve breaking a number of Chinese aviation practices which were decided long before AA decided it needs to have a partner in China.

Success of the route and not just the route case literally hangs on far bigger issues and AA knows it. AA's success in the route case and everything associated with it has enormous influence on AA's position in LAX. If AA fails to maintain its market position in LAX and be the largest US airline from LAX to Asia, AA's very position in the US market is at stake.

AA chose to seek a presence in LAX-PEK which has enormous overtones and requires winning a number of political and market challenges which no US airline has ever all won.

I remain skeptical that AA can pull off all of that regardless of what the DOT wants to see with increased competition.
 
uberflieger
Posts: 1573
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 2:47 am

AA & DL inventory to (East) Asia from USA Mainland 8/3/2017

Japan
AA: 3395 seats / 14 flights
DL: 1902 seats / 7 flights

China Mainland & HKG
AA: 1750 seats / 7 flights
DL: 1556 seats / 6 flights

Korea:
DL: 963 seats / 3 flights
AA: 285 seats / 1 flight

Total:
AA: 5430 seats / 22 flights
DL: 4416 seats / 16 flights
 
jbs2886
Posts: 2220
Joined: Wed Apr 01, 2015 9:07 pm

Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 3:33 am

uberflieger wrote:
AA & DL inventory to (East) Asia from USA Mainland 8/3/2017

Japan
AA: 3395 seats / 14 flights
DL: 1902 seats / 7 flights

China Mainland & HKG
AA: 1750 seats / 7 flights
DL: 1556 seats / 6 flights

Korea:
DL: 963 seats / 3 flights
AA: 285 seats / 1 flight

Total:
AA: 5430 seats / 22 flights
DL: 4416 seats / 16 flights


That clearly includes JAL JV flights.
 
Sydscott
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 7:32 am

atl100million wrote:
Some people can't accept that the LAX-PEK case has little to do with gaining PEK airport slots that fit AA's definition of what is commercially viable and a whole lot more to do with AA trying to redefine alliance and commercial relationships in China which is a much bigger issue but one which ultimately determines whether LAX-PEK becomes "commercially viable in the long-term. .


Ah, without the PEK Airport slots there isn't a whole lot AA can do on LAX-PEK. So yeah the route case is about getting slots so AA can put bums on seats and fly there.

atl100million wrote:
Add in that the route case has taken over a year so far, and AA is marching closer and closer to the opening of Daxing which will dramatically increase DL's ability to add competition to the
market, something AA didn't want to happen in LAX - even though DL has repeatedly been portrayed in this thread as the party that was trying to suppress competition.


No it won't. To add competition to the market you'd need the US and China to expand the bilateral. Considering how long a process that is, and considering how difficult all US carriers have found it to get slots in China, do you really think the US would expand the Treaty without guarantees of slots? Do you really think that it will be a quick process to agree on an expanded bilateral?

atl100million wrote:
This case has little to do with DL. It has everything to do with AA trying to upend the status quo because LAX is the only one of the big 3 airports where it is still the largest carrier and Asia is the largest international region from LAX. Problem for AA is that DL and UA never said they were no longer interested in LAX to Asia and both have far greater market strength which they AND THEIR CHINESE ALLIANCE PARTNERS are willing to exercise to protect their market positions.


AA has built itself into being the largest Airline at LAX under its cornerstone strategy, it didn't start out like that. As Commavia and others have stated LAX forms part of an overall strategy to gain and maintain Corporate and other Contracts from the US side by having a Western Gateway and entry point into the AA system. They don't need a Chinese Partner Airline for that although they would be better off long term cultivating that relationship. (Which they're doing with China Southern)

atl100million wrote:
Just because AA suddenly decided that HKG isn't the greatest hub to serve China doesn't really matter nor does the fact that China Southern is part of Skyteam which justifiably does have limitations on codesharing outside of the alliance. Heads would blow up on a.net if people suggested that DL could walk into CX's offices and be able to codeshare alongside AA and yet that is exactly what people want to believe is realistic here.


Considering AA only started flying to HKG a year ago your words here don't make logical sense.

atl100million wrote:
This case IS extraordinarily complicated and gaining actual slots is only part of AA's challenge. Few other parties have any interest in seeing AA achieve its goals with the LAX-PEK route and those goals involve breaking a number of Chinese aviation practices which were decided long before AA decided it needs to have a partner in China.


For other parties have any interest in seeing AA achieve its goals? You could say that about any competitive route not just LAX-PEK.

atl100million wrote:
Success of the route and not just the route case literally hangs on far bigger issues and AA knows it. AA's success in the route case and everything associated with it has enormous influence on AA's position in LAX. If AA fails to maintain its market position in LAX and be the largest US airline from LAX to Asia, AA's very position in the US market is at stake.AA chose to seek a presence in LAX-PEK which has enormous overtones and requires winning a number of political and market challenges which no US airline has ever all won. I remain skeptical that AA can pull off all of that regardless of what the DOT wants to see with increased competition.


A single route isn't going to break AA at LAX. And if you're correct about Daxing allowing DL to add competition to the market the same also works in reverse to AA's advantage if its stripped of the right. So logically AA will still get there anyway if we use your logic.
 
grbauc
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 7:36 am

atl100million wrote:
We have indeed made progress in this discussion


Only in your head possible. Your walls of text turned this in to a retreading over and over. I'm trying to think of any new pertinent information that you have brought to light and can think of none.
 
atl100million
Posts: 445
Joined: Tue May 23, 2017 1:28 am

Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 1:53 pm

You can decide what is relevant to the discussion for you but there are clear facts that are larger than the discussion which you and others simply don’t want to discuss and haven't discussed because they highlight that AA’s Asia strategies really aren’t quite as successful as you want to believe they are.

The reality is that AA came to the conclusion with the US merger that it wasn’t going to get the opportunity to buy/merge with a carrier with a large Asia position as DL and UA so AA decided to grow its own. It has operated ORD to Asia for years and underperformed UA for the entire time the two have directly competed on every route. AA decided to focus on DFW as a gateway and built out service to the 5 largest markets in Asia which is commendable because AA finally had an Asia gateway where it did not directly have to compete against other US carriers – and for the most part, Asian carriers either. While AA faces little direct competition from DFW to Asia, flights are much longer than to more northern gateways which means AA’s cost to serve many of the same O&Ds that DL and UA serve are much higher.

AA realized it needed a west coast to Asia gateway because so much of the Asia market is to/from the west coast. Timing seemed to be on AA’s side because Latin America – esp. Brazil – was weak so AA pulled capacity from S. America and redeployed it to Asia. Feel free to look at the traffic reports but for many quarters, there is almost a one for one shift of capacity from Latin America to Asia on AA’s network. Problem is that DL and UA never indicated that they were willing to walk away from LAX to Asia and, in fact, have both indicated they want to grow their operations and have gained space to do so including access to the TBIT for DL with incentives by LAWA for DL to add international flights at LAX. It is naïve to think that DL and UA won’t grow their international operations in markets that are directly competitive with AA. The LAX-PEK route case is testament to DL's intention to compete in the LAX to China market; given that DL has already become the largest US airline in the LAX-PVG market despite starting it last, AA faces an uphill battle in gaining the upper hand to PEK.

Despite the fact that AA is the smallest US global carrier to Asia, it has built its Asia strategy around two of its three gateways where DL and/or UA have historically been stronger to Asia than AA has been. In contrast, DL and UA’s largest gateways not just to Asia but to other parts of the world are from gateways where they are the largest US airline.

On the Asia side, AA secured a joint venture to Japan but AA’s size is basically unchanged and DL and UA both outperform AA in average and total revenue as well as size. AA and CX chose to be a part of the same alliance and AA has indeed made good progress in building HKG where UA has long had a dominant position among US carriers.

But to mainland China, the big 3 Chinese carriers aligned with DL and UA and AA finds itself as the odd man out. In order to make LAX-PEK and ultimately all of its mainland China routes perform financially comparable to DL and UA, AA has to have a partner on the China end.

I have no idea how AA’s bid to gain a China partner will work out but it is grossly naïve to believe that the market will simply roll over and accommodate AA because it finally woke up and realized it needed a Chinese partner even after contractual obligations had been implemented that divide up the China market such that AA and CX have a privileged position at HKG while DL and UA split the largest mainland Chinese carriers. Add in that alliances by nature have limits on codesharing outside of the alliance and that HKG and CAN are very close together and there are indeed a whole lot of parties that would be harmed by AA’s desire to jump into existing alliance arrangements or move CZ into oneworld where AA can then freely negotiate its own commercial arrangements.

Perhaps more baffling is that AA and so many people here can’t accept that other carriers DO accept that they can’t be all things to all people and AA does have significant structural advantages in other markets which other carriers don’t try to think they can break down just because they believe a market is strategically necessary for them. I am sure that DL and UA could both easily argue that S. Florida to Latin America is strategically necessary for them – and no one would be very surprised based on the current marketplace – if they failed miserably and would be hit by a ton of bricks in their attempts to grow into that market. Somehow, though, we are supposed to believe that AA is going to succeed in the LAX to Asia market just because it decided to declare LAX to Asia one of its key strategies.

Might I remind you that, IIRC, NYC is also part of AA’s cornerstone strategy and yet AA’s market position not only in NYC has fallen for years, including since the US merger in not just the NYC market as a whole but also in the JFK-LAX market where AA was once the largest carrier. Now, AA is #3 out of 3 in JFK to LAX in both revenue and passengers considering just JFK to LAX and #4 out of 4 in the EWR/JFK to LAX combined market. I can’t imagine how anyone would call a market strategy successful that included losing market share and revenue advantage. There are plenty of companies that have implemented strategies that did not turn out successfully. Those of us who are willing to take the 40K view of LAX to Asia rightfully question how AA is going to achieve anything more than a presence in a market where larger competitors in key markets ultimately erase whatever advantage AA thought it was gaining by entering the market, specifically LAX-PEK.

Of course, AA might realize that its entire presence at LAX is at risk if it can't succeed in the LAX -Asia market while other carriers can and will grow in markets where at least AA, DL and UA can all serve successfully and other airlines can also start LAX to Asia.

For now, AA hasn’t even got slots it can swap with China Southern or any other party which is the first step. Even those who don’t want to acknowledge the other issues I raise can’t ignore that AA has been unable to get slots while DL which started the route proceeding has been able to secure slots and says its partner is willing to swap them.

I’d be happy for someone to tell me when and how AA will get slots and take a guess as to when they will be able to start the LAX-PEK route.
 
winginit
Posts: 2627
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 2:54 pm

atl100million wrote:
The reality is that AA came to the conclusion with the US merger that it wasn’t going to get the opportunity to buy/merge with a carrier with a large Asia position as DL and UA so AA decided to grow its own.


AA came to that conclusion long before the US merger. It was an obvious one.

atl100million wrote:
It has operated ORD to Asia for years and underperformed UA for the entire time the two have directly competed on every route. AA decided to focus on DFW as a gateway and built out service to the 5 largest markets in Asia which is commendable because AA finally had an Asia gateway where it did not directly have to compete against other US carriers – and for the most part, Asian carriers either. While AA faces little direct competition from DFW to Asia, flights are much longer than to more northern gateways which means AA’s cost to serve many of the same O&Ds that DL and UA serve are much higher.


We're going back to stating what is painfully obvious to even an amateur enthusiast. Thank you? I guess?

atl100million wrote:
AA realized it needed a west coast to Asia gateway because so much of the Asia market is to/from the west coast. Timing seemed to be on AA’s side because Latin America – esp. Brazil – was weak so AA pulled capacity from S. America and redeployed it to Asia. Feel free to look at the traffic reports but for many quarters, there is almost a one for one shift of capacity from Latin America to Asia on AA’s network. Problem is that DL and UA never indicated that they were willing to walk away from LAX to Asia and, in fact, have both indicated they want to grow their operations and have gained space to do so including access to the TBIT for DL with incentives by LAWA for DL to add international flights at LAX. It is naïve to think that DL and UA won’t grow their international operations in markets that are directly competitive with AA. The LAX-PEK route case is testament to DL's intention to compete in the LAX to China market; given that DL has already become the largest US airline in the LAX-PVG market despite starting it last, AA faces an uphill battle in gaining the upper hand to PEK.


More painfully obvious statements that no one is or would argue against.

atl100million wrote:
Despite the fact that AA is the smallest US global carrier to Asia, it has built its Asia strategy around two of its three gateways where DL and/or UA have historically been stronger to Asia than AA has been. In contrast, DL and UA’s largest gateways not just to Asia but to other parts of the world are from gateways where they are the largest US airline.

On the Asia side, AA secured a joint venture to Japan but AA’s size is basically unchanged and DL and UA both outperform AA in average and total revenue as well as size. AA and CX chose to be a part of the same alliance and AA has indeed made good progress in building HKG where UA has long had a dominant position among US carriers.


We're still in painfully obvious territory. This recap is entirely unnecessary. We know, and no one is arguing to the contrary.

atl100million wrote:
But to mainland China, the big 3 Chinese carriers aligned with DL and UA and AA finds itself as the odd man out. In order to make LAX-PEK and ultimately all of its mainland China routes perform financially comparable to DL and UA, AA has to have a partner on the China end.


That might be true, and AA appears to have come to this conclusion as well given their equity stake, but for reasons that have been hashed out already the existing TPAC climate is such that the value of a Chinese partner is currently overvalued given flow yields.

atl100million wrote:
I have no idea how AA’s bid to gain a China partner will work out but it is grossly naïve to believe that the market will simply roll over and accommodate AA because it finally woke up and realized it needed a Chinese partner even after contractual obligations had been implemented that divide up the China market such that AA and CX have a privileged position at HKG while DL and UA split the largest mainland Chinese carriers. Add in that alliances by nature have limits on codesharing outside of the alliance and that HKG and CAN are very close together and there are indeed a whole lot of parties that would be harmed by AA’s desire to jump into existing alliance arrangements or move CZ into oneworld where AA can then freely negotiate its own commercial arrangements.


I think you overestimate SkyTeam's 'hygiene rules', which restrict the percentage of ASMs that can be used for codeshare outside of the alliance. CZ should have no alliance issues whatsoever in building a robust codeshare network with AA.

atl100million wrote:
Perhaps more baffling is that AA and so many people here can’t accept that other carriers DO accept that they can’t be all things to all people and AA does have significant structural advantages in other markets which other carriers don’t try to think they can break down just because they believe a market is strategically necessary for them. I am sure that DL and UA could both easily argue that S. Florida to Latin America is strategically necessary for them – and no one would be very surprised based on the current marketplace – if they failed miserably and would be hit by a ton of bricks in their attempts to grow into that market. Somehow, though, we are supposed to believe that AA is going to succeed in the LAX to Asia market just because it decided to declare LAX to Asia one of its key strategies.


Please state your definition of success in the LAX to Asia market. Without it we're just running in circles here.

atl100million wrote:
Might I remind you that, IIRC, NYC is also part of AA’s cornerstone strategy and yet AA’s market position not only in NYC has fallen for years, including since the US merger in not just the NYC market as a whole but also in the JFK-LAX market where AA was once the largest carrier. Now, AA is #3 out of 3 in JFK to LAX in both revenue and passengers considering just JFK to LAX and #4 out of 4 in the EWR/JFK to LAX combined market. I can’t imagine how anyone would call a market strategy successful that included losing market share and revenue advantage. There are plenty of companies that have implemented strategies that did not turn out successfully. Those of us who are willing to take the 40K view of LAX to Asia rightfully question how AA is going to achieve anything more than a presence in a market where larger competitors in key markets ultimately erase whatever advantage AA thought it was gaining by entering the market, specifically LAX-PEK.


Again, you don't know AA's definition of success in the LAX Asia market as they've never stated it. As for gauging that success - that comes down to shareholders. not internet enthusiasts. Sorry, but Doug Parker doesn't care what you think.

atl100million wrote:
Of course, AA might realize that its entire presence at LAX is at risk if it can't succeed in the LAX -Asia market while other carriers can and will grow in markets where at least AA, DL and UA can all serve successfully and other airlines can also start LAX to Asia.


That's absurd. AA runs a robust domestic LAX operation that is hardly dependent on international flow.

atl100million wrote:
For now, AA hasn’t even got slots it can swap with China Southern or any other party which is the first step. Even those who don’t want to acknowledge the other issues I raise can’t ignore that AA has been unable to get slots while DL which started the route proceeding has been able to secure slots and says its partner is willing to swap them.

I’d be happy for someone to tell me when and how AA will get slots and take a guess as to when they will be able to start the LAX-PEK route.


I've told you what... three times now how it will likely unfold based on my experience? Whether or not you want to accept that as the likely outcome is irrelevant.
 
atl100million
Posts: 445
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 5:21 pm

While some have seen this discussion as simply about AA getting a slot that AA deems commercially viable, the larger part of the case involves AA’s ability to compete effectively in the LAX to Asia market, of which LAX-PEK is simply one part.
AA’s goals for LAX and its system are well-established given that American Airlines Group is a for-profit US corporation. As a US airline, it is required to file enormous amounts of data that detail how well it does not only by global region but also at the individual market level.

LAX might well be a critical piece of AA’s system strategies, but it wasn’t long ago that they said that LAX was break even at best for them. Granted that was before bankruptcy and the merger but AA has poured a lot of money to hold onto its position in LAX. While they chose the A321T strategy which cut costs, they also have lost share in their marquee JFK-LAX route and it is very doubtful that they make anywhere near as much money as B6 and DL who have grown at AA’s expense. AA has simply turned its strategic focus at LAX to Asia but there is no assurance – and a whole lot of reason for doubt – about AA’s ability to be a viable long-term player in yet another international market where other carriers have a keen strategic focus but also have some of the very same advantages that have relegated AA to a very distant number two position in Chicago to Asia. If AA even makes money flying ORD to Asia, UA surely makes far more. Given that AA dominates its largest gateways to Latin America, it is all the more puzzling how people don’t realize the risk that AA is taking by building its Asia strategy around two highly competitive markets where AA has yet to demonstrate that it can even reach market parity in revenue performance with a joint venture, longer market history, and more domestic feed.

And even if AA is able to achieve a codesharing relationship with CZ – either exclusively as part of oneworld or shared with DL as part of Skyteam – AA still has to compete against DL and UA in China who have existing codeshare partnerships that are not at risk of changing. AA’s alliance strategy is at best to push into relationships which DL and UA have long-established. Further, we have heard nothing about what AA is willing to pay to gain a partnership or give up in terms of its China presence or partnership in order to gain a presence which it needs but which very likely benefits few if any other parties. DL and other Skyteam airlines are going to continue to feed traffic to CZ but I’m sure they all would be willing to consider the possibility of “sharing CZ” if AA and CX were willing to open their relationship up to Skyteam airlines. Given the clear antitrust concerns which even westerners can see with even considering allowing CZ and CX in the same alliance, any proposed alliance between AA and CZ most likely is not going to be exclusive which again raises the question of what AA gains if every move it makes is in markets that other carriers and alliances serve.
And the most basic question of how AA is going to gain slots has not been answered. If AA doesn’t even have one, the question has to be asked why they didn’t get any at the last IATA slot conference. The most likely explanation is that AA was offered a poor slot pair but they rejected it because it didn’t meet their version of “commercially viable.” Now that they are working on a partner with whom they MIGHT be able to swap a slot, they don’t have one. Given that the next IATA slot conference is for spring 2018, at best AA might gain a one year advantage before Daxing airport opens and other carriers – potentially including DL and UA and their partners – add service. AA made such a big deal in its route application about DL’s SEA hub because it really doesn’t want to have to compete against DL to Asia where AA very much knows that both DL and UA outperform AA to Asia. UA just didn’t happen to be part of this route case.

We can certainly pause the conversation until AA gains a slot or has a definite approval for any part of this whole thing but I still find it hard to believe that AA can achieve a long-term profitable presence in the LAX to Beijing market, let alone LAX to Asia against a host of foreign airlines plus DL and UA.
 
winginit
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Re: AA Applies For LAX-PEK

Tue Jul 18, 2017 10:31 pm

atl100million wrote:
And the most basic question of how AA is going to gain slots has not been answered. If AA doesn’t even have one, the question has to be asked why they didn’t get any at the last IATA slot conference.


The likely outcome here has now been discussed to exhaustion, so let's close the book on it so we don't need to waste anymore time reading your absurdly long and often painfully obvious summary posts.

atl100million wrote:
We can certainly pause the conversation until AA gains a slot or has a definite approval for any part of this whole thing


Yes. Please stop.

atl100million wrote:
I still find it hard to believe that AA can achieve a long-term profitable presence in the LAX to Beijing market, let alone LAX to Asia against a host of foreign airlines plus DL and UA.


And finally, after all of that typing, we have an opinion that can be contested and thus is worth discussing. Personally? I don't disagree! Although many do, and have good facts and context to back their contrasting assertions.
 
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diverdave
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 3:53 pm

commavia wrote:
diverdave wrote:
I cannot imagine that DL would end up moving NRT-PVG to LAX-PEK.


I think it's a virtual certainty that Delta will move NRT-PVG to a nonstop U.S.-China route as soon as AA's LAX-PEK authority is resolved one way or another. To me, the only question is whether that nonstop U.S.-China route is LAX-PEK or ATL-PVG. Of the two, though, I think the chances are better than 50/50 that it's LAX-PEK over ATL-PVG. As the data from AA's filings in the LAX-PEK route case highlighted, the NRT-PVG route truly is, at this point, largely meaningless to U.S. travelers - and I think Delta knows it, too. In 2015, over 2/3 of the traffic on the flight was intra-Asia (and that was before Delta cut JFK/MSP-NRT). As said, I think Delta is just exhausting its last and final option to try and lock up these final daily China Zone 1 frequencies by prying them away from AA and if (when, I suspect) it fails, Delta will quickly go to the obvious Plan B.


So at a quick look, it appears you are correct that Delta will be moving NRT-PVG to a nonstop US-China route. It will be ATL-PVG and not LAX-PEK.

http://news.delta.com/delta-expand-trans-pacific-service-nonstop-shanghai-atlanta-flight

The release does not specifically refer to NRT-PVG being dropped, but where else would the slot come from? (That is the speculation on FlyerTalk.)

http://www.flyertalk.com/forum/delta-air-lines-skymiles/1854974-goodbye-nrt-pvg-hell-atl-pvg.html

David
 
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Polot
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 3:57 pm

diverdave wrote:

The release does not specifically refer to NRT-PVG being dropped, but where else would the slot come from?

NRT-PVG is the only route (AFAIK) that DL can freely move without having to ask the DOT first. DL are not going to highlight the fact that they are dropping NRT-PVG in their press release though when talking about new service. Airlines generally don't promote route cancellations (especially in a case like this where NRT-PVG is a route that doesn't even touch the US, so why bother).
 
atl100million
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 5:34 pm

Polot wrote:
diverdave wrote:

The release does not specifically refer to NRT-PVG being dropped, but where else would the slot come from?

NRT-PVG is the only route (AFAIK) that DL can freely move without having to ask the DOT first. DL are not going to highlight the fact that they are dropping NRT-PVG in their press release though when talking about new service. Airlines generally don't promote route cancellations (especially in a case like this where NRT-PVG is a route that doesn't even touch the US, so why bother).


probably has more to do with the fact that DL's ATL-PVG route is subject to government approval, don't you think?
 
winginit
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 5:37 pm

Polot wrote:
diverdave wrote:

The release does not specifically refer to NRT-PVG being dropped, but where else would the slot come from?

NRT-PVG is the only route (AFAIK) that DL can freely move without having to ask the DOT first. DL are not going to highlight the fact that they are dropping NRT-PVG in their press release though when talking about new service. Airlines generally don't promote route cancellations (especially in a case like this where NRT-PVG is a route that doesn't even touch the US, so why bother).


The internal corp comm communication, which has already been latched onto by various media outlets, explicitly states that NRT-PVG is being dropped
 
ldvaviation
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 5:50 pm

winginit wrote:
The likely outcome here has now been discussed to exhaustion, so let's close the book on it so we don't need to waste anymore time reading your absurdly long and often painfully obvious summary posts.


Some posts parody themselves.

Brevity is often the best defense against self-parody.
 
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Polot
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 5:51 pm

atl100million wrote:
Polot wrote:
diverdave wrote:

The release does not specifically refer to NRT-PVG being dropped, but where else would the slot come from?

NRT-PVG is the only route (AFAIK) that DL can freely move without having to ask the DOT first. DL are not going to highlight the fact that they are dropping NRT-PVG in their press release though when talking about new service. Airlines generally don't promote route cancellations (especially in a case like this where NRT-PVG is a route that doesn't even touch the US, so why bother).


probably has more to do with the fact that DL's ATL-PVG route is subject to government approval, don't you think?

If that was the reason they don't mention the shift then they wouldn't have publicly announced ATL-PVG in the first place ;)

Again, airlines generally don't promote route closures in highly public releases. That is PR 101. You promote good news, not something that can been seen as a negative. And if you are required to release negative news you do so at the most opportune time where it would get the least media coverage (i.e., Friday afternoons).
 
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spinotter
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 6:38 pm

grbauc wrote:
atl100million wrote:
We have indeed made progress in this discussion


Only in your head possible. Your walls of text turned this in to a retreading over and over. I'm trying to think of any new pertinent information that you have brought to light and can think of none.


Hey, guy - Because I think only a male would write such a thing. Females largely are kinder. What is the matter with you that you would address another hman being in that way? Just wondering...
 
b377
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 7:18 pm

According to Airlineinfo.com DL has filed a motion with the DOT to transfer 6 of the 7 NRT-PGV frequencies they have to ATL-PGV with no approval needed. On the otherhand 1 frequecy apparently was awarded under different rules and will require approval to make this new service daily.
 
grbauc
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Re: AA Applies For LAX-PEK

Wed Jul 19, 2017 7:23 pm

b377 wrote:
According to Airlineinfo.com DL has filed a motion with the DOT to transfer 6 of the 7 NRT-PGV frequencies they have to ATL-PGV with no approval needed. On the otherhand 1 frequecy apparently was awarded under different rules and will require approval to make this new service daily.


I've been wondering when this would happen now we know.
 
incitatus
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Re: AA Applies For LAX-PEK

Thu Jul 20, 2017 1:25 am

winginit wrote:

And finally, after all of that typing, we have an opinion that can be contested and thus is worth discussing. Personally? I don't disagree! Although many do, and have good facts and context to back their contrasting assertions.


No number of long paragraphs can hide the fact that DL has more obstacles to grow LAX-Asia than AA has. And some are DL's own making, like the SEA hub.
I do not consume Murdoch products including the Wall Street Journal
 
commavia
Topic Author
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 12:38 am

From AA's 2Q17 earnings call this morning comes, I'd say, fairly definitive evidence of what's going on related to the subject that generated so much (inane) discussion a week ago:

"It's Steve [Johnson, AA EVP-Corporate Affirs]. We actually haven't closed the transaction yet. We're waiting for some final government approvals related to the slot exchange. We expect to get those, I was going to say this month, but in early August and can close the transaction then. And I actually haven't done the calculation, but it's sort of 3%-ish of China Southern."
 
WPvsMW
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 12:50 am

b377 wrote:
According to Airlineinfo.com DL has filed a motion with the DOT to transfer 6 of the 7 NRT-PGV frequencies they have to ATL-PGV with no approval needed. On the otherhand 1 frequecy apparently was awarded under different rules and will require approval to make this new service daily.


PGV (Pitt Greenvile)?? You mean PVG. Shanghai/Pudong
 
ldvaviation
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 2:16 am

commavia wrote:
From AA's 2Q17 earnings call this morning comes, I'd say, fairly definitive evidence of what's going on related to the subject that generated so much (inane) discussion a week ago:

"It's Steve [Johnson, AA EVP-Corporate Affirs]. We actually haven't closed the transaction yet. We're waiting for some final government approvals related to the slot exchange. We expect to get those, I was going to say this month, but in early August and can close the transaction then. And I actually haven't done the calculation, but it's sort of 3%-ish of China Southern."


It is almost like AA (Steve Johnson) is trolling a specific person on airliners.net...
 
atl100million
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 12:52 pm

seriously?

Steve Johnson could care less about what anyone on a.net thinks.

DL's whole purpose in challenging the ruling is as much at this point in making AA fly the route or force the DOT to reconsider its route decision. All of the consumer benefits the DOT has cited mean nothing if AA doesn't fly the route.

Given that AA's 3rd quarter guidance is for weakening RASM growth, throwing in yet another slow to spool up Pacific route will put pressure on AA's bottom line.

it's also interesting that AA is now talking about a slot exchange when they argued they never had one before.

Given that the new Peking airport will likely bring new slots, DL will likely start the route within not much more than a year anyway. Even with its own LAX-PEK route, AA will just be in a position of competing against DL and/or UA.

and DL will also likely proceed with its own LAX-Asia expansion.
 
SFOtoORD
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 3:47 pm

atl100million wrote:
seriously?

Steve Johnson could care less about what anyone on a.net thinks.

DL's whole purpose in challenging the ruling is as much at this point in making AA fly the route or force the DOT to reconsider its route decision. All of the consumer benefits the DOT has cited mean nothing if AA doesn't fly the route.

Given that AA's 3rd quarter guidance is for weakening RASM growth, throwing in yet another slow to spool up Pacific route will put pressure on AA's bottom line.

it's also interesting that AA is now talking about a slot exchange when they argued they never had one before.

Given that the new Peking airport will likely bring new slots, DL will likely start the route within not much more than a year anyway. Even with its own LAX-PEK route, AA will just be in a position of competing against DL and/or UA.

and DL will also likely proceed with its own LAX-Asia expansion.


How long do you plan to drone on with half page posts that make the same point over and over? And now that you might be wrong about DL winning their appeal you relent to debating future slots. Would be great to have some actual news or posts that don't repeat the last 50 posts.
 
atl100million
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 4:04 pm

SFOtoORD wrote:
atl100million wrote:
seriously?

Steve Johnson could care less about what anyone on a.net thinks.

DL's whole purpose in challenging the ruling is as much at this point in making AA fly the route or force the DOT to reconsider its route decision. All of the consumer benefits the DOT has cited mean nothing if AA doesn't fly the route.

Given that AA's 3rd quarter guidance is for weakening RASM growth, throwing in yet another slow to spool up Pacific route will put pressure on AA's bottom line.

it's also interesting that AA is now talking about a slot exchange when they argued they never had one before.

Given that the new Peking airport will likely bring new slots, DL will likely start the route within not much more than a year anyway. Even with its own LAX-PEK route, AA will just be in a position of competing against DL and/or UA.

and DL will also likely proceed with its own LAX-Asia expansion.


How long do you plan to drone on with half page posts that make the same point over and over? And now that you might be wrong about DL winning their appeal you relent to debating future slots. Would be great to have some actual news or posts that don't repeat the last 50 posts.


Since most of what is said on a.net is recycled over and over again, the only difference between what I say and others have said regarding this topic is perspective.

I have no problem whatsoever if AA operates LAX-PEK... but they have too actually do it, not sit on it as commavia suggested. Given that AA is losing money on its Pacific operations, there is plenty of reason to believe that AA does not want to start another new route going into the winter. It is also no surprise that AA isn't interested in starting a new route where it will have to compete against DL or UA. The DOT can't protect AA from competition and there is ample evidence to show that AA underperforms its peers in direct competition.

Again, the point is simply that AA has to figure out how to start LAX-PEK. The fact that AA brought up the issue says they know full well what is at stake in gaining access.
 
SFOtoORD
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 4:47 pm

atl100million wrote:
SFOtoORD wrote:
atl100million wrote:
seriously?

Steve Johnson could care less about what anyone on a.net thinks.

DL's whole purpose in challenging the ruling is as much at this point in making AA fly the route or force the DOT to reconsider its route decision. All of the consumer benefits the DOT has cited mean nothing if AA doesn't fly the route.

Given that AA's 3rd quarter guidance is for weakening RASM growth, throwing in yet another slow to spool up Pacific route will put pressure on AA's bottom line.

it's also interesting that AA is now talking about a slot exchange when they argued they never had one before.

Given that the new Peking airport will likely bring new slots, DL will likely start the route within not much more than a year anyway. Even with its own LAX-PEK route, AA will just be in a position of competing against DL and/or UA.

and DL will also likely proceed with its own LAX-Asia expansion.


How long do you plan to drone on with half page posts that make the same point over and over? And now that you might be wrong about DL winning their appeal you relent to debating future slots. Would be great to have some actual news or posts that don't repeat the last 50 posts.


Since most of what is said on a.net is recycled over and over again, the only difference between what I say and others have said regarding this topic is perspective.

I have no problem whatsoever if AA operates LAX-PEK... but they have too actually do it, not sit on it as commavia suggested. Given that AA is losing money on its Pacific operations, there is plenty of reason to believe that AA does not want to start another new route going into the winter. It is also no surprise that AA isn't interested in starting a new route where it will have to compete against DL or UA. The DOT can't protect AA from competition and there is ample evidence to show that AA underperforms its peers in direct competition.

Again, the point is simply that AA has to figure out how to start LAX-PEK. The fact that AA brought up the issue says they know full well what is at stake in gaining access.


You really can't help yourself can you?
 
ldvaviation
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 5:01 pm

atl100million wrote:
seriously?

Steve Johnson could care less about what anyone on a.net thinks.

[...] It's also interesting that AA is now talking about a slot exchange when they argued they never had one before.

Given that the new Peking airport will likely bring new slots, DL will likely start the route within not much more than a year anyway. Even with its own LAX-PEK route, AA will just be in a position of competing against DL and/or UA.

and DL will also likely proceed with its own LAX-Asia expansion.


I used the word "almost," as in "not literally."

It seems you have a lot to learn about adverbs, nuance, and bi-laterals. More slots at the new Beijing airport will not automatically mean more Zone 1 flights for US airlines.

And, just because Steve Johnson referred to the transaction as a "slot exchange" does not mean they are actually "exchanging" a slot for another slot. He may have had something else in mind, for example, exchanging money for a slot.

As to DL's own LAX-Asia expansion, nothing is stopping them from adding more Asia flights now, other than declining passenger numbers, unit revenue, and yields to Asia.
 
atl100million
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 5:38 pm

I'd love to see the data you have to back up your last statement.

As for your next to last paragraph, we've been told for years that slots can't be sold in China. Now that it seems like AA needs to do that, apparently it is ok. I have no idea what is actually permitted or not - but I do know that you can't bend and change the rules to suit your own needs even in China.

And the rest of what you have to say simply reinforces what AA has tried to do from the beginning which is to gain access to a route which no one else can serve - because the evidence really is there that AA doesn't do well over the Pacific when it has to compete against DL or UA. That is also true to continental Europe but that is another story.

AA may gain access to the LAX-PEK route but it won't gain a monopoly and even if it gains CZ as a partner, it still will have to compete with DL and UA at least as equals and in all likelihood with disadvantages compared to what they built.

As hard as it is for you or anyone to accept, DL and UA never said they were going to roll over and let AA build a LAX to Asia gateway just because they didn't have the forethought to build one in a market which other carriers aren't also interested in.
 
ldvaviation
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 7:41 pm

atl100million wrote:
I'd love to see the data you have to back up your last statement.


Refer to the regional numbers in the Q2 earnings report.

atl100million wrote:
As for your next to last paragraph, we've been told for years that slots can't be sold in China. Now that it seems like AA needs to do that, apparently it is ok. I have no idea what is actually permitted or not - but I do know that you can't bend and change the rules to suit your own needs even in China.


You have no idea what is permitted. Yet, you know that the rules (which you don't know) cannot be broken.

atl100million wrote:
And the rest of what you have to say simply reinforces what AA has tried to do from the beginning which is to gain access to a route which no one else can serve - because the evidence really is there that AA doesn't do well over the Pacific when it has to compete against DL or UA. That is also true to continental Europe but that is another story.


So what? For years, Northwest (Delta) took advantage of the regulatory scheme to carry more connecting traffic to Asia, relative to its domestic market share. It is how airlines compete. Even Delta and United are not averse to claiming a structural disadvantage in order to win a route case. That is how Delta got the last HND authority for MSP.

atl100million wrote:
AA may gain access to the LAX-PEK route but it won't gain a monopoly and even if it gains CZ as a partner, it still will have to compete with DL and UA at least as equals and in all likelihood with disadvantages compared to what they built.

As hard as it is for you or anyone to accept, DL and UA never said they were going to roll over and let AA build a LAX to Asia gateway just because they didn't have the forethought to build one in a market which other carriers aren't also interested in.


Well, you wouldn't know it from what is happening. United gave up 4 gates at T6 to American (LAWA). Even before that, it gave up the United Express facility. American took it over and now it stands in the way of a future T9.

It's been almost a year since AA started LAX-HKG. Still no response from United and Delta.

More to the point, if Delta thought it could compete with American and everyone else on this route, it would have already started the flight with its slots and transferable route authorities. That it hasn't suggests that Delta also wants to be the only US airline on the route for obvious financial reasons.

And, for the record, we've heard this "roll over" argument before. It is a rather puerile argument, especially when it is accompanied by the claim that one airline is going to put the other airline out of business. For example, there was a poster here (now banned?) who once ranted that Delta was going to put JAL out of business. You are starting to sound a lot like him.
 
jfk777
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 8:58 pm

ldvaviation wrote:
atl100million wrote:
I'd love to see the data you have to back up your last statement.


Refer to the regional numbers in the Q2 earnings report.

atl100million wrote:
As for your next to last paragraph, we've been told for years that slots can't be sold in China. Now that it seems like AA needs to do that, apparently it is ok. I have no idea what is actually permitted or not - but I do know that you can't bend and change the rules to suit your own needs even in China.


You have no idea what is permitted. Yet, you know that the rules (which you don't know) cannot be broken.

atl100million wrote:
And the rest of what you have to say simply reinforces what AA has tried to do from the beginning which is to gain access to a route which no one else can serve - because the evidence really is there that AA doesn't do well over the Pacific when it has to compete against DL or UA. That is also true to continental Europe but that is another story.


So what? For years, Northwest (Delta) took advantage of the regulatory scheme to carry more connecting traffic to Asia, relative to its domestic market share. It is how airlines compete. Even Delta and United are not averse to claiming a structural disadvantage in order to win a route case. That is how Delta got the last HND authority for MSP.

atl100million wrote:
AA may gain access to the LAX-PEK route but it won't gain a monopoly and even if it gains CZ as a partner, it still will have to compete with DL and UA at least as equals and in all likelihood with disadvantages compared to what they built.

As hard as it is for you or anyone to accept, DL and UA never said they were going to roll over and let AA build a LAX to Asia gateway just because they didn't have the forethought to build one in a market which other carriers aren't also interested in.


Well, you wouldn't know it from what is happening. United gave up 4 gates at T6 to American (LAWA). Even before that, it gave up the United Express facility. American took it over and now it stands in the way of a future T9.

It's been almost a year since AA started LAX-HKG. Still no response from United and Delta.

More to the point, if Delta thought it could compete with American and everyone else on this route, it would have already started the flight with its slots and transferable route authorities. That it hasn't suggests that Delta also wants to be the only US airline on the route for obvious financial reasons.

And, for the record, we've heard this "roll over" argument before. It is a rather puerile argument, especially when it is accompanied by the claim that one airline is going to put the other airline out of business. For example, there was a poster here (now banned?) who once ranted that Delta was going to put JAL out of business. You are starting to sound a lot like him.



LAX to Hing Kong is already well served by Cathay Pacific, AA and soon the second HK airline associated with the Hainan group using A350-900. United is doing the right things for them by flying 787-9 to Singapore nonstop. DL & UA west coast flying to Hong Kong is better from their west coast hubs.
 
grbauc
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 9:36 pm

commavia wrote:
From AA's 2Q17 earnings call this morning comes, I'd say, fairly definitive evidence of what's going on related to the subject that generated so much (inane) discussion a week ago:

"It's Steve [Johnson, AA EVP-Corporate Affirs]. We actually haven't closed the transaction yet. We're waiting for some final government approvals related to the slot exchange. We expect to get those, I was going to say this month, but in early August and can close the transaction then. And I actually haven't done the calculation, but it's sort of 3%-ish of China Southern."


Thanks for all the insight and Info you post.. :bigthumbsup:
 
grbauc
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 9:38 pm

atl100million wrote:
seriously?

Steve Johnson could care less about what anyone on a.net thinks.




That is a joke... Good day.
 
grbauc
Posts: 1465
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Re: AA Applies For LAX-PEK

Sat Jul 29, 2017 9:56 pm

spinotter wrote:
grbauc wrote:
atl100million wrote:
We have indeed made progress in this discussion


Only in your head possible. Your walls of text turned this in to a retreading over and over. I'm trying to think of any new pertinent information that you have brought to light and can think of none.


Hey, guy - Because I think only a male would write such a thing. Females largely are kinder. What is the matter with you that you would address another hman being in that way? Just wondering...




Male and Female both can be equally flawed. Same has a internet troll can be female or male.

Wikipedia -"In Internet slang, a troll (/ˈtroʊl/, /ˈtrɒl/) is a person who sows discord on the Internet by starting quarrels or upsetting people, by posting inflammatory,[1] extraneous, or off-topic messages in an online community (such as a newsgroup, forum, chat room, or blog) with the intent of provoking readers into an emotional response[2] or of otherwise disrupting normal, on-topic discussion,[3] often for the troll's amusement."
 
atl100million
Posts: 445
Joined: Tue May 23, 2017 1:28 am

Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 3:28 am

Internet trolls are those who, at least relative to this subject, can't accept that AA
1. Really does lose money flying to Asia - using data which AA has provided to the DOT
2. AA decided on its own that it would build a hub in Asia and has repeatedly said that other carriers have hubs elsewhere on the west coast.
3. That AA has played the disadvantage card in the west coast to China route case despite the fact that they have two central US to China gateways which neither DL or UA have - but AA is disadvantaged because it can't have one to China on its own.
4. DL got the MSP-HND route because DL really did and does have a structural disadvantage to Japan which created Open Skies which allowed AA and UA to create JVs with Japanese carriers and then turned around and has worked to slowly open HND just enough to transpacific traffic to make DL's NRT hub no longer viable. Surprisingly, even with the JV, AA still is the smallest of the 3 US carriers in Japan and ALSO gets the lowest average fares to the US mainland.
5. AA , at best, will compete with DL and UA to China as equals - but the situation in Japan shows that AA isn't likely to get comparable average fares to China with a codeshare agreement given that it can't do it in Japan with a joint venture partner.
6. Three and one-half years after the US merger, AA is still the 3rd largest US carrier to both Europe and Asia; AA has simply accepted its position in Europe but continues to pour money into Asia to build a route system.
7. Neither DL or UA ever agreed they aren't interested in LAX-Asia and will aggressively compete for the market regardless of what happens with the current LAX-PEK case.

Those are cold, hard facts that are based on facts and data that a whole lot of people want to pretend don't exist.

AA can win the route case from the DOT but it still has a minimal chance of being profitable on the route based on current US-Asia routes where AA has to compete wiht DL and/or UA
 
grbauc
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 5:40 am

atl100million wrote:
Internet trolls are those who, at least relative to this subject, can't accept that AA
1. Really does lose money flying to Asia - using data which AA has provided to the DOT
2. AA decided on its own that it would build a hub in Asia and has repeatedly said that other carriers have hubs elsewhere on the west coast.
3. That AA has played the disadvantage card in the west coast to China route case despite the fact that they have two central US to China gateways which neither DL or UA have - but AA is disadvantaged because it can't have one to China on its own.
4. DL got the MSP-HND route because DL really did and does have a structural disadvantage to Japan which created Open Skies which allowed AA and UA to create JVs with Japanese carriers and then turned around and has worked to slowly open HND just enough to transpacific traffic to make DL's NRT hub no longer viable. Surprisingly, even with the JV, AA still is the smallest of the 3 US carriers in Japan and ALSO gets the lowest average fares to the US mainland.
5. AA , at best, will compete with DL and UA to China as equals - but the situation in Japan shows that AA isn't likely to get comparable average fares to China with a codeshare agreement given that it can't do it in Japan with a joint venture partner.
6. Three and one-half years after the US merger, AA is still the 3rd largest US carrier to both Europe and Asia; AA has simply accepted its position in Europe but continues to pour money into Asia to build a route system.
7. Neither DL or UA ever agreed they aren't interested in LAX-Asia and will aggressively compete for the market regardless of what happens with the current LAX-PEK case.

Those are cold, hard facts that are based on facts and data that a whole lot of people want to pretend don't exist.

AA can win the route case from the DOT but it still has a minimal chance of being profitable on the route based on current US-Asia routes where AA has to compete wiht DL and/or UA



your so funny....
Id attempt to answer if it was even slightly fruitful.
 
NZ321
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 11:20 am

I don't see QF reducing capacity to North America. They are about to take delivery of the equipment that will enable them to open new routes further east. They might, however, reduce capacity slightly to the west coast i.e. LAX and hold SFO at 1 daily when they add ORD and maybe JFK or YYZ. So that could open up possibilities for AA DFW-MEL or DFW-AKL or additional capacity into HKG and HND or NRT to feed CX and JL. I'm not holding my breath on diversification of China routes because of lack of Oneworld feed (unless they do an agreement with Hainan) and agree that most of SE Asia seems to be low yielding but I don't think that's true for SIN and UA seems to be doing well on SIN. I fly a lot out of SIN and business class is always full or close to full. Lots of destination and origin traffic back and forwards between the US and SIN and UA is now doing this nonstop from both SFO and now LAX. So, whether or not AA get the PEK slot, my pick is more frequency to key destinations over a significant expansion in destinations.
Plane mad!
 
SFOtoORD
Posts: 1202
Joined: Tue Jul 03, 2007 2:26 am

Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 2:24 pm

atl100million wrote:
Internet trolls are those who


1. Are insanely repetitive.
2. Rant on for a page at a time when it is not needed
3. Can't agree to disagree
4. Don't want to understand that they're trolling even when called out on what they're doing.
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 5:45 pm

Actually, atl100million offers a very insightful and intriguing point of view. While atl100 might be somewhat repetitive, its only because his points are valid and hard to argue with.

AA across the pacific, namely from LAX to HKG and PVG, at least on the surface, appear to be very weak performers. Look at the seat mappers hours before scheduled departure up to and including a day out. First class is empty, business class is very empty, main cabin extra.. empty. Is AA making money on LAX-HKG while flying half empty planes in the premium cabins? Close to departure, the business class and first class cabins fill up which usually indicates non revs and upgrades are taking those seats. So, while Delta could easily start up a LAX-HKG flight, it appears they are not willing to lose money on a ULH flights like AA does. The proof is in the details. Just look at DL's earnings compared to AA's. DL takes AA to the cleaners. AA's LAX-PVG flights, same thing as the LAX-HKG flight and that's on the much smaller 788.

So, while it looks like AA will undoubtedly get the LAX-PEK authority, it wouldn't surprise me if that also turned out to be the money loser that AA's other LAX - China flights are.
Last edited by jumbojet on Sun Jul 30, 2017 5:47 pm, edited 1 time in total.
 
atl100million
Posts: 445
Joined: Tue May 23, 2017 1:28 am

Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 5:45 pm

just remember that all of that works both ways... and hearing things you don't want to hear, even if they are factually based, is not trolling.

As hard as it is for some of you to accept, AA had one choice for a network carrier merger by the time it went through chapter 11. US was in a different alliance from AA and had no usable presence to Asia... and nearly 4 years after the merger, AA now is #3 out of 3 US airlines to both Europe and Asia. They are trying desperately to build an Asia network even while competing against DL and UA which bought/merged w/ carriers that had them. Further, AA chose to build its west coast Asia hub at LAX even though DL and UA never have given one iota of indication that they were walking away from the LAX to Asia market.

Perhaps when some of the people who participate in threads on subjects like this accept that AA very well might be engaged in a costly and risky process of building an Asia network esp. from LAX that will not gain it any longer term advantage let alone be profitable, then perhaps there might be a discussion instead of perpetuating the incessant belief that adding routes is the sum total of an airline's market success.
 
MAH4546
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 5:50 pm

Just remember atl100 is the same person who used to argue ad nauseum that DL would build a major LAX-Asia hub and, taking advantage of the 767, connect LAX to every runway in Japan and China.
a.
 
incitatus
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 6:37 pm

atl100million wrote:
just remember that all of that works both ways... and hearing things you don't want to hear, even if they are factually based, is not trolling.

As hard as it is for some of you to accept, AA had one choice for a network carrier merger by the time it went through chapter 11. US was in a different alliance from AA and had no usable presence to Asia... and nearly 4 years after the merger, AA now is #3 out of 3 US airlines to both Europe and Asia. They are trying desperately to build an Asia network even while competing against DL and UA which bought/merged w/ carriers that had them. Further, AA chose to build its west coast Asia hub at LAX even though DL and UA never have given one iota of indication that they were walking away from the LAX to Asia market.

Perhaps when some of the people who participate in threads on subjects like this accept that AA very well might be engaged in a costly and risky process of building an Asia network esp. from LAX that will not gain it any longer term advantage let alone be profitable, then perhaps there might be a discussion instead of perpetuating the incessant belief that adding routes is the sum total of an airline's market success.


DL "walking away" from the LAX to Asia market? DL has very little to walk away from. Aside from service to Tokyo, DL had no other presence in Asia until it started flying to PVG two years ago.

DL is desperately trying to build an Asia presence at LAX and the PEK route that AA got is a big void that DL cannot make up for.

DL has many problems in setting up an Asia presence at LAX, and DL's problems are bigger than AA's. And you know it.
I do not consume Murdoch products including the Wall Street Journal
 
commavia
Topic Author
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 6:49 pm

MAH4546 wrote:
Just remember atl100 is the same person who used to argue ad nauseum that DL would build a major LAX-Asia hub and, taking advantage of the 767, connect LAX to every runway in Japan and China.


The laughably ridiculous diatribes, and characteristically transparent fear and paranoia, are, indeed, eerily reminiscent of the past.

In any event, back in reality, AA continues to do precisely what it said it would - build out a viable, competitive transpacific gateway at LAX to compliment AA's extensive domestic network and already quite competitive presence in Europe and dominant presence in Latin America. Delta and United can knock themselves out doing what ever they want to respond - AA, obviously, doesn't need their permission. With the likely-eminent announcement of a finalized China Southern "strategic relationship," and slots facilitating the launch of LAX-PEK, AA will be operating the second largest transpacific gateway of any U.S. airline.

AA isn't as large - overall - to Asia as either Delta or United, but of course it doesn't need to be. AA just needs to be roughly competitive, and AA is rapidly approaching getting there - a few more select, surgical adds and AA will be pretty much "done." To paraphrase one of history's greatest orators - LAX-PEK is not "the end" or the "beginning of the end," but rather the "end of the beginning."
 
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Rookie87
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 7:08 pm

jumbojet wrote:
Actually, atl100million offers a very insightful and intriguing point of view. While atl100 might be somewhat repetitive, its only because his points are valid and hard to argue with.

AA across the pacific, namely from LAX to HKG and PVG, at least on the surface, appear to be very weak performers. Look at the seat mappers hours before scheduled departure up to and including a day out. First class is empty, business class is very empty, main cabin extra.. empty. Is AA making money on LAX-HKG while flying half empty planes in the premium cabins? Close to departure, the business class and first class cabins fill up which usually indicates non revs and upgrades are taking those seats. So, while Delta could easily start up a LAX-HKG flight, it appears they are not willing to lose money on a ULH flights like AA does. The proof is in the details. Just look at DL's earnings compared to AA's. DL takes AA to the cleaners. AA's LAX-PVG flights, same thing as the LAX-HKG flight and that's on the much smaller 788.

So, while it looks like AA will undoubtedly get the LAX-PEK authority, it wouldn't surprise me if that also turned out to be the money loser that AA's other LAX - China flights are.


Except that those upgrades aren't cheap. I asked an agent once and i was informed that you'd have to pay the fare difference between economy and business to get said upgrades.
Now I'm not sure how EPs get upgraded on international routes but even if those seats filled up last minute, that's a lot of money.
 
nutsaboutplanes
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 7:30 pm

This thread is funny to read. An airline building a TPAC hub is not a short term project. Clearly AA Is in this for the long-game and they understand that a solid TPAC offering benefits the network. Very few routes are looked at in terms of how they perform individually, they are looked at for their overall contribution to the network including the ability to capture corporate business which is largely dependent on "breadth of destinations".

I think AA has been pretty clear that their ASIA expansion would be capital intensive and that the development of an ASIA network would take time. Nothing today is a departure from what the airline has openly acknowledged and I think it's pretty hard to argue that AA has in fact done a commendable job of growing its ASIA network since the merger with US.
American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
 
jumbojet
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 8:31 pm

incitatus wrote:
DL "walking away" from the LAX to Asia market? DL has very little to walk away from. Aside from service to Tokyo, DL had no other presence in Asia until it started flying to PVG two years ago.

DL is desperately trying to build an Asia presence at LAX and the PEK route that AA got is a big void that DL cannot make up for.

DL has many problems in setting up an Asia presence at LAX, and DL's problems are bigger than AA's. And you know it.


DL is building their LAX gateway to Asia in a financially responsible way. There is no need for them to rush into adding flights that will only amount to the problems that AA and UA are facing, and that is the inability to make money over the Pacific. Yields over the Pacific are very weak. Combine that with over capacity and you would be a fool to want to add anything, at this time, TPAC. Out of the big 3 DL has always been the airline least likely to start a route knowing that they will lose boat loads of money. If there is money to be made on a route, DL will fly it. If not, then they most likely won't. Again, look at the June quarter results; you need look no further than that to get a grasp on how smart DL really is.
 
atl100million
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Re: AA Applies For LAX-PEK

Sun Jul 30, 2017 9:39 pm

The are two issues that are core to this discussion and that some people can't accept.
1. Not every airline strategy works. AA had no choice but to try to build an Asian gateway at LAX if it was going to have one on the west coast at all. It is amazing that people comment on the Bob Crandall thread that one of AA's great strategic blunders is that AA did not acquire one of the two airlines that had Pacific networks and yet they can't accept that some of those strategic decisions don't allow an airline to gain what it passed on. DL and UA have simply never indicated they are willing to walk away from LAX either as a domestic or an Asian gateway. We can talk until we are blue in the face on the issue but AA is going to have to build its west coast to Asia gateway on top of a two competitors who are very much interested in protecting their position to Asia from the west coast.

DL never bought an airline w/ US to Latin America authorities and UA walked away from the Pan Am authorities it bought. Neither are trying to compete in the massive S. Florida to Latin America market -other than DL's MIA-HAV route. DL is profitable to Latin America - just not as large.

And yet, based on a.net logic, we are supposed to think that AA is going to push its way into a highly competitive market like LAX to Asia and aren't supposed to question if that will ultimately work out.

2. Building an airline network is not just about adding routes. This whole thread has been about every nuance involved in AA's attempt to try to gain a route which they had no interest in starting - until DL applied for it. Now, AA is facing one challenge after another just to be able to operate the route.
And yet, the bigger issue even for those who want to continually talk about how long it takes to build a network is that AA significantly underperforms UA from ORD to Asia - on routes that have been operating for years. In LAX, for a time, AA DL and UA all operated LAX-NRT side by side for years - and AA had the weakest financial performance on the route. Now the same thing is happening on LAX-PVG, a route that AA announced first. Then we moved on to LAX-HND, and AA still underperforms DL - and AA has had a joint venture that should have been helping it to Japan.

I believe it is a completely valid question to ask how long AA intends to subsidize its Pacific operations and how long it will underperform DL and UA.

It is also very much worth noting that AA wanted to argue that it should be awarded the LAX-PEK route because SEA is DL's hub - and yet the DOT cannot protect any airline from competition. The new PEK airport will lead to new route authorities; it is ludicrous to think that every other US and Chinese airline is going to be content to accept a no-growth scenario because AA doesn't want to face growth from LAX-PEK.

DL is profitable over the Pacific and has been slowly but consistently building its presence at LAX. DL intended to be operating LAX-PEK by this time - so the notion that DL doesn't or won't grow at LAX is simply wishful thinking.

UA is also growing its LAX to Asia presence.

DL is not spending $2 billion on new terminals at LAX and hasn't gained specific incentives to have access to TBIT gains for adding international flights because they are going to operate two flights/day to Asia and wait the better part of a decade to add flights to LAX.

AA won the route authority; they need to use it but they also need to recognize that the longer they take to start the route, the shorter the time it will be before other airlines including DL also operate the route.

Given AA's track record of competing alongside DL and UA to Asia, it is very much a legitimate question to ask if AA will do more than just fly another route to Asia or if they will ever be financially viable and profitable - which is the requirement that they have to their shareholders.
 
Sydscott
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Re: AA Applies For LAX-PEK

Mon Jul 31, 2017 2:15 am

atl100million wrote:
It is also very much worth noting that AA wanted to argue that it should be awarded the LAX-PEK route because SEA is DL's hub - and yet the DOT cannot protect any airline from competition. The new PEK airport will lead to new route authorities; it is ludicrous to think that every other US and Chinese airline is going to be content to accept a no-growth scenario because AA doesn't want to face growth from LAX-PEK..


What is very well worth noting, which you are completely ignoring and have done repeatedly, is the underlying reason this was a competitive route allocation which is because these are the last slots for US majors under the current bilateral for PEK, PVG and CAN. You keep saying that "the new PEK airport will lead to new route authorities" and have done numerous time while neglecting the inherent difficulties in actually negotiating with the Chinese Government to expand the bilateral to permit this access.

It's also not ludicrous to think that the Chinese Carriers will accept a no growth scenario for a couple of reasons:

1. They've got plenty of scope to expand from their secondary city gateways which aren't bilaterally constrained;
2. More importantly the Central Government will tell Chinese Carriers to take what they've currently got and shut up. Because you can do that in their system of Government.

So until we see progress on a new bilateral, which depends completely on the relationship between the Chinese and US Governments, there is no way for DL to get more slots. Nor is it guaranteed that the Chinese will reserve slots for foreign carriers at either Beijing Capital or Daxing when the move happens. It's equally plausible, given growth on regional Asia flying and Chinese domestic flying, that they'll reserve the vast bulk of the new capacity for that.
 
LAXtoATL
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Re: AA Applies For LAX-PEK

Mon Jul 31, 2017 3:10 am

jumbojet wrote:
Actually, atl100million offers a very insightful and intriguing point of view. While atl100 might be somewhat repetitive, its only because his points are valid and hard to argue with.

AA across the pacific, namely from LAX to HKG and PVG, at least on the surface, appear to be very weak performers. Look at the seat mappers hours before scheduled departure up to and including a day out. First class is empty, business class is very empty, main cabin extra.. empty. Is AA making money on LAX-HKG while flying half empty planes in the premium cabins? Close to departure, the business class and first class cabins fill up which usually indicates non revs and upgrades are taking those seats. So, while Delta could easily start up a LAX-HKG flight, it appears they are not willing to lose money on a ULH flights like AA does. The proof is in the details. Just look at DL's earnings compared to AA's. DL takes AA to the cleaners. AA's LAX-PVG flights, same thing as the LAX-HKG flight and that's on the much smaller 788.

So, while it looks like AA will undoubtedly get the LAX-PEK authority, it wouldn't surprise me if that also turned out to be the money loser that AA's other LAX - China flights are.


You can not look at seat maps at least on AA to determine how a route is performing! AA typically does not assign seats until check-in. So every flight will have a wide open seat map until hour or so before departure. Very few complimentary upgrades on international and nonrevs typically aren't cleared untul minutes before departure. So, your analysis looking at seat maps is completely flawed. Now as for whether or not the flights make money, there are too many variables for us to actually know that but I can assure you that AA's LAX-HKG flight is a very good performer! AA's LAX-PVG not so much.As for DL taking AA to the cleaners based on earnings... I would suggest you re-evaluate those earnings reports.

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