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American answers Delta’s expansion in Los Angeles with its own new push from LAX

American Airlines is joining its US legacy rival Delta during 2013 in making a push from Los Angeles International Airport, a strategic but highly fragmented market where no one carrier holds a dominant, commanding position. Presently United has a marginal edge over its two rivals in terms of seat share, but it appears that American and Delta are aiming to close that gap by adding new service from Los Angeles throughout the year.

Unlike Delta, which is launching service to some already-crowded markets from Los Angeles, American appears to be undertaking a different strategy, introducing service in markets served by only one other carrier. In some instances the only other competitor is Allegiant Air, which is a low-frequency operator whose business model is not built on competing with other airlines based on schedules. In other markets Delta is American’s lone competitor, introducing an interesting set of competitive dynamics into the Los Angeles market.

American Airlines, Eagle launch corner-stone upgrade at Los Angeles

After rolling out its corner-stone strategy throughout the rest of its domestic network, American Airlines rounded out its service expansions and terminal upgrades by announcing 10 new destinations for its Los Angeles hub, from 05-Apr-2011. American estimates that its expanded service will add approximately USD600 million a year in local economic impact, increasing its total annual economic impact in Los Angeles to approximately USD6 billion. However, it did not quantify what the new service would do for the airline itself. American expects to add to its current 4,400 employee complement with the expansion.