American Airlines pays about $34,000 in fuel

[Duke787]

@...Ever wonder how much it costs to fill the fuel tank on a Boeing 767 jet? CNBC answers that in a story that looks at American Airlines fuel costs, writing that "at the recent market price of roughly $3.85 a gallon, that means it costs about $77,000 to top off a Boeing 767." The network adds it takes about 9,000 gallons of jet fuel for a 767 to make a cross-country flight "That," CNBC writes, "means American Airlines pays about $34,000 in fuel costs alone for that flight, up $15,000 in just the past year. The airline takes in about $54,000 in total revenue for the average flight from JFK to LAX. That leaves the company about $20,000 to pay for everything else, let alone make a profit.' CNBC's interesting number-crunch comes as it looks at how AA tries to cope with soaring jet-fuel costs. CNBC says that "although American isn't about to go under, it is hurting. The $6 billion it saved in a painful, post-9/11 reorganization has been swept away in a whirlwind of rising fuel prices. The airline guzzles more than 95 gallons every second, draining its coffers by more than $20,000 a minute." Not surprisingly, American -– like all U.S. carriers –- is looking to cut fuel costs however it can. As part of its efforts to rethink the way AA consumes fuel, the company is taking an especially hard look at how weight and time spent on the ground affect its fuel consumption. "We spend 5% of our total fuel expense on the ground," Scott Turner, an AA pilot and the company's manager of flight operations efficiency, says to CNBC. "That's $500 million a year just spent taxiing these airplanes around." As for weight, CNBC says AA saves 14,000 gallons of fuel a year for each pound it lighten a plane's weight by. That statistic is largely behind the airline's decision move to remove magazines, and is leading the airline to replace its 19,000 food carts with new ones that are 17 pounds lighter, according to CNBC. The estimated savings from that: $7.3 million a year at current fuel prices, CNBC says.



It doesn't mention in this article, how the pilots leave the apu's on because they think that will affect Arpey's bonus!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[jimntx]

The airline takes in about $54,000 in total revenue for the average flight from JFK to LAX. That leaves the company about $20,000 to pay for everything else, let alone make a profit.'

Uh, has the idea of raising fares crossed anyone's mind? When the cost of providing fresh tomatos approaches the price being charged, that's what my favorite grocery store does? They increase the price being charged. And, they don't have to stop providing shopping carts, plastic bags or twist ties, or charge for those separately. What a concept!

That statistic is largely behind the airline's decision move to remove magazines, and is leading the airline to replace its 19,000 food carts with new ones that are 17 pounds lighter, according to CNBC. The estimated savings from that: $7.3 million a year at current fuel prices, CNBC says.

Remove magazines? First I've heard. Is this all magazines including American Way? How will we direct them to our "electronic device policy and other topics?" :lol

Or, is it just the other stuff they put in the seat back pockets these days? Of course, it may be moot either way. It seems like they've stopped repairing the torn/broken seat back pockets; soon, none of them will hold anything anyway. <_<

I keep hearing about these new carts. Has anyone seen any yet other than the displays in Ops? Like, on an airplane with catering stuff inside?

 

[Hopeful]

It doesn't mention in this article, how the pilots leave the apu's on because they think that will affect Arpey's bonus!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Duke, since you are obviously a newbie here, or maybe a veteran poster who decided to change your name,,,,let em explain to you the situation at hand....

This company has raped its employees and loves to use the slogan "PULL TOGETHER, WIN TOGETHER." The executives have been rewarding themselves handsomely because THEY MADE THE DECISIONS TO RAPE US....

If some of Arpey's bonus pay is stock price based, then he gets a tad less when the stock dives... But the board of directors just give him tens of thousand more of company stock to compensate the low price...

 

[jimntx]

If some of Arpey's bonus pay is stock price based, then he gets a tad less when the stock dives... But the board of directors just give him tens of thousand more of company stock to compensate the low price...

And, therein lies the fallacy in your argument. None of Arpey's bonus pay (nor the bonus pay of any of the other executives) is based on stock price. Nor is it based on any wild, outrageous measure like PROFITS.

The executive bonus plan is based upon the performance of AMR stock relative to a basket of other airline stocks. On the date that the measure is taken, AMR stock may be in the toilet. But, as long as it is swirling around a little higher in the bowl than the other airline stocks, the executives win.

 

[Hopeful]

And, therein lies the fallacy in your argument. None of Arpey's bonus pay (nor the bonus pay of any of the other executives) is based on stock price. Nor is it based on any wild, outrageous measure like PROFITS.

The executive bonus plan is based upon the performance of AMR stock relative to a basket of other airline stocks. On the date that the measure is taken, AMR stock may be in the toilet. But, as long as it is swirling around a little higher in the bowl than the other airline stocks, the executives win.

Fallacy????? Gee Mr. MBA Financial wizard.....poor performance = poor stock price = less $$$$ for shareholder....

But I do agree with your last sentence .....THE EXECUTIVES WIN.....


THEY ALWAYS WIN......

 

[The Goose]

...
Uh, has the idea of raising fares crossed anyone's mind? ...

The answer will lie in partial (if not complete) re-regulation. The kiddies don't have enough sense to stop undercutting each other to their own detriment.

Set fares to account for the cost of providing a given service plus a reasonable profit for an entity's time and trouble of providing said service. USA domestic airlines are one part of National Security and they need to remain viable.

Normally, I'd never suggest the government get involved in anything but in this case, they should. This mismanaged industry is incapable of straightening up by itself and even as incompetent as the feds are, I'm sure they could do a better job.

Just listen to the execs - what they scream and whine about is what it will take to fix the problems in the industry; they've simply found it too profitable (personally) to straighten out the mess they created.

They don't want to fix anything as long as they rake in the cash - damn the company.

 

[jimntx]

Fallacy????? Gee Mr. MBA Financial wizard.....poor performance = poor stock price = less $$$$ for shareholder....

But I do agree with your last sentence .....THE EXECUTIVES WIN.....


THEY ALWAYS WIN......

Do you really believe the executives hold on to the stock they are granted? As a rule, they cash in those options so fast it would make your head swim. They then take the cash and invest it in something safe, like oil company stocks.

I was just responding to the implication that running the APU excessively affects the executives one whit. It does not. It just advances the day that BK will be filed and the current stock and the employee options becomes worthless. (Yes, I am one of those people that when the stock hit $40 last year, I said, "When it gets to $45, I'm going to sell." :blink: )

BTW, how did you know I have an MBA?

 

[BigBangTheory]

BTW, how did you know I have an MBA?

Maybe he has a crystal ball???

 

[Hopeful]

Do you really believe the executives hold on to the stock they are granted? As a rule, they cash in those options so fast it would make your head swim. They then take the cash and invest it in something safe, like oil company stocks.

I was just responding to the implication that running the APU excessively affects the executives one whit. It does not. It just advances the day that BK will be filed and the current stock and the employee options becomes worthless. (Yes, I am one of those people that when the stock hit $40 last year, I said, "When it gets to $45, I'm going to sell." :blink: )

BTW, how did you know I have an MBA?

What I am saying is that even thought the stock price tanks, one way or another, the executive is affected... But gets more than compensated for it in other ways..

And of course running the APU excessively does not affect the executives one "whit." My point is that no matter what the company says we need to do is going to make one bit of difference...NOTHING! SO we might as well run those APU's and stay cool...

I am throught helping this company! I am through sharing the pain while the execs only share the gain...I do exactly what is expected of me for a paycheck.Nothing more, nothing less...

As for your MBA...I believe that one of the mandatory MBA courses covers the evils of unions and how bad they are for America and how the upper class executives are better than anyone beneath them...Some of your rhetoric is that of a trained finance professional..
Why are you not utilizing it to your full potential elsewhere? Is AA your life? Do you owe them your MBA?

Let me ask you and your MBA credentials....

If an executive holds, let's say, 100,000 shares of stock granted at any price, low or high,,,and tomorrow morning AA files for CH 11 bankruptcy,,,,are you telling me they he hasn't lost anything? Now, grant you, if AA GAVE he or she the stock,,,,sure he or she didn't LOSE anything, but that part of their compensation didn't pay off....

Now, unlike the workers of AA where I as a mechanic gave back $20,000 a year in return for 449 shares of stock....I immediatley LOST a ton of money because the stock would have to hit $300 a share for me to just break even....

 

[The Goose]

...
If an executive holds, let's say, 100,000 shares of stock granted at any price, low or high,,,and tomorrow morning AA files for CH 11 bankruptcy,,,,are you telling me they he hasn't lost anything? Now, grant you, if AA GAVE he or she the stock,,,,sure he or she didn't LOSE anything, but that part of their compensation didn't pay off.
...

Hopeful:

When the old pre-bankruptcy stock is voided, new stock will be issued for the reorganized corporation.

The creditors (that helped bring about the reorganization through their concessions) are first at the trough followed very closely by the executives (buzzards with a suit and tie).

 

[Hopeful]

Hopeful:

When the old pre-bankruptcy stock is voided, new stock will be issued for the reorganized corporation.

The creditors (that helped bring about the reorganization through their concessions) are first at the trough followed very closely by the executives (buzzards with a suit and tie).

Of course,,,,all this taking care of the executives while the workers stand in line for crumbs...

Just look at the recent airline bankruptcies where the companies asked the judges to abrogate the union agreements while asking for increased compensation for the top executives so they would not jump a sinking ship....

Shameful....

 

[The Goose]

Of course,,,,all this taking care of the executives while the workers stand in line for crumbs...

Just look at the recent airline bankruptcies where the companies asked the judges to abrogate the union agreements while asking for increased compensation for the top executives so they would not jump a sinking ship....

Shameful....

We've all seen it. The unfortunate thing is there's little to be done about it as these people found out long ago that ethical behavior in that level of business doesn't pay very well at all.

 

[frontline]

Uh, has the idea of raising fares crossed anyone's mind? When the cost of providing fresh tomatos approaches the price being charged, that's what my favorite grocery store does? They increase the price being charged. And, they don't have to stop providing shopping carts, plastic bags or twist ties, or charge for those separately. What a concept!

How can you work in our industry - and claim to have an MBA - and have so little understanding of basic economics? I'll spell it out for you: air travel isn't like buying food. If food goes up in price, it's a necessity that people will continue to pay for. Think back real hard to those econ courses about a concept called "elasticity of demand." If airlines raise the price too much it will kill demand and that $54,000 in revenue per flight may drop to $50,000 or less. Even though the airline raises prices (actually, as a direct result of it).

 

[eolesen]

It's also called the equilibrium point...

 

[jimntx]

The MBA school I attended was less interested in teaching economic theory--and most of the economic models out there are just that...theory--and more interested in teaching business facts, such as "If you consistently sell your product for less than it costs to produce, it won't matter how elastic the demand is, you'll be out of business."

As far as your vaunted elasticity of demand...
1. The travelers most likely to forego travel if the price goes up are the same people who think they have a Constitutional right to transcon airfares less than $100 each way. Losing them will not seriously affect the bottom line of AMR. In fact, we would be well rid of those passengers.
2. The travelers we most depend upon, the business traveler, will not much care if fares go up. The increase will either be passed on to their customer, or they will deduct it from their business income tax as an expense.