Fuel edging up. Great time to start negotiating?

[Overspeed]

TWU better get in there. Fuel edging up and Jan revenue down. Did the APA and APFA get theirs while ground workers get left with an empty bag?


American Airlines Reports January Traffic And Raises Fuel Cost Guidance

http://seekingalpha.com/article/2900996-american-airlines-reports-january-traffic-and-raises-fuel-cost-guidance?ifp=0

 

[Zom JFK]

TWU better get in there. Fuel edging up and Jan revenue down. Did the APA and APFA get theirs while ground workers get left with an empty bag?

Yeah what else is new? Does it really matter how fast the twu "gets in there"? I love how guys like you talk like the twu is for real. They are probably waiting for the company to tell them what they are going to get. Then they can tell the membership what a good deal it is. Or better yet leave blank pages for the company to fill in later.

 

[CMH_GSE]

Yeah what else is new? Does it really matter how fast the twu "gets in there"? I love how guys like you talk like the twu is for real. They are probably waiting for the company to tell them what they are going to get. Then they can tell the membership what a good deal it is. Or better yet leave blank pages for the company to fill in later.

Hard to argue with that, it's all happened before.

 

[AA-MRO.COM]

Negotiate...
you will be retired before they hammer something out
The pilots got your raise and your 401K contribution better luck next time...
 
Just more facts for the twu history books...

 

[DNTULSA]

The twu will get the guys a small raise in the next contract.
 
The cost?   More outsourcing of jobs!

 

[Bob Owens]

http://www.businessinsider.com/oil-price-february-11-2015-2
 
Looks like the day OS started this thread oil went down. 
 
From what he posted the company projected fuel costs at around 20 cents a gallon more than what its costing them, so thats all just extra profit. 

 

[WorldTraveler]

Even with the recent bubble that crude has had, fuel is still up compared to its lows a couple months ago.

http://www.marketwatch.com/investing/future/CLH5

further, when a company doesn't hedge, they have to buy based on the market price in effect at the time.

even though oil has come down slightly from its highs, it was higher long enough that AA had to buy some fuel during that time and costs have to reflect the price on those days.

no one knows for certain where oil is going including AA so they are going to be very careful about adding costs given the possibility that prices could go up and have been trying to do just that.

further, you and others continue to consider only fuel prices when figuring how much extra profit AA should have. AA still faces greater revenue weakness than any of the other big 4 in large part because of Latin America and AA also has $650 million in currency tied up in Venezuela that likely will have to be impaired, far more than any other carrier.

the mere fact that AA is not projecting a profit margin significantly higher than any of its peers says the fuel price impact is not the only factor affecting profitability in the industry.

and as much as you might not want to hear it, I believe you will see that Parker got the pilots and FAs taken care of and will be far, far slower in settling with other labor groups.

I hope for your sake that I am wrong but I think Parker has been very intentional in the order he has chosen to deal with each labor group and he isn't afraid to drag out settlements with the ground employees

I do wish you and the ground employees at AA/US well.

 

[Zom JFK]

and as much as you might not want to hear it, I believe you will see that Parker got the pilots and FAs taken care of and will be far, far slower in settling with other labor groups.

Of course. The pilots and FAs are union.

I hope for your sake that I am wrong but I think Parker has been very intentional in the order he has chosen to deal with each labor group and he isn't afraid to drag out settlements with the ground employees

Parker has no reason to fear those groups. They are twu.

 

[700UW]

Only groups left are CWA which are in negotiations right now for a JCBA.
 
And the Association, which is waiting for the ruling from the NMB before any negotiations can take place.

 

[WorldTraveler]

IOW, most of the ground employees, right?

 

[Overspeed]

Long term outlook on fuel prices http://aviationweek.com/commercial-aviation/drop-oil-prices-means-airline-profitability-boost-now
 

 

[WorldTraveler]

They went on and on about fuel costs but failed to develop the idea which they started on that AIRLINE revenue is absolutely related to fuel prices and the strength of the dollar.

Given that AA's revenue performance in Latin America, the most sensitive global region to changes in the dollar, has taken a hit of 11% or more in the past several quarters, the authors once again fail to adequately calculate the differences in fuel prices for different global regions.

Further, although they note that there are capacity changes taking place in the industry, they do hot acknowledge that competitive forces in the industry are not equal. European legacies are much more impacted by low fuel prices because of the ME3 - which they acknowledge are not hedged - and because Euro LCCs/ULCCs benefit more by being able to lower fares.

Specific to AA, as I have repeatedly noted, AA's competitive situation is far different from DL or UA's where AA is seeing massive amounts of growth in competitive capacity because of the fall of the Wright Amendment and Open Skies in Latin America plus the DCA divestitures that were part of the merger.

as much as labor wants to think that AA has clear sailing because of low fuel prices, there are far more revenue challenges facing AA that will impact earnings than what they will save by not having fuel hedges.

 

[zethya]

An interesting "threat" regarding NC's Fuel Tax at CLT:
 
http://www.charlotteobserver.com/2015/02/19/5525263/american-airlines-fuel-tax-break.html#.VOupg_nF98H

 

[WorldTraveler]

a major industry analyst issued a downgrade of AAL stock with the following comments.

Cowen’s Helane Becker and team explain why they cut American Airlines (AAL) and made United Continental (UAL) their top pick:

American will likely underperform its peers in terms of PRASM growth as a result of pricing pressure in Dallas and in Latin America. We continue to like the story longer term but believe there is downside risk to consensus estimates in both 2015 and 2016…

American’s operations are in the middle of two weak PRASM regions. American guided 1Q15 PRASM to be down 2% to 4%, compared to the industry expecting to be +/- 1%.


http://blogs.barrons.com/stockstowatchtoday/2015/02/24/american-airlines-right-place-wrong-time/?mod=yahoobarrons&ru=yahoo

----

for airlines the size of the big 3 in the US, a difference of 3-5% in revenue production can amount to as much as $2 billion in revenues.

 

[700UW]

And DL was downgraded 10% today in its target price.