DL to suspend SEA-HND Flights

[WorldTraveler]

no one said that other airlines can't effect change. and AA may well have friends in Washington too.

but the rules of issue were that the route would become dormant after 90 days.

there is no requirement that it have been used daily.

And if that rule even existed, then AA would have lost its HND route long before it abandoned it.

the fact that AA did the exact thing it is now trying to use against DL is one of the prime arguments against the DOT's actions and against AA getting the route even if it is stripped from DL.

you are the one that clearly lives in fear since you refuse to acknowledge that DL has restructured its Pacific network PROFITABLY while AA has lost hundreds of millions of dollars per year in the Pacific and shows no signs of that changing.

 

[commavia]

Still repeating the same useless lines over and over long after they stopped mattering.  AA loses money across the Pacific, just as Delta lost money in NYC and on the refinery.  And yet on the measure that really matters - overall profitability and cash flow - AA has now pretty much closed the gap with Delta.
 
Fear, fear, fear.

 

[WorldTraveler]

DL does not currently lose money in NYC or on the refinery.

AA still loses money flying the Pacific.

can you tell us when that will turn around?

AA's increased profitability if it comes will be because AA does not have fuel hedge losses and because it doesn't pay profit sharing. other analysts have repeatedly said that.

If AA's employee costs were the same without profit sharing, then there would be no advantage.

AA's profit advantage is coming in part off the backs of its people - the same strategy that Parker used at US.

the only fear is that you admit that Parker has turned AA into US.

Parker at least was smart enough to realize that US couldn't compete in some of the biggest markets in the world like NYC so he dramatically reduced US' operations there.

the same thing will eventually happen to new AA on the west coast to Asia and in NYC.

 

[commavia]

What AA has "turned into" is an airline larger than Delta, and as profitable if not more profitable than Delta, depriving Delta's #1 cheerleader of some of the most overused talking points that stopped being relevant 18 months ago.  And that's what this is really all about - fear, fear, fear.

 

[robbedagain]

you have nothing to fear... but fear itself....

 

[WorldTraveler]

What AA has "turned into" is an airline larger than Delta, and as profitable if not more profitable than Delta, depriving Delta's #1 cheerleader of some of the most overused talking points that stopped being relevant 18 months ago.  And that's what this is really all about - fear, fear, fear.

I have no fear.

AA is succeeding the same way that US did - on the backs of its employees who do not have the opportunity to work in as many locations or earn as much total compensation as DL employees do.

AA and DL will both report their financials within a week.

if you can show me that AA spends more per employee on total compensation then DL, then I will rest my case.

I am quite certain that will not happen.

 

[eolesen]

DOT is simply changing the rules as they go.

Perhaps, but route authorities are a national asset, not a corporate entitlement. If the public good isn't being served by one entity, the DOT is the agency tasked with determining who will.

 

[WorldTraveler]

and the DOT doesn't have the right to act today in a manner that is inconsistent with the policies it both required when the route was awarded or that it used under other route cases, including when AA was given the right to operate JFK-HND but left the route unserved for months without the DOT taking action.

 

[topDawg]

I have no fear.

AA is succeeding the same way that US did - on the backs of its employees who do not have the opportunity to work in as many locations or earn as much total compensation as DL employees do.

AA and DL will both report their financials within a week.

if you can show me that AA spends more per employee on total compensation then DL, then I will rest my case.

I am quite certain that will not happen.

you don't want to do that....... 
 

Perhaps, but route authorities are a national asset, not a corporate entitlement. If the public good isn't being served by one entity, the DOT is the agency tasked with determining who will.

I am not saying they aren't in legal right to do so. 
 
but I would never be happy with the government just changing the norm as they wish. 

 

[WorldTraveler]

the reason why you at least are smart enough to know that you don't want a rule of 'whatever feels good at the moment' is because it can and usually does cut both ways.

AA is willing to play that game to scrap together something of significance in the Pacific. Despite years of proving that they can't compete on par with DL and UA to/from NYC, ORD, and LAX, AA might quickly find out that all of the political wins can't change the reality that DL wins and wins for good in the marketplace.

AA might better hope that FWAAA is right and that AA doesn't get the route.

 

[jcw]

Actually the law does not say DOT has to leave route authority forever to never be re-examined.  The DOT does not have to grant route transfers - so for example DOT let DL buy PanAm's routes - the DOT could of put all of those back out for bid - DL can't have it both ways.  They have received many favorable ruling from the DOT - they might not win everything they want.
 
These are national assets not corporate rights

 

[eolesen]

Government changes the rules in the middle of the game all the time. If they're not violating the Constitution, all you can do is piss & moan to your Senators and Representatives to reign in those agencies.

So far, DOT hasn't violated the Constitution. DOT is supposed to be blind to the corporate ambitions of DL or anyone else. Their job is to make the best use of a limited asset. How that gets determined was left up to them to decide. Not Congress, not the courts.

The only power with the ability to override a DOT award decision is the White House, and that hasn't happened since 1992 or 1993 as far as I recall. ORD-NRT was awarded to AA from DOT staffers. UA appealed it to the White House and got the ruling overturned. It probably helped that Sam Skinner (head of the DOT) was well connected with Mayor Daley.

 

[WorldTraveler]

that may all be true, E, but the real outcome of this route case will be the marketplace where DL has a nearly flawless track record of pushing itself into key AA markets and growing very quickly to parity with AA for the quality of revenue that AA carries.

even if AA wins the route and DL loses it, AA will have to compete with DL on LAX-HND.

AA now also will have to compete with DL on LAX-PVG to a city where DL has now slightly passed UA in terms of the quality of revenue DL carriers compared to UA even though UA still carries more volume. UA would far rather deal with only DL than AA and DL.

AA's ambitions of growing a west coast to Asia position might be even more complicated than it was before if DL and UA both decide to focus all of their competitive energies on AA.

I always prefer to see the marketplace decide winners and losers over the legal system. AA could well be setting up a scenario where it loses in the marketplace regardless of what happens in the legal process - and FWAAA is likely right that AA won't even win in the legal (DOT) system.

this will probably go down as yet another one of Parker's strategic failures in his attempts to compete with DL.

 

[700UW]

Hainan Airlines Co., Ltd, has applied with the DOT to add service from Shanghai to Seattle (already operate PEK-SEA) along with Beijing to San Jose.

HU says the added SEA service would operate 4x weekly using A330 equipment while SJC would see the 787 5x weekly. Both routes anticipated to be launched in June.

OST-2007-0066


Interestingly like their recent BOS application they provided a financial forecast as part of their application. The SEA route is forecast to incur a $2.9mil loss the first year while SJC sees a $1.3mil loss.
 

 

[FrugalFlyerv2.0]

that may all be true, E, but the real outcome of this route case will be the marketplace where DL has a nearly flawless track record of pushing itself into key AA markets and growing very quickly to parity with AA for the quality of revenue that AA carries.

 
Just like ORD-LHR.
Oh, wait, that doesn't fit the narrative .....