AA seeks new service to Brazil

I wrote here before AA ever entered BK even when they were proposing massive growth (20% at the time) that they would never be able to add that much international capacity because of competitive pressures and nearly every one of these markets that have been added has confirmed that. It was clear then that AA needed to add a bunch of capacity in order to get its CASM down and that is exactly what they have done, even though AA’s revenue growth has suffered while it has retained capacity in the face of capacity cuts and much larger revenue increases at other carriers. Further, AA’s need to be relevant in key global markets has collided with the reality that it has not found success in most of its service to continental Europe or Asia.

Point of order, WT, about the bolded portion: AA first proposed the 20% increase in capacity from the hubs on February 1, 2012, after it filed for Ch11 protection, not prior to bankruptcy. Horton was adressing the constant drumbeat of "AA isn't big enough to take business away from UA or DL and thus must merge with US."

Building network scale and alliances by increasing capacity across American's five key markets – Dallas/Fort Worth, Chicago, Miami, Los Angeles and New York – by 20 percent over the next five years, and by increasing international flying.
http://hub.aa.com/en...lity-and-growth

Of course, the pro-merger crowd droned on and on that there was no way that AA could take business away from UA or DL, and yet in 2012, AA managed to take away some business from UA as AMR increased its total revenues by $876 million over 2011, despite being in Ch 11. That amounted to 88% of the revenue goal that Horton had proposed by 2017 ($1 billion increase in annual revenue) in just one year. I admit that he may have set that bar a little low, but recall that Jamie Baker and all the other Wall St asshats bloviated on and on that AA would shrink by at least 10% in 2012 and bleed billions of revenue to UA, DL and US.

CO spent most of the past decade growing with the benefit of its low costs (gained thru prior bankruptcies). WN, B6, FL and NK also grew over the past decade with their low costs. Another airline grew a bunch after its bankruptcy - your former employer, (Deleted by moderator). I'm curious why you discount AA's ability to grow at UA's expense over the next 4 years now that it has lowered its costs thru bankruptcy even though DL was able to grow in its post-bankruptcy/post-merger years. Low cost airlines tend to grow at the expense of higher-cost competitors, and UA's costs have been increasing by double-digit percentages. UA has fixed some of its 2012 operational issues, but the damage may be long-term.

If DL was able to grow its international flights, why is it a given that AA will fail at the same endeavour? What makes DL so invincible yet guarantees AA's failure?
 
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thank you for the correction about the timing of the intended 20% increase in capacity. But even by your statement, it wasn't driven by market realities but by a need to be a certain size - and devoid of a realistic plan to successfully add that capacity. More significantly, it means that AA didn’t use bankruptcy to get rid of the parts of its network that didn’t make money – and every airline has them – but continued to hope that it would turn itself around and could make it on its own.

It is precisely because AA's network is built around the largest and most competitive markets that it will have the most difficult time adding int'l capacity, not only because it has to compete against foreign carriers, most of which are far stronger financially than their US peers, but also because AA was the last going into and coming out of BK and thus has a lot fewer options to grow left to it.

I'm reluctant to even mention DL, but since you asked, I will speak about their strategy and I will also point out your quote asking about their strategy to anyone who even thinks of accusing me of hijacking the conversation.

DL's strategy has long been to be the lowest cost legacy carrier; as much as anyone wants to think otherwise, the airline industry is largely a commodity business which means that the lowest cost provider ends w/ the largest share of the market and the highest profits. While every carrier tries to differentiate its product, there is no evidence yet that in the US airline industry, anyone but the lowest cost provider wins.

You are correct that AA gained a lot of revenue against UA but you also fail to note that UA’s operation was in complete meltdown mode for much of 2012 because of its botched merger. It isn’t surprising that AA’s RASM growth early in its BK – which you were quick to point out (and rightly so) – came to a halt not only when AA’s own operation went thru the operational meltdown of last fall but which also coincided when UA began to get its act together operationally.

It also doesn’t change that UA and AA have been longtime direct rivals – which is a unique relationship that doesn’t exist between any other two US airlines. AA and UA have long directly competed in some of the US’ top markets and felt they each had to “one up” the other. AA and UA don’t have identical route systems but the whole LAX-PVG saga shows that neither one is going to cede anything to the other.
As much as some predicted otherwise, WN backed down its presence in ATL because it has thrived precisely because it has not tried to compete directly with other airlines. As DL has become much more aggressive in NYC, B6 has looked for growth elsewhere.

And as you well note, CO grew at EWR largely because AA and DL didn’t do anything to challenge them for an important ten years. And as you also note, CO’s cost advantage began to disappear by the mid-2000s which is why it became increasingly apparent they could not remain independent, esp. because DL came out of BK with intentions on being much larger in NYC and DL was larger and had better alliance connections.

Note also that even though DL and NW were the last going into BK, they were the first to merge. UA and US both talked about mergers with other carriers but DL moved first. There is always a first mover advantage in any major strategic initiative and DL gained that with the NW merger. It is precisely because DL gained enough mass in NYC and then turned its attention to the slot deal and now the Virgin Atlantic ownership deal and JV that it has now pretty well wrapped up what it needs to do in NYC, and has gained significantly against AA over the past 10 years.

Remember also that DL tried JFK-EZE, AA doubled capacity, and DL decided it wasn't that strategically important to serve two destinations in S. America from JFK. UA moved their EZE flight up to EWR recently where they stand a much better chance of competing in the NYC-EZE market. Both DL and UA recognize AA's strength in Latin America and will grow where they can but they aren't going to fly routes that can't make money.

UA gave up nothing to AA at ORD and has kept AA looking for a place to profitably operate int’l flights from Chicago other than to its alliance partner hubs.

It is precisely because DL and UA went ahead of AA in the BK and merger processes and because they built out their networks in the areas that would make it hardest for AA to grow that it now makes it much more difficult for AA to find clear air for int’l growth from its own network.

Remember also that DL and UA both grew into Africa and the Middle East, markets that aren’t big enough to support much of presence by all three carriers. Even with its lack of presence in Asia outside of Japan, DL has grown its Asian network from DTW, where no other Asian carrier flies, and SEA where DL has been able to use the lower cost 767 and the AS codeshare to fill its flights – and where there is little US carrier presence.

Given that AA significantly underperforms both DL and UA to NRT from LAX, it’s not likely that AA could have found any place to grow from LAX to Asia that would not have resulted in a competitive response.

But AA could very well have chosen any other route to Asia besides ICN from DFW and we probably wouldn’t be having this discussion. AA talked for years about flying DFW-China and presumably could have gained the support from the pilots to do so now – or could have had it forced upon them in BK. AA could have also started ORD-HKG where AA has an alliance partner. But AA started DFW-ICN, the only other East Asia route served from DFW by a competitor and LAX-PVG where UA has long been the dominant carrier, even if it didn’t fly it nonstop. Further, DL and UA have much stronger alliance presences in China.

Specific to Brazil, AA already gets half of the market or more from LAX to both GRU and Brazil as a whole. AA also gets a revenue premium compared to other carriers at LAX to GRU and Brazil. DL and UA perform relatively better but in many cases AA still is the largest carrier in other west coast markets such as SAN, SFO, and SEA to GRU and/or Brazil as a whole. A new AA route from LAX-GRU isn't likely to change AA's market position in SAN, SFO, or SEA and it also isn't likely to improve AA's market position in LAX where AA already has a significant market share and revenue premium. The question remains why AA feels a need to add a lot of costs to a market where they already do very well, aren't likely to see much improvement, while being unable to gain a significant advantage in markets like SEA and SFO where other carriers already have a much larger int'l presence - and thus marketing clout to counter AA's growth at LAX.

The two biggest areas that will be strategically important competitively in the industry in the next couple years are the opening of Dallas Love Field to domestic competition which will disproportionately impact AA and the opening of WN's int'l ops at HOU which will impact UA. Once again, it will be AA and UA who will have to battle low fare carriers more so than other carriers over the next couple years.

As hard as it is for you or others to hear, those are the kinds of decisions that AA mgmt has made (and int’l route decisions typically go to the top of the organization) are the ones that the creditors have to look at and ask how AA mgmt has used its resources.

As I have noted before, AA could easily add PHL to a number of points in Asia and likely find little to no competitive resistance. PHL is geographically positioned such that AA could serve a large chunk of the eastern US. While the future of PHX is not as certain, there is no reason to think that the addition of a couple Asian routes from PHX could easily improve the economics of that hub. Strategically, new AA may not be in a position to serve all of Asia from all of the US on its own metal but neither are DL and UA trying to serve all of Latin America from all of the US.

It’s about doing what you can do well and know that there are limitations to your network; use alliance partners to round out the shortcomings – and AA’s alliance partners have a large enough presence on the west coast for AA to have a network presence.

As hard as it may be for you and others to believe that me saying that AA can’t grow in some of the top industry markets to Asia and continental Europe, the reality is that the new AA has ENORMOUS growth potential – but it will come based on the strengths of the combined network and in the case of Asia and continental Europe, that will probably be from current US hubs.

I appreciate the honest and candid discussion. You have long set yourself apart from the rest of the AA fan club in your ability to engage in difficult but respectful discussion and I wholeheartedly commend you for that quality.
 
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WT, if every person who held a similar disdain for you was a pseudo-ID of mine, I'd be half the user IDs on the boards.

It's not your opinions I find distasteful. It's your demeanor I find repulsive.

It's your little games of spelling out my full name, and then running to the moderators (deleted by moderator)
 
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WT, if every person who held a similar disdain for you was a pseudo-ID of mine, I'd be half the user IDs on the boards.

It's not your opinions I find distasteful. It's your demeanor I find repulsive.

It's your little games of spelling out my full name, and then running to the moderators (deleted by moderator)
I never said that every person who ever voted down a post of mine was a pseudonym of yours... nor do I have anything against people intelligently and judiciously using the post voting system.
I do have a REAL problem w/ people using the post voting system to REPEATEDLY vote down posts for someone else, esp. when the ID of the red button pusher doesn't even bother to participate in the discussion.

May I remind you that you have posted plenty of personal information about me on this forum which I never revealed to you.... you choose to use your real name to participate in this forum but the vast majority of people here do not, including me.

Regardless of what you detest, you do not and never will have license to break the rules in this or any other arena of life. Other people have figured out how to post their displeasure and do it in a constructive and cordial manner. I particularly hold out FWAAA as someone with whom I have disagreed on many, many occasions but who knows how to "color within the lines" and still mount a spirited and cogent defense. I have a lot of respect for him.

As usual though, yet another sideshow about personalities and the post voting system is solely an attempt to turn attention away from the fact that I for years have criticized AA mgmt.'s stewardship of the historic franchise whicn it was entrusted to run for many years and it is becoming increasingly apparent that my criticism is echoed well beyond the pages of this forum.

I am immensely happy that a new era is coming for American Airlines and its employees and I wish them extraordinarily well in all they do.

My thanks to the moderators for standing firm to the principles that make this board a great place for the exchange of ideas, even when they are highly charged and touch deeply at the hearts of those who participate in this forum.
 
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My thanks to the moderators for standing firm to the principles that make this board a great place for the exchange of ideas, even when they are highly charged and touch deeply at the hearts of those who participate in this forum.

Especially when they jump to your defense, and apply a double standard of allowing you to address me by name, but not allowing me to address you by name?

(deleted by moderator)

Your feigned empathy and wishes for the employees at AA are a bunch of crocodile tears for where your real loyalties lie.

And lie.

And lie.
 
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Especially when they jump to your defense, and apply a double standard of allowing you to address me by name, but not allowing me to address you by name?

Your feigned empathy and wishes for the employees at AA are a bunch of crocodile tears for where your real loyalties lie.

And lie.

And lie.
no, it's not a double standard because I have been called on the carpet for the very same offenses against other people that you are doing to me. I learned my lesson... you apparently have not and continue to push the envelope.

This forum prides itself on the protection of information which has not been revealed on this site by a specific user.

Trying to deflect my true wishes for AA and its people is merely an attempt to recast the discussion on the rocky interactions between us - and they are two very different issues as much as you want to try to make it otherwise.

No, I really do care about the employees of AA and I want to see AA return to the grandeur it once knew.


The world is big enough for multiple airlines, just as it is for multiple people w/ multiple opinions. That's the way I see it but apparently you don't.

I genuinely wish the people of AA and US all the best as they build a new airline... nothing in life is easy and heavens knows the people of AA and US have been thru the fire enough that they deserve some smooth air.

Celebrating the best in commercial aviation is not an exclusive game.
 
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(Deleted by moderator) is full of listen to me, and hear me about the great delta on nearly every post. Does every post really need to to 15 paragraphs long and go on about delta delta delta?

There is a whole thread line dedicated to just delta. But your need to post on every airline thread and always about how delta is taking over is just sicking to have to see and read. along with your laughable additional names who complement you and post up your threads. It really show how weak and sad your arguments must really be.
 
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EDITED is full of listen to me, and hear me about the great delta on nearly every post. Does every post really need to to 15 paragraphs long and go on about delta delta delta?

There is a whole thread line dedicated to just delta. But your need to post on every airline thread and always about how delta is taking over is just sicking to have to see and read. along with your laughable additional names who complement you and post up your threads. It really show how weak and sad your arguments must really be.
problem is you fail to note that I have mentioned United Airlines in many posts about AA but you want to twist the conversation into one about me showing preference for DL. I have repeatedly said that AA and UA have a much deeper and intense competitive relationship than does DL with either AA or UA. I have also said that AA's gains during its early BK came at UA's expense and because of their operational problems- and there is ample evidence to support.

The airline industry is highly competitive. No airline, regardless of my loyalties or yours, is going to get a free pass regarding how well it does or does it not. The problem is that you can't seem to accept that there are very valid criticisms of the way AA has run its business - and it will be increasingly apparent that my concerns are being heard and addressed, because that is what needs to happen for AA to return to viability.

Presumably, you have an interest in seeing AA become a healthy and viable airline again.

That is my wish.

I certainly hope there will be many opportunities for AA to be the gold standard that is used to compare other airlines but it isn't going to happen w/o passing thru more painful cuts which should be more than offset by new growth opportunities.

Lest you think my points are not valid about AA's performance in the Pacific which have met lots of jeers from you and others, you might note that AA is pulling down capacity to/from Tokyo later this year, including on routes that I have specifically noted where they underperform their peers.

http://airlineroute.net/2013/06/25/aa-tyo-oct13/

I commend you, however, for coming forward and posting instead of just pushing the red button in silent frustration.
 
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blah blah blah.... one time i mentioned UAL. 99.9 percent of your post have a single common thread and that is delta, with a .1 percent just eludes to delta. Its all delta delta delta. Simply put no one can have substantive conversation about real world things happening with out one of your twisting delta post. so sorry for you now back to delta delta delta.
 
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I think your signature line tells us exactly what the problem is.... and why the next few months and months are not going to be much fun in your eyes - as if that will change anything.

"Open me up, see the truth, I cant lie no more, no excuse so, Open me up, see the truth, I cant lie, I cant lie, I cant lie so, Open me up, see the truth, I cant lie no more, no excuse so
Open me up, Open me up, Open me up"

There is nothing that stops you or anyone else from debating the business issues that I raise... problem is that too often threads like this turn into personal pushing matches instead of the issues at hand.
I simply persistently stay focused on the issues at hand.
 
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There is nothing that stops you or anyone else from debating the business issues that I raise... problem is that too often threads like this turn into personal pushing matches instead of the issues at hand.
I simply persistently stay focused on the issues at hand.
The problem is that often you post statements and make conclusions that are either wrong or inaccurate. Moreover, you do not readily provide the data to support/refute what you say. Finally, when somebody does correct you, you go back and make qualifying statements/conditions, just so that you can say "I'm right you're wrong". If you adjusted these flaws, I think even the AA employees, former AA employees, AA fans and AA frequent flyers could more easily tolerate your DL-centric posts.
 
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I appreciate your candid response...

I have at times used data that cannot be publicly posted so yes there is an advantage that I have had over others in conversations... but I have also used plenty of publicly available data including annual reports and other SEC and public DOT data.

There have also been plenty of observations which I have made and which have indeed come true and no one has come on here and said "gee, guy, you were right after all." There is a real pride that we all possess in admitting that we are wrong and someone else is right... I understand that.

I am happy to admit when I am indeed completely wrong but many of my observations are based on detailed observations so it is indeed often accurate to be able to qualify what was previously said. If you don't think my qualifications are adequate, feel free to say so.

Generally, though, my criticisms of AA have been at a pretty high level - ones where there is little doubt whether they are true or not and where sufficient publicly available data exists.

Let's be clear though, that, the issue is not really about DL but about the fact that many people on this forum have been intensely loyal to AA for years. There is nothing wrong with that. What DL does is not going to impact the changes that are coming to AA anymore than the loyalty of some AA fans will.

Let's be honest... AA has been restructuring for over 10 years.... and few real structural changes have taken place to the business. I don't think any other airline has encountered as much difficulty as AA has encountered and yet been able to avoid change like AA has done. As much as some people want to fight it, there are very legitimate criticisms of the way AA has been run for over 10 years. The best thing is that there appears to be real change coming that will result in AA becoming what I think most of us really want - a strong, successful American Airlines.

My desire is and remains that AA will be a viable and profitable entity for its employees and stakeholders.
 
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Hijacked by who?
Certainly not me.

this thread like so many others has turned into another personal pi78ing match because there are a few AA loyalists who wear their emotions on their shirtsleeves and can't debate the issues at hand so instead turn to personal attacks - whether written or via the post voting system.

The subject is AA in Latin America. If you even tried to look at the thread, you would see that I have engaged in discussions about that topic far more recently in this thread than a number of other posters.

I'm flattered that you and others want to talk about me... but I didn't ask for it and am not promoting it.

And as long as the moderators continue to allow people on this forum to participate despite repeatedly and flagrantly violating the board rules, then I will most certainly continue to post since I have to keep coming back to document what has been posted on this forum and ensure that my desires that it be removed are followed.

The thread needs to be locked and cleaned up since no one besides FWAAA and I have contributed anything to the conversation in about a dozen posts.
 
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when us n aa do merge are they going to keep all of the brazil slots to the cities they serve now respectively? with the aircraft orders i wonder if they would use the 787 to brazil from clt and phl as well as lax ord and dfw to gig gru