I'm running short on time today but I'll respond to this because I'll keep it brief. Yes, I read it, and I'm very familiar with the finances of AA and its competitors over the past decade.
I don't think anyone is going to argue with you (or Bob Herbst) that AA had a serious erosion of revenue in the two years leading up to the bankruptcy filing. And a lot of what you posted addressed that. My response to that is "who cares?" The guy responsible for that failing, Gerard Arpey, is gone. And except for Tom Horton, so are all the other upper management.
What I didn't see addressed is what I'll call "the what have you done for me lately" info. Specifically, Horton has been in charge for just over one year and in that time, AA's revenue performance has improved at a better rate than UA or US (and has about kept pace with DL's revenue gains). AA's mainline yield is the highest in the industry for the first nine months of 2012. Higher than Delta, UA or US. I used mainline yield because, as you know, 2-class RJs (all RJs) generally produce much higher yields, and AA is at a serious disadvantage with just 47 of them. Not to worry, though, because Horton's plan is to add 200 to 250 more of them, all seating 76 passengers. DL, UA and US already have, combined, several hundred 2-class large RJs (seating 55-76). These RJs will enable AA to finally gain on the consolidated PRASM advantage shared by DL, UA and US. Their consolidated unit revenue figures are all much higher than AA due to the large number of 2-class RJs.
As Horton said the other day, AA was profitable for in the second and third quarters (excluding reorg and special one-time items) even without most of the cost savings achieved in Ch 11 (which begin to kick in now). If AA had enjoyed the labor and other cost savings for the first nine months of 2012 (that it will have in 2013), then AA would have been the most profitable airline among AA, UA, DL and US during those first three quarters. Change has already happened. And, of course, since it doesn't fit the script (we cannot survive without US and Doug Parker), nobody wants to admit it.
US yields are great in CLT, but the costs are also very high, as so much of it arrives and departs on high-cost planes. Lots of 2-class RJs and even more 50 seaters and lotsa props. AA wants 2-class RJs to serve JFK, LGA and ORD, where those large RJs will pull in very high revenue (like DL and UA are already doing).
Other than pimply-faced teenage readers of airliners.net, who cares how many cities in Europe US serves? That "dots on the map" analysis doesn't tell me about revenue and profits. As your colleague AAviator recently posted, AA has more daily seats to London than US flies to all of its European destinations. It's not about dots on the map, it's about flying to where the First Class and Business Class passengers want to go. The big spenders - they generally focus on London. None of US' European cities (other than London) are restricted markets - AA can fly to any of them with some of its hundreds of new planes on order. You don't need to merge with US for AA to serve LIS or any other European destination served by US.
AA has increased its revenue by about a billion dollars this year even before any of the cost savings kicked in. And before a single new 76 seat 2-class RJ took to the sky. And before any of the 14 new 77Ws begin flying. And before any of the 42 787-9s were delivered. And so on.
Many AA employees are so desparate to declare Horton's plan DOA before it even takes effect. If that's not emotionally driven . . .
I see a several billion dollar revenue bump driven by the addition of 250+ large 2-class RJs with 76 seats each. Several billion dollars more as the old MD-80s are replaced by new, modern planes (I realize that the MD-80s could fly forever but some customers decry them as old and undesirable). Not just replacement - we're talking about growth airplanes. And several billion dollars driven by the new international routes that 14 new 77Ws can open up. Those transcon A321s? Yes, Virgin America and Spirit will win the JFK-LAX/SFO race once those planes are flying. [/sarcasm] Those planes will take business away from UA and DL.
I just don't see the need for an immediate $13 billion of revenue that is profitable solely becsuse Chip Munn, Capt Sulley and others willingly fly 737s and A320s for a mere $125/hr, combined with FAs who would need raises of 25% to 35% just to get to parity with AA's FA wages. Bring the US employees up to AA payscales and the entire US side becomes unprofitable.
Low-cost airlines tend to grow and high-cost airlines tend to shrink. You've seen a lot of that in action the last 10 years. Now that AA has finally lowered its costs, it's time to grow - organically, like airline employees generally prefer. And yet you're banging the "we can't survive without merging with US" drum.
Yes, PHL looks good as does DCA. And there's no denying that AA can't carry someone from RIC to JAX without a Charlotte or Atlanta. And building up RDU again is a nonstarter. Can't be all things to all people. DL can't fly people around intra-Texas in its current setting. UA has almost no presence in South Florida. And AA is not strong in NASCAR-country (US Southeast).
Ahh, so in this paragraph the real motivation shines thru. It's not so much about making AA profitable and positioning AA to compete against the competition, it's about the never-ending hope that you can squeeze just a few dollars more out of management. There's nothing wrong with doing so, but don't tell everyone you care about AA's revenue and profitability in one breath and then admit with the next that you really just want Parker to give you mo' money right now.
Gotta give Parker credit where credit is due: He's got you and others cheerleading for a merger of completely unequals in the hopes that he'll do what he hasn't done for his own employees since 2005: Pay his pilots and FAs more money. Some AA employees are so eager to make as much (or more) money, right now, than DL or UA employees, that they're willing to whore themselves out trying to sell a misguided merger with ugly-girl US. A rather expensive ugly girl, at that.
Now if LCC shareholders get no more than 15% of the combined equity and AMR creditors get 85%, that wouldn't be quite as ugly a deal.
