Does LAX Hold the Key to American Airlines' Future in Asia?
LOS ANGELES ( TheStreet) -- Merger or no merger, American
But LAX, despite holding vast advantages as an Asian gateway, is a tough place to bulk up because it is both intensely competitive and geographically impaired.
San Francisco is so strong a hub that United plans to try a new airplane, the Boeing
Delta, meanwhile, is growing rapidly in Seattle, the closest major U.S. mainland airport to many Asia destinations. Delta said last week it will add 11 new domestic flights from West Coast cities (including Los Angeles) to Seattle in order to feed its six daily non-stops to Asia.
That leaves LAX, the third-busiest U.S. airport in 2012 with 64 million passengers, as well as the third-busiest U.S. international gateway after John F. Kennedy International and Miami International, as the best opportunity for a West Coast, Asia-oriented hub for American.
Unfortunately, it's tough to gain an edge at LAX, where four carriers -- the big three plus Southwest
United's LAX hub offers about 200 daily departures to 65 destinations including three in Asia, while American's has about 160 daily departures to 51 destinations including two in Asia, Narita and Shanghai. Delta offers 125 daily departures to 38 destinations.
"American does need a strong anchor city on the West Coast, and the only one left that really matters is Los Angeles," said David Cush, a former American executive who is CEO of Virgin America, which ranks sixth at LAX with about 5% of passengers. "Los Angeles is a big market that is also a rich market, but it's complicated. It's been fragmented for a long time (and) it's as brutal as it can get in terms of competition. Several airlines have tried to claim it, and no one has been successful.
"I think American can, but you need to be patient when you expand in LA," Cush said, in an interview. "It takes a while for routes to mature; that's the lesson we all have to learn at LAX. There is no overnight success."