AA competition for CX on the LAX route
 

Strong rumour of American Airlines starting the LAX-HKG route

http://onemileatatime.boardingarea.c...rican-lax-hkg/

I personally would welcome this. CX fares on this route are very high and I welcome the competition. AAs hard product matches CX so assuming their fares will be much lower I look forward to trying it.

It would be great if this happened, provided AA and CX don't do some revenue sharing agreement or something where they basically collude on prices together. It was a shame when UA dropped the route back when they did, if for no other reason they helped keep a lid on premium seat prices.

No CX/AA JV as No Open Skies
 

I expect that AA doesn't serve a mid flight full meal service too!

http://onemileatatime.boardingarea.c...las-hong-kong/

AA food actually looks decent. And they also cater/budget for mid flight snacks hence negating CX's reason why they need to serve a mid flight meal.

Since AA is having very good success on DFW-HKG, what in the world makes you think they will price their fares "much lower" than CX on this route?

Regards

Good news indeed, CX needs more competition.

Competition and perceived inferior soft product?

I also feel AA food isn't that bad. Granted I have not actually flown AA in a premium class on a transpac, but on my transcons (SFOJFK) the food offered is pretty good. Quite filling and tasty. Their alcohol selection on the other hand is nothing to write home about. I imagine AA would have better offerings on their long haul routes, no?

I guess we'll see, but AA doesn't seem to be having a whole lot of trouble filling planes on the Asia routes they have added.

Personally, I wouldn't expect "much lower" fares, but I guess time will tell.

Regards

True, but you have to admit LAX has a far different profile than any other Asia route AA has launched. There is a ton of capacity on the route....all of it a CX monopoly. 4/4 daily LAX-HKG flights are operated by CX.

Further, due to AAs current lack of capacity on the route ,you gotta presume a decent chunk of the current CX demand on that route are AA "friendly" folks - either elites, corporate contracts, etc. I bet AA has decent business from the codeshares. Presumably CX will lose some business here when AA launches.

I dont think its the same as DFW. DFW is an extreme example - there were zero flights to HKG before. LAX is a longstanding, high capacity OW Asia route that has been around for ages, and CX has incrementally increased capacity over the years by adding flights and making tweaks to fill increasing demand (the most recent change coming in 4Q 2015, when CX added ~200 seats weekly by changing equipment a few days per week). The bottle isn't being uncorked here like perhaps DFW was.

I'm definitely in the camp who thinks this will have a competitive effect (positive, from consumers' views) on pricing. I agree AA can fill seats, but i think the bigger variable is CX...at what expense does AA filling seats impact CX. I bet it does in a material way, which causes CX to be more cautious with prices.

i believe some AA friendly folks done LAX NRT HKG in the past and if you factor in connecting flights i assume their fares would be reasonably competitive.

collusion is now illegal in hk with recent introduction of competition ordinance.

it is quite possible that CX could respond as they usually do by upping their own capacity ( LHR, SIN are just some examples)

5th Daily and more 77G

from CX perspective- CX losing the share of the market is more damaging to itself than if AA lost it ( enters and then exists)
considering CX has more to lose they should probably fight tooth and nail to kick the competitor off as they have done in the past...

If this gets confirmed it will be interesting to see what happens to CX.

AA will fill the plane very profitably with AA flyers no problem. I still think lots of the Asian community in LA, and corporates based in LA who frequent HKG, along with transfer traffic beyond HKG will still prefer CX.

However CX will stand to lose some of the premium AA traffic as well as connections beyond LAX.

There is room for both players, I just hope CX can maintain 4x daily.

In a broader term, I do hope one day that there can be an open skies between HKG and USA to allow CX to join the JL/AA JV. It would allow CX and AA to become true partners across the Pacific and a move like this would not be seen as a threat or a competitor.