A M R Hurt By Broker Moves

[TWAnr]

Hot off the press:

Shares of AMR Corp. (AMR:NYSE) , parent of American Airlines, fell 6% on Tuesday after Citigroup Smith Barney downgraded the company and other brokerages lowered earnings estimates.

Citigroup analyst Daniel McKenzie dropped his rating on AMR to hold from buy and cut his price target to $13 from $19, telling investors that the company would continue to "limp along" in the coming year as it tries to become more efficient and simplify operations. In reaction, shares of the carrier dropped 62 cents to $9.73, hitting an intraday low of $9.53, a level unseen since mid-August 2003.

"We think it is prudent to become more cautious on AMR, given our view that UAL (UALAQ.OB:OTC:BB) and Delta Air Lines (DAL:NYSE) will ultimately end up with a cost structure materially lower than AMR within the next year, thereby leaving AMR at a competitive disadvantage," the analyst wrote in his downgrade. (Citigroup Smith Barney does and seeks to do business with the companies covered in its research reports.)

"Despite the benefits from a major shift in labor costs implemented last year, American Airlines looks to have been hit with many factors that will detract from fundamental performance for the near and intermediate term," said Hemme, in his note. (Prudential has no investment banking business, and Hemme does not own shares of American.)

The downgrades and sliding estimates are the latest signals that Wall Street is growing disillusioned with American, which has seen its turnaround plan run off track because of high fuel costs and a difficult operating environment.

TheStreet.com complete article

 

[Wretched Wrench]

The subtitle of this thread asks, "more concessions".

Of course. But it will take more than lower wages and benefits for our management team to function. I believe they could run SWA into the ground in six months.

SWA is the most profitable airline, the most heavily unionized, and pays the most. From that, we can infer that the problem must lie elsewhere. Have they looked elsewhere?

 

[AAStew]

I know this may be a pittance in the grand scheme of things, but in the flight service group, I still don't understand why we have supervisors. Mine does absolutely nothing! I have called her for help a few times in the past month and she is totally clueless! We have so many totally useless frontline management, surely they can achieve some cost savings there!

 

[goingboeing]

I know this may be a pittance in the grand scheme of things, but in the flight service group, I still don't understand why we have supervisors. Mine does absolutely nothing! I have called her for help a few times in the past month and she is totally clueless! We have so many totally useless frontline management, surely they can achieve some cost savings there!

At TULE we are extremely TOP HEAVY with management.
We have 5 supervisors on an aircraft line that has less than 50 people.There is something bad wrong with this picture and there are no corrections in sight!
We have 2 supervisors on 1 shift on 1 aircraft dock position.This is at least 1 too many and multiply this at every "C" check dock position in the hangars.
I could cite numerous other examples but it would take too much time.

 

[MCI transplant]

<_< One of the few things I due agree wiyh the TWU is the concept of shared pain! Our supervisors still have all their holidays, and as for percentage of pay, and benifit cuts, I'de venture a guess and say, no where's near what we took!!! :down:

 

[LiveInAHotel]

At least we all agree on one thing; AA has to many management employees. AAStew, my so called supervisor is worthless too!

 

[Garfield1966]

Here here. I have several worthless FA's, pilots and members of managment we can get rid of as well.

Who is going to make the list?

 

[LiveInAHotel]

Here here. I have several worthless FA's, pilots and members of managment we can get rid of as well.

Who is going to make the list?

I knew a few crew schedulers who need to take the high road!

Some have been shown the door already.

 

[PRINCESS KIDAGAKASH]

RELAX EVERYBODY! THERE WILL BE NO MORE CONCESSIONS! ARPEY SAID SO!

 

[LGA Fleet Service]

Seeing as Delta hasn't gotten a dime from their pilots yet and United is still in Chapter 11, how exactly can Danny Boy predict with any degree of accuracy both companies will have "Materially lower costs than AMR in the next year"?


Keep in mind this is the same guy who came up with this gem in USA Today:

"Smith Barney analyst Daniel McKenzie said in a research note that labor costs and competition from low-cost carriers were major risks facing Delta, predicting management may need to take a more confrontational stance to secure about $1 billion in cost cuts from pilots."

May need to take a more confrontational stance? Well gee Danny,to get to that "Materially lower cost structure" they'd better get cracking eh?

 

[Garfield1966]

Yea, if memory serves me we lost about 8 or so last Sept or when ever the cuts happened. There are still a few more that I think need to find a different vocation and I do not think they will last too long.

Perhaps if we are lucky, AA will do some real house cleaning from top to bottom.

 

[goingboeing]

Yea, if memory serves me we lost about 8 or so last Sept or when ever the cuts happened. There are still a few more that I think need to find a different vocation and I do not think they will last too long.

Perhaps if we are lucky, AA will do some real house cleaning from top to bottom.

I agree that the house needs a major cleaning and it should have already happened.

 

[LiveInAHotel]

Perhaps if we are lucky, AA will do some real house cleaning from top to bottom.

It needs to start at the top with management. Why in the blue hell do we need 45 top executives? Companies with double the employees of AA don't even have 45 top executives.

 

[Oneflyer]

Companies with double the employees of AA don't even have 45 top executives.

Name one.

 

[LiveInAHotel]

Name one.

PepsiCo!