AA makes significant winter cuts to TATL network

[jcw]

The good news is AA continues to demonstrate how to make more money than any other airline - remember one airline has a revenue premium on every route but manages to make less net income quarter after quarter

 

[robbedagain]

excellent post cltrat    so true    agree there jcw   AA knows what theyre doing  and how to go about it to make money  

 

[WorldTraveler]

The good news is AA continues to demonstrate how to make more money than any other airline - remember one airline has a revenue premium on every route but manages to make less net income quarter after quarter

again, let's be clear that AA's profitability is solely due to Parker's decision to not hedge fuel.

native AA had fuel hedges that Parker dumped at just the right time. If AA was still operating as a standalone airline, they would likely still have had hedges and would have lost on them - just like other airlines did.

Parker made the right call. I have never argued otherwise.

But AA's revenue performance as measured by RASM has underperformed the industry for most of the time of the merger after the first 6 months.

AA's profitability advantage is due to the fuel hedging decision and not for any other reason.

Going forward, fuel prices will be comparable.

Parker knows that if he wants to continue cashing those stock option checks, he has to get AA's profitability on a fuel equal basis on par with other carriers. Schedule reductions are being implemented because Parker knows that optimizing revenue performance works best with a flexible schedule.

These are positive moves by AA. You'll recall that I said the same thing about another round of international schedule cuts a year ago and they helped AA's RASM to improve over the Atlantic in the winter of 2015. It is not a sign of weakness to adjust schedules to match demand wherever in the world it might be necessary to do so.

When someone immediately assume that it is a sign of weakness that a carrier is being weak by cutting schedules even on a temporary basis, then it is not a surprise that they will try to argue against clear facts rather than admit that it just might be the right thing to do.

Perhaps AA won't have a presence in FCO for a month or fly to CDG and ZRH from key markets as much as they did in the past or as much as their competitors.

On a short-term basis, that may or may not matter. On a longer term basis, reduced schedules might affect the ability of corporate passengers to choose that carrier but I haven't even suggested that AA is at that point with any of these markets; others have jumped to those kinds of conclusions regarding other schedule related issues that have been discussed and they are pure speculation.

again, I didn't make any commentary about whether AA's decision to cut its TATL schedules was good or bad although I noted a number of factual reasons why AA might be making changes now that they didn't have to make a year ago, some of which are unique to AA and some of which are not.

 

[topDawg]

Will there be a thread started on the DL site listing all the DL cuts?

you mean the airline that cuts back a large part of its TATL network in the winter and is out of compliance with its TATL JV agreement with DALPA? 
 
nope, but we will get more and more rambling about how Delta can do anything it wants. 
 

None of these cuts are new.
 
MIAMXP will operate at greater frequency/capacity this winter than last winter.
 
JFKBHX is a brand-new route that launched in May.
 
AA also did not serve Rome whatsoever last year, roughly for part of February/March.
 
LAXLHR is not being reduced.
 
Reductions on the JFKCDG/etc. routes are in line with last year.
 
Stick to making up facts about Delta, you are better at that. 

not really. 

 

[commavia]

Aggressively managing capacity to adjust to demand and yields - both of which generally fall off a cliff to much of Europe in the slowest parts of the year (i.e., winter).  Smart move.

 

[WorldTraveler]

Aggressively managing capacity to adjust to demand and yields - both of which generally fall off a cliff to much of Europe in the slowest parts of the year (i.e., winter).  Smart move.

precisely.

something US did aggressively and which Parker brought to AA.

and the overnight devaluation of the yuan and the ripple effect on other Asian currencies likely will result in even more global peaks and valleys in demand for the US mega 3

 

[FrugalFlyerv2.0]

Finally, some markets like MXP are markets that the ME3 have entered from the US and their presence is impacting financial performance in the winter.

 

What other market(s) between the USA and EU have the ME3 entered besides EK's lone MXP-JFK route?

 

I'll have to double check but I believe QR is in a market or two... perhaps an LHR market.

 

 
How is your search progressing?
Or should we chalk that statement up as another one of WT's Fabricated Fact?
 

Parker made the right call. I have never argued otherwise.

 
Oh, that's interesting. 
I was thinking you were going to say that the right call was to purchase a decrepit refinery.

 

[WorldTraveler]

current schedules shows that the only current market by a big 3 carrier from Europe to the US is EK on JFK-MXP. In the time since EK entered the market, AA has reduced its winter schedule from JFK-MXP. Other carriers have not. nowhere did I state with certainty what routes other than JFK-MXP ME3 carriers serve

Feel free to start a thread on the refinery if you would like.

That decrepit refinery is profitable, is net positive profitable from the day it was put into service, and that doesn't even include what it has done to reduce the cost of jet fuel.

focus on the facts and the topic, not on mud throwing and we'll all get along.

commavia and I see eye to eye on this one. AA is cutting seasonal capacity to improve profitability during the winter. The move makes sense and it worked this past winter just as it likely will this winter as well.

 

[cltrat]

excellent post cltrat    so true    agree there jcw   AA knows what theyre doing  and how to go about it to make money  

thank you robbed yes it was ,as you can tell it's no longer here thus proving my point.

 

[robbedagain]

i hear ya bro   Ive had a number of my posts taken away too thus proving  but none of his   AA and SWA saw huge increase