Same story as before; AA wating on the sidelines before ordering new planes as many others are doing:
http://biz.yahoo.com/ap/050608/american_ai...s_ceo.html?.v=1
http://biz.yahoo.com/ap/050608/american_ai...s_ceo.html?.v=1
Arpey Still Not Eager To Buy 787s
- Thread starter FWAAA
- Start date
Maybe thats because they are still getting new planes?FWAAA said:
Just because they are not ordering the first batch of a new model-which usually have a lot of kinks to work out, it doesnt mean they arent getting new planes with the money they took from the employees.
""We've got to take the airplanes we have today and drive them to profitability," Arpey said. Once the company is profitable, he said, it could get better terms on loans for new aircraft."
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I wonder if he would buy the aircraft if he could get better terms now. Having heard that, I wonder if Boeing is considering offering better terms.
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I wonder if he would buy the aircraft if he could get better terms now. Having heard that, I wonder if Boeing is considering offering better terms.
It's not necessarily better terms from boeing, but banks who loan the money to buy the planes. While they could finance through Boeing Capital...it would be expensive there too.
Bob Owens said:
Were the orders for these aircraft placed before or after the concessions?
Answer: Before
Boeing has been very generous in allowing AA to defer/cancel orders, but they weren't going to let us defer/cancel all of them.
If you were working for Boeing instead of AA, you'd probably be complaining that your inferior management team went too easy on AA and others.
You can move on to griping about something else, Bob.
Hopeful
Veteran
- Dec 21, 2002
- 5,998
- 347
AA doesn't have to be the first kid on the block with the new toy. Personally, I would be mad as hell if AA announced an order for new aircraft given the finances of the company, and more importantly, the sacrifices made by the employees.
Here's a little article about NWA and the DC9.
Associated Press
Update 1: Using Old DC-9s Pays Off for Northwest
02.20.2005, 05:23 PM
Each day, a little piece of aviation history takes off in Columbus, Ohio. And in Buffalo, N.Y., and dozens of other cities where Northwest flies DC-9s that average 34 years old. Some of them first flew when Lyndon Johnson was president. Northwest's DC-9s tie it for the oldest fleet among the world's 60 largest airlines, even as Northwest adds new planes.
Analysts say Northwest's 1995 decision to gut and refurbish those DC-9s rather than replace them is helping it weather high fuel prices and competition from low-cost carriers better than most major carriers.
Unlike most other airlines, Northwest owns a significant chunk of its fleet outright. Northwest says that has given it the flexibility to park unneeded planes during travel slowdowns like those during the Iraq war and the SARS epidemic.
"Putting a plane down is much different when you own it than when you're paying $330,000 per month" in debt payments for a new airplane, said Tom Bach, Northwest's vice president of market planning, who was closely involved in the research that went into the decision to refurbish the DC-9s, which were developed by Douglas Aircraft Co. and first flew in 1965.
Joel Denney, an airline analyst at Piper Jaffray in Minneapolis, agreed. "In a really difficult environment, you want to have very low fixed costs," he said.
Certainly, Northwest still has problems. It's pressing for labor concessions and recently announced it would eliminate free meals in coach on all domestic flights. But while it's losing money, the airline still had $2.46 billion in cash at the end of 2004 and has avoided bankruptcy, unlike some if its competitors.
Northwest's reliance on DC-9s - the aircraft accounts for more than a third of its 432-plane fleet - gives it an average plane age of about 18 years, according to data provided by BACK Aviation Solutions of New Haven, Conn. That ties with Aerolineas Argentinas for the oldest fleet among the world's top 60 airlines, according to BACK.
By contrast, the average plane age of the other five hub-and-spoke airlines is about 10 years old. Houston-based Continental Airlines Inc., which went on a buying spree in the late 1990s, has a fleet that averages just eight years old.
Northwest's fleet is so old, "it's the airline probably most worried about President Bush's Social Security proposal," cracked George Hamlin, director at airline consulting firm MergeGlobal Inc. "Northwest has chosen to be a contrarian in terms of keeping these aircraft much longer than anyone expected."
The safety of the planes isn't an issue because of federally required maintenance, said Ed Greenslet, publisher of the Airline Monitor trade journal.
The Federal Aviation Administration doesn't care how old an aircraft is, just how many times it has been flown. It measures that by the number of times it has been pressurized and de-pressurized - generally, once per flight. The DC-9, based on testing, is approved for 105,000 of these cycles.
Bach said some of Northwest's DC-9s are hitting that limit and being retired. In January, the company said it would retire 10 DC-9s this year.
In 1995, Eagan-based Northwest began updating its DC-9s, gutting the interiors and installing new carpeting, lavatories, and seats. It also upgraded the planes' electronic and mechanical systems and installed "hush kits" so the engines comply with noise limits.
Bach said comparable new planes at the time were running around $30 million, and the upgrades cost a fraction of that, though he said he wasn't sure exactly how much.
Delta Air Lines, Continental and US Airways all once flew DC-9s. Delta replaced its DC-9s in the 1980s, and Continental and US Airways followed suit in the 1990s, Hamlin said. Some wanted bigger planes, and others wanted planes that could be flown by pilots already trained on other aircraft. But Northwest has so many DC-9-trained pilots that that's not a factor, he said.
Many of the DC-9s are outfitted with around 100 seats - just right for midsize markets such as Columbus, Ohio or Buffalo, N.Y. where a larger plane would risk having too many empty seats.
Airplane buying used to be driven by moneysaving design changes such as more efficient engines or cockpits that required two crew members instead of three, Hamlin said. The DC-9s meet those requirements, including the two-person cockpit, so Northwest sees no reason to replace them, Hamlin said.
"It's a rugged airplane that's got a reputation for durability," he said
Here's a little article about NWA and the DC9.
Associated Press
Update 1: Using Old DC-9s Pays Off for Northwest
02.20.2005, 05:23 PM
Each day, a little piece of aviation history takes off in Columbus, Ohio. And in Buffalo, N.Y., and dozens of other cities where Northwest flies DC-9s that average 34 years old. Some of them first flew when Lyndon Johnson was president. Northwest's DC-9s tie it for the oldest fleet among the world's 60 largest airlines, even as Northwest adds new planes.
Analysts say Northwest's 1995 decision to gut and refurbish those DC-9s rather than replace them is helping it weather high fuel prices and competition from low-cost carriers better than most major carriers.
Unlike most other airlines, Northwest owns a significant chunk of its fleet outright. Northwest says that has given it the flexibility to park unneeded planes during travel slowdowns like those during the Iraq war and the SARS epidemic.
"Putting a plane down is much different when you own it than when you're paying $330,000 per month" in debt payments for a new airplane, said Tom Bach, Northwest's vice president of market planning, who was closely involved in the research that went into the decision to refurbish the DC-9s, which were developed by Douglas Aircraft Co. and first flew in 1965.
Joel Denney, an airline analyst at Piper Jaffray in Minneapolis, agreed. "In a really difficult environment, you want to have very low fixed costs," he said.
Certainly, Northwest still has problems. It's pressing for labor concessions and recently announced it would eliminate free meals in coach on all domestic flights. But while it's losing money, the airline still had $2.46 billion in cash at the end of 2004 and has avoided bankruptcy, unlike some if its competitors.
Northwest's reliance on DC-9s - the aircraft accounts for more than a third of its 432-plane fleet - gives it an average plane age of about 18 years, according to data provided by BACK Aviation Solutions of New Haven, Conn. That ties with Aerolineas Argentinas for the oldest fleet among the world's top 60 airlines, according to BACK.
By contrast, the average plane age of the other five hub-and-spoke airlines is about 10 years old. Houston-based Continental Airlines Inc., which went on a buying spree in the late 1990s, has a fleet that averages just eight years old.
Northwest's fleet is so old, "it's the airline probably most worried about President Bush's Social Security proposal," cracked George Hamlin, director at airline consulting firm MergeGlobal Inc. "Northwest has chosen to be a contrarian in terms of keeping these aircraft much longer than anyone expected."
The safety of the planes isn't an issue because of federally required maintenance, said Ed Greenslet, publisher of the Airline Monitor trade journal.
The Federal Aviation Administration doesn't care how old an aircraft is, just how many times it has been flown. It measures that by the number of times it has been pressurized and de-pressurized - generally, once per flight. The DC-9, based on testing, is approved for 105,000 of these cycles.
Bach said some of Northwest's DC-9s are hitting that limit and being retired. In January, the company said it would retire 10 DC-9s this year.
In 1995, Eagan-based Northwest began updating its DC-9s, gutting the interiors and installing new carpeting, lavatories, and seats. It also upgraded the planes' electronic and mechanical systems and installed "hush kits" so the engines comply with noise limits.
Bach said comparable new planes at the time were running around $30 million, and the upgrades cost a fraction of that, though he said he wasn't sure exactly how much.
Delta Air Lines, Continental and US Airways all once flew DC-9s. Delta replaced its DC-9s in the 1980s, and Continental and US Airways followed suit in the 1990s, Hamlin said. Some wanted bigger planes, and others wanted planes that could be flown by pilots already trained on other aircraft. But Northwest has so many DC-9-trained pilots that that's not a factor, he said.
Many of the DC-9s are outfitted with around 100 seats - just right for midsize markets such as Columbus, Ohio or Buffalo, N.Y. where a larger plane would risk having too many empty seats.
Airplane buying used to be driven by moneysaving design changes such as more efficient engines or cockpits that required two crew members instead of three, Hamlin said. The DC-9s meet those requirements, including the two-person cockpit, so Northwest sees no reason to replace them, Hamlin said.
"It's a rugged airplane that's got a reputation for durability," he said
I think what he meant to say was drive them into the ground more than we already have AA's tin is starting to look like a goodwill store inside!
$330,000 per month
So thats over $10,000/day!!!!
Almost $4 million/year! Per plane, the size of a DC-9 no less!
$10,000 a day for debt payments!!!!!
Now, I wonder how those prices compare to what they were ten years ago, or twenty years ago?
Then tell us how LABOR costs, which are over 40% less than they were years ago(adjusted for inflation) are what is killing the industry.
Is soaring labor costs killing the industry or have other costs risen much much more? Are these other costs the real culprit of what ails the industry?
So thats over $10,000/day!!!!
Almost $4 million/year! Per plane, the size of a DC-9 no less!
$10,000 a day for debt payments!!!!!
Now, I wonder how those prices compare to what they were ten years ago, or twenty years ago?
Then tell us how LABOR costs, which are over 40% less than they were years ago(adjusted for inflation) are what is killing the industry.
Is soaring labor costs killing the industry or have other costs risen much much more? Are these other costs the real culprit of what ails the industry?
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
Bob Owens said:
Bob, you're so full of crap sometimes....
Boeing was one of the first places we went to for relief. During 2002, they helped us place 15 of our 737 deliveries with Qantas, they gave us relief on TWA's remaining 717 deliveries, and helped place those as well as the other 717's and MD90's that we were parking.
Seattle Times January 2003 said:
- Thread Starter
- #12
Bob Owens said:
Too funny!
Ever borrow $150 million, Mr Owens? At a favorable 5% interest rate, that's $7.5 million/year in interest alone. Airplanes are expensive.
As to your complaints that labor costs have been trimmed even though airplanes went up in price, I've said it before and I'll say it again:
Even if you voted no, by showing up for work and not leaving for better pastures, you voted yes. You vote yes each and every day you show up for work.
The employees were the only source that wasn't gonna say NO. The jetfuel providers weren't gonna take a huge hit. The lenders weren't gonna take a huge hit. Only the employees could be counted on for that. And each day, they vote YES, despite their protests to the contrary.
Bob Owens said:
Ya know, you go on and on and on about how you feel you got screwed. It's like a broken freakin' record already. You floated the kegs at your pity party a long time ago, but you want to keep on going.
I can only imagine how frustrating it must be for you to have so many parts of your life outside of your control. The things that made your life so comfortable for so long (union seniority list, union contract, union pay scale, etc) are now a huge factor in what's making you so damn bitter.
If unionized mechanics didn't have a seniority list, you could probably be a WN mechanic in ISP or ALB and make the good money and profit sharing that you preach about daily on this board.
If you weren't married (share a contract) to overhaul mechanics in TUL, MCI, and AFW, perhaps you'd have that NYC stipend that you preach about daily on this board.
In this thread you've flamed the TWU and the overhaul mechanics at TUL and MCI. However, having taken a job as an unionized AMT, these are the people you've agreed to make your bed with.
Switching to AMFA might get you a different mattress and set of sheets, but you still wake up to the same person every morning.
Buck said:
I know that, thank you for reminding me.
You missed my point.
I'll let you re-read it and see if you get it the 2nd time around.
