no, robbed, it isn't good for DL but not for AA. Returning cash to stockholders is good for both; the question is whether it can be afforded and sustained.
If AA believes they can afford to return cash to shareholders, then they probably have little choice but to follow DL because DL is doing what WN and AS have done which is to boost the value of the stock.
AAL is not going to compete in the same league as ALK, DAL, LUV without throwing some bennies out there.
AA does have cash to give to use to improve stock performance because AAL's cash position is fairly strong.
AA also has the honeymoon period after BK in which costs are lower in several areas than carriers that have been out of BK longer or in WN's case have never been there.
But remember also that AA has a whole lot more debt obligations on the horizon than AS, DL, or WN have so AA can give a boost to stockholders now but they will have to keep doing it down the road.
Given that AA, DL, and WN all have very similar costs in total - within a couple percent - each can rearrange the pieces of their cost structure but none can have costs that are much different than the other and still be competitive on Wall Street or have similar levels of profitability.
For now, whether it is easy to hear or not, AA's cost advantage is coming from its lower paid employees. there are some provisions for that to remain the case several years down the road but by then AA will probably have been able to reduce its headcount from current levels which are significantly higher than other airlines on a similar- size basis.
If AA's debt service levels don't drop, they will be paying much more in interest charges than other airlines. DL has said that its debt reduction program has already reduced interest costs by several hundred million dollars per year.
Again, the parts of the cost equation can be moved around but the overall costs have to be within roughly the same range in order to be similarly attractive to Wall Street.
