Amr first quarter reusults
- Thread starter damajagua
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Jamie Baker of JP Morgan asked Arpey the following:
"Is American thinking of any bold new ideas to shake things up, "above and beyond new flights to Helsinki?" Baker asked. "I'm quite confident that the market would reward you for some really fresh thinking. Any thoughts?"
Arpey's response was not all that impressive. Read more at: http://finance.yahoo.com/news/On-the-Call-Analyst-apf-3582472088.html?x=0&.v=1
To be fair to AA, however, it did just gain approval to implement its TPAC joint venture with JAL and has just begun to implement its joint venture across the Atlantic with BA and IB. AA may not need any "bold new ideas to shake things up," what it needs is some time to make its TATL joint venture payoff (like NW, DL, UA and CO have enjoyed for years). On top of that, fuel is over $3/gal, and at that price, no legacy airlines are gonna make money in the first quarter. Add to that the Japan catastrophe.
And, of course, AA needs to get its costs inline with its competitors.
"Is American thinking of any bold new ideas to shake things up, "above and beyond new flights to Helsinki?" Baker asked. "I'm quite confident that the market would reward you for some really fresh thinking. Any thoughts?"
Arpey's response was not all that impressive. Read more at: http://finance.yahoo.com/news/On-the-Call-Analyst-apf-3582472088.html?x=0&.v=1
To be fair to AA, however, it did just gain approval to implement its TPAC joint venture with JAL and has just begun to implement its joint venture across the Atlantic with BA and IB. AA may not need any "bold new ideas to shake things up," what it needs is some time to make its TATL joint venture payoff (like NW, DL, UA and CO have enjoyed for years). On top of that, fuel is over $3/gal, and at that price, no legacy airlines are gonna make money in the first quarter. Add to that the Japan catastrophe.
And, of course, AA needs to get its costs inline with its competitors.
AANOTOK
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Oops! You left out "labor" between it's and costs. 🙄
Come on, if you are going to talk like management you better get the words right. Dont leave anything out or the scare tactic wont work. You forgot LABOR in your bullsh** comment. Now try it again.....
WorldTraveler
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AMRs first quarter financials had mixed news.
First, revenue from fare increases did appear to largely cover the increased cost of jet fuel… that might continue through the 2nd quarter since many of the tickets sold should now have the fare increases in them… still there has been a lot of discounting going on, esp. prior to summer in order to keep loads propped up… all the fare increases might be undone if you have to put seats on sale in order to move them.
2nd, AA did a good job of controlling non-fuel costs and much of it came though keeping capacity up… not surprisingly, AA finally succumbed to remove some capacity later in the year – as analysts wanted them to do but at levels below what other network peers are doing. Clearly, AA’s reluctance to remove capacity is to keep CASM from going up.
3rd… yes AA has more cash on hand but they also have more debt. AMR’s total debt went up by $1.5B while their net debt (which factors in cash) went up by a couple hundred million. AMR has taken on debt to keep the bank balance up… not terribly novel but it will add costs.
4th…AA’s system RASM increased by 5%... based on earlier guidance from other carriers, they expect theirs to rise almost twice that amount. AA’s RASM growth on the Atlantic and Pacific were both negative; Atlantic capacity was flat while Pacific was up 23% and that was before the LAX-PVG route started. Given that the JFK-HND route was operational, it will be interesting to see UA and DL’s Pacific RASMs where DL started and quickly cut its HND flights and UA which has a smaller percentage of Pacific capacity in Japan – and no new HND flights – than either AA or DL. AA’s domestic RASM growth was the same as in Latin America although domestic capacity was flat and LatAm capacity grew at a healthy 10% rate.
5th – the biggest cut in AMR’s costs both in terms of percent and dollars was in maintenance materials and repairs at 13% or $46M.
First, revenue from fare increases did appear to largely cover the increased cost of jet fuel… that might continue through the 2nd quarter since many of the tickets sold should now have the fare increases in them… still there has been a lot of discounting going on, esp. prior to summer in order to keep loads propped up… all the fare increases might be undone if you have to put seats on sale in order to move them.
2nd, AA did a good job of controlling non-fuel costs and much of it came though keeping capacity up… not surprisingly, AA finally succumbed to remove some capacity later in the year – as analysts wanted them to do but at levels below what other network peers are doing. Clearly, AA’s reluctance to remove capacity is to keep CASM from going up.
3rd… yes AA has more cash on hand but they also have more debt. AMR’s total debt went up by $1.5B while their net debt (which factors in cash) went up by a couple hundred million. AMR has taken on debt to keep the bank balance up… not terribly novel but it will add costs.
4th…AA’s system RASM increased by 5%... based on earlier guidance from other carriers, they expect theirs to rise almost twice that amount. AA’s RASM growth on the Atlantic and Pacific were both negative; Atlantic capacity was flat while Pacific was up 23% and that was before the LAX-PVG route started. Given that the JFK-HND route was operational, it will be interesting to see UA and DL’s Pacific RASMs where DL started and quickly cut its HND flights and UA which has a smaller percentage of Pacific capacity in Japan – and no new HND flights – than either AA or DL. AA’s domestic RASM growth was the same as in Latin America although domestic capacity was flat and LatAm capacity grew at a healthy 10% rate.
5th – the biggest cut in AMR’s costs both in terms of percent and dollars was in maintenance materials and repairs at 13% or $46M.
strikeforce
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Like I said before.....AA keeps mortgaging the farm....debt went up 1.5B and I'm sure interest went up as well. Not a good way to run a company. Only saving grace is the 6B in hoarded cash. That's the only reason Wall Street keeps loaning AMR money. Management is running the company just like our politicians are running this country.....on BORROWED time! keep up the good work!
strikeforce
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after reading the company results and statement I get the feeling that management is proud that we lost 436M. I mean, when Arpey indicates that we had "improved results over 2010", and in 2010 we lost 505M, I'm sorry but he needs to go! Just typical of AA management's arrogance. Correct me if I'm wrong but I believe under Arpey AA has had only ONE profitable year out of the last 8 years of concessions. I said it before...these guys are purposely sabotaging the ops in order to cry poor during negotiations. Absolutely pathetic!
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