flyingeph12

My reference to regional or LCC was not in regard to quality of product (indeed there is little difference in quality between LATAM and the various LCCs—e.g., Sky, etc.—although LATAM might be somewhat more reliable). Rather, I was referring to AA’s ability to get passengers to destinations in one ticket. Imagine a business traveler flying AA into SCL, GRU, EZE, LIM, and having to have a separate ticket to get to whatever their final destination is.

I don’t think this is the end of the world in terms of AA’s MIA hub or dominance in Latin America, but as evidenced by AA’s response already (both in its quickness and defensiveness), I think it’s certainly serious.

DMPHL

Well, I don't imagine there are businesses with large volumes of corporate traffic based out of, like, Porto Seguro. The corporate contracts will be mostly for traffic in EZE, GRU, GIG, SCL.

moondog

Why can't they just do codeshares with several airlines, as needed? It's not like this is an unprecedented situation.

SmithJC

UA eliminated First Class, eliminated their JFK presence, and went entirely to Newark. How many of those executives are actually on a full-fare F ticket? None. They fly private from TEB.

moondog

Doesn't the SAG still require F (doesn't need to be full fare)? And, isn't AA the only airline on the route that still offers F?

DMPHL

1. Wrong. Many of them don't fly private from Teterboro. Many studio executives fly commercial, even C-suite studio executives.
2. The lucrative contracts are for talent, who often by contract fly First. I've been in F cabins a number of times wihere A-list actors, musicians, etc. are also flying. I imagine they are on full-fare F tickets (albeit negotiated contract rates). UA's eliminating F and eliminating their JFK presence are precisely things that have favored AA.

flyingeph12

Sure, AA could codeshare. And maybe all the business travel is to destinations already served by AA (although I doubt it). That still doesn’t answer the question of why businesses would choose AA/some at the moment hypothetical codeshare partner over DL/LA.

And just to be clear, I was originally responding to someone wondering why this would be a big deal to someone accruing AA miles or chasing AA status. My point is that this is likely a big deal not because of those chasing status or accruing AA miles caring but because of the potential loss of corporate contracts and increased competition in what has been a OW dominated market. And as we’ve seen, Parker’s AA doesn’t seem to hold up all too well to direct competition (e.g., AA in NYC now vs ten years ago).

moondog

After codeshares are put in place, they will no longer be hypothetical. In light of the fact that the LATAM news broke just several days ago, and the dust has yet to settle, it's understandable that a new strategy has yet to be finalized, let alone deployed.

DMPHL

Point taken about a non-zero amount of corporate travel originating outside of those places. To capture that traffic, AA would definitely need to find partners for feed on the SA end. The vast majority of that traffic will still originate in major metropolitan areas where AA flies directly. For secondary markets in, for instance, Brasil, AA could codeshare with GOL, whose domestic product pretty much exactly the same at LATAM'S. The ability to do it all on one ticket will be important for those markets.

If AA can do that, I can't see the market being in bad shape. AA has a lot of corporate contracts in SA, and also owns a lot of contracts for US-based companies with business in SA, with a lot of name recognition and popularity among people at large. The AA brand is strong in SA, especially places like Brasil.

Except for businesses that have/want to keep their business with LATAM, there is currently no reason for companies/fliers to flee AA simply because LATAM is no longer a partner.

flyingeph12

That AA seems to have been caught flat footed is telling in itself, in my opinion. In any event, whatever strategy AA deploys better happen quickly, I think. Particularly given that AA/LA has already suspended their codeshare agreement for future flights.

flyingeph12

The AA brand might be strong in SA, but is it stronger than the combination of DL/LA? To me that is not a trivial question. In fact, a lot of money might be riding on that question.

MAH4546

No, SAG doesn’t require F.

enpremiere

LATAM international service is consistent so at worst I give them that and they tend to be quite decent when measured against the AA average.

Indeed the LATAM lounges in SCL and GRU are definitely better in terms of seating, food, and overall size than their AA counterparts (even before the SCL AA club closed).

Antarius

It is definitely serious, I agree. My point is, they can still codeshare with different local partners in the future and achieve a lot of what they have now.

Adelphos

As far as LAX to JFK, AA will always have a few advantages

1) UA abandoned JFK
2) Most of Delta’s hard product is the 767, which isn’t competitive to AA’s A321 F
3) JetBlue (which could theoretically be a viable alternative) doesn’t have lounges
4) Alaska (which was a viable alternative years ago as Virgin) cut frequencies and devalued the experience

Plenty of actors seem to fly AA F from LAX to NYC and back, I’ve seen them. I love Delta but AA’s LAX to JFK experience is significantly more premium all around

AA has basically given up on JFK/SFO, so you can see the seem to do relatively well on LAX/JFK