Huge aircraft order rumour
- Thread starter MAH4546
- Start date
Hopeful
Veteran
- Dec 21, 2002
- 5,998
- 347
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
I have no interest in AA pay issues but I can read the financials put out by the industry... AA's labor costs are some of the highest in the industry... no company in any industry can win with costs tthat are consistently out of whack with its competitors. the facts come first.
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Jeez World Traveler,....were in Hel* have you been ????
Did FLY..(UAL)..kidnap you, and keep you CHAINED in her basement, or some other drastic occurance ??
You've been M I A for awhile, and I was starting to be concerned.
NH/BB's
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
And Macy's has far higher operating costs than Walmart. So what?
Since your employer/favorite airline just went thru a bankruptcy, I guess you missed out on the important part of the equation, which is "costs can't exceed revenue."
Yes, AA has higher labor costs, but lower non-labor costs such as facilities, equipment leases, suppliers, etc.
AA also has held a higher revenue premium than DL historically, although that probably has changes somewhat now that your favorite airline has robbed pilots of their retirements, outsourced maintenance to Canada, and sending calls to be answered by Rakesh pretending to be Ralph in India.
Bottom line... focusing on costs only and ignoring revenue is foolish. And no, revenue doesn't mean higher ticket prices; it means attracting higher paying customers more often.
AA's longhaul product is a lot more attractive than DL's, for both transcon and transoceanic. That tends to attract more higher yield travelers. The only thing that DL offers me is assured delays at JFK and perhaps free drinks in the Crown Room (which I still wind up paying for via higher membership fees than I pay for the Admirals Club).
You can be a higher cost provider as long as you have revenues to support it. It's not a perfect situation, but as Jetblue is proving, having low costs alone isn't a guarantee.
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
More appropriately, he's probably waiting to see who wins the elections at APA tomorrow. Ralph Hunter (current APA president) looks to be as popular as George Bush at a rally supporting gay marriage for illegal aliens.
MCI transplant
Veteran
- Jun 4, 2003
- 5,311
- 587
Here's a "beach ball" that we can "bat around" for a while, to see "where it goes".
I ask this question VERY seriously.
With the Loooong wait time for the 787, with the 737-800 holding almost as many people, and close in range as the 757, with the 767-200's days numbered, as well as the A-300........Could AA operate its current AND future schedule...using the 737-800, and various models of the 777 "ONLY" (Bypassing the 787 altogether) ?????????????
(Ok, throw in the few remaining 767-300er's for very specific routes only...like jfk/lax)
NH/BB's
I ask this question VERY seriously.
With the Loooong wait time for the 787, with the 737-800 holding almost as many people, and close in range as the 757, with the 767-200's days numbered, as well as the A-300........Could AA operate its current AND future schedule...using the 737-800, and various models of the 777 "ONLY" (Bypassing the 787 altogether) ?????????????
(Ok, throw in the few remaining 767-300er's for very specific routes only...like jfk/lax)
NH/BB's
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
Could they? Sure. But it would be at the expense of containerized cargo. Cargo alone doesn't make a route profitable, but it sure helps tip the balance in more than a few markets.
You also have to remember that the "long wait times" for the 787 are self-imposed by Boeing and the supply chain. They're waiting to make sure the chain works before starting up a second production line. Once that happens, the long waits become a lot more realistic.
And, as has been mentioned so many times that it may as well be a FAQ or a sticky post at the top of the forum, AA has a contract with Boeing that gives them deliveries with only 18-24 month lead times. And I have no doubt they'll pull the trigger on that clause as soon as the labor contracts are in place.
You also have to remember that the "long wait times" for the 787 are self-imposed by Boeing and the supply chain. They're waiting to make sure the chain works before starting up a second production line. Once that happens, the long waits become a lot more realistic.
And, as has been mentioned so many times that it may as well be a FAQ or a sticky post at the top of the forum, AA has a contract with Boeing that gives them deliveries with only 18-24 month lead times. And I have no doubt they'll pull the trigger on that clause as soon as the labor contracts are in place.
http://custom.marketwatch.com/custom/excit...92593-898559062
On closer reading it may not be an official announcement, but it sure looks like something's brewing.
MK
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Thanx...E.
You KNOW you miss this place(AA) NH/BB's
