Rumor: Auckland and Abu Dhabi announcement

[MAH4546]

Rumor has it both will be announced shortly, I suspect maybe this week.

 

[IORFA]

Are we to assume LAX-AKL? If Abu Dhabi, from where? JFK? Who hubs ther? Etihad? Gulf? Both? We seem to codeshare a lot with Etihad.

 

[commavia]

AKL isn't surprising - it's been rumored for months since Parker basically pre-announced it at the SYD announcement.  AUH is far more surprising.

 

[FWAAA]

I get Auckland, because travel to/from New Zealand is growing rapidly, especially people from New Zealand visiting the USA (which grew 25% in the most recent year). New Zealand visitors to the USA outnumbered Americans visiting New Zealand. So NZ and UA are adding capacity, so I can see the business case for AKL.

But Abu Dhabi? Zero tourism in either direction, as it's a tiny city (about 1.5 million) in the UAE. On Flyertalk, someone posted that an AA flight from DFW to AUH would enable AA to capture a bunch of revenue from people who would connect to EY (Etihad) who would carry them to India, Africa and some other low-yield destinations. It just doesn't make any sense to me to fly 8,000 miles on a no-O&D route to deliver connecting passengers to one of the ME3 hubs. Even from JFK, it's a 6,800 mile flight. On top of that, EY already flies to DFW three times a week. The rumour is that AA would fly the other four days a week. If it made sense to fly 7x weekly, then wouldn't the state-owned EY already be doing it?

 

[commavia]

But Abu Dhabi? Zero tourism in either direction, as it's a tiny city (about 1.5 million) in the UAE. On Flyertalk, someone posted that an AA flight from DFW to AUH would enable AA to capture a bunch of revenue from people who would connect to EY (Etihad) who would carry them to India, Africa and some other low-yield destinations. It just doesn't make any sense to me to fly 8,000 miles on a no-O&D route to deliver connecting passengers to one of the ME3 hubs. Even from JFK, it's a 6,800 mile flight. On top of that, EY already flies to DFW three times a week. The rumour is that AA would fly the other four days a week. If it made sense to fly 7x weekly, then wouldn't the state-owned EY already be doing it?

 
I don't necessarily disagree with the overall sentiment, and while I have no idea whether the AUH rumor is true or not, I must admit that I share some of your skepticism.
 
Nonetheless, one point - there isn't literally no O&D between DFW and AUH.  There is at least some traffic related to oil as well as aerospace/defense.  In addition, it is certainly true that the O&D between DFW and India is huge and growing, and AUH would provide extensive connectivity - although it is interesting to consider how this would then, hypothetically, interact with the JV with BA which also moves plenty of people over LHR between DFW and India.

 

[WorldTraveler]

It basically says that AA's ME3 statement apparently becomes "if you can't beat ém, join 'em" and having some confusing ownership issues involved helps to explain the about face.

It still is hard to understand how a US carrier can compete in any market where their primary reason for being there is to feed passenger to an ME3 carrier who has far lower costs and will compete with AA from far other market s- unless the announcement involves a JV.

It also says that AA's int'l growth is coming by not adding int'l routes competitive with US carriers but instead is apparently willing to try to use its "American-ness" as an advantage.

 

[FWAAA]

Nonetheless, one point - there isn't literally no O&D between DFW and AUH.  There is at least some traffic related to oil as well as aerospace/defense.  In addition, it is certainly true that the O&D between DFW and India is huge and growing, and AUH would provide extensive connectivity - although it is interesting to consider how this would then, hypothetically, interact with the JV with BA which also moves plenty of people over LHR between DFW and India.

That's a fair point - I didn't mean literally zero O&D, but far less O&D than, say, PHL-TLV (of which 28% of the passengers on the average flight were O&D). And since the route is already served 3x weekly by the hometown state-owned airline, I have to think that whatever O&D exists to AUH is already served by EY.

If AA announces an attempt to get antitrust immunity for a joint venture with EY as part of the announcement, then everything changes. But with EK and QR both serving DFW along with EY, I just don't see the need for AA to add service to any of the low-O&D ME3 hubs. Their primary reason for existence (according to their public statements) is to capitalize on what they see is favorable geography as a replacement for LHR and secondarily in hopes of attracting tourists to their desert oases. LHR is a giant successful hub because there's also tons of demand to London. I don't see that at AUH, but if it happens, it will be a big surprise.

I don't think the AA/BA joint venture covers the Middle East, India or other parts of central Asia, but AA does get to keep the revenue on the USA-LON segment if it then delivers a passenger to BA for those regions.

 

[WorldTraveler]

even with a JV, the revenue and profits will factor in costs and revenue contributed by each carrier. AA is always going to be a high cost carrier operating in a low fare region. It is hard to imagine how that is going to be terribly profitable on an 8000 mile segment presumably using the 773ER which is not near as low CASM as it could be given the relatively low seat density. The 773ER for AA is simply a slightly larger version of DL's 772LR with very similar CASMs. that also says that if AA can justify operating a 773ER as a brand new airplane at the CASM it does, then the economics of the 772ER/LR are good enough for them to not only remain in service but also for the rumor of DL potentially shopping for used 772ERs to make sense.

as for AKL, the market really comes down to how well AA can take on Star. it is doubtful that NZ will simply roll over in LAX regardless of the aviation environment that exists in NZ and OZ.

 

[jcw]

High cost like DL

 

[WorldTraveler]

higher cost than DL but less than UA.

check the SEC documents.

and UA does have experience in operating to multiple points in the Middle East.

 

[FWAAA]

even with a JV, the revenue and profits will factor in costs and revenue contributed by each carrier. AA is always going to be a high cost carrier operating in a low fare region. It is hard to imagine how that is going to be terribly profitable on an 8000 mile segment presumably using the 773ER which is not near as low CASM as it could be given the relatively low seat density. The 773ER for AA is simply a slightly larger version of DL's 772LR with very similar CASMs. that also says that if AA can justify operating a 773ER as a brand new airplane at the CASM it does, then the economics of the 772ER/LR are good enough for them to not only remain in service but also for the rumor of DL potentially shopping for used 772ERs to make sense.

as for AKL, the market really comes down to how well AA can take on Star. it is doubtful that NZ will simply roll over in LAX regardless of the aviation environment that exists in NZ and OZ.

WTF does this topic have to do with Delta Air Lines? Does DL fly to AUH?

Are you incapable of discussing a rumoured AA route from DFW to AUH without discussing Delta? Nobody here gives a $#!? about a rumour that DL might buy some used 777s. And the relative CASM of DL's 777s is irrelevant in a discussion about a potential route flown by AA to a ME3 hub.

 

[commavia]

WTF does this topic have to do with Delta Air Lines? Does DL fly to AUH?

Are you incapable of discussing a rumoured AA route from DFW to AUH without discussing Delta? Nobody here gives a $#!? about a rumour that DL might buy some used 777s. And the relative CASM of DL's 777s is irrelevant in a discussion about a potential route flown by AA to a ME3 hub.

 
If it ain't Delta, it ain't worth discussing.  You haven't learned that yet?

 

[WorldTraveler]

because the economics of the 777 are at stake.

AA's 773ERs are configured nearly the same as the DL 772ERs or LRs which have very similar CASM. The only difference is that AA is TRYING TO put as many seats on some versions its 772ERs as DL has... in fact AA's reconfigured 772ERs in one config will have nearly identical configuration to DL and just a few seats different from AA's 773ERs.

yes, it is absolutely relevant to talk about the economics of the 777 and that data is not limited just to AA.

and since UA has used 777s exclusively to the Middle East as has DL, it is not irrelevant that UA is potentially operating an even longer route - unless it is NOT from DFW - on an aircraft similar to what DL and UA have done.

or perhaps you can tell us that the route doesn't involve DFW but rather an East coast hub (PHL, perhaps?) and it wn't use a 777 of some variety?

but maybe this JV rumor provides some basis for the TLV cancellation.

as for aircraft, might the 787 be AA's choice for AKL?

 

[700UW]

Do you have to pollute every thread with your delta fecal matter?

Go post it on DL forum.

You need mental help.

 

[WorldTraveler]

I need no mental help whatsoever.

Perhaps you can tell us what AA's CASM is on its 773ER and tell us why AA will have a CASM that will be different or better than DL which has operated 777s to the Middle East with a similar configuration to what AA has on its 773ERs or its high density 772ERs.

If AA is going to make money flying to the Middle East - if it does - then it has to come up with a strategy different from what DL and UA have used - which has not exactly resulted in blazing success against the ME3.

Even joining the ME3 with similar costs to its competitors isn't going to change anything.

did someone mention a potential JV in this thread before I did?

Funny that a couple of AA fan kids specifically said they had doubts about the AUH rumor but when the discussion turns to actual economics, it all becomes hostile.