American Airlines announced it is drastically scaling back its international presence in Los Angeles, slashing the majority of its longhaul flights. Will Delta and United step in to fill the void or is LAX simply too difficult a hub?
AA Announces Major International Reduction At LAX
American Airlines will end longhaul service from Los Angeles to:
- Buenos Aires
- Hong Kong
- Sao Paulo
That will leave:
American called its cancelled longhaul routes “underperforming” and will concentrate its transpacific traffic at Dallas-Fort Worth, though it will add Seattle – Shanghai service from its new Seattle focus city.
AA’s story is a familiar one. LAX does not have a dominant carrier and airlines have struggled to find profit in Los Angeles over the years.
Why Carriers Struggle At LAX
Delta tried London Heathrow service and failed. United tried Frankfurt, Hong Kong, and Singapore service and failed. Los Angeles, more than any other airport in the USA, has a high concentration of origin-destination (local, not-connecting) traffic. So what is the problem?
On the negative side, high competition from U.S. and foreign carriers drives fares downs and limits profitability. It is no longer a surprise to see transpacific economy fares under $600 or transatlantic fares under $400. While those may not be sustainable longterm, we’ve seen them long enough that they are more than just a blip. The pandemic may change that, especially if air travel to China remains restricted and Norwegian permanently scales back longhaul service.
On the positive side, one reason why U.S. legacy carriers have avoided such a huge build up at LAX is because their partners already have it covered. Even as alliances continue to lose their relevance, these partnerships remain and even stronger joint venture partnerships mean revenue sharing, making which carrier actually operates the flights less important.
U.S Legacy Partner Carriers Serving LAX
American Airlines has partners offering nonstop longhaul service at LAX including:
- Air Tahiti Nui
- British Airways
- Cathay Pacfiic
- China Southern
- Fiji Airways
- Japan Airlines
- Qatar Airways
Delta Air Lines has longhaul partners serving LAX including:
- Air France
- China Eastern
- Korean Air
- Virgin Atlantic
- Virgin Australia
United Airlines has longhaul partners serving LAX including:
- Aer Lingus
- Air China
- Air New Zealand
- EVA Air
- LOT Polish
- Singapore Airlines
- Turkish Airlines
That’s quite a conglomerate of partners for all three carriers.
Is This A Golden Opportunity For Delta Or United?
I asked Patrick Quayle, United’s Vice President for International Network and Alliances, about how United would respond to AA’s latest departure at LAX. He told me:
“As airlines continue to move through the current environment and make changes and adjustments to their network offerings, there may be opportunities for United. We remain committed to serving the Los Angeles market and we will continue to closely monitor demand and adjust our schedules as demand dictates.”
That’s hopeful in one sense. United at least leaves open the opportunity for more service. On the other hand, Quayle did not even affirm United’s hub status at LAX, setting only that it would contain to serve the LA market. United CEO Scott Kirby has said “there are no sacred cows” when it comes to preserving all existing United hubs.
Delta did not respond to Live and Let’s Fly prior to publication, but likely would have given the same non-answer answer.
From my own viewpoint, as much as it seems like a golden opportunity to bulk up international service, it has been tried before and usually fails. With partners increasingly able to offer passengers nonstop service to major cities around the world, adding additional flights makes less sense than other hubs like Minneapolis or Denver where passengers are hub captive.
As an Angeleno, I’d love to see more longhaul nonstop service from legacy airlines. But I don’t expect it. LAX is too competitive and most gap are already filled by partners.
Do you think United or Delta will counter American’s retreat with more flights at LAX?
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image: Prayitno / Flickr