BA values AMR deal at $500m in sales.

[Hopeful]

Wonder what value AMR places on this deal?

http://www.bloomberg.com/news/2011-02-08/british-airways-says-amr-venture-may-add-500-million-in-revenue.html?cmpid=yhoo

 

[FWAAA]

Last July, Horton said that various alliance benefits plus the cornerstone strategy would be worth about $500 million in annual revenue:

We estimate that we’ll see an aggregate of over $500 million in revenue improvement and cost savings from network realignment and alliance activities. We expect to realize most of this improvement in 2011 and reach the full run rate by the end of 2012.

This estimate includes the impact of our recently launched cornerstone strategy, focusing our network assets on the four largest metro areas in the U.S., New York, Los Angeles, Chicago and Dallas-Fort Worth and of course, Miami, the hub of the Americas. During the second quarter, we added flights in Chicago and New York and yesterday we implemented our commercial agreement with JetBlue, adding connections for our customers through both New York and Boston, to 14 of American’s international destinations and 18 JetBlue markets domestically.

http://seekingalpha.com/article/215737-amr-corporation-q2-2010-earnings-call-transcript

AA has been vague with breakdowns of expected revenue improvements from AA/BA/IB ATI plus the AA/JL ATI.

 

[WorldTraveler]

AA is intentionally being smart not to put too precise values on specific codeshares/alliances because there may be some necessity to defend those numbers in the future.... also competitively it doesn't help to reveal too much.
That said, AA likely will see a nice bump in revenue as a result of its two ATI/JVs.... other carriers have seen this kind of revenue jump and an ATI/JV effectively is a revenue merger so it is a big step up from simple codesharing.

The other side is that the economy is recovering from the lows so it is easier to show revenue improvements and hard to argue what is attributable to the agreement and what is simply an improvement in the economy. Airline mgmts obviously want to show the values of these agreements, esp. to employees who are skeptical that they benefit.

AA does have a big hole to climb out of since oneworld and these ATI/JVs still are the smallest of the 3 on both the Atlantic and Pacific.

OTOH, AA did see above average improvements in revenue over the Pacific last summer even before the JL ATI/JV as AA and JL undoubtedly took steps to begin coordinating revenue. The bump on the Atlantic may not be as noticeable since UA/CO and DL both continue to add capacity both to LHR and Spain and to nonstop points from the US beyond AA/BA/IB's gateways.

Still, there is no doubt that AA will see revenue improvements.