Of course UA and DL have a leg up -- they have had extremely limited competition over the past 60 years. When you have a government sanctioned duopoly anchored by two strong carriers, anyone coming in late to the game will be at an automatic disadvantage, especially when 80% of the slots & frequencies remain in the hands of those two carriers.
Sorry, E, but I have to challenge you on this statement....
You do realize that it was AA AND UA that are the remaining two of the original four trunk carriers that received most of the preferential routes in the US - the other two being Eastern and TWA. DL never had access to the key domestic routes under the regulated area.
AA bought TW and DL scrambled after EA's collapse and was able to solidify DL's position as the number one carrier on the East Coast, a position that DL has not lost since EA's collapse 20 years ago.
Internationally, AA, DL, and UA all have bought their way into the international scene with the original chosen international carriers - Pan Am, Northwest, TWA, and Braniff all now history.
DL missed the opportunity to buy PA's LHR operation because UA moved faster (strategic blunder on DL's part) and so almost all of DL's Pan Am operation has been flown under Open Skies for most of the past 20 years. DL merged with NW just as Japan - the last remaining large Asian market that was not Open Skies either de facto or in reality open up to virtually unlimited flights and ATI/JVs. Based on DL's history in other parts of its network, they are not going to lose their market position in Japan where they fly one-third of all capacity between the US and Japan, more than the ATI/JV partnerships of oneworld or Star.
The notion that DL EVER had any a privileged or sheltered position is simply not accurate. DL has acquired and internally grown its way into every key global market with the Pan Am and Northwest acquisitions providing the bulk of DL's international route system. More of DL's current network reflects merger and acquisition than perhaps any other US airline.
The rest DL has grown internally and by taking advantage of strategic opportunities such as the opportunity to enter LHR from BOS and MIA as part of the AA-BA anti-trust agreement.
Further, it is AA that had its best premium revenue sources at LHR and Latin America, markets that have historically been limited access. AA was very smart to buy its way into those key markets but let's be clear that in far more competitive markets such as continental Europe, AA has fared much worse. You do realize that AA's continental Europe network is smaller than CO, DL, UA, or US?
Domestically, AA's best revenue now comes from DFW and MIA, markets in which AA has no hub competitor. It is precisely because MIA is among the largest international gateways but has no other US longhaul carrier other than AA that it presents a great opportunity for someone to challenge AA's dominance.
UA has been a major competitor to AA for a long time - but for most of the time, it was AA that had the advantage vis-a-vis revenue premiums and larger market shares in the highest value markets. It is precisely UA's recent aggressiveness in challenging/limiting AA's international growth at ORD - and now LAX - that has the tables turned, a trend that will likely extend to domestic markets with the CO merger.
I've never said that AA isn't growing. It is simply that other carriers have been and are growing more aggressively. It doesn't matter that AA has been growing if other carriers have been more successful at doing it.
And even though AA has been growing in some key markets, they have also closed four hubs in the past 15 years - far more than any other carrier and with it have lost much of the local market revenue that they once controlled.
Most recently, AA's pulldown of service at BOS and DL's buildup has allowed a long-standing change in market position to occur with DL now becoming the largest domestic and internaional network carrier.
While B6 has clearly done very well expanding at BOS and in the Caribbean it is apparent that some carriers like DL can exist alongside low fare carriers while AA has walked away from markets leaving them to WN and B6.
My concern expressed here regarding the AA-B6 agreement is that AA mgmt is painting the B6 codeshare as a win-win when in reality is that B6 has successfully pushed AA out of key markets and then signed a codeshare agreement so that AA buys seats on B6 flights in markets that AA abandoned...
My reason for posting here simply is that I bring a perspective to the AA discussion that few can or have. In an ongoing argumentive that pits AA management against employees with each blaming the other for AA's problems, I am simply saying that there is clearly enough blame to go around.
The vast majority of AA employees don't know the financial implications behind the strategic challenges AA faces and to simply say incessantly that AA has a labor cost problem is not at all the truth.
As I have shown, AA has a productivity problem - 10,000 too many employees producing the same amount of capacity compared to productivity rates at DL and UA. Despite what people like Bob want to argue, AA doing in-house overhauls doesn't account for all of that productivity gap.
I don't know AA's labor contracts well enough to know what AA mgmt could do to close the productivity gap which is the root of AA's labor cost problem. When AA is forced to fly ORD-PEK and directly compete against UA instead of flying DFW-PEK like it originally wanted because the APA wouldn't agree to the DFW-PEK route, then there is responsibility labor has to bear for the problem. How well each of the labor cost issues can be addressed by labor and management is something that AA mgmt and labor leaders have to figure out.
But to continue to believe that AA can effectively compete against low fare and network carriers that are larger and more cost efficient is simply not looking at the data that is available for anyone to see - if they want to.
AA has had some of the lowest financial results among network carriers for most of the decade. AA is leaving markets and/or competitors are entering markets and adding their own revenues with relative ease - which is why they keep doing it.
AA cannot and will not grow - and that means taking on a bunch of new aircraft until it can reverse its labor cost problems and ALSO stop competitor incursions into key AA markets.
I don't enjoy hammering away at AA's problems but those of us who remember the power which AA once had in the industry are dumbfounded at how AA has been reduced to a proverbial Samson which competitors can taunt.
Someone needs to tell the truth about aspects of AA's problems which others aren't or won't tell. Hopefully, employees and supporters (perhaps yourself) will act to change AA's course.
It is the time of year when we shift our attention to things more pleasant so I'm going to give it a rest for a while.
Perhaps the new year will bring some good news, competitive wins, and strategic changes for AA supporters and employees.
