The DOT Approves American & Rejects Delta For LAX To Beijing Route

In mid-March, Delta announced that they planned to operate daily nonstop flights between Los Angeles and Beijing as of December 16, 2016. Exactly two weeks later, American announced that they planned to operate daily nonstop flights between Los Angeles and Beijing as of December 16, 2016.

American-787-Business-Class - 2

Obviously the announcements coming just days apart is no coincidence. As it turns out, there was only one slot available for Beijing, so when Delta requested permission to fly the route, American quickly followed. I doubt the route would have been on American’s immediate radar, but when they saw that Delta was going to operate it, they wanted to make sure they would get it instead. After all, American is trying to turn LAX into their Pacific gateway.

So over the past few months the airlines have had to make their case to the Department of Transportation about why they should be allowed to operate the route.

Well, the Department of Transportation has made their decision, and they’ve awarded American the right to fly between Los Angeles and Beijing. Here’s part of the DOT’s logic for awarding the slot to American:

The Department tentatively finds that the potential benefits of selecting American, and thereby adding a third U.S. competitor to the West Coast-Beijing market, outweigh the benefits that would be achieved through selection of Delta. American’s clear advantage in terms of U.S. connecting points would enhance both service and competition, and thereby maximize public benefits more than would an award to Delta.

While Delta also proposes to offer connections from U.S. points to Beijing over Los Angeles, all of the connecting points Delta proposes already have connecting service to Beijing on Delta over Seattle. An award to American, on the other hand, would promote intergateway competition, as passengers at a significant number of interior U.S. points, and notably those in the Western and mountain states, would have the meaningful option of reaching Beijing either on American over Los Angeles or on Delta over Seattle (as well as on United over its West Coast-Beijing gateways).

Delta also argues that American dominates transpacific and international services at Los Angeles. However, the Department does not tentatively find this argument persuasive. Delta could expand its international services at Los Angeles anytime by selecting markets that are not subject to frequency limits like Beijing.

That does seem like sound logic, given that Delta and United already have flights from the west coast to Beijing.

I guess in the coming weeks we’ll find out when American will launch the route, what the flight times will look like, and what plane they’ll use.

At this point American’s transpacific route network out of LAX is looking pretty good:

lax-international

What do you make of American being awarded the right to fly between Los Angeles and Beijing?

(Tip of the hat to LAXintl)

Comments

  1. Yes AA long-haul network at LAX is shaping up very nicely. Add in their GRU and LHR service, they will have a very comprehensive and compelling offering.
    Makes one wonder really what DL will or maybe more can can do with their intended large build up at LAX once their terminal move comes to fruition.

  2. Now that AA has a PEK route, I wonder what their next move in the LAX-Asia market will be: LAX-ICN or
    LAX-Some secondary Chinese city (like UA is doing out of SFO). Or maybe they will fly PHL or CLT to NRT

  3. Just wondering how AA is gonna get a decent slot at PEK without a partner.
    And also wondering if DL is gonna drop the NRT-PVG flight to compete with AA on this route.

  4. The public-side reasoning makes sense. However, too unfortunate for Delta because they were more prepared for that route (first applied, have slots & aircraft to use planned), and their unique SEA – China routes became an argument against them.

  5. Makes sense since DL already has a Pacific Gateway Hub in SEA with a flight to PEK and AA has been making a concerted push to develop LAX into their West Coast Hub and Pacific Gateway.

  6. Why DOJ need to rule whether an airline (Delta, or AA or whoever) can fly this route or that route? Why can they just open it up? If an airline wants to fly a contested route, why not let them, and let them win business on their own merit?

  7. DOT abuse of power, seeking to enforce its version of proper route maps. Unfortunate that the airlines are required to play that game, makes me wonder how corrupt the vetting process was. Especially considering that AA’s application seems to have been knee-jerk response to Delta filing their petition.

  8. @Robert

    Of course, but one could also say DL’s LAX-PEK was a knee-jerk response to AA’s LAX-HKG announcement, the only difference being that AA’s intent to eventually apply for LAX-PEK was pretty well-known. It almost seems like DL made that move to preempt AA’s buildup at LAX.

  9. I like the decision. My favorite part of the document was when Delta said a reason they should operate the route is that they have better customer service, which would bring in more customers, and therefore revenue. Gotta love politicking and throwing a jab at AA at the same time!

    @DallasfortWorthSpotter on IG

  10. @Bob – the US-China bilateral treaty limits the number of airlines that can operate on a given route, and there’s only one US carrier authority available for to operate LAX-PEK, so the DOT has to choose who gets the authority to operate the route. In cases where there are no limits, the DOT doesn’t interfere and anyone can enter the market.

  11. There are only 2 more slots available USA-China, so NO MORE ROUTES USA-China by any US carrier! HKG has no such limitations – it is shocking that DL does not offer HKG service from any of its other hubs except SEA.

  12. Hope AA to consider to fly LAX-SIN soon, well ahead of SQ. Also, no direct flight LAX-BKK and LAX-DEL, why doesn’t any airline consider to grab these popular routes first?

  13. Seeing a number of new airlines from China, like, Xiamen, Sichuan, start to fly from secondary China cities to LAX. Maybe DL should consider to fly more Chinese cities besides PEK and PVG. The wealthy cities are CAN, SZX, CTU, CKG, TSN. The route might be profitable considered DL’s expanded network in US.

Leave a Reply

Your email address will not be published. Required fields are marked *