AA posts 220 mil 2nd qrtr profit

[robbedagain]

accrding to multiple news outlets thru www.justplanenews.com amr posted a 2nd qrtr profit of 220 million

 

[FWAAA]

Excluding special items and reorganization expenses, profit was $357 million:

http://hub.aa.com/en/nr/pressrelease/amr-corporation-reports-net-profit-of-357-million-excluding-reorganization-and-special-items---amrs-best-second-quarter-result-in-company-history

 

[WorldTraveler]

obtaining a profit is a great thing; it is worthwhile looking at the drivers for the profit.

AA mainline number of employees fell by 6000, or a 9% reduction.
Mainline fuel cost was down 7%.
RASM (revenue per available seat mile) was flat (unchanged).
AA's Pacific RASM was down 7% on 8% more capacity while Latin America RASM was down 3% on 9% more capacity. Atlantic RASM was up 7% on 2% less capacity. Pacific yield was down 4%. Domestic RASM was flat on 1.4% less capacity and slightly lower yields on slightly higher LFs.

AA's profit was cost driven.

Consolidated and mainline capacity was up by 1% and AA expects to keep capacity while it acknowledges "revenue headwinds":

"AMR estimates consolidated capacity in the third quarter of 2013 to be up approximately 2.7 percent versus the third quarter of 2012, driven by the combination of a longer average stage length per operation flown, and by new or increased capacity into South Korea, Mexico, Central and South America."

 

[1AA]

http://finance.yahoo.com/news/amr-corporation-reports-net-profit-120000042.html

According to this news release it is AMR's second best quarter result in company history. If this is what we expect and more in the future and out of BK, I wonder why Jim Little decided to give away our Profit sharing? Unions are suppose to look out for the best interest of its members.

 

[dash8roa]

Maybe Tom Horton was not so bad and maybe Doug Parker might not be the best man at the helm. Airways had two trips through #11 and drove wages down to low levels. AA only made one trip through #11 and in less than two years appears to have turned things around. One good quarter does not make an airline consistently profitable but its a good start.
I hope the new management team will not try to make AA a larger version of US, but will bring US customer service up to AA's level.
Many variables such as fuel prices, state of the economy, and the threat of terrorism will play a large part in the future of all airlines and I hope AA will stay intact as far as customer service.

 

[700UW]

I guess you forgotten AA's employees took concessions in 2003 outside of bankruptcy and never have gotten a new CBA since then and now are under chapter 11 CBAs.

 

[FWAAA]

http://finance.yahoo...-120000042.html

According to this news release it is AMR's second best quarter result in company history. If this is what we expect and more in the future and out of BK, I wonder why Jim Little decided to give away our Profit sharing? Unions are suppose to look out for the best interest of its members.

Actually, it says that the second quarter 2013 was the best Q2 in the company's history, not the second best quarter in the company's history.

Thing is, management screwed up - it's not the best Q2 in the company history - according to Terry Maxon, that honor belongs to the second quarter of 1998:

http://aviationblog.dallasnews.com/2013/07/may-we-quibble-at-amrs-best-second-quarter-financial-performance-in-the-companys-history.html/

Whoops. Second quarter of 1998 had higher net income plus better margins.

This was a good quarter, but not as good as Horton said it was.

 

[N288AA]

Maybe Tom Horton was not so bad and maybe Doug Parker might not be the best man at the helm. Airways had two trips through #11 and drove wages down to low levels. AA only made one trip through #11 and in less than two years appears to have turned things around. One good quarter does not make an airline consistently profitable but its a good start.
I hope the new management team will not try to make AA a larger version of US, but will bring US customer service up to AA's level.
Many variables such as fuel prices, state of the economy, and the threat of terrorism will play a large part in the future of all airlines and I hope AA will stay intact as far as customer service.

Not gonna argue the customer service issue but lets face it Parker had nothing to do with US Air's 2 trips to chapter 11. He was at AWA at the time. David Siegel was the man at US at the time of one if not both bankruptcies. Parker merged the two after the second bankruptcy.

 

[robbedagain]

bruce lakefield was in the second ch 11 i believe.. seigel was the 1st one and his famous line was im not taking the money n run but of course he did just do that i do not recall if us made profits in or after the 1st ch 11

 

[LD3]

Maybe Tom Horton was not so bad

Tell that to the AA people that had their jobs eliminated....

 

[dash8roa]

Not gonna argue the customer service issue but lets face it Parker had nothing to do with US Air's 2 trips to chapter 11. He was at AWA at the time. David Siegel was the man at US at the time of one if not both bankruptcies. Parker merged the two after the second bankruptcy.

I did not say Parker was at US during the two trips through #11, but he inherited the low pay scales that was the result of two #11's and he stalled labor negotiations for years and that is what gave airways its edge over other carriers. Had US had comparable pay scales as the other majors back then, there might not have been a Usairways today.
I remember Dave Siegals video we all were required to watch where he said he was in it for the long haul at Airways and a week before his golden parachute was to expire, he bolted with 4.5 million. A real honorable man with morals.LOL.
Is he with Frontier airlines today, I thought I saw his name in connection with Frontier?

 

[robbedagain]

parker took over in 05 after lakefield left and dp orchastrated the 08 low wage contracts that gave the company higher profits i do think that seigel is still w frontier air...

as for horton i think it is safe to say that aa only made the money they did on the backs of labor and minus all of the ones they got rid of.. if it were not for that i think they would have had a high loss

 

[BigMac]

They made a profit because we are in BK and labor has a shite contract...the end

 

[FWAAA]

parker took over in 05 after lakefield left and dp orchastrated the 08 low wage contracts that gave the company higher profits i do think that seigel is still w frontier air...

Funny thing about US; if you net the profits and the losses since the merger in 2005, US has a cumulative, aggregate net loss for 2006-12. Despite having the lowest-paid pilots and flight attendants among the network legacy airlines, US still hasn't made a cumulative net profit since the merger with HP.

as for horton i think it is safe to say that aa only made the money they did on the backs of labor and minus all of the ones they got rid of.. if it were not for that i think they would have had a high loss.

True, just like US Airways, United and Delta. Now that all of them have been thru Ch 11 at least once, all profits they report (and will ever report) will be "on the backs of labor." None of them have ever reported a post-bankruptcy profit larger than their annual labor cost savings obtained in bankruptcy.

For the second quarter, AA's labor costs declined by $328 million, almost the same amount as the net profit (excl special items and reorg expenses).

Note that AA's profit in the second quarter happened even though its pilot and FA costs are still substantially higher than they would be if they were paid what US pilots and FAs are paid.

 

[WorldTraveler]

True, just like US Airways, United and Delta. Now that all of them have been thru Ch 11 at least once, all profits they report (and will ever report) will be "on the backs of labor." None of them have ever reported a post-bankruptcy profit larger than their annual labor cost savings obtained in bankruptcy.

For the second quarter, AA's labor costs declined by $328 million, almost the same amount as the net profit (excl special items and reorg expenses).

sorry but that is not true.

in the year ended 2007 (the year DL and NW emerged from BK), their ANNUAL labor cost decreases were $176 million for DL compared to 2006 and $94 million for NW. AMR's QUARTERLY labor cost decrease was larger than DL and NW's ANNUAL labor cost increase in the year DL and NW emerged from BK.

More significantly, during the same period, DL's revenue increased by $1.6 BILLION while NW's increased by $204. Fuel prices were, however, going up and DL's fuel bill for the same period was up by over $200M while NW's was down slightly as they retired older aircraft.

http://phx.corporate-ir.net/phoenix.zhtml?c=71481&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTU0NzQyNzEmRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d

NW's financial statements are also available on DL's investor relations website.

DL has reported profits over $1B since BK and is expected to report profits this year that may exceed anything they have reported since BK.

DL's restructuring and the NW merger has been based far more on increased revenue than reduced labor costs and the revenue increases thru the reallocation of DL's network began long before DL exited bankruptcy.

Based on UA's recent monthly RASM increases, it is very likely that AA's lack of revenue growth is directly due to the fact that UA is now recapturing much of the revenue which it lost to AA during UA's operational problems.

As much as some people here don't want to hear it, AA's BK has not generated the revenue increases that other restructurings have generated and has thus had to use cost decreases - heavily sourced from labor - in order to generate profits.

Based on AA's regional RASM information in their quarterly report, AA also continues to maintain and add capacity in long haul markets because it pushes down the CASM even though RASM for Pacific and Latin regions are not keeping up with the capacity growth.

Given that US' revenue increases over the past several years have largely come by carrying revenue that is below industry average, no one has yet to answer the question how AA/US will increase revenues, especially important since AA and US' labor costs will rise as part of the labor agreements necessary to obtain support for the merger.