AA studies the idea of low cost carrier

FA Mikey

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Aug 19, 2002
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Reuters
American studies forming own low-cost carrier
DALLAS, Feb 12 (Reuters) - The chief financial officer of American Airlines parent company AMR Corp. said on Wednesday the world''s largest carrier is studying the formation of a discount carrier within its fleet.

Jeff Campbell, speaking at a transportation conference, said that while history has shown a poor track record for forming a carrier within a carrier, the concept is something American has to examine as its competitors look to implementing the idea.
If you look at the history over the last decade, the history of carriers within a carrier is sure not particularly positive, Campbell said at the conference in Florida that was broadcast over the Internet.
On the other hand, I think we would be foolish at American and AMR to not be giving it very serious thought in a world where Delta, has said they are going to try it again, where UAL, parent of United Airlines) has said they are going to try it again, he said.
AMR had mostly dismissed the idea of forming its own low-cost carrier, but Campbell said the step may be needed in order to help it better compete with its larger rivals, and low-fare domestic carriers such as Southwest Airlines Co
 

Connected1

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Aug 20, 2002
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I hope that nobody gets themselves too worked up about this. It isn't going to happen. We typically implement only a small fraction of what we analyze.

Case in point - many of the cost reduction initiatives announced last August were analyses that had been done over the course of the past couple of years that were analyzed but not implemented.
 

RV4

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What if?

What if AA split TWA back out of the AA equation and gave the employees their well deserved seniority back, then lowered their pay and benefits to "low cost" carrier status?

Would the lawsuits then been settled? And the back stabbing internal labor strife end?
 

KCFlyer

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So, can anyone tell answer these questions -

1. What will the mainline units offer that the low cost units won't?

2. What will the price differentiation be on mainline flights versus low cost flights (difference between lowest and highest fare)?

3. What will the carriers do in cities that have a strong low cost presence as well as a strong "mainline" presence? Examples include MCI, STL, BNA, and Chicago. Will both units offer flights out of these cities, or will they become "low cost" cities only?

I'm still not sold on the "airline within an airline" ideas. The "majors" might get an airline that can compete on costs with JBLU or LUV, but at what cost to their mainline unit? And more importantly, at what cost to their already rocky employee relations?
 

Hopeful

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Dec 21, 2002
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On CNN the other night, I saw the new President of "SONG", Delta's new low cost venture. One of the things SONG will be doing is not offering pension plans to employees. There will be a 401k but no company match. Employees will make only slightly less than their Delta counterparts. He said that imitation is the sincerest form of flattery and that SONG will almost carbon copy JetBlue. He did also emphasize that SONG will be targeting JetBlue. I give SONG a better chance than others because Delta does not have unions and their contracts to deal with.
 

MiAAmi

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In that case lets give everyone with other airline experience their well deserved seniority. And everyone that transfered from other areas of AMR their well deserved seniority too. Won't that be fun.
 

DLstew

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Feb 12, 2003
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[/blockquote]
One of the things SONG will be doing is not offering pension plans to employees. There will be a 401k but no company match.


true and false... Song will not offer a pension plan to employees, however, There is a 7.5% company match on the 401k in CASH if you are a founder of Song, meaning Hired in the original hiring waves. I just had my interview and this was discussed in detail, thank you very much!
 

jj

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Aug 20, 2002
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Low paid employees high turnover just a summer job for some folks. Keep costs down offer rock bottom fares.
 

RV4

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[blockquote]
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On 2/12/2003 10:46:58 AM MiAAmi wrote:

You get what you pay for.
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[/blockquote]


Then why is it for $1.8 Billion we are not being offered better management?

Maintenance Supervisor is such an undersireable job, that quality has diminished beyond belief!
 

AAquila

Senior
Sep 22, 2002
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[blockquote]
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On 2/12/2003 9:03:23 AM RV4 wrote:

What if?

What if AA split TWA back out of the AA ----------------

[/blockquote]

What if we drop the name American and resurrected the TWA logo. It makes sense since we are more an International carrier than we are just an American carrier.


Just a thought.
 

desertfox

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Sep 13, 2002
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[blockquote]
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On 2/12/2003 8:32:39 AM FA Mikey wrote:

We would be better off, by the company addressing costs in the primary carrier AA. Fixing the fare structure and going after the competition that way.
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[/blockquote]

Is'nt there ALREADY an airline within the airline here??...........It's name is Eagle. Is an airline, in an airline within an airline what is needed?
 

AAquila

Senior
Sep 22, 2002
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AA should charge fares by the pound. Weigh the passengers, then we would get lighter passengers meaning lighter loads, which translates into better fuel efficiency, and less demand on in-flight food, which leads to less demand of in-flight toiletries i.e. toilet tissue.

DAL is already pushing a lose 'wait,' ad campaign meaning less lines, we'll just go on step further.
The FAA wants it done for safety reasons on small aircraft

Yes; it would be controversial at first, but Americans have always risen to beat any challenge.

"Take the load off your dairyer then call American Air ."