American's Revenues Fall Short Of Estimate

[Checking it Out]

LATEST NEWS
12:20 PM CDT Wednesday
American's revenues fall short of estimate

Fort Worth-based AMR Corp., parent of American Airlines Inc., is $1 billion short of revenue projections it presented to its unions last year while trying to win concessions to turn around the carrier's finances, a union official says.


The unions, fearing American was near bankruptcy, agreed to contribute $1.62 billion in annual wage and benefit concessions to keep the company solvent -- including $660 million a year from American's pilots.

The resulting lower-cost contracts have been in effect since May, but American's revenue is $1 billion less than the company predicted for the year, said John Darrah, president of the Allied Pilots Association, in a letter to the pilots union's members.

The high cost of jet fuel could increase the shortfall to $1.8 billion by the end of the year, he wrote.

"Granted, there are many variables that have impacted these results," Darrah said, defending his actions in helping push the concessions. "But even if we were to account for these influences, AMR's financial results would still not meet the goals identified in their restructuring plan based on the model from which we based our concessions,"

Darrah did not run for re-election and Ralph Hunter, one of the contract's key negotiators, was elected to take his place.

American has acknowledged that its results haven't matched earlier projections, but company officials say they will not seek more concessions. The carrier has blamed rising fuel prices -- it expects to spend $600 million to $700 million more this year -- for halting what it believes could have been a successful turnaround.

AMR will announce its second-quarter earnings July 21 and analysts believe the company will almost break even. AMR lost $166 million in the first quarter of 2004, after losing more than $6.4 billion in the previous three years combined.

 

[Checking it Out]

American Airlines said Wednesday that June traffic increased 8.2 percent to 11.7 million revenue passenger miles compared with 10.8 million a year ago. ...

Southwest Slashes Fall Fares To $39, $99

WESH.com, FL - 1 hour ago
... American Airlines, Northwest Airlines and US Airways are already moving to match the sale fares. Consumers have until Aug. 5 to buy tickets. ...

Looks like compitition and rising fuel cost are going to have a big impact on profitability this year. I see we at AA made the smart choice last year! No matter how painful it was!

 

[PRINCESS KIDAGAKASH]

CIO, since the company says it's a BILLION$ short, how much is the TWU gonna give ARPEY this year? I've asked this before, and I will ask the question again. How much lower will you be willing to go CIO,TWUER?

 

[local 12 proud]

"just be glad ya got a job brother", "they can do that ", "look at all the jobs we saved", "we'll get'em next time", "live to fight another day", "if we don't concede they will chapter 7 the place", "if amfa gets in they will contract out all maintenance"........................................

 

[Hackman]

"American has acknowledged that its results haven't matched earlier projections, but company officials say they will not seek more concessions." Dallas Morning News.

'Ol cio the twu company man. Anything the company says has got to be true, they have never lied to us before. Whew!!! That makes me feel better.

I know at the AA I work at, if their lips are moving, they're lying. (twu or management)

The twu has never met a concession they didn't like. AA management loves them.

HOW LOW WILL YOU GO?

NO VOTE? NO PEACE!!!!

 

[Checking it Out]

Hack, Are you running for a position with the TWU to makes changes or are you going to volunteer for the RO committee to ensure AA is keeping work in-house ?

 

[Rusty]

cio, are you going to stay in the company's bed or, are you going to join AMFA?

 

[Hackman]

Hack, Are you running for a position with the TWU to makes changes or are you going to volunteer for the RO committee to ensure AA is keeping work in-house ?

1. If I did run cio, and was elected, I would be removed by unelected Sunny Hall and the unelected twu International henchmen. Why? Because I would not be a suitable twu yes man. I would seek major changes, and we all know that will never happen.

2. If your twu International can't get an RO report and verify it, then you don't know whats going out the door. The twu claims the outsource rate is 21%. I have read reports from the DOT and Aviation sources that state its from 38% to as high as 47%.

3. I would not waste my time in trying to make the twu into "AMFA lite".

NO VOTE? NO PEACE!!!!

 

[Bob Owens]

Whats the point of this post CIO? Didnt you once post that AA was making money and then claim that our concessions were working? So what are you saying now? That they are not working?

 

[scorpion]

Hack, Are you running for a position with the TWU to makes changes or are you going to volunteer for the RO committee to ensure AA is keeping work in-house ?

Since you have all your srp's trained why not use your influence and get a copy of how much work is outsourced per the scope clause. July is here so lets have it, post it, flaunt it, nows your time to shine and while your asking for this mythical document tell ol jimmy you want it on official company letter head with a contact person to verify its authenticity. This is where you start getting the phone tag and email tag b.s.

 

[James T. Kirk]

1. If I did run cio, and was elected, I would be removed by unelected Sunny Hall and the unelected twu International henchmen. Why? Because I would not be a suitable twu yes man. I would seek major changes, and we all know that will never happen.

2. If your twu International can't get an RO report and verify it, then you don't know whats going out the door. The twu claims the outsource rate is 21%. I have read reports from the DOT and Aviation sources that state its from 38% to as high as 47%.

3. I would not waste my time in trying to make the twu into "AMFA lite".

NO VOTE? NO PEACE!!!!

Garry here is a good compain picture for you.

 

[James T. Kirk]

Garry here is a good compain picture for you.

Ops, that should read ( Garrrrry here is a good campaign picture for you).

 

[Rusty]

Ops, that should read ( Garrrrry here is a good campaign picture for you).

Hey Kirk, here is a picture of a person who claimed to be an A&P mechanic but, was later found to be just another typical twu liar!!!

 

[TIME FOR CHANGE]

The company will say they lost money until we are working for minimum wage.


The twu will grant concessions until we are at minimum wage.


The concessions will never end at AA with the company union.


But at least we have a job. Vote twu and degrade the profession of the AMT.



The fact is the twu suxs and they get worse with every contract negotiation.




What happened to June 28th chicken sit little. You showed them just like you showed them at the contract negotiations. I cant wait until the early opener comes up. I am ready to give them my under ware so the insertion is quick and easy. You spineless coward. Work for dog sit and eat it. ATD my arse. This union suxs.

Oh but thank the gods of the Air Transport Division that I have a job making less than I did 15 years ago. What a bunch of crooks.

WAKE UP PEOPLE minimum wage is next. Sign a card and vote these scum bags out of your deteriorating life.


More losses on the way at AArogant Airlines and more concessions to follow.

The useless TWU the leader in concessionary contracts that is a fact.

 

[Checking it Out]

Low-cost airlines

Turbulent skies

Jul 8th 2004
From The Economist print edition

Innovative and bold low-cost carriers have transformed the airline industry on both sides of the Atlantic. But are they now doomed to lose their momentum?

EVER since its creation nearly a century ago, the commercial-airline industry has been prone to abrupt ups and downs. Changing aircraft technology, big capital investments and the shifting priorities of governments have repeatedly forced airline operators to scramble to stay aloft. Yet few of these periods of change have promised to transform air travel as thoroughly as the wave of increased competition, new entrants and aggressive price cutting now sweeping through the airline business in both Europe and America. A slew of new low-cost airlines is attacking big incumbent network carriers, some of whom will probably not survive. What shape the industry will take after this shake-out remains unclear, but one thing seems certain: passengers are already being offered more choice and better prices.

When low-cost airlines were first launched in Europe after the liberalisation of Europe's domestic airline market was completed in 1997, Ryanair and easyJet, the pioneers, explicitly and expertly mimicked American budget airlines such as Southwest and ValuJet (now AirTran). The essential elements of the business model were: a single-type fleet of planes; fast turn-rounds; use of cheap secondary airports; no frills—definitely no moisturiser in the toilets; and enticingly low fares that rose only as a flight filled up.



The airline industry

Aviation Economics, Ryanair, easyJet, Southwest, AirTran, JetBlue, Frontier, Song, Ted, Independence Air, Virgin America, AirAsia

But today the American and European budget-airline sectors have somewhat diverged. Partly this reflects the relative maturity of the concept in America and its youth in Europe. But intriguingly, the differences go deeper than that. America's budget airlines are starting to move upmarket in service quality, whereas Europe's give every impression of moving relentlessly downmarket. They emphasise dirt-cheap tickets, yet they are also expanding as they try to fend off start-up competitors. At the same time, both of Europe's leading low-cost airlines have blurred the simplicity of the original business model they adopted from their American predecessors.

A generation after deregulation of America's airlines in 1978, low-cost carriers have seized control of the domestic market. It was not always thus. Of the 34 newcomers created after deregulation, 32 soon went bust. Those were the days when the strong, incumbent firms such as American Airlines could simply unleash even lower fares whenever a low-cost upstart invaded its market. Before the antitrust authorities could do anything about it, the competitor was crushed.

Low-cost airlines may now be mature as a concept in America, but the market remains in flux. Since September 11th 2001, the six largest network carriers have slashed costs and reduced capacity by one-fifth as they have struggled to stay financially solvent. Even before the terrorist attacks, however, budget airlines were on a roll. Since 2000 they have expanded capacity by 44%. Low-cost carriers currently have 400 orders out for new planes, whereas the old network carriers have only 150 planes on order.

Most of the expansion has come from JetBlue, Frontier and AirTran; Southwest, which accounts for nearly half the sector, has been obliged by the wider air-travel recession to check its expansion, although it is now returning to its former growth path of 10% a year. Southwest is the fourth-largest American airline by passenger numbers, and so was bound to suffer more than younger budget carriers.

Behind the current recovery there lies a bitter truth for network carriers. Though their passenger numbers are rising, revenues remain flat because they cannot raise prices. As the cost of jet fuel soared in the spring, some network carriers tried to compensate by raising ticket prices, only to give up within days. Budget airlines control pricing in the market.

The cost advantages enjoyed by low-cost carriers are striking. Flexible workforces mean that airlines such as Southwest need only 80 workers to fly and support each aircraft, compared with 115 or more at a traditional network carrier. For passengers, the clearest evidence of the rival cost structures is the way the cabin staff of low-cost carriers parade rubbish bags before and after each landing, performing the task assigned by the network carriers to an expensive, standby cleaning crew.

full story