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Why Cant AA Make Money?  
User currently offlineMax Q From United States of America, joined May 2001, 4782 posts, RR: 19
Posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13869 times:

In this economic climate, with all other Airlines reporting very healthy profits AA is still in the red.



Over the years, for the most part their management has proven quite savvy (with the exception of the TWA acquisition)
and their yield management was always the best.



What's going on with them ?


The best contribution to safety is a competent Pilot.
89 replies: All unread, showing first 25:
 
User currently offlineLonghornmaniac From United States of America, joined Jun 2005, 3359 posts, RR: 45
Reply 1, posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13868 times:

Quoting Max Q (Thread starter):

Labor, labor, labor. With one of, if not THE highest costs in the industry, it's definitely working against them.

Cheers,
Cameron


User currently offlinemerlot From , joined Dec 1969, posts, RR:
Reply 2, posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13809 times:

Quoting Max Q (Thread starter):
What's going on with them ?

The labor problem is of cours a specific loss maker, but IMO there are broader issues as well:

1. Domestically: they are a preferred choice if you are flying to/from DFW, ORD or MIA and maybe LGA. If you are NOT going to Dallas, Chicago or Miami today or you can fly to a NYC airport besides LaGurdia, the reasons to fly AA versus a competitor are nonexistent or even problematic. The same is of course true for all hub and spokes but lately AA has seem to have lost its slight edge and still of course competes poorly with WN .... just wait until DAL becomes fully unrestricted in 2014.

2. Internationally: AA is now a full horse length behind UA's flat beds in all premium cabins and other legacies making improvements; also much fewer will choose to fly AA longhaul if a competing BA flight gives them the same AAdvantage status...but this could be partially alleviated by codeshares and cost/revenue sharing on routes.

Still a market leading F class product stateside but little else appeals.

Merlot


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2266 posts, RR: 9
Reply 3, posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13795 times:

Might be that most of their competition dumped the bills in bankruptcy. They continued operating a profitable company, yet now have to compete against others who did not, but were kept alive in the courts. The competition has artificially low cost.


I don't understand everything I don't know about this.
User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 4, posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13719 times:

Quoting merlot (Reply 2):
The labor problem is of cours a specific loss maker, but IMO there are broader issues as well:

1. Domestically: they are a preferred choice if you are flying to/from DFW, ORD or MIA and maybe LGA. If you are NOT going to Dallas, Chicago or Miami today or you can fly to a NYC airport besides LaGurdia, the reasons to fly AA versus a competitor are nonexistent or even problematic. The same is of course true for all hub and spokes but lately AA has seem to have lost its slight edge and still of course competes poorly with WN .... just wait until DAL becomes fully unrestricted in 2014.

How in the heck is this any different than United, Continental, US Airways, etc. This interesting part of your comment is that AA probably more point to point than any other legacy with the exception of Delta.

Due to their high labor costs, they've drastically cut back on point to point flying, but they are no worse off than the previously mentioned airlines.

At the end of the day, the high labor costs have resulted in reduction in point to point flying (these have become unprofitble due to the high labor costs), reluctance into entering new markets, and an inability to fund a better on board experience.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7812 posts, RR: 25
Reply 5, posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13675 times:

Quoting merlot (Reply 2):
just wait until DAL becomes fully unrestricted in 2014.

Its not going to make much of a difference.

DAL is only going to have 20 gates and will never be allowed to have more. Of those 20, WN will have 16 (or 18, I cant remember). There is no way WN will be able to maintain their current schedule and start flying to places like LAX, OAK, DEN, BWI, MDW, BNA, MCO, etc. with any amount of regularity. AA will still be the undeniable king of the Dallas/Fort Worth area minus the local traffic between the other Texas cities. WN will gain some market share to other cities around the US, but they might lose some local Texas traffic as well, but AA will still be as strong here.

The bottom line is that WN and AA at DFW will look like WN and CO in Houston or FL and DL in Atlanta. Its not going to be dramatic in Dallas.



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User currently offlineLonghornmaniac From United States of America, joined Jun 2005, 3359 posts, RR: 45
Reply 6, posted (4 years 4 months 3 weeks 5 days 21 hours ago) and read 13622 times:

Quoting merlot (Reply 2):
same AAdvantage status

It is my understanding that you cannot accrue AAdvantage miles on BA routes where AA competes. I could be wrong about that, though.

Quoting merlot (Reply 2):
AA is now a full horse length behind UA's flat beds in all premium cabins and other legacies making improvements;

While AA's J hard product is inferior to the horizontal lie flat on UA, I'd much prefer AA's Flagship product over UA's. Furthermore, I believe the soft product on AA is well ahead of UA, so overall, UA's advantage is really restricted to the J-class hard product. I expect AA will roll out a new J seat soon, or with the introduction the 787 to the fleet at the very latest. There have also been discussions about removing either 1 row of J or 2 rows of Y, and allowing the J seat to go fully flat. This would, at minimal cost, provide a product that is very comparable to UA.

It's disingenuous to compare any other domestic airline's premium product to AA's J(or UA's, for that matter) because they don't really fit a neat comparison. Both DL, CO, and US have hybrid business/first seats (certainly evident by the naming of CO's product, BusinessFirst). As soon as DL and CO get their seats horizontal lie flat (not sure what the status on those are, CO may have already), their product is certainly slightly ahead of AA's J, but from what I've heard/read, is not that different when it comes to catering or overall service. Admittedly, I have not flown the new J on the 767-300s, and I can imagine the portable entertainment devices are annoying...on the 777, no such problem. So therefore, AA's Business may be slightly behind BizElite or BizFirst (not really sure about Envoy, I think they're pretty even, personally), but AA still has the best F product in the western hemisphere.

  

Cheers,
Cameron


User currently offlineSchweigend From United States of America, joined Jun 2010, 639 posts, RR: 2
Reply 7, posted (4 years 4 months 3 weeks 5 days 20 hours ago) and read 13514 times:

Quoting merlot (Reply 2):
lately AA has seem to have lost its slight edge and still of course competes poorly with WN .... just wait until DAL becomes fully unrestricted in 2014.
Quoting LAXdude1023 (Reply 5):
Its not going to make much of a difference.

CO at IAH and WN at HOU have coexisted nicely for some time--both are profitable. There is about a 35mi separation between these airports, and they serve different markets.

Now how has AA (and UA too for that matter) at ORD been affected by WN's growth at MDW? The Chicago market is unfamiliar to me. I get the impression that it is not so friendly as Houston's....

Does Dallas have a rapid train to DFW? That would even out the O&D fight with WN at DAL a little.

Scottie


User currently offlineLonghornmaniac From United States of America, joined Jun 2005, 3359 posts, RR: 45
Reply 8, posted (4 years 4 months 3 weeks 5 days 20 hours ago) and read 13425 times:

Quoting Schweigend (Reply 7):

Does Dallas have a rapid train to DFW?

No. The Trinity Rail Express (TRE) has a stop south of the airport (south of 183), but it's not particularly convenient to the airport. I expect even with shuttle service to the airport (which I presume exists, but don't know for a fact), it's out of the way for most people (especially if they've got luggage).

Cheers,
Cameron


User currently offlineLipeGIG From Brazil, joined May 2005, 11459 posts, RR: 58
Reply 9, posted (4 years 4 months 3 weeks 5 days 19 hours ago) and read 13342 times:
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Quoting Longhornmaniac (Reply 6):
It is my understanding that you cannot accrue AAdvantage miles on BA routes where AA competes. I could be wrong about that, though.

It's just because they can't code-share with BA up to recently as they can't enter into ATI. You will be able soon to accrue and redeem miles on BA (inclusive qualification miles) with the ATI.

Quoting merlot (Reply 2):
1. Domestically

Agree. But you have to see that the domestic market in the United States is made by hubs and AA now has the least after DL merge with NW and UA with CO, among the big 3 legacies.

Quoting merlot (Reply 2):
2. Internationally

Their big advantage is the Latin American network which helps feed MIA (more) and DFW (less) domestic operations. On the other side, they have a weak Atlantic (Europe) operation which can be boosted now with BA being able to offer code-share to AA



New York + Rio de Janeiro = One of the best combinations !
User currently offlineETinCaribe From Ethiopia, joined Dec 2009, 740 posts, RR: 0
Reply 10, posted (4 years 4 months 3 weeks 5 days 19 hours ago) and read 13342 times:

Quoting merlot (Reply 2):
the reasons to fly AA versus a competitor are nonexistent or even problematic

I agree. I very reluctantly fly AA all the time b/c I happen to live in Miami. The AA product is even worse than the other US legacies IMHO.


User currently offlinemastyc From United States of America, joined Mar 2009, 144 posts, RR: 0
Reply 11, posted (4 years 4 months 3 weeks 5 days 19 hours ago) and read 13311 times:

Quoting Schweigend (Reply 7):
Does Dallas have a rapid train to DFW? That would even out the O&D fight with WN at DAL a little.
Quoting Longhornmaniac (Reply 8):
No. The Trinity Rail Express (TRE) has a stop south of the airport (south of 183), but it's not particularly convenient to the airport. I expect even with shuttle service to the airport (which I presume exists, but don't know for a fact), it's out of the way for most people (especially if they've got luggage).

There is a shuttle from the TRE station but the whole thing is a major pain. I doubt too many people use it as it would be faster to DFW by car. Although when I lived in Dallas, I never wanted to drive out to DFW. DART(Dallas Area Rapid Transit) is building one of the train lines out to DFW but DAL will get a station first. The DART trains are nice and I always took them when going somewhere where parking was an issue. (Downtown, American Airlines Center)


User currently offlinedtw757 From United States of America, joined Oct 2003, 1595 posts, RR: 4
Reply 12, posted (4 years 4 months 3 weeks 5 days 17 hours ago) and read 13119 times:

Quoting SPREE34 (Reply 3):
Might be that most of their competition dumped the bills in bankruptcy. They continued operating a profitable company, yet now have to compete against others who did not, but were kept alive in the courts. The competition has artificially low cost.

That is exactly it! AA is the only legacy carrier who has not filed bankruptcy. The others walked away from their debts some more than once. AA would be a whole lot better off had they done so as well right now but they chose to not stick everyone who gets shafted in the bankruptcy process. I say kudos to AA!



721,2,732,3,4,5,G,8,9,741,2,3,4,752,3,762,3,4,772,3,788,D93,5,M80,D10,M11,L10,100,AB6,319,20,21,332,3,346,388,146,CR2,7,
User currently offlinegoldenstate From United States of America, joined Feb 2010, 583 posts, RR: 4
Reply 13, posted (4 years 4 months 3 weeks 5 days 16 hours ago) and read 13091 times:
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AMR's labor issues come down to one issue: lack of effective corporate leadership.

User currently offlineGoBoeing From United States of America, joined Jun 2000, 2727 posts, RR: 15
Reply 14, posted (4 years 4 months 3 weeks 5 days 16 hours ago) and read 13079 times:

Quoting dtw757 (Reply 12):
they chose to not stick everyone who gets shafted in the bankruptcy process. I say kudos to AA!

Agreed.

And, they don't even realize how many millions it's saving them each year.


User currently offlineflybyguy From United States of America, joined Jun 2004, 1801 posts, RR: 1
Reply 15, posted (4 years 4 months 3 weeks 5 days 16 hours ago) and read 12859 times:

Quoting GoBoeing (Reply 14):
And, they don't even realize how many millions it's saving them each year.

I guess Arpey really wants to have a decent relationship with his employees and investors. I figure if Bob Crandall was running the show he'd probably send the company into financial re-organization through bankruptcy court. Tear up the current union contracts, eliminate the pension, and slash every other cost from here to Tuesday.

In the airline industry, it's really easy to turn a profit when one shafts one's lenders. What I'm really surprised about is that despite AA's high costs it doesn't seem that AA's creditors are moving an inch to reduce some of AA's debt obligations outside of BK court. Though the likelihood of modest profitability is on the horizon, AA's loss-making is unsustainable at this rate. Especially when AA's merged competitors are making hundreds of millions of dollars in profit a fiscal quarter. I suspect if something drastic isn't done by the end of this year, AA will be in bankruptcy by this time next year, especially if the unions strike loyal AA customers into the arms of AA's revamped competitors UA and DL.



"Are you a pretender... or a thoroughbred?!" - Professor Matt Miller
User currently offlineTOMMY767 From United States of America, joined Aug 2003, 6936 posts, RR: 9
Reply 16, posted (4 years 4 months 3 weeks 5 days 15 hours ago) and read 12698 times:

Quoting flybyguy (Reply 15):

I guess Arpey really wants to have a decent relationship with his employees and investors.

If that's the case why did AA's F/A's almost strike earlier this year? Honestly, AA is good at saving money but I fail to see how their corporate leadership is in good shape with their employees -- They don't seem all that happy.



"KEEP CLIMBING" -- DELTA
User currently offlinenonrevman From United States of America, joined Nov 2001, 1302 posts, RR: 1
Reply 17, posted (4 years 4 months 3 weeks 5 days 13 hours ago) and read 12009 times:

As a resident of the DFW area, I can say that AA typically comes up with the higher fares when planning flights. It would be nice if they could match the lower fares offered by other carriers, but this simply has not been the case for me lately. I guess AA figures the convenience of nonstop flights should cost more, much more, than their competitors. They are often getting undersold, judging by the looks of Orbitz, Expedia, and the airline web sites.

The only fare matching I can really see is with some of the routes that WN serves from DAL within Texas. This has been seen on runs such as AUS, SAT, HOU, MAF, etc. In this case, I end up buying the WN ticket and flying out of Love Field due to the lack of bag fees. After all, you have to check a bag for a camping trip.

This is not really an attempt to AA bash. They are an important part of the DFW economy. I just wish they would try harder to be competitive.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7812 posts, RR: 25
Reply 18, posted (4 years 4 months 3 weeks 5 days 11 hours ago) and read 11320 times:

Quoting Schweigend (Reply 7):
CO at IAH and WN at HOU have coexisted nicely for some time--both are profitable. There is about a 35mi separation between these airports, and they serve different markets.

No, IAH and HOU serve the same market. Houston. Just because one is on the north side of town and the other is on the south side of town doesnt matter. Its the same in Chicago. MDW and ORD very much serve the same market. Some people have a preference, but thats about it. HOU is closer to downtown, but not by that much. Working in corporate travel as a contract negotiator with over 15 clients in Houston, I can say without a doubt that very, very few of Houston's big business use WN at HOU over CO at IAH even though lots are based in the Post Oak area or Downtown which are closer to Hobby.

That isnt going to be any different in Dallas. DFW's big businesses overwhelmingly prefer AA because of their schedule. Even with Wright gone, WN will not be able to fly hourly to NYC, or every 75 minutes to LA, or every two hours to SFO, or every 30 minutes to Chicago, or fly to MEX. AA will still claim all of that traffic.

Why would people think for a moment that Houston and Atlanta could support two airlines, but somehow DFW could not?

Quoting Schweigend (Reply 7):
Now how has AA (and UA too for that matter) at ORD been affected by WN's growth at MDW? The Chicago market is unfamiliar to me. I get the impression that it is not so friendly as Houston's....

UA affects AA in Chicago far more than WN. UA is the hometown ailrines and offers more extensive service than AA. AA has had a hard time matching it.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlinejr From United States of America, joined May 1999, 970 posts, RR: 6
Reply 19, posted (4 years 4 months 3 weeks 5 days 10 hours ago) and read 10858 times:

Quoting ETinCaribe (Reply 10):
Quoting merlot (Reply 2):
the reasons to fly AA versus a competitor are nonexistent or even problematic

I agree. I very reluctantly fly AA all the time b/c I happen to live in Miami. The AA product is even worse than the other US legacies IMHO.

Not an attempt to bash AA, but the overall customer experience with AA is just flat out low. I live in the DFW area, and fly DL as much as possible, and Alaska on trips to Seattle. If you fly often enough, you can't help but feel that AA is way outdated in where they are. While they are certainly the most convenient option in DFW, I gave them enough shots before switching away permanently. I know this is not the case with most people living in DFW, but to put it lightly, I don't miss flights on AA.



I've flown on 9V-SPK.
User currently offlinetexan From New Zealand, joined Dec 2003, 4287 posts, RR: 52
Reply 20, posted (4 years 4 months 3 weeks 5 days 10 hours ago) and read 10722 times:

AA made a $196 million operating profit last quarter. They then paid $207 million in interest expenses. So AA is making money operationally. If the interest expense had held steady from 2009, AA would have reported a profit of around $40 million. So AA's losses are coming from interest payments. Not from labor, not from losing money on routes, not from having empty planes, or from decreasing yields. From 2009-2010, operating revenue increased 16% while wages rose 0.9%. Fuel increased by 24%. But overall operating expenses increased only 7.1%. AA filled 83.9% of seats, an increase from last year. And yields increased 14% year-over-year.

Hope that helps.

Texan



"I have always imagined that Paradise will be a kind of library."
User currently offlineLAXdude1023 From India, joined Sep 2006, 7812 posts, RR: 25
Reply 21, posted (4 years 4 months 3 weeks 5 days 10 hours ago) and read 10535 times:

Quoting jr (Reply 21):
Not an attempt to bash AA, but the overall customer experience with AA is just flat out low. I live in the DFW area, and fly DL as much as possible, and Alaska on trips to Seattle. If you fly often enough, you can't help but feel that AA is way outdated in where they are. While they are certainly the most convenient option in DFW, I gave them enough shots before switching away permanently. I know this is not the case with most people living in DFW, but to put it lightly, I don't miss flights on AA.

AA's service may be subpar, but I would rather have subpar service and a nonstop flight, than good service and connect in Houston everywhere I go (with CO).



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 564 posts, RR: 0
Reply 22, posted (4 years 4 months 3 weeks 5 days 10 hours ago) and read 10399 times:

USAir - 2x in bk.
America West - 1x in bk.
United - 1x in bk and United wasn't exactly in a rush to get out of it.
DL - 1x in bk.
NW - 1x in bk.
Continentail - 2x in bk.
F9 - 1x in bk and amazing survived for a LCC

Original equity investors - wiped out.
Many legacy liabilities - wiped out.
Unprofitable operating obligations/contracts - wiped out.
Older/unneeded planes - often returned to lessors or lenders.
Labor contracts - renegotiated/imposed.
Pensions - wiped out.

I think that sums it up pretty well. American tried to restructure outside of the courts and did so, but that only got them so far.


User currently offlineEricR From United States of America, joined Jul 2010, 1904 posts, RR: 1
Reply 23, posted (4 years 4 months 3 weeks 5 days 9 hours ago) and read 10240 times:

Quoting texan (Reply 22):
AA made a $196 million operating profit last quarter. They then paid $207 million in interest expenses. So AA is making money operationally. If the interest expense had held steady from 2009, AA would have reported a profit of around $40 million. So AA's losses are coming from interest payments. Not from labor, not from losing money on routes, not from having empty planes, or from decreasing yields. From 2009-2010, operating revenue increased 16% while wages rose 0.9%. Fuel increased by 24%. But overall operating expenses increased only 7.1%. AA filled 83.9% of seats, an increase from last year. And yields increased 14% year-over-year.

Hope that helps.

Texan

Interest expense may have contributed to the loss, but the primary factor is labor. If their labor costs were in line with the other legacy carriers, AA would have had a net profit. To put it in perspective, AA's YTD labor cost was $1.7 billion. AA's YTD net interest expense, by comparison, was $207 million.


User currently offlineRIPCORDD From United States of America, joined Apr 2000, 1197 posts, RR: 1
Reply 24, posted (4 years 4 months 3 weeks 5 days 9 hours ago) and read 10302 times:

Ok first off it is contract time so they will do everything in their power and much of these posters are buying into it that labor is the problem....But it is very much a shell game so AA loses money but AMR is very profitable. With all the layoff's this company has done it has not layed off any management only hired more when you do that nobody has respect for the top. Their is a rift btwn the front line and the top then will never be repaired. Their product is not much different than any of the other carries in F/J/Y and you get great service with all of them and bad service. Nonrevman they have a very good yeild managment program that allows them to charge those higher fares and get the passenger to pay for that their is no need to lower the fares to match somone else when people are willing to pay what they ask for.

25 SPREE34 : Exactly. The competition dumped their interest and debt obligations, and so paid pennies on the dollar. Were AA to do the same, that $207 million in
26 EricR : I can tell you do not understand because labor expense and interest payments are not on the balance sheet as you stated above, they are located on th
27 jfklganyc : AA doesn't make money because for the past decade they have been 5 years behind the rest of the industry. -They still have one major regional carrier
28 Post contains images Longhornmaniac : What a joke. Tell that to the employees of other airlines who lost their pensions during Ch. 11 restructuring. The current problems are not to do wit
29 MoMan : Let's look at a few of the factors affecting AA: 1) Routes: American has for now the best domestic hub layout conveniently covering all major business
30 AAORY : I'll tell that to all of the management people that I know that have been laid off, both at HDQ and in the field. Take a stroll sometime through HDQ1
31 tommytoyz : Yes they can, because if the longer routes are more profitable than the inner Texas routes, WN will load up DAL with the longer more profitable route
32 EricR : Careful here. American's positive cash flow is largely attributed to the issuance of debt (bonds) with minor contributions from the issuance of equit
33 LipeGIG : That's a good and valid point. However be in mind that interest expense means they raised cash from banks and from the market, to build their cash re
34 dldtw1962 : Also, AA pricing for their F or J class is so much higher then DL, CO, or UA's. I can't speak for UA or CO. But, DL's F/J class service and seats incl
35 Post contains images commavia : As others have already said - the reason why AMR has generally underperformed its legacy peers is that it didn't file for bankruptcy. When you reorgan
36 GlobalCabotage : UA is Chicago's home town airline, but AA picked up lucrative corporate contracts that they still have today after one on UA's many labor problems in
37 EricR : Whoa whoa whoa. I never said anything about cash flows from operations, I said cash flow. Cash flow from operations is one third of the equation. Tot
38 commavia : What I was referring to - and apologies if I misunderstood your point - is the common misconception that the only way AMR is generating positive cash
39 EricR : Agreed. There is no doubt that cash flow from ops has been positive.
40 Max Q : I have always been impressed by the fact AA has never filed for bankkruptcy. There is no question CH11 filings have helped their competitors. But I th
41 Longhornmaniac : I disagree, I think they are in a good position for modest growth to important markets. Sure, a mega DL or UA will have more service, but as long as
42 Post contains images SPREE34 : Ya can't flow through if there is no movement ahead of you. That are paid for, and thus, cost LESS per month to operate than the 737-800. Fuel is onl
43 GlobalCabotage : AA could have filed for Chapter 11, but they chose the FORD, not the GM ROUTE.
44 Dokfdoe : In my 90,000 miles traveled domestically this year, American takes first place in bad service for me. In nine flight segments, they've literally made
45 enilria : They never filed Ch11 like everybody else and it has put them at a huge disadvantage both in terms of labor and in terms of non-productive assets.
46 GlobalCabotage : Being in DFW, I'm stuck with AA's bad service (and that is being polite). But when I have to go to DC, NY, or CHI for business, no one touches them. U
47 Max Q : Enilria, That is not what I said and I could not disagree more. Its always easy to blame labour. You are quoting someone else.
48 Post contains images lightsaber : Mostly labor efficiency, but also rates. True, but somehow WN is never a real threat until they've undermined the revenue potential of a competitor.
49 commavia : I'm not saying Southwest won't have an impact - and I'm definitely not saying that Southwest won't make money. All I'm saying - in complete agreement
50 Post contains images FlyASAGuy2005 : And BUYING more MD-90s off the market. I took a look at one of Delta's recent SEC filings. I'm not positive what it was all about but I think they re
51 wn700driver : It does, but this needs improvement, like pretty much every mass transit system in TX Correct. The Airlines from Atlanta and Chicago have long since
52 flyfree727 : AA's fa/s are currently awaiting release from NMB to begin the 30 day cooling off period, after which, AA fa's WILL go on strike unless an agreement
53 Max Q : And every time you want to blame labour for all of AA's woes you might want to consider some of the gigantic blunders their management has made. Numbe
54 Post contains images Jacobin777 : The object was to relieve ORD, which was starting to suffer from serious delays. Also, AA did sell a number of B757's, B717's and have kept a number
55 Max Q : Well, that didnt work and STL is a shell of it's former self. So they sold a number of incompatible Aircraft and kept some obsolete ones, that rather
56 tothestars : It certaily was for the TWA people.
57 par13del : Based on A.Net wisdom, their greatest blunder was not following NW in Chpt.11 before the laws provisions expired. The industry at the time had alread
58 GlobalCabotage : AA is very conservative. This has it's pros and cons. First of all, it kept AA out of Chapter 11. Sure, AA could have filed and cleaned up some issues
59 thegreatRDU : I think they do too much in house also.... Sending the fleet to El Salvador for heavy maintenance checks should have been a no brainer
60 nwaesc : According to who? You?[Edited 2010-08-03 13:17:17]
61 thegreatRDU : According to the millions that could have been saved...
62 flyfree727 : I would imagine those that are still collecting a paycheck would disagree with you. Not to mention the TWA retirees that are still collecting benefit
63 AADC10 : The killer is the pensions. UA in particular was able to dump the pensions onto the few remaining companies that still had pensions, AA included. Oth
64 boeing12345 : Here is one of the biggest issues within this industry. Instead of finding a way to balance out this issue so work stays here keeping jobs, people ar
65 Post contains links commavia : Well, one might expect that that would lead AA's mechanics here to recognize how good they have it, but instead they're busy organizing another - mor
66 AAExecPlat : I wasn't sure if I could add anything of value in this conversation, but I have found a few things that I think I can shed some light on...For full di
67 skyguyB727 : That certainly can't be true from the non-union ticket agent/reservations agent side. Paying minimum wage does not give a company high labor costs. W
68 commavia : It is true. You may think AA's wages were low - compared with McDonalds back whenever. But today, in 2010, AA's compensation - base pay, to say nothi
69 skyguyB727 : They were low: $5.00 per hour. Minimum wage at that time was $5.00 per hour. In 1997, AA started at $5.00 per hour for customer service agents. NW st
70 flyfree727 : IIRC, around that time, AA was outsourcing many agent jobs. I recall specifically LGA, where the ticket counter agents were contracted for $5 /hr no
71 ssides : Ticket agents and reservations agents make up a miniscule percentage of airline employees, especially when compared to flight attendants, pilots, ram
72 TOMMY767 : This is very true. IMHO, if your not Platinum or Executive Platinum on AA (or Gold and don't mind paying for upgrades) then flying AA is the pits bec
73 nwaesc : Then why haven't they listened to you and done it? Maybe it's actually cheaper. What's an OSM start out at these days? If this T/A goes through, ther
74 thegreatRDU : Bro, this shoot the question back alec type stuff isn't working...grow up...are you gonna seriously contend the fact that they could have saved more
75 EricR : The problem is that they have the highest labor cost in total. Maybe the non-union ticket agent/reservations agent side does not have high labor rate
76 nwaesc : I didn't make the contention that they could save "millions" outsourcing, you did. Surely you thought it out before posting it, right? So lets hear w
77 commavia : In a word: money. Pure and simple. You cannot MBV a 777 in Tulsa for less than you can in Beijing, nor a 737 for less than you can do it in El Salvad
78 thegreatRDU : Hello? The millions that will be saved not maintaining facilities, parts, staff, etc... Nobody in the AA boardroom has a spine..plain and simple...th
79 nwaesc : How about some substance? Why do you think AA upper mgmt. has no spine? I would bet the other way, and say that the compAAny union has given them dam
80 commavia : They are not competitive in the slightest. I've seen numbers comparing AA's organic maintenance with non-airline MROs on both turn-time and hourly co
81 TOMMY767 : Not to mention they were in big time procrastination mode from 2001-2008 until they FINALLY decided to order more 738s to replace the gas guzzling M8
82 thegreatRDU : Ultimately..it's management's fault for where they are today... Couldn't have said it better myself...
83 EricR : In 2001/2002 when all other legacies were declaring bankruptcy, AA's management did a fantastic job keeping the airline out of bankruptcy. In hindsig
84 thegreatRDU : Thanks for reiterating my point ....it's management's fault for where they are today...
85 aaexecplat : I get that. This is common sense. But the point I was making still stands...namely that if you were an owner of shares of a mutual fund that held DL,
86 baw716 : This is a question that cannot be answered within the scope of one post, because the reasons that AA has not done well are complicated. What I will sa
87 EricR : You would not have done anything different if the decision was yours 10 years ago (if you were even born then).
88 thegreatRDU : The airline industry has always been a herd industry Somebody does something that saves them or makes money and usually others follow..
89 enilria : Take a look at my OAG thread this week. AA is moving a lot of capacity out of ORD and seemingly into MIA. They are also adding a few flights in CLE. I
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