Aa Slow Death

[HGIEFOswitch]

Good posts. I hope I'm wrong and most of you are right. Time will tell.

 

[WingNaPrayer]

There have been very few 50,000+ employee/$1B+ revenue companies which have gone completely out of business, let alone collapse and disappear overnight.

For some reason, Enron comes to mind. Everyone thought they were a sure thing too but as it turned out . . . (there's that clue you were looking for)

Just remember, congress is no longer of any frame of mind to help out this particular sector of the transportation industry. They gave the airlines money before, watched executives squander it and stuff it in golden parachutes, then lay off more than 100,000 people industry wide.

One more national emergency will put them all under the auspices of one court or another. AA certainly isn't immune. Sure, they've hocked the farm to shore up their bank accounts, but no airline is capable right now of stepping in to fill the huge void that an airline the size of UA or AA or even DL (even though DL turned out to be a wonderful stock investment over the past two weeks with a 100% gain in less than 10 days) would leave, should they find themselves at the mercy of their lenders again.

 

[Wretched Wrench]

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

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.

[post="196880"][/post]​

According to more than one high union official, AA was threatening chapter 7 if we revoted on the concessions. That would have been about as sudden as a skyscraper toppling, I believe. Of course the union presidents bought it.

 

[jimntx]

For some reason, Enron comes to mind. Everyone thought they were a sure thing too but as it turned out . . . (there's that clue you were looking for)

[post="196966"][/post]​

Enron was not a "going" business. It was a house of cards. Besides, it didn't collapse and disappear. Enron still exists today.

 

[Dizel8]

"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".

Actually, the big problems for jetblue were the high cost of fuel and the hurricanes in Florida. Of course, in a roundabout way, the fact that fares are so low, that they are not offsetting the high fuel cost, could be attributed to AA and DL. However, having said that, you could then say that the losses by AA and DL were caused by jetblue.

But that is a silly game to play, since if jetblue losses $5 a seat, DL and AA loses $15. Then the question becomes, is it worth it and who can fight the war of losing money the longest?

I was advised of the numbers for the increased fuel cost and the hurricanes. Without those, the bottom line would have been much better, not that it makes matters different, since the same can be said for almost all airlines.

jetblue is predicting a loss for 4th quarter, due to the high fuel prices, but we are in good company. An indication of how ugly it is, SWA would have lost money, had it not been for brilliant foresight on the fuel hedging. If the low cost leader and most continuosly profitable company, SWA, could not make money at the non hedged fuel prices, then surely we all hang together.

 

[WingNaPrayer]

You would think these airline CEO's would swallow their pride long enough to get together and mutually agree to unilaterally raise ticket prices to bring the carriers more in line with the outrageous fuel prices these friends of Bush have caused.

If every carrier does it, then there won't be any need to worry about one carrier's passengers scrambling over to another. This allowing passengers to milk an airline dry (while laughing at them, and not behind their backs, right in their faces!) just because you are afraid they will scamper on over to the competition is just plain stoooopid! I say let the cheap bastards go somewhere else and the airline that gets them will be the first to go down the tubes. Their planes may be full, but full planes mean more expensive fuel and at these prices, their bank accounts will be as empty as their planes used to be.

Eventually, you'll get your passengers back, and be all the stronger for the wait.

 

[Fly]

I believe that is against the law, Wing. Price fixing

 

[FWAAA]

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.

[post="196780"][/post]​

Excellent points. AA has coexisted with WN for many years and will continue to do so for many more.

USAir and UAL are teetering on the brink of oblivion - and AA is poised to jump if either of them fold. Over $3 billion of unrestricted cash in the bank and oil prices falling sharply. If either of them goes Ch 7, AA has the cash to bid on key assets and become much larger.

More gates at DFW? Why? Let someone else lose money like DL was.

 

[WorldTraveler]

Dizel8,
My point is that no other airline has had the arrogance to take on two legacy airlines in order to establish themselves in the market as JetBlue is donig. AA and DL both have a huge amount invested at JFK and are not about to walk away from it because some fresh-faced upstart comes around. AA and DL both know what they have to do to compete against B6 and they will do it. B6 will find their going alot tougher as AA and DL both work to keep B6 in a nice, little box.

Yes, WN has coexisted with alot of legacy carriers because they don't get into tiffs w/ the big boys. If WN recognizes that it ain't worth it to pick a fight with someone much larger, then B6 should be doubly concerned when it decides to pick a fight w/ two big boys. And don't tell me that AA and DL are on the ropes and ready to keel over.... both have lots of fight left in them.

 

[sfb]

An indication of how ugly it is, SWA would have lost money, had it not been for brilliant foresight on the fuel hedging. If the low cost leader and most continuosly profitable company, SWA, could not make money at the non hedged fuel prices, then surely we all hang together.

Actually, not true. Southwest still would have been profitable, even if they hadn't hedged fuel. Their net income would have been $46 million instead of $119 million (the $131 million in fuel hedging gains counts as part of operating income, which was $191 million including profitsharing). Had they not been hedged, their profitsharing and income taxes would have also declined in the quarter.

And besides, jetBlue was also fairly well-hedged in the quarter, and both WN and DL had more flights affected by the hurricanes.

AA certainly does not need Delta's old gates at DFW considering that they're getting most of Terminal D when it opens. Shoot, it's bad enough that they're going to be spread across four different terminals, even with the new train going online.

 

[eolesen]

For some reason, Enron comes to mind. Everyone thought they were a sure thing too but as it turned out . . . (there's that clue you were looking for)

[post="196966"][/post]​

Thanks for proving my points.

Enron, despite popular belief, didn't die. Thousands of employees at all levels were laid off, and retirement funds evaporated due to being invested in worthless stock, but the company continued to function, and the remaining employees continued to get paid. And they continue to exist today. Take a look at the job postings on Enron.Com if you don't believe me.

You would think these airline CEO's would swallow their pride long enough to get together and mutually agree to unilaterally raise ticket prices to bring the carriers more in line with the outrageous fuel prices these friends of Bush have caused.

Thanks for further proving that you're clueless. Collusion is illegal.


Wretched Wrench, I don't ever remember hearing a Ch.7 threat in 2003, even at the worst point last year. Let your "high ranking official" go on the record to refute that, but any one who had the facts knew that Ch.11 was a certainty, and that liquidation would only occur after years in bankruptcy -or- if there were some other event like a strike after a contract having been arbrogated (like what's being discussed over in the USAir forum).

 

[Dizel8]

"My point is that no other airline has had the arrogance to take on two legacy airlines in order to establish themselves in the market as JetBlue is donig".

Not arrogance, although depending on what side of the fence you are, it may appear different, it is simply business. If AA and DL manages to run jetblue out of town, then so be it.

As for SWA they no longer get into "tiffs" with the "big boys", they are THE big boy domestically. SWA does not worry about AA or DL, it is the other way around. I am sure the thought of SWA showing up at DFW gives AA a bit of worries.

Sfb says: "Southwest still would have been profitable, even if they hadn't hedged fuel. Their net income would have been $46 million instead of $119 million."

You are indeed correct. Not sure where I read the reference, but IIRC it was from a credible source.(It was not this quarter btw) If I can dig it up I will. Although, the point is still somewhat true, 119 vs 46. JBU was sadly not hedged as well as SWA, believe the number was 40%. As far as disruptions due to the hurricane, while true both DL,AA and SWA et al. suffered from these events and may have cancelled more flights, percentage wise I think jetblue would be right up there.

 

[NewHampshire Black Bears]

Excellent points. AA has coexisted with WN for many years and will continue to do so for many more.

USAir and UAL are teetering on the brink of oblivion - and AA is poised to jump if either of them fold. Over $3 billion of unrestricted cash in the bank and oil prices falling sharply. If either of them goes Ch 7, AA has the cash to bid on key assets and become much larger.

More gates at DFW? Why? Let someone else lose money like DL was.

[post="197178"][/post]​

++++++++++++++++++++++++++++++++++++++++++++++++++
(JESUS) FWAAA,"
We've got to stop meeting like this" (AGREEING) !!!!!

People will start talking about us starting a NEW TREND !!!!!!!!!!!!


NH/BB's

 

[goingboeing]

You would think these airline CEO's would swallow their pride long enough to get together and mutually agree to unilaterally raise ticket prices to bring the carriers more in line with the outrageous fuel prices these friends of Bush have caused.

If every carrier does it, then there won't be any need to worry about one carrier's passengers scrambling over to another. This allowing passengers to milk an airline dry (while laughing at them, and not behind their backs, right in their faces!) just because you are afraid they will scamper on over to the competition is just plain stoooopid! I say let the cheap bastards go somewhere else and the airline that gets them will be the first to go down the tubes. Their planes may be full, but full planes mean more expensive fuel and at these prices, their bank accounts will be as empty as their planes used to be.

Eventually, you'll get your passengers back, and be all the stronger for the wait.

[post="197135"][/post]​

The President does not set or determine fuel prices and besides the fuel costs are about where they should be when adjusting for inflation.
This year the excuse for bad management is fuel cost and next year it will be something else.

 

[WingNaPrayer]

Collusion is illegal.

Thanks for proving your own stupidity. In order for collusion to exist, there must be a fraudulent or otherwise illegal purpose. Now, if pricing one's product at a break-even price is fraudulent or illegal, then you may have a point. Now, if they decided to put a stranglehold on the market and they all price tickets at 100% profit - that would be collusion. But, to agree with each other than they must stop selling tickets for less than what it costs to deliver the service (which in my estimation will ultimately jeopardize the transportation industry, ergo the nation's economy) is just good, smart business practice, not collusion. Remember, when they did exactly that - it was called "regulation" and that which you call "collusion" was controlled by the government.

People will pay it and fly, or they won't and they'll walk. It's better to forego possible ticket sales that are being sold at an astronomical loss. Why fly a butt somewhere at a loss when not flying that butt is a savings, especially on fuel?