American is evaluating LAX as possible hub for Asia flights, the airline’s president said

Will American build an Asian gateway at LAX? Photo: American.

Will American build an Asian gateway at LAX? Photo: American.

American Airlines is evaluating ways to make Los Angeles a primary gateway to Asia, but that does not mean it will happen, Flight Global’s Edward Russell reported this week.

“Figuring out how to make Los Angeles successful and a gateway to Asia is a strategic issue for us,” American Airlines Group president Scott Kirby said on April 4 at the Phoenix International Aviation Symposium. The Flight Global story is behind the site’s paywall but Russell gave me permission to cite it. Kirby said LAX is “very important,” to American.

In terms of Trans-Pacific flights, Los Angeles has been a difficult market for U.S-based carriers. American (Shanghai and Tokyo), Delta (both Tokyo airports) and United (Tokyo and Shanghai) have relatively few flights from L.A. across the Pacific. United and Delta have both had Hong Kong flights in the past, but no longer. LAX is still well covered in terms of international lift, but most of it comes from major international carriers ANA, Cathay Pacific, JAL, Korean, Asiana, Eva Airways, etc.

It’s possible American will change the dynamic. Los Angeles is not the ideal place for a Pacific gateway because it has not historically been as strong of a connecting hub as other airports. Flights tend to work best when there’s a good mix of local traffic (Angelenos in this case) along with connecting traffic. (Passengers from places like Phoenix and Salt Lake and Sacramento, etc. who come to the hub only long enough to change planes.) These gateways tend to be more lucrative when there’s relatively little competition from international carriers.

Los Angeles has the local traffic. The connecting traffic issue is more complicated. Yes, American has flights from throughout country to Los Angeles. But compared to say, Dallas and Chicago, Los Angeles is a small hub. So there are far fewer connecting passengers to feed the international flights. And it’s hard for American to add more domestic flights to feed the international ones, because the airline is gate constrained in L.A. Russell says American has access to 24 gates at LAX, though 10 of them are in a remote terminal and can only handle regional jets. It is to receive access to a few more gates in the airport’s new international terminal, but that’s no panacea.

Still, American is now the world’s largest airline. And as the world’s largest airline, American may need a West Coast gateway. San Francisco is taken — United owns it. And Delta is building a global hub from scratch in Seattle. So that leaves L.A. (I’m assuming that Phoenix is not a viable option.)

Here’s another thing people don’t think about with L.A. It’s actually quite a bit farther from Asia than San Francisco and Seattle. Russell says L.A. is 327 miles farther from Asia than San Francisco. L.A is about 432 miles father from Asia than Seattle.

What do you think? Will American try to build an Asian gateway in L.A.?

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  • Robbie Plafker

    I’d love to see an AA hub at the non-constrained SFO. It has the runway space, and they could build another terminal for AA near the superbay.

  • Brian Sumers

    Robbie- That’s true but think about how hard it would be to compete for traffic with United. Overall United may not be pleasing its shareholders as much as it could but it owns SFO.

  • chring2295

    I think its definitely possible since American has 42 Dreamliners and 22 Airbus A350s on order. Although they will mostly replace the gas guzzling 767s, the Dreamliners have already proven to open new routes that were previously struggling to make think i.e. United’s LAX-PVG. Even though LAX is further away from Asia than SFO or SEA, the Dreamliner’s range could allow flights for AA up to LAX-SIN. It seems American’s biggest problem will be gate space at TBIT. They will likely have to schedule either early afternoon flights or midnight flights to Asia to make it work. American will have to give it a shot if they want to compete with UA and DL. Will it work? It’s possible with the right planes, times, and destinations.

  • qwarthon

    It’s probably totally out of mind for american, but Portland seems like it could be a good hub. PDX probably doesn’t have the same capacity, but they don’t really have an global airline. Sure, Delta has an Amsterdam and Narita flight, but it could be built up. I could also still see Phoenix as a good connecting hub, what with US Airways presence. I’m just happy to be in Seattle, where hopefully Delta will bring down prices. But I’m still sticking with Virgin and Alaska.

  • Tango Lima

    I don’t think AA has a whole lot of options of of LAX. The four places that come to mind; ICN, NRT, TPE, and HKG are all well covered as you said. CX is adding a 4th daily out of LAX. I don’t think they’re willing to give up a slot for AA, let alone go into a JV. ICN would be a bloodbath between KE, OZ, and TG. TPE is well represented with CI and BR. They could possibly open up PEK. That’s about it. I don’t see BKK happening as it’s low yield and SIN isn’t a OW hub.

  • Bensen

    Hi — this is an interesting well reported story, but three’s something that needs to be added:

    AA code-shares with Cathay Pacific. And if you take the Cathay flight to HK, (which I do, about twice a month), you’ll find a very large percentage of AA aadvantage member travelers on that flight.

    So in essence, AA does already fly to HK (but not to Beijing), but not in their own branded planes.

    Is there demand to fill more planes? I sort of doubt it, at the moment, as there are about nine different ways to get to HK – and Bangkok, Singapore, Taipei, Beijing, and Shanghai – in the other terminal, with Asian airlines that codeshare with UA, Delta, and American.

    And finally, this: If AA plans to put planes on that route, they have to do better than Singapore, Thai and Cathay. I fly on all of them. And quite simply, AA’s planes aren’t in the same league in terms of seating, entertainment, service and comfort.

  • Brian Sumers

    Hi Bensen — You make some good points. From the customer’s perspective, it is all seamless. American’s customers can get to so many destinations in Asia on Cathay. The customers can even earn American frequent flier miles. The problem is that American and Cathay are marketing partners, but they don’t share revenue. So American doesn’t actually make money on these flights. If American were to run its own Asia operation from L.A., it could potentially capture more revenue. Of course, there’s another issue here that some readers have pointed out here. American and JAL do share revenue, so perhaps that’s the better partner to look at. Maybe JAL’s strength in Asia is enough for American. And maybe because of that American does not need a West Coast trans-Pacific hub. But JAL is a relatively small player at LAX, so who knows…

  • luvUamerica

    I travel a lot to asia. This whole idea, that LAX will not make a good hub is stupid. A lot of times I have to fly from LAX to SO, or LAX to Honolulu or LAX to Vancouver to get to asia.

    The one airline that makes this an asia hub will do well. The asian population in SoCal has grown tremeduosly in the past 10 years. I think these domestic carriers are missing the boat.

    I for one will switch to American if they make it a HUB. I am a United 1K.