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AA May Cut More Capacity  
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Posted (5 years 9 months 1 week 5 days 20 hours ago) and read 8276 times:

AA CFO suggests additional capacity cuts if demand does not pick up.
http://www.reuters.com/article/ousivMolt/idUSTRE52B79N20090312

Quote:
American Airlines parent AMR Corp (AMR.N) may need to make deeper capacity cuts to accommodate weaker travel demand during the economic recession, the company's chief financial officer said on Thursday.

AMR, the second-largest U.S. airline, slashed its mainline capacity in the fourth quarter by 8.3 percent. The airline has said it would cut its mainline capacity by more than 6.5 percent in 2009.

Horton said capacity cuts have created new opportunities for cost cuts as well. "When you cut capacity, there are certain costs that come out naturally," Horton said. He noted, in particular, a lessened need for airplane maintenance facilities. AMR is considering whether it still needs all three.

Horton said the airline industry has long been plagued with overcapacity and there is probably a role for further industry consolidation.

"Over time, there will probably be fewer airlines in the world," Horton said. He noted, however, that tight credit markets make consolidation difficult right now.


41 replies: All unread, showing first 25:
 
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 1, posted (5 years 9 months 1 week 5 days 20 hours ago) and read 8234 times:



Quoting LAXDESI (Thread starter):
"Over time, there will probably be fewer airlines in the world," Horton said. He noted, however, that tight credit markets make consolidation difficult right now.

Delta and NorthWest were able to do an all stock deal.


User currently offlineJFernandez From United States of America, joined Feb 2004, 304 posts, RR: 0
Reply 2, posted (5 years 9 months 1 week 5 days 19 hours ago) and read 8085 times:

So... what routes? We saw a great post about load factors/profits of their domestic routes, but I'm wondering how the International Routes (ORD-DME most interesting) are doing.

User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 3, posted (5 years 9 months 1 week 5 days 17 hours ago) and read 7874 times:

Of the big points in AA's int'l network Western Europe and esp. LHR is being hard hit by the financial crisis. Russia and India are weak but it is actually the traditional "first world" markets that are some of the hardest hit.

User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 4, posted (5 years 9 months 1 week 5 days 17 hours ago) and read 7832 times:



Quoting WorldTraveler (Reply 3):
Russia and India are weak but it is actually the traditional "first world" markets that are some of the hardest hit.

It may surprise many that Indian international traffic overall has been growing while the domestic traffic is down.


User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 5, posted (5 years 9 months 1 week 5 days 12 hours ago) and read 7336 times:

India loads are being bouyed by low fares which are producing unsustainably low revenues. There is still way too much capacity to/from India even though hardly a week goes by without a carrier announcing India int'l service reductions.

User currently offlineLACA773 From United States of America, joined Nov 2004, 4064 posts, RR: 2
Reply 6, posted (5 years 9 months 1 week 5 days 9 hours ago) and read 6645 times:
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Quoting WorldTraveler (Reply 3):
Of the big points in AA's int'l network Western Europe and esp. LHR is being hard hit by the financial crisis. Russia and India are weak but it is actually the traditional "first world" markets that are some of the hardest hit.

Since LHR has taken a very hard hit from all levels, is it feasible AA might use 763s on current 777 flights or run 763s on slower, off peak days and run the 777s on the busy, high peak days?

Will markets like LAS, MCO see a reduction in flights over other's?


User currently offlineSTT757 From United States of America, joined Mar 2000, 16907 posts, RR: 51
Reply 7, posted (5 years 9 months 1 week 5 days 9 hours ago) and read 6634 times:



Quoting LAXDESI (Thread starter):
He noted, in particular, a lessened need for airplane maintenance facilities. AMR is considering whether it still needs all three.

I'm hoping the Kansas City facility survives, the State of Missouri has suffered enough with the loss of all those jobs at the former St.Louis hub.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 8, posted (5 years 9 months 1 week 5 days 8 hours ago) and read 6352 times:



Quoting STT757 (Reply 7):
I'm hoping the Kansas City facility survives, the State of Missouri has suffered enough with the loss of all those jobs at the former St.Louis hub.

767 winglet installation is done at Kansas facility, which should make it less likely that it will be closed.


User currently offlineAmerican 767 From United States of America, joined May 1999, 3996 posts, RR: 12
Reply 9, posted (5 years 9 months 1 week 5 days 7 hours ago) and read 6267 times:
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This is something that doesn't make a lot of sense to me:
I booked a flight LGA-ORD-BRU for April and the ORD-BRU, flight AA 88, has had a recent equipment change. That flight, which was always a 767 since American started flying to Brussels 20 years ago, is now a 777 starting on April 6th. Why do they put a 777 on that flight? They fly DFW-LHR on the 763 and ORD-DME which is 5000 miles long on the 763. Wouldn't it make more sense to swich both of those routes to 777's and keep the 763 on the ORD-BRU route? I would have never expected a 777 on that route, they should have kept the 763.
My thoughts:
LHR, a One World hub, is supposed to be an all 777 base as far as AA is concerned, and ORD-DME is among the longest nonstop flights on the system. It would make more sense to assign the 777's on the longest nonstop flights and then the 763's on other long haul flights where the yields don't justifly the need to schedule a 777.
So to be clear: why put a 777 on the ORD-BRU route and leave the 763 on the longer ORD-DME flight? The opposite would have made sense to me.
The other reason that makes me think upgrading ORD-BRU to a 777 won't be anymore profitable is this: SN will in the near future be a member of Star Alliance which means that the AA/SN codeshare might vanish, hence AA selling fewer seats on routes to BRU.

Ben Soriano



Ben Soriano
User currently offlineWedgetail737 From United States of America, joined Aug 2003, 5950 posts, RR: 6
Reply 10, posted (5 years 9 months 1 week 5 days 7 hours ago) and read 6241 times:
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If AA is smart, they would further eliminate additional MD-80's from their fleet to save on fuel and use their 737-800's on some of the remain mainline, narrowbody routes.

User currently offlineGulfstream650 From United Kingdom, joined Mar 2008, 539 posts, RR: 0
Reply 11, posted (5 years 9 months 1 week 5 days 4 hours ago) and read 5872 times:

This topic really disappoints me. I've clocked up 336,631 miles since late 2004 on AA which I think is a fair amount of miles - most are international flights - UK or South America.

Sadly, AA cut the ORD - LEX flight (which was 8/10 as good as full) and now I'm left wondering what to do with my airline future - DFW is not much of an option (flights are limited)

I committed to AA, but she dumped me................



I don't proclaim to be the best pilot in the world but I'm safe
User currently onlineBMI727 From United States of America, joined Feb 2009, 15831 posts, RR: 27
Reply 12, posted (5 years 9 months 1 week 5 days 4 hours ago) and read 5844 times:



Quoting American 767 (Reply 9):
ORD-DME is among the longest nonstop flights on the system. It would make more sense to assign the 777's on the longest nonstop flights and then the 763's on other long haul flights where the yields don't justifly the need to schedule a 777.
So to be clear: why put a 777 on the ORD-BRU route and leave the 763 on the longer ORD-DME flight? The opposite would have made sense to me.

ORD-DME was always supposed to be a 763. The 777s were needed to start the route because the 767 altimeters could not use the Russian altitude system. The metric system was not a problem but the fact that the Russians measure altitude above the ground rather than altitude over sea level caused trouble. It took some time for AA to convert the 763s.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineAmerican 767 From United States of America, joined May 1999, 3996 posts, RR: 12
Reply 13, posted (5 years 9 months 1 week 4 days 19 hours ago) and read 5061 times:
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Quoting Wedgetail737 (Reply 10):
If AA is smart, they would further eliminate additional MD-80's from their fleet to save on fuel and use their 737-800's on some of the remain mainline, narrowbody routes.

That's what they are going to do in the next two years. In 2011, American will have twice as many 737-800's than they have now, and fewer MD-80's. In the 2010's the MD-80 will be considered an old gas guzzler, it will be what the 727-200 was in the early 1990's: old, gas guzzler, beginning phase out of the type, but still widely in mainline passenger service. Back then the MD-80 was new compared to the 727, like today (late 2000's) the 737-800 is new compared to the MD-80.

Just a slight correction to my previous post although not relevent to the subject of this topic: I said the flight AA 88 ORD-BRU always was a 767 (they flew both the 200 and the 300 Series on that route), this is not completely correct. In the early 1990's American flew the DC-10 on that route for about a year. But yes, since the summer of 1992 up until now it is true that American always flew the 767 on the ORD-BRU-ORD route.

Ben Soriano



Ben Soriano
User currently offlineLAXdude1023 From India, joined Sep 2006, 7808 posts, RR: 25
Reply 14, posted (5 years 9 months 1 week 4 days 19 hours ago) and read 5022 times:



Quoting American 767 (Reply 9):
I booked a flight LGA-ORD-BRU for April and the ORD-BRU, flight AA 88, has had a recent equipment change. That flight, which was always a 767 since American started flying to Brussels 20 years ago, is now a 777 starting on April 6th. Why do they put a 777 on that flight? They fly DFW-LHR on the 763 and ORD-DME which is 5000 miles long on the 763. Wouldn't it make more sense to swich both of those routes to 777's and keep the 763 on the ORD-BRU route? I would have never expected a 777 on that route, they should have kept the 763.

I can explain that one.

First off DFW-LHR does have a 777 on the route. AA flies DFW-LHR with 1x 777 and 1x 763. Come this summer they will have 1x 777 and 2x 763. They just put 777's where there is the most F demand. DFW-LHR has F demand, but with BA flying it as well, if gets the F capacity it needs.

As for ORD-BRU, it was upgraded to a 777 because AA has seen an upswing in premium traffic on that route.

As for ORD-DME, ill be shocked if it makes it for the long haul.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineLambertMan From United States of America, joined Aug 2003, 2081 posts, RR: 36
Reply 15, posted (5 years 9 months 1 week 4 days 17 hours ago) and read 4865 times:

Good bye whatever is left of St. Louis. Oh well

User currently offlineJetstar From United States of America, joined May 2003, 1662 posts, RR: 10
Reply 16, posted (5 years 9 months 1 week 4 days 14 hours ago) and read 4730 times:
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Quoting Gulfstream650 (Reply 11):
This topic really disappoints me. I've clocked up 336,631 miles since late 2004 on AA which I think is a fair amount of miles - most are international flights - UK or South America.

Sadly, AA cut the ORD - LEX flight (which was 8/10 as good as full) and now I'm left wondering what to do with my airline future - DFW is not much of an option (flights are limited)

I committed to AA, but she dumped me................

I am a million miler on AA and they did the same to me.

AA dropped all their LGA to Florida, except MIA flights, I do a fair number of LGA to TPA or MCO flights during the year, so I had no choice but to change over full time to Delta, who was glad to get my business and matched my AA elite status for the first year.

As an AA million mile member, I have lifetime Gold status, but the only way I will ever fly AA again, other than if AA is the only airline that flies there, is to use up my AA miles I still have.

It appears Gerard Aprey, the CEO, does not see the fact that when they drop out of a major market, they are losing a lot of other future business. My wife and I fly about 30,000 miles a year, we are not what you would call road warriors, but we are also not typical leisure type travelers either, we always booked AA, even if there was a cheaper fare on the run, because of the perks we got as elites.

In my opinion, I think AA is slowly going down the toilet, the way management is running the company, they chased my wife and I away.

JetStar


User currently offlineWedgetail737 From United States of America, joined Aug 2003, 5950 posts, RR: 6
Reply 17, posted (5 years 9 months 1 week 4 days 14 hours ago) and read 4684 times:
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My guess is that AA will eventually drop their intra-California services out of SFO and SJC.

User currently onlineBMI727 From United States of America, joined Feb 2009, 15831 posts, RR: 27
Reply 18, posted (5 years 9 months 1 week 4 days 13 hours ago) and read 4601 times:



Quoting LambertMan (Reply 15):
Good bye whatever is left of St. Louis. Oh well

I was thinking that a STL-LHR flight might work pretty well. The unfortunate thing is that such a flight would be just outside of a 757s range. That said, there are probably a lot of people who would prefer connecting in STL instead of ORD or DFW. More importantly, St. Louis is home to several large financial companies, plus a large chunk of Boeing and A-B, so a nonstop to the world's financial capital would be useful.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineLegacyins From United States of America, joined Aug 2003, 2145 posts, RR: 0
Reply 19, posted (5 years 9 months 1 week 4 days 13 hours ago) and read 4577 times:



Quoting Wedgetail737 (Reply 17):
My guess is that AA will eventually drop their intra-California services out of SFO and SJC.

If anything, possibly the SJC routes. The SFO-LAX route is profitable for AA.



John@SFO
User currently offlineWorldTraveler From , joined Dec 1969, posts, RR:
Reply 20, posted (5 years 9 months 1 week 4 days 13 hours ago) and read 4529 times:



Quoting Jetstar (Reply 16):
It appears Gerard Aprey, the CEO, does not see the fact that when they drop out of a major market, they are losing a lot of other future business.

That is precisely why in a highly competitive market like NYC, you have to fly all of the key markets. However, AA's costs are simply too high for them to compete in NE-Florida markets outside of their MIA hub.
The other side of the coin is that some carriers didn't offer the transcon and LHR flights that AA dominated for years. Now other NYC carriers serve those markets plus alot more that AA doesn't. NYC is no different than what AA has had to do in CHI against UA - serve almost all of the same markets or never be able to compete for the same corporate accounts. There are clearly individuals that don't need all of the routes one carrier offers but the bigger accounts certainly do and it is those accounts that make or break a carrier in a competitive market.


User currently offlineJetstar From United States of America, joined May 2003, 1662 posts, RR: 10
Reply 21, posted (5 years 9 months 1 week 4 days 8 hours ago) and read 4346 times:
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Quoting WorldTraveler (Reply 20):
That is precisely why in a highly competitive market like NYC, you have to fly all of the key markets. However, AA's costs are simply too high for them to compete in NE-Florida markets outside of their MIA hub.

AA can not be competitive in a lot of markets because they were the only major airline not to declare bankruptcy. Their competitors who did were able to shed a lot of debt and lower their operating costs.

This has put AA in a competitive disadvantage, they saved their employee pensions and benefits, but in doing so its hurting them in the long run. And now the pilots union is threatening major labor actions or slow downs if they don’t get back the wages they gave up and some of the flying that has been given over to Eagle, which is only going to continue AA’s spiral down.

There has been talk that AA will have to declare bankruptcy so they can reduce their costs and be competitive again. The Delta/NW combo is really going to put the pressure on AA in the future

There is a lot of animosity between the pilots and management, always has been ever since the pilots broke away from ALPA and formed their own union, and always will be..

I would not want to be flying on AA in the near future with the risk of the pilots taking some sort of labor action disrupting travel. Just look back a few years ago when the United pilots did the same thing, UA lost a lot of business because some of their customers took their business somewhere else after the pilots returned back to work.

One thing you never do is take your labor problems out on the customer, because it only comes back to hurt you in the long run.

JetStar


User currently offlineSFOHORIZON From United States of America, joined Jun 2007, 96 posts, RR: 0
Reply 22, posted (5 years 9 months 1 week 4 days ago) and read 4189 times:



Quoting Wedgetail737 (Reply 17):
My guess is that AA will eventually drop their intra-California services out of SFO and SJC.

I seriously doubt it. SFO's AA routes to LAX, feed the AA routes out of LAX to NRT and LHR. I know this because I have had numerous friends in the Bay Area that book flights on AA, flying to NRT and LHR out of LAX. And of course, they use AA to get down to LAX.

Plus, with a focus city in LAX, AA needs to feed it from SJC, SFO and other places in California. I don't see the LAX focus city going anywhere, hence why the other California services will remain relatively untouched.

Just my two cents.


User currently offlineLAXDESI From United States of America, joined May 2005, 5086 posts, RR: 47
Reply 23, posted (5 years 9 months 1 week 3 days 18 hours ago) and read 4024 times:



Quoting Jetstar (Reply 21):
There has been talk that AA will have to declare bankruptcy so they can reduce their costs and be competitive again. The Delta/NW combo is really going to put the pressure on AA in the future

That's one reason I have been selling some of my AA stock holding and buying Delta and Continental stocks.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7808 posts, RR: 25
Reply 24, posted (5 years 9 months 1 week 3 days 18 hours ago) and read 4003 times:



Quoting LAXDESI (Reply 23):
That's one reason I have been selling some of my AA stock holding and buying Delta and Continental stocks.

Buying any airline stock right now is probably a bad idea.



Stewed...Lewd...Crude...Irreverent...Belligerent
25 WorldTraveler : Absolutely true. But at some point, AMR has to decide that the cost disadvantage is too great and their chances of turning the company around is too
26 LAXdude1023 : The market hasnt hit rock bottom yet. Buying any kind of stock right now is probably a bad idea. In 6 months that probably wont be true. A trip to BK
27 QQflyboy : Red Hat (NYSE: RHT)... just had a long conversation about this in the past couple of days. Extremely stable company and under valued stock. There's b
28 AAR90 : Wrong. When AA pilots were essentially "forced" into leaving ALPA and creating their own union, there was relative labor "peace" between AA and APA f
29 Super80DFW : I'm not sure if any of AA's 762's are -ER models, but if any are, this route would seem feasable with that aircraft. The 10F, 30J, and 119Y configura
30 OB1504 : Yep, all of AA's remaining 762 fleet is the -ER version, used primarily on JFK-LAX, JFK-MIA, and JFK-BDA.
31 Tommy767 : AA lost my business in late-2008. My last flight with them was downright unacceptable. The recent cuts out of EWR has also rubbed me the wrong way. D
32 ERJ170 : AA having the RDU flight has absolutely no impact on STL having a LHR flight. If AA wanted to have a flight from STL, they could at any moment. They
33 Jetstar : I agree, on almost all the LGA/TPA flights I was on, the airplane was just about if not 100 percent full, so it was not their load factors. And these
34 LAXdude1023 : The reason theyre staisfied with it is because its revenue guarenteed. If it werent, it wouldnt exist. There no connection because an STL-LHR flight
35 BMI727 : I'm not optimistic either. If it could be done with a 757 there would be a decent shot, but STL is just a little too far. Summer might work, but such
36 ERJ170 : Sounds like a good reason to me.. and I don't think any airline CEO would be dissatisfied with guaranteed revenue..
37 WROORD : I know AA is trying to save on gas by reducing a number of MD80 aircraft it operates, but what I do not understand why they've put dinky small planes
38 WorldTraveler : RJs aren't great for prime routes but if you need to cut capacity due to lower demand but need to keep frequencies up, RJs can do the job. Summer seas
39 Cubsrule : IMO, that's the only way that STL-LHR will happen. AA and BA have a ton of redundant capacity at ORD that would probably be better-served by BA 744s
40 Ckfred : This is a proverbial which came first, the chicken or the egg question. Is AA contemplating more capacity cuts, solely because of the economy, or have
41 Aajfksjubklyn : AA will have to cut a lot more capacity after their pilots (NOT ALL) stop with their delayed taxi's in building artificial time into schedules to keep
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