ashill

That may be true to some extent, but despite their marketing agreement (which is all oneworld is), AA and QR are competitors, just like any two airlines that don't have antitrust immunity. There are increasingly many cases in the airline industry in which two airlines are competitors on some routes or in some cases but cooperate in other ways.

Remember that QF dropped their joint venture with BA in order to form one with EK, yet QF remains in oneworld and is expanding their joint venture with AA. Meanwhile, if AA does form a joint venture with EY (or QR for that matter), they'll be competing with EK and, by extension, QF -- their joint venture partner.

Similarly, CX has a partnership with NZ, in direct competition with alliance partner QF. (And also in competition with NZ's alliance partner SQ, even though SQ and NZ each have ownership stakes in and joint ventures with VA.)

Airline partnerships are necessarily a tangled web that really can't be boiled down to three global alliances in which alliance members cooperate with each other and compete with everyone else. I just don't see QR's oneworld membership as a real obstacle to AA forming a closer partnership or joint venture with EY. (As others have suggested, it's not impossible that QR would join such a partnership anyway.)

Ldnn1

More importantly in my view, EY is in direct competition with BA for connecting traffic, particularly to South Asia ex-US (and some others). The overlap isn't quite the same as with QR but it's significant nonetheless. It will be interesting to see if there's any impact on the AA/BA relationship if AA do jump into bed with EY.

scnzzz

I agree that the section in bold (my bold) is true. But I fail to see where AA and QR compete - on what routes? AA doesn't serve South Asia, Africa, or the Middle East...and they're not competitors on any single route, nonstop or direct that I can tell. US-Europe? That's a stretch I would think.

Now if AA served DEL/BOM, and a few others in that region, I can see the statement that they are competitors in certain markets, but AA/QR don't really compete there that I can tell. EK and QF/BA do compete on the SYD-LHR route (more so when QF routed through SIN). And certainly CX and SQ/NZ compete for Australia/NZ - North Asia/Europe/US routes

I guess I'm missing something...?

FWAAA

What you're missing (or just forgetting) is that airlines compete on thousands of city pairs that neither flies nonstop. They compete on connecting itineraries and they compete even where one sells codeshare tickets on the other. Without antitrust immunity, codeshare partners are not allowed to agree on scheduling or fares or capacity, etc. That's one reason why AS doesn't provide DL with everything it needs in SEA: AS is primarily concerned with scheduling flights in and out of SEA without regard to optimal connecting flight times to serve the DL international flights.

If AA sells a ticket from PHX to AUH, it must compete with QR and any other airline that sells a ticket from PHX to AUH. Obviously, no airline flies that nonstop, and thus every airline must interline with other airlines to carry passengers between those two cities. There are protocols in the industry for sharing the revenue such interline tickets generate, but AA and QR and every other airline must compete with each other on those routes unless granted antitrust immunity.

scnzzz

Fair enough - I stand (sit) corrected.

TheBOSman

To be completely overly pedantic, BA flies to both PHX and AUH from LHR, so they might not have to interline with anybody. That said, the specific endpoints are not totally germane to the argument, exchanging PHX for SAT as an example and the point holds anyway.

roadwarrior84

Proof that my source is really in the "know" about what´s been going on....Qatar just announced expansion of code share flights with JetBlue. See here: http://www.qatarairways.com/english_...e-share-281015

So folks, keep your eyes open. I think very interesting things are going to happen between AA and EY in the near future. We´ll see....

JonNYC

I'd say your source most definitely is a good one!

Xero

I wonder how the new AA will handle its "cornerstones" or is the cornerstone strategy gone. With the old AA, all all flights that did not touch LAX, DFW, ORD, MIA, JFK or LGA were at risk of being chopped. BOS, SFO, and RDU saw a lot of destination cuts (I still miss SFO-SNA). The remaining number of non-hub routes could be counted with fingers.

The new AA has BOS as a focus city. I wonder if BOS will survive or will there be cuts? If no cuts, could BOS-SFO return?

scnzzz

Sure hope so!^ Aside from the perimeter-restricted cornerstones, SFO does have service to all the others (although I do rather miss HNL service)

GNRMatt

I think the idea of those "cornerstones" is LONG gone. It was one that did not work financially for AA (it was a business that was doing quite poorly from that "strategy") and it is something that was from a previous leadership team at the company.

I think saying that a strategy from a previous regime is still at a company is like saying a football team's strategy from one former coach is the same as the current coach.

Austin787

I don't see the current cornerstone strategy changing. The current leadership also adopted cornerstones when they were running US: majority of their flights touched PHX, CLT, DCA, or PHL.

ashill

I don't really see support for any of these statements. Pre-bankruptcy AA had the highest costs in the industry and thus was more limited in the fares they could profitably sell than the rest of the industry. Therefore, they flew out of the markets where they could command high fares, and their hub/cornerstones were very well suited to that model. Sure, they weren't profitable, but I see no reason to believe they would have been more profitable without the cornerstone strategy.

And if anything, pmUS was more focused on their hubs (counting DCA as a hub) than pmAA. And US's hubs are all lower-yielding than any of pmAA's hubs. To me (with limited knowledge), it looks like pmUS was profitable and pre-bankruptcy AA wasn't because of costs, not because of management choices about network structure.

pmUS had damn near zero non-hub routes, pmAA the same, and current AA the same. Hard to argue that the hub-focused strategy isn't alive and well.

Ldnn1

Agreed. I'm not really sure what the poster above is on about. Have there been any post-merger route announcements which aren't hub-focused?

akarneboge

Boston clearly has a few point to point routes, however I've never heard AA call it (or LaGuardia for that matter) a focus city. I know back in the days of the cornerstone, "New York" was combined (as that JFK and LGA were one). Now, neither Boston or LaGuardia has enough routes to be called hubs. I'd be interested to see what they do with Boston. They had some good times there back in the day...it's sad to walk those corridors now.