AA Applies For LAX-PEK

commavia · Mon Mar 28, 2016 8:54 pm

Just as predicted ...

American Airlines Submits Application to U.S. Department of Transportation to Operate Service Between Los Angeles and Beijing

http://finance.yahoo.com/news/american-airlines-submits-application-u-203820144.html

Following Delta's application for frequencies on the route, AA today filed not only its own LAX-PEK application but also a reply to Delta's application that requests the DOT now make this a competitive process.

[Edited 2016-03-28 13:57:49]

LAXintl · Mon Mar 28, 2016 9:01 pm

Proposed schedule per DOT filing:

Eff Dec 16th.
AA181 LAX-PEK 1115-1605+1
AA180 PEK-LAX 1805-1415

777-200

Of course both AA and DL application timings are fantasy as neither carrier has secured PEK slots, and the IATA slot allocation conference is not until June.

MAH4546 · Mon Mar 28, 2016 9:08 pm

Great to hear; while I'm sure AA's plans to serve LAX-PEK were longer term, no way is it going to let somebody else snap up seven of the last nine frequencies when the future of more frequencies becoming available is very murky.

a380787 · Mon Mar 28, 2016 9:12 pm

UA might also submit a rival bid for the fun of it, but they have little chance of actually winning. A long shot bid is better than no bid because at least it's more defensible than being accused of sitting on their laurels.

I agree with the consensus sentiment that AA has the best chance of winning this round of bidding. Once again, the rug got yanked from beneath them.

MAH4546 · Mon Mar 28, 2016 9:16 pm

Also be interesting to see how UA's dormant SFO-PVG slots come into play, if at all. AA has previously even supported UA's efforts to keep them dormant due to slot issues.

LAXintl · Mon Mar 28, 2016 9:20 pm

Quoting MAH4546 (Reply 4):
Also be interesting to see how UA's dormant SFO-PVG slots come into play, if at all. AA has previously even supported UA's efforts to keep them dormant due to slot issues.

Well UA could upend the situation and take those 7 frequencies and use them for another zone-1 market like LAX-PEK if they think they can get slots at PEK instead.

Though United has until Oct 29th to continue trying to get PVG slots, and also in the mean time using the allotment on additional GUM-PVG frequencies in the interim.

a380787 · Mon Mar 28, 2016 9:24 pm

Quoting MAH4546 (Reply 4):

Also be interesting to see how UA's dormant SFO-PVG slots come into play, if at all. AA has previously even supported UA's efforts to keep them dormant due to slot issues.

AA and UA are somewhat in "frenemy" territory now (as opposed to totally hostile), so it would be awkward if AA attempts to argue that the dormant PVG frequencies be released for bidding. Additionally, DOT fully understands that the dormancy is driven by reality of slots, not any attempts to hoard a scarce resource.

UA might also extend an olive branch by withholding from submitting their own bid, and endorsing the AA one instead.

ldvaviation · Mon Mar 28, 2016 11:21 pm

Good move.

That just leaves ICN.

Sydscott · Mon Mar 28, 2016 11:46 pm

Quoting MAH4546 (Reply 4):
Also be interesting to see how UA's dormant SFO-PVG slots come into play, if at all. AA has previously even supported UA's efforts to keep them dormant due to slot issues.

They won't because AA will want UA's support to keep the PEK frequencies dormant when they can't get commercial slots to fly them with.

commavia · Mon Mar 28, 2016 11:59 pm

Quoting LAXintl (Reply 1):
Of course both AA and DL application timings are fantasy as neither carrier has secured PEK slots, and the IATA slot allocation conference is not until June.

Quoting a380787 (Reply 3):
I agree with the consensus sentiment that AA has the best chance of winning this round of bidding.

We'll see.

I agree that at least some of AA's arguments seem compelling, and will essentially come down to:

* AA would be a new entrant, and the only U.S. carrier, LAX-PEK
* AA is smaller U.S.-China than Delta and especially United
* AA would add a new competitor in many West Coast-PEK markets where United (via SFO) and Delta (via SEA) already compete but AA is effectively does not given the non-competitiveness (required backtracking) of ORD/DFW
* AA offers broader and more extensive connectivity (more flights, more routes) beyond LAX than Delta
* Delta is presently using 7 frequencies of the U.S. carriers' allocation to serve China not from a U.S. gateway but from NRT

As said previously - much to the inexplicable protestations of some - these are almost certainly going to be AA's lines of argument, whether any of us agree with some or all of them or not.

If/when DOT formally makes this a competitive case, it will be interesting to see whether or not these resonate with DOT and if the DOT ultimately concludes that AA's arguments are superior to Delta's. I guess (hope) we'll soon see.

Quoting ldvaviation (Reply 7):

Good move.

That just leaves ICN.

When (if) AA adds ICN, and maybe as a real long shot TPE, AA's LAX transpacific gateway will effectively be "done."

Just what AA has done essentially in a matter of months out of LAX is pretty impressive - and I agree there isn't much left for AA to do in order to largely close its competitive gap in the West Coast-Asia market.

RyanairGuru · Tue Mar 29, 2016 12:03 am

Quoting a380787 (Reply 6):
it would be awkward if AA attempts to argue that the dormant PVG frequencies be released for bidding

It would be especially awkward since neither DL nor AA will be getting slots at PEK anytime soon. It would be the height of hypocrisy to have them stripped from UA because they are dormant, just to then squat on them as they can't find slots either.

jfk777 · Tue Mar 29, 2016 12:17 am

Quoting commavia (Reply 9):
When (if) AA adds ICN, and maybe as a real long shot TPE, AA's LAX transpacific gateway will effectively be "done.

LAX is very well served by the two Taiwan airlines and the two Korean Airlines with A380 used on at least 3 ICN to LAX flights daily. China & EVA Air fly enough 777 to the US west coast to make us believe they are the biggest buyers of 77W except Emiraes. AA can find a better route for a 777 or 787 used to ICN or TPE.

commavia · Tue Mar 29, 2016 12:35 am

Quoting jfk777 (Reply 11):
LAX is very well served by the two Taiwan airlines and the two Korean Airlines with A380 used on at least 3 ICN to LAX flights daily. China & EVA Air fly enough 777 to the US west coast to make us believe they are the biggest buyers of 77W except Emiraes. AA can find a better route for a 777 or 787 used to ICN or TPE.

I'm not so sure.

There is no question that these markets are downright flooded with capacity by either state-owned and/or -subsidized, substantially lower-cost, and/or arguably higher-quality, competitors. But the same can be said of LAX-HKG and LAX-PEK, honestly, and yet we now have two U.S carriers who want to go up against said competition in one or both of these markets.

In addition, the overall network contribution of these flights may well make them worthwhile - which may be precisely the reason why AA itself has publicly named HKG, PEK and ICN as markets being evaluated from LAX. We now have AA formally seeking to fly two of those three - so not sure why it's unthinkable that at some point it would go for the third.

TPE is clearly a long shot as it smaller and/or has less of a premium component than HKG, ICN, etc., but I think it's at least possible - maybe not probable, but possible.

jfk777 · Tue Mar 29, 2016 12:53 am

Quoting commavia (Reply 12):
There is no question that these markets are downright flooded with capacity by either state-owned and/or -subsidized, substantially lower-cost, and/or arguably higher-quality, competitors. But the same can be said of LAX-HKG and LAX-PEK, honestly, and yet we now have two U.S carriers who want to go up against said competition in one or both of these market

The cost of FA in the PRC is much less then in the USA but Hong Kong is an expensive place and FA have to make enough to afford the rent there. ITS doubtful that Cathay's crew costs are less or much less the the US3 or EU3.

commavia · Tue Mar 29, 2016 12:57 am

Quoting jfk777 (Reply 13):
The cost of FA in the PRC is much less then in the USA but Hong Kong is an expensive place and FA have to make enough to afford the rent there. ITS doubtful that Cathay's crew costs are less or much less the the US3 or EU3.

Okay. Lower cost was one of four qualifiers I attached to the competitors flooding capacity on LAX-HKG, LAX-PEK and LAX-ICN. At least one of the others applies to Cathay Pacific. And yet AA is about to compete with Cathay Pacific on LAX-HKG, along with - again - seeking to compete with Air China (for which multiple of those qualifiers apply) on LAX-PEK. So again, I'm not sure why - given that - it is totally unthinkable that AA would also eventually go for LAX-ICN, precisely as the airline itself has acknowledged it is considering.

MAH4546 · Tue Mar 29, 2016 1:15 am

Quoting commavia (Reply 9):
When (if) AA adds ICN, and maybe as a real long shot TPE, AA's LAX transpacific gateway will effectively be "done."

Disagree. Just like many airports/cities/governments in China are throwing money at United for SFO links, they will do the same to AA. I wouldn't be surprised if AA is flying to 2-3 secondary China markets from LAX come 2020.

hoons90 · Tue Mar 29, 2016 2:09 am

Quoting commavia (Reply 14):
I'm not sure why - given that - it is totally unthinkable that AA would also eventually go for LAX-ICN, precisely as the airline itself has acknowledged it is considering.

I'm just wondering why they haven't done so already. Is it because they need to move quickly to obtain the frequencies in China before it's too late, whereas US-Korea is open-skies so AA can just start LAX-ICN whenever?

TWA772LR · Tue Mar 29, 2016 4:06 am

Quoting LAXintl (Reply 5):
Though United has until Oct 29th to continue trying to get PVG slots

Where would UA use these PVG slots? More LAX, SFO and EWR? Or another hub?

LAXintl · Tue Mar 29, 2016 4:22 am

Quoting TWA772LR (Reply 17):
Where would UA use these PVG slots? More LAX, SFO and EWR? Or another hub?

They have been attempting to add 2nd SFO-PVG since 2014.

Sydscott · Tue Mar 29, 2016 11:40 am

Quoting hoons90 (Reply 16):
I'm just wondering why they haven't done so already. Is it because they need to move quickly to obtain the frequencies in China before it's too late, whereas US-Korea is open-skies so AA can just start LAX-ICN whenever?

That and with AKL coming online there just aren't enough 787's on property for the route. There also isn't the opportunity that AA has in HKG scheduling wise because the a/c only spends a couple of hours on the tarmac before turning around.

commavia · Tue Mar 29, 2016 12:03 pm

Quoting hoons90 (Reply 16):
I'm just wondering why they haven't done so already. Is it because they need to move quickly to obtain the frequencies in China before it's too late, whereas US-Korea is open-skies so AA can just start LAX-ICN whenever?

Quoting sydscott (Reply 19):
That and with AKL coming online there just aren't enough 787's on property for the route. There also isn't the opportunity that AA has in HKG scheduling wise because the a/c only spends a couple of hours on the tarmac before turning around.

ICN is one of the most competitive, and least restrictive, Asian markets, and beyond that AA simply doesn't have enough 787s (the ideal aircraft for this route, given all the competition) to go around yet.

That being said, AA executives have - on multiple occasions - publicly mentioned either adding a new route from ICN or specifically adding LAX-ICN. Let's hope it happens.

DFWEagle · Tue Mar 29, 2016 1:00 pm

Fantastic news! As mentioned in the other thread, AA just had to do this now or else they don’t know when they could get another chance at adding the route. Based on most criteria cited in previous DOT route awards, AA has the stronger case here and they have a really good shot at winning.

Quoting LAXintl (Reply 1):

Proposed schedule per DOT filing:

Eff Dec 16th.
AA181 LAX-PEK 1115-1605+1
AA180 PEK-LAX 1805-1415

777-200

Of course both AA and DL application timings are fantasy as neither carrier has secured PEK slots, and the IATA slot allocation conference is not until June.

Obviously that’s AA’s “ideal” schedule – leaving at exactly the same time as LAX-NRT and arriving within 10 min of PVG-LAX, so getting good feed from the established banks. Plus, optimum timing for local market and an efficient 2hr turn in PEK.

I agree that AA is unlikely to receive such perfect slot timings, but AA does have the option to “settle” for off-peak late/early slots and interwork with the ORD-PEK flights. They could fly a schedule similar to LAX-HKG, with feed from the same banks, and cut down the 12 hr+ ground time that the 788 has in PEK between ORD flights. This would require only one additional frame (maybe from ORD-MAN), and would be a good reason for using the more economical 788 on the route rather than a 777. For example:

00:50 LAX 05:40 PEK (turns to ORD at 10:10/4hr30 later)
21:25 PEK 17:35 LAX (turns from ORD at 19:25/2hr earlier)

This schedule would leave LAX at a similar time to LAX-HKG and arrive not much later than the HKG-LAX flight. It would allow a full day in Beijing and maximum connectivity on Hainan to other points in China.

Quoting commavia (Reply 9):
Just what AA has done essentially in a matter of months out of LAX is pretty impressive - and I agree there isn't much left for AA to do in order to largely close its competitive gap in the West Coast-Asia market.

It’s really amazing to see how AA has grown in Asia/Pacific, and particularly in the LAX-Asia/Pacific market over the past year or two. Parker and Co. really meant what they said about building up LAX and Asia and they are doing a fantastic job of it. AA flying LAX-SYD/AKL/HKG/PEK/HND would have been almost unthinkable just a few years ago, not to mention all the domestic additions at LAX and MEX/GDL etc.

[Edited 2016-03-29 06:02:10]

AABB777 · Tue Mar 29, 2016 1:37 pm

Quoting DFWEagle (Reply 21):
It’s really amazing to see how AA has grown in Asia/Pacific, and particularly in the LAX-Asia/Pacific market over the past year or two. Parker and Co. really meant what they said about building up LAX and Asia and they are doing a fantastic job of it. AA flying LAX-SYD/AKL/HKG/PEK/HND would have been almost unthinkable just a few years ago, not to mention all the domestic additions at LAX and MEX/GDL etc.

I agree. AA has been aggressively expanding their LAX TPAC routes over the past few years and its allowed AA to offer a really nice portfolio of destinations to their Los Angeles corporate accounts and beyond. The missing link is now LAX-ICN.

I am also in agreement that the DOT will award AA the LAX-PEK route and not DL. As others have already explained, the battle for these China frequencies is AA's to lose. AA may have preferred to launch LAX-PEK at a later date, but it seems to be now or never (or, not for a very long time).

Do we know how much marketing/promotional activity AA has been doing on the Asian side of the pond to promote these new routes to LAX? Just curious if AA is mostly relying on U.S. POS or if they are also aggressively marketing ex-Asia.

commavia · Tue Mar 29, 2016 2:47 pm

Quoting MAH4546 (Reply 15):
Disagree. Just like many airports/cities/governments in China are throwing money at United for SFO links, they will do the same to AA. I wouldn't be surprised if AA is flying to 2-3 secondary China markets from LAX come 2020.

Perhaps.

By the time AA gets around to exploring such routes, I think the market will be largely saturated by the Chinese carriers who obviously have lower costs, government subsidies and far stronger China POS presence.

That being said, I don't think it's impossible or totally out of the question - I agree that if there is another U.S. city that is likely to ever be able to support U.S. carrier flying to non-PEK/PVG/HKG China, it is almost certainly LAX, and I also agree that if any U.S. carrier is positioned to be able to actually do this at LAX, it might be AA. But I'm still skeptical.

Quoting DFWEagle (Reply 21):
I agree that AA is unlikely to receive such perfect slot timings, but AA does have the option to “settle” for off-peak late/early slots and interwork with the ORD-PEK flights. They could fly a schedule similar to LAX-HKG, with feed from the same banks, and cut down the 12 hr+ ground time that the 788 has in PEK between ORD flights. This would require only one additional frame (maybe from ORD-MAN), and would be a good reason for using the more economical 788 on the route rather than a 777. For example:

00:50 LAX 05:40 PEK (turns to ORD at 10:10/4hr30 later)
21:25 PEK 17:35 LAX (turns from ORD at 19:25/2hr earlier)

I agree this is quite possibly the most likely (only) outcome - aircraft exchanged with another route (likely ORD). It seems a foregone conclusion - as others have said - that Delta and especially AA have very little realistic prospect of actually getting the slot times they want, especially that whichever of these carriers gets this authority will now be going directly up against national champion Air China in one of that airline's largest, if not the largest, "core" longhaul markets. I doubt the Chinese government will have much interest in helping AA or Delta compete with Air China.

Quoting AABB777 (Reply 22):
AA has been aggressively expanding their LAX TPAC routes over the past few years and its allowed AA to offer a really nice portfolio of destinations to their Los Angeles corporate accounts and beyond. The missing link is now LAX-ICN.

FSDan · Tue Mar 29, 2016 8:28 pm

Quoting commavia (Reply 9):
* AA would be a new entrant, and the only U.S. carrier, LAX-PEK

Same for DL...

Quoting commavia (Reply 9):
* AA is smaller U.S.-China than Delta

Are they? If we're looking at U.S.-PEK/PVG:
AA LAX-PVG
AA DFW-PEK
AA DFW-PVG
AA ORD-PEK
AA ORD-PVG
DL SEA-PEK
DL SEA-PVG
DL LAX-PVG
DL DTW-PEK
DL DTW-PVG

Seems pretty similar...

Quoting commavia (Reply 9):
* AA offers broader and more extensive connectivity (more flights, more routes) beyond LAX than Delta

True, but how much of the demand is coming from outside the large cities like SFO, SJC, SAN, LAS, PHX, and DEN? DL has comparable schedules to most of those from LAX. DL also has a stronger partner on the PEK side in CZ and therefore could be more beneficial to LAX originating passengers travelling to other cities in China.

Basically, it seems to me that neither AA nor DL vastly outweighs the other in terms of benefit to the flying public, so it would seem slightly unfair to me to award the route to the carrier that applied second...

a380787 · Tue Mar 29, 2016 8:37 pm

Quoting FSDan (Reply 24):

The biggest trump card AA will use is DL's existing NRT-PVG that can be moved to LAX-PEK instead. Additionally, AA may also point out that certain DL services to mainland China were less than daily in winter, and downgauged to 767.

I'm not saying DOT would necessarily buy into these talking points, but they're arguments that would be touted nevertheless.

One completely out-of-the-blue solution is that since there are 9 frequencies left, DOT might get both parties on the table and offer to split it 5x weekly for 1 carrier and 4x weekly for the other, or you can end up with winner take 7 and loser takes 0. A partial foot-in-the-door might be slightly better than completely locked out for years to come.

OA412 · Tue Mar 29, 2016 8:48 pm

Quoting a380787 (Reply 25):
Additionally, AA may also point out that certain DL services to mainland China were less than daily in winter, and downgauged to 767.

Which ones were downgauged? SEA-PEK was always planned on the 763 and started on that aircraft. I believe it may have gone up to an A332 at some point, but going from one to the other isn't really that big a drop in capacity. Certainly nothing like going from, say, a 744 down to a 763. I don't believe any of the PEK/PVG frequencies were flown less than daily this winter.

Quoting FSDan (Reply 24):
Are they? If we're looking at U.S.-PEK/PVG:

DL also has NRT-PVG, but I agree that it's pretty similar. DL being larger than AA by one frequency is certainly not a slam-dunk argument for AA. It's true, but I don't know if it's that much of a selling point.

TheAccountant · Tue Mar 29, 2016 8:53 pm

Quoting a380787 (Reply 25):
The biggest trump card AA will use is DL's existing NRT-PVG that can be moved to LAX-PEK instead.

Why should Delta have to reallocate a route that has been in continuous operation for far longer than AA has even been in China? The route has been operating since well before the latest frequency allocations were negotiated between the US and China.

NRT-PVG allows for cities like PDX and MSP to sustain nonstop TPAC flights, something that the DOT I assume looks favorably upon. Moving the slot could put those flights in jeopardy. It also allows for Hawaii, Guam and Saipan residents to access PVG easily, though I imagine those markets aren't overly large. Long story short, there are clearly benefits to the US public with NRT-PVG and the argument to "just move your NRT-PVG" frequencies in theory shouldn't hold a whole lot more water than "move your ORD-PEK or DFW-PEK frequencies".

On a different note, I actually think that Delta can use it's #2 position in LAX to its advantage, contrary to the current wisdom on here that AA is larger in LAX and therefore has a better chance. Delta can use the argument of DOT making the largest carrier even more dominant by granting AA the frequencies, or they can help make the #2 carrier a stronger competitor to the #1 carrier.

a380787 · Tue Mar 29, 2016 8:55 pm

Quoting OA412 (Reply 26):

Which ones were downgauged? SEA-PEK was always planned on the 763 and started on that aircraft. I believe it may have gone up to an A332 at some point, but going from one to the other isn't really that big a drop in capacity. Certainly nothing like going from, say, a 744 down to a 763. I don't believe any of the PEK/PVG frequencies were flown less than daily this winter.

From airlineroute.net

DELTA over the weekend of 23MAY15’s schedule update has adjusted its winter 2015/16 operation for Asia-Pacific region. Following changes will commence from 25OCT15 (based on outbound flight date).

Seattle – Beijing Boeing 767-300ER replaces A330-200, 1 daily service
Seattle – Shanghai Pu Dong Boeing 767-300ER replaces A330-200, 1 daily service

Then OAG changes on 7/17/2015

ww.airliners.net/aviation-forums/general_aviation/read.main/6449844/1/

*DL SEA-PEK NOV 1.0>0.9 FEB 1.0>0.9
*DL SEA-PVG NOV 1.0>0.9 DEC 1.0>0.9 FEB 1.0>0.9

LAXdude1023 · Tue Mar 29, 2016 8:57 pm

Quoting TheAccountant (Reply 27):
NRT-PVG allows for cities like PDX and MSP to sustain nonstop TPAC flights, something that the DOT I assume looks favorably upon. Moving the slot could put those flights in jeopardy. It also allows for Hawaii, Guam and Saipan residents to access PVG easily, though I imagine those markets aren't overly large. Long story short, there are clearly benefits to the US public with NRT-PVG and the argument to "just move your NRT-PVG" frequencies in theory shouldn't hold a whole lot more water than "move your ORD-PEK or DFW-PEK frequencies".

That's not really the way they look at it though.

They will look at connectivity for the American consumer as a whole. PDX-NRT does a lot for the Portland area, but given the connectivity LAX offers, it would feed many more American markets. The DOT will put more value in that.

incitatus · Tue Mar 29, 2016 9:09 pm

Quoting LAXintl (Reply 5):

Quoting TheAccountant (Reply 27):
Delta can use the argument of DOT making the largest carrier even more dominant by granting AA the frequencies

In the recent past DL has a history of writing very creative arguments trying to win routes in DoT cases. The problem is that competition catches on. I expect a lot of DL-like arguments to come from the AA camp. It is going to be entertaining.

OA412 · Tue Mar 29, 2016 9:11 pm

Quoting a380787 (Reply 28):

Oh OK. Well that's from July so I'm not sure what was actually flown. Nevertheless, it looks like PEK was daily all of December and January and PVG was daily in January. Given the slight drop in frequency and the months involved, I'd say that's more holiday related than going down to 6 weekly or something like that. Again, I don't recall an official frequency reduction this winter from daily to 5 or 6 weekly.

With respect to the downgauging argument, I actually think AA would shoot itself in the foot with that one. If I'm not mistaken, they've downgauged every single one of their China frequencies from 777 to 787. If they used either arugment, and I don't think they will, the only one that'll get them anywhere is frequency, if DL did indeed do non-holiday frequency reductions. Bringing up smaller gauge just hurts AA when DL has been able to support larger gauge on many of its routes, such as the 744 on DTW-PVG or 77L on PVG-NRT or LAX-PVG.

a380787 · Tue Mar 29, 2016 9:35 pm

Quoting TheAccountant (Reply 27):

NRT-PVG allows for cities like PDX and MSP to sustain nonstop TPAC flights, something that the DOT I assume looks favorably upon. Moving the slot could put those flights in jeopardy. It also allows for Hawaii, Guam and Saipan residents to access PVG easily, though I imagine those markets aren't overly large.

Those are the same arguments DL tried using against daytime HND allocations, saying it'll kill PDX MSP flights, but DOT didn't buy that either. HNL GUM SPN all have nonstop PVG access already, so that argument isn't particularly strong. 2 out of those 3 aren't even part of a state.

PDX/MSP-NRT flights have to "earn their keep", so to speak. DOT isn't here to ensure those cities are "entitled" to service.

Quoting OA412 (Reply 31):
Bringing up smaller gauge just hurts AA when DL has been able to support larger gauge on many of its routes, such as the 744 on DTW-PVG or 77L on PVG-NRT or LAX-PVG.

LAX-PVG's usage of the 777 is mostly out of range necessity. The 332 can hypothetically perform it, but given its far more southerly routing compared to DTW-PEK, I'd imagine payload penalty would be even higher, rendering it challenging from a profitability point of view.

Other than certain routes like DTW-PVG, it's hard to definitively argue that DL won't downgauge if they had the 787-8 at their disposal.

777ord · Tue Mar 29, 2016 9:49 pm

I'm very excited to see this addition to our TPAC portfolio!

What I know will never happen, but, would be amazing to see, would be LAX-GUM. That would decimate the UA monopoly on the route. Granted, it would be tricky with respect to yield, but you never know!

a380787 · Tue Mar 29, 2016 9:54 pm

Quoting 777ord (Reply 33):

What I know will never happen, but, would be amazing to see, would be LAX-GUM. That would decimate the UA monopoly on the route. Granted, it would be tricky with respect to yield, but you never know!

What monopoly ? UA doesn't fly GUM to lower 48 nonstop at all, nor does anyone else. If AA wants LAX-GUM, they would become the monopoly.

LAXdude1023 · Tue Mar 29, 2016 10:00 pm

Quoting a380787 (Reply 32):
PDX/MSP-NRT flights have to "earn their keep", so to speak. DOT isn't here to ensure those cities are "entitled" to service.

MSP should be able to support a daily flight to Asia with or without the DL hub on the other side.

PDX on the other hand...

DFWEagle · Tue Mar 29, 2016 10:30 pm

Quoting FSDan (Reply 24):
True, but how much of the demand is coming from outside the large cities like SFO, SJC, SAN, LAS, PHX, and DEN? DL has comparable schedules to most of those from LAX.

Those large western cities already have an option to fly to Beijing on DL via SEA, but no option to fly AA without backtracking to DFW, which is mostly impossible on the same day because of time zones. Awarding AA LAX-PEK would introduce a new competitor into the west coast to Beijing market for multiple large cities in the western US. Since they already have DL via SEA, it would not be so if Delta was given LAX-PEK.

Sightseer · Tue Mar 29, 2016 11:17 pm

Quoting DFWEagle (Reply 36):
Awarding AA LAX-PEK would introduce a new competitor into the west coast to Beijing market for multiple large cities in the western US.

If AA is awarded a daily flight, that will probably be the reason why. However,

Quoting a380787 (Reply 25):
DOT might get both parties on the table and offer to split it 5x weekly for 1 carrier and 4x weekly for the other

Given there are more than seven weekly slots remaining, perhaps this may end up being what happens.

a380787 · Tue Mar 29, 2016 11:32 pm

Quoting Sightseer (Reply 37):
Quoting a380787 (Reply 25):
DOT might get both parties on the table and offer to split it 5x weekly for 1 carrier and 4x weekly for the other

Given there are more than seven weekly slots remaining, perhaps this may end up being what happens.

If neither side believes that their argument is indisputably and unequivocally strong, it may be in their best interest to compromise rather than go for a winner-take-all gamble.

I'm surprised CA hasn't spiked up capacity to make their pending rivals' entry as challenging as possible.

Sightseer · Tue Mar 29, 2016 11:39 pm

Quoting a380787 (Reply 38):
I'm surprised CA hasn't spiked up capacity to make their pending rivals' entry as challenging as possible.

Well FWIW, they're already up to 3x daily on at least some days, and I have seen them offering $586 RT fares on LAX-HKG, so I doubt any competitor is going to have an easy time against them.

MAH4546 · Tue Mar 29, 2016 11:40 pm

Quoting Sightseer (Reply 37):
Quoting a380787 (Reply 25):
DOT might get both parties on the table and offer to split it 5x weekly for 1 carrier and 4x weekly for the other

Given there are more than seven weekly slots remaining, perhaps this may end up being what happens.

Both DL and AA will undoubtedly express in the application they will not accept less than seven frequencies each. If it was that easy/beneficial, airlines would always compromise. It's only ever happened once, when AA and DL competed for secondary Brazil frequencies and found a compromise. But DL eventually returned them all.

Quoting a380787 (Reply 38):
I'm surprised CA hasn't spiked up capacity to make their pending rivals' entry as challenging as possible.

Spike it up to what? They went from 7w to 21w in about 18 months time, and that's already an insane amount of capacity.

commavia · Wed Mar 30, 2016 12:26 am

Quoting FSDan (Reply 24):
Same for DL...

Quoting FSDan (Reply 24):
Basically, it seems to me that neither AA nor DL vastly outweighs the other in terms of benefit to the flying public, so it would seem slightly unfair to me to award the route to the carrier that applied second

Again - I was simply suggesting that whether said arguments were right, wrong, strong, weak, whatever - they were almost certainly the arguments AA would employ. And, indeed, AA has already stated some of them in its initial submittal.

Quoting LAXdude1023 (Reply 35):
MSP should be able to support a daily flight to Asia with or without the DL hub on the other side.

PDX on the other hand...

Quoting DFWEagle (Reply 36):
Those large western cities already have an option to fly to Beijing on DL via SEA, but no option to fly AA without backtracking to DFW, which is mostly impossible on the same day because of time zones. Awarding AA LAX-PEK would introduce a new competitor into the west coast to Beijing market for multiple large cities in the western US. Since they already have DL via SEA, it would not be so if Delta was given LAX-PEK.

There are multiple U.S. markets in the western U.S. that today have 1-stop access to PEK on both United (via SFO) and Delta (via SEA) but no 1-stop access to PEK on AA. AA LAX-PEK would clearly add another 1-stop competitor in these markets whereas Delta LAX-PEK would not. This will of course be one of AA's primary arguments, and in my view may be one of the - if not the - most compelling.

Sightseer · Wed Mar 30, 2016 12:30 am

Quoting MAH4546 (Reply 40):
Both DL and AA will undoubtedly express in the application they will not accept less than seven frequencies each.

I would expect so, if for no other reason than to prevent the other from starting the route with the remaining frequencies, but would that necessarily prevent the DOT from splitting the frequencies between them anyway? I know DL has started some China routes at less than daily in the past.

MAH4546 · Wed Mar 30, 2016 1:35 am

Quoting Sightseer (Reply 42):
I would expect so, if for no other reason than to prevent the other from starting the route with the remaining frequencies, but would that necessarily prevent the DOT from splitting the frequencies between them anyway?

DOT generally won't ignore that request - if they say "we will accept no less than daily," DOT won't grant them less than daily. Of course DOT probably has the power to say, "tough luck, here's 4 for you and 5 for you," but I think the chances of that happening are slim to none.

peanuts · Wed Mar 30, 2016 6:15 am

I'm not even convinced either carrier will fly it, once awarded, anytime soon.
Acquiring desirable slots will be the linchpin of it all.
DL decided to apply knowing AA would eventually apply as part of their LAX expansion plans and AA's growing competitive advantage at LAX. If DL gets it, they're probably in no hurry to start. They'll kick the frequency around like a ball for a while. Shutting AA out.
If AA gets it they still have their hands full on other new routes across the Pacific. DL forcing their hand to act now, trying to overload AA on too much too fast LAX-Pacific expansion. But AA may very well do the same if they're not ready to fly it. Delay it for a while when they can. Shutting DL out.
DL didn't really have a choice on this frequency application considering the pace AA is going at LAX. They had to make a move.

In other words: DL's motive for LAX-PEK may be more competitively driven towards AA specifically. AA's motive to respond is to follow their LAX plan; Expand Pacific flying. Maybe not on their own ideal timeline but they'll take it.

DL may have forced AA to act now but indirectly it's probably more like DL feeling the heat and expansion drift from AA at LAX.

Maybe the Delta Sky360 Club at Nationals Park will be fertile lobbying grounds soon while enjoying America's favorite pastime...

COPolynesianPub · Wed Mar 30, 2016 6:52 am

I realize this is a bit off topic but with alot of talk about Delta and American it reminded me of their interline dispute recently. Was a resolution ever reached between DL and AA on interlining or is it still cancelled? Thanks.

winginit · Wed Mar 30, 2016 1:52 pm

Quoting COPolynesianPub (Reply 45):

I realize this is a bit off topic but with alot of talk about Delta and American it reminded me of their interline dispute recently. Was a resolution ever reached between DL and AA on interlining or is it still cancelled? Thanks.

Still cancelled.

commavia · Sat Apr 02, 2016 1:02 pm

On a semi-related note, today (2 April) marks the tenth anniversary of AA inaugurating its first service to China and first service to East Asia beyond Japan - ORD-PVG. It is remarkable to consider how much has changed for AA in China, and across the Pacific in general, in ten years.

To begin with the obvious, AA has gone from one daily flight to China to, by the end of this year, seven and possibly eight. By the end of this year, Japan will account for 38% of AA flights to Asia and 33% of total AA transpacific flights, whereas ten years earlier it was 71% of flights to Asia (including DEL) and 83% of transpacific flights - and none of those numbers account for AA potentially being awarded LAX-PEK. Additionally, in the last ten years, ORD has gone from - by some measures - AA's largest Asia gateway (1 daily 777 each to NRT, PVG and DEL) to its smallest (1 daily 787 each to NRT, PVG and PEK).

jfk777 · Sun Apr 03, 2016 1:18 am

Quoting commavia (Reply 47):
AA's largest Asia gateway (1 daily 777 each to NRT, PVG and DEL) to its smallest (1 daily 787 each to NRT, PVG and PEK).

AA changing from 777 to 787 is not a matter of downsizing for downsizing sake but a 767 could not fly from ORD to Asia and a 787 can. The 777-200ER was probably too large for AA's route system in Asia but they had no alternative since the 767 has only Atlantic range.

Delta has a similar problem, only the 744 & 777 have Pacific range, their A330 have only west coast to Asia range not JFK or DTW to NRT range. DL does have some SEA to Asia 767 flights.

The 787 is a game changer as United using the 787-9, SFO to Singapore is showing us what it can do. Qantas will probably do something ultra long haul with their future 787-9's.

commavia · Sun Apr 03, 2016 12:44 pm

Quoting jfk777 (Reply 48):
AA changing from 777 to 787 is not a matter of downsizing for downsizing sake but a 767 could not fly from ORD to Asia and a 787 can. The 777-200ER was probably too large for AA's route system in Asia but they had no alternative since the 767 has only Atlantic range.

That, and the 787 has operating economics far better than the 767.

Of course AA didn't downgauge for downgauging's sake - AA was an airline waiting for an aircraft, for years. The 777 - due both to its size and configuration (3-class, low-density) - was long a suboptimal and non-viable solution for AA to sustainably grow across the Pacific.

Since the introduction of the 787, the game has totally changed - just like the 767 facilitated AA organically growing a network in Europe under the nose of Pan Am and TWA 30 years ago, the 787 today gives AA the opportunity to construct an Asia network smaller than, but at least broadly competitive with, its rivals.

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