Azul lands in AA"s backyard, AA lands in Azul's.

[WorldTraveler]

I didn't say that AA's partnership won't reap rewards.. .but AA flies to practically every city in Brazil that has a decent amount of business. DL does not. DL relies on Gol far more to distribute traffic and provide a network than AA does. It is precisely because of AA's larger size and footprint in Brazil that Latam is less essential to AA than Gol is to DL.

sorry you can't see the obvious.

 

[eolesen]

Talk about spin... AA doesn't need its partner, but DL does?

I thought you were the expert in revenue generation, loyalty, and network valuation?...

 

[AANOTOK]

You know WT, whenever you are provided with facts and have to back pedal and say something relatively positive about AA such as your comment above (I didn't say AA partnership won't reap awards), it is always and I do mean always followed by "BUT", and then also why Delta would/ does do it better and why AA will ultimately fail. So predictable!

 

[WorldTraveler]

sorry if you can't see that AA is in a STRONGER position in Latin America and esp. Brazil so they don't need a partner to connect traffic as much as DL does.

I am truly dumbfounded how hard you AA folks work to not even accept something positive when it is given to you.

DL's best advantage with Gol is that DL has its logo beside the boarding door and on the forward bulkhead of every Gol aircraft - but all DL passengers have to connect at BSB, GIG, or GRU.

And UA doesn't even have BSB.

 

[FWAAA]

From the announcement that TAM and LAN Colombia had joined Oneworld and AA planned to increase codesharing with them:

Once the codeshare agreements are approved, these new relationships will provide American's customers seamless connecting service within Colombia and Brazil. At the same time, this partnership will allow TAM and LAN Colombia's customers access to new destinations in the U.S. such as Boston, Chicago, Dallas/Fort Worth, Las Vegas and Seattle.

TAM operates nearly 5,600 weekly flights to 42 destinations throughout Brazil as well as 18 international destinations in the United States, Latin America and Europe. LAN Colombia operates more than 930 weekly flights to cities throughout Colombia as well as destinations in Brazil and the United States. From its Bogota hub, LAN Colombia offers 134 daily flights, including service to 20 Colombian cities.

http://www.prnewswire.com/news-releases/american-airlines-expands-its-longstanding-partnership-with-latam-airlines-group-by-embarking-on-codeshare-agreements-with-tam-and-lan-colombia-183785571.html

LAN covers Chile, Peru, Argentina, Columbia and Ecuador while TAM provides connections throughout Brazil.

I'm certain that low-fare competition is coming on long-haul flights. It's been rumoured since Freddie Laker gave it a go. And eventually it will be a reality.

 

[silverbird007]

WT can I get you a cocktail?

 

[eolesen]

I am truly dumbfounded how hard you AA folks work to not even accept something positive when it is given to you.

Maybe that's because your idea of saying something positive is this:
 

 Tam is and likely always will be just a codeshare partner, not a joint venture partner because the combined size of the two is so large. Given that AA already flies to nearly all of the cities in S. America
that have any real business sense, the value of JJ to AA is a lot less than you want to believe it is.

 

..followed immediately by this:

 AA will be increasingly forced to defend its core Latin network from competitors at the same time that those Latin economies - which provide enormous amounts of tourists to the US - not only slow internally but travel growth slows because of weak currencies.

it is no different from what is happening in Japan except that AA has no currency hedges while DL and UA do for the yen.

 
 
What exactly there was positive again?...

On a percentage basis, I'm sure DL relies more on Gol than AA does on LATAM.

On a net/gross basis, what AA is reaping from the JJ/LA partnership is likely many times more that which DL is getting from G3.
 

I'm certain that low-fare competition is coming on long-haul flights. It's been rumoured since Freddie Laker gave it a go. And eventually it will be a reality.

Yep.

Oasis couldn't make it work. Tower didn't last. I think People Express may have been the last low-fare international airline that didn't go bankrupt, and they were just a few years after Laker.

Norwegian might make it work if they can use those Thai flight crews they want to import.

 

[WorldTraveler]

On a percentage basis, I'm sure DL relies more on Gol than AA does on LATAM.

On a net/gross basis, what AA is reaping from the JJ/LA partnership is likely many times more that which DL is getting from G3.

precisely.. since AA is about twice the size of DL in Latin America including Brazil, it isn't surprising that AA gains a higher gross share.

still doesn't change my original point that AA is not going to get as much benefit from a carrier with which they likely will not be able to get a joint venture than with any carrier that they have a joint venture with or that DL gets with G3 because of DL's ownership position and seat on their board.

Oasis couldn't make it work. Tower didn't last. I think People Express may have been the last low-fare international airline that didn't go bankrupt, and they were just a few years after Laker.

except there are long haul carriers that will succeed from Latin America to the US and Azul will be one of them. further, much of Latin America is within range of narrowbody aircraft to the US and that is where the biggest amount of competition with come for AA.

 

[eolesen]

Sure, there will be long-haul carriers who succeed, but that's not what we said. The question is whether or not ULCC's or LCC's are going to be able to make long haul work.

So far, Jetblue's done OK on 3 & 4 hour flying, but they're less of a LCC these days and clearly a hybrid along with WN.

Not sure where Azul's onboard product stacks up in terms of density or comfort. I get that the standards of comfort for POS Latin America are going to be different, but it's pretty clear there's a threshold by which the typical ULCC or LCC's density stops being effective, especially on a narrowbody.

If it isn't working in Asia beyond a 3-4 hour flight, it's not likely to work in Latin America.

 

[WorldTraveler]

since Azul just launched its longhaul services, I don't know how their premium cabin service compares but they have the same model in coach as B6 with AVOD, multiple snacks etc. I fully expect their

the biggest advantage that Azul has is that they have a large hub at VCP and they have the potential for connections at both FLL and JFK in the US.

thus, their longhaul flights are built just like a network carrier's, not the point to point LCCs.

Avianca Brasil says they are going to launch longhaul as well... I'm not sure how they will price or position their product but more competition is coming.

 

[Kev3188]

Cranky Flier's latest "Across the aisle" is with David Neeleman...
 
http://crankyflier.com/2014/12/04/across-the-aisle-from-david-neeleman-on-why-azuls-new-service-to-the-us-is-going-to-work-part-1/

 

[WorldTraveler]

thanks, Kevin.

outstanding article and validates many of the points I have made.

Azul is a very well run airline and will do very well. Given that they have targeted top markets and have strong financials, they will take a big bite out of the market.

given the slow Brazilian economy, there will be loss of passengers from some carriers to other instead of pure growth in the market as many LCCs do.

 

[jcw]

I assume when EK or QR lands in ATL you will be on here talking about the negative impact that will have on DL - we will watch for you to start that thread when that happens

 

[WorldTraveler]

if any of the ME4 end up in DL's hubs, then it would be a major development, but they haven't.

meanwhile, there are multiple ME4 carriers in AA's hubs including DFW which is AA's largest fortress hub but where AA carriers a lower percentage of the TATL or TPAC traffic than DL does from ATL.

 

[eolesen]

Maybe that's because DFW and IAH are considered world class cities, and ATL isn't?

Conveniently, WT's measure is % of traffic, not raw seats. When you're in the 9th largest market, it's pretty easy to be the big dog.

https://www.census.gov/dataviz/visualizations/026/