Here's where the $14B comes from:
[blockquote]
Code:
$ Billions
-----------------------------------------------------------
Average Annual Total Profitability
Profitability Improvements Over
Improvements Program Period
(5.5 years)(a)
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Labor and Capacity
Reduction 1.2 6.4
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Non-Labor Cost Reduction
and Revenue Enhancement 1.4 7.7
-----------------------------------------------------------
Total 2.6 14.1
-----------------------------------------------------------
(a) Totals for the period may be less than if multiplied by 5.5 years due to rounding
[/blockquote]
Non-Labor Cost Reduction includes things like reduced capital spending (deferred aircraft, decreased facility improvements, delayed replacement of ground equipment), renegotiated contracts with major vendors (CRS's, caterers, suppliers), reduced meal service, deferred maintenance (not safety items, but discretionary things like cabin upgrades), and reduced IT development.
It might even include little things like keeping the HVAC turned down in office buildings on weekends, having employees turn off PC's and printers overnight, reduced watering of WHQ's lawn...
The biggest problem I see with this is that revenue enhancement is included as part of the non-labor cost savings. Given where revenue has been for most of the majors during the past two years, I don't think too many analysts are buying into that argument.
Take out revenue growth, and the real cost savings are probably still only in the $2B - $2.3B range. Throw in a couple other variables, like increases in fuel or landing fees, and those savings could be even lower.
Not trying to be a pessimist, but finance is not one of those areas where being too optimistic pays off...