United narrows Q3 PRASM Guidance - analyst expects them to lead Q4 PRASM growth
Oct 20, 2014, 11:50 am
#181
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We don't know that. No one is disclosing yield in that market. It feels like an attempt to be additive but LA has a history of bloodbaths as UA learned in the early 2000s.
Or put another way - how much higher would yield have been if there was no expansion there? It's a bet they don't yet know will play out.
Or put another way - how much higher would yield have been if there was no expansion there? It's a bet they don't yet know will play out.
AA can expand on LAX-BOS all they want but they won't command ANY fare premiums since VX and B6 will both pull them down to earth.
Oct 20, 2014, 11:58 am
#182
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Just like New York and Chicago can.
Oct 20, 2014, 12:13 pm
#183
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The key distinction is its geographic position isn't suited to being a connecting hub of the scale that Chicago and New York are, so it relies heavily on O&D which is inherently a tougher game to win a high margin presence.
Not enough volume to Asia from ex US flyers the way there is to Europe via New York.
And Chicago is a natural midcon connection point.
Not enough volume to Asia from ex US flyers the way there is to Europe via New York.
And Chicago is a natural midcon connection point.
Quote:
Originally Posted by 787fan
LAX is such a bloody 4-plus-2-way war (true hubs of AA UA DL WN plus major focus of VX and AS) that it is absolutely foolish to do aggressive expansion even if the others are pruning capacity a bit.
That's ridiculous. It's the second largest metropolitan area in the country, and a major business center. It can sustain several carriers with significant presence.
Just like New York and Chicago can.
Originally Posted by 787fan
LAX is such a bloody 4-plus-2-way war (true hubs of AA UA DL WN plus major focus of VX and AS) that it is absolutely foolish to do aggressive expansion even if the others are pruning capacity a bit.
That's ridiculous. It's the second largest metropolitan area in the country, and a major business center. It can sustain several carriers with significant presence.
Just like New York and Chicago can.
Oct 20, 2014, 1:10 pm
#184
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The key distinction is its geographic position isn't suited to being a connecting hub of the scale that Chicago and New York are, so it relies heavily on O&D which is inherently a tougher game to win a high margin presence.
Not enough volume to Asia from ex US flyers the way there is to Europe via New York.
And Chicago is a natural midcon connection point.
Not enough volume to Asia from ex US flyers the way there is to Europe via New York.
And Chicago is a natural midcon connection point.
There's more to the world than just Europe.
LAX could make an excellent Latin gateway, and UA is already a major player in Latin America.
DL has begun to leverage Latin America via LAX with some of their recent Latin growth.
Oct 20, 2014, 1:41 pm
#185
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Most of them have it so stuck in their head that Miami is the gateway to the USA that trying to get them to use LAX might be near impossible. This is coming from someone who is in transportation and has been trying to do this for 5+ years.
Oct 20, 2014, 1:55 pm
#186
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He's not doing much thinking - the question is fed by his clients who own / trade the stock. Pension funds, hedge funds, etc.
Context is not just LA but also SEA and the updated overall capacity guidance that implies 4% domestic growth.
They are also seeing LA get ramped by AA and thinking "we've seen this movie before in the 90s" and it didn't end well.
.
Context is not just LA but also SEA and the updated overall capacity guidance that implies 4% domestic growth.
They are also seeing LA get ramped by AA and thinking "we've seen this movie before in the 90s" and it didn't end well.
.
Oct 20, 2014, 2:24 pm
#187
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The bigger issue is whether SEA *TPAC* is profitable. It's very easy to have domestic PRASM increase in SEA because their expansion was mostly short-haul around west coast, and thus a major reduction in average stage length.
Oct 20, 2014, 7:06 pm
#188
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It's also easy to have a PRASM increase if you're starting from a low point.
Oct 20, 2014, 7:10 pm
#189
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Adding 50 flights from SEA, in the context of DL's thousands of domestic flights, does virtually nothing to average stage length. This is 6th grade math.
Oct 20, 2014, 7:32 pm
#190
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This is 2nd grade reading.
Mod Edit: please continue the discussion on http://www.flyertalk.com/forum/unite...l#post23721436
Last edited by J.Edward; Oct 23, 2014 at 7:17 am