Average Fares down, Profits up at DFW

[jimntx]

https://www.dallasnews.com/opinion/commentary/2019/02/24/dfws-fortress-hub-isnt-scary-anymore

A major income source: Baggage and ticket change fees came to over $2 Billion for fiscal year ending in last September!

 

[WeAAsles]

https://www.dallasnews.com/opinion/commentary/2019/02/24/dfws-fortress-hub-isnt-scary-anymore

A major income source: Baggage and ticket change fees came to over $2 Billion for fiscal year ending in last September!

Sorry I missed this Jim. And I also didn’t mean to make it seem like I was saying AA isn’t still doing quite well. I’m just disappointed that it does seem like right now Delta is crushing AA on revenue.

Parker has stated that the tide will begin to turn and the gap between the two will turn. Particularly when Delta starts to place large aircraft orders.

Hopefully Crema will catch this post. He’s pretty good at these conversations.

 

[jimntx]

Turn's out we're singing from the same hymnal after all. AA spent a whole bunch of money on new airplanes. Seems manufacturers don't want to take a dollar down, a dollar a week in payment for all that aluminum; so, they have to be paid for. AA management got a wild hair that the MD-80s still being part of the fleet was driving away passengers. If that is so, isn't it true that Delta is buying/leasing every single one they can get the keys to? I would be willing to bet that the only people complaining about the MD-80s are the one's seated in the "where is your God now" section in the back. I will admit the 80s are a tad loud in that section.

As a flight attendant, I loved the 80s. They're the only airplanes in the domestic fleet that have a decent galley in First Class.

 

[Kev3188]

TI would be willing to bet that the only people complaining about the MD-80s are the one's seated in the "where is your God now" section in the back.

Lol. Ok, that was good!

 

[WeAAsles]

Turn's out we're singing from the same hymnal after all. AA spent a whole bunch of money on new airplanes. Seems manufacturers don't want to take a dollar down, a dollar a week in payment for all that aluminum; so, they have to be paid for. AA management got a wild hair that the MD-80s still being part of the fleet was driving away passengers. If that is so, isn't it true that Delta is buying/leasing every single one they can get the keys to? I would be willing to bet that the only people complaining about the MD-80s are the one's seated in the "where is your God now" section in the back. I will admit the 80s are a tad loud in that section.

As a flight attendant, I loved the 80s. They're the only airplanes in the domestic fleet that have a decent galley in First Class.

Well I know that Cuba has a sort of classic charm about it with all of those 1950’s cars driving around but I do think people today aren’t as concerned about the roominess of those Desotos over wanting the modern bells and whistles in new metal.

Not to mention the fuel efficiency of new engines and the composite fibers of the outer shells.

 

[CremaDiLimone]

Sorry I missed this Jim. And I also didn’t mean to make it seem like I was saying AA isn’t still doing quite well. I’m just disappointed that it does seem like right now Delta is crushing AA on revenue.

Parker has stated that the tide will begin to turn and the gap between the two will turn. Particularly when Delta starts to place large aircraft orders.

my feeling was that aa had and still has an over-reliance upon RJ flying and my contention is that it bit aa in the a$$ in 2018.

2018 was a great year for ua & dl, despite the jet fuel price spike. of course, aa ended up with a pre-tax profit of $2.9 billion in 2018..but, lagged behind dl & ua..some quarters with revenue/profit or both, certainly margins.

ua and dl told us at every earnings call that more premium passengers and higher fares basically negated the jet fuel price spike. 90% for the year at ua, 80% for the year at dl.

aa kept that percentage hush-hush, until pressed by an analyst in the 3rd quarter. cfo kerr told us aa recouped 40% of the jet fuel price spike.

failure. that's not on the lazy ass fsc sleeping in a chair all day or the clown ramping bags with an open curtain and bags falling out...that is on upper management. failure. despite that one particular colossal failure, aa still earned $2.9 billion pre-tax. long live the shale oil revolution..where even mr. magoo can run this airline and it will still be profitable.

some RJ service out of bigger hubs still used the 50-seaters with no premium seats. failure. by the fact that aa has offered a 7 yr. contract to envoy ticket agents, looks like aa is doubling down on envoy service?? where just high winds force cancellations of RJs and the reliability and dependability of routes goes into the crapper and business people who need that reliability and dependability decide to book united (offers mainline service to yyz from ord, aa does not) and delta. those business people pay the highest fares and that's where we fail in regards to revenue and yields.

as far as the rest for aa, the worm is finally starting to turn for the better in regards to balance sheets. dl assumed more debt last year and has way less cash on hand. aa claims that cap ex will shrink going forward and now they can eliminate chunks of debt.

my opinion, but i only throw bags for a living. this is also my company and i'm entitled to that opinion.

 

[WeAAsles]

my feeling was that aa had and still has an over-reliance upon RJ flying and my contention is that it bit aa in the a$$ in 2018.

2018 was a great year for ua & dl, despite the jet fuel price spike. of course, aa ended up with a pre-tax profit of $2.9 billion in 2018..but, lagged behind dl & ua..some quarters with revenue/profit or both, certainly margins.

ua and dl told us at every earnings call that more premium passengers and higher fares basically negated the jet fuel price spike. 90% for the year at ua, 80% for the year at dl.

aa kept that percentage hush-hush, until pressed by an analyst in the 3rd quarter. cfo kerr told us aa recouped 40% of the jet fuel price spike.

failure. that's not on the lazy ass fsc sleeping in a chair all day or the clown ramping bags with an open curtain and bags falling out...that is on upper management. failure. despite that one particular colossal failure, aa still earned $2.9 billion pre-tax. long live the shale oil revolution..where even mr. magoo can run this airline and it will still be profitable.

some RJ service out of bigger hubs still used the 50-seaters with no premium seats. failure. by the fact that aa has offered a 7 yr. contract to envoy ticket agents, looks like aa is doubling down on envoy service?? where just high winds force cancellations of RJs and the reliability and dependability of routes goes into the crapper and business people who need that reliability and dependability decide to book united (offers mainline service to yyz from ord, aa does not) and delta. those business people pay the highest fares and that's where we fail in regards to revenue and yields.

as far as the rest for aa, the worm is finally starting to turn for the better in regards to balance sheets. dl assumed more debt last year and has way less cash on hand. aa claims that cap ex will shrink going forward and now they can eliminate chunks of debt.

my opinion, but i only throw bags for a living. this is also my company and i'm entitled to that opinion.

Alan Alda wasn’t a real Doctor, he only played one on TV. And I’m not an Airline Financials genius and don’t even try to play one on Airline Forums.

Your opinion sounds great to me and I’d love to see some of the more well versed on the subject return and discuss it.

BTW Crema weren’t all these new planes AMR ordered supposed to be 30% more fuel efficient then the gas guzzlers they’re replacing?

Isn’t that putting a dent in fuel costs against our competitors?

 

[CremaDiLimone]

yes, i don't remember the percentages...but that is the main reason i was very cynical & sarcastic about aa telling us that ord-china was a loser due to jet fuel??

let's see...767/dc-10 to more fuel efficient 777 and md-11 to super duper fuel efficient 787 and we're complaining about jet fuel costs to china? united, hainan and china east get free jet fuel to fly ord-china??

the dot gave aa a victory and said that the ord-china dormancy rights extend to this summer (june, i believe). in june, i expect aa to fly ord-china or those rights will go to ua and dl.

on top of that, i just read where aa is looking to fly to india and africa in a few years. maybe out of phl???

in that article above, i see ord has higher hub margins than phl, yet aa looks to shoe-horn the unsuspecting intl. traveling public into phl - a mess of immigration and customs. the fact that ord is the usa's number 1 airport for connectivity, while who knows where phl is at...says one thing...

....america west management.

prior aa management gutted this hub in favor of eagle. apprx. 930 FT & PT, not counting freight, nowadays. the new management is eliminating ord intls in favor of seasonal service and looking at phl as the be all, end all?? ok.

 

[jimntx]

Alan Alda wasn’t a real Doctor, he only played one on TV. And I’m not an Airline Financials genius and don’t even try to play one on Airline Forums.

Your opinion sounds great to me and I’d love to see some of the more well versed on the subject return and discuss it.

BTW Crema weren’t all these new planes AMR ordered supposed to be 30% more fuel efficient then the gas guzzlers they’re replacing?

Isn’t that putting a dent in fuel costs against our competitors?

I agree that Crema seems to be spot on. And, I just saw his post about flying to India in the future. Now, last time we tried to provide ORD to India service, it proved to be a hole where you stored giant sums of profit money in preparation for setting it on fire and destroying the profits record. What has changed, or is going to change in the future to make that route profitable?

The move to more and more RJs is also a mistake. AA seems to think that having even 1 or 2 empty seats on a route represents a need to change that route to AE. Non-revving to places such as BHM (my hometown) from DFW can be a nightmare now. Used to have 5 MD-80s/day (140 seats, 16 in F/C which were occupied most of the time) on that route. Now it's 5 RJs and last time I checked one of those was a 40-seater. I spent over 12 hours in BHM airport one Sunday last October trying to non-rev back to Dallas. Finally made it on last flight of the day.

Now, I'm not judging, I'm just saying. Surely the fact that AE pilots and f/as are paid a lot less than mainline AA personnel wouldn't have anything to do with the change of equipment on so many routes. Would it? Would it? Anybody there? Hellooo?

 

[CremaDiLimone]

i actually used to work that del-ord flight..it came early am to ord. apparently, the indian govt. gave us crappy india times for arrival and departure.

the biggest complaint from mangt. was that that route held up 3 777s. 1 in del, 1 in ord and 1 always in the air.

isn't that nature of the business? in ord now, ettihad, qatar and emirates fill their planes with indians, while air india also has a daily flight. not enough seats for usa-india.

as far as the labor costs...an over-reliance on RJ service is a good move for the post 9-11 era. not anymore. dl and ua proved that...you are denying yourself revenues (premium passengers and freight), while increasing your operation's exposure to reliability and dependability issues...along with the famous eagle customer service issues (mbr).

if it's simply this pilot earns $46k a year vs. that pilot earns $160k a year...well, we can hire people out of high school to make these decisions.

 

[jimntx]

AA's less than stellar performance has caught the attention of the markets. I just checked what's happening on Wall Street. AAL (our stock designation) is back down $0.7134 to 32.0466/shr. Over last 12 months it has been as high as 57.44/shr (3/13/18). That means the drop in share price (25.41) is now almost the same as the current value. If it should accidentally move up to the $50/shr neighborhood, I think it would be a good time to sell. ($40/shr is probably more realistic.)

Just FYI, UAL is down $1.99/shr at $82.34! DAL is down $0.585shr at $49.125.

 

[B737 driver]

Turn's out we're singing from the same hymnal after all. AA spent a whole bunch of money on new airplanes. Seems manufacturers don't want to take a dollar down, a dollar a week in payment for all that aluminum; so, they have to be paid for. AA management got a wild hair that the MD-80s still being part of the fleet was driving away passengers. If that is so, isn't it true that Delta is buying/leasing every single one they can get the keys to? I would be willing to bet that the only people complaining about the MD-80s are the one's seated in the "where is your God now" section in the back. I will admit the 80s are a tad loud in that section.

As a flight attendant, I loved the 80s. They're the only airplanes in the domestic fleet that have a decent galley in First Class.

Delta is getting Rid of their 88s in exchange for Airbus NEOs , but they are looking for every 717 and MD90 they can find.