American Airlines’ parent company reports earnings of $292 million — and that’s just in July

[robbedagain]

josh near term both airlines can survive.. but a lot of the industry analysts all say that in order for them to compete against the big boys of dl and ua plus wn and b6 and the other lccs they cannot do it as stand alone.... it just seems odd that they allowed freely dl/nw wn/fl and ua/co even though ua leased 18 slots at ewr it appears to me that the doj is playing double standards

 

[WorldTraveler]

but wait....

We've heard for months how this merger would allow AA and US to COMPETE against DL and UA and now we read about from people EVEN IN THIS THREAD about how AA doesn't need US because it can effectively COMPETE on its own now.

Who do you think AA is competing against? Amtrak and Air Botswana?

AA is competing with DL and UA and it is and always will be appropriate to compare what AA does with its competitors.

And apparently you slept through the discussion about the Wright Amendment and the impact on AA - because WN - not DL - but WN - would be free to expand in AA's backyard.

The simple reality is that DL pulled off the most effective airline turnaround and merger in the history of US aviation - which is why DL's earnings and market value are at the top of the industry, DL continues to grow its revenues at the expense of its competitors, and DL also has achieved the strategic objectives it set out to do.

Lest anyone fail to comprehend what DL has accomplished, a review of financial performance by region in the first quarter of 2013 as reported to the DOT might be helpful. Delta Air Lines was the ONLY large multi-region US airline that was profitable in EVERY region of its network in the first quarter, the most recent reported. AS lost money in Latin America, AA lost money domestically and in the Pacific, HA lost money in the Pacific, UA lost money in EVERY region, and US lost money across the Atlantic.

If the measure of success of a company is financial, then DL is doing what it is supposed to do. If the measure is operational performance, then DL is doing what it is supposed to do.
If the purpose is to continue to increase employee salaries and bring jobs back to DL employees, then DL is succeeding. DL does have the best labor relations among any network carriers in an industry where labor unrest has destroyed tens of millions of dollars in revenue.

You tell me what metric you want to consider as to how effective any airline is in COMPETING and we can discuss it.

As long as there are people on here who want to talk about how effective airlines are at COMPETING, Ithen the topic will be about specifics and not just some generalities that avoid mentioning anything of substance.

-----

In the meantime, this thread is telling about how toxic labor relations would have been if the AA-US merger had gone through; one press release of financial news has set off a whole litany of “we are capable of doing it on our own” while others proclaim “welcome to the cellar of low pay while your employers make money off of you” ….
AA and US aren’t dramatically different than what they were before the merger was announced ….
In fact they are really a whole lot more alike now than they were 1 year ago.

AA has indeed cut wages; a large part of its profit increase came from labor cost cuts.
AA has increased its revenue driven by added capacity and RASM increases that are within the range of what the industry has reported over the past several months.
AA’s strategy of reducing labor costs and then adding capacity in order to be “large enough to compete” is exactly what US has done for years.
It is precisely industry analyst concerns that AA will fall into the exact same strategy as US has done for several years – continue to add capacity in order to maintain a “necessary” size to compete with larger carriers while competing at fare levels that are not sustainable long-term including to raise employee salaries.

AA’s competitors – DL, UA, and WN – will add capacity back and will do it in the same way they have with US – in core markets that will further marginalize and erode AA’s RASM. To believe that AA will take a different course than US when the strategies are not that much different is more than a little fanciful. AA’s revenue growth right now is heavily drive by industry capacity cuts from AA’s competitors who have been able to merge and rationalize their networks and the resulting stronger pricing environment.

It also doesn’t change that AA hasn’t made money on a year-round basis. The link above has archives of AA’s monthly financial reports to the courts. It is very possible that with $1B in annual labor cost cuts (which is very closely correlated to the current month), AA can be profitable even in off-peak months when it has to pull capacity when it makes no sense to fly as much capacity as it does in the winter.

AA also has avoided a lot of finance related expense in BK that will have to be paid when they emerge. We’ve seen the very same trend in every one of the previous airline BKs. Finances that look great inside BK aren’t quite as impressive a few quarters later.
The profit is great news… but it doesn’t change that many of the same structural issues that challenged AA and US before the merger announcement – and which were reasons for AA and US to seek the merger are still there.

 

[etops1]

Don't try pulling off this nonsense. US is the one that needs AA, standalone alone US has a route network centered around insignificant, low revenue markets like CLT, PHL, and PHX. The airline is only profitable because the company has been able to enjoy labor costs far below their competitors by prolonging your bankruptcy concessions. Obviously US employees support the merger so the Ugly Sister can pay higher wages and employees can non-rev to more cities.

Josh

Are you really that much of an arrogant douche bag ?

 

[700UW]

Do you really have to ask that question?

 

[etops1]

Do you really have to ask that question?

I guess not ..

 

[737823]

Hey 700 will the IAMAW start a drive at Liberty Mutual? Read the comments on this article:

http://www.bostonglobe.com/business/2013/08/26/liberty-mutual-cuts-retiree-benefits-retirement-contributions-for-rank-and-file/XMSd5ORv6WFVaH2ZrTzJ8I/story.html

Stranger things have happened. The SEIU now organizes interns and residents, UAW represents grad students and administrative employees at many universities.

Josh

 

[N288AA]

Don't try pulling off this nonsense. US is the one that needs AA, standalone alone US has a route network centered around insignificant, low revenue markets like CLT, PHL, and PHX. The airline is only profitable because the company has been able to enjoy labor costs far below their competitors by prolonging your bankruptcy concessions. Obviously US employees support the merger so the Ugly Sister can pay higher wages and employees can non-rev to more cities.

Josh

Josh, I am a 27 year employee with AA. Having said that I don't know one person against the merger personally here at DFW. Also management members that were very anti-merger a year ago are actually looking forward to this merger happening. So I can assure that it is not only our counter parts at US (not the Ugly Sister) that are pro-merger, but there are many AA employees that are pro-merger. Also the US guys aren't the only ones who want a raise most the AA guys are looking forward to this too!

 

[737823]

Josh, I am a 27 year employee with AA. Having said that I don't know one person against the merger personally here at DFW. Also management members that were very anti-merger a year ago are actually looking forward to this merger happening. So I can assure that it is not only our counter parts at US (not the Ugly Sister) that are pro-merger, but there are many AA employees that are pro-merger. Also the US guys aren't the only ones who want a raise most the AA guys are looking forward to this too!

Thanks for the reply. I get the sense many employees are blindly supporting the merger and taking DPs "1+2=4" spiel and all the great synergies this deal will provide, great raises and other enhancements you all will get. The merger might result in a more stable and viable carrier but those "synergies" don't always materialize, in fact there can even be dis synergies from combinations. I'm not saying M&A is a bad thing-often times it can greatly enhance the performance and long term viability of a company but I'm not so sure that is the case here.

I know several AA employees, mostly FAs and agents that are NOT sold on the merger although I will agree most seem to havw a positive about the whole thing.

Josh

 

[Jacobin777]

Thanks for the reply. I get the sense many employees are blindly supporting the merger and taking DPs "1+2=4" spiel and all the great synergies this deal will provide, great raises and other enhancements you all will get. The merger might result in a more stable and viable carrier but those "synergies" don't always materialize, in fact there can even be dis synergies from combinations. I'm not saying M&A is a bad thing-often times it can greatly enhance the performance and long term viability of a company but I'm not so sure that is the case here.

I know several AA employees, mostly FAs and agents that are NOT sold on the merger although I will agree most seem to havw a positive about the whole thing.

Josh

I agree, from the people who I have spoken with (mostly FA's and pilots)-they aren't really sold on the merger but want "change for the sake of change". Not sure if that's really a good reason for a merger.

Also, a number of senior AA employees are going to be replaced by Parker's team-can't say they are all too happy about it, especially if they don't get a job or a lesser position and/or pay in some other company.

 

[700UW]

Hey 700 will the IAMAW start a drive at Liberty Mutual? Read the comments on this article:

http://www.bostonglo...zJ8I/story.html

Stranger things have happened. The SEIU now organizes interns and residents, UAW represents grad students and administrative employees at many universities.

Josh

 

[AANOTOK]

Love reading Josh and Jacobs comments about the company I have worked at for over 30 years. I enjoy the entertainment the two provide, but I don't have the time or energy to correct all the wrong assumptions or wrong facts that these two seem to think they know...carry on boys!

 

[FWAAA]

I think the fundamental problem on this board and site in general is that the vast majority of the participants simply do not view *any* airline industry news through the prism of "How this relates to Delta" or "Yes, but Delta ______". No matter the topic, it always boils down to how by comparison,"Delta did it cheaper,better,faster and without harming puppies,kittens or the environment".

My vote for post of the month. Perhaps for 2013.

A while back, someone posted the news article about AA getting its new A321Ts, and we were treated to multiple dissertations edumacating everyone about how far AA has fallen and how much revenue share Delta and jetBlue and VX were getting.

The topic of that thread, of course, was that AA is finally set to retire its ancient 762s in favor of more fuel-efficient planes.

The topic of this thread is that AA turned in a pretty good month on balance. Its revenue was up a lot compared to July 2012, and its costs were down. It's not proof that AA has permanently fixed everything that ailed it in November, 2011, but it is another small nugget of data that tends to show that AA is turning things around. Lower costs and higher revenues.

If there's any doubt about why many people are frequently annoyed with WT, JFK Fleet Service has accurately summarized the reasons.

 

[Kev3188]

Love reading Josh and Jacobs comments about the company I have worked at for over 30 years. I enjoy the entertainment the two provide, but I don't have the time or energy to correct all the wrong assumptions or wrong facts that these two seem to think they know...carry on boys!

Silly you & your 3+ decades on the inside. Everyone knows what's best for you! Didn't you get the memo?

My vote for post of the month. Perhaps for 2013.

A while back, someone posted the news article about AA getting its new A321Ts, and we were treated to multiple dissertations edumacating everyone about how far AA has fallen and how much revenue share Delta and jetBlue and VX were getting.

The topic of that thread, of course, was that AA is finally set to retire its ancient 762s in favor of more fuel-efficient planes.

The topic of this thread is that AA turned in a pretty good month on balance. Its revenue was up a lot compared to July 2012, and its costs were down. It's not proof that AA has permanently fixed everything that ailed it in November, 2011, but it is another small nugget of data that tends to show that AA is turning things around. Lower costs and higher revenues.

If there's any doubt about why many people are frequently annoyed with WT, JFK Fleet Service has accurately summarized the reasons.

Amen.

 

[WorldTraveler]

My vote for post of the month. Perhaps for 2013.

A while back, someone posted the news article about AA getting its new A321Ts, and we were treated to multiple dissertations edumacating everyone about how far AA has fallen and how much revenue share Delta and jetBlue and VX were getting.

The topic of that thread, of course, was that AA is finally set to retire its ancient 762s in favor of more fuel-efficient planes.

The topic of this thread is that AA turned in a pretty good month on balance. Its revenue was up a lot compared to July 2012, and its costs were down. It's not proof that AA has permanently fixed everything that ailed it in November, 2011, but it is another small nugget of data that tends to show that AA is turning things around. Lower costs and higher revenues.

If there's any doubt about why many people are frequently annoyed with WT, JFK Fleet Service has accurately summarized the reasons.

because it is more fun to PRETEND we are doing ok because that is what we all sit around in a circle and tell ourselves we are?

because it is more fun to forget that WT has said for years that AA's strategies meant that it was losing significant share in the key NYC market and now that it is perfectly obvious that is exactly what has happened, we'll just pretend he never said it?

because it is easier to think we're "holding the line" in LAX and Asia by sticking with flights that are being subsidized by employee wage cuts, but by golly, we are still there....

whatever floats your boat.

 

[Jacobin777]

Love reading Josh and Jacobs comments about the company I have worked at for over 30 years. I enjoy the entertainment the two provide, but I don't have the time or energy to correct all the wrong assumptions or wrong facts that these two seem to think they know...carry on boys!

Too bad you can't share your vast wealth of knowledge regarding AA with us.