Amr first quarter reusults
- Thread starter damajagua
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Tex-Mech
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Wow what a revisionist recollection of the Crandall days. I recall the man being an @-hole who used layoffs and recalls to get concessionary contracts voted in. I recall flexible benefits, srp, 6.5% over 6 years, and many other concessions. I don't recall being happy with Crandall. Then again, considering that Chicago was happy enough to vote in the T/A, maybe you were happy back then. 😛
strikeforce
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Tulsa & AFW agreed to SRP's & OSM's.....flex benefits were flow-thru items that we all accepted & the TWU never negotiated.....I'll take layoffs over crushing concessions anyday....and right now 6.5% over 6 years compares to winning the lottery....I accrued 10 sick days @ FULL pay...time & half and double time for overtime...double time & half for 10 holidays and kept my vacations....80 days for Injury on Duty.....and I voted NO for the T/A! YOU'RE DAMN RIGHT I WAS HAPPY!!! I'll take Crandall over Arpey & Carty anyday!
strikeforce
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I get the sense that you're happy with Arpey & Horton!
After reading just about every post you have made, I think you have got the me, me, me, me, me attitude. First overhaul vs line, layoffs and concessions, and others I don't even want to bring up again. It seems to me you would like to work in a non-union shop where you can screw everybody else and get what you want instead. As long as your taken care of, the heck with everyone else. I think management might have some openings you might consider.
Tex-Mech
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Never said anything close to saying that I was happy with Arpey, Horton, or even Carty for that matter. Simply commenting on the your recollection of the Crandall days. BTW...the srp program was a product of two of Chicagos finest, Ed K and John O.
Hopeful
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Operation was dismantled, not the routes.
Imjustsayin
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Jeez, really? Smell the coffee dude/victim. All of that is barn droppings! Uh, you don't get it. I'm out.
strikeforce
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If you don't like my posts, don't reply!
I'm not sure where you work, but the issues I present are real. Line vs. OH is real.....layoffs or concessions is real. I've been screwed 19 out of my 21 years at AA, and I don't see anyone else give a rats ass. It's absolutely pathetic. Union? It's a joke!Go ahead and do nothing, and wait for AA to just give you a handout. So, you think it's all about ME? Look around buddy and see how many of our so-called union brothers will cut your throat to get a better deal. Don't fall, you might get kicked by your lower seniority union brothers. That's the type of union we have! No wonder AA plays us like a grand piano.
Like I said before....people on this forum DON'T want to hear the TRUTH!
Tex-Mech
Veteran
I don't believe, but I can agree with your overview of the situation. And it is the same in overhaul, but we prefer OH vs. Line. 😛
I can say that here, there really isn't a union made up of members, it is more like a bunch of disgruntled mechanics who sit around and blame their life struggles on those who get elected to office at the local level because they are pissed off that the intl drives buicks, the exectuives of this company takes bonuses, and the twu backs democrats who want to tax the rich more. I'm not saying it is acceptable to buy buicks or give bonuses, but at some point they need to realize that those are minor things compared to having barely any solidarity. Heck I've had amp guys tell me that they would cross a twu picket line, and twu guys tell me that they would cross an amp line. I see title 1 guys treat title 2 and stores like cr@p all the time. They just don't get it. Rant of a day on the life at AFW is over. 🙂
Frank Szabo
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Divide and conquer is the chosen tactic of AMR and its wholly owned subsidiary, the TWU. All that's necessary is playing egos against each other and, unfortunately, ALL titles groups aren't bright enough to see this happening.
"How is it those who hath wrought such wonders lack the sense of geese?"
[sub]from "The Wrath of Abibarshim" by Paul Pendragon[/sub]
So why do you keep working at AA? Are you unemployable anywhere else?
Nothing personal intended.
WorldTraveler
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Other airline management teams figured out that when you have to deliver bad news, do it fast and get it over with. AA’s current leaders may be trying to be nice to AA employees by not “lowering the boom” but it only drags out the pain and ultimately still doesn’t get the ship turned around.
I don’t think it is a coincidence that DL heavily used early out programs from right before its BK until the NW merger and in so doing allowed a lot of people who didn’t want to stick with the ups and down of the airline industry to get out… other airlines have used early outs but I don’t know of any airline that has used them as much as DL did during its worst days.
I also think that DL will offer early outs as soon as the representation issues are settled to allow some of the PMNW people to go but they can’t offer them on either side because it would probably be a violation of “laboratory conditions.”
IIRC, AA has never entered CAI, LIS, or TLV, all cities served by TW in the summer of 2000 from JFK. Other cities in southern Europe were not served continuously through the acquisition.
I’m sure there is a little sarcasm here but let’s dissect the question and as we do look at how UA and DL grew to the size they have in NYC and with it why AA has not.
First, a little historical tour of NYC is in order.
NYC as many of the major cities on both coasts were divided between carriers. NYC, BOS, and LAX etc were all considered important and large markets but weren’t geographically ideal for early hubs which were placed inland. As a relatively small airport, LGA’s heaviest routes have been to the various carriers’ inland hubs and focus cities, to/from Florida, and to the major east coast business markets. JFK was largely the longhaul version of LGA for domestic markets as well as the int’l airport, primarily the domain of TWA which provided nonstop service to the major western Europe capitals as well as the foreign flags. Historically, EWR was a backwater airport.
All this changed with People Express which tried to turn EWR into a NYC airport. Eventually, CO’s restructuring plan was built around EWR and for the first time, NYC had a true global hub at one of the area’s airports. CO obtained significant revenue premiums by quickly dominating the NYC air travel market.
Prior to 2000, AA, DL, and UA all had a presence in NYC. AA and UA largely split the northern tier US flows and the transcons while DL along w/ US (and EA and others before) dominated north-south traffic.
The LHR acquisitions by AA were pivotal for AA which became the largest carrier at JFK and remained so until the mid-2000s when DL displaced AA. AA largely “won” the contest for NYC with UA who ultimately left the NYC-LHR market (the largest int’l market in the world) completely to AA. UA remained in the transcon market by walking away from the majority of the passengers, focusing only on the high revenue top of the market (although probably making more money in those markets than either AA or DL who compete for the whole market). AA’s strength as the business airline of NYC can be seen by the fact that AA was able to make JFKNRT work despite not having a hub on either end (other than the JL codeshare – not a JV at the time) and that AA was by far the largest revenue carrier in NYC-GRU (one of AA’s largest revenue premiums to the industry in any market on AA’s system).
CO continued to build EWR as a full-service hub and they succeeded largely because their low labor costs – still a benefit from their bankruptcies in the 90s and their continuous hiring of new employees – but AA and DL were content to let CO “do its thing” in NYC.
That changed in the early 2000s when DL decided it wanted a larger portion of the NYC market; since DL’s network was largely up and down the east coast, it wanted a larger portion of the higher revenue east-west domestic markets as well as key int’l markets from NYC, instead of just settling on the profitable but highly seasonal Mediterranean markets that were the backbone of TW and PA’s networks – and which were the basis of DL’s JFK network for 10 years after that acquisition.
DL first tried to buy CO to get a larger piece of the NYC market but because of DL’s poor negotiating skills (ironically involving HR integration or so it was reported), the CO merger fell through and CO strengthened its relationship with NW.
Forced to build NYC on its own or walk away from it, DL poured enormous amounts of resources into NYC, esp. post BK. A great deal of the increased 767 time made available from DL’s removal and reconfiguration of international 767s from domestic routes went to JFK which is now the largest of DL’s gateways to Europe, bypassing ATL to Europe (but not transatlantic since more of DL’s African capacity is to/from ATL).
DL’s efforts can be seen in its ability to start LGA-ORD where it now has about a 15% market share, still one-third of AA’s but notable considering DL only uses 2 class Ejets but still gets average fares comparable to AA and UA’s. DL also started JFK-NRT post-merger, a route neither DL or NW could make work pre-merger but in the first summer, DL became the largest revenue carrier in the NYC (including EWR) to Tokyo market. DL now carries almost as revenue NYC-NRT as AA and CO COMBINED and at average fares higher than either AA or CO. Note that since AA announced the JV with JL, its average fares to NRT have jumped, allowing it to move from the #3 to #2 US carrier in NYC-NRT , showing the power of alliances. However, the CO/UA merger and CO’s entrance into the Star/NH JV will undoubtedly reshuffle the market even further, something AA will try to tilt in its favor with the HND route, although the value of HND seems minimal at best for any carrier.
Finally, DL is now carrying very close to the same level of passengers as AA is from NYC to LHR at average fares comparable to AA’s and superior to the revenue CO is getting on its LHR flights.
The net sum of all of this is that DL’s average fares relative to the industry average for NYC over the past five years have jumped more than 20% while AA’s have dropped about 10%; AA and DL now have nearly identical average fares from NYC while DL is the larger revenue player – by a factor of about 20%. CO still has an average fare advantage, partly because EWR has much less low cost competition than LGA or JFK but that of course changes with WN’s entrance to EWR.
So, how did this all happen… let’s look honestly at what happened, how DL accomplished what it did, and how AA could have or still could regain its position in the NYC market – and whether it matters. Debate the issues and challenge my assumptions – because agreeing on these matters is critical to understanding the future for AA, DL, and UA, not just in NYC but nationwide – because in many respects NYC is a microcosm of the larger US market.
First, the slots. NYC was not fully slot controlled until the past couple years. EWR was not slot controlled at all and JFK was only slot controlled during the peak evening rush. LGA has long been fully slot controlled.
Several years ago, DL rushed in and added a bunch of RJ flights at both LGA and JFK; congestion was bad and DL only made it worse. But sure enough, full-time slot controls were put in place at all three airports - but DL still managed to end up w/ the most slots of any airline at JFK.
LGA is an interesting case study on slots. IN the past five years, AA has actually REDUCED its schedule at LGA by about 14% in terms of flights and about 8% in overall capacity. Obviously, these numbers say that AA pulled out of a disproportionate number of RJ markets from LGA but still pulled down a lot of capacity. In fact, only UA pulled down more capacity at LGA. Further, AA and UA both pulled down capacity in LGA-ORD so that half of the capacity that DL added to LGA-ORD replaced capacity which AA and UA pulled down!
Lest you come to the conclusion that DL simply is flying a bunch of regional jets in/out of NYC, the average a/c size for DL and AA at LGA is comparable at just over 100 seats. The real “waste” of LGA slots comes from US who has an average aircraft size of less than 65 seats. Not hard to see why US wants to get rid of a lot of slots in the DL slot deal.
It’s also not hard to see how DL will be further able to move the NYC market if the slot deal goes through; while DL has not commented on the odds of it happening, US has said it is more likely than not to happen and both DL and US have put their lawsuits against the FAA on hold, apparently waiting for the approval of the WN-FL merger which will give WN about 25 flights/day at LGA.
Given that DOT statistics show that the NYC still prefers JFK and LGA over EWR for NYC originating traffic based on average fares and market size at LGA or JFK vs EWR, the chances are very high that with the slot deal, DL could overtake even the combined DL/UA as the largest airline in NYC as a whole.
The implications are esp. significant for AA if DL is able to create a true hub at LGA which would eliminate the traditional divisions of the LGA market between carriers, allowing DL to create at LGA what exists in other inland hubs and what CO created at EWR – concentrate the market into the hands of a single carrier which will be checked by the presence of low fare competition – the same concept that exists at hubs like ATL, CHI, DEN and others.
Let me repeat that first part again because it is VERY CRITICAL.
The implications are esp. significant for AA if DL is able to create a true hub at LGA which would eliminate the traditional divisions of the LGA market between carriers.
So, Mikey, NYC may be slot controlled now but it wasn’t always and DL has been very aggressive in obtaining what it needed in order to build its presence in NYC such that it currently has 90% of CO’s local NYC average revenue. The slot deal will allow DL to further build on its presence in NYC despite the UA/CO merger. Look for DL to add key markets like LGA-DFW and LGA-MIA as well as other key hub markets for other carriers such as IAH and CLE. .
Is AA’s future in NYC at risk? You tell me but I can say with a fair degree of certainty that AA will drop even further in the rankings even if the slot deal doesn’t go through based on the concentration of the market that has already occurred. IF DL uses the slots more efficiently than US has, the chances are quite high that the NYC market will be divided between DL and UA with a heavy LFC presence by B6 and WN.
When you see that DL is filling a higher percentage of its NYC flights with NYC local revenue than even CO despite higher CO capacity, it’s not hard to recognize that DL’s perhaps forced decision to build NYC on its own actually will result in more revenue for DL with fewer flights than CO who maintains its schedule at EWR which much higher percentage of connecting passengers than AA or DL do at LGA or JFK.
DL and CO/UA are in all of the key domestic markets and also serve far more markets in continental Europe. While AA has added service to a number of new cities esp. to its codeshare partners’ home markets, DL has remained the largest revenue carrier from NYC to all of those markets. Even in neutral (to each other) markets like BRU and ZRH where AA has long had an advantage, DL has shifted revenue to be on par with AA.
The key advantage AA has right now is NYC-Latin America. GRU is one of AA’s highest revenue premium markets yet DL and CO are well established and generating revenues sufficient for them to stay there.
EZE is the only major market that AA uniquely serves and it is very likely that DL will once again add JFK-EZE once AR joins Skyteam.
Factor in that AA has not been able to stay in many large but relatively low revenue north-south markets to/from Florida, and the ability becomes clear for DL to become the one-size-fits all airline on the NY side of NYC while CO will do the same from EWR (even though it generates less local revenue than LGA and JFK).
So where does that leave AA in NYC?
Let’s summarize
1. DL decided it had to become a larger player in NYC and move away from its north-south niche. AA was content to be a niche player even though its niche was the top revenue markets from NYC.
2. DL added service to key markets including NRT, LHR, and GRU as well as in the transcons, and LGA-ORD, one of AA’s “backbone markets”.
AA added service to key secondary markets but DL still is a larger revenue player in most of the int’l markets from JFK in which it competes with AA.
3. CO built NYC via EWR which gave them a strong presence but the affinity of NYC travelers is for LGA and JFK.
4. AA reduced flights at LGA, even suggesting that the way to deal with the congestion was to reduce the number of slots held by existing carriers, tantamount to unilateral nuclear disarmament. DL added flights and ultimately obtained a slot premium which was translated into a passenger and revenue premium relative to other NY, NYC carriers. Suggestions that AA could use slots seem far-fetched considering that AA has reduced LGA flights (where did their slots go?)
5. AA is using alliances to beef up its presence in NYC, but the other two alliances are larger. DL’s revenue and share of NYC-Asia is just about larger than AA and CO combined even without the help of an alliance partner.
6. DL recognized a domestic merger would help its presence; NW delivered the dominant position from NYC to the Midwest to DL.
7. DL recognized that it could no longer be the largest airline in the low fare NYC-Florida markets but it still maintains the only network carrier service in both LGA and JFK to nearly all Florida cities – LGA-MIA being the key missing element in DL’s NYC-Florida network.
8. DL maintains a cost structure that allows it to compete in low fare carrier markets and profitability that allows it to remain in key markets such as the transcons which are probably not profitable for DL during most of the year but which are strategically necessary. AA’s tolerance for development and unprofitable flying is much lower.
And the implications for AA are the same nationwide…
DL has accomplished the same thing in BOS as they have in NYC, a market which has long been divided between multiple carriers but where AA was the largest international carrier. With DL’s addition of BOS-LHR service – which will likely lose money for both DL and AF for some time as part of the price of winning the market – yet another key business market shifts from the AA to DL column – but here UA/CO won’t change the situation because neither were large. AA continues to hang into the transcon markets which DL has so far not attempted to reenter but instead leave to the low fare carriers.
DL has started chipping away at MIA, first on TATL routes where it already carries about 40% of the MIA-Europe traffic even without flying nonstop.
You don’t have to be a rocket scientist to see that DL’s strategy is to continue to move into key AA markets, focusing first on the east coast where DL is strongest but continuing to go after some of AA’s top revenue. Based on all accounts, DL has made a lot of progress not just in NYC but up and down the east coast, key markets not only for Europe and US based corporations but also for Latin America.
Not entirely… DL largely built JFK on its own… NW had a minimal presence there. All NW really contributed to the DL JFK operation was the ability to make NRT work very well because of a hub in Asia and the 744s and 330s which have allowed DL to very cost effectively add a lot of capacity to some TATL routes. NW did add bulk to LGA but note that DL plus NW as of the end of 2008 (the year the merger legally closed) was still smaller added together at LGA than AA was… it was only in 2009 that DL passed AA as the largest revenue carrier at LGA. By the end of 2010, DL was the largest revenue carrier at LGA with about a 30% revenue share for a revenue total 25% larger than AA. Also, CO and UA are largely combining “end on end” in NYC… building on UA’s strength at LGA and JFK (although one of the smallest network airlines) and CO’s strength at EWR. Combined, though, CO/UA are the largest revenue carrier right now in NYC although DL carries more local NYC passengers.
But again, AA had the opportunity to participate in mergers but said they would focus on being a niche carrier.
You tell me how you think that strategy is working but all the evidence I see is that the conventional wisdom of the airline industry which says that size directly correlates to the ability to control revenue is still correct.
Seriously, A 2500 plus response to a 2 sentence sarcastic remark about the fuzzy math you use in an attempt to make Dal and Ual look like something they are not. It doesn't take a rocket scientist to know what your 10 paragraph response is filled with. I am sure they are equally impressed with your dissertations at the NASA web board, on how Dal is going to reinvent space travel and colonize other planets through ATL and JFK.
I agree 100% Hang it up WT and go somewhere else! You come work a day at AA and then you can comment.
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