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And The Winner Is...AMR  
User currently offlineSpeedport From United States of America, joined Sep 2001, 284 posts, RR: 0
Posted (11 years 2 months 2 days 22 hours ago) and read 3372 times:

All of the airlines knew they had to address the problem of overcapacity, but none seemed willing to be the first to make cuts. I've been watching this game of chicken waiting to see who would blink first. It now appears someone has.

AMR is the first to tip its hand, and has released this statement; "The reality is we will not be able to fly every nonstop route we fly today, nor will we be able to provide the same level of service in markets that cannot profitably support our current flight schedule."

I wonder who will be next?

http://www.marketwatch.com/news/yhoo/story.asp?source=blq/yhoo&siteid=yhoo&dist=yhoo&guid=%7B48CE8B9B%2D0079%2D489E%2DB2B0%2D7CB14B4DFF80%7D







21 replies: All unread, jump to last
 
User currently offlineTekelberry From United States of America, joined May 2003, 1459 posts, RR: 4
Reply 1, posted (11 years 2 months 2 days 22 hours ago) and read 3363 times:

This topic is already being discussed here.

User currently offlineMattnrsa From United States of America, joined Dec 2002, 393 posts, RR: 1
Reply 2, posted (11 years 2 months 2 days 22 hours ago) and read 3357 times:

Isn't AA adding seats to their planes?

User currently offlineUnitedFirst From United States of America, joined Jun 2001, 478 posts, RR: 2
Reply 3, posted (11 years 2 months 2 days 14 hours ago) and read 3155 times:

Gimme a break...

AA has this incredible ability of making everything it does seem like this incredibly forward-thinking operation. Granted, certain things have been (ie, MRTC...as much as that was spurred on by UA's Economy Plus) very progressive, these concepts by Arpey is not one of them.

I wonder how long AA can elude bankrupcy court.

-Derek


User currently offlineTekelberry From United States of America, joined May 2003, 1459 posts, RR: 4
Reply 4, posted (11 years 2 months 2 days 13 hours ago) and read 3135 times:

I wonder how long AA can elude bankrupcy court.

They are in no immediate danger of bankrupcy currently.


User currently offlineWorkbench From , joined Dec 1969, posts, RR:
Reply 5, posted (11 years 2 months 2 days 7 hours ago) and read 3059 times:

AA is actually in gave danger on a CH11 this fall. Remember AA lost 1B in the 1st Quarter, the 2nd will be break even at BEST, still likely a loss. AA cannot let their cash reserves fall below 1B. With the slow down in the fall/winter season ahead AA will likely be burning millions a day. IMHO this will likely force AA into CH11 by YE.

User currently offlineOrd From United States of America, joined Jul 1999, 1381 posts, RR: 1
Reply 6, posted (11 years 2 months 2 days 6 hours ago) and read 3035 times:

American blinking first? Have you not noticed the major cuts Delta has made since 9/11 to rightsize their ship, including a near-total dismantling of mainline at DFW? Or the cuts other big airlines have made?

American is way behind most everybody else in terms of downsizing if you ask me.


User currently offlineSptv From United States of America, joined Dec 2000, 130 posts, RR: 0
Reply 7, posted (11 years 2 months 2 days 6 hours ago) and read 3004 times:

Anyone have any idea which routes will be the first to go?

User currently offlineAzjubilee From United States of America, joined Apr 2000, 3906 posts, RR: 27
Reply 8, posted (11 years 2 months 2 days 6 hours ago) and read 2974 times:

Actually, AA seems to be the last one to pull the head out of the sand and recognize that they've got serious issues!! First to make cuts? RIGHT! Northwest started recognizing the need to trim the fat in MARCH OF 2001!!!!!
They're in their 6th cost cutting round since 3/01. Now who's got the prudent and forward thinking mgmt?


AZJ


User currently offlineUal777contrail From , joined Dec 1969, posts, RR:
Reply 9, posted (11 years 2 months 2 days 4 hours ago) and read 2931 times:

ORD,
you hit it right on the head, i couldnt agree with you more.


ual 777 contrail


User currently offlineTango-Bravo From United States of America, joined Jun 2001, 3805 posts, RR: 29
Reply 10, posted (11 years 2 months 2 days 3 hours ago) and read 2889 times:

The "Winner" is AMR????? How so? As other replies have already noted, AA isn't exactly on the cutting edge of capacity reduction at this point in time. And since when does reducing capacity cure what ails an airline? Many fixed costs remain with fewer available seat miles over which to spread those costs, meaning unit costs increase. When airlines slashed capacity by around 20% immediately after 9/11/01, their overall costs typically went down by only 7-9%

From the article linked in the starter thread, it sounds as though AA smugly assumes that the world of U.S. air travelers is cowering in fear and trepidation at their announcement that more flights will have to be dropped; as though we should be fearful that we won't be able to fly unless we are willing to acquiesce to extortionary fares and rules. (a "public be damned" attitude IMO)

When one sees through the spin, AA's announcement is nothing more, IMO, than 1) gaming for more handout$$$ from public agencies that they hope to hoodwink into subsidizing their failed business model and, 2) a further attempt at market manipulation.

As for 2) above, as long as the market remains free from artificial constraints, AA's attempts at market manipulation (in concert with their would-be cartel comrades) are handing even more opportunities to the LCCs they try to blame for their malaise. Even though AA remains no more than one step from the brink of BK, they still don't get it. This makes them "the winner"?????????????





User currently offlineLuv2fly From United States of America, joined May 2003, 12103 posts, RR: 49
Reply 11, posted (11 years 2 months 2 days 3 hours ago) and read 2873 times:
Support Airliners.net - become a First Class Member!

Tango-Bravo

I always enjoy reading your posts. I do agree with you. AA is just now following what other carriers have already done. To little to late.



You can cut the irony with a knife
User currently offlineUnitedFirst From United States of America, joined Jun 2001, 478 posts, RR: 2
Reply 12, posted (11 years 2 months 2 days 3 hours ago) and read 2858 times:

ORD, AZJubilee, Tango-Bravo...I couldn't agree more!

As far as I'm concerned, if AA wants to falter, they better do it before the Bush administration leaves the White House – do you think the Texan would let this Texas-based airline fall apart?

I think not.

-Derek


User currently offlineTan Flyr From United States of America, joined Aug 2000, 1906 posts, RR: 0
Reply 13, posted (11 years 2 months 2 days 3 hours ago) and read 2825 times:

and the winner is...Hmm...who really is the winner...no one!

Even though I am a loyal AA customer, I see a lot of changes that should have been/still can be made to increase revenue and make gains to profitability.
The number one item is VALUE PRICING....I just don't understand why they do not grab the bull by the horns and DO IT..get all the free publicity..even get Crandall to go do TV commercials/interviews (like he did in 92?)...whatever it takes to get the public to know that they can always get a faire price at AA.

Costs have to be broughtcloser to SW, JB, etc...we all know that...a tought road..not only the wages, but work rules, etc.

Hopefully some OPEC members cheat enough to bring petrol down some also.( ya know, the caribou in ANWR are more important than peoples jobs in the lower 48....yeah, right!)
Fuel is a bit of a wild card for all of them.

I'm sorry a lot more are being laid off...best of luck to you...the travel economy had changes forced on it by 9/11...who would have guessed the changes would be this severe.



User currently offlineTcttx From United States of America, joined Dec 1999, 219 posts, RR: 0
Reply 14, posted (11 years 2 months 2 days 3 hours ago) and read 2806 times:

-------------------------
The number one item is VALUE PRICING....I just don't understand why they do not grab the bull by the horns and DO IT..get all the free publicity
-------------------------

AA tried that once before in the early 90s to much fanfare. Only problem is, as they say, you're only as smart as your dumbest competitor, and in that case it turned out to be NW.


User currently offlineSpeedport From United States of America, joined Sep 2001, 284 posts, RR: 0
Reply 15, posted (11 years 2 months 1 day 17 hours ago) and read 2684 times:

Is AAL a winner, no. I was being facetious.

...cuts Delta has made since 9/11 to rightsize their ship

Every major carrier made cuts in capacity following 9/11.

RIGHT! Northwest started recognizing the need to trim the fat in MARCH OF 2001!!!!!

Every major carrier made cuts in response to the Iraq war and SARS.

Now, these events are behind us. Most analysts see the beginnings of a recovery ahead for the industry. And American's response to this is what?

"we will not be able to fly every nonstop route we fly today..."

Why is this different compared to 9/11, Iraq and SARS? Because American has looked into the abyss, as United has, and their response has been to cut back while United has been maintaining, and even reinstating, parts of its schedule.

It doesn't need any explanation that American and United are in fierce head to head competition with each other. Neither has wanted to be the first to cut back on capacity for fear of losing market share to the other.

How does this affect the larger context of national capacity?

I anticipated the DL/NW/CO alliance to start cutting capacity on overlapping routes, and still do, while American held on to its routes.

When United filed for bankruptcy many on this board predicted that, if they survived, it would be a much smaller airline. United, however, operating through bankruptcy, has been able to hold on to its routes while American appears ready to abandon some of theirs.

Yes, I would say American blinked.


User currently offlineUA744Flagship From , joined Dec 1969, posts, RR:
Reply 16, posted (11 years 2 months 1 day 4 hours ago) and read 2620 times:

Poor AA has been left alone on the dance floor.

Sure, she thought she was going to rely her critical mass to combat UA/US and DL/CO/NW, but it looks like she'll have to diet now. No longer is the title of "World's Largest" something that instills pride and invokes awe and envy. In that respect, AA's like the prom queen no one wanted to take home and bang.


User currently offlineDL Widget Head From United States of America, joined Apr 2000, 2092 posts, RR: 5
Reply 17, posted (11 years 2 months 1 day 4 hours ago) and read 2607 times:

This is hardly a revelation...airlines have been paring excess capacity and poor performing flights even pre 9/11--just good business really. They're certainly not the first and won't be the last.

User currently offlineLuv2fly From United States of America, joined May 2003, 12103 posts, RR: 49
Reply 18, posted (11 years 2 months 1 day 4 hours ago) and read 2600 times:
Support Airliners.net - become a First Class Member!

UA744Flagship
If you are ever in the CLE area please stop by and clean off my computer screen as the coffee I was drinking is now all over it, thank to your post. The analogy is 110% correct.



You can cut the irony with a knife
User currently offlineSESGDL From United States of America, joined Jan 2001, 3474 posts, RR: 10
Reply 19, posted (11 years 2 months 23 hours ago) and read 2540 times:

AA management has finally started to get some sense. Other carriers were chopping routes and cutting capacity while AA was doing things like this just weeks ago:

AMERICAN LAUNCHES ADDITIONAL SERVICE IN MORE THAN 50 CITIES STARTING SATURDAY

As if AA needed to add service to 50 additional cities when there's already 20% too much capacity in the industry. Also, with the war on Iraq AA cut the least. UA cut overall capacity 12%, Delta 12%, NW 10%, CO 10-12%(not sure), while AA cut international service 6% and didn't cut domestic capacity.

Jeremy


User currently offlineUal777contrail From , joined Dec 1969, posts, RR:
Reply 20, posted (11 years 2 months 13 hours ago) and read 2465 times:

AA Was waiting for UAL to DIE!!! And we aren't dead, we are still alive. We may be sedated at times, and wish we had died, but the fact remains AA has made some horrible decisions lately and they are ALL coming back to bite them in the rear.

I can understand the pride one feels for an airline but when UAL made the choices they made, cutting flights, countless layoffs and wage concessions, everybody said it will be a matter of time. But UNITED got what it needed and the bleeding may not have stopped but damnit hopefully it is starting to clot. Hopefully we will make it through this alive, and who really cares if you are the worlds biggest airline, I just want a paycheck and flight bennies.


ual 777 contrail


User currently offlineSESGDL From United States of America, joined Jan 2001, 3474 posts, RR: 10
Reply 21, posted (11 years 2 months 4 hours ago) and read 2420 times:

I agree 110% Ual777contrail. Good points. Hopefully AA can get themselves out of their problems.

Jeremy


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