Rosy outlook for AA

[700UW]

there is a published article that showed the number of flights cancelled by each of the carriers.  UA was worst, AA/US was in the middle, and DL had the lowest. 
 
let's be clear that I have no problems whatsoever if AA succeeds... but one data point doesn't change the fact that AA has underperformed the industry average operationally for a number of years.  US has done a pretty good job of running operationally.
 
I am confident that US leadership will provide the leadership to move AA up the rankings.
 
Despite what some want to believe, winning is not an exclusive right.  If multiple airlines can do it all at the same time, it is more than fine with me. 

http://www.dallasnews.com/business/airline-industry/20140318-american-airlines-group-employees-earn-100-bonus-for-january-performance.ece
 

Last month, the airline’s new management announced that employees could earn monthly bonuses if American Airlines Inc. and US Airways Inc. topped their major rivals — Delta Air Lines Inc., United Air Lines Inc. and Southwest Airlines Co. — in three key categories.
 





Right off the mark, American and US Airways employees did so.
 
In January, the first month the new program was in effect, American and US Airways finished ahead of those airlines in on-time arrivals and the rate of baggage problems, the U.S. Department of Transportation said in its monthly report on airline performance.
 
“It’s great to take the top position in two of the three metrics in our very first month reporting as a combined airline,” American Airlines Group chief operating officer Robert Isom told employees in a message. “And it took everyone on the team pulling together to do it. You fought through extremely challenging conditions in January and finally broke Delta’s stronghold on the number one rankings.”
 
In the third category that could earn $50 bonuses — customer complaints — American-US Airways finished second behind Southwest Airlines and Southwest’s AirTran Airways Inc. unit.





 
 

 

[Kev3188]

However Delta only had to deal with "one" union group to integrate.

Greetings from Pedantry Place!

There were (are) 2 unions on the PMDL property, ALPA & PAFCA. Both obviously "live" after the merger, but during integration, DL had the AMFA, IAM, AFA, NAMA, ATSA, and the TWU and at least the 9 to 11 work groups you've noted.

FWIW, I agree with most of the rest of your post- especially the last sentence.

 

[WorldTraveler]

first, swamt,  DL and ALPA agreed to a unified contract BEFORE the merger closed.  Tell me what other major airline group has done the same.
 
DL's advantage is because it got busy with all of the issues of a merger and did it nearly flawlessly compared to other mergers.
 
I am sure that AA will improve as a result of the merger.  I have never denied that.  But you and others have yet to provide a list of comparable strategic challenges that any other airline has faced that are comparable to the ones I have noted and which the article I cited says AA has to overcome.
 
Further, every carrier, including WN is doing all it can to minimize the advantage that AA will gain from a merger.  No one is going to give AA a red carpet welcome to their merger.
 
AA will gain advantages but no one else is sitting still.  AA has to resolve all of their strategic challenges and build revenue faster than other carriers in order to take the advantage.
 
In case you have missed it, WN's biggest growth target for 2015 will be south of the border - THE prime region for AA.
 
DL is focusing on the west coast, the one region where AA/US have gained little structural advantage because of the merger and have little ability to grow because of airport constraints.  DL isn't slowing its revenue growth in NYC and growth of advantage over AA.  UA is strengthening its lead over AA at ORD and key overlap markets. 
 
AA's biggest challenge is that they are merging at the same time that others are reaping benefits from their mergers.
 
Finally, who is to say that AA will reap advantages that other carriers implemented because they reduced capacity and strengthened industry pricing yet capacity is now growing - exactly what will most hurt AA's ability to reap the benefits that other carriers gained as a result of their mergers. 
 
The notion that AA will simply now reap the same or greater benefits that other carriers gained because AA is now merging is logically flawed.
 
Maybe AA will grow and reap benefits - but not for the same reasons that helped other carriers and AA won't necessarily be able to react as quickly to new advantages that other carriers will continue to use to their own advantage and not which AA can benefit from. 

 

[RJcasualty]

The ruthlessness of DP versus the wiliness of Anderson might hold a clue to the future.

 

[WorldTraveler]

that reality has more implications for costs than revenue and is precisely why AA has a far better chance of executing the merger better on the cost side than UA has done.

 

[MetalMover]

 
 
Maybe AA will grow and reap benefits - but not for the same reasons that helped other carriers and AA won't necessarily be able to react as quickly to new advantages that other carriers will continue to use to their own advantage and not which AA can benefit from. 

Thank you Nostradamus.

 

[AdAstraPerAspera]

 
In case you have missed it, WN's biggest growth target for 2015 will be south of the border - THE prime region for AA.

 
You are grossly overstating any impact that will occur "south of the border."
 
First of all, United/Continental is arguably the biggest carrier to Mexico via IAH, etc... AA has never been particularly interested in Mex, outside of the major business destination of Mexico City in which AA will always be significant, or... the trash-yielding vacation destinations such as CUN, SJD, PVR, etc... all of which are already saturated by innumerable carriers, inclusing US and Mexican ULCCs such as Frontier, Spirit, Sun Country, Volaris, and on and on. WN's expansion into vacation markets will impact them the most, and even then it won't be significant. Who cares? AA is strong in "deep" South America... markets where it is virtually unchallenged by everyone outside of Oneworld other than token presences, and often is the sole carrier, and all of these cities, by the way, are unlikely (or completely unable) to be served by a 737 from any airline in the future.

 

[WorldTraveler]

 nice to carve up and write off most of the Latin market north of the equator but AA is indeed the largest carrier in ALL of Latin America.
 
And feel free to start walking away from the leisure markets in the Caribbean and then Mexico.
 
That is exactly what WN wants.
 
At some point, holding onto deep S. America as the "only market that is worth it"  will leave AA with the claim to be #1 in nothing.
 
When any business starts saying that one segment of the market which it serves isn't worth protecting, they will lose it all.  Guaranteed. 
 
AA's presence in Latin America has to be fought for - all of it. 
 
IF WN really succeeds in any segment, AA is very much at risk 
 
BTW, I have never said that the implications for UA by WN are insignificant.