Horton hints at maintenace base closure

[Hopeful]

American's old news is new news again
Terry Maxon

AMR/American Airlines CFO Tom Horton repeated Tuesday that American will reduce its domestic capacity by 9 percent and its international capacity by 2.5 percent. Those are the same numbers the airline revealed on Jan. 21 when it announced Q4 2008 earnings.

To our surprise, those numbers became the focus of Associated Press and Marketwatch stories Tuesday about Horton's appearance at the JP Morgan transportation conference, even though the numbers are nearly two months old.

Well.

What I found interesting was Horton's relatively optimistic comments about advance bookings.

"Looking out over the next four months, our booked load factors are down about 2.5 points versus last year, with international down about 4.5 points and domestic off 2 points," he said at the conference.

"So from a load factor perspective, we are seeing some improvement versus what we were looking at in January," he said.

The bad news, he noted was that "some of this load factor improvement is being driven by yields coming down from their highs in the fourth quarter." In other words, the airline is getting people onto airplanes with fare sales and lower average ticket prices.

He also dropped a hint that American is taking a hard look at getting rid of one of its three maintenance bases as it shrinks its flying and its fleet.

"We'll be thinking about rightsizing all of our assets," he said.

"For example, we've got three maintenance bases today. We've got one in Fort Worth, one in Tulsa, and one in Kansas City that we acquired as part of the TWA acquisition," Horton said.
"Well, with our fleet the size it is today, we may not need three maintenance bases, so there is the potential for a change in costs there," he said.

 

[The Dissident]

"We'll be thinking about rightsizing all of our assets,"

"

Rightsizing, LOL that must be the new term for screw the employees and pad their golden parachute.

 

[FWAAA]

Makes sense to look at closing a maintenance base. At the end of 2000, prior to the TWA asset purchase, AA had 717 mainline planes and two bases. At the end of 2008, AA had 626 mainline planes and three bases (and since then more planes have been grounded). Although AA might still need all three bases, the fleet size alone would argue otherwise.

 

[LGA Fleet Service]

Isn't MCIE basically closed for all intents and purposes? All the posts I've read here about tooling being moved, half the bays being abandoned,shops closed and only 60 AMT's left after all the layoffs would negate MCIE as a base.

Of course in typical AA fashion they'll gut the place and then turn around and drop a ton of new work in there and expect miracles with no staffing and no resources.

 

[Hopeful]

Don't forget the Delta hangar that was obtained in DFW. They could close either MCI or AFW and that facility could handle the load.

 

[AA767JET]

I think they had to say something of a cut to increase the stock prices again for there shareholders, they deflated in value lately..

 

[Hopeful]

And for executive PUPS

 

[MCI transplant]

Isn't MCIE basically closed for all intents and purposes? All the posts I've read here about tooling being moved, half the bays being abandoned,shops closed and only 60 AMT's left after all the layoffs would negate MCIE as a base.

Of course in typical AA fashion they'll gut the place and then turn around and drop a ton of new work in there and expect miracles with no staffing and no resources.

<_< ------- I think that pretty much describes what's going on pretty accurately. MCI (last I heard) was down to a total of about 250 people. That's everyone. But, at this point, even calling it a "maintenance base" may be a stretch. It does have the potential for an easy, and inexpensive, expansion in the future, if needed.------ Although at this point in time, I don't think they're taking that into consideration.-------- In fact, some of my friends had a talk with Ed Cheverits, the ex MCIE Director, now heading a local General Aviation company, about his feeling about MCI's future. They told me that came away with the feeling that Ed felt that there was a hard core of Big Money boys that never did like anything connected with TWA, and to say the least, weren't going out of their way to preserve the base, or it's workers.

 

[Hopeful]

The Delta hangar in DFW was obtained to preclude either closing AFW or MCI. Although I might agree with you about the big money boys' distaste for anything TWA, it may be an economic decision to have just two facilities in two states as opposed to three. The fleet is shrinking and as much as I love to disagree with any executive, I do think Horton is correct about not needing three overhaul bases.

Then again, all this Horton rant about highest labor costs in the industry may be from the typical play book of having the TWU cave in. Worked well last time.

 

[MCI transplant]

Then again, all this Horton rant about highest labor costs in the industry may be from the typical play book of having the TWU cave in. Worked well last time.[/quote] <_< ------ Hopeful, it may be an "economic decision" to close one, or scale back, one of the three bases. Although I feel a good arguement could have been made as to "which" base that would be.------- And that more than a little bet of politics entered into the decision that that base is MCI!------ But, than again, at this point in time, it seems a mute issue. ------ Or is it? :huh:

 

[FrequentFlierCA]

It is all about survival at this point. The FA furloughs and this potential base closing are pretty clear indicators that AA is going to do whatever it has to do in order to survive.

 

[AA767JET]

Mr Horton Better re-think his strategy! With engines crapping out on take off's lately and a bunch of AD's gathering on the horizon one would think he would.

 

[MCI transplant]

It is all about survival at this point. The FA furloughs and this potential base closing are pretty clear indicators that AA is going to do whatever it has to do in order to survive.

<_< ------- Oh really!? What about the millions $$$ in PUP money scheduled to go into the top executives pockets next month? And their up and coming 10% raise. All conducive to control AA's labor costs, and the survival of AA!!!!------ RIGHT! :down:

 

[Hopeful]

MCI, the pro management posters here are going to tell you that our poor executives are underpaid compared to their peers at other companies. they will tell you the need to pay these people the PUPS, so we don't lose our "key" talent. And lastly, they will tell you that the payouts are stock based and how every employee received stock...blahh blahh blah....


These are the same people are are so envious of the fatcats, they blame labor for all the woes of the industry.

 

[MCI transplant]

These are the same people are are so envious of the fatcats, they blame labor for all the woes of the industry.[/quote] <_< ----- Hopeful, I think we all know their excuses. And they're getting old. It seems, in their minds, we're the ones to take the hit, not them!-------- But our Unions are the ones that let them get away with it! So ultimately who's to blame? :unsure: