jumbojet wrote:

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.

I for sure do not agree with that. DL, AA and UA are mostly not different in the way that they use profits of the high-performing parts of their network to fund parts that they see it as strategic. DL has strongholds in ATL, MSP and DTW, and funnels those profits to maintain a strong presence at LAX, SEA and NYC. There are many examples of DL doing just that in what were evidently bad decisions in Latin America - Brazil especially, in Europe - DL bought their way into LHR several times, and in Asia - HND, especially from SEA.

And if Asia is so weak, why is it that DL went after LAX-PEK? Why is it that DL is moving towards serving ATL-PVG?

BTW, I do not see the relevance of this argument that DL does not start money losing routes while other airlines do - even if true - to the topic in question.

atl100million wrote:

(...)

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. (...)

Oh well. DL never bought an airline based in Seattle. The same diatribe applies ipsis litteris. If DL heeded to wise advice, it would close that SEA money pit now. And to boot, closing SEA would make that LAX-as-an-Asian-gateway idea a lot more viable.

I find it quite humorous to read the absolutely flawed logic that pervades the arguments of some people regarding this topic. The more some people write, the more desperate they are to ignore the truth.
1. The Chinese carriers aren’t going to replace growth at PVG and PEK for a bunch of secondary Chinese airports in large part because it is no secret that the fares from those secondary Chinese airports are in the gutter. The Chinese government isn’t stupid regarding what it takes to grow their economy; they simply are not going to choke off growth in order to protect American.
2. Since someone wants to argue about how successful AA’s LAX-HKG flight is, actual data shows that DL gets more revenue per flight on LAX-HND – a much shorter flight – than AA does on LAX-HKG with a larger aircraft. You can’t blindly argue when actual data is available. And you can’t trash DL’s performance to Asia while trying to hold up AA’s or anyone else’s when it doesn’t take too much looking to see why AA loses money flying the Pacific while DL does not.
3. DL has been very conservative and has cut capacity to Asia because it has been a financial bloodbath. AA and UA’s financial performance shows it. AA simply chose to believe that DL’s lack of growth meant that AA had free reign to expand while UA has dumped tons of new capacity and has been willing to sustain low profit margins in order to grow market share. DL is ready to grow to Asia – but it will do it while remaining profitable.
4. DL most certainly handedly outperformed AA and UA in earnings for the last quarter and DL is expected to post one of the strongest RASM growths in the US industry – after AA having a couple quarters – yes a couple quarters of high growth.
5. DL generates comparable or higher higher revenues from NYC and SEA than its peers – I’d likely to know who is losing money in those markets if DL can post comparable revenues and still be ‘subsidizing’ those hubs.
6. AA’s pulldown of Latin America was driven by the same factors that caused AA to cut; DL just started sooner and is now profitable while UA is not.
7. DL is adding ATL-PVG and is seeking LAX-PEK because they can profitably grow on those routes. You blindly believe that weakness is due to no growth when the measurement of weakness in a for-profit company is profitability or not. It is highly relevant that DL does not start routes just to grab the rights from other carriers as is clearly the case with AA on LAX-PEK or that DL will lose money in starting a route. There is more than enough data to show route performance. DL simply has never started an Asia route other than the first round of HND nighttime flights that generated revenues as low as what some carriers are willing to accept for their new Asia routes; and AA’s performance on its JFK-HND route was far worse than DL’s from DTW but DL simply was not willing to sustain those losses as long as AA was.
The issue w/ this route case is simply that DL was willing to start a route that it believed would be profitable and has its current Asia network and other PEK routes as the evidence of its ability to do that. In contrast, AA jumped into the route case so that it could try to block DL from gaining the route, didn’t have the resources necessary to start the route even after winning it, and has a track record of underperforming to Asia on routes that are directly competitive w/ DL and UA – and that has been the case even on routes that have operated for years.

And calling DL's SEA hub money losing is simply a not very veiled admission that it was AA that failed strategically to build a west coast to Asia hub in a city where it could operate the majority of the flights which is completely opposite of what they are now having to do in LAX. Meanwhile, DL and UA both have their own west coast gateways to Asia which no other US carriers serve to Asia and are also committed to growing in LAX to Asia where AA thinks it will be able to set up its own successful LAX hub.

atl100million wrote:

I find it quite humorous to read the absolutely flawed logic that pervades the arguments of some people regarding this topic. The more some people write, the more desperate they are to ignore the truth.
1. The Chinese carriers aren’t going to replace growth at PVG and PEK for a bunch of secondary Chinese airports in large part because it is no secret that the fares from those secondary Chinese airports are in the gutter. The Chinese government isn’t stupid regarding what it takes to grow their economy; they simply are not going to choke off growth in order to protect American.

A couple of points:

1. It's also no secret that the various Chinese Provinces highly subsidise these flights from Secondary Chinese cities on Chinese Airlines. So while fares may be in the gutter it largely doesn't matter;
2. No-one has said their going to replace one with the other. You're the one who keeps saying that DL will be able to immediately start LAX-PEK after AA does while others point out that unless a new bilateral happens that's not going to happen. Are you going to sit there and guarantee that the Trump Administration will be able to successfully negotiate increased capacity with the Chinese Government? You can't which is precisely why DL wanted the current batch of slots and is agitating for AA to be stripped of them. If a new bilateral was around the corner they wouldn't need to;
3. More air carrier services to PEK, PVG and CAN, while nice, are not absolutely essential to keep growing the Chinese Economy going. A significant amount of US / China traffic goes through HKG, Japan and Korea anyway due to comparable 1 stop access to the industrial and manufacturing hubs which aren't just in those 3 cities. So to say that economic growth will be choked off because Delta can't get access to a LAX - PEK service is ridiculous to say the least;
4. Not 1 single post above has said the Chinese Government is protecting American yet you keep repeating this. I'm not sure, on the counterfactual argument, how one could argue that the Chinese Government would open up the market just because Delta wants them to. Both arguments are absurd which is why neither argument has been made.

atl100million wrote:

And calling DL's SEA hub money losing is simply a not very veiled admission that it was AA that failed strategically to build a west coast to Asia hub in a city where it could operate the majority of the flights which is completely opposite of what they are now having to do in LAX. Meanwhile, DL and UA both have their own west coast gateways to Asia which no other US carriers serve to Asia and are also committed to growing in LAX to Asia where AA thinks it will be able to set up its own successful LAX hub.

Also, just an FYI on the hubs neither UA at SFO nor DL at SEA operate "the majority" of flights at the airport. At SFO UA is by far the biggest carrier but with under 50% while at SEA AS is still larger than DL. So on while competition at LAX is fierce, neither DL nor UA have it easy at their respective hubs with UA's grip on SFO being markedly higher than DL's at SEA.

atl100million wrote:

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.

Your still at it.


quote "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" quote



And in time that answer will come to Light. I'll say so far they must because AA is still working towards that goal and hasn't let up. There pushing there facilities to the max and working towards there goal. Time will tell.

Saying and repeating over and over again the same nonsense > mixed in with obvious and undisputed stuff in large walls of text, Doesn't make your argument. I know a guy I work with that thinks if he yells louder and louder it will make him right on issue.

nutsaboutplanes wrote:

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.

This is the bottom line. Setting aside the detached-from-reality rantings (hilarious as they are to read, "ignore" is a wonderful feature), the bottom line is that AA views Asia expansion as an investment. AA's own executives past and present have spoken at length about the need for AA to build a robust, credible Asia franchise that compliments AA's already-strong global presence in Europe and Latin America and reflect's AA's share of the U.S. domestic market. That is happening - AA has, in the last decade, dramatically narrowed the gap across the Pacific relative to its closest rival there, Delta. LAX-PEK is a part of that continuing investment. It's similar to Delta itself, which spent years and untold millions "investing" in a competitive and sustainable presence in NYC. This is no different.

AA's Pacific network is still not generating returns commensurate with the rest of the network, but few investments pay off instantly. I think any objective assessment would conclude that AA's own network across the Pacific at this point is, frankly, pretty impressive - not only relative to where it started, but just in general. The complimentary gateways of DFW, ORD and LAX provide very good access from throughout the U.S. And then layer on top of that an extensive JV with JAL (and possibly soon QANTAS), and strong (or, by all accounts, soon-to-be-strong) partnerships with China's biggest airline (China Southern) and arguably its best airline (Cathay Pacific). As many of us have been saying, if I'm AA, I suspect I'm fairly happy - overall - with the direction things are going across the Pacific.

LAXtoATL wrote:

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.

Huh? FC and business class customers don't get seats assigned at check-in. They get their seats at purchase.

Looking at seat maps gives a very good idea of the loads up front. Filling up at the last minute very much indicates that non revs are getting the seats and perhaps some passengers are using upgrade certificates as well.

David

diverdave wrote:

LAXtoATL wrote:

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.

Huh? FC and business class customers don't get seats assigned at check-in. They get their seats at purchase.

Looking at seat maps gives a very good idea of the loads up front. Filling up at the last minute very much indicates that non revs are getting the seats and perhaps some passengers are using upgrade certificates as well.

David

Not at all. I have access to loads for all carriers and there is rarely a correlation in any class to what's actually available to what's on the seat map.

diverdave wrote:

LAXtoATL wrote:

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.

Huh? FC and business class customers don't get seats assigned at check-in. They get their seats at purchase.

Looking at seat maps gives a very good idea of the loads up front. Filling up at the last minute very much indicates that non revs are getting the seats and perhaps some passengers are using upgrade certificates as well.

David

You are wrong sir! I am not quessing, speaking from experience and very familiar with the process.
If you don't believe me try to purchase a First class seat on AA Flt 136 (LAX to LHR) this evening. You can not, it is sold out. Now, look at the seat map and you will notice that only one seat has been assigned at this point.

LAXtoATL wrote:

You are wrong sir! I am not quessing, speaking from experience and very familiar with the process.
If you don't believe me try to purchase a First class seat on AA Flt 136 (LAX to LHR) this evening. You can not, it is sold out. Now, look at the seat map and you will notice that only one seat has been assigned at this point.

I am looking right now. That flight is now 12 hours from departure.

Every seat in FC on that lfight has an X and is not available.

There are 52 seats in BC, and 7 are available the rest have X's are not available.

Just for fun I looked at tomorrow's flight 136 - FC is not for sale and one seat of 8 available for assignment. 6 available for assignment in business.

Seats assigned in a premium cabin on US carriers are very much an indication of the paid load factor.

David

atl100million wrote:

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.

You think no - others think so. The end. Can we stop this now?

diverdave wrote:

LAXtoATL wrote:

You are wrong sir! I am not quessing, speaking from experience and very familiar with the process.
If you don't believe me try to purchase a First class seat on AA Flt 136 (LAX to LHR) this evening. You can not, it is sold out. Now, look at the seat map and you will notice that only one seat has been assigned at this point.

I am looking right now. That flight is now 12 hours from departure.

Every seat in FC on that lfight has an X and is not available.

There are 52 seats in BC, and 7 are available the rest have X's are not available.

Just for fun I looked at tomorrow's flight 136 - FC is not for sale and one seat of 8 available for assignment. 6 available for assignment in business.

Seats assigned in a premium cabin on US carriers are very much an indication of the paid load factor.

David

Here are your loads for LAX-LHR on AA 136 tonight:

3AA 136 F0 A0 J5*LAXLHR 745P 225P‡1 77W DB 0 DCA /E
R4 D4 I0 Y7 B0 H7 K7 M7 L7 G7 V7

That is just SABRE is it not. Can't rely on that.

The "truth" is only known inside the carrier's interface. It changes hour by hour. Internet ticketing should be somewhat accurate but still a ton of exceptions to that.

LAXdude1023 wrote:

Here are your loads for LAX-LHR on AA 136 tonight:

3AA 136 F0 A0 J5*LAXLHR 745P 225P‡1 77W DB 0 DCA /E
R4 D4 I0 Y7 B0 H7 K7 M7 L7 G7 V7

I'm literally laughing out loud at that one. A GDS read out is only mildly indicative of actual loads. For example, using my own, far more accurate semi-public methods, I can tell you that there are, for example, at time of typing, 19 main cabin seats open on that flight tonight, which is hardly alluded to in your Sabre read out there.

LAXtoATL wrote:

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.

What are you claiming? I have never booked an FC or Business ticket without choosing a seat - and neither have any of my associates. Nor any friends and business contacts I know. It is a "given" that we choose the seats we want. And looking at the AA website, you can see that even Coach passengers are allowed to select seats in advance (except that "Basic Economy" program).

I don't understand posters who destroy their credibility with such patently ludicrous statements...

alfa164 wrote:

LAXtoATL wrote:

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.

What are you claiming? I have never booked an FC or Business ticket without choosing a seat - and neither have any of my associates. Nor any friends and business contacts I know. It is a "given" that we choose the seats we want. And looking at the AA website, you can see that even Coach passengers are allowed to select seats in advance (except that "Basic Economy" program).

I don't understand posters who destroy their credibility with such patently ludicrous statements...

Pre-assigning seats is a very American thing. It's very common in Asia and Europe to simply not pre-assign.

I realize it's hard for us to grasp here - aviation enthusiasts will research and carefully plan these things - but most people don't care.

MAH4546 wrote:

alfa164 wrote:

LAXtoATL wrote:

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.

What are you claiming? I have never booked an FC or Business ticket without choosing a seat - and neither have any of my associates. Nor any friends and business contacts I know. It is a "given" that we choose the seats we want. And looking at the AA website, you can see that even Coach passengers are allowed to select seats in advance (except that "Basic Economy" program).

I don't understand posters who destroy their credibility with such patently ludicrous statements...

Pre-assigning seats is a very American thing. It's very common in Asia and Europe to simply not pre-assign.

I realize it's hard for us to grasp here - aviation enthusiasts will research and carefully plan these things - but most people don't care.

Even in America, though, seats are not always assigned. I've had a number of tickets where I couldn't select a seat (pre-basic economy times). I found this happened more often when booking using an agent through work.

Furthermore, some tickets are sold within a few hours of departure, so looking this morning for a flight this evening isn't accurate. On the flip side, we are all aware now of overbooking, so if you look at SABRE availability, it may show more fares available than seats available.

MAH4546 wrote:

Pre-assigning seats is a very American thing. It's very common in Asia and Europe to simply not pre-assign.

I realize it's hard for us to grasp here - aviation enthusiasts will research and carefully plan these things - but most people don't care.

Fair enough, but for a US based airline the seatmap for FC and BC is going to be reasonably reflective of bookings. Coach much less so, as there are premium or preferred coach seats not available for general selection.

IME, many US based travel systems will attempt to assign a seat if an assignment can be made.

David

diverdave wrote:

MAH4546 wrote:

Pre-assigning seats is a very American thing. It's very common in Asia and Europe to simply not pre-assign.

I realize it's hard for us to grasp here - aviation enthusiasts will research and carefully plan these things - but most people don't care.

Fair enough, but for a US based airline the seatmap for FC and BC is going to be reasonably reflective of bookings. Coach much less so, as there are premium or preferred coach seats not available for general selection.

IME, many US based travel systems will attempt to assign a seat if an assignment can be made.

David

This is my last post on the subject...
You are referring to reserving a seat! That seat is not actually assigned until check-in. (at least for AA)
(and as we all know you may or may not get the seat you actually reserved)

winginit wrote:

LAXdude1023 wrote:

Here are your loads for LAX-LHR on AA 136 tonight:

3AA 136 F0 A0 J5*LAXLHR 745P 225P‡1 77W DB 0 DCA /E
R4 D4 I0 Y7 B0 H7 K7 M7 L7 G7 V7

I'm literally laughing out loud at that one. A GDS read out is only mildly indicative of actual loads. For example, using my own, far more accurate semi-public methods, I can tell you that there are, for example, at time of typing, 19 main cabin seats open on that flight tonight, which is hardly alluded to in your Sabre read out there.

not to mention F is full and J has only 5 open seats...

winginit wrote:

LAXdude1023 wrote:

Here are your loads for LAX-LHR on AA 136 tonight:

3AA 136 F0 A0 J5*LAXLHR 745P 225P‡1 77W DB 0 DCA /E
R4 D4 I0 Y7 B0 H7 K7 M7 L7 G7 V7

I'm literally laughing out loud at that one. A GDS read out is only mildly indicative of actual loads. For example, using my own, far more accurate semi-public methods, I can tell you that there are, for example, at time of typing, 19 main cabin seats open on that flight tonight, which is hardly alluded to in your Sabre read out there.

You completely missed the point of why I posted that. Showing that 0 seats are in F or A will show that cabin to be completely full. Knowing how to read GDS, it also shows there are 5 seats left in business. You are correct in that there is no way to know what Y loads are from this.

Can we interrupt this diversionary discussion about seat assignments on LAX-LHR so that I can note that anyone that has access to any kind of data knows that AA does very well on LAX-LHR. And seat assignments provide no insight into how well a flight does. Individual flights aren’t representative of much more than, at best, the individual flight which is why there is aggregated data on US carrier performance even on international routes.

winginit wrote:

atl100million wrote:

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.

You think no - others think so. The end. Can we stop this now?

I am more than happy to respect other people’s belief about how well a route is going to do… but I and no one who rationally participates in a discussion about airline performance can clap their hands over their ears and call other people’s posts non-sense just because they don’t like the factual information others bring to the table. Is it too much to ask that the same respect that some people want given regarding support for the development of AA’s Pacific network should also apply to those who might bring an opposing point of view? Honestly, I’m not sure some people think they should be free to trash other people’s opinions and then expect their points of view to be treated as sacrosanct.

I offered before and I will say again that I am happy to put the discussion on ice until some sort of firm development is reached.
Given that data shows that AA does well on LAX-LHR and I’m not afraid to give them credit for that, I’m not sure why some people are so afraid to hear/read that there is also data that shows that AA has underperformed DL and/or UA on every route where AA directly competes against them to Asia. All of the pleading that “it takes time to develop a route” has to be viewed in that data-based reality.
Further, there are plenty of failed hubs/gateways including AA’s SJC gateway and DL’s PDX gateway. The difference is simply that DL regrouped, built SEA and now indeed has a hub where it offers the only US carrier transpacific service, just as UA does in SFO – which is what I said above.

In contrast and, what some people can’t accept, is that AA has chosen to build an Asia gateway at LAX where DL and UA not only have Asia flights but are both committed to growing their operations there – which is why it is highly relevant, that AA not only will have to compete directly against DL and UA on routes where it does not have a verifiable track record of comparable financial performance on routes competitive with DL and UA even where AA has a joint venture partner but DL does not. I’m still waiting for someone to explain how AA manages to underperform DL and UA on routes to Japan – but I’d settle for an admission that they do.

It is also worth noting that AA’s revenue performance to Asia is best from DFW – where they face no direct US carrier competition. I’m not sure why some people can’t connect the fact that AA does well where it doesn’t have to compete against DL and UA but can’t accept that the very same principle applies at LAX.

DL and UA simply never said they intended to pull down LAX to Asia – that is what this route case is about. While so many were so quick to argue that DL is trying to block competition, that is in fact what is happening with AA’s desire to serve the route – whether that is what they wanted or not. DL would have been operated the route for over 7 months if AA had not applied. DL will expand its presence in the LAX to China market. There will be an expansion of the US-China bilateral that will allow additional routes including expansion of LAX to Beijing, currently the largest route with the least amount of US carrier service. AA’s single flight even if it ultimately starts will not put the market back in balance with the amount of capacity the market needs and secondary China routes are no more of a substitute for increased PVG and PEK service than it is logical to argue that increased service to DTW and ORD is a reasonable substitute for growing NYC and LAX.
And no one has yet to admit that, AA will never be able to start service to CAN to connect with China Southern’s hub as long as there are zero no new flights to PVG, PEK or CAN.

Instead of pridefully beating one’s chest and talking about how great one carrier does and attempting to shut down anyone that has actual proof to the contrary is hardly the recipe for informed, respectful dialogue.
When AA successfully operates LAX-PEK long enough to generate revenues comparable to other US carrier west coast to Asia flights, or more likely, directly competitive w/ other LAX-PEK flights, then there will finally be the basis to argue that bringing up uncomfortable realities and details is no longer needed.

atl100million wrote:

I offered before and I will say again that I am happy to put the discussion on ice until some sort of firm development is reached.

Great. We'll do that now, because literally everything else you've said in that post has been at this point repeated to exhaustion.

incitatus wrote:

If DL heeded to wise advice, it would close that SEA money pit now.

But considering that you have no clue what SEA's finances are, so why are you offering anyone such "advice?"

alfa164 wrote:

I have never booked an FC or Business ticket without choosing a seat - and neither have any of my associates. Nor any friends and business contacts I know.

Which is yet another example of why using anecdotal references (such as your limited sphere of acquaintance) is a bad idea when trying to prove a point.

Plenty of airlines don't let you choose seats, or make it cost-deterrent to do so.
Heck, BA won't let even paid J pax choose a seat, not without paying several hundred dollars in fees for a roundtrip selection.

LAX772LR wrote:

incitatus wrote:

If DL heeded to wise advice, it would close that SEA money pit now.

But considering that you have no clue what SEA's finances are, so why are you offering anyone such "advice?"

If only DL had the smarts to make business decisions on the basis of a.net poster incitatus and what their competitor, Alaska, wants, DL would be better off.

winginit wrote:

atl100million wrote:

I offered before and I will say again that I am happy to put the discussion on ice until some sort of firm development is reached.

Great. We'll do that now, because literally everything else you've said in that post has been at this point repeated to exhaustion.

because, quite literally, your statement is not accurate.

and the reply from LAX772LR just above highlights precisely why accurate presentation of facts is far from the norm in this discussion.

Pure emotion is all that exists when blind loyalty to one airline and blind ignorance about other airlines is the basis for a conversation - and that is exactly what much of this discussion has been about.

We look forward to you being an advocate for accurate and factual discussion.

LAXtoATL wrote:

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.

How in the world could you deduce that LAX-HKG is performing well for AA? Do you have any data to support this? Anecdotally, their fares are incredibly low and it often takes a long time for a carrier to turn a profit on a highly competitive longhaul flight that's been, for decades, dominated by another lower-cost foreign carrier(s). While AA has made enormous inroads in the LA-Asia market, one can be almost assured that LAX-HKG for any airline outside of CX is going to be a tremendous challenge, especially given that AA just started the route not that long ago. CX's dominance of the market for so long, in spite of how enormous the market is, should be highly indicative of the difficulty of operating in this market and the loyal customer base that is driving's CX control of the market. It's crucial that AA serve LAX-HKG if it wants to be a contender for LA's number one US airline to Asia, but I would bet my annual salary that AA is losing millions, if not tens of millions of dollars in the LAX-HKG on a yearly basis. Overall, it's a loss worth taking but I don't think anyone who's knowledgeable of market economics and the LA-Asia airline market would for a second think that AA suddenly started LAX-HKG and just started making money. It will likely take years for AA's LA-Asia routes to break even, but it's simply too important for AA not to take those risks. Thus far, they seem to be paying off.

Jeremy

atl100million wrote:

Pure emotion is all that exists when blind loyalty to one airline and blind ignorance about other airlines is the basis for a conversation - and that is exactly what much of this discussion has been about.

How exceptionally rich coming from you. Welcome back World Traveler.

As if some mythical demon from the past changes the topic.

The more relevant response you should take is to explain the basic, factual basis of what I have presented which is that AA has underperformed DL and UA on every route to Asia where AA has competed directly competitive w/ DL or UA.

If you and others would simply admit that those facts really exist and quit looking for every reason to shoot the messenger, we might actually make some progress here.

atl100million wrote:

The more relevant response you should take is to explain the basic, factual basis of what I have presented which is that AA has underperformed DL and UA on every route to Asia where AA has competed directly competitive w/ DL or UA.

No one. has. denied. that.

Stop.

atl100million wrote:

As if some mythical demon from the past changes the topic.

The more relevant response you should take is to explain the basic, factual basis of what I have presented which is that AA has underperformed DL and UA on every route to Asia where AA has competed directly competitive w/ DL or UA.

If you and others would simply admit that those facts really exist and quit looking for every reason to shoot the messenger, we might actually make some progress here.

Let's level set the conversation a bit. I am sure that DL and UA outperform AA across the pacific in almost every example. That said, with two airlines who via mergers and decades of organic growth have bridged the pacific for 75+ years, I would certainly hope that this would be the case. Each has developed substantial FF bases and have well developed marketing programs and business/community ties. If they weren't outperforming AA at this point I would be shocked.

AA however is doing an awful lot right. Reconfigured 772's, the only US airline with a true F cabin to offer and the only US airline offering Premium Economy across the Pacific with the introduction of the 789 (NRT transitions to 789 on August 4th) followed by several other routes.

AA's revenue picture will steadily improve but as I said before, if UA and DL were not outperforming AA at this juncture I would be stunned.

nutsaboutplanes wrote:

atl100million wrote:

As if some mythical demon from the past changes the topic.

The more relevant response you should take is to explain the basic, factual basis of what I have presented which is that AA has underperformed DL and UA on every route to Asia where AA has competed directly competitive w/ DL or UA.

If you and others would simply admit that those facts really exist and quit looking for every reason to shoot the messenger, we might actually make some progress here.

Let's level set the conversation a bit. I am sure that DL and UA outperform AA across the pacific in almost every example. That said, with two airlines who via mergers and decades of organic growth have bridged the pacific for 75+ years, I would certainly hope that this would be the case. Each has developed substantial FF bases and have well developed marketing programs and business/community ties. If they weren't outperforming AA at this point I would be shocked.

AA however is doing an awful lot right. Reconfigured 772's, the only US airline with a true F cabin to offer and the only US airline offering Premium Economy across the Pacific with the introduction of the 789 (NRT transitions to 789 on August 4th) followed by several other routes.

AA's revenue picture will steadily improve but as I said before, if UA and DL were not outperforming AA at this juncture I would be stunned.

thank you for that very honest response. Of course it is logical to believe that DL and UA outperform AA.

However, despite what some think, there is FAR FROM agreement that reality exists - as evidenced by the attempts to throw completely erroneous statements about DL's performance as if that is an acceptable explanation for AA's underperformance on long-standing rights.

and, with all due respect, AA's reconfigured 772s are nearly identical to what DL has flown for years except DL has and is retaining 9 abreast coach while AA is not. DL is also now selling premium economy so, if the product is worth something, AA and DL are both going to benefit. I'm not interested in getting into an aircraft debate but AA's Pacific aircraft strategy is not at all revolutionary. The only real point is that they had way too few seats on their 777s. Adding more seats certainly helps but needing to fill more seats doesn't make the job of pushing up average fares any easier.

And my real beef w/ what so many have posted is their blind loyalty to AA's strategy - as evidenced by ignoring my posts because they don't like the truth I lay on the table followed by a complete denial of the fact that LAX is a highly competitive market and DL and UA fully intend to compete in the LAX to Asia market.

I honestly EXPECT AA to underperform - and I don't care if they tell their stockholders that they will have to subsidize their Pacific operations from ORD and LAX to Asia if that is what they have to do.

But no one should think that even if AA is able to start LAX-PEK and the CZ alliance is implemented that AA will gain any advantage when the evidence is pretty clear that even with a JV in Japan, AA has not been able to produce industry comparable results or to grow to parity with DL and UA.

A little recognition that AA is facing an uphill battle in its desire not just to do technically what is necessary to start LAX-PEK but to gain the type of strategic advantage that they have to Latin America and LHR, markets where they are unquestionably leading the US carriers

This has to be the most exhausting and bizarre thread on this website ever.

nutsaboutplanes wrote:

Let's level set the conversation a bit. I am sure that DL and UA outperform AA across the pacific in almost every example. That said, with two airlines who via mergers and decades of organic growth have bridged the pacific for 75+ years, I would certainly hope that this would be the case. Each has developed substantial FF bases and have well developed marketing programs and business/community ties. If they weren't outperforming AA at this point I would be shocked.

AA however is doing an awful lot right. Reconfigured 772's, the only US airline with a true F cabin to offer and the only US airline offering Premium Economy across the Pacific with the introduction of the 789 (NRT transitions to 789 on August 4th) followed by several other routes.

AA's revenue picture will steadily improve but as I said before, if UA and DL were not outperforming AA at this juncture I would be stunned.

Perfectly put.

Nobody has every seriously suggested that AA was going to dominate LAX or the Pacific, nor that LAX-PEK was going to be an instantaneous license to print money. Rather, as many of us have long understood, AA is doing precisely what it said it would do. Specifically, AA is building a robust and credible transpacific presence that (1) provides sufficiently competitive access for AA's high-value customers and (2) compliments AA's extensive existing network. AA's steady growth in Asia - going from 6 flights and 2 cities a decade ago to (soon) 14 flights and 5 cities is, indeed, impressive. And when combined with AA's strong and growing partnerships spanning the Pacific - including with JAL, QANTAS, Cathay Pacific and (soon) China Southern, AA is rapidly approaching where it needs to be. LAX-PEK is clearly part of this effort. But, needless to say, such an endeavor as organically building a transpacific franchise - particularly up against such long-established players - takes time, and money, and AA's executives have repeatedly acknowledged as much.

B737900ER wrote:

This has to be the most exhausting and bizarre thread on this website ever.

Indeed. The "ignore" feature really does help, though.

and if you took your finger off the ignore button long enough, you would have read that no one questioned that AA could add a bunch of flights from LAX to Asia.

The question was and remains how AA is going to turn LAX to Asia into a profitable operation and what is going to change that will allow AA to be profitable in markets that are directly competitive w/ DL and UA when that hasn't been the case even on routes that have been operated for decades.

Boldly addressing those issues would do wonders to add clarity to the conversation.

B737900ER wrote:

This has to be the most exhausting and bizarre thread on this website ever.

One poster living in an alternate reality with epic rantings.

atl100million wrote:

despite what some think, there is FAR FROM agreement that reality exists - as

What I think is that your reality is in an alternate universe. And I'm not talking about the content of this thread. I'll give you something to practice: "agree to disagree." Much easier than a 2 page repetitive wall of text.

In DOT filing today, AA says it has the required slots to commence service between LAX and PEK.

The new slots become available with the W17 IATA schedule season and AA says it plans a November 5th start up.

Proposed times:
LAX-PEK 1110-1620
PEK-LAX 1830-1515

Accordingly, AA request DOT to grant a brief additional start up waiver extension from September 16th to November 5th.

AA says it anticipates opening the flight for sale "within days"

LAXintl wrote:

In DOT filing today, AA says it has the required slots to commence service between LAX and PEK.

The new slots become available with the W17 IATA schedule season and AA says it plans a November 5th start up.

Proposed times:
LAX-PEK 1110-1620
PEK-LAX 1830-1515

Accordingly, AA request DOT to grant a brief additional start up waiver extension from September 16th to November 5th.

AA says it anticipates opening the flight for sale "within days"

So in short things unfolded more or less exactly as was anticipated by many.

This is good news and on par with expectations. Good outcome for AA.

LAXintl wrote:

In DOT filing today, AA says it has the required slots to commence service between LAX and PEK.

The new slots become available with the W17 IATA schedule season and AA says it plans a November 5th start up.

Proposed times:
LAX-PEK 1110-1620
PEK-LAX 1830-1515

Accordingly, AA request DOT to grant a brief additional start up waiver extension from September 16th to November 5th.

AA says it anticipates opening the flight for sale "within days"

Cool - good news. I expect the DOT to accept AA's request for a 5 November launch.

Looks like things unfolded just as predicted, and this seemingly indicates that the AA-China Southern "strategic relationship" is, indeed, a "done deal." Better yet for AA, looks like it was, in fact, ultimately able to get a nearly-optimal slot pair with which to operate this flight - given past history with slots at major Chinese airports, it's actually amazing how close the apparent schedule is to what was originally proposed/announced. Having an alliance with a Chinese state airline helps!

This footnote at the bottom of page 3 also pretty much confirms what many of us have long suspected - just like with HND, AA was clearly ensuring that it kept U.S. regulators informed on slot availability at PEK throughout this entire process:

"American thanks the Department for its support as American worked to acquire the new slots."

winginit wrote:

So in short things unfolded more or less exactly as was anticipated by many.

Haha, yeah ... but weren't all those pages of rambling diatribes so helpful in illuminating all the salient issues involved?

Pardon me but is this route still to be operated with a 777

tilerchin wrote:

Pardon me but is this route still to be operated with a 777

It will almost certainly be operated by a 787.

commavia wrote:

tilerchin wrote:

Pardon me but is this route still to be operated with a 777

It will almost certainly be operated by a 787.

ok thank you i was wondering because the original AA application stated a 772 as the aircraft

commavia wrote:

tilerchin wrote:

Pardon me but is this route still to be operated with a 777

It will almost certainly be operated by a 787.

Well that isn't what AA proposed. Not that AA can't change the aircraft, but who knows.

jbs2886 wrote:

Not that AA can't change the aircraft

A 788 down gauge will most certainly get Atlanta's attention.

LAXintl wrote:

In DOT filing today, AA says it has the required slots to commence service between LAX and PEK.

The new slots become available with the W17 IATA schedule season and AA says it plans a November 5th start up.

Proposed times:
LAX-PEK 1110-1620
PEK-LAX 1830-1515

Accordingly, AA request DOT to grant a brief additional start up waiver extension from September 16th to November 5th.

AA says it anticipates opening the flight for sale "within days"

well glory hallelujah.

Nearly a year after DL COULD have started the route, AA manages to do what DL had already arranged... but hey I don't want to EVER hear another comment about the injustice of DL getting the MSP-HND route or why AA could have done it better... DL could have flown MSP-HND at a 30% load factor since it was awarded the route and would have carried more passengers than AA will carry on LAX-PEK in the same period from when the DOT made its route award decision in the LAX-PEK case.

And of course it will be "very interesting" to watch AA's Pacific profitability as this new route comes online... since as we have seen over and over again, AA deeply discounts its new LAX to Asia routes for a good six months.

and now the question is what AA does for its encore... it has now built up ORD, DFW, and LAX to Asia other than ORD-HKG and LAX and ORD to ICN.

and yes AA wouldn't even dare to think of putting a 788 on the route.

atl100million wrote:

and yes AA wouldn't even dare to think of putting a 788 on the route

jbs2886 wrote:

Well that isn't what AA proposed. Not that AA can't change the aircraft, but who knows.

The DOT typically affords airlines significant flexibility to change operational aircraft on given routes once awarded the requisite international route authorities.

In this case, for all the competitive and economic reasons already thoroughly discussed in this thread, the 787 is the ideal aircraft for a U.S. carrier to operate on LAX-PEK. Delta proposed the 777 because it didn't, obviously, have the 787 available and thus, among Delta's existing longhaul widebody fleet, the 777 likely was the next best option. I suspect AA then countered with also proposing a 777 - with almost the exact same number of seats - to essentially remove that argument from Delta. But personally, I suspect that even if AA begins operation with the 777, this route will very rapidly switch to the 787.

That said, on the subject of competitive and economic challenges in this and other U.S.-China markets, I also fully expect that the "strategic relationship" with China Southern, once fully realized, is going to have an immediate and significant - significantly positive, to be specific - affect on the economic performance of AA's Mainland China flights. The level of domestic feed and sales support is, I suspect, going to be utterly transformational for AA in China.