American To Grow Los Angeles With a Bunch of Regional Jets

American has been talking about its cornerstone strategy for a long time now, but while there have been big changes in most of its hubs, LAX has seemingly been ignored. That finally changed yesterday when American announced a broad expansion of service at LAX, but a lot of it looks like things that have been done before. There are a couple reasons that’s the case, and this may very well be the best American can do right now. Still, my hopes are not high for success here.

There are 10 new routes (including the already announced Shanghai flight), and there are additional flights from LAX to 5 more cities (the other hubs, Vegas, and Orlando). Here’s a map to sum things up.

American New LAX Routes

I put the other airlines that fly these routes nonstop on this map just to give you an idea of how underserved these markets are. (Hint: they aren’t.) Now that United has announced it will also fly LAX to Shanghai, every single one of these new American routes is already flown by United. Oh, and Southwest? The airline flies to six of these nonstop, seven if you count Houston/Hobby the same as Houston/Intercontinental, and the other two are easy single stops on the airline. Throw in Delta on a couple routes and US Airways to Phoenix and you’ve got a crowded house.

Some of this may seem familiar. That’s because Delta tried to build up some of these cities in the last couple of years but those routes failed and Delta retrenched. Now Delta seems content serving the bigger cities from LAX and letting Alaska fill in the rest in order to feed Delta’s international network. But American thinks it’s worth a run here so it’ll give it a shot.

I went to the sparsely-attended press conference held at the swanky Wolfgang Puck restaurant at the top of the Ritz-Carlton in downtown LA yesterday and asked what the idea was here. American had Virasb Vahidi, Chief Commercial Officer at the event, and I specifically asked why they chose these routes. His answer? “It’s what our best customers have been asking us for.”

El Paso? Really? Maybe there’s a big corporate client on that route.

But I have a different theory. I think that American wants to make it clear that it cares about LA and it wants to expand but it’s somewhat hamstrung. With the exception of the Shanghai flight, all these new routes will be flown by American Eagle. As part of this, American will be putting $20 million into expanding the American Eagle terminal from six to ten gates. (The Eagle terminal is now where United Express used to be, on the east side of the airport and you have to take a bus over there.) That’s great, but why not expand its Terminal 4 home? It can’t anytime soon.

Terminal 4 is landlocked and the terminal is running just about at capacity. Clearly American can squeeze a few more flights out here (additional frequencies to the hubs) but there isn’t an opportunity for much expansion. When the expensive Bradley Terminal project is done, American’s Terminal 4 will be connected behind security (it hopes) to additional gates in that terminal. But that’s not expected until 2014. So until then, there’s not much American can do unless it wants to start using gates in different terminals, but that would be a big undertaking and a massive inconvenience for passengers.

For now, American has to do much of its expansion with Eagle in LA. That’s not all bad. Now that American has ordered more CRJ-700s and outfitted them with First Class, American can at least offer something closer to a mainline product. At the very least, the airline can offer something competitive with what United has on its army of 70 seat jets. American will put its CRJ-700s on the long hauls like Houston and Oklahoma City (along with some Phoenix and an Albuquerque). Maybe those cities make sense on the newly-acquired 70 seaters whereas they wouldn’t have made sense on MD-80s or 50 seat regionals. Maybe?

Even though the talk today was all about the commitment to LA, I have to think international feed is a big part of this as well. Right now, American only flies to Tokyo from LA with Shanghai coming soon. American is also awaiting final approval for its joint venture with Japan Air Lines. LAX is bound to be an important gateway for that relationship, especially with United dominating San Francisco, so this could be an effort to build a network to fill those Pacific flights. I suppose we’ll find out when that deal gets going with JAL.

While there’s nothing imaginative here at all – it’s all been done before – it’s about what I’d expect American to try and do. My guess is that a fair number of these routes won’t be around in a year, but it’s encouraging to at least see American paying some more attention to its western cornerstone. Maybe the airline will come up with something more creative for its future moves here.


29 Responses to American To Grow Los Angeles With a Bunch of Regional Jets

  1. Gary Leff says:

    Houston flight is great for LAX-based American flyers looking for awards to Europe, now that AAdvantage members can redeem from US to London on BA, since BA’s premium cabin award space on IAH-LHR is out of the world outstanding.

  2. Cranky

    A reason for the LAX to El Paso routing may be that right outside of El Paso is White Sands Missile Test Range and various other military installations.

    There are still a lot of aerospace firms that have locations in the greater LA area (Northrup Grumman, etc.) that do their testing at White Sands, so it may be that AA is trying to gain some of that business.

  3. dab says:

    American… I need to fly them at some point to keep my miles alive, but that doesn’t stop me still being irritated with them. When I started my job that demands a lot of travel, American had an MD-80 non-stop SAT-LAX at a really good time for business travel. The return wasn’t so hot as I remember, but doable. I built up almost to silver (or whatever they call it) and then they canceled that flight in ’08, which, by the way I had flown on several times immediately prior and was full, and raised all their prices through Dallas. I remember my boss and I talking about it after we both booked trips on Continental “well, all those miles on American were a waste…”.

  4. It’s good to see American going west from Phoenix again. We have some bump vouchers that are only good on American metal, which means we _have_ to go east from Phoenix to use them currently.

    This is an improvement.

  5. Jason H says:

    American making moves like this gives me a couple of thoughts. First, they really are the odd ones out when it comes to domestic service (excepting WN) in that they don’t really have a strong partner to feed them. Alaska is marginal at best right now as they seem to be getting closer to Delta. I think that leaves American in a tight spot trying to get feed for their hubs. I’d wager that they would have much rather given that flying to an alliance partner with a lower operating cost.

    Second, I would think that this might be utilization of CRJs that they were otherwise going to use to replace MD-88s, but the passengers returned to enough routes that they saw fit to keep the larger planes serving them. Of course they also have those aircraft coming off of the San Juan routes they are shutting down.

    • Anon says:

      What makes you think the AA-AS partnership is marginal? There are as many codeshares as there ever have been, and when you go to AS’s website, you see way more AA flights popping up as partner flights than DL flights (this may have to do with DL’s terrible IT problems). Also, AS has communicated to its elite frequent fliers that AS and AA plan to enhance the reciprocal frequent-flyer benefits for each other’s elites (e.g., exit row seat selection, priority boarding, free checked bags, etc.). The AS-DL partnership has improved, but it’s unclear to me that this has been at the expense fo the AS-AA partnership in any way.

      • Jason H says:

        I’m not necessarily marginalizing the AA-AS partnership, but AA has been flying some head to head routing against AS. Additionally, the partnership with DL just appears stronger. When I look for a DEN-SEA or DEN-PDX flight the first thing that delta.com shows me are AS flights, not their DEN-SLC-xxx flights. Additionally when I look at something like DEN-NRT my routing options are populated with a large number of DEN-SEA segments on AS. I didn’t see that kind of think with AA when I was looking at flights from YYZ-GEG or YYZ-SEA.

        In the end I think it depends on the routing choices, but you have to admit that the partnership with DL gives AS flyers a much larger reach than the AA partnership.

  6. Timbo says:

    I wonder if these enhancements are in response to Virgin America initiating service b/w DFW and LAX? Obviously the increases in DFW-LAX frequency make sense in that regard, but not quite sure if the other changes do.

  7. Why do airlines always say ‘it’s what our customers want’ that is always such bull. They are doing LAX-IAH because UA does LAX-DFW so it’s more for international feed then local traffic.

    I guess people want to fly RJ’s to places like TUS/ELP/ABQ instead of those bigger 737’s WN flys with its no bags fees, no changes fees, happy employees, etc.

    But at least American is doing something, oh wait it’s not American it’s American Eagle who’s doing something.

  8. SEAN says:

    American does fly to LHR from LAX.

    What would be interesting is if Alaska & American merged. In that case, the LAX hub could be moved to either Portland or better yet Seattle where Alaska is based. With Seattle, you already have a built in route network across the pacific & don’t need to compete with United or Delta. Although United does have a large number of flights there despite it not being a hub.

    • Anon says:

      Not very likley. ALK’s market cap is $1.79B, and AMR’s is $2.49B. An Alaska-Delta merger seems more likely (DAL’s market cap is $10.6B), though I think DL still needs some time to finish digesting NW.

  9. Alex Hill says:

    Off-topic, but it took me a few counts to figure out what all those globe logos are doing on the map. Continental doesn’t fly LA-Boise! Then it dawned on me. I like.

    On-topic: While this isn’t too dissimilar from what Delta did, doesn’t American have a much larger base in LA to start with than Delta ever did? Doesn’t that give them at least a better chance for sticking with these routes than Delta? Also, IIRC, the trends in air travel, particularly premium air travel, are much better now (up) than they were a few years ago when Delta tried to build up LA (down).

    Lastly, it’s notable that every single one of these routes does not overlap with AA’s partner Alaska/Horizon (Horizon having recently dropped Boise).

  10. Coe says:

    I think its all about “fill those Pacific flights” — Alaska is mostly no help for them in these markets without a conx in PDX or SEA, and Reno Air is…well…long gone.

  11. EricInChi says:

    Seems to me like they are in the proverbial rock and hard spot. They need feed into LAX to make the PVG/JL/QF thing work…obviously…and there are not many viable markets west of the Mississippi that are NOT connected to LAX. Do you think that they are banking on AAdantage demographics and brand to make this work??
    I’m concerned about the heavy reliance on connecting traffic, which dings yield, coupled with Eaglet’s cost disadvantage. I wonder how long it will take before B6 shows up on some of these segments..using the AA code.

  12. Potcake says:

    Delta doesn’t fly nonstop between LAX-PHX.

    • Nick in PHX says:

      Delta service between LAX and PHX starts March 3rd and will be flown 4x daily with 76 seat CRJ-900 aircraft operated by SkyWest.

  13. Zack Rules says:

    AA did mention something about examining whether to add Hong Kong and Guangzhou from LAX as they were determining whether it would be better to serve them via Tokyo on Japan Airlines or Cathay Pacific. What AA should do with LAX is to add those markets and a few more, Beijing perhaps but more importantly Taipei and Seoul as both have huge O&D traffic and could still be augmented by the new feeder traffic. It is a real niche as UA only does Tokyo and Shanghai nonstop so serving major trans-pac markets nonstop would make sense for AA.

    And Delta tried building up LAX some years ago but that was before the merger with NW and could not really take advantage of the feed they now have to Tokyo Narita (and Haneda).

  14. Bill says:

    Eleven years ago AA bought QQ for $124MM, dismantled their network and now is sinking money into flying into some of the same cities? Also, who in their right mind wants to fly long distance in a CRJ? AA should really listen to their top flyers. I bet they would suggest 86’ing the CRJ’s for E-175’s and E-190’s.

  15. Now UA/CO have announced new service from their hubs starting 2011 including Denver-Dallas/Love Field. Now isn’t that a kick to AA.

    A lot of it looks like it will be express service with some mainline tossed in.

  16. Barry says:

    thanks for covering this, cranky. i got AA’s email this morning, but thought it was funny how vague they were about which “new” domestic markets are being brought on. it’s great that you already had it taken care of with a handy map to boot.

  17. Daniel says:

    I just want to say I feel like an idiot because I was asking myself when Continental got all these routes out of LAX because seriously, does Continental fly LAX-BOI. But alas, I have to re-associate the logo with United.

  18. YO says:

    Geez, how many times is AA going to try LAX-PHX?

    They are going to fail..as usual. LAX-PHX is US and WN and a few crappy UA flights.

  19. Baron says:

    Although the outlying terminal is inconvenient, this is great for us frequent American fliers who fly to LAX from ABQ. At the moment our non-stop choices are rather limited — two flights a day on United and those on Southwest.

  20. bball40dtw says:

    Even though UA and WN already serve TUS-LAX, there is no reason why that route shoudn’t be a success. AA has a perferred airline contact with Raytheon, Southern Arizona’s largest private employer. There are also multiple military installations in the Tucson area. But…it all comes back to labor/management relations for AA. This is a perfect route for a 100 seater, but I don’t expect there to be an E-195 in the AA livery by April.

  21. Jeremy says:

    On LAX-ABQ United uses the CRJ 200 mostly exsept during the Balloon Feasta and during the months when ABQ-SFO is not making much on a CRJ 700

  22. Simon says:

    TUS, ABQ, OKC and IAH in particular have huge loyal AA FF bases, and I believe AA is the second largest carrier at each of those airports.

  23. brad says:

    This is American Airlines. So of course adding overcapcity to potential VX routes is a motivator.

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