ARCHIVE: Routes (Flights) and Hubs (Speculation, News and Discussion)
#3361
Join Date: Dec 2014
Location: Alexandria, Longboat Key
Programs: UA Gold Marriott Gold AA Gold Choice Gold Wyndham PLAT IHG PLAT Avis President's Club Amtrak Select
Posts: 2,263
#3362
FlyerTalk Evangelist
Join Date: Aug 2008
Location: Usually in SAN or Central Europe.
Programs: AA:EXP/1MM. Accor/Radisson:Silver; HH:Gold; ICH:Plt Amb.
Posts: 22,307
Since the 330s are Y-heavy, I can see them being deployed on MIA-Europe routes in the peak winter/spring tourist season for MIA (and the Carribean), and while many are not needed for CLT/PHL-Europe flights.
#3364
FlyerTalk Evangelist
Join Date: Aug 2011
Location: Austin, Texas
Programs: Airline nobody. Sad!
Posts: 26,062
I know what I'm about to refer to does not specifically mention profitability of DFW-HKG specifically, but (bolding mine):
http://seekingalpha.com/article/3202...r-the-sell-off
Fig 4: American Airlines Capacity Management
American Airlines is maintaining a disciplined operation and growing capacity at less than the overall industry growth worldwide in an attempt to maintain current yields. The only exception to this is in Asia where American Airlines had little presence until its merger with US Airways. Once it became the world's largest airline, it needed to add routes to Asia in order for high value corporate clients to consider using American Airlines for their travel needs. CEO Doug Parker has described Asia as an investment, and the growth should come down to industry averages over the next few years as American catches up to competitors in Asia. The investment is paying off and Doug Parker stated their Dallas - Hong Kong route is now one of their most premium traffic heavy routes.
American Airlines is maintaining a disciplined operation and growing capacity at less than the overall industry growth worldwide in an attempt to maintain current yields. The only exception to this is in Asia where American Airlines had little presence until its merger with US Airways. Once it became the world's largest airline, it needed to add routes to Asia in order for high value corporate clients to consider using American Airlines for their travel needs. CEO Doug Parker has described Asia as an investment, and the growth should come down to industry averages over the next few years as American catches up to competitors in Asia. The investment is paying off and Doug Parker stated their Dallas - Hong Kong route is now one of their most premium traffic heavy routes.
#3365
Join Date: Jul 2010
Location: NYC, SLC, LAX
Programs: AA EXP, UA Plat
Posts: 3,952
Cite?
I know what I'm about to refer to does not specifically mention profitability of DFW-HKG specifically, but (bolding mine):
http://seekingalpha.com/article/3202...r-the-sell-off
I know what I'm about to refer to does not specifically mention profitability of DFW-HKG specifically, but (bolding mine):
http://seekingalpha.com/article/3202...r-the-sell-off
06/2014 Earnings Call, Doug Parker:
[DFW-HKG and DFW-PVG] have not been ... profitable as of yet. We hope they will be over time. They are investments. We’ve seen nice improvement, and indeed our Asia revenue per ASM [available seat mile] over the past year has grown at a rate in excess of the industry, so we feel very good about the future prospects. But these, like a lot of routes at airlines, are investments and haven’t yet been profitable.
“In 2014, some of those new routes [DFW-HKG and DFW-PVG] weren’t profitable at the time, though they were exceeding our forecast, and we feel actually really good about the startups that we had in 2014,” he said. “If we looked at it today, I don’t have a specific forecast that goes route by route. But I’m pretty sure that with fuel prices where they are today, we’d expect even our Asian routes to be profitable in 2015.”
Last edited by DWFI; Oct 26, 2015 at 6:56 pm
#3366
Join Date: Nov 2014
Posts: 49
I'm not 100% sure HKG is not nominally profitable as of right now but here is the evidence I use to assert my statement that it is not significantly profitable. Break even, perhaps. But I'm sure we would hear about it with great fanfare once there is a meaningful profit being made. I have flown AA metal to HKG 3 times now and each time I paid less than $800 USD. 5 of 6 times I have cleared into J.
As an anecdote, I'm based in CRW, on an annualized basis we have almost the exact same capacity for the merged AA and HKG does with a single 77W daily. I can't argue that CRW is as important of a city as HKG (we only have 50k people here), yet currently similar capacity. The value of the long-haul routes does go beyond just the direct earnings of the route sometimes.
And since we can't get from CRW-DFW in time to catch HKG the same day, we really need an Envoy e175 to restart that route with twice per day service next year!
#3367
Join Date: Apr 2009
Location: YYF/YLW
Programs: AA, DL, AS, VA, WS Silver
Posts: 5,951
Re AUH, DL has announced that they're dropping ATL-DXB (snarky DL blog post and FT thread).
That makes it particularly interesting that AA (apparently) considers AUH worth throwing at the dartboard, at least if there's no antitrust immunity.
That makes it particularly interesting that AA (apparently) considers AUH worth throwing at the dartboard, at least if there's no antitrust immunity.
#3368
Join Date: Dec 2014
Location: Alexandria, Longboat Key
Programs: UA Gold Marriott Gold AA Gold Choice Gold Wyndham PLAT IHG PLAT Avis President's Club Amtrak Select
Posts: 2,263
Re AUH, DL has announced that they're dropping ATL-DXB (snarky DL blog post and FT thread).
That makes it particularly interesting that AA (apparently) considers AUH worth throwing at the dartboard, at least if there's no antitrust immunity.
That makes it particularly interesting that AA (apparently) considers AUH worth throwing at the dartboard, at least if there's no antitrust immunity.
#3369
FlyerTalk Evangelist
Join Date: May 2012
Location: MCO
Programs: AA, B6, DL, EK, EY, QR, SQ, UA, Amex Plat, Marriott Tit, HHonors Gold
Posts: 12,809
Re AUH, DL has announced that they're dropping ATL-DXB (snarky DL blog post and FT thread).
That makes it particularly interesting that AA (apparently) considers AUH worth throwing at the dartboard, at least if there's no antitrust immunity.
That makes it particularly interesting that AA (apparently) considers AUH worth throwing at the dartboard, at least if there's no antitrust immunity.
#3370
Join Date: Apr 2009
Location: YYF/YLW
Programs: AA, DL, AS, VA, WS Silver
Posts: 5,951
Others have suggested that AA and EY might form a joint venture as part of this rumored route. I have no idea if US/UAE treaties/laws even allow this.
#3371
FlyerTalk Evangelist
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
The USA and UAE have had an open skies treaty since AA began flying 777s, so there shouldn't be too much difficulty getting government approval. Of course, AA hasn't been in bed with any of the ME3 the way AA and BA were cozying up all those years, so it's possible that EY and/or QR might not be alll that excited about a joint venture.
I mentioned earlier the rumoured possibility that EY and QR both team up with AA against EK, the airline that doesn't want to join an alliance but is developing joint ventures, notably with QF.
#3372
Join Date: Sep 2001
Location: los angeles, calif.
Programs: Alaska Airlines Gold MVP
Posts: 7,170
#3373
Join Date: Apr 2009
Location: YYF/YLW
Programs: AA, DL, AS, VA, WS Silver
Posts: 5,951
Thanks for the clarification that an open skies treaty does exist so a JBV is possible.
EY has certainly shown a very strong willingness to engage in joint venture partnerships, so I suspect that they'd be more than willing to start one with AA. A good comparison is VA: VA operates a less-than-daily SYD-AUH flight, while EY operates a ton of Australia-AUH capacity. VA provides connections to pretty much everywhere in Australia for EY, and EY provides beyond AUH connections for VA. That's very similar to a possible AA/EY joint venture.
Of course, EY does have ownership stakes in most (all?) of its current joint venture partners, but I can't imagine they'd consider that a roadblock to a joint venture with AA.
So to me, it seems that the question is whether AA is willing to start a joint venture with EY. The more I think about (ME3 politics aside), I have trouble seeing why AA wouldn't. There just isn't much overlap between the AUH and beyond routes that EY serves from the US and routes that AA serves from the US, so it would be mostly growth for AA. And if the cost is a less than daily DFW-AUH flight, why not? It's not even clear to me that AA would have to maintain the DFW-AUH flight if it doesn't work out; AA and QF had a joint venture for several years before AA operated any Australia flights.
Of course, EY does have ownership stakes in most (all?) of its current joint venture partners, but I can't imagine they'd consider that a roadblock to a joint venture with AA.
So to me, it seems that the question is whether AA is willing to start a joint venture with EY. The more I think about (ME3 politics aside), I have trouble seeing why AA wouldn't. There just isn't much overlap between the AUH and beyond routes that EY serves from the US and routes that AA serves from the US, so it would be mostly growth for AA. And if the cost is a less than daily DFW-AUH flight, why not? It's not even clear to me that AA would have to maintain the DFW-AUH flight if it doesn't work out; AA and QF had a joint venture for several years before AA operated any Australia flights.
#3374
Join Date: Dec 2014
Location: Alexandria, Longboat Key
Programs: UA Gold Marriott Gold AA Gold Choice Gold Wyndham PLAT IHG PLAT Avis President's Club Amtrak Select
Posts: 2,263
If AA/EY do pursue a JV, I'd say DFW-AUH, albeit two/three times a week operated on AA doesn't sound that far fetched after all. It will interesting to see how this will work if AA does go ahead and pull the trigger in the next few weeks.
#3375
Join Date: Aug 2010
Programs: AA 1.6MM EXP; UA GS; SPG LTG,Hilton Gold, Marriott Gold
Posts: 1,477
What's interesting in this whole joint venture with EY idea is that EY is in direct competition with QR for connecting traffic, particularly to South Asia ex-US. I can imagine AAB not being terribly happy with AA routing traffic through AUH rather than DOH.