This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

American, United Battle for Los Angeles

LOS ANGELES ( TheStreet) -- Every trend line in U.S. aviation seems to lead to Los Angeles International Airport, now a key battleground as the country's Big Three airlines grapple for transpacific superiority.

The trends include growth in transpacific travel (particularly to China), growth in the importance of international alliances, growth in commitment to hub flying and increasingly confrontational relations between these carriers.
LAX

At the start of the year, the same battle was being fought in Tokyo, as Delta (DAL - Get Report) sought to undo American's (AMR) decade-old partnership with Japan Air Lines.

That didn't work , meaning that American, Delta and United (UAL - Get Report) all continue to operate hubs at Tokyo's Narita Airport, the most important airport in Asia because of its broad range of connections.

The focus shifted to Los Angeles this month. On October 1, American filed for a Los Angeles-Shanghai route. On October 7, regulators approved. On October 6, American partner Iberia said it would start Madrid-Los Angeles service next April.

On October 12, United applied for Los Angeles-Shanghai. On October 13, regulators approved. . And on October 20, American announced plans to boost Los Angeles service by 28% in April, with service to 10 new destinations.

Also on October 6, regulators tentatively granted transpacific antitrust immunity to American and JAL as well as to United, Continental and ANA.

American has said LAX expansion is part of a strategy to focus, with its Oneworld partners, on the global hubs most preferred by high-premium business travelers. "Los Angeles is the third most important travel market in the world," said American President Tom Horton, in an October 6 interview with TheStreet. "So we're looking hard at LAX -- there may be more to come."

American needs to expand in Los Angeles, said CRT Capital Group analyst Mike Derchin. "I don't think they have a choice," he said. "They have to grow Asia-Pacific organically. They need a jumping off point. They are stronger in Los Angeles than they are in San Francisco, and they are not big enough in Seattle." Moreover, United has a hub in San Francisco.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DAL $41.18 0.00%
ALK $67.44 0.00%
UAL $54.31 0.00%
LUV $33.41 0.00%
TSLA $267.88 -4.23%

Markets

DOW 17,776.91 +93.33 0.53%
S&P 500 2,081.34 +12.58 0.61%
NASDAQ 4,997.4590 +5.5190 0.11%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs