Jeff Campbell, AMR's CFO said, "...On the other hand, I think we would be foolish at American and AMR to not be giving it very serious thought in a world where Delta Air Lines Inc. (DAL) has said they are going to try it again, where UAL Corp. (UAL), parent of United Airlines, has said they are going to try it again."
Why not see how UA and DL fare before throwing your hat in the ring? If they fail, you could potentially be there to pick up the proverbial pieces with your mainline product.
Just my $0.02 worth.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Captaingomes From Canada, joined Feb 2001, 6413 posts, RR: 55
Reply 1, posted (12 years 3 months 2 weeks 8 hours ago) and read 3872 times:
Interesting as Carty has previously knocked Air Canada for venturing into the low cost market with Tango and Zip. He also said that MRTC was the way to go. Seems like he has now changed his mind, at least with respect to the LCC idea.
What is interesting is that the mainline airlines don't seem to know what to do. They try something, fail, try it again, or they claim that is not the way to go when competitors try it, then they try it themselves. The next couple of years will be very interesting with respect to mainline airlines, especially in North America.
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
DesertJets From United States of America, joined Feb 2000, 7842 posts, RR: 14
Reply 2, posted (12 years 3 months 2 weeks 8 hours ago) and read 3869 times:
The world is mad I tell you.
In this world of overcapacity my question to American Airlines is where are they going to put this LCC?? The market for LCCs seems to be pretty saturated at the moment. With Song, JetBlue, AirTran and Southwest locking up much of the east coast and northeast to Florida traffic; and with America West, Southwest, and Alaska (though not a LCC, but the new ticket structure makes them more like it) holding down the west coast... there does not seem to be a market with enough demand to support a LCC. I think American would be insane to try to base it from DFW and do a lot of intra-Texas flying. ORD would make even less sense given historically high yields there. Possibly a base in St. Louis, but where would they fly to that Southwest doesn't already serve?
Until I hear more specifics about bases and routes and product, I can only think that this is nothing more than a brain storm session by AMR management than a serious attempt to spin-off an LCC, which unlike UAL or Delta, AMR has not done before.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
Meechy36 From United States of America, joined Nov 2001, 315 posts, RR: 0
Reply 6, posted (12 years 3 months 2 weeks 6 hours ago) and read 3724 times:
When I first read this I almost peed my pants. Yet again it is classic Carty, for months we have heard that "American has NO plans to start a low cost carrier!", yada yada yada. Now that Delta looks like it might have a good shot at succeeding with Song, NOW it's time to start contemplating it, 2 years to late. I say that Delta might have a good chance with Song because of the union issue and also because I believe the trust level is much higher there than at AMR. There isn't a chance in hell that American could pull this off.
It is so divisive here that Carty could call a press conference tomorrow and announce a 15% pay raise and my first thought would be "what does he want from us now?!"
I have 16 years with this company and believe this will be my last one here. If this airline is still around in 2004 it will be a shadow of it's former self. Carty wanted to be the biggest with the TWA purchase and he just might be at the helm of the biggest chapter 7 filing in the history of aviation, of course while the grunts are left to pick up the shattered pieces of their lives Carty and company will be moving on to greener pastures rolling in AMR dough.
Ual777contrail From , joined Dec 1969, posts, RR:
Reply 8, posted (12 years 3 months 2 weeks 5 hours ago) and read 3664 times:
I don't know about song, but as far as UNITED goes it will be different. They haven't told us of their plan yet but one thing is for sure, it will be low cost and low fare.
This is a copy-cat industry, and I could see song and this new UNITED to do well. I could also see AA missing out on a lot of revenue because they want to sit back and wait. I think the big jets into little stations are done, and I also think the CRJ is the most overrated plane on the planet. It may save money, but the plane breaks down more than the old 727's do.IMHO
"As for changing our business model to become a no-frills carrier like Southwest, that answer is pretty simple, too. First, we’d have to reduce our seven remaining fleet types to one. We’d have to eliminate all the international flying. We’d be forced to get rid of hundreds of airplanes and lay off tens of thousands of employees. We would no longer be a strong global network carrier, but just one more airline in a pack of point-to-point low-cost carriers.
Transforming American into Southwest would, in effect, dismantle all of American’s strengths. Today, we offer a very good, dependable, distinct product that customers value and will continue to demand. We have a huge network, great service, and a reputation that inspires loyalty and trust. Customers overwhelmingly prefer us when the fares are competitive – we’ve already seen that in several markets.
So instead of a "silver bullet," our strategic plan going forward is to build on what we already do well, and find a way to offer that product at fares our customers are willing to pay. Offering the American brand at competitive prices is not a silver bullet, but it is a sound plan for competitiveness and survival."
All this talk about an LCC makes for a good news story on an otherwise slow newsday in the airline indusrry. Some beat reporter picked up on an old story and really doesn't talk about anything new.
Lindy From , joined Dec 1969, posts, RR:
Reply 12, posted (12 years 3 months 2 weeks 4 hours ago) and read 3570 times:
If I remember correctly. Earlier last year, American CEO said:
"AA is full service airline and never will go on their knees to be like Southwest or AirTran. If you dont want to pay our fares then go with them, we dont care for customers like you".
You can do little research and find topic about it somewhere on this forum.
Now they are on their knees with s**t almost on lower lip level.
"...Transforming American into Southwest would, in effect, dismantle all of American’s strengths. Today, we offer a very good, dependable, distinct product that customers value and will continue to demand. We have a huge network, great service, and a reputation that inspires loyalty and trust. Customers overwhelmingly prefer us when the fares are competitive – we’ve already seen that in several markets...."
Key here "when the fares are competitive."
Also mentioned in AMR CFO, Jeff Campbell, that the product, hub and spoke, more room is worth about a 30% premium.
Is the American/or Global public (business or leisure) willing to pay a 30% premium for this improved product that AA offers?
Will the low cost carrier offer less than steller service at a price customers are willing to afford?
Maybe, the LCC's are here to stay, if looks like a bus, smells like a bus... guess air transportation in the minds of the public is just a flying over crowded bus?
If AA is able to get the 30% premium, then why change the product mix?
What about the dilution (increase in mile points needed) for Loyalty program participants to use AAdvantage reward miles, could miles only be redeemed on the LCC?
CannedSpam From , joined Dec 1969, posts, RR:
Reply 16, posted (12 years 3 months 2 weeks 1 hour ago) and read 3463 times:
Ok Blink, and how much would be saved on an annual basis if only Carty and Crew took pay cuts and not the FA or any other labor group? A few million? How does that compare to a annual cost savings of 1.8 billion that are needed. Are you suggesting that Carty and Crew are not taking cuts?
Once again, the media has taken statements out of context. AA is not looking to create another airline within an airline like Song, MetroJet, Delta Express, Continental Lite, United Shuttle... yadda yadda yadda. The statement was only meant to suggest that all avenues for financial recovery are being looked at. There will be no Song or Shuttle in AA's future and there will be no difference in brand recognition than there is today within the AMR family.
Ha763 From United States of America, joined Jan 2003, 3703 posts, RR: 5
Reply 19, posted (12 years 3 months 1 week 6 days 23 hours ago) and read 3349 times:
In late Sept 2001, Don Carty gave up his salary for the rest of the year and bought 40,000 AMR shares. It worked out to be about $193,000 for those last 3 months. Or almost 8 of the yearly wages of a $25,000 FA.
Ual777contrail From , joined Dec 1969, posts, RR:
Reply 21, posted (12 years 3 months 1 week 6 days 19 hours ago) and read 3271 times:
American will be bankrupt by April, they will sit back and watch everyone else sink or swim. Then when AA tries to start their own? They will sink.
and as far as the comment about carty and his goons not taking paycuts? What crap, F/A's have a choice in life, they choose to be waitresses in the sky vs. Land locked or on the ground. They make pretty damn good money for someone who has to make drinks and push a cart up and down an aisle.
they get what they deserve, stop slamming upper management, your starting to sound like us here at UNITED.LOL
Milemaster From United States of America, joined Mar 2001, 1084 posts, RR: 2
Reply 22, posted (12 years 3 months 1 week 6 days 9 hours ago) and read 3189 times:
What crap, F/A's have a choice in life, they choose to be waitresses in the sky vs. Land locked or on the ground. They make pretty damn good money for someone who has to make drinks and push a cart up and down an aisle.
lol. Oh man.. here it comes..
Soon this board will be slammed with FA's opening cans other than softdrink cans.