Originally Posted by sinoflyer

Here are the LAX-SJC average fares for 2013 Q4. I've also included LAX-SFO for comparison. The source is the latest available USDOT O&D Market Survey.

LAX-SJC
UA / $136.58
AA / $119.57
WN / $115.20
DL / $113.68
VX / $102.43
AS / $ 93.19
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Avg Fare $112.26

LAX-SFO
VX / $126.85
UA / $124.20
DL / $116.47
AA / $113.17
WN / $109.15
-------
Avg Fare $119.30

UA is not in LAX-SJC for the local (LAX-SJC as endpoints) traffic. The high average fare suggests that UA's pricing strategy deliberately discourages local travelers in favor of connecting traffic through LAX to/from someplace else. VX and AS presumably carried a lot more local traffic. It's reasonable to conclude that their low average fares directly led to their routes' demise this year.

IMO it's hard for any airline to make LAX-SJC (and LAX-SFO for that matter) profitable with these fares; however, as many people are saying, the question shouldn't be based solely on whether one route is profitable, but rather how it fits in the overall network. WN, with its high frequency service on LAX-SJC, undoubtedly also carries a lot of connecting traffic (which is not reflected in these numbers). LAX-SJC can therefore play an important role in determining whether the LAX and SJC stations are profitable for WN.

In the newly consolidated industry, the other airlines are trying to build their domestic networks. AA and DL don't appear to be doing very well in both LAX-SJC and LAX-SFO markets per se, but IMO it remains to be seen whether these routes will improve the profitability of LAX, SJC, SFO, and their overall networks. UA is taking the opposite approach by dismantling its domestic network. The outcome, with near certainty, is a marginalized, less viable "hub" at LAX that could cascade to further erosion of traffic.