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What Will Post-Ch11 AMR Look Like?  
User currently offlineenilria From Canada, joined Feb 2008, 6838 posts, RR: 14
Posted (2 years 4 months 3 weeks 1 day 14 hours ago) and read 27841 times:

This is a big topic, so I think it requires a separate thread...

1) I think we can assume that AMR will be in CH11 no more than 18 months as a result of tightened laws that theoretically force AMR out in a year, but can be extended with a judge's approval. That has fleet implications on the next point...
2) AMR has a lot of gas guzzling airplanes including 200+ MD80s and 200+ ERJs of 50 seats or less. All 400 of these planes are considered non-economic because of fuel. It's hard to imagine AMR not taking the opportunity to ditch all these planes, but they can't be replaced in one year. They could possibly renegotiate the leased airplanes into short term deals, but the mortgaged planes have to be dropped while in Ch11 and returned to creditors or kept. This could mean significant reductions in operations.
3) ORD. AMR is habitual second banana in ORD. Would they take this opportunity to exit ORD? If they did, would they replace it with anything? Could they merge as a means of replacing it? If so, with who?
4) Will US Airways attempt to bid for AA in Ch11?
5) This may be the most important question. If AA emerges with lower costs than DL or UA, possibly as low as US, what does that do to DL/UA long term? Does AA become a powerhouse and force DL/UA into more cost cuts? Ch11 is a continual spiral.
6) If AA emerges with super-low costs and money in the bank, do they buy B6 which would then be much closer to them in terms of labor costs?

249 replies: All unread, showing first 25:
 
User currently offlinecommavia From United States of America, joined Apr 2005, 11121 posts, RR: 62
Reply 1, posted (2 years 4 months 3 weeks 1 day 14 hours ago) and read 27824 times:

Quoting enilria (Thread starter):
I think we can assume that AMR will be in CH11 no more than 18 months as a result of tightened laws that theoretically force AMR out in a year, but can be extended with a judge's approval.

I agree AMR is going to try and be in-and-out and done with this process as quickly as possible, for a variety of economic, strategic and ego reasons. The APA president's letter to members seemed to imply that Horton indicated to him that the company was indeed targeting an 18-month timeline.

Quoting enilria (Thread starter):
AMR has a lot of gas guzzling airplanes including 200+ MD80s and 200+ ERJs of 50 seats or less. All 400 of these planes are considered non-economic because of fuel.

Yes and no. The MD80s do need to go, as AMR is already in the process of doing. The Embraers I'm not so sure about - at least not quite yet. As they get up in age and cycles, and requirement more maintenance, the economics of these aircraft are certainly deteriorating. That being said, there are definitely many markets where they are about the right size airplane, and where the stage length is too long to be competitively or profitably operated with a prop. I'm thinking particularly of a lot of high-yielding monopoly routes in and out of DFW, MIA, etc. I suppose AA could take the opportunity of bankruptcy and the highly likely eviscerating of SCOPE to move a larger fleet of 70-90-seaters into these markets, but that seems too big.

Quoting enilria (Thread starter):
It's hard to imagine AMR not taking the opportunity to ditch all these planes, but they can't be replaced in one year.

No, they certainly can't be replaced in one year. That being said, AA is already replacing the MD80s rather quickly. By next year, they were already going to reach the tipping point where the 737s outnumbered the MD80s. The MD80 retirements will no doubt accelerate as the airline shrinks in bankruptcy. With the Embraers and Eagle, again - I'm not sure. AMR stopped the Eagle spinoff, and now that Eagle is filing bankruptcy, perhaps AMR now plans to keep Eagle and restructure its economics just as they will do with mainline. In that context, and with a restructured SCOPE, perhaps AA can replace the Embraers with larger jets and/or a mix of large props as well, but again the question is how quickly.

Quoting enilria (Thread starter):
ORD. AMR is habitual second banana in ORD. Would they take this opportunity to exit ORD? If they did, would they replace it with anything? Could they merge as a means of replacing it? If so, with who?

I may be in the minority, but I don't see AA closing the Chicago hub. The fundamental problems with Chicago can actually now be addressed head-on in bankruptcy. Namely, AA's system costs overall were too high. And, AA did not have the right fleet for the Chicago hub, where AA's lack of a place between a CRJ700 and an MD80 was becoming a major strategic challenge. Bankruptcy will dramatically lower AA's costs, and a likely-to-be-far-more-flexible SCOPE clause may well me a mid-size (100-seat) jet, which would do wonders for the competitiveness of AA's Chicago hub.

As for a merger, I don't know how that would be any viable replacement or substitute for Chicago. There are only two other hubs in the upper midwest - Detroit and Minneapolis - and both are obviously locked down and not merging with AA anytime soon.

Quoting enilria (Thread starter):
Will US Airways attempt to bid for AA in Ch11?

Maybe, maybe not. There is some logic in that transaction, as the combined network, with some adjustments, would be impressive, but on the flip side the integration - especially labor - would be horrific. Will be interesting to watch.

Quoting enilria (Thread starter):
If AA emerges with lower costs than DL or UA, possibly as low as US, what does that do to DL/UA long term? Does AA become a powerhouse and force DL/UA into more cost cuts? Ch11 is a continual spiral.

If AA emerges from bankruptcy, which I think is likely, I don't think there is any question it will have dramatically lower costs. AA will likely emerge renewed, refreshed, leaner, nimbler, and more competitive. That will obviously pose a new competitive dynamic to other post-bankruptcy peers like Delta and United, who have been taking full advantage of AA's competitive weakness for the last few years. Will it lead to Chapter 11 for them? Highly doubtful. But it will lead to a more evenly competitive, but also more economically sustainable, industry, which I believe is in the long-run in the interests of all stakeholders.

Quoting enilria (Thread starter):
If AA emerges with super-low costs and money in the bank, do they buy B6 which would then be much closer to them in terms of labor costs?

I personally believe that, like with the prospect of a USAirways merger, an AA-JetBlue combination is interesting, but fraught with challenges. The logic of the combined airline being able to build a true megahub at JFK is self-evident and enticing, but again, the labor integration might be difficult. Although, if AA emerges with much lower costs, that plus JetBlue's non-union workforce might make such a hypothetical integration easier. Again, interesting to watch.


User currently offlinemicstatic From United States of America, joined Jul 2001, 773 posts, RR: 1
Reply 2, posted (2 years 4 months 3 weeks 1 day 14 hours ago) and read 27741 times:

Quoting commavia (Reply 1):
I personally believe that, like with the prospect of a USAirways merger, an AA-JetBlue combination is interesting, but fraught with challenges.

I can't disagree. But it would still be a shame to have the jetblue culture get replaced by Americans due to size. I've always respected the culture over at jetblue.



S340,DH8,AT7,CR2/7,E135/45/170/190,319,320,717,732,733,734,735,737,738,744,752,762,763,764,772,M80,M90
User currently offlineTdan From United States of America, joined Nov 2011, 394 posts, RR: 3
Reply 3, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27620 times:

AA will be a dangerous animal after ch 11. Sleeping giant with 450+ aircraft entering the fleet before the end of the decade


We will ride this thunderbird, silver shadows on the earth, a thousand leagues away our land of birth... -Captain Bruce
User currently offlinejfk777 From United States of America, joined Aug 2006, 8091 posts, RR: 7
Reply 4, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27488 times:
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Quoting commavia (Reply 1):
I may be in the minority, but I don't see AA closing the Chicago hub. The fundamental problems with Chicago can actually now be addressed head-on in bankruptcy. Namely, AA's system costs overall were too high. And, AA did not have the right fleet for the Chicago hub, where AA's lack of a place between a CRJ700 and an MD80 was becoming a major strategic challenge. Bankruptcy will dramatically lower AA's costs, and a likely-to-be-far-more-flexible SCOPE clause may well me a mid-size (100-seat) jet, which would do wonders for the competitiveness of AA's Chicago hub.

The "new" AA will look different in some ways, familiar in others. E-190 will join the fleet or as a regional operation. New destinations with the 777-300ER which are coming next year and 2013. AA will try to get as many 737-800 it can get as soon as it can them with the "early" retirement of the MD-80 fleet. Some Asian business could get chopped, New Delhi, Peking and Shanghai.

Hong Kong and South Africa could join the route map. The 767-200 Transcon fleet is history.


User currently offlinehiflyer From United States of America, joined Nov 2004, 2153 posts, RR: 3
Reply 5, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27427 times:

Yes it does need it's own topic...

all my opinion after watching/being involved with these type filings for 30 years.

One or more of the 5 hubs will be downsized significantly ...the 5 corner strategy obviously did not work. Of the 5 DFW and MIA are the most vulnerable to a drop in AMR service...and MIA most of all. NYC/ORD and the west coast have a far more balanced portfolio of other carriers and hubs. DFW can attract Southwest.

MD80's will go...the court will be used to break those leases if needed. Future aircraft orders will be reduced...they were a great tease to dangle for union negotiations. Goodbye to the 50 or less seat rj's. Expect Skywest and Republic step in with 70 seaters. Outlook for Eagle is bleak IMHO.

Obviously AMR has been planning this so the question of route and asset sale has been addressed and prioritized internally. AMR knows costs and value...all will be balanced on what is considered essential to exit....and I have $5 that definition changes over time.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16694 posts, RR: 51
Reply 6, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27432 times:

Quoting enilria (Thread starter):
1) I think we can assume that AMR will be in CH11 no more than 18 months as a result of tightened laws that theoretically force AMR out in a year, but can be extended with a judge's approval. That has fleet implications on the next point...

All depends on the economy, if it dips again or does not grow at a fast enough rate they could be in trouble. While a CH-11 bankruptcy is not a death sentance, there will be some hesitation on the part of the traveling public to book travel with a bankrupt carrier. This will not effect them as much in MIA and DFW as it will in ORD and NYC where there is plenty of options. Keep in mind the economic condition of the country is much different now than it was earlier in the decade when UA, DL, NWA and US filed for bankruptcy. There's much more risk now.

Quoting enilria (Thread starter):
AMR has a lot of gas guzzling airplanes including 200+ MD80s and 200+ ERJs of 50 seats or less. All 400 of these planes are considered non-economic because of fuel. It's hard to imagine AMR not taking the opportunity to ditch all these planes, but they can't be replaced in one year. They could possibly renegotiate the leased airplanes into short term deals, but the mortgaged planes have to be dropped while in Ch11 and returned to creditors or kept. This could mean significant reductions in operations.

AA's fleet is going to shrink, no question about that, the queastion is how fast. I'm going to predict their fleet is going to be smaller by 100 frames in 2013. Where they can renogotiate they will, where they can't they will park. When aircraft come up for heavy maintenance they will park, either for a short period like DL has done in the past or for good. The MD-80s, 757s and 767-200s are going to be leaving at an accelerate rate. The 767-200s will probably be gone by 2013.

Quoting enilria (Thread starter):
3) ORD. AMR is habitual second banana in ORD. Would they take this opportunity to exit ORD? If they did, would they replace it with anything? Could they merge as a means of replacing it? If so, with who?

Again they are going to reduce their fleet size, they can either spread the cuts across the hubs or focus the cuts. If they are focused cuts the obvious hub to reduce would be ORD, I do not forsee AA cutting ORD altogether. However I can see a smaller operation, especially in terms of mainline aircraft. However no one has successfully shrunk a hub to profitability, I can see the same process that occured in Denver with CO and DFW with DL playing out in ORD with AA. An airline in a permanent secondary position begins to restructure to try and maintain a presence while reducing their costs. I think the bankruptcy filling will contribute to AA's decision to restructure ORD, there will be some negative effect on their Corporate contracts as UA will aggresively pursue AA's accounts. And the ignorance of the CH-11 process in the general public will no doubt cause some causual travelers to book away from AA, WN at MDW would probably be a possible beneficiary of that traffic.

Quoting enilria (Thread starter):
US Airways attempt to bid for AA in Ch11?

Chances are very strong, US has leadership that has succesfully restructured their company post bankruptcy. Lenders would have confidence in their abilities.

Quoting enilria (Thread starter):
) If AA emerges with super-low costs and money in the bank, do they buy B6 which would then be much closer to them in terms of labor costs?

No, what does B6 offer? Their main assets are slots at LGA (which AA has), JFK slots (which AA has) a new JFK terminal (which AA has), a big BOS operation (AA used to have). You merge with another company to make your company stronger where it is weak, look at CO/UA and DL/NWA. Very complimentary networks, little overlap. What AA should do with B6 is build a strong alliance, and play to each other's strengths and away from competing with each other. AA should swap their LGA slot portfolio, which is mostly operated by Regionals anyway, to B6 in exchange for B6 slots at JFK.

B6 is predominantely a domestic carrier, let them take over LGA and operate their A320s and ERj-190s on domestic flights within the perimeter. AA could use the B6 slots at JFK to build up their hub to better feed their international routes.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinecommavia From United States of America, joined Apr 2005, 11121 posts, RR: 62
Reply 7, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27439 times:

Quoting jfk777 (Reply 4):
E-190 will join the fleet or as a regional operation.

Agreed.

Quoting jfk777 (Reply 4):
New destinations with the 777-300ER which are coming next year and 2013.

Agreed. I could see Hong Kong, Johannesburg, possibly Mumbai depending on Kingfisher.

Quoting jfk777 (Reply 4):
AA will try to get as many 737-800 it can get as soon as it can them with the "early" retirement of the MD-80 fleet.

Agreed, although I'm not sure how much faster AA can take them, or if AA would be able to finance new and/or faster deliveries from Boeing.

Quoting jfk777 (Reply 4):
Some Asian business could get chopped, New Delhi, Peking and Shanghai.

I don't see any of those - Beijing, Shanghai or Delhi - getting cut altogether, but it's certainly possible.

Quoting jfk777 (Reply 4):
Hong Kong and South Africa could join the route map.

Again - agreed. Miami-Johannesburg makes infinite sense, as does DFW-Hong Kong, and potentially a second Chicago-Hong Kong to compliment Cathay Pacific's existing flight.

Quoting jfk777 (Reply 4):
The 767-200 Transcon fleet is history.

Agreed. AA will get rid of the 767-200s as quickly as possible. I wonder what will replace them.


User currently onlineflymia From United States of America, joined Jun 2001, 7006 posts, RR: 9
Reply 8, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27177 times:

Quoting hiflyer (Reply 5):
One or more of the 5 hubs will be downsized significantly ...the 5 corner strategy obviously did not work. Of the 5 DFW and MIA are the most vulnerable to a drop in AMR service...and MIA most of all.

Is this a serious statement? I am guessing you mean DFW and MIA are the least vulnerable?



"It was just four of us on the flight deck, trying to do our job" (Captain Al Haynes)
User currently offlineSTT757 From United States of America, joined Mar 2000, 16694 posts, RR: 51
Reply 9, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27143 times:

Quoting flymia (Reply 8):
Is this a serious statement? I am guessing you mean DFW and MIA are the least vulnerable?



I agree, if anything AA will be looking to grow more in DFW and MIA than ORD, NY, LAX etc.. Reallocating assets will be part of the restructuring. For example less ORD-Europe and more MIA-Europe.



Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinewilliam From United States of America, joined Jun 1999, 1240 posts, RR: 0
Reply 10, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27104 times:

I keep reading in some places that some think AA is NOT a merger candidate.............Some please tell me what WOULD prevent from US Doug Parker not merging with AA. Financing will not be a problem and neither will its present labor problems.

User currently offlineckfred From United States of America, joined Apr 2001, 5067 posts, RR: 1
Reply 11, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27102 times:

Quoting commavia (Reply 1):
I may be in the minority, but I don't see AA closing the Chicago hub. The fundamental problems with Chicago can actually now be addressed head-on in bankruptcy. Namely, AA's system costs overall were too high. And, AA did not have the right fleet for the Chicago hub, where AA's lack of a place between a CRJ700 and an MD80 was becoming a major strategic challenge. Bankruptcy will dramatically lower AA's costs, and a likely-to-be-far-more-flexible SCOPE clause may well me a mid-size (100-seat) jet, which would do wonders for the competitiveness of AA's Chicago hub.

I agree. AA has a number of contracts, because of the large amount of flights at ORD. AA picked up a lot of business in Chicago, after the UA pilot sick-out in 2000. Downsizing ORD would mean losing contracts to UA or DL. So while the costs of operating ORD would decrease, revenue would take a significant hit.

The answer for ORD is a fleet that makes sense. The A319s on order would fill the space between the CRJ 700 and the MD-80. The Embrear 190 and the Canaadair C-Series would also work very well. Frankly, AA has a number of routes that see a number of the Embrear 135/140/145 aircraft operating a fair number of flights. If AA gets planes in the range of 70 to 120 seats, it could cut out the little gas guzzlers and cut a frequency or two on such routes.

The idea of AA eventually merging with B6 has some positives, including regaining a larger presences at BOS had making JFK a true rival to DL's hub at JFK, the UA hubs at EWR and IAD, and the US hub at PHL.

But, combining workforces will be a headache. AA pilots didn't take kindly to how management merged QQ pilots into the workforce. There are still issues between former TWA employees and AA's unions.

Plus, JFK would be a real puzzle. B6 and AA have both invested heavily in new terminals that are on opposite ends of the terminal complex. B6's terminals probably couldn't easily handle AA's widebody aircraft and the volume of passengers from Europe, Asia, and Latin America. AA's terminal has room for expansion, and there was a plan for an Eagle operation. So, the B6 Embrears would probably work in what was supposed to be the Eagle space. But I'm not sure that the entire B6 operation could be shoehorned into an expanded AA terminal.


User currently offlineual777uk From United Kingdom, joined Nov 2005, 3356 posts, RR: 1
Reply 12, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27066 times:

Quoting commavia (Reply 7):
Agreed. AA will get rid of the 767-200s as quickly as possible. I wonder what will replace them.

Was wondering that myself. Maybe they will go the UA PS route with the 757??

Dont see ORD going anywhere, save for shrinking

Quoting commavia (Reply 7):
Miami-Johannesburg makes infinite sense, as does DFW-Hong Kong

Also agree. I dont see them flying ORD - HKG though, I think they will leave that to CX. Saying that AA, should have been flying that route years ago!


User currently offline727LOVER From United States of America, joined Oct 2001, 5958 posts, RR: 17
Reply 13, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27039 times:

What Will Post-Ch11 AMR Look Like?

The titles will say AMERICAN   


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User currently offlinecommavia From United States of America, joined Apr 2005, 11121 posts, RR: 62
Reply 14, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 27030 times:

Quoting hiflyer (Reply 5):
One or more of the 5 hubs will be downsized significantly ...the 5 corner strategy obviously did not work.

I'm not sure the cornerstone strategy "obviously didn't work." Perhaps bankruptcy is what's ultimately needed to make it work. AA's entire systemwide, enterprise, network cost was too high. With lower costs, the right fleet, and the right union contracts, perhaps all five cornerstones can be sustainable and profitable. I believe they can be.

Quoting hiflyer (Reply 5):
Of the 5 DFW and MIA are the most vulnerable to a drop in AMR service...and MIA most of all.

Exactly the opposite. DFW and MIA are the two strongest and "safest" of AA's hubs. Others are relatively more vulnerable. But, alas, again - I doubt any of the hubs will be "cut."

Quoting hiflyer (Reply 5):
Outlook for Eagle is bleak IMHO.

I'm not so sure. Eagle will be restructuring in bankruptcy along with AA and the parent company. Restructuring costs in bankruptcy, rejecting leases and unfavorable contracts, etc. - Eagle could emerge leaner and stronger as well. AMR already seemed reluctant to part with Eagle, and may want to keep it if it's salvageable.

Quoting STT757 (Reply 6):
While a CH-11 bankruptcy is not a death sentance, there will be some hesitation on the part of the traveling public to book travel with a bankrupt carrier. This will not effect them as much in MIA and DFW as it will in ORD and NYC where there is plenty of options. Keep in mind the economic condition of the country is much different now than it was earlier in the decade when UA, DL, NWA and US filed for bankruptcy. There's much more risk now.

I'm not so sure. Again - past experience is instructive. There didn't seem to be a massive book-away problem at Delta, Northwest, United, USAirways, etc. I don't see why AA would be any different.


User currently offlineOzarkD9S From United States of America, joined Oct 2001, 4878 posts, RR: 22
Reply 15, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26969 times:

Quoting william (Reply 10):


Someone please tell me what WOULD prevent from US Doug Parker not merging with AA.

Nothing at this point. He's probably burning up his cellphone as we type.

As far as post Ch11 goes there are most likely two scenarios:

1. AMR/AA emerges as a stand alone company with the current route system they have with fewer T-tailed aircraft and lower labor costs.

2. AMR/AA is brought out of BK with a merger partner, most likely US in which case far more tweaking to the combined route systems, and fewer T-tails and lower labor costs.

I think the speculation that ORD is toast for AA in either scenario is stretching credibility at this time. There is room for 3 large players in Chicago, and while AA plays second fiddle to UA at ORD, they are quite a bit larger than WN at MDW.



Next Up: STL-TPA-BWI-PWM-BWI-STL
User currently offlineTOMMY767 From United States of America, joined Aug 2003, 6584 posts, RR: 11
Reply 16, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26986 times:

Well kind of like what DL did in 2007, AA is going to need a fresh image to keep the flying public engaged. Again, chapter 11 isn't necessarily a death sentence, but it doesn't help their current image either. AA has to transform their brand into something exciting over the next few years. If they keep doing what they are doing they can expect to go chapter 7 or purchased by US.

Quoting enilria (Thread starter):
3) ORD. AMR is habitual second banana in ORD. Would they take this opportunity to exit ORD? If they did, would they replace it with anything? Could they merge as a means of replacing it? If so, with who?
4) Will US Airways attempt to bid for AA in Ch11?

AA does have a loyal following and corporate contracts in Chicago, but if they had to let the hub go, it I'm sure they would. You can expect that UA and WN are going to pounce over the next few years to suck up as many corporate contracts as they can. AA has zero leverage against the giant UA right now in ORD -- it really comes down to that.

Quoting enilria (Thread starter):
5) This may be the most important question. If AA emerges with lower costs than DL or UA, possibly as low as US, what does that do to DL/UA long term? Does AA become a powerhouse and force DL/UA into more cost cuts? Ch11 is a continual spiral.

I think with the upcoming airbus order and the BK filing, Doug is going to do something to acquire AA in the next few years. The combined carrier will definitely not be as strong as DL or UA, but it would be a viable competitor.



"Folks that's the news and I'm outta here!" -- Dennis Miller
User currently offlineenilria From Canada, joined Feb 2008, 6838 posts, RR: 14
Reply 17, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26846 times:

Let me open up another point. Apart from US or B6 transactions, how likely is it that AA comes out of Ch11 with BA owning 20% (or more if they can change the law using this Ch11 as justification)?

Quoting commavia (Reply 1):
I'm thinking particularly of a lot of high-yielding monopoly routes in and out of DFW, MIA, etc. I suppose AA could take the opportunity of bankruptcy and the highly likely eviscerating of SCOPE to move a larger fleet of 70-90-seaters into these markets, but that seems too big.

The will destroy scope.

Quoting jfk777 (Reply 4):
E-190 will join the fleet or as a regional operation.
Quoting hiflyer (Reply 5):
Expect Skywest and Republic step in with 70 seaters.

Here is an interesting thought. What if RJET sends F9's E190s to AA? It's not a huge fleet, but it can be done quickly and easily.

Quoting commavia (Reply 1):
The MD80 retirements will no doubt accelerate as the airline shrinks in bankruptcy. With the Embraers and Eagle, again - I'm not sure.

I think the Embraers are even more likely.

Quoting commavia (Reply 1):
AMR stopped the Eagle spinoff, and now that Eagle is filing bankruptcy

Exactly, they delayed it because now they can ditch the ERJs and make it a viable company. I think Eagle will see more change in this filing than mainline will.

Quoting commavia (Reply 1):
I may be in the minority, but I don't see AA closing the Chicago hub.

You are not in the minority. I think they will only close it if they find an alternative. I don't think DFW is a reasonable substitute.

Quoting commavia (Reply 1):
Quoting enilria (Thread starter):
Will US Airways attempt to bid for AA in Ch11?

Maybe, maybe not. There is some logic in that transaction, as the combined network, with some adjustments, would be impressive, but on the flip side the integration - especially labor - would be horrific. Will be interesting to watch.

I think US will try to buy them, but will fail.

Quoting commavia (Reply 1):
Will it lead to Chapter 11 for them? Highly doubtful. But it will lead to a more evenly competitive, but also more economically sustainable, industry, which I believe is in the long-run in the interests of all stakeholders.

Imagine this scenario. AA gets scope wiped away and can now have E190s at Eagle or Skywest. How long will it be before that forced DL/UA to seek the same thing? The only way to get that is in Ch11.

Quoting commavia (Reply 1):
I personally believe that, like with the prospect of a USAirways merger, an AA-JetBlue combination is interesting, but fraught with challenges.

I think post-Ch11 is it possible the AA culture looks a lot more like B6 regardless of whether they merge.

Quoting hiflyer (Reply 5):
DFW can attract Southwest.

DAL will have a huge nationwide WN hub in a couple of years. AA should be preparing for that while they go through Ch11.

Quoting STT757 (Reply 6):
there will be some hesitation on the part of the traveling public to book travel with a bankrupt carrier.

I don't think so. Everybody else has filed with little effect. It is no coincidence that they filed after the Thanksgiving rush in a relatively quiet period, however.

Quoting STT757 (Reply 6):
I'm going to predict their fleet is going to be smaller by 100 frames in 2013.

Then ORD is in big trouble.

Quoting STT757 (Reply 6):
Quoting enilria (Thread starter):
) If AA emerges with super-low costs and money in the bank, do they buy B6 which would then be much closer to them in terms of labor costs?

No, what does B6 offer?

Really? AA has always wanted to control NYC. Look in their latest pilot proposal how they asked for the ability to brand the US Shuttle with the AA code. Basically B6 has picked up everything AA has shed over the last few years as their costs got out of control. Now with a purchase they can turn back the clock and aided by post-Ch11 costs it might even work.It's way smarter than merging with US.


User currently offlinerealsim From Spain, joined Apr 2010, 625 posts, RR: 0
Reply 18, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26838 times:

http://www.csmonitor.com/Business/La...-AMR-Corp.-seeks-Ch.-11-protection

"Horton said, however, that as the company goes through a restructuring it will probably reduce the flight schedule "modestly," with corresponding cuts in jobs".

What does "modestly" mean is up to each one, but at least it doesn't sound like 100 aircraft less...


User currently offlineHiFlyerAS From United States of America, joined Jul 2011, 829 posts, RR: 2
Reply 19, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26798 times:

One of the proposals in the last contract offer with the pilot group was supposedly to increase the number of code share flights allowed. Now that AA management is writing all the new contracts you can look for more code share flying by AA's partners. AS was specifically mentioned as a potential beneficiary in any code share expansion.

User currently offlinesteeler83 From United States of America, joined Feb 2006, 9112 posts, RR: 18
Reply 20, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26777 times:

Quoting hiflyer (Reply 5):
One or more of the 5 hubs will be downsized significantly ...the 5 corner strategy obviously did not work. Of the 5 DFW and MIA are the most vulnerable to a drop in AMR service...and MIA most of all. NYC/ORD and the west coast have a far more balanced portfolio of other carriers and hubs. DFW can attract Southwest.

I know AA operates a bit of a megahub out of DFW with some 700 flights or so. How big is AA at Miami? I know that's their Latin America/Caribbean and South America gateway. Would DFW and MIA still be hubs but only smaller ones at that?

If we wanted to talk mergers later on, I guess merging with B6 would result in the least amount of baggage. US would provide too much overlap with PHL, CLT and PHX hubs, plus a growing one in DCA. If they merge with B6 they could pick up gates at JFK as well as in ORD and the West Coast, strengthening their hubs there. They'd pick up the E90s this way as well giving them equipment in between the Crj700 and 737-800.



Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
User currently offlineLipeGIG From Brazil, joined May 2005, 11365 posts, RR: 59
Reply 21, posted (2 years 4 months 3 weeks 1 day 13 hours ago) and read 26782 times:
AIRLINERS.NET CREW
FORUM MODERATOR

Quoting commavia (Reply 1):
Yes and no. The MD80s do need to go, as AMR is already in the process of doing. The Embraers I'm not so sure about - at least not quite yet

Agreed. And they have the Eagle divesture which will take the Embraers.

Quoting commavia (Reply 1):
I may be in the minority, but I don't see AA closing the Chicago hub

If they want to get rid of 100-150 planes, they will need to close one of their major hubs. I would say it could be the best, together with some additional flights at JFK.

Quoting Tdan (Reply 3):
AA will be a dangerous animal after ch 11. Sleeping giant with 450+ aircraft entering the fleet before the end of the decade

Agreed.

Quoting jfk777 (Reply 4):
The "new" AA will look different in some ways, familiar in others. E-190 will join the fleet or as a regional operation. New destinations with the 777-300ER which are coming next year and 2013

I don't see new destinations now as they need to fix their current network.

Quoting commavia (Reply 7):
Agreed. AA will get rid of the 767-200s as quickly as possible. I wonder what will replace them.

Before the MD80s they need to get rid of their 762 fleet ! I always remember the "inside American Airlines" tv show saying a full 762 made US$ 300 in profits (yes three-zero-zero dollars).
And i keep saying, with a fleet that need to go (762), the best is to use the 77W to replace some 772 routes, allowing in the end 763's to be used on some transcons, but not all.



New York + Rio de Janeiro = One of the best combinations !
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 551 posts, RR: 1
Reply 22, posted (2 years 4 months 3 weeks 1 day 12 hours ago) and read 26680 times:

Quoting commavia (Reply 14):
I'm not so sure. Eagle will be restructuring in bankruptcy along with AA and the parent company. Restructuring costs in bankruptcy, rejecting leases and unfavorable contracts, etc. - Eagle could emerge leaner and stronger as well. AMR already seemed reluctant to part with Eagle, and may want to keep it if it's salvageable.

Why not as part of the process get a Republic, Skywest, ExpressJet, or Mesa bid against Eagle for the flights? If those entities can do it for less money, then value of the bankruptcy estate only increases. Eagle will then have to match those offers or beat them to survive. I also doubt third parties will bid for the work without some compensation since there is an existing in-house operator.

Also having third parties in place would allow the survivng AA to keep Eagle honest in terms of cost structure as there would be a third party ready to bid and operate if Eagle's costs start to climb again. AA would also have fewer employees going forward and the relationship wouldn't be governed by labor contracts, but rather a contract to provide service which would seem to provide AA with more recourse.

I am guessing a little bit here, but third party operators may give AA more flexibility in the future.


User currently offlinecommavia From United States of America, joined Apr 2005, 11121 posts, RR: 62
Reply 23, posted (2 years 4 months 3 weeks 1 day 12 hours ago) and read 26695 times:

Quoting enilria (Reply 17):
Let me open up another point. Apart from US or B6 transactions, how likely is it that AA comes out of Ch11 with BA owning 20% (or more if they can change the law using this Ch11 as justification)?

I think there is a very high likelihood of one or multiple oneworld partners to participate in the airline's recapitalization. Of all of the stakeholders involved in AA's restructuring, perhaps none are more exposed - strategically, if not necessarily economically - to AA than their airline partners. The feed and domestic U.S. access AA provides for their partners - especially IAG, JAL, QANTAS, and LAN - is immense. They will have a huge economic incentive to protect that. I could definitely see them assembling some form of financing mechanism to secure their partner's success.

Quoting enilria (Reply 17):
I think Eagle will see more change in this filing than mainline will.

I agree. I think AA sees this as an opportunity to not only restructure mainline, but also Eagle, and may even see a chance of turning ownership of the regional into a strategic asset rather than a liability.

Quoting enilria (Reply 17):
Imagine this scenario. AA gets scope wiped away and can now have E190s at Eagle or Skywest. How long will it be before that forced DL/UA to seek the same thing? The only way to get that is in Ch11

It's all a competitive back-and-forth, as it's always been, but I highly, highly doubt that Delta or United will file Chapter 11 in response to a post-bankruptcy AMR.

Quoting enilria (Reply 17):
I think post-Ch11 is it possible the AA culture looks a lot more like B6 regardless of whether they merge.

Doubtful. Culture is all about people. JetBlue's are happy. AA's are bitter. And with what is about to happen, AA's are about to get more bitter still.

Quoting enilria (Reply 17):
AA should be preparing for that while they go through Ch11.

The AA that is likely to emerge from Chapter 11 - whatever form it takes - is going to be a far leaner, nimbler, more competitive company. That will position them well to compete across the network, including against Southwest in the Metroplex.

Quoting realsim (Reply 18):
"Horton said, however, that as the company goes through a restructuring it will probably reduce the flight schedule "modestly," with corresponding cuts in jobs".

What does "modestly" mean is up to each one, but at least it doesn't sound like 100 aircraft less...

It's all about P.R. spin. He's trying to stay as optimistic as possible. The reality, of course, is that he's not the one in control, and doesn't know how severe the capacity and labor reductions will be. We will all find out in time. I'm sure he is genuine in suggesting that he doesn't want to cut the network or workforce too dramatically, but on the flip side, I'm also sure that he recognizes that he has little influence over the outcome.


User currently offlineGentFromAlaska From United States of America, joined Feb 2005, 2926 posts, RR: 1
Reply 24, posted (2 years 4 months 3 weeks 1 day 12 hours ago) and read 26567 times:

Quoting enilria (Thread starter):
AMR is habitual second banana in ORD. Would they take this opportunity to exit ORD?

I've often thought why does AA maintain two super hubs in the central U.S. ORD is more of a east-west hub while DFW supports Central and South America and the rest of the globe. I realize ORD supports global Ops as well.

Having been stuck at ORD snowstorm for three days on a SEA-ORD-DCA one-stop several years ago I can appreciated the DFW hub during the winter months. Of equal consideration would be routing through DFW from SEA for an ultimate Northeast destination which I have selected across the winter months.

I suppose the correct decision would be to evaluate labor, infrastructure and other expenses and close the hub that brings the least value added. The armchair COO in me is leaning more on the side that MIA or DFW may need to go.



Man can be taken from Alaska. Alaska can never be taken from the man.
25 Revelation : Not to mention 100+ 757s. I think a lot depends on how AA handles employee relations. Everyone across the board is about to take a hit, even after ma
26 Post contains links STT757 : They're going to be parking / returning a lot of aircraft; http://www.aa.com/content/images/res...craftLessorsLendersandTrustees.pdf I'm going to stic
27 ual777 : Why on earth would AMR give Republic flying? They are a competitor. Just what this business needs...more crap regional jobs.
28 Alias1024 : I don't think scope will go away entirely. It will be difficult for the company to argue for scope relief that goes farther than their competitors. Th
29 enilria : I find that from a PR perspective when you want to do something dramatic, the first step is to introduce the concept, but make it seem like a much sm
30 Post contains images DeltaMD90 : I'm not saying ORD will be closed, but I think at least one hub will get the ax. It's sad to see AA downsize but they are seriously reducing their fle
31 commavia : No, but it will be dramatically more flexible than the SCOPE clause in place today - I think most would agree on that.
32 ual777 : There will be an increase in 70 seaters, but I strongly doubt they will get 90 seat scope relief. I think they will end up with 100-150 70 seaters. A
33 ADent : So are they going to keep 5 hubs? Seems like they could kill LAX and leave it with minimal service. Get AS to take over some of the flying and gate le
34 ThreeIfByAir : MIA is extremely valuable for Central and South America. Many routes have zero/minimal competition. Cargo is huge. LAX is my guess for downsizing - c
35 STT757 : As long as they don't have winglets, if they have winglets forget about cargo conversion. Most of PMUA's don't have winglets, and will stay that way
36 ozark1 : Was curious as to your thoughts on: The fact that most of you indicate a pretty rapid downsizing. Do you forsee layoffs because of that? Do you think
37 D L X : I assume you're asking what would it take for Parker to not go after AA? I think closing the ORD hub makes Parker say no. A midwestern hub is the GIA
38 ckfred : WN at DAL isn't as big a threat as you may think. I forget, but there is a hard cap on the number of gates that WN has at DAL. For the most part, for
39 commavia : I think there will certainly be a downsizing. How big and how rapid remains to be seen. Absolutely yes. And the downsizing will only be the beginning
40 DeltaMD90 : Oh yeah. I'm not a betting person but I'd bet on that. I'm sure they'll try and get rid of old FAs, but I'm sure the incentive wouldn't be that great
41 Post contains images delta2ual : ORD will remain in the system. AA is very important here in Chicago. With lower costs and some relief on scope, they can make ORD work. It depends on
42 ThreeIfByAir : A cursory glance through the photo database shows only frames with winglets. Hopefully the next destination for these birds is not a can factory, but
43 delta2ual : I highly doubt that. DL management seems to be doing a pretty decent job at running a sound business plan. Plus, they have much greater flexibility a
44 Stitch : I don't think the C11 filing will have much affect on public confidence in choosing AA. As noted, a number of major US carriers have filed for C11 in
45 Aloha717200 : I'm probably in the minority here, but I for one am going to be personally sad to see the Md-80s go, even if it is better for AA in the long run. It w
46 ultrapig : Ok let me start a little trouble. Alot of TWA employees ripped AMR for taking over TWA but suppose AMR had not done the TWA deal-Would it be better of
47 STT757 : Even if AA never acquired TWA they would be still in the same situation.
48 Atrude777 : STL is not a Hub anymore. They lost Hub status officially April of 2010 when they pulled all American Connection flying. We "only" have flights to th
49 ozark1 : Probably one of the worst decisions in AA history. I'm not so sure it would have mattered at this point as it was pre 9/11. Our costs, for sure, woul
50 GentFromAlaska : In bankruptcy and the courts there are no sacred cows. Now politics, compounded by the current economic landscape is another story. In my mind MIA an
51 commavia : No "sacred cows" involved. DFW and MIA are AA's two most strategically important, and likely most profitable (or least unprofitable) hubs. Neither wi
52 Post contains images etops1 : Maybe like this .Per CNBC Today .
53 Acey559 : Eagle is now and has routinely been profitable, even despite our higher labor costs.
54 enilria : Exactly, it's hard to imagine them weakening their position in MIA/DFW for any reason. Here is a crazy idea akin to SJU. They sell ORD to B6, forge a
55 PittPanther : I got a huge kick out of this, just looking at the map - looks pretty solid
56 D L X : Really?! Were they already assuming US had bought them? If you know they can only own 20%, how are they going to buy AA?
57 Post contains images TOMMY767 : Not bad!!
58 planemaker : The Chap 11 filing decision was not an overnight one so one can only guess at at this point how far back management were planning for this contingency
59 Post contains images Markam : There is a third way: Parker convinces IAG and the rest of the Oneworld partners that he is the right man to run the show for them in North America,
60 STT757 : VX is on the verge of bankruptcy themselves, there are no real assets to VX for B6 to acquire.
61 Squid : I think AA is in the position of fight or flight with ORD. If they want to keep ORD, that shoud take top priority while in BK. All the new A319's shou
62 FlyPNS1 : But that's unlikely. Neither UA or DL were able to get E190 sized aircraft to operate at their regionals. Hardly. Having a different 100 seater paysc
63 rbgso : IMHO a big winner in all this is G4, since there will be a glut of used MD80s available at rock bottom prices.
64 DCA-ROCguy : If the judge and AA determine that AA having 90-100-seaters would strengthen the airline's ability to recover more money for creditors, and become a
65 AeroWesty : The timing of this filing isn't surprising, in light of fleet planning. People have already either flown or booked their holiday travel and the 60-da
66 STT757 : Hardly, They were still negotiating with labor groups leading up to the filling. The CEO has been adamant about not pursuing CH-11 Now that they are
67 AADC10 : It will not be so easy to get rid of them. The MD-80s are more likely to be owned rather than leased and few will be interested in taking old, fuel g
68 AeroWesty : By no means do I believe that point to be the only reason behind the timing of this filing, but it certainly must have been a consideration for when
69 Post contains images enilria : That doesn't mean anything. AA has an intra-company contract with Eagle to provide feed that is massively above market rates, so it is irrelevant. If
70 Post contains links and images Jacobin777 : I'm not so sure about this one. Probably "scaled-down" a bit possibly. A lot of them are leased... "We cannot afford to retain all the aircraft curre
71 STT757 : Again I am certain that they did not time their decision on how it will most negatively effect their competition. On the contrary it's timed with the
72 enilria : It will be very easy. The huge refinancing AA just did used a bunch of MD80s as security collateral. Those are "owned planes", but now they can just
73 LipeGIG : I know many will not agree, but i would expect regulators to impose limits to a potential US x AA domination on East Coast: New York, Philladelphia,
74 FlyPNS1 : But that alone did not drive US into bankruptcy...it might have been a SMALL contributor, but US had far bigger problems. Actually, they both tried p
75 STT757 : B6 cancelled their orders.
76 AeroWesty : Here's the problem with your posts: You took one sentence out of context, that being a qualifier to a point in what my expectations are in a thread s
77 D L X : That other major investor is likely going to be US Airways... which CAN buy the entire airline.
78 DeltaMD90 : I keep seeing people saying ORD and all hubs will stay. Fair enough, your opinions. But no one can deny there will be a huge fleet reduction. 100+ air
79 commavia : Well, actually, AA is, indeed, talking about "modest" cuts. The "100+ aircraft" suggestion is from A.net, certainly not AMR. Now, whether Horton is a
80 tsnamm : Bingo...and bitter employee's give bad service; in an airline that can't afford to alienate the flying public any further...if they start dumping the
81 DeltaMD90 : My bad. What do "modest cuts" mean? I'm having trouble figuring that out.
82 Post contains links and images LAXintl : CEO Tom Horton had a Q&A interview with the Dallas Morning News. http://aviationblog.dallasnews.com/a...om-horton-discusses-amr-bankr.html . Accor
83 LipeGIG : Thanks for sharing. It could not be different. Working with finance and large corps, AA best chance now is to downsize and take full advantage of as
84 flyinryan99 : My question is...are these 100-150 airplanes gross or net? Obviously they are going to try and pick up 70+ seat aircraft to back fill some of these a
85 DCA-ROCguy : I'd actually give Parker more credit than that. The main point is that US still exists and does not appear to be in serious financial danger. One key
86 FlyPNS1 : No, it's even worse. The economy is far weaker than 2003, oil prices are far higher and AA's competitors all have lower costs. Now, I don't expect AA
87 slvrblt : Practically nil. That's absolutely what forced us into this filing. Agree with most of you here, Ch 11 was probably inevitable - but..... I also beli
88 enilria : I agree. The problem is that they have to get rid of the planes they don't want NOW and they can't get new ones until later unless they do a deal wit
89 ozark1 : I could not agree more with this post! And that's what really concerns me. If the unions can't snap out of the fact that, yes, they took the cuts, an
90 IrishAyes : They serve entirely different purposes. They're over 1,100 mi apart!! It's not like MEM and ATL... I don't think a merger with US is critical for AA'
91 bennett123 : Folk are talking about the B737-800 on order. How about used B738-800 ex FR?.
92 deltaflyertoo : yeah you are right, they need new innovative long haul routes. Someone else on here was saying they should end India service, really? India like Braz
93 ckfred : 160-127=33. That's the amount of flights that WN can grow by, when the renovation of DAL is finished. That doesn't leave a lot of flying to MDW, SEA,
94 FCAFLYBOY : _ bennett123 From United Kingdom, joined Aug 2004, 5579 posts, RR: 1 Reply 91, posted Tue Nov 29 2011 14:08:24 UTC (12 minutes 36 secs ago) and read 1
95 deltaflyertoo : Agree. And as DCA-ROC guy pointed out US holds its own very well against WN at PHX/PHL. IF AA can successfully pull this Ch 11 off, WN having no Wrig
96 flymia : What is AA going to shut down all their hubs? I think people do not understand what Chap-11 protection means. MIA and DFW are SAFE anyone who thinks
97 bennett123 : If you mean BA, afaik they are getting A32S
98 Post contains images blink182 : I've long been under the impression that FR's high utilization rates greatly wear down the aircraft. Every time I fly FR, I am amazed the aircraft is
99 Post contains images avek00 : What a future American Airlines will look like:
100 nyc2theworld : They may sound weird but why not by AA for their workforce, specifically the pilots? Use the AA pilots to take over more US Airways group flying. Eit
101 OA412 : Here's a pipe dream. How amazing a route network would you get if AA and DL merged? Huge presence in the Midwest, large NYC presence, ATL, DFW, MIA, S
102 ual777 : If that happens, then I for one am going to get a master's degree and get the F out! You guys just don't understand. I have NO problem with an E-190
103 etops1 : Quoting ckfred (Reply 93): Will Parker try to buy AA? Probably. But he would be nuts. Considering that he still can't combine the HP and US pilots int
104 laca773 : I think we'll see JFK-LAX/SFO go ala UA p.s., if not in PJY, then a large J and smaller Y cabin with 75Ws. Parker @ US still can't get his pilots to
105 LipeGIG : A new route means an additional fixed cost despite the revenue it can generate but it will need time to become mature and can be profitable or not. F
106 mah4546 : I'm hearing there might be a positive route announcement very soon, probably strategically done at this time to show the public, "look, we're moving f
107 FlyPNS1 : Hardly. While the RJ's impacted US, the bigger problem was US's bloated costs. US had been struggling even when DL had no RJ's at all. I might also n
108 ual777 : I think it will be 70 seats and capped at that. Everyone else makes money with it.
109 staralliance85 : Doug Parker is probably in or on his way to Fort Worth right now! This is an opportune moment for US to acquire AA. In the long term, both US and AA n
110 steeler83 : If you go back and reread the post, I wasn't making any kind of statement about any hub or hubs closing. I know what CH11 protection means. I was sim
111 irshava : Does anyone know whether or not AA will take delivery of the long haul planes they have on order at the moment? and..... Would DL consider taking some
112 DeltaMD90 : No they don't. Doesn't Southwest prove that size doesn't matter? US and AA can be strong carriers and be separate. I think it would be an ugly combin
113 Post contains images LAXintl : while many folks might deride Tom Horton's selection as the new CEO, putting a numbers man in charge of AMR is absolutely the right thing to do. Ever
114 irshava : Yes but AA has been getting new B737-800s in the past few years.... so to lighten the load wouldn't DL want to snatch some up even though AA wouldn't
115 klkla : It will be interesting to see what happens with the 777-300ER order. AA doesn't actually need them. They're not fully utilizing the widebodies they ha
116 irshava : Does anyone know what will happen to the MD80s? Are they going to the scrapper or is their still life for them somewhere else?
117 DeltaMD90 : How would they do that?
118 irshava : Well with the economic pressure - maybe they would have to submit some aircraft back to their lessors?
119 crAAzy : I guess I would be in the minority also. Anyone who thinks AA is going to close or significantly scale down ORD is living in UA dreamland. Being seco
120 par13del : As long as the pilots who jumped ship early and those who did not get on in time stay around to fly them.
121 thegreatRDU : As long as RDU-LHR is still around...I...I...think it'll be ok...
122 LipeGIG : Agreed, in special the 772. But i believe after some sale-lease back, they have some 772 now under leasing. As long as it is a profitable route, it w
123 DeltaMD90 : I'm sure they will get rid of some leased aircraft but they'll be only the oldest models. These new 737s would be some of the last to go, AA would pr
124 klkla : That's interesting to know. I wasn't sure which aircraft were bought/leased. Selling is an option although I would imagine they're all encumbered. Th
125 irshava : I thought Boeing was the main man who gave out delivery slots... is it possible for an airline to sell its positions?!
126 ERJ170 : I got a feeling AA would be hanging on to RDU-LHR as hard as they can (BTW, the route HAS to be profitable for AA to fly it so I don't think there is
127 mcdu : Not so sure I agree with your assessment of the parking. You look at the UA BK filing and they parked 777's and 400's during BK. Lease agreements are
128 SonomaFlyer : AA will not pick up any used 738's from FR or anyone else. They are taking deliveries as we speak and the pace will be picking up. Starting in 2013, t
129 mah4546 : Fact: AA knos what it needs - costs in line with the industry. It has attempted to achieve this without bankruptcy, and has failed. AA's widebody fle
130 wedgetail737 : Does the bankruptcy make AA a candidate for a merge?
131 AAIL86 : That is quite a hot opinion. I'd say just throw away the airline if they see the need to get rid of DFW and/or MIA. He is a bankruptcy expert, isn't
132 Post contains links crAAzy : Sorry, not trying to pick on you but just trying to present some facts. Fact: AA will need additional long haul aircraft starting 2013 as leases on 2
133 jamake1 : This from the Dallas Morning News: • The Boston base of the Allied Pilots Association passed on a report saying that American's chief pilot said "th
134 PSU.DTW.SCE : While all of the wild speculation on A.net is fun, the prescedent for airline bankruptcies has already been set over the past decade. I remember the d
135 LAXintl : Since we are speaking about leased versus owned aircraft below is the count per AA 10-K filing. Owned CRJ-700 - 39 ERJ-135 - 39 ERJ-140 - 59 ERJ-145 -
136 klkla : Delta sold 737 positions duirng their BK with the approval of Boeing. Basically the order stayed on their books but they presold them (to a leasing c
137 liftsifter : I for one want to know how this will affect Willie Walsh and the IAG. Less frequencies and decreasing destinations will definitely make American less
138 usflyer msp : This does not make sense as AA pilots are significantly more expensive than US East or US West pilots. How does using more expensive labour make US p
139 mah4546 : Which has been in the works before BK and I am willing to bet will continue to progress without interruption. Rumors have indicated it will likely be
140 LipeGIG : Thanks again. I remember one transaction that also included 772's. I think the 12 B762 will be among the first to leave the fleet as soon as they hav
141 etops1 : "What I forsee happening is US purchasing AMR and slowly transferring AA's assets to the lower-cost US operation which will hire new FA's and pilots o
142 MasseyBrown : The legal limit is 25% of voting stock. Lufthansa's ownership of JetBlue is 20% (actually something like 19.99%) in order to avoid accounting rules t
143 na : You seem to think no intl. routes are being cut. I wouldnt be sure of that. I wouldnt be surprised at all if they terminate the lease of some 763s an
144 mah4546 : No. They received brand-new interiors less than three years ago and are actually in pretty good shape inside - new sidewalls, LCD monitors, near lie
145 mikey72 : From LHR AA flies daily : 2 x DFW 2 x BOS 3 x ORD 2 X MIA 1 x RDU 1 x LAX 4 x JFK Would it make more sense for BA to operate some of these services ?
146 richardw : BA is adding flights to MIA and JFK and also changing to larger aircraft, so more seats on these routes anyway.
147 na : That should count zero under Ch.11 (LH retired its A300s, some with interiors just a year old). AAs 762s were built in the late 80s and therefore old
148 mah4546 : I didn't say it would count for anything. You made a false statement that the 762s are not up to date. On the contrary, AA has done a decent job keep
149 FlyPNS1 : True, but many of those new routes are dead or dying. Most of the international markets from the U.S. are currently over-served....particularly Europ
150 AAplat4life : Once AA gets its costs structure sorted out, the next question is what if anything does it need to do to differentiate itself from the competition. A
151 commavia : I agree they need to bolster their presence in both Boston and San Francisco - chiefly by adding back flights between those two cities. Two daily A31
152 LAXdude1023 : How so? What routes would you move from DFW? DFW-NRT is by far the best preforming NRT route, so that would be dumb. LHR is a OneWorld route, CDG is
153 VictorKilo : Could AA choose to reduce Eagle capacity by dramatically reducing the size of the ATR fleet - which would be relatively easy to do, since the fleet i
154 Revelation : Strange. It seems as one part of the company is pouring $billions into redoing Terminal 8, the other side is letting slots it needs to be a success d
155 norcal : Absolutely not, numbers guys see the cost of everything and the value of nothing. They need operations guys who know that smart investment in product
156 AAExecPlat : Agreed. Most Fortune 500 CEOs these days are "numbers guys" and they usually come out of Finance. THat's because Wall Street favors folks who know ho
157 WA707atMSP : AA does have an advantage over DL in that they have the best base of corporate contracts at LAX. The movie studios have been very loyal to AA over th
158 na : The 762 as such is 80s technology and therefore not up to date, thats what I meant. I dont dispute they have been well maintained and upgraded, but s
159 Burkhard : I absolutely agree. I know from near insight a company working in medical drugs, taken over by number guys after several mergers. They are reducing t
160 TOMMY767 : The biggest priority beside labor relations is fleet age. AA should really talk to Boeing and Airbus about getting the newer deliveries bumped up to n
161 delta2ual : Um, I would say UA & DL have quite a few "eggs" in Asia too.
162 PSU.DTW.SCE : I wouldn't necessarily count the 762s out as fast as everyone claims. Ultimately what is going to happen is during the reorganization process is that
163 mogandoCI : It's the JFK-LAX route alone that leads to $50-100M of annual losses for AA. Still thanking these movie studios for demanding all this excess F/J cap
164 STT757 : [ They're getting them starting in 2013, that's pretty quick considering lead times for parts and materials that have to be put in place prior to prod
165 ckfred : etops1: You're correct that Parker can't force the US-East and US-West pilots to agree to a combined contract. My point is that if after all this time
166 Post contains links and images enilria : I give Parker credit for keeping the pilots focused on each other instead of the company. That is why the airline is profitable. I do not give him cr
167 hiflyer : re my statement that DFW and MIA are the most vulnerable.... All other AA 'hubs' are far more balanced with other carriers and can handle a loss of AA
168 seatback : AA isn't going to do away with ORD. It may be a loss now and for the next 18 months, but with AA's loyal following and history in Chicago and with th
169 Post contains links LAXintl : For those that feel the 762s will stick around a bit longer, maybe you are not aware however their pull down was to begin this winter even prior to Ch
170 STT757 : As you mentioned that was prior CH-11, that will probably be expedited.
171 enilria : That will never happen. Even if AA closed the hub in DFW you will not see WN put a hub in DFW. They are much better off dominating DAL than joining a
172 ripcordd : #1-It will be Eagless they are burden on AMR and have been yes they make money on paper but they really dont. They are trying to sell eagle debt free
173 enilria : AA just asked the court to dump 24 MD80s on creditors effective immediately. It said some where out of service at the moment. My guess is that these p
174 AAExecPlat : I doubt it...some of these 24 have probably not been flying anyway, and AA will continue to take delivery of 738s. Maybe some high frequency markets
175 enilria : I think this is barely round 1. The fact they want to take 24 out immediately is a big deal unless they are all parked and AA states that they are no
176 ckfred : Of course, if WN cuts way back on service out of DAL to AMA and MFA, that could drive some people over to AA. The point is that AA has about 700 flig
177 FlyPNS1 : Sorry, you are wrong. At most the judge could issue an injunction trying to stop a strike, but honestly if a judge tries to force 100 seaters on the
178 PSU.DTW.SCE : The fact is that these 24 aircraft are low hanging fruit. Either already parked or where likely to be parked in the near future. Makes sense to start
179 apodino : Since ALPA does not represent the USAirways pilots either after US pilots dumped ALPA a few years ago, it wouldn't be ALPA. But you bring up an inter
180 hiflyer : Wonder what the market value on a dump of old and well used MD80's is? Aside from G4 who may have all they need for now with that last deal from SAS.
181 mah4546 : Absolutely not. AA can't afford to park 180 planes and remain a viably competitive airline!
182 Post contains images enilria : I don't think anybody thinks WN is going to attempt to replace AA. WN is going to attempt to make money and they can do that better from DAL where th
183 micstatic : Let's remember, the AA after bankruptcy could look totally different. Much smaller possibly. I agree doubtful. Let's also remember that they are curr
184 slvrblt : Absolutely. And, MIA is a strange blend of hub/origin city. Unlike most monster hubs where most of the traffic is connecting, MIA has LOADS of origin
185 planemaker : Leeham just came out with a short blurb that he thinks that Parker may make a bid for AA now that it is in Chap. 11.:
186 LipeGIG : It seems AA know they need to place the 77W on markets to build competitive advantages as i expected. Well done! But still need much more fuel. Agree,
187 wn700driver : And just how small do you think those two are anyway? Aside from the other things commavia pointed out, just how on earth would one go about building
188 usflyer msp : FYI DL at ATL is still significantly larger than AA at DFW but I agree with your point...there would be no point in combining DFW and MIA...they serv
189 Post contains links and images Longhornmaniac : Any US/AA merger/takeover would retain AA's everything. US has next to no brand recognition in the rest of the world, especially compared to AA. This
190 texan : This was not a quick decision. They would have started preparing the documents weeks, if not months, ago. Publicly Arpey said they would not pursue C
191 flymia : Every major US airline would love to get their hands on MIA if AA went away. IF that did happen we would probably see DL make a huge move in MIA and
192 enilria : Nothing new there. IAG is going to play a roll. I think US needs to convince IAG they are the right partner for AA. I don't think they are. IAG doesn
193 FlyPNS1 : Most lessors will take a short term lease versus getting nothing at all which is what they will get if AA rejects the aircraft. You also miss that AA
194 American 767 : That's what they have been doing in the last two years. Some pilot bases including BOS, SFO, and of course MIA, are now MD-80 free. Now that most ORD
195 Post contains links PSU.DTW.SCE : I like using data: From AMR's last 10-K: http://www.sec.gov/Archives/edgar/da...000095012311014726/d78201e10vk.htm Page 20-21 This table shows planned
196 enilria : That's a question mark. Allegiant would probably give the owner a few million per airplane for a good number of the MD80s and AA is going to want to
197 WA707atMSP : I would be really surprised to see this route cut. Other posters have said that PSP is the only west coast destination where AA sees higher yields vi
198 FlyPNS1 : G4 can't take that many MD80's. They might take 20-30 of them, but not all. G4's growth is slowing and their profit margins are shrinking. Even for G
199 texan : And you could be right. I don't think it makes much sense for AA to cut one of their major hubs, but I also don't know the financial performance of e
200 ckfred : Add to the headache the issue of former TWA pilots. They are stapled to the bottom of the seniority list, but with a fence around STL. Many pundits t
201 enilria : You make the mistake of thinking that G4 is going to fly these planes. They will fly some of them, but if these are planes with a fresh AA C-check it
202 Post contains images crAAzy : So you're essentially seeing AA eliminate it's ORD hub. Sorry, but it's never going to happen, and on a more personal note, I'm rather hurt that you
203 mogandoCI : Doesn't AA have ORD-DEL already? Another prime example (other than JFK-LHR) that can easily up-gauged to lower CASM to go from 6x to 4x. Take those 2
204 crAAzy : Yes they do, but there are conflicting opinions of whether this route is profitable for AA. I think it also tells you that behind NYC, ORD is really
205 LipeGIG : It could become, on AA side, 2x daily 77W (i suspect right now is 3 772 + 1 763). JFK can become 1x daylight 772 + 2x daily 77W also. Glad to see i'm
206 HPRamper : It's cracking me up how AA has five hubs (six if you count both NYC airports, and not counting a few focus cities) and according to posters here, EVER
207 AADC10 : No, that is exactly why the MD-80s will be hard to get rid of. Some of the leased and mortgaged 738s will probably get taken back since they can be l
208 slvrblt : Heh....probably true! Every city has it favorite fan base. The actual fact somewhere lies in cutting a bit of everywhere and some small stations goin
209 irshava : What if IAG were to take over AA? :O (I can dream can't I? :P)
210 DeltaMD90 : Foreign ownership laws prevent this.
211 irshava : Ok how about owning a large share... Is that possible?
212 enilria : Wall Street agrees with me. The MD80s are toast. The bonds backed by MD80s are essentially trading as unsecured debt meaning that AMR is not expected
213 DeltaMD90 : Don't know too much about the laws, but I trust texan when he says: Now, there can always be talks of Congress changing the laws, but right here righ
214 American 767 : OK you're right. I shouldn't have said that. I was only imagining a scenario if AA reduces capacity at its ORD hub. No I'm not suggesting AA eliminat
215 Post contains images teme82 : I must say that this is a bit weird since when ORD-HEL route was launched it used B762 and it was in AA's colors. Now if this is going to change that
216 FlyPNS1 : I'm not an AA employee. However, I know that are very prone to over-exaggerating and creating more hysteria than really exists. You were the one swea
217 PlaneAdmirer : If the leases are going to be kept for only a few more years until the new 320s and 737s come online, then the bonds won't trade as though they are g
218 enilria : They are still coming. They will be used to secure gates in 2014. There is no reason to file suit now as the law still prevents access from other car
219 STT757 : 25% is the limit.
220 liftsifter : American has a huge presence at ORD that is quite subtle. if American were to leave ORD, they would loose a huge market and O'Hare would loose value
221 Cubsrule : There will be no injury in 2014. You can't file suit without an injury. In such a scenario, it's probably most likely that ORD would move VX, B6, DL,
222 crAAzy : Kidding about the being hurt part of course, but I do think many of the routes you're suggesting go to ERJ will likely be shifted to A319s as you all
223 LAXdude1023 : It probably will depend on the route more than anything. With the MD-80s going away fast, I would think that DFW/ORD-West/East Coast would go 738 and
224 PlaneAdmirer : And the amount paid on them is about to be renegotiated and there is no other user for the aircraft. G4 may want a few for flying and a few more for
225 enilria : The injury will be that WN broke the agreement which means they must give up gates. It doesn't specify that WN must give up the gates immediately or
226 Cubsrule : Nope. That's the wrongful act. The act has to cause some injury to the plaintiff for that plaintiff to be able to sue.
227 rj777 : Do you think we will see a new corporate logo and livery?
228 Acey559 : I was at the flight academy yesterday and talked to a few people, and they said we may dump ten to twelve Embraers, but that isn't official by any me
229 AADC10 : Of course the MD-80s are toast and they will try to get rid of many of them through lease rejections and repossessions. On the other hand, they have
230 PSU.DTW.SCE : NW's bankruptcy did not kill the DC-9......
231 Post contains links mah4546 : Boyd Group prepared this analysis: http://www.aviationplanning.com/Imag...tcy%20-%20Time%20For%20Reality.pdf Long story short, they believe that the b
232 miaami : This is very accurate. Although the TWU reached a TA, I believe it has been pulled in account of the C-11 filing. Q: What role did unions and union ne
233 Acey559 : I'd like to know where you heard we get paid massively above market rates. Every single person I've spoken with said we get paid industry average mar
234 SkedGuy : I really do agree with you on these points. I posted the following as a response in another thread, but it's probably more appropriate here anyway: B
235 delta2ual : Did you read that document? Boyd said this BK involves shedding their debt burden and reducing their pension/retiree benefit costs. As for "fixing" E
236 klkla : Let's hope. Many companies emerge BK with fresh logos and a new attitude (a la DL). AA's logo and livery are dated. They need an image that speaks to
237 genybustrvlr : For all of those who speculate that AA's chapter 11 filings is pre-packaged, you're wrong. If that were the case, there would have been a mass of cour
238 Post contains links delta2ual : Also from the following thread: http://aviationplanning.com/Images/A...tcy%20-%20Time%20For%20Reality.pdf Q: How will AMR Eagle be affected? A: A lot
239 crAAzy : Rather interesting read. However, I found it a bit bizarre how they criticized all the conjecture from other sources and then they go on in detail wi
240 SESGDL : DL's ATL hub in the largest in the world, by a pretty significant margin. DFW is the 2nd largest. Debatable. I think UA's EWR is a strong contender f
241 LOWS : They've even got the same Bankruptcy Attorney/Firm: Harvey Miller of Weil, Gotshal & Manges. I think that's why they filed in S. New York. He's o
242 STT757 : *IF* they park that much of the Eagle fleet it's going to hurt, as much as we would like AA is not going to replace ERJs operating Chicago-Fort Wayne
243 Giancavia : Just a tidbit of intrigue from me.. Since they need new paint for the 787 and will be emerging from Bankruptcy will we finally see a different AA colo
244 Acey559 : Not to mention a lot of the intra-texas routes. Dan Garton told my new-hire class that even the -135s can be profitable on flights like DFW-TYR where
245 crAAzy : Unless they decide to contract all routes with 50 seats and less out to another carrier.
246 LAXdude1023 : Even beyond Texas, there are rotes that do well from DFW on Eagle that a 319 may be too large for. A lot of the Mexico routes come to mind (AGU and S
247 AAIL86 : "While possible, it is not indicated that C-11 will be used to materially reduce the size of the mainline AA fleet. The current system has high load f
248 flyinryan99 : I take 2 issues with their projections. While I do agree with most of what they say, they don't address approximately how many contracted airplanes w
249 Post contains links srbmod : Please continue the discussion here: What Will Post-Ch11 AA Look Like? Pt.2 (by enilria Dec 7 2011 in Civil Aviation) In the future, if someone starts
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