malgudi

An inadvertent portmanteau?

UA-NYC

It's no longer a hub, and dollars to donuts, the # of mainline flights you quoted will undoubtedly drop in the coming years as well

IAH-OIL-TRASH

Just the whole metropolitan agglomeration from Santa Barbara thru LA to San Diego.

schley

LAX IMO will not be de hubbed for many of the reasons mentioned previously already. 2nd largest city in the USA and significant international gateway for star alliance are two obvious reasons it won't go away from it's status. The bigger concern is UA continually going less and less mainline, which I just really dislike RJ's. To DEN and IAH, SFO and SEA I predict more RJ's, but not less frequency flying. ugh.

cesco.g

looks like all LAX-MEX n/s are gone and one needs to route thru IAH.

FWAAA

No, that bolded part is false. US is getting but one gate at T-3.

The AA build-up at LAX involves more domestic nonstops (IND, PIT, RDU, etc) plus more international flights.

AA is getting preferential use of four new gates at TBIT, all widebody-capable, and probably all of AA's LAX widebody flights will use those gates.

True, except that PHX is the 7th largest O&D market in the country, and still growing faster than the CLE metro area. CLE? About 48th largest. Phoenix is a desirable destination for nationwide (and worldwide) visitors. CLE? Its air service is primarily for its residents and the business travelers who have to travel there. PHX has four times the O&D of CLE. I predict that new AA will rationalize the PHX hub, but unless it waves the white flag and surrenders the market to WN and others, PHX will still have a lot of nonstop flights.

Flights to Asia succeed when they're flown from cities with substantial O&D, and LAX is tops in Asian O&D. From where will AA get passengers? Probably by taking them away from UA. For two years now, AA has been eating UA's lunch and as AA builds up its Asian presence, AA should be able to capture even more traffic from UA.

Where else might AA get passengers at LAX to fill flights to Asia? Mainland Chinese carriers aren't the airlines of choice of most USA residents, and the OZ CFIT at SFO won't engender any love for Korean carriers either.

That's true, but I don't predict success if AA tries to fly to very many cities in Asia from DFW. AA does alright from DFW to Tokyo. There aren't any nonstop flights from MIA to Asia, and that's because of the very high cost of such long flights.

Exactly. The four new widebody gates at TBIT will be what enables AA to expand at LAX.

ZZYZXROAD

Basically CLE is no longer a HUB, that's it. Still largest carrier, still tons of flights. Has anyone even flinched on this announcement? Don't see much changing there at all.

Just me yapping here, but spending 2-5k on 4.5 hour is nuts. Are these PS selling out? With instruments? Personally, if AA can sell a seat for $4k RT FC PS LAX-JFK then the airline business is a lot healthier than I thought.

cesco.g

The traffice volume LAX-HKG and LAX-Germany (FRA,MUC) is obviously huge. Yet UA is unable/unwilling to fill a single daily flight on each. Two headscratchers indeed.

WineCountryUA

Isn't that part of the role of Star Alliance? UA has a lot of capacity to FRA/MUC from other airports and given the TATL JV with LH, why would UA further compete with LH?

escapefromphl

There are a few direct, wish there were more though.

EWR764

UA is one of the two US-flagged operators permitted on LAX-MEX and will not concede this route, despite significant negative pressure on fares and yields to MEX as of late. AS is the other carrier in the market (slot relinquished by DL about 10 years ago) and both AA/DL would fall all over each other to get into the market.

Two different situations. UA has a presence in LAX-MUC/FRA by virtue of its revenue-sharing JV with LH. For all intents and purposes, it is in the market. LAX-HKG is a large, high-volume market but the yields do not justify a dedicated UA long haul service. Keep in mind that many CX pax are actually transferring at HKG to destinations throughout SE Asia.

Kacee

The whole reason that UA, AA, and DL all offer premium service on that route is that there is substantial demand for it. If they weren't selling a substantial number of those seats, they wouldn't be offering the premium service.

I do suspect that most of UA's paid traffic on the ps routes these days is pursuant to corporate contracts with hefty discounts. That's the only justification for their offering such patently noncompetitive fares - they have no real intention of selling the full fare tickets.

EWR764

As a corollary to that, the premium traffic in that market demands the higher level of service (which is delivered at a higher cost). You can bet that, sans competition, UA would prefer to deploy a higher-density, lower cost product if they could command the same premium. Thus, it's not necessarily a chicken-or-egg situation, but rather an equilibrium brought on by the nature of competition in that market.

There are no doubt other transcon (and non transcon) markets which drive strong paid premium demand, but UA is able to compete in those city pairs with a lower-cost product because the competitive landscape has not made such higher-end offerings a prerequisite to capturing premium traffic. That's one of the reasons the NYC-LAX/SFO markets are unique in the US domestic scene (I consider DL's BE service on JFK-SEA an attempt to drive connecting premium demand over the SEA operation to Asia, as JFK-SEA substantially lags LAX/SFO in terms of average fare and paid premium traffic).

spin88

I find this issue being raised to be very interesting. After NYC, LAX is the "must be" airport for corporate accounts. Its O/D is both very large, and premium heavy. My guess is the "premium" (high yield) markets are in order NYC, LAX, SFO, DC (both airports), ORD, HOU, ATL. If you want to bid for the big, high value corporate accounts LAX is a key part of the mix.

Delta clearly sees this, hence its very large build up. American after facing large financial pressure is now doing the same, and has increased. Here is the market share (as taken from the LAX airport site) for 2013 and 2010 (last year before Jeff took over):

2013: AA/Eagle: 17%, US 3% (20% total) UA 16.3%, DAL 13.5%, SWA 11%, AS 5% , SkyWest 3.5%.

2010: AA/American Eagle 15.9%, US 3.2%, UA 13.1%, CO 4.5% (total 17.6%) DAL 11.1%, AS 4.5%, SWA 11.6%, SkyWest 4.3%.

I've included SkyWest separately as they fly for both DAL and UA, but even without allocating them the numbers are interesting. AA has added +2.1% and Delta has added +2.4%market share. AS which partners with both of them has gained +.5%. Meanwhile UAL has given up at least 1.3% of market share (I say "at least" as some of the SkyWest reduction - if not all of it, was UAL flights, I don't think DL regional were reduced at LAX in 2013).

What should have happened was that with more destinations, and a bigger network, UAL should have been able to pick up corporate traffic and market share at LAX, yet they did not, and both AA and DAL have said they have had corporate sales growth at LAX.

I chock this up to the "changes you will like" airline just not being competitive either domestically or internationally. When its OD traffic (as LAX mostly is) and there is competition, UAL founders. And given the lack of narrow body lift at UAL, I don't see much, if anything, that UAL can do about LAX, and I think they will continue to trim their scheduled and lose market share.

LAX is not going to get axed, but I think that competitive pressures, and no real response that UAL can mount (either on the service level front, or by expanding service/network,and a "here are miles for flying to/from LAX" promo is so not the CO thing) will counter it. I think its more like "shrink as your relative yields fall" is UAL's medium term fate at LAX. As the SYD flights are dowgaged the incoming lift will be as well, and as DAL ramps up on SEA and SFO routes, and the new DAL/AA flights start, expect downgaging if not flight cuts.

AA has not blinked at LAX, as the market shares show, and with a larger foot print, new aircraft, and lots of cash, I expect AA to put the pressure at LAX and transfer some of the PHX traffic to LAX via upgaging flights. I would not be surprised to see then add a shuttle like product to LAX-SFO (as they need it to compete for corporate accounts) and also expand inter CA where WN rules, but corporate accounts want flights. E.g. LAX-SMF, LAX-SJC.

I see little to be taken from dropping a single flight LAX-EWR. They service NYC with JFK and have a competitive advantage on that route, a single flight does not really allow them to compete, and I doubt they gave much, if any, high value traffic that will only fly to EWR, and not JFK. This said, I would be very interested to know how profitable the "new" Continental-ized" two class PS service was in 2013, if it was actually profitable.

LAX-Germany given the LH tie in is at least semi-understandable, the failure to fly to HKG (with traffic then ongoing to SIN, BKK, and onwards) really says that UAL can't compete. But once HKG-BKK is dropped and the HKG-SIN was downgaged (since reversed) the change they could get the premium lift to make the flight profitable went away. No way they can run a 747 profitably, and I doubt they can do it with a 772ER given the winds without a fuel penalty, and at 7236 miles, the 787-8 does not have the legs to do it Westbound with the prevailing winds. If the 787-8 had a longer range, they might be able to fill it, but it does not.

Had UAL been able to build up its market share, rather than having it fall, routes like this might be profitable, but as UAL's elite/HVFer base at LAX erodes, they get further and further out of reach. More potential from this merger wasted.

I agree that the yields likely do not justify for UAL given the AC mix they will have going forward, but I would also point out that HKG is a major transfer point for travel to a number of places in Asia that are very important for network, PMUA had BKK and SIN flights, and you could fly UAL to a number of places onward via SQ and TG. Given the very large combined FF/elite base that CO and UA had at LAX, they should have been able to make the flight work. By not doing so, and instead offering LAX-SFO-XXX they conceded the market to HKG and onward to other cities.

The merger had a lot of potentially for UAL to take a leading position at LAX, which is a very important market, and I think UAL ceded that lead to AA and now DAL.

bob_the_d

i fly the p.s. routes and i rarely see the BF cabin empty. i've actually seen Y with empty seats before, but BF is rarely empty ime. i've even missed RPU's on them before.

i think i remember on the LAX runs the SAG contracts have first class stipulated for them or something along those lines, and i find that when i go it's often times people who work at agencies and they travel in groups. i would imagine the company is paying for BF tickets, but that's just speculation.

on my SF runs it's often bankers. i'm pretty certain the banks are paying for the BF tickets to those, and SF-NYC isn't an uncommon run for financial services folks.

the front cabin for these routes sells plenty. it's why AA has 3 class planes. even jetblue jumped in with their life flat seats on these routes. DL has lie flats on tcons as well.