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.
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?
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.
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.
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.
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.
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.
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.
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.
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.