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Discussion in 'American Airlines' started by Buck, Mar 19, 2018.
it's code for america west/us air now run the world's largest airline.
when aa is down 4% a day over 2-3 days and dl is down 1.5% a day over the same time span, it's clear that institutions (buffett) are selling off..rotation out of dividend losers like aa.
aa had to raise it's dividend. this has been talked about for at least a year. aa failed to do so, hence now the stock is getting hammered. to match delta's current yield (2.81%), aal would have to go to $14.50 a share. if delta goes lower, aa would have to go under $10 a share to match dl's yield.
it's not as if aa doesn't have $$ to throw at the shareholders. last earnings, aa said they still have $1.7 billion committed to stock buy-backs; july '18 - dec '20.
if they halted the buybacks and matched delta's dividend of $1.40 a year, that $1.7 billion will pay for dividends equal to dl for about 3 years...and the stock would be in the $50s, maybe higher. aa wouldn't have to give 1 red cent more to shareholder over 3 years.
Your analysis should explain to your co workers why management will put the money towards stock shareholders value, and not shower money on the employees, except the pilots group. Or you guys will sitting for a long time regardless what union sits at the negotiating table.
it's already been explained...the company's priority is the shareholder, not the employee. when the company balks at an additional $24 million a year to get 30,000 assoc. members on iam/lus insurance but happily committed another $2 billion to share buy-backs (2018-2020), it's clear for all to see.
to me, delta has it's toggle switch on the sweet spot..between shareholder-employee.
to me, that's the reality.
The big problem is the stock buy backs they have done. They have a very high debt level compared to Delta due to the aircraft purchases they made. They had an opportunity to pay down the debt with all the money they have made but did not. Not a prudent move IMO. I'm not impressed at all with this mgmt team. They had as good a set up as you can get and just bought back stock. It's kind of like the TWU had the opportunity with the merger to get stronger but joined the Association without members voting. WTF. Both mgmt and the TWU have a lot in common, bad business choices.
as someone who is a bit familiar with the market, i can't believe the stock doesn't get the love it should.
dl also buys back shares, obviously, not at the same frenzied pace that aa did. delta does have a killer dividend compared to aa (nearly 4xs more)...i have no doubt that props dl stock up more than aa's debt level to dl's..
ua pays no dividend, yet it has relatively so few shares outstanding that the gamble paying $80/share for ual is that united can pay a $3 a share dividend and it will cost them the same it costs delta to pay it's $1.40 dividend.
will ual pay a $3/share dividend. most likely, no.
i agree with your assessment of our mgmt team. the fact that aa allowed jetblue and delta to lead it by the nose on the $5 checked bag bump says it all.
hindsight is 20/20. as a shareholder, buy-backs are great. a juicy dividend is even better. i believe that delta just assumed another $12 billion in debt with it's airbus purchases. i've never heard aa say at what point they would be happy with the amount of shares outstanding. 400 million? 350 million? 300 million? less??
bottom line...boeing works with GE, GE capital works with aa. they don't want any customer filing for bk and getting .15 cents on the dollar. GE capital will work with aa if the nightmare scenario happens. terrorism/$150 oil/economy tanks/string of accidents.
I would encourage everyone to fill out the American Voice survey today! Let the company see how you really feel. I know I did and it was not pretty.........
delta had a great q3 '18..
$1.31 billion income off of nearly $12 billion in revenue for the quarter.
delta credited rising ticket prices and surging premium traffic for offsetting higher fuel costs and hurricane florence.
in a few weeks we'll hear what aa mgnt has to say.
Haven't you figured it out yet that the company is only concerned about maximizing profits by squeezing it's employees and passengers. Surveys?
They'll post a profit but will blame fuel prices and hurricane Florence for not hitting it's target. They'll probably ask for more cuts and belt tightening as well as increased fees to compensate for what lies ahead of us.
No thanks. Since it's on Jetnet, not a paper submission. I don't think you can't really voice your true feelings and be truly anonymous. Some of the language that I would want to use and opinions would probably get me in some sort of hot water.
yeah, i wouldn't doubt that. personally? i feel they will beat estimates.
what will the company say about profit sharing? delta just added $395 million into the kitty. 2018's running total for delta employees is approx. $975 million...and there's still the 4th quarter to add to that.
You folks have an opportunity to send a loud and clear message to the company executives and are foolish if you do not do it. The lowest participation rate comes form the union work force. Participation last time was 53% if that rose to 80%+ and the results where worse than last year that will be a huge message they will have a hard time ignoring. It is anonymous but even if it where not I would it it and tell it like I see it.
I'm not trying to prove a point or giving an analogy just a question.If you had a 100k loan at 4% and you could take that 100k and invest in say Ford that gives a decent dividend coming out to say 7 or 8%. Would you pay off the loan first or invest in the stock
The problem with what American has done Al is they used in the area of 12 billion dollars to buy back their own stock. Might even be more. And looking at the stock it has investors bailing which shows a lack of confidence in mgmt.They did not make anything off this, they did it for the shareholders. And now it looks foolish with the stock tanking. They better have good earnings. Even with low interest on what they owe, the amount is so large and now fuel is up so their strategy is looking weak to say the least.