QF adding SYD-DFW

[FWAAA]

But eolesen, that doesn't make sense to the airliners.net crowd, for whom points on the map and exotic destinations, not financial viability, reign supreme. Their typical MO is to pull out a globe, list the cities to which AA does not fly, and complain.

By their thinking, AA management is stupid for not flying nonstop to SIN or BKK or SYD or AKL or BOM or CMB or NBO or CPT or JNB or any other far-flung city they'd like to visit once the graduate from high school.

 

[damajagua]

But eolesen, that doesn't make sense to the airliners.net crowd, for whom points on the map and exotic destinations, not financial viability, reign supreme. Their typical MO is to pull out a globe, list the cities to which AA does not fly, and complain.

By their thinking, AA management is stupid for not flying nonstop to SIN or BKK or SYD or AKL or BOM or CMB or NBO or CPT or JNB or any other far-flung city they'd like to visit once the graduate from high school.

FWAA I find your comment about high graduate some what offesensive.

For your informartion there are many of us with graduate degrees that choose to do this job for whatever reason.
And many of us would love to see AA have a bigger global reach not just because we want to visit....but becuase
we want to see our company succeed. I think its going to be harder and harder for our sales department to sell
AA when the new United and Delta have global reach way more impressive than ours. So while YES it would be nice
to visit many destinations while working......If I really want to go; I can go on my own. in the end how much can
one really enjoy a great city like Sydney or Hong Kong on a 24 hours layover after a 14 or 15 hours flight. Most of
us just go to rest on our layovers.

 

[FWAAA]

FWAA I find your comment about high graduate some what offesensive.

You're offended that I implied that the typical airliners.net poster has not yet graduated from high school and, thus is still a teenager? Whatever.

For your informartion there are many of us with graduate degrees that choose to do this job for whatever reason.
And many of us would love to see AA have a bigger global reach not just because we want to visit....but becuase
we want to see our company succeed. I think its going to be harder and harder for our sales department to sell
AA when the new United and Delta have global reach way more impressive than ours. So while YES it would be nice
to visit many destinations while working......If I really want to go; I can go on my own. in the end how much can
one really enjoy a great city like Sydney or Hong Kong on a 24 hours layover after a 14 or 15 hours flight. Most of
us just go to rest on our layovers.

In your zeal to be offended and to give me the prototypical lecture about how well educated the typical airline employee happens to be, it appears that you are laboring under the mistaken impression that my post was about you (or any other adult) airline employee when it was not. From your post, you appear to be a grown-up, real-life airline employee (flight attendant?), not a member of the group to which I was referring. If I had meant to insult the adult employees of AA, I would not have used the words I used.

Perhaps you are not familiar with the phrase "airliners.net crowd." I was referring to the website www.airliners.net where the typical user is a teenage fanboi of various airlines and argue endlessly about which airline is best. Debates about Boeing v. Airbus rage on endlessly there as well.

Sounds to me like this was an Emily Litella moment for you. B)

Have a great weekend!

 

[damajagua]

Sorry FWAA my mistake.
Have a great weekend too.

 

[WorldTraveler]

Sure, blame the pilots and management because AA's partners have better service and a stronger presence at the other end of the route...

If QF didn't offer vastly superior service, and the market wasn't so strongly weighted towards AU point of sale, perhaps there might be cause for AA to consider flying their own metal. But that's not the case. There's no way business travelers would choose AA metal over QF, and it's even less likely that Australians would want to fly on a US carrier over an AU carrier.

Not sure how lopsided the US-HKG market is, but again, CX offers far superior service, even in coach, to what AA offers.

UA and DL fly the routes because they've got weaker (or no) partners in the region. V-Australia's got great service, but has a tiny fleet and is unknown outside of Australia. Air NZ isn't a weak partner, but they're stretched pretty thin as far as their fleet goes.

by your logic, AA should be flying to a whole lot more destinations that UA and DL because oneworld is smaller than Skyteam or Star.
In reality, AA has a limited transpacific network because it would have to compete against UA on every route it serves - and AA has done very poorly in competing to Asia to/from the Asia/Pacific region. UA obtains higher revenues on a lower cost base than AA to/from every destination AA serves out of ORD to Asia. The pulldown of LAX-China on AA appears to me - and I am ready to be proven wrong - that AA tried to find a market to/from Asia where they would be away from UA's presence - and, lo and behold, UA showed up and dropped in right on top of AA.

Because AA doesn't have any "skin in the game" (its own metal) in key oneworld markets like HKG and SYD, it is very doubtful that those partners will ever share revenue with AA in those markets which relegates AA to the position of being a feeder airline to those foreign carriers. Yes, AA can add a dot or two to its route map and buy seats from those carriers which AA can then resell its own, but AA cannot jointly set fares with those carriers, cannot make decisions together about where to fly or how to optimize the schedules, and cannot share revenues - because those all require antitrust immunity which AA does not have with QF or CX.

By your logic, DL and UA should not bother to fly to S. Korea or other markets because they have partners who offer higher quality service - and those carriers have better networks "on the other end" of the transpac networks.

The reality is that AA doesn't fly to HKG or SYD because they do not have the aircraft that could fly those routes, they don't have the market strength to compete against stronger carriers (US and foreign), and AA doesn't have the labor costs necessarily to effectively compete in those markets.

AA's strategic problem is that there are fewer and fewer markets outside of Latin America - which is the smallest global region - that AA COULD serve throughout the world where DL or UA are not entrenched even if AA had labor costs low enough.
Thus, AA's strategy will increasingly be to develop the best codeshare relationships it can and funnel passengers onto other carriers' networks.
The goal is not to add dots to a route map - which the a.net crowd seem to think is the objective of an airline - but rather to find profitable places to grow the network. If AA can find those places on its existing network, more power to them. But the problem again is that other carriers are growing in AA's key strategic markets like LHR and Latin America as well as NYC but AA is not growing its network into other new regions or other carriers' networs.

 

[FWAAA]

The pulldown of LAX-China on AA appears to me - and I am ready to be proven wrong - that AA tried to find a market to/from Asia where they would be away from UA's presence - and, lo and behold, UA showed up and dropped in right on top of AA.

"Pulldown?" LAX-PVG appears to begin on April 5.

Of course UA followed AA's lead on LAX-PVG; That route features the largest O&D to China not served by a USA-based airline, and USA-originating passengers have overwhelmingly showed a preference for USA-based airlines over Chinese carriers. UA applied for LAX-PVG a few years ago and laid out the case very convincingly. No surprise that UA doesn't want to leave that market to AA alone.

The route should be able to survive based on O&D alone but both UA and AA feature sufficient connectivity to thrive on this route. The O&D on LAX-PVG far exceeds the O&D from Chicago.

 

[commavia]

Blah, blah, blah. Sick of lambasting AA over on "another forum," now AirlineForums.com has to be treated to the continual drumbeat of how AA can't compete, won't compete, doesn't have the "market strength," is being left in the dust by Delta (first and foremost, of course) and United. Blah, blah, blah.

AA has problems that need to be sorted out - everyone on this website and involved with the company knows that.

But AA is not falling apart, the company has plenty of "market strength" and massive growth potential ahead of it when it overcomes its challenges, and the present run of "success" that Delta and United are enjoying is not going to last indefinitely. Nobody stays "on top" forever - not even invincible, flawless Delta.

AA need not necessarily fly to Sydney specifically since they already have unparalleled access to Australia through QANTAS, which has more capacity from the U.S. to Down Under than any other competitor. AA does need to grow in new, dynamic regions where opportunities exist for growth - markets like Hong Kong, Seoul, Moscow, Tel Aviv, the Mid East (Dubai, probably), possibly Mumbai, and Africa (likely Johannesburg, but I think AA could definitely also make MIA-Accra and MIA-Lagos work). All things in time - AA will grow, and strengthen its network, and build upon the spectacular hubs that it has in the U.S. All in time.

 

[eolesen]

WT, in the past four years, I have yet to find a routing I couldn't fly on oneworld with one connection out of an AA hub. But it's rare when I have a choice of more than two carriers on a given routing, and that's by design more than fate.

Star alliance has 20 members, more than half of which are based in the EU or neighboring countries: within the same region. Lufthansa, LOT, Croatia, Swiss, SN Brussels, SAS, TAP, SpanAir, Aegean, Adria, Blue1 and BMI are all in the EU. Singapore & Thai sit right on top of each other -- their hubs are just 800 miles apart, and they fly to most of the same destinations overseas. Then there's Air Canada, US, UA and CO...

Skyteam a.k.a. the Leftover Alliance has just 12 members, but is growing to 15. Yet only a few are what I'd call top shelf (AF,KL, DL, and maybe KE). I'm neutral on Aeromexico and Kenya Airways. But Tarom, Vietnam Airways, China Southern, Alitalia, AirEuropa and Aeroflot aren't exactly carriers I'd seek out to fly.

I have yet to fly on S7 or Malev, but most carriers in oneworld are known for quality. I just flew on Royal Jordanian this week, and have no qualms about flying them again. I don't particularly care for Iberia, but now that they're merging with BA, even they have some hope...

My point.... oneworld seems to have decided quality is more important than quantity. Southwest has pretty much proven that flying to the most destinations is less important than flying to the right destinations. The same holds true with alliances and partners.

 

[FrequentFlierCA]

Totally agree with the quality over quantity comment, and I've also not had any problems finding a routing that I needed.

What I do not understand is why some of the employees on this board feel it is necessary to disparage partnerships that don't take jobs away from them (they provide new opportunities, in fact) and bring additional revenues to AA. It makes me wonder if some people aren't just so set on bashing their employer that AA could print money and it wouldn't make a difference to them.

 

[WorldTraveler]

yes, LAX-PVG does appear to be bookable again which it wasn't on AA.com (not to speak of the other websites) for a couple of months. I'm glad AA is going to give LAX-PVG a shot but I can't say that I reasonably expect AA to do very well in a market where it has no alliance partner on the other end; it has costs that are higher than the other nonstop players; and AA's presence in Asia as a whole is weaker in EVERY market it competes in, including China. I am willing to be surprised but given that AA underperforms UA on every route to Asia the two compete on, I'm not sure why anyone would think LAX-PVG would be any different.

Of course, E, you want to argue that AA and oneworld are now a "quality" alliance/airline now that AA and oneworld are number 3 out of 3... but the simple fact is that both Skyteam and Star serve more of the world with more flights than oneworld does and the same comparison exists between AA and DL and UA.
The simple fact is that AA and BA were fixated on getting ATI/JV for years while regulators on both sides of the Atlantic were demanding slots - and at the same time, other carriers were buildilng much larger and deeper alliances.

You are correct that size ultimately doesn't matter. The simple fact is that US airlines are BUSINESSES and are judged by the metrics for BUSINESSES. ON that mark, AMR and American Airlines underperform its peers in the US network airline business on nearly all financial metrics for the industry. So, not only does AA not have the largest network, it doesn't provide the financial performance that every one of its US network airline peers provide.

Commavia,
the simple fact is that this is a discussion about SYD-DFW. Just like on that "other board" there are people here are want to see AA in SYD and other markets like HKG. The simple fact is that there are very solid business reasons why AA is not able to make those markets work and why they rely on their partners to serve those markets - even though if AA was able to serve those markets, there would be more growth in the company and more jobs for AA employees.
Talk of new aircraft and new cities belies the fact that AA HASN"T managed to turn the company around 7 years after it did its out of court restructuring. Until AA addresses its basic structural problems, there will be those of us who will call the rumors and fantasies of massive growth for what it is. This forum happens to be one where the truth can be freely spoken from many perspectives.
When AA begins to address those structrural problems - and I believe APA will be key in beginning that process - then you and others will be able to freely dream about what AA can do.

But for now, make no mistake, other carriers ARE encroaching into AA"s key markets far more than exists for any other carrier.
---

let me add a few more things....

first, I have been quite complimentary of AA's efforts to reduce its distribution costs - siding clearly with the company and declaring that they will ultimately prevail. My only concern has been the cost of transtion that AA will clearly incur as they become uncompetitive relative to their peers relative distribution channels. But I have had no qualms in saying that AA is assuming its historical position of leadership with regard to the online agency debate, noting that this is an effort that helps AA employees because it is hundreds of millions of dollars of expenses which AA doesn't need to obtain from employees - and in which AA will have an advantage over its competitors for at least a short period.

I don't have any problem w/ pointing out the strong points as well as the challenges for any airline, DL included.

But while you want to deny DL's accomplishments, let me remind you of what DL has accomplished in less than 5 years since it emerged from BK:
1. After years of being able to figure out what it should be or being unable to recognize the changing market, DL decisively shifted its assets to become the largest US int'l carrier as measured by miles of int'l routes and RPMs flown, even before the NW merger.
2. DL reduced its costs to the lowest among the US carriers and has become one of the best performing US airlines from a financial stanpoint. Prior to the CO/UA merger, DL's market capitalization was larger than AA/UA/CO combined.
3. DL has executed the NW merger smoother than any large merger among US airlines.
4. DL is the only US network carrier that is growing its mainline capacitiy - and also shrinking its regional carrier capacity. Although UA/CO based on last year's size was larger than DL, based on current schedules and published guidance, DL could overtake UA as the largest US airline again in 2011.

While many (including over "there") argued that DL's hub at NRT would become obsolete, in fact, DL now has the largest transpacific connecting complex at NRT as JAL pulled down significant amounts of NRT capacity, is within a few percentage of being larger than JAL as the largest int'l airline from Japan, and DL managed to obtain the largest percentage of seats at HND (40% - whcih is very close to DL's overall transpacific seat share at NRT), meaning that all of the predictions of a masive shift in connecting capacity from NRT to HND simply aren't happening while DL is well positioned at both NRT and HND.
Further, DL has added more transapacific capacity overflying Japan than any other US airline, by this summer making DL's DTW gateway larger than UA's SFO gateway by RPMs (but not seats or flights) and larger than AA and UA at ORD COMBINED.

DL has managed to grow to 10 flights per day at LHR, including 3 flights/day from BOS and MIA using slots which AA and BA had to provide as part of its own ATI/JV approval - making DL the only carrier that bothered to even apply for any AA/BA slots.

Sure DL has not won every battle but the fact that DL's failures of the past few years have been small enough NOT to derail their overall progress and growth, you have to give them credit for what they have accomplished.

So, you can argue against DL if you want but an honest objective analysis shows that they have done what they needed to do as part of their restructuring, accomplishing things with respect to network, financial performance, and employee relations - while an honest assessment also shows that AA's restructuring has accomplished none of that.

Specific to this discussion, DL managed to being service with its own metal to SYD, obtain a partner for ATI/JV, and obtain the support of the Australian government in pushing for approval of the agreement from the US government.

I am happy to objectively discuss ANY airline and what they have accomplished. But in an open forum, it requires being objective about the accomplisments and failures of any airline you wish to discuss.

In this context, AA is one of the slowest growing US airlines, still has the highest costs, and is delivering financial results which trail its peers.

 

[FA Mikey]

. I am willing to be surprised but given that AA underperforms UA on every route to Asia the two compete on, I'm not sure why anyone would think LAX-PVG would be any different.

What is this under performance based on? You post it time and again yet provide no hard dollar facts.

Of course, E, you want to argue that AA and oneworld are now a "quality" alliance/airline now that AA and oneworld are number 3 out of 3... but the simple fact is that both Skyteam and Star serve more of the world with more flights than oneworld does and the same comparison exists between AA and DL and UA.
The simple fact is that AA and BA were fixated on getting ATI/JV for years while regulators on both sides of the Atlantic were demanding slots - and at the same time, other carriers were buildilng much larger and deeper alliances.

I think Eric pointed out very well quality does for many people trump quantity.

 

[FA Mikey]

You are correct that size ultimately doesn't matter. The simple fact is that US airlines are BUSINESSES and are judged by the metrics for BUSINESSES. ON that mark, AMR and American Airlines underperform its peers in the US network airline business on nearly all financial metrics for the industry. So, not only does AA not have the largest network, it doesn't provide the financial performance that every one of its US network airline peers provide.

Three large unions with open contracts in negotiations. Its amazing they are not rolling in the dough. I would check AA's performance after they are settled. They have a history of profits and growth following settled agreements.

Further, DL has added more transapacific capacity overflying Japan than any other US airline, by this summer making DL's DTW gateway larger than UA's SFO gateway by RPMs (but not seats or flights) and larger than AA and UA at ORD COMBINED.

Since DTW is farther VS SFO isnt that an unfair comparison?

DL has managed to grow to 10 flights per day at LHR, including 3 flights/day from BOS and MIA using slots which AA and BA had to provide as part of its own ATI/JV approval - making DL the only carrier that bothered to even apply for any AA/BA slots.

There may actually be a reason no one else "bothered" to apply. They are at 10 flights a day or planning for? How well they do remains to be seen.

 

[WorldTraveler]

Mikey,
airlines report revenue performance to the DOT... so it is quite possible to compare the performance of carriers.
In every market from ORD-Asia in which AA and UA both compete, UA obtains average fares 15-20% higher.

Yes, a comparison of SFO to DTW for ASMs is not valid - which is why I mentioned seats and flights. But ORD and DTW are only a couple hundred miles away and when DL has built DTW into an Asian gateway that is larger than AA and UA's COMBINED ORD-Asia operation, it kinda shows that DL is in fact capable of competing quite effectively to Asia.

You should also know that DL's performance on JFK-LHR has generated average fares at or above what AA obtains, partly because DL is in more of a niche position at LHR.
BOS and MIA to LHR were both routes that didn't make sense to too many carriers. DL was #2 at BOS and is using the new LHR flights to overtake AA as the largest network carrier at BOS - in just the same way DL has overtaken AA as the largest carrier on the NY side of NYC.
DL has flown MIA-London before and obviously feels they can make LHR-MIA work. Given that Skyteam carriers also serve the key markets from MIA, DL is working w/ its Skyteam partners to provide multiple routes using the Skyteam ATI/JV.

You may pride yourself on the quality you provide at AA and i don't slight you for doing your job well. But keep in mind, once again, that AA is a business. They don't provide any service solely because they want to appear high in quality metrics - whether AA does or not. Every airline - AA or not - provides services and levels of quality based on their ability to use that quality to generate profits. Singapore and Emirates have high quality services as part of their strategy and use that quality to draw passengers onto their networks -wihch is important given that their hubs are generally not "on the way."
US airlines, AA included, generally do not provide services at quality levels comparable to most foreign airlines and they do that specifically because they have access to the largest travel market in the US.
It is great if you want to beileve that AA or oneworld provide high quality service but if it doesn't translate into profits at or above other carriers, it doesn't really matter.
And based on the travel surveys I have seen, AA is NOT ranked as one of the highest quality US airlines.

As for the open contracts, if AA thought their costs would go down by settling the contracts, they would have done so a long time ago. The fact that AA labor unions continue to believe they deserve raises/snapbacks without providing the productivity that AA needs in order to regain labor competititveness is why AA mgmt isn't in a hurry to try to resolve those contracts - because labor and mgmt clearly have very different ideas about what needs to happen.....

and that is why AA is not growing at the rates of other US airlines and why AA is expanding its network only by adding codeshare service on its partners, such as QF's new service to SYD.

 

[jersey777]

As much as people want to diss WT, everything he says is steeped in facts. As an AA employee I wish that he was not right. People can talk about quality vs. quantity but the bottom line will be reported within the next week when yearly results are finalized...predictions are 1.5 billion profit for UA, 1.4 billion for DL, and a 444 million loss for AMR. Oh yeah, it's labor costs! Looks like AA just can't seem to get it share of premium revenue.


And Frequentflyerca....you have nothing to add besides jumping on the anti-employee bandwagon.

 

[FWAAA]

Mikey,
airlines report revenue performance to the DOT... so it is quite possible to compare the performance of carriers.
In every market from ORD-Asia in which AA and UA both compete, UA obtains average fares 15-20% higher.

That settles it. AA shouldn't even bother flying to Asia since UA apparently eats AA's lunch on each and every route to Asia.

Even if your bolded assertion is true (I have not looked to verify whether it is), UA's performance must really suck in most other markets, as AA's 2009 systemwide mainline yield and PRASM exceeded UA's 2009 systemwide mainline yield and PRASM.

AA's 2009 Yield: 12.28
AA's 2009 PRASM: 9.91

UA's 2009 Yield: 11.81
UA's 2009 PRASM: 9.70

I'd say that's an impressive yield premium for AA - almost half a penny per mile. On over 122 billion revenue passenger miles. That's about $575 million more in revenue than UA would have receieved at its lower yield on AA's traffic. We'll know later this week if UA was able to right the ship or whether AA continues to attract higher revenues, on average, than UA. UA's 2009 load factor was higher than AA's, which is to be expected when UA undercuts AA's systemwide prices by about 4%.

Things get interesting when you look at the numbers.