Delta helps other airlines

[WorldTraveler]

Maybe if you got drunk enough you could run the world's largest airline instead sitting at home posting about it continuously.

his greatest accomplishment, and undoubtedly the one that AMR's creditors were most attracted to, is that he was able to keep US' labor costs so far below the industry average for so long.
 

Excellent post, and I agree.   That's one reason I'm hammering on their short-sighted decision to save a few million dollars by cutting AA's meals.   The most they can hope to gain is the few million dollars in cost savings, but the potential downside is unlimited.   It's like writing naked options.   Nobody is going to pay AA higher fares because they cheaped out the meals.  Dunno if any will flee or pay lower fares because of the miserly meal policy.   Why take the risk?   $1.9 billion in profits in just six months even with AA's too-generous meals argues for status-quo.   
 
We've seen what can happen when revenue takes a holiday and finds a different airline:  UA's experience from March 3, 2012 thru the present day.   DL, AA and US all saw better revenue performance for most (or all) of the periods since then.   What Parker needs most of all is higher revenue.   Much higher revenue.   2014 looks like a pretty good year for AA's revenue, but cuts didn't begin until late in the third quarter.   Parker needs higher revenues year after year after year to pay for all his promises (and all those improvements to US employees).   
Does Parker risk mass defections from cutting meals?  No.   The meal cuts, however, portend a future with more and more cuts, not improvements.   Improvements help attract revenue from other airlines (like from UA).   Cuts on top of cuts is what you do when you've failed at increasing revenues (like at UA).

no one will defect because of meals but passengers will defect for lower costs. Again, the real story of this merger is that AA came out of BK and a merger and within two quarters lost the cost advantage it gained in BK. Parker couldn't get rid of the orders which AA had agreed to but now AA has the largest order book in the US industry - and with it the greatest amount of debt - and now is losing its cost advantage too.

And AA faces more pressure on its revenues over the next few months than all of the other carriers combined - as DAL opens up to long haul flights, a large chunk of AA's DCA hub gains low cost competition - after losing the equivalent of AA's entire DCA slot portfolio pre-merger - and as AA gains new low fare competition to Latin America, AA's most profitable region and the only one where it is the largest among the big 4 carriers.

Finally, AA benefitted greatly because of UA's operational problems but UA is improving its operational performance and right now AA and UA are running very similar operations... as such it is very possible that UA will regain passengers it has lost.

Parker pulled together a merger that provides a lot of mass, particularly on the domestic system, but it came at great increase in costs, including the fact that fuel costs are increasing for AA relative to DL.

But DL's fuel strategy affects all carriers - and the evidence is that DL gained a fuel cost advantage to EVERY large airline in the US. and most significant is that DL's fuel cost advantage has increased over the past several quarters.