Originally Posted by
spin88
ex-LAX I can't think of a major market in the western part of the US that UA serves and DL and AA don't. And other than LAX-MSP (on a RJ on UA, AA flies it mainline) I can't think of a single flight that UA has ex-LA into a competitors hubs in the Eastern UA, and I can for DL and AA. (e.g. AA flies LAX-IAH, LAX-IAD, LAX-ATL, Dl flies LAX-MIA). Of course you see this in the market share numbers.
Point taken... LAX-DFW would qualify, though.
My point is that as UA pulls down, and AA/DL add ex-LAX, the lack of connecting traffic will eventually kill LAX other than as a spoke city. United is well on the way to this.
This I can't reconcile. LAX is the largest O&D airport in the world, and has significant local demand to virtually every market. To the extent the West Coast functions as a logical connecting point on an itinerary, United would rather route that traffic over SFO to augment the Pacific hub. UA also (still) has comprehensive service intra-California, which can use LAX as a connecting complex, but again, more service is offered at United's preferred hub.
I don't think United needs or wants LAX traffic to be primarily flow-oriented. It wants local traffic, plus certain connecting flows for a handful of O&D-oriented routes it doesn't serve elsewhere (Hawaii, Australia, etc.). If a route is in a hyper-competitive market with depressed yields, or relies on connecting traffic to be sustained, I think it's easy to see what will happen. United clearly is not interested in remaining in a LAX city pair purely for market share purposes. The 'network effect' hub is at SFO.
And don't tell me this was a planned decision, everyone knew how important LAX was, and it was a city that United was No 1 in when Jeff took over
. . .
What happened was the former management team treated LAX like it treated IAH and EWR, and cut service quality and service and expected people to suck it up "they will fly United for price and schedule" I believe was the mantra.
I know it's important for the narrative to connect every cut to LAX to Continental and the former management team, but at the time of the merger, United was not in a growth mode at LAX, and a significant volume of departures were CRJ and at-risk EM2 flying. As SkyWest exited EM2 flying and UA accelerated 50-seater retirements, connecting traffic undoubtedly was eroded, and there was no longer an economically viable way to capture that segment. Of course, this had an effect on larger-gauge traffic, but United was already on a path to reorienting the hub into an O&D-focused operation.
The approach of splitting resources between SFO and LAX cost United opportunities at SFO, and I would argue that doing so (in concert with other factors) left the door wide open for VX to enter SFO and set up shop. Meanwhile, at LAX, UA may have been #1 in passengers, but AA was long the leader in local market share, and even at its peak, United's traffic advantage over competitors at LAX was in the single digits. No matter what, LAX was going to be more competitive than SFO, and United would never have the all-important dominance that is often discussed in other threads as a structural advantage of AA/DL hubs vis-a-vis United's.
At SFO, OTOH, United had a hub where it was effectively 'the only game in town', and IMO under-investment there cost it in terms of yield and market share with the growth of VX. Since the merger, United has clearly chosen to reallocate capacity from NRT/LAX to SFO, grow the transpacific franchise, and bolster the connecting flow feeding that operation. Not surprisingly, SFO has flourished.
LAX is too fragmented for any airline to grow to the ~300 daily departures United has at SFO. AA has a ceiling of about 200 daily flights at LAX, while DL's is slightly lower. Again, United cannot be all things to all people, and their apparent decision is to grow a more robust SFO operation, with an O&D-focused complex at LAX. Both AA and DL would likely trade their respective West Coast arrangements for United's in a second.
What's happening at LAX is United and American have essentially traded places, with Delta capturing a larger share of traffic as well. Historically, AA@LAX was mostly O&D-focused, supplemented by a smaller Eagle operation and comprehensive service in the major LAX local markets. Around the time of AA's bankruptcy, their 'cornerstone' strategy called for building out LAX as a connecting hub, and that approach has survived the merger and management change. AA has no other viable West Coast international gateway option, which is growing in strategic importance (DFW cannot support service to Asia growth markets yet), nor does it have a large Pacific footprint, so it has no choice but to 'win' LAX as a platform for organic growth and JV cooperation. It's quite interesting, to me, as AA should, by all means, have the largest LA operation by a significant margin, owing to its past acquisitions (AirCal, RenoAir) and those of its merger partner (PSA->US). Most of those positions were squandered to WN in the intervening years, so in some respects AA is just trying to reclaim territory it once held, albeit in a different form.