Airline industry expects $7B profit in 2011

[Buck]

Airline industry expects $7B profit in 2011

Europe’s sovereign-debt crisis, the Middle East’s high fuel costs and Japan’s slow recovery from nuclear catastrophe are likely to leave North America as the airline industry’s most profitable region in 2011 and 2012, the International Air Transport Association said in a regular forecast issued Wednesday morning.

 

[BoeingBoy]

Airline industry expects $7B profit in 2011

Europe’s sovereign-debt crisis, the Middle East’s high fuel costs and Japan’s slow recovery from nuclear catastrophe are likely to leave North America as the airline industry’s most profitable region in 2011 and 2012, the International Air Transport Association said in a regular forecast issued Wednesday morning.

Just be aware that that is the global airline industry, not U.S. based carriers. All the U.S. based carriers combined are forecast to have a $2 billion profit. Looking ahead to 2012, IATA expects global profits to be just $3.5 billion of which $1.7 billion is expected to be the U.S. based carrier's share.

Jim

 

[WorldTraveler]

Just be aware that that is the global airline industry, not U.S. based carriers. All the U.S. based carriers combined are forecast to have a $2 billion profit. Looking ahead to 2012, IATA expects global profits to be just $3.5 billion of which $1.7 billion is expected to be the U.S. based carrier's share.

Jim

when you consider that AMR is expected to post a loss half the size of the total profit for the industry, the US industry AS A GROUP has recovered significantly. When you cnosider that the forecast for 2012 is for US carriers to post half of the global industry's profits, it says the US industry is going a pretty good job of adapting.

 

[Bob Owens]

when you consider that AMR is expected to post a loss half the size of the total profit for the industry, the US industry AS A GROUP has recovered significantly. When you cnosider that the forecast for 2012 is for US carriers to post half of the global industry's profits, it says the US industry is going a pretty good job of adapting.

And now that AA has bought all the refridgerators, computers, microwaves, chairs , tables , desks, remodelled all the terminals, remodelled rooms, bought new airplanes, put wingletts on all the old ones and scores of others mods and silly expenditures they are going to find it harder than ever to post losses. $24 billion is a lot to burn especially when you have 40,000 less employees!

AMR will bring in roughly $300,000 per employee this year, they did not get to this number by outsourcing labor either which would artificially inflate that figure, in 2001 the figure was $147,000. AMR employees have increased their productivity by over 100%.

AMR chooses not to show profits because they are greedy, show losses now, use those losses to get concessions then show massive profits down the road.

 

[FWAAA]

And now that AA has bought all the refridgerators, computers, microwaves, chairs , tables , desks, remodelled all the terminals, remodelled rooms, bought new airplanes, put wingletts on all the old ones and scores of others mods and silly expenditures they are going to find it harder than ever to post losses. $24 billion is a lot to burn especially when you have 40,000 less employees!

Not a whole lot to burn once you add fuel plus labor costs. For full year 2011, fuel will be $8.6 billion and labor will be $7.1 billion. In 2001, fuel and labor did not consume anywhere near 65% of revenue. In 2001, fuel and labor were only 57% of AMR revenue. For 2011, wages will be down about a billion dollars but fuel will be up from $2.9 billion to $8.6 billion. That's an increase of $5.7 billion for fuel.

AMR will bring in roughly $300,000 per employee this year, they did not get to this number by outsourcing labor either which would artificially inflate that figure, in 2001 the figure was $147,000. AMR employees have increased their productivity by over 100%.

AMR chooses not to show profits because they are greedy, show losses now, use those losses to get concessions then show massive profits down the road.

"Chooses not to show profits." Uh-huh. Yep. That's the ticket.

 

[TWU informer]

And now that AA has bought all the refridgerators, computers, microwaves, chairs , tables , desks, remodelled all the terminals, remodelled rooms, bought new airplanes, put wingletts on all the old ones and scores of others mods and silly expenditures they are going to find it harder than ever to post losses. $24 billion is a lot to burn especially when you have 40,000 less employees!

AMR will bring in roughly $300,000 per employee this year, they did not get to this number by outsourcing labor either which would artificially inflate that figure, in 2001 the figure was $147,000. AMR employees have increased their productivity by over 100%.

AMR chooses not to show profits because they are greedy, show losses now, use those losses to get concessions then show massive profits down the road.

Sometimes even I wonder where you are coming from.

 

[FWAAA]

The total market cap of AMR (total value of all AMR common stock) was about $10 billion in January, 2007 when AMR peaked at $41/share.

Does anyone seriously believe that management would intentionally scuttle $10 billion of shareholder value just to administer a beatdown on labor?

Or might some of the causes be the $50 billion that AMR has spent on fuel since the concessions instead of the $20 billion managment had hoped to spend (what fuel would have cost since the concessions had it stayed at 2002's prices)? That extra $30 billion on fuel isn't a major cause?

Might some of the cause be due to the subsequent bankruptcies at other airlines where those employers gave their employees a beatdown, driving costs below AA's costs?

Might some of the cause be due to the growth of WN and B6, two lower-fare, lower-cost airlines that helped eat away at AA's revenue?