Aa Slow Death

[HGIEFOswitch]

Check out the latest moves by LUV from this press release....


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By Dan Reed, USA TODAY
DALLAS — No. 1 discounter Southwest set sights Thursday on a Chicago expansion following the Chapter 11 filing this week by Indianapolis-based ATA.

Southwest CEO Gary Kelly, at the airline's annual media day here, called growth at Chicago Midway — the city's No. 2 airport — the "top priority" for the fast-growing airline.
Kelly said Southwest's planners are working on new schedules that will accommodate "a significant amount of growth" in the January-March quarter.

Southwest's renewed focus on Midway is a direct challenge to rival low-cost carrier AirTran Airways, which agreed Tuesday to pay ATA $87.5 million for leases to ATA's 14 gates at Midway. The revitalized South Side Chicago airport has become one of the USA's largest and most important local markets and connecting point for low-fare air travel.

Atlanta-based AirTran plans to lease planes and crews from ATA to operate at Midway until it can take over itself. But that deal must be approved by the bankruptcy court, which is likely also to hear rival proposals from other carriers interested in acquiring some or all of ATA's assets.

Raising more uncertainty is a disagreement about whether leases on the Midway gates are ATA's to sell. The city of Chicago contends that it, not ATA, will decide who gets the gates, and under what terms. City and ATA officials plan to meet soon to discuss it.

America West, the nation's No. 2 discount carrier behind Southwest, has expressed a strong interest in acquiring some or all of ATA's assets, including ATA's employees.

Southwest, with a string of 54 consecutive profitable quarters, is already the market leader at Midway, its fourth-largest airport behind Las Vegas, Phoenix and Baltimore/Washington. At Midway, it has 45% of the passenger traffic and 19 gates. It has room to grow without acquiring any of ATA's gates. But Kelly says Southwest would like to acquire an undetermined number for more growth.

Kelly said Southwest hasn't determined how many Midway flights will be added next quarter. He said Southwest has "a good handful of planes" to deploy there. The focus on Midway means that Southwest, which serves 59 cities, won't launch service to a new city in the first quarter.

The addition of new cities could be pushed back further if some airlines liquidate in cities where Southwest has a presence. Southwest would focus on expanding in those place rather than adding cities, Kelly said.

Southwest expects to grow 10% next year, with a net increase of 29 jets to its 400-plane fleet.

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Now, what's AA's response to DAL pulling out of it's number one hub in DFW? Park 15 MD80's. Like that's making a big difference when the MD80 fleet is 300 plus. AA should be looking to take those DAL gates. I suppose that's the difference between LUV and AA. One's a winner and the other.............I can't bring myself to say it.....too painful.

 

[jsn25911]

I feel like I am repeating history...AGAIN!

This is exactly what happened to Ozark airlines....then TWA....could AA be next?



I was with Ozark Airlines and was purchased by TWA. I experienced all the downfalls of a struggling airline at Ozark...then TWA....?AA??. They all begin the cycle with a downsize..... .

 

[HGIEFOswitch]

AA is absolutely going the way of TWA. The shrinking fleet, bitter employees, and lousy service. Let's not forget the AA arrogance. This was the same attitude at TWA up into the 1980's. "Number 1 airline to Europe" and "Try Walking Across." Anyway, reread the following quotes...


1) Kelly said Southwest hasn't determined how many Midway flights will be added next quarter. He said Southwest has "a good handful of planes" to deploy there.

2) The addition of new cities could be pushed back further if some airlines liquidate in cities where Southwest has a presence. Southwest would focus on expanding in those place rather than adding cities, Kelly said.


Gee, does AA have "a good handful of planes" to deploy? Could AA expand if some airline liquidate in a city where AA has presence...like DFW??? I really believed that AA would swarm into DFW after the DAL announcement. It seems like a once in a lifetime chance. Perhaps there is some hidden plan, but I have serious doubts. Shrink to profitability. This company is definitely going TWA.

 

[Bagbelt]

They are adding 90 flights a day in DFW. Mia and Jfk are opening huge new terminals. What would be the point in more real estate? It is growing bigger than we needed to be that got us in more trouble than we would otherwise be. SW will not expose itself to unhedged fuel supplies, they will only grow within that context. Half the industry in bankrupcy court is hurting us more than SW.

 

[extwacaptain]

AA is absolutely going the way of TWA. The shrinking fleet, bitter employees, and lousy service. Let's not forget the AA arrogance. This was the same attitude at TWA up into the 1980's. "Number 1 airline to Europe" and "Try Walking Across." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
HGIEFO switch,

It was my pleasure to be with TWA "up into the eighties". Until 1983 to be exact.
Bitter employees and lousy service and arrogance are not my memories of that period of time.

My records reveal some of the finest comments from passengers, (regarding their opinion of TWA, AND the service, AND the employees), up through (and beyond) the 80's.

Quite possibly if AA could duplicate TWA's performance during the years of which you speak, they, too, will be around for almost another two decades.


Randy Kramer

 

[flyboymd8]

HGIFO also doesn't realize that as late as the 2 years prior to the AA buyout, TWA was the on time airline of the year 2 years in a row, and Won the JD and Power associates award for customer satisfaction on long and short haul flights. About the only thing he got right is we did shrink. It's easy to blame and point fingers at others when the entire industry's management has their head up their backside, oil wouldn't be even an issue if the airlines had some pricing discipline. You don't see Fedex, UPS, DHL, nor the many other cargo carriers hurting with high fuel prices, do you? It's only because they pass on costs to the customer, they don't sell their product below cost. We can all cry about how the people would run to the other carriers, but it is clearly evident that in the case of Fedex, ups, dhl, etc no mass exiting of customers to the competitor has happened. Look what US air did every time they got concessions from employees, they lowered ticket prices. Talk about cutting your own nose to spite your face. They also didn't go with several attempts at increasing ticket prices when the rest of the industry tried. The whole industry is a mess because of lack of pricing discipline, period.

 

[eolesen]

Expanding into DL's gates at DFW would be about the dumbest thing I could think of right now. We don't need them -- with Terminal D opening up next year, we'll have 10-15 gates opening up in Terminal A (all the gates currently required for FIS arrivals). More important, we need more passengers paying fares which can cover our costs and then some.

I don't see anyone jumping to fill the void, either. Airtran is focused on MDW, WN is focused on MDW and PHL. Jetblue is a wild card, but they also know that coming into DFW would be a far different fight than what they had/have with the transcon markets.

 

[NewHampshire Black Bears]

AA is absolutely going the way of TWA. The shrinking fleet, bitter employees, and lousy service. Let's not forget the AA arrogance. This was the same attitude at TWA up into the 1980's. "Number 1 airline to Europe" and "Try Walking Across." Anyway, reread the following quotes...
1) Kelly said Southwest hasn't determined how many Midway flights will be added next quarter. He said Southwest has "a good handful of planes" to deploy there.

2) The addition of new cities could be pushed back further if some airlines liquidate in cities where Southwest has a presence. Southwest would focus on expanding in those place rather than adding cities, Kelly said.
Gee, does AA have "a good handful of planes" to deploy? Could AA expand if some airline liquidate in a city where AA has presence...like DFW??? I really believed that AA would swarm into DFW after the DAL announcement. It seems like a once in a lifetime chance. Perhaps there is some hidden plan, but I have serious doubts. Shrink to profitability. This company is definitely going TWA.

[post="196659"][/post]​

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HGIEFO,

Plz. let me know what if any stocks you may be investing in, on Wall street, because , if your buying, I'm SELLING, and visa/versa.
MY point,
You obviously don't know SQUAT about AA, or "perhaps" this industry.

AA's got their eyes on a much bigger fish, than WN.
That being UAL, and ORD !!!!!!!!!!
(I'm sure your familiar with UAL. They fly LARGE airplanes to far away places.)
My point again,
AA has co-existed with WN, in north "Texass" for decades, and their not overly concerned with how many flts. WN has from MCI to ABQ !!!!!!!!!!!!!!!!

AND THEN,
there's the "small matter" of American Eagle. But thats another subject for another time.

NH/BB's

 

[Wretched Wrench]

With Southwest's success and AA's lingering death, the best we can hope for is for them to buy us, or at least our assets. Then we can keep our seniority (or perhaps some of it) and be elevated to their pay (and benefits) scale.

 

[jimntx]

Now, what's AA's response to DAL pulling out of it's number one hub in DFW? Park 15 MD80's. Like that's making a big difference when the MD80 fleet is 300 plus. AA should be looking to take those DAL gates. I suppose that's the difference between LUV and AA. One's a winner and the other.............I can't bring myself to say it.....too painful.

[post="196650"][/post]​

AA is absolutely going the way of TWA. The shrinking fleet, bitter employees, and lousy service. I really believed that AA would swarm into DFW after the DAL announcement. It seems like a once in a lifetime chance. Perhaps there is some hidden plan, but I have serious doubts. Shrink to profitability. This company is definitely going TWA.

[post="196659"][/post]​

Sorry, but you can't have it both ways. First, you denigrate the effect that grounding 15 a/c would have on the fleet costs--" Like that's making a big difference when the MD80 fleet is 300 plus." Then, you decry the grounding as "shrinking to profitability" madness.

What is the "swarm into DFW" suppose to mean? DAL pulling out is not increasing opportunities--there are few destinations served by DAL from DFW that are not also served by AA/AE already. It is reducing competition on those routes. Few if any of the LCCs would be interested in the "puddle jumping" routes which DAL had out of DFW--i.e., DFW-JAN-ATL--and the long-haul routes are already covered by AA.

DFW airport currently has 4 terminals with another under construction. AA has ALL of 2 of those terminals and a third of the gates in another. They will have something like half the gates at the new International terminal without ceding any of the gates they already have. How much more of DFW do you want AA to control? AA is not going to keep the LCCs out of DFW if they choose to come in. The best we can do is minimize the effect they will have.

 

[jsn25911]

With Southwest's success and AA's lingering death, the best we can hope for is for them to buy us, or at least our assets. Then we can keep our seniority (or perhaps some of it) and be elevated to their pay (and benefits) scale.

[post="196796"][/post]​

I don't know if you are kidding or not, but it has happen to me twice (Ozark and TWA). Your statement about "WN takeover of AA" is a possibility somewhere in AA's time. Hopefully it will not be when you are in your 50's and you have to go back to school to learn a new trade (making 1/2 the salary that you were making) - however those in their 20's are still working.

 

[WingNaPrayer]

Companies this size don't die slow deaths. They collapse like a skyscraper in a 10.0 earthquake!

 

[Bagbelt]

AA's not going away- we all might be-but they have allways done what they had to do, 1983 all over again.

 

[eolesen]

Companies this size don't die slow deaths. They collapse like a skyscraper in a 10.0 earthquake!

[post="196807"][/post]​

Now, there's a clueless statement. You'd better go take a few business classes at Dade County Community College. If you already took them, get a refund because you didn't learn much....

There have been very few 50,000+ employee/$1B+ revenue companies which have gone completely out of business, let alone collapse and disappear overnight. You have a few high revenue companies which imploded during the dot.com bust, but they had more hype than actual assets.

 

[WorldTraveler]

AA is a very well run company and is not able to go anywhere anytime soon. AA achieved a tremendous amount 1 1/2 years ago with their restructuring, but as I predicted, Delta has achieved even more. AA's recent hesitation and talk of deeper cuts is because they realize that, as deep as the cuts AA got, they aren't deep enough. UA will get deeper cuts in bankruptcy while DL has best AA in cost cutting using the out-of-court model that AA developed; several analysts are now saying, as I have, that DL's costs could well drop below 9 cents - the first time a legacy has achieved that goal in many, many years. With the threat of a major LCC expansion at DFW, it is only prudent that AA should go back and ask for more before they are drained to the point AA and DL were in their first round of cost cuts.

It is foolish to think that AA can keep competition out by hoarding assets. The best way to deal with competition is to be well-prepared to face it and then go after them with everything you've got. AA, DL, and NW all have a pretty strong track record of aggressively going after LCCs after the long haul. They all realize that the best way to keep LCC growth in check is to aggressively fight for passengers by offering a superior product at competitive fares within the context of a competitive cost structure.

Do not doubt that much of the reason why JetBlue had difficulty in maintaining its financial performance this past quarter was because of the combined impact AA and DL have had. In DFW or MIA, AA has nothing to fear from WN or any competitor but it means that employees have to be willing to recognize that passengers almost always have a choice of airlines and the business is won or lost every day by every employeee in every action. More than reducing pay and benefits, every legacy carrier employee must realize that an attitude of winning is what is needed if their companies are to succeed.