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TheStreet Open House

No Airline Dominates LAX but American Has Hopes

Stocks in this article: AAMRQ.PK DAL LCC LUV UAL

LOS ANGELES ( TheStreet) -- Merger or no merger, American (AAMRQ.PK) is working to build a stronger hub at Los Angeles International Airport, an airport that no single airline has been able to dominate.

Instead, four airlines have market shares between 11% and 18%, according to Los Angeles International Airport passenger counts for January and February. United (UAL - Get Report) had 18%, American had 16%, Delta (DAL - Get Report) had 12% and Southwest (LUV - Get Report) had 11%. A few points should be added to the American, Delta and United shares due to uncounted flying by regional partner SkyWest.

American said Wednesday it will add nine new LAX destinations this year, bringing its LAX total to 51. The new destinations include Columbus, Ohio; Hartford, Conn; Eugene, Ore. and Indianapolis. American is also seeking regulatory approval to fly to Sao Paulo, and it plans to put a new Boeing 777-300ER on its Los Angeles-London Heathrow route in June. Currently, American offers 163 daily LAX departures with destinations including Shanghai and Tokyo.

"We have said publicly we plan to grow all of our hubs including LAX," said Virasb Vahidi, American's chief commercial officer. "The Los Angeles hub serves a key role in domestic and international routes, particularly as an extremely important gateway to Asia Pacific. Los Angeles is the largest local market for Asia."

Although United is slightly larger than American at LAX, American appears to have some unique advantages as it grows there, although it must also be said that the pre-bankruptcy American didn't appear to successfully capitalize on its Los Angeles presence.

The advantages include a large presence by American's Oneworld partners -- Air Berlin, British Airways, Cathay Pacific, Iberia, Japan Airlines, LAN, Malaysian and Qantas all serve LAX.

American's long-running narrative is that it is particularly strong in top business markets. In Los Angeles, Vahidi said, the top three business markets are New York, London and Chicago, all hubs for American or partner British Airways. (Next are Washington and Newark). American offers nine daily departures to New York Kennedy and is the only carrier with three-class service. Also, only American and Alaska (ALK) fly between Los Angeles and Washington National.

Another American advantage is that its LAX terminal is closest to the airport's Tom Bradley International Terminal, home to most of the airport's international airlines including all of the Oneworld members. The layout enables departing passengers who are connecting to international airline partners to avoid going through security twice.

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