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AA Too Large?  
User currently offlineMbj-11 From Jamaica, joined Aug 2000, 386 posts, RR: 1
Posted (7 years 2 months 1 week 5 days 21 hours ago) and read 5993 times:

Is AA too large or getting to large? I mean they basically are the Walmart of the skies on this side of the globe and that may not be too good a sign. I know they've been having labour issues and the talk surrounding a/c replacement has been hovering around the place, but somehow when I see them today I am reminded of Pan Am in their heyday.
Should they probably cut their operations into subsidiaries and do a GM style operation? Or are they good to keep going?


Jesus is the Christ and he alone saves
58 replies: All unread, showing first 25:
 
User currently offlineAa757first From United States of America, joined Aug 2003, 3350 posts, RR: 7
Reply 1, posted (7 years 2 months 1 week 5 days 20 hours ago) and read 5900 times:

I'm not sure how an airline gets too large. AA only has a 15% market share for domestic flying. And what do you mean by "Wal-Mart of the skies"?

User currently offlineLrdc9 From United States of America, joined Sep 2007, 610 posts, RR: 0
Reply 2, posted (7 years 2 months 1 week 5 days 20 hours ago) and read 5895 times:

Quoting Mbj-11 (Thread starter):
they basically are the Walmart of the skies

How so. They certainly aren't the cheapest airline out there for fares.



Just say NO to scabs.
User currently offlineSW733 From United States of America, joined Feb 2004, 6372 posts, RR: 9
Reply 3, posted (7 years 2 months 1 week 5 days 20 hours ago) and read 5882 times:

As long as they can get me there on time, on safe planes, and with nice people, I don't give a darn how big they are...just means they can get me more places. They aren't my favorite airline, not even in the USA, but they're a good airline, and no, I don't think they are too big at all...odd question.

The Wal-Mart thing intrigues me too...

Quoting Mbj-11 (Thread starter):
Should they probably cut their operations into subsidiaries and do a GM style operation?

Yep...if there is ever a model of financial success in the USA, it's GM...


User currently offlineDoug From United States of America, joined Jul 1999, 858 posts, RR: 0
Reply 4, posted (7 years 2 months 1 week 5 days 20 hours ago) and read 5812 times:

I have always kinda pegged Southwest as the Wal-Mart of airlines.

User currently offlineSTT757 From United States of America, joined Mar 2000, 16908 posts, RR: 51
Reply 5, posted (7 years 2 months 1 week 5 days 20 hours ago) and read 5764 times:

I think AA needs to be leaner but that does not mean they are too large, I just think they need to trim their fleet types and eliminate some point to point flying. I would also totally eliminate the STL focus City/hub, I know the STL folks don't want to hear that but it's probably in AA's best interest.


Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineRbgso From United States of America, joined Jun 2006, 599 posts, RR: 0
Reply 6, posted (7 years 2 months 1 week 5 days 20 hours ago) and read 5740 times:

Quoting Mbj-11 (Thread starter):
Is AA too large or getting to large?

Given the fact that most "experts" say the industry needs consolidation, I don't see how one can consider AA too large.

On the other hand, I personally don't agree that consolidation needs to happen. Once a company reaches a certain size, it becomes next to impossible to consistently manage successfully so that everyone is on the same page, so to that extent I do see the point of your question.


User currently offlineMbj-11 From Jamaica, joined Aug 2000, 386 posts, RR: 1
Reply 7, posted (7 years 2 months 1 week 5 days 19 hours ago) and read 5693 times:

Quoting Aa757first (Reply 1):
I'm not sure how an airline gets too large. AA only has a 15% market share for domestic flying. And what do you mean by "Wal-Mart of the skies"?

In the sense that they have from what I understand the largest operations of any carrier this side of the globe. Am I wrong?
Correct me (without condition) if I am . Also, like Walmart they are able to stifle the competition while cornering the market.



Jesus is the Christ and he alone saves
User currently offlineUAL747 From , joined Dec 1969, posts, RR:
Reply 8, posted (7 years 2 months 1 week 5 days 19 hours ago) and read 5671 times:

AA has a good accounting department. They AREN'T as large in Capacity than Delta, they AREN'T as large in networking as UA, but they seem to utilize their aircraft well and offer more connections and connecting times than any other airline. Actually, I may be wrong about the capacity, but they are very comprehensive in what they do. They carefully pick out their routes and are generally VERY conservative with their future plans. They have a great partnership with BA and JL, so basically, you can get to any major city in the world with only one or two stops, transiting ORD, DFW, JFK, LAX, NRT or LHR.

They started the wave of having only twins in their fleet plan (other than WN, which is an entirely different airline) and they are trimming the subtypes in the fleet to only 3 or 4 types, as is their longterm plan.

Hardly the "Wal-Mart" of Airlines.

UAL


User currently offlineSW733 From United States of America, joined Feb 2004, 6372 posts, RR: 9
Reply 9, posted (7 years 2 months 1 week 5 days 19 hours ago) and read 5653 times:

Quoting Mbj-11 (Reply 7):
In the sense that they have from what I understand the largest operations of any carrier this side of the globe

Some airline somewhere in the world has to be the largest.


User currently offlineD328 From United States of America, joined Jul 2007, 307 posts, RR: 0
Reply 10, posted (7 years 2 months 1 week 5 days 19 hours ago) and read 5572 times:

WN in my opinon is the "Walmart of the skies".

User currently offline1MillionFlyer From , joined Dec 1969, posts, RR:
Reply 11, posted (7 years 2 months 1 week 5 days 19 hours ago) and read 5550 times:

Quoting D328 (Reply 10):
WN in my opinon is the "Walmart of the skies".

It's funny that WN pays their employees better than AA yet they have a bad reputation on anet for being cheap LOL


User currently offline777STL From United States of America, joined Dec 2004, 3783 posts, RR: 3
Reply 12, posted (7 years 2 months 1 week 5 days 19 hours ago) and read 5550 times:

Quoting STT757 (Reply 5):
I would also totally eliminate the STL focus City/hub, I know the STL folks don't want to hear that but it's probably in AA's best interest.

Care to elaborate? STL just turned the biggest revenue increase(%) out of any of AA's hubs. STL does well for AA.



PHX based
User currently offlineRyanair!!! From Australia, joined Mar 2002, 4757 posts, RR: 25
Reply 13, posted (7 years 2 months 1 week 5 days 18 hours ago) and read 5468 times:

There is nothing wrong with being the largest airline on the globe. If they expand, ground suport should theoratically expand relatively with the company. If they can support further growth, why not?


Welcome to my starry one world alliance, a team in the sky!
User currently offlineHPAEAA From United States of America, joined May 2006, 1026 posts, RR: 1
Reply 14, posted (7 years 2 months 1 week 5 days 18 hours ago) and read 5429 times:

Quoting 1MillionFlyer (Reply 11):
It's funny that WN pays their employees better than AA yet they have a bad reputation on anet for being cheap

It is funny that WN pays well, but what's no funny is that WN employees are some of the most productive ($$/hour vs Work units per hour) in the industry... I don't doubt that AA would pay more if they could gain more flexible work rules and higher productivity... bottom line AA pilots want the pay without any added work... just not going to happen imho...

Quoting 777STL (Reply 12):
Care to elaborate? STL just turned the biggest revenue increase(%) out of any of AA's hubs. STL does well for AA.

your right.. from the Q3 conference call that is the case... the the question that was not posed or answered is where the base line was... for example, if ORD had base line RASM of 2.00 per ASM, but STL had base line RASM of 1.00 per ASM then STL would have to more than double the RASM per ASM just to keep pase with the system....


Is AA to Big? I'm not one to judge.. Personally I've always been impressed how diverse they are, and I think Arpey is right, that they need to evaluate each asset on an individual basis and it's NPV... while the stock holders may want immediate increase in stock price, perhaps they need to look forward at the fact that AMR is more diverse than any non government back airline in the world...



Why do I fly???
User currently offlineBok269 From United States of America, joined May 2007, 2104 posts, RR: 0
Reply 15, posted (7 years 2 months 1 week 5 days 18 hours ago) and read 5371 times:

Quoting SW733 (Reply 9):

Some airline somewhere in the world has to be the largest.

AA is the largest in terms of fleet size and total passenger-miles. AF/KL is largest in terms of revenue.

Source:
http://www.aviationexplorer.com/american_airlines.htm As well as Aviation Week and Space Technology.



"Reality is wrong, dreams are for real." -Tupac
User currently offlineOB1504 From United States of America, joined Jul 2004, 3448 posts, RR: 6
Reply 16, posted (7 years 2 months 1 week 4 days 22 hours ago) and read 4571 times:

Quoting 777STL (Reply 12):
Care to elaborate? STL just turned the biggest revenue increase(%) out of any of AA's hubs. STL does well for AA.

Additionally, they can use the STL hub as a reliever of sorts for the ORD hub, much like what CO does with CLE and EWR, respectively.


User currently offlineER757 From Cayman Islands, joined May 2005, 2616 posts, RR: 7
Reply 17, posted (7 years 2 months 1 week 4 days 21 hours ago) and read 4279 times:

AA has managed so far to avoid filing chapter 11 bankruptcy which many large airlines have been unable to do. It seems to me if they were too large, they would not have remained solvent all this time.

[Edited 2007-10-19 16:15:16]

User currently offlineAlbird87 From , joined Dec 1969, posts, RR:
Reply 18, posted (7 years 2 months 1 week 4 days 20 hours ago) and read 3947 times:

AA although may be big in amount of aircraft they have, they dont serve that many destinations outside there side of the world. You look at BA for instance and they fly to nearly every major place in the world.
AA i dont think are like Pan Am yet and never will be but they are very cautious on there routes. I think actually a big hand needs to be given to AA who were one of the only major carriers in the USA to not file for chapter 11 and i think that they were actually one of the biggest hit by 9/11 (as along with UA it was their planes that were in the incident).
To be fair the other carriers actually used Chapter 11 as a springboard there to get new aircraft and open up new routes and a new buisness plan when AA stuck it through and made a lot of cutbacks (and management mad a foolish move) but they have actually plowed through and are slowly making a comeback
I do think though that now we are seeing the drawbacks of AA doing this and as soon as they can get all this pilot/ FA legal stuff over and done with, AA will flurish again and i wouldnt be suprised to see a better service on board.


User currently offlineLrdc9 From United States of America, joined Sep 2007, 610 posts, RR: 0
Reply 19, posted (7 years 2 months 1 week 4 days 19 hours ago) and read 3858 times:

Quoting STT757 (Reply 5):
I would also totally eliminate the STL focus City/hub

I think thats actually a great place to operate out of. Good connectivity.

Quoting UAL747 (Reply 8):
Actually, I may be wrong about the capacity,

Bingo. You are. They have like 600+ a/c.



Just say NO to scabs.
User currently offlineSkyyMaster From , joined Dec 1969, posts, RR:
Reply 20, posted (7 years 2 months 1 week 4 days 18 hours ago) and read 3796 times:

Quoting 1MillionFlyer (Reply 11):
It's funny that WN pays their employees better than AA yet they have a bad reputation on anet for being cheap LOL

Exactly. And they generally have better service and their employees attitudes are MUCH better overall than AA's.


User currently onlinePC12Fan From United States of America, joined Jan 2007, 2477 posts, RR: 5
Reply 21, posted (7 years 2 months 1 week 4 days 7 hours ago) and read 3615 times:

Quoting Mbj-11 (Thread starter):
Is AA too large or getting to large?

No.

Signed,

St. Louis.

Quoting STT757 (Reply 5):
I know the STL folks don't want to hear that but it's probably in AA's best interest.

If it wasn't in "their best interest", they wouldn't have come in the first place.



Just when I think you've said the stupidest thing ever, you keep talkin'!
User currently offlineBrianDromey From Ireland, joined Dec 2006, 3931 posts, RR: 9
Reply 22, posted (7 years 2 months 1 week 4 days 7 hours ago) and read 3580 times:

I think people say get rid of STL, becasue its "too close to ORD" really mean "its not true AA".

Point to point flying is, IMHO a very good idea. There is a better chance that delays will be less and yield will be higher, versus a one-stop via a hub, P2P is also likely to increase RASM, increase utilisation of both aircraft and gates. Funnelling all traffic through a hub is not always a good idea, remember LHR and BA last Christmas?

The American fleet is not all that diverse, MD80, 738, 757, 767, 777.. In a fleet of 600+ aircraft this is sustainable. Just becasue an aircraft is "old" does not mean costs will be significantly more, as the asset will be more ikely to be owned, haven been depreciated. Also MX have a better chance to find 3rd pary parts vendors or refurbished parts, again reducing costs. Look at SAS, they fly AvroRJ,, F50, DHC8, 733,735,736,73G,738, MD80, A319,A321, A330 &A340, in a fleet of 170 aircraft.

A lot of broad, sweeping statements are made about airlines, like "commonality" too many hubs" and "duplication". Some aspects of AA are not ideal, sure, but to make these statements smacks of ignorance about the reality. Employees looking for increases is aloso somewhat premature, IMHO, its only a $175 million profit, its not like AA is awash with cash. A lot of airlines make similar money with a fleet a fraction of the size. Im sure the people of American work hard for thier money, but the money might be better spent on building a product people will actaully pay for.
Target the people who would fly AA for the the product, not those who will fly someone else to save $5. You dont see BA or SQ giving away ipgrades like confetti, thus their product has value and exclusivity, is suitably presented and priced to reflect this.

Brian.



Next flights: MAN-ORK-LHR(EI)-MAN(BD); MAN-LHR(BD)-ORK (EI); DUB-ZRH-LAX (LX) LAX-YYZ (AC) YYZ-YHZ-LHR(AC)-DUB(BD)
User currently offlineBobnwa From United States of America, joined Dec 2000, 6538 posts, RR: 9
Reply 23, posted (7 years 2 months 1 week 4 days 7 hours ago) and read 3556 times:

Quoting Mbj-11 (Thread starter):
but somehow when I see them today I am reminded of Pan Am in their heyday

Pan Am in its heyday was smaller than AA,UA,TW, and EA. AA is larger than any carrier has ever been with the exception of Aeroflot many years ago before it split up.


User currently offlineEXAAUADL From , joined Dec 1969, posts, RR:
Reply 24, posted (7 years 2 months 1 week 4 days 6 hours ago) and read 3501 times:

Quoting STT757 (Reply 5):
would also totally eliminate the STL focus City/hub, I know the STL folks don't want to hear that but it's probably in AA's best interest.

Actually I think STL makes a profit now that it has been downsized...the yields are mostly local with less connecting traffic than before Nov 2003


25 EXAAUADL : I think if any airline risks being "too big" it is DL with all the new expansion into markets where they were otherwise unknown or weaker than the com
26 SESGDL : What? DL is a major airline at JFK, BOS, and LAX and always has been. DL has, disputably the second largest FF base of any US airline after AA, and i
27 EXAAUADL : DL has not always been a major player at LAX. Until recently they have been a bit player there for quite sometime. Some of DL's growth has been quite
28 SLCUT2777 : As they do with DFW, going along with keeping the operating costs at that airport so high that they rank right up there with SEA, YYZ & MIA for being
29 SESGDL : Not at all. DL's XE contract is at-risk for XE, not Delta. And DL has always been one of the 4 largest airlines at LAX ever since their takeover of W
30 OB1504 : Although they never really "came" to STL, it was just part of the package with TW. Well, that's not AA as much as the fact that they're reconstructin
31 ConcordeBoy : They took the #1 spot from DL quite some time ago, so far as pax carried and capacity offered. Ironically, that may be what's hurting them most now--
32 LambertMan : Yields for the most part are terrific. Consider the following routes have no other non-stop competition on them: -Seattle -LaGuardia -Boston -Reagan
33 Aa757first : Not really. No airline can anymore. They face at least some degree of competition on almost every route, some having quite a lot. For example, NYC to
34 Post contains images Brilondon : And Skybus is the thrift shop of the sky.
35 Flighty : True enough. Too many fleet types? Are these a.net people on crack? AA is big enough to have 8 to 10 fleet types, and 4 or 5 hubs, with no penalty in
36 Catdaddy63 : I don't think AA is too big. They will be buying new aircraft soon and will grow more new markets as they modernize. They desperately need something i
37 AASTEW : Pre 2001 F100 MD-80 B727 B737 B757 B767 B777 DC-10 A300 Now 2007 MD-80 B737 B757 B767 B777 A300 How many more need to go according to the experts at A
38 OB1504 : Don't forget the MD-11. The 717s are gone, too. Incidentally, aren't AA the only airline to have ever flown the entire Boeing series of jetliners, fr
39 ConcordeBoy : ...add the M11 to that
40 Post contains images SkyyMaster : Good point, and good comparison with Aeroflot. Now if I ever board an AA flight and get seated next to a woman holding a live chicken, then I know th
41 ElmoTheHobo : St. Louis and Miami were profitable by Q1 2004. And that's only mainline. The 717s were TWA birds, I wouldn't count them as part of the AA fleet, oth
42 SLCUT2777 : That might have been the conventional thinking during the 1990s, but OO has been a highly effective regional partner for both DL and UA, and I'm sure
43 Tango-Bravo : In this respect and others, WN can be much better compared with Costco. Besides both paying their employees well and management treating them with ge
44 HPAEAA : your right... but Walmart once had a more simplified line.. however due to the need do continue increases in same store sales and appease investors,
45 Tango-Bravo : Are you (or anyone) able to name any example(s) of where the "all things to all people" approach has resulted in improved overall customer satisfacti
46 FlyDreamliner : See, I doubt it. In ORD they are head to head with UA, who has always had the upper hand in that market, and where there are wicked delays and terrib
47 Post contains links and images OB1504 : Well, they were repainted into a version of the AA livery while the DC-9s were not, which is why I counted them: View Large View MediumPhoto © M
48 HPAEAA : Dell, HP, SQ, Apple.. take your pick.. Dell, HP and Apple offer customizable products to customers based on the level that they want to pay... and ye
49 ElmoTheHobo : They were painted in the hybrid scheme and carried American Airlines registrations, but I don't think they were ever on American's certificate. We'll
50 Okie73 : wow, someone asking if an airline is too large. Kinda the exact opposite of the usual AA should merge with A or B or C etc topics we get here on Airli
51 Adicool : Okay...I haven't read all of the post here, but I would just like say one thing about AA and the Wal-Mart-thing. I flew with them domestically from JF
52 Cjpark : The Wally World Airlines title belongs solely to Southwest. They have lowered the price of airtravel so much that the other US airlines have all had
53 2H4 : Incorrect. In reality, American Airlines has never wanted to compete in the DFW area head to head with Southwest Airlines without special circumstanc
54 HPAEAA : The Wright Amendment was a law supported by all DFW carriers when the airport was opened in the 70s... When the airport was built, it was in the midd
55 Cjpark : More myth making by the Southwest crew. It is funny that none of you will admit that the two cities of Dallas and Ft Worth went to Congress together
56 Mbj-11 : Is this law still in effect? and if so is it needed? Wouldn't the liberalization of the industry render this law unnecessary?
57 ElmoTheHobo : No, because federal and state legislation can still restrict and legislate aviation. LaGuardia and National's perimeter restrictions, the Wright Agre
58 Mbj-11 : Outside of those airports, are there any other major airports subject to this form of control? (so to speak)
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