WHAT WILL AA DO?

[AirwAr]

What AA needs to do is grow a pair! I'm tired of AA being so timid with their international partners. We should stop relying on them solely to provide our lift. We did that with JAL, and look what they're doing, leaving the party with one of their strongest competitors.

We need to begin flying to Australia, HKG and China. Think about it. If QA gets into financial trouble, what makes more sense, for them to partner with AA or one of their competitors? We need to have skin in the game. I've always thought that end-to-end merges were nice, but a merger that removes one of your competitors, priceless!

Our very next move should be to find a way to pry Air China from Star. With their cross-investments in Cathay, there is a very real danger we could lose them as well.

As far as QA, if we don't start service ourselves to Australia and become a force to be dealt with, we need to invest heavily in QA.

 

[MERV]

What AA needs to do is grow a pair! I'm tired of AA being so timid with their international partners. We should stop relying on them solely to provide our lift. We did that with JAL, and look what they're doing, leaving the party with one of their strongest competitors.

We need to begin flying to Australia, HKG and China. Think about it. If QA gets into financial trouble, what makes more sense, for them to partner with AA or one of their competitors? We need to have skin in the game. I've always thought that end-to-end merges were nice, but a merger that removes one of your competitors, priceless!

Our very next move should be to find a way to pry Air China from Star. With their cross-investments in Cathay, there is a very real danger we could lose them as well.

As far as QA, if we don't start service ourselves to Australia and become a force to be dealt with, we need to invest heavily in QA.

Easier said than done. AA would need a massive outside investment to do something like that. They need a new A/C example 773ER to handle the routes and a certain amount capacity to be able compete. With AA in talks with their groups of employees for new contracts don't see something like that happening. it easier to keep JAL and its cheaper also it would cost AA just 500m to JAL as partner.

 

[AirwAr]

Easier said than done. AA would need a massive outside investment to do something like that. They need a new A/C example 773ER to handle the routes and a certain amount capacity to be able compete. With AA in talks with their groups of employees for new contracts don't see something like that happening. it easier to keep JAL and its cheaper also it would cost AA just 500m to JAL as partner.

Obviously this won't happen over night, but there needs to be a mindset change. If we are not going to invest in our own lift in those areas of the world deemed important, then we need to find a way to seal our partnerships to make sure we can rely on them in good times as well as bad.

When 2 people live together, keeping pay, bills, and bank accounts separate, it's much easier to separate than a married couple with kids and a mortgage.

If we want to keep our partners, we need skin in the game. Is it by investing in our own lift? By investing in our partners? I don't know, but something has to change.

 

[FrequentFlierCA]

The money that is being offered to JAL is not AMR's to do anything with. The money belongs to TPG. I can assure you that TPG will not give the money to AMR for bonus money. That is NOT going to happen. There will be no money unless JAL stays in OW and accepts the OW offer rather than the DL/Skyteam offer.

You are absolutely right. The money is TPG's and any assertion that it is going to go to the execs for bonuses is false, inflammatory and serves a specific agenda.

 

[s80 wrenchhead]

You are absolutely right. The money is TPG's and any assertion that it is going to go to the execs for bonuses is false, inflammatory and serves a specific agenda.

Inflammatory, are u ****** me, They have been using my money for 6 years to pay themselves bonuses!

 

[MERV]

You are absolutely right. The money is TPG's and any assertion that it is going to go to the execs for bonuses is false, inflammatory and serves a specific agenda.

If that was true they could invest with or without AA. They'll gain something from it. If they have any type of investment in AA. If AA stands to lose any value they'll protect it.

 

[Skymess]

Don't underestimate the HKG connect vs. NRT, folks.

Definitely have to agree with you.

I could see CX deciding to serve ORD if AA doesn't, which might be some incentive for APA to consider giving the same waiver they did for DEL.

I don't see another cheese plate waiver coming anytime soon.

 

[JFK777]

AA flies to NRT from LAX, JFK, ORD plus its fortress hub at DFW, airlines flew from the first 3 to Tokyo long before Star, Oneworld or Skyeam existed and survived. AA will continue flying to Tokyo with daily flights from each gateway and hub. AA will expand more to China as Peking from ORD starts at the end of April, 2010 to go along with its Shanghai service from ORD already operating. Peking from LAX or JFK might work as HKG from ORD could too. United flies HKG to ORD with no support from STar aliance at the HKG end.

 

[MERV]

AA flies to NRT from LAX, JFK, ORD plus its fortress hub at DFW, airlines flew from the first 3 to Tokyo long before Star, Oneworld or Skyeam existed and survived. AA will continue flying to Tokyo with daily flights from each gateway and hub. AA will expand more to China as Peking from ORD starts at the end of April, 2010 to go along with its Shanghai service from ORD already operating. Peking from LAX or JFK might work as HKG from ORD could too. United flies HKG to ORD with no support from STar aliance at the HKG end.

In airlines theirs no such thing as a fortress HUB but they own the majority of the market yea but not fortress. I could say the same about the other US airlines established in NRT. Hope so but to have an asian HUB will hard basically NRT is their HUB in asia. HKG will be great to have but leaving from one US city doesn't help slots are very limit its like the NYC airports or ORD or ATL or DFW or IAH. Unless china opens theirs skies than we talking. Then we can have PEK or SHI. They need a large A/C to compete with UA and other chinese carriers. Also they will need a better contract with APA for it to work. Its cheaper to keep JAL they already have the asian market. It would cost AA a small price but they need more asian partners in One World. The other would take time and money but its needed. AA needs to start their own trans-pacific coverage. Our B772ER compete with a B7474ER thats doesn't include their partners in other US cities. UA could under cut us still find ways to offset their cost.

 

[eolesen]

There are a couple options for oneworld partners...

Right now, China Eastern is floating around without an alliance partner. With Chinese entry requirements, PVG probably wouldn't be too useful for anything more than an entry point to the beyond markets in mainland China.

Malaysia has been aligned with Virgin Atlantic and Virgin Blue/V-Australia, but also doesn't belong to any of the three alliances. Great reputation for service, but KUL's a little too far south to be useful.

Lastly, with all the overlap that Skyteam and Star have between their own partners have in Asia-Pacific, it wouldn't surprise me if one or two of the existing Star or Skyteam carriers decided to be a bigger fish in the oneworld pond rather than be a small fish in the Star Alliance or Skyteam ocean...

They need a large A/C to compete with UA and other chinese carriers

No, they don't.... UA's down to just 24 B744's compared to 52 B777's. Delta's only got 16 B744's, 16 B777's and 29 A330's.

More than half the foreign operated Transpac capacity is now being operated with twin engine aircraft, so I'd say AA's got the right size aircraft with the B777. What they don't have is the route authorities.

Going in relative size, with the exception of QF and SQ with their A380 experiments, all of what I'd consider major transpac carriers have been moving in favor of twins:

Singapore (Star) has less than 20 B744's left, but 76 B777s, 10 A380s, 8 A330's and 5 A340's.

Cathay (one) still has around 40 active B744's, but they've almost 65 B777's and A330s, plus 11 A340s.

JAL (???) have 46 B777's and only 42 B744's, and if they shrink, I suspect they'll get rid of most if not all of the 744's during the restructuring.

Korean (Sky) are evenly split as well -- 44 B744's, 19 A330's and 25 B777's.

China Airlines (Sky) have 30 B744s, 17 A330's and 6 A340's.

Thai (Star) have 18 B744's, 20 B777's, 16 A330's, and 10 A340's

Qantas (one) have 27 B744s, 22 A330s, and 6 A380s. They and SQ are bucking the trend a bit with the A380, and honestly, I don't see the economics for those working out too well long term...

All-Nippon (Star) has 13 B744s but 44 B777s. Maybe they'll get some of JAL's aircraft, too...

Air China (Star) has 18 B744's, 10 B777's and 20 A330's.

Malaysia (no alliance) has 15 B744's, 17 B777's and 14 A330's.

Asiana (Star) has 12 B744's, 10 B777's and 8 A330's.

China Eastern (no alliance) has 20 A330's and 10 A340's. No B777's or B744's.

China Southern (Sky) has 2 B744's, 12 B777's, and 14 A330's.

Lastly, tiny Air New Zealand (Star) is down to 7 B744's and 8 B777's.

 

[JFK Fleet Service]

The question of what will AA do has already been answered.

Furlough and furlough often, across all work groups.

It's the AA way.This airline lost any drive for innovation years ago.Surrender is the new mantra at AA.

 

[MERV]

There are a couple options for oneworld partners...

Right now, China Eastern is floating around without an alliance partner. With Chinese entry requirements, PVG probably wouldn't be too useful for anything more than an entry point to the beyond markets in mainland China.

Malaysia has been aligned with Virgin Atlantic and Virgin Blue/V-Australia, but also doesn't belong to any of the three alliances. Great reputation for service, but KUL's a little too far south to be useful.

Lastly, with all the overlap that Skyteam and Star have between their own partners have in Asia-Pacific, it wouldn't surprise me if one or two of the existing Star or Skyteam carriers decided to be a bigger fish in the oneworld pond rather than be a small fish in the Star Alliance or Skyteam ocean...



No, they don't.... UA's down to just 24 B744's compared to 52 B777's. Delta's only got 16 B744's, 16 B777's and 29 A330's.

More than half the foreign operated Transpac capacity is now being operated with twin engine aircraft, so I'd say AA's got the right size aircraft with the B777. What they don't have is the route authorities.

Going in relative size, with the exception of QF and SQ with their A380 experiments, all of what I'd consider major transpac carriers have been moving in favor of twins:

Singapore (Star) has less than 20 B744's left, but 76 B777s, 10 A380s, 8 A330's and 5 A340's.

Cathay (one) still has around 40 active B744's, but they've almost 65 B777's and A330s, plus 11 A340s.

JAL (???) have 46 B777's and only 42 B744's, and if they shrink, I suspect they'll get rid of most if not all of the 744's during the restructuring.

Korean (Sky) are evenly split as well -- 44 B744's, 19 A330's and 25 B777's.

China Airlines (Sky) have 30 B744s, 17 A330's and 6 A340's.

Thai (Star) have 18 B744's, 20 B777's, 16 A330's, and 10 A340's

Qantas (one) have 27 B744s, 22 A330s, and 6 A380s. They and SQ are bucking the trend a bit with the A380, and honestly, I don't see the economics for those working out too well long term...

All-Nippon (Star) has 13 B744s but 44 B777s. Maybe they'll get some of JAL's aircraft, too...

Air China (Star) has 18 B744's, 10 B777's and 20 A330's.

Malaysia (no alliance) has 15 B744's, 17 B777's and 14 A330's.

Asiana (Star) has 12 B744's, 10 B777's and 8 A330's.

China Eastern (no alliance) has 20 A330's and 10 A340's. No B777's or B744's.

China Southern (Sky) has 2 B744's, 12 B777's, and 14 A330's.

Lastly, tiny Air New Zealand (Star) is down to 7 B744's and 8 B777's.

They'll need larger A/C for few reason they could carrier more paidload to offset their operating cost. Also if they don't have access right way to more slots and routes that extra paid would help them compete against most of the carrier. I didn't mean it like theyre going to need 50 them but few A/C will help on a short term lease up to when they get a new widebody. Airline work on critical mass. some of those carrier have the 773ER or equivalent to it for those cities that need it. Those A/C carries more paidload . That's why A380 was made for slots and route restricted cities. the majority those cities are either gateways or hubs. No wonder AF, LH, QF, KE and few others bought them for overseas markets that have limited slot. Bigger A/C means less moments will balance the cost.

I hope so, that one or more would leave either one of those alliances to come over to WO. I hope its ANA or JAL stays because of our Gateway/HUB in Japan. Thats the cheapest option for now. The other would cost money and time. It also doesn't guarantee profitable route. But at same we should start up our own ops in asia or get more partners like that we are not at the mercy of anyone.

 

[eolesen]

Ever wonder why AA doesn't operate as many domestic widebodies as they used to?...

The "more payload to offset operating cost" argument is a falacy, Merv.

Crandall used to get asked at Presidents Conferences all the time why we didn't operate the 744, and his answer was always along the lines "nobody ever went broke having too small of an aircraft."

It might work out two or four months out of the year, but there are perhaps a dozen routes globally where you can fill 400 seats per flight 360 days a year. Only one or two are in markets where AA could get rights to operate, and you don't buy an aircraft to fit just one or two markets. AA had that with the 74SP, and the operating costs for that fleet were ghastly.

Being able to run a three or four day routing like DFW-NRT-DFW-LGW-DFW-RON, as opposed to DFW-NRT-DFW-RON-DFW, has some huge paybacks in terms of revenue.

The Asian airlines operating the A380 will see some benefits, but LH and AF are operating it for one reason only -- national pride.

The A380 is about 12% heavier per ASM than the B747. It has engines which are 9% more efficient, but the offset only works if you can run at the same load factors *and* operating margin. Carriers operating big aircraft where there's not super-high demand wind up dumping seats on the market at fire-sale prices just to take less of a loss on the fuel needed to move the heavier airframe...

Carriers have found that the 777 is easier to fill consistently, and you're likely to wind up with a better revenue mix in the process.

Bottom line.... if the plane can't be filled up every day of the week, it's a mistake to operate it.

 

[MERV]

Ever wonder why AA doesn't operate as many domestic widebodies as they used to?...

The "more payload to offset operating cost" argument is a falacy, Merv.

Crandall used to get asked at Presidents Conferences all the time why we didn't operate the 744, and his answer was always along the lines "nobody ever went broke having too small of an aircraft."

It might work out two or four months out of the year, but there are perhaps a dozen routes globally where you can fill 400 seats per flight 360 days a year. Only one or two are in markets where AA could get rights to operate, and you don't buy an aircraft to fit just one or two markets. AA had that with the 74SP, and the operating costs for that fleet were ghastly.

Being able to run a three or four day routing like DFW-NRT-DFW-LGW-DFW-RON, as opposed to DFW-NRT-DFW-RON-DFW, has some huge paybacks in terms of revenue.

The Asian airlines operating the A380 will see some benefits, but LH and AF are operating it for one reason only -- national pride.

The A380 is about 12% heavier per ASM than the B747. It has engines which are 9% more efficient, but the offset only works if you can run at the same load factors *and* operating margin. Carriers operating big aircraft where there's not super-high demand wind up dumping seats on the market at fire-sale prices just to take less of a loss on the fuel needed to move the heavier airframe...

Carriers have found that the 777 is easier to fill consistently, and you're likely to wind up with a better revenue mix in the process.

Bottom line.... if the plane can't be filled up every day of the week, it's a mistake to operate it.

Domestically it doesn't work because paxs wants frequency. example DL has the shuttle on the hour to and from NYC BOS DC. DL was using B737-800s in a single class thats around 160 but they were flying half full or less. Than they changed it to MDs because they were losing money. AA works as HUB spoken airline, so they bring pax from the surrounding areas to larger A/C to either fly Trans-Con, Trans-Pacific and Trans-atlantic. Airlines chose the best A/C that will give them an edge over the competitor. Right now AA has about 1500 seats to NRT they don't need anything bigger than what we right now (from different airport). lets said we decide fly to HKG from ORD go head to head with UA they can switch to B747 instead of B772ER given it competitive edge over AA in pricing. I am not saying they need it but will help. I don't believe they'll get to many slots and routes to asia that fast. Plane like the B773ER will help to certain extend it will give some capacity and range to some cities that need that type of A/C. Its like when you get someone in your backyard competing against you but you flying smaller A/C and they have B757-200 in a single class its about two hundred seats you better bet on it they'll be changing to bigger/mid size A/C or have more movements to make up the difference in capacity for pricing purposes. To be able to kill them off. DL song try it on BJ in NYC but failed because they were using the same flight crews basically they had the same operating cost to mainline DL but with cheaper fares. BJ came out on top because their cost but DL kick them out ATL. Chinese government protects their own from competitors. All airlines defend their routes and cities from competitors, so larger capacity A/C would give you that presence you need to not be push around. Once you get more cities and routes to that city its not longer need because now you can offset competitors pricing. You need it just at the begin of the route to have presence in capacity for pricing. Not to forget that you'll be feeding that that A/C from all other cities.

The Asian airlines operating the A380 will see some benefits, but LH and AF are operating it for one reason only -- national pride.

The A380 is about 12% heavier per ASM than the B747. It has engines which are 9% more efficient, but the offset only works if you can run at the same load factors *and* operating margin. Carriers operating big aircraft where there's not super-high demand wind up dumping seats on the market at fire-sale prices just to take less of a loss on the fuel needed to move the heavier airframe.

Ok if that was true they're very bright CEO But I don't believe that right now AF has a big advantage over its competitors in NYCCDG with a few movements a day they'll have many paxs traveling and more market share to their HUB and out price AA at why AA downsize their plane from two 767 to a 767 and 757. DL only has one CDG I believe because they said would code-share major of their NYCCDG. BA got the A380 theirs a reason why European carriers got the A380 its to better compete against US carriers. This was before open skies between them will see if the A380 was a success in few years. But with the open skies it will be little harder because their less restrictions on routes and slots in few cities pairs.

 

[MERV]

Ever wonder why AA doesn't operate as many domestic widebodies as they used to?

Yes we do to certain cities JFK: MIA SFO LAX. DFW: LAX SFO ORD. MIA: DFW ORD JFK. You probably meant 300-400 seaters but B767 is use to ops to west coast and B777 is use in .

some cases. Carriers have found that the 777 is easier to fill consistently, and you're likely to wind up with a better revenue mix in the process.

I agree with you but true replacement to B747-4ER is B773ER. Many internationally carrier except few are replace B772ERs with B773ERs. Better performances and a great paidload. It gives them edge over the competitor. No wonder UA and NW(DL) didn't store all their B747 it balance the pricing in many cities they compete with same or great seating capacity.