Air­lines are fight­ing for the 1pc at LAX

The Pak Banker - - COMPANIES/BOSS -

U.S. air­lines would love to get their hands on pas­sen­gers like Danielle Cla­man Gel­ber.

The tele­vi­sion pro­ducer flies an av­er­age of about once a month from Los An­ge­les to New York and other points East and for now is loyal to one car­rier: Amer­i­can Air­lines. She gushes about the ameni­ties and the ser­vice in Amer­i­can's unique first-class cabin. But ev­ery time she checks her bags at LAX, Amer­i­can's ri­vals get a chance to woo her away.

Air­lines are fight­ing for busi­ness at Los An­ge­les In­ter­na­tional, the largest des­ti­na­tion air­port in the U.S., renowned for wealthy, celebrity pas­sen­gers pay­ing full fare and the highly lu­cra­tive New York-to-L.A. route. LAX is one of a hand­ful of ma­jor U.S. air­ports where no one car­rier dom­i­nates -- each of the four big­gest air­lines now holds mar­ket share be­tween 14 per­cent and 18 per­cent. At Harts­field-Jack­son At­lanta In­ter­na­tional, by con­trast, Delta Air Lines Inc. claims 74 per­cent of pas­sen­gers.

To court the most de­sir­able pas­sen­gers, the air­lines have been rolling out amenity-laden cross-coun­try flights, lie-flat busi­ness-class seats, vented com­part­ments that can house a pet and a slew of more flights. Delta runs spe­cial flights to woo the Hol­ly­wood crowd. Up next are fancy new ter­mi­nals: Delta, United Air­lines and South­west Air­lines Co. are spend­ing more than $1.3 bil­lion ren­o­vat­ing fa­cil­i­ties there.

"L.A. is very at­trac­tive real es­tate," said Stephen Van Beek, vice pres­i­dent of avi­a­tion con­sul­tant ICF In­ter­na­tional. "It's the latest com­pet­i­tive bat­tle on the West Coast and we're still fig­ur­ing out who the win­ners and losers are go­ing to be and how they try to carve up those mar­kets." The stakes shouldn't be un­der­es­ti­mated. Flights be­tween L.A. and New York's Kennedy will pro­duce al­most $1 bil­lion in rev­enue this year, more than any sin­gle route in the U.S., ac­cord­ing to the U.S. Bureau of Trans­porta­tion Sta­tis­tics.

LAX is the sec­ond-largest U.S. air­port in terms of passen- gers, be­hind only At­lanta, ac­cord­ing to Air­ports Coun­cil In­ter­na­tional. It's the largest in terms of peo­ple who start or end their trip there, as op­posed to con­nect­ing to another flight.

Nearly 70.7 mil­lion trav­el­ers moved through LAX last year, a 6 per­cent in­crease from 2013 and a record. More than 19 mil­lion were on in­ter­na­tional flights, also a record. And good news for the air­lines: De­spite the stepped-up com­pe­ti­tion, ticket prices are gen­er­ally hold­ing steady or even ris­ing, ac­cord­ing to data from OAG, an avi­a­tion re­search com­pany.

"It's im­por­tant be­cause it's one of the largest gen­er­a­tors of cor­po­rate traf­fic," An­drew Nocella, Amer­i­can's chief mar­ket­ing of­fi­cer, said of LAX. "It pulls more than its weight in terms of the qual­ity of rev­enue it con­trib­utes to the sys­tem."

The flight that Gel­ber, an ex­ec­u­tive vice pres­i­dent for Wolf Films, took is part of Amer­i­can's ex­er­cise in pam­per­ing cus­tomers on the L.A. to New York route. "It's beau­ti­ful; it's ex­quis­ite; it's in­cred­i­ble," Gel­ber said of Amer­i­can Air­lines' first- class cab­ins. Last year the car­rier gam­bled on adding a first-class cabin on 17 planes flown on two transcon­ti­nen­tal routes in­clud­ing L.A. to New York. The air­craft are the only ones for U.S. flights with three cab­ins, for first, busi­ness and coach.

Delta runs in­vi­ta­tion-only flights to spe­cial events, such as the South by South­west fes­ti­val in Austin, Texas, and the Sun­dance Film Fes­ti­val in Utah. "It is a crit­i­cal mar­ket for Delta to be in, and for us to earn cus­tomer pref­er­ence in," said Ran­jan Goswami, Delta's vice pres­i­dent for sales on the West Coast. Along with posh ser­vices like pri­vate check-in, air­lines are also adding new des­ti­na­tions from LAX or in­creas­ing the fre­quen­cies of ex­ist­ing routes. Delta de­par­tures are up 17 per­cent from a year ear­lier, while Amer­i­can's have risen 7.6 per­cent and South­west's, 2.5 per­cent. United's de­par­tures have slipped 20 per­cent as it re­placed some smaller planes with fewer, larger ones.

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