LCC & AMR Market Action

[USA320Pilot]

Hawkhunter,

Thanks for the corrections. I think we all know Doug Parker and Scott Kirby. Unfortunately my typing is not too good and I added an n in United.

Another contributing factor to US Airways' security being under accumulation was a potential short squeeze. With the company's fundamentals improving, significant a la carte revenue that is out performing the industry, lower jet fuel prices, improving RASM, and the potential to boost liquidity short sellers likely began covering positions.

Regards,

USA320Pilot

 

[USA320Pilot]

Another interesting point is that the volume was enormous. The 3 month daily average is 9,723,390 shares traded. Today there was 42,414,048 shares traded, which is almost 5 times the normal volume. Regardless of the reason somebody wanted to buy the security and there where very few sellers except the Market Maker.

Regards,

USA320Pilot

 

[jimntx]

Well with the demise of the STL hub this is the perfect time for US to start STL-DCA. They announced MIA but STL-DCA is a better option since AA will leave that route eventually since neither DCA nor STL are hubs.

Don't be too sure about that. AA has quite a bit of non-hub to hub flying--just look at AUS originating flights to MIA, LAX, SFO, LGA, etc. The 4 flights/day on STL/DCA are almost always full to oversold. The presence of Boeing in St. Louis as well as a number of military installations in the area makes STL-DCA an important market for us. (It's why we have to serve a meal in F/C on that less than 2 hour flight. At least they've adjusted the evening flight departure time from DCA so that we don't have to serve full dinner on the way to STL. :blink: )

Even if they close the STL base (which, of course, they deny is going to happen. I've already started packing. ), the flights will be operated. They already do one flight a day in each direction that is a DFW-STL-DCA through flight and the reverse. ORD-STL-DCA would also be very doable and wouldn't add that much time to the ORD-DCA nonstop. I never thought that there would be any business for a DFW-STL-DCA through flight considering how many DFW-DCA non-stops we have each day. But, I worked the DFW-STL leg of the through flight the other day, and there were over 20 through passengers to DCA. Every one of them said that they had to get to DCA that day and all the the non-stops were oversold; so, the through flight was the most convenient option.

 

[flyJOE]

They're also adding service to AVP and ABE, which is sure to steal market share from US (and UA).

This may have impacted US more in the past before the PIT pull down. AA offers considerably more markets from ORD vs. the handful of flights through PHL connections. Places like RST, DSM, OMA, SLC, YYC, and many more aren't available from PHL. Now this will definitely impact UA a lot more. UA's only benefit is they are running CR-7 with their EX Plus product vs. AA Eagle's ERJ-145s.

 

[Airline Employee]

This may have impacted US more in the past before the PIT pull down. AA offers considerably more markets from ORD vs. the handful of flights through PHL connections. Places like RST, DSM, OMA, SLC, YYC, and many more aren't available from PHL. Now this will definitely impact UA a lot more. UA's only benefit is they are running CR-7 with their EX Plus product vs. AA Eagle's ERJ-145s.

This is aimed sqaurely at United and only United. United is the weakest carrier so AA is attacking. With the exception of United Airlines, AA has a hard time competing with other airlines. They've cut flights in (STL-WN) (CLT-US) (ATL - FL) from LGA & STL (MSP - NW to LGA & STL) and a few other cities.
United is the weakest carrier and is under assault in all of its hubs. Now AA is attacking in ORD which is a very smart and shrewd move.

It would be interesting to see what UA's response will be.

 

[mike33]

The Call option were $5.00 ending today. Pretty interesting it settled at $4.98 so the big " Options Boys" win under $5 and still hold onto their stock. Don't forget they are still in on Mondays open so WATCH OUT LCC.

It only has to do with making money and they are making it.

 

[aquagreen73s]

Another interesting point is that the volume was enormous. The 3 month daily average is 9,723,390 shares traded. Today there was 42,414,048 shares traded, which is almost 5 times the normal volume. Regardless of the reason somebody wanted to buy the security and there where very few sellers except the Market Maker.

Regards,

USA320Pilot

AMRwas just under 7 X average volume. Yesterday and today were quite interesting. Both stocks held most of their gains from this week. I'm far from an expert, but the buying in both stocks seemed to be steady and consistent yesterday, almost like some big money is taking a huge position in each of them. I suspect it won't be long before we know what's really going on, like perhaps a week or two. Pull up a chair and break out the popcorn because the fun is just gettin' going.

 

[USA320Pilot]

What Lifted US Airways Shares?

In assessing the share-price increase, ignore the chatter making the rounds in aviation circles, that American might move to acquire US Airways, or at least US Airways' most valuable assets: positions at key Northeast airports and in Charlotte, N.C., the only southeastern hub besides Atlanta.

Even so, the American/US Airways talk seems absurd.

See Story

Regards,

USA320Pilot

 

[mike33]

Ok, monday is here and the call options are 10k for Oct. Whats odd is that LCC and AMR are going up together!..............Whats with that while everyone else is down?

Make of it what you will and i'll do the same but " Someones in the kitchen with Dina" <_<

 

[wings396]

This may have impacted US more in the past before the PIT pull down. AA offers considerably more markets from ORD vs. the handful of flights through PHL connections. Places like RST, DSM, OMA, SLC, YYC, and many more aren't available from PHL. Now this will definitely impact UA a lot more. UA's only benefit is they are running CR-7 with their EX Plus product vs. AA Eagle's ERJ-145s.

I can't see this putting much of a hurt on US or UA at this point. A few years ago, AA came to ABE with Mainline service to ORD and RDU. At this time UA also had Mainline service to ORD, and it didn't run them out of town. Needless to say that AA cutover to Eagle service to RDU, and pulled the plug on ORD completley. Even with the Eagle service they didn't stick around much longer. The ABE of today is nothing like it was 10 years ago, so I can't see this time around being any better for AA than it was before. It is pretty much a proven fact that the only Mainline service that the ABE area is willing to support are the Florida markets with
Walmart fares. The ABE Airport is nearly dead in comparison to what it WAS in the past. The locals prefer to drive to EWR or PHL instead of supporting their local airport in favor of a direct flight. The area has more residents and businesses than it did 10 years ago, but airport traffic has been on a steady decline for years. Just about all of the real airline mainline service is gone, with the exception of ONE US flight to CLT. A mixed bag of airline wanna-bees come and go with Fla, service, but that is about it. UA, DL, NW Mainline are all gone, and US is down to the one flight from a high of 8 per day years ago. If it weren't for the cheap Fla, flights, the ABE airport would be an excellent candidate for an oversized bus terminal.

 

[ClueByFour]

Ted Reed missed the point: the most valuable asset US has right now is the DCA operation.

AA has a huge NYC operation and the MIA operation. They won't buy in CLT what they could have built at RDU and/or BNA.

Which leaves UA.

 

[back2CLT]

All legacies are up big today, with Southwest flat. My general take is the airlines are being rewarded for being pro-active during the downturn, and are facing up-coming better economic prospects (though I think we will see a mild double-dip recession).

 

[mike33]

All legacies are up big today, with Southwest flat. My general take is the airlines are being rewarded for being pro-active during the downturn, and are facing up-coming better economic prospects (though I think we will see a mild double-dip recession).

Yeah DAL came around, but you guys are missing the boat on LCC. Like it or not if the price barriar of $5.35 gets beat today than lookout. it's all about the $$$$$

 

[FutureUScapt]

Ted Reed missed the point: the most valuable asset US has right now is the DCA operation.

AA has a huge NYC operation and the MIA operation. They won't buy in CLT what they could have built at RDU and/or BNA.

Make no mistake, AA would love to have CLT and the presence up and down the east coast that goes along with that. They lack that now and a build-up at RDU or BNA would have been far too costly since ATL and CLT were already substantially bigger than either even in their hey-day. The real question is would AA want all the "extra baggage" that comes along with US...probably not.

 

[ClueByFour]

Make no mistake, AA would love to have CLT and the presence up and down the east coast that goes along with that.

Make no mistake--AA thought so much of the east coast north/south operation that it closed not one, but two hubs. Just yanked another bunch of flights from RDU. How, exactly, does that square with wanting CLT?

They lack that now and a build-up at RDU or BNA would have been far too costly since ATL and CLT were already substantially bigger than either even in their hey-day. The real question is would AA want all the "extra baggage" that comes along with US...probably not.

Want to know what CLT and RDU and BNA all have in common? Poor O&D for hub airports and a lack of scale compared to ATL. There is no reason for AA to want that--it's no more costly to "build" RDU back up again that it would be to take over CLT.

Hubs like CLT/CVG/CLE/MEM/SLC will all be in some degree of peril if the economy does not turn. CLT might be the best off, not because of the O&D of the metro area but because US has no other option and PHL cannot operationally handle being US' only hub east of PHX.

WN enters CLT and all bets are off--which AA also knows.