User avatar
EA CO AS
Topic Author
Posts: 13397
Joined: Wed Nov 14, 2001 8:54 am

AA To Launch Their Own LCC?

Thu Feb 13, 2003 3:04 am

As unbelievable as it seems, this is the latest word from our friends at AA.

http://www.foxnews.com/story/0,2933,78374,00.html

Jeff Campbell, AMR's CFO said, "...On the other hand, I think we would be foolish at American and AMR to not be giving it very serious thought in a world where Delta Air Lines Inc. (DAL) has said they are going to try it again, where UAL Corp. (UAL), parent of United Airlines, has said they are going to try it again."

Why not see how UA and DL fare before throwing your hat in the ring? If they fail, you could potentially be there to pick up the proverbial pieces with your mainline product.

Just my $0.02 worth.  Smile


"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
captaingomes
Posts: 6251
Joined: Tue Feb 13, 2001 1:33 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 3:11 am

Interesting as Carty has previously knocked Air Canada for venturing into the low cost market with Tango and Zip. He also said that MRTC was the way to go. Seems like he has now changed his mind, at least with respect to the LCC idea.

What is interesting is that the mainline airlines don't seem to know what to do. They try something, fail, try it again, or they claim that is not the way to go when competitors try it, then they try it themselves. The next couple of years will be very interesting with respect to mainline airlines, especially in North America.
"it's kind of like an Airbus, it's an engineering marvel, but there's no sense of passion" -- J. Clarkson re: Coxster
 
desertjets
Posts: 7564
Joined: Fri Feb 18, 2000 3:12 pm

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 3:12 am

The world is mad I tell you.

In this world of overcapacity my question to American Airlines is where are they going to put this LCC?? The market for LCCs seems to be pretty saturated at the moment. With Song, JetBlue, AirTran and Southwest locking up much of the east coast and northeast to Florida traffic; and with America West, Southwest, and Alaska (though not a LCC, but the new ticket structure makes them more like it) holding down the west coast... there does not seem to be a market with enough demand to support a LCC. I think American would be insane to try to base it from DFW and do a lot of intra-Texas flying. ORD would make even less sense given historically high yields there. Possibly a base in St. Louis, but where would they fly to that Southwest doesn't already serve?

Until I hear more specifics about bases and routes and product, I can only think that this is nothing more than a brain storm session by AMR management than a serious attempt to spin-off an LCC, which unlike UAL or Delta, AMR has not done before.
Stop drop and roll will not save you in hell. --- seen on a church marque in rural Virginia
 
Al319
Posts: 76
Joined: Fri Jun 18, 1999 9:05 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 3:18 am

Perhaps they will bring back the TWA name  Smile/happy/getting dizzy and the 717's  Laugh out loud
“atom celled…jet propelled”
 
H. Simpson
Posts: 933
Joined: Sat Mar 10, 2001 7:30 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 3:24 am

I thought AA are losing few billions a day...
 
Guest

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 3:53 am

AI319...

Would be nice to see TWA back in the American skies as Low Cost operator....

Oh no.....damn, I've sold my TWA 763 from Herpa a week ago..... Big grin
Well, let's wait and see.
 
meechy36
Posts: 299
Joined: Fri Nov 02, 2001 10:55 pm

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 5:24 am

When I first read this I almost peed my pants. Yet again it is classic Carty, for months we have heard that "American has NO plans to start a low cost carrier!", yada yada yada. Now that Delta looks like it might have a good shot at succeeding with Song, NOW it's time to start contemplating it, 2 years to late. I say that Delta might have a good chance with Song because of the union issue and also because I believe the trust level is much higher there than at AMR. There isn't a chance in hell that American could pull this off.

It is so divisive here that Carty could call a press conference tomorrow and announce a 15% pay raise and my first thought would be "what does he want from us now?!"

I have 16 years with this company and believe this will be my last one here. If this airline is still around in 2004 it will be a shadow of it's former self. Carty wanted to be the biggest with the TWA purchase and he just might be at the helm of the biggest chapter 7 filing in the history of aviation, of course while the grunts are left to pick up the shattered pieces of their lives Carty and company will be moving on to greener pastures rolling in AMR dough.

Mike-BOS F/A
 
flyingbronco05
Posts: 3484
Joined: Fri May 10, 2002 11:43 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 5:31 am

UPDATE - American ponders launching low-fare airline

http://biz.yahoo.com/rc/030212/airlines_american_carrier_3.html
Never Trust Your Fuel Gauge
 
ual777contrail
Posts: 2914
Joined: Sun Feb 17, 2002 11:33 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 6:22 am

I don't know about song, but as far as UNITED goes it will be different. They haven't told us of their plan yet but one thing is for sure, it will be low cost and low fare.

This is a copy-cat industry, and I could see song and this new UNITED to do well. I could also see AA missing out on a lot of revenue because they want to sit back and wait. I think the big jets into little stations are done, and I also think the CRJ is the most overrated plane on the planet. It may save money, but the plane breaks down more than the old 727's do.IMHO


ual 777 contrail
 
PSU.DTW.SCE
Posts: 6091
Joined: Mon Jan 28, 2002 11:45 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 7:01 am

This doesn't make sense, read Carty's weekly message issued yesterday...

<http://www.amrcorp.com/hotline/11feb03.htm>

Read this paragraph...

"As for changing our business model to become a no-frills carrier like Southwest, that answer is pretty simple, too. First, we’d have to reduce our seven remaining fleet types to one. We’d have to eliminate all the international flying. We’d be forced to get rid of hundreds of airplanes and lay off tens of thousands of employees. We would no longer be a strong global network carrier, but just one more airline in a pack of point-to-point low-cost carriers.

Transforming American into Southwest would, in effect, dismantle all of American’s strengths. Today, we offer a very good, dependable, distinct product that customers value and will continue to demand. We have a huge network, great service, and a reputation that inspires loyalty and trust. Customers overwhelmingly prefer us when the fares are competitive – we’ve already seen that in several markets.

So instead of a "silver bullet," our strategic plan going forward is to build on what we already do well, and find a way to offer that product at fares our customers are willing to pay. Offering the American brand at competitive prices is not a silver bullet, but it is a sound plan for competitiveness and survival."

All this talk about an LCC makes for a good news story on an otherwise slow newsday in the airline indusrry. Some beat reporter picked up on an old story and really doesn't talk about anything new.
 
dan2002
Posts: 2024
Joined: Tue Dec 17, 2002 7:11 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 7:21 am

Well lets hope they dont name it "SONG"  Laugh out loud But seriously that wouldnt be a bad idea. They could use some of the old F-100s or 717s.  Smile/happy/getting dizzy



But lets make shure that the FAs dont Say enie menie minie moe it might cause loss of memory. Big grin
A guy asks 'What's Punk?'. I kick over a trash can and its punk. He knocks over a trash can and its trendy.
 
BR715-A1-30
Posts: 6525
Joined: Thu May 30, 2002 9:30 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 7:26 am

This is a sack of pure shit.

What is going on here. Now with all of these 'Fake' LCCs by the Majors, we can have 2 categories of LCCs

The originals (Which will succeed)
jetBlue
Frontier
AirTran

The Fakes (which will fail)
American (LCC)
Delta (Song)
United (Shuttle)

Learn from the mistakes of Continental, and UScair
Puhdiddle
 
Lindy
Posts: 4722
Joined: Wed May 19, 1999 10:42 pm

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 7:37 am

If I remember correctly. Earlier last year, American CEO said:
"AA is full service airline and never will go on their knees to be like Southwest or AirTran. If you dont want to pay our fares then go with them, we dont care for customers like you".

You can do little research and find topic about it somewhere on this forum.
Now they are on their knees with s**t almost on lower lip level.

Rafal

BWIADCA - Nikon D100
 
Boeingfan
Posts: 369
Joined: Thu Aug 30, 2001 1:47 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 7:52 am

From DFW.SCE" target="_blank">PSU.DFW.SCE text of article posting above, second paragraph:


"...Transforming American into Southwest would, in effect, dismantle all of American’s strengths. Today, we offer a very good, dependable, distinct product that customers value and will continue to demand. We have a huge network, great service, and a reputation that inspires loyalty and trust. Customers overwhelmingly prefer us when the fares are competitive – we’ve already seen that in several markets...."

Key here "when the fares are competitive."

Also mentioned in AMR CFO, Jeff Campbell, that the product, hub and spoke, more room is worth about a 30% premium.

Is the American/or Global public (business or leisure) willing to pay a 30% premium for this improved product that AA offers?

Will the low cost carrier offer less than steller service at a price customers are willing to afford?

Maybe, the LCC's are here to stay, if looks like a bus, smells like a bus... guess air transportation in the minds of the public is just a flying over crowded bus?

If AA is able to get the 30% premium, then why change the product mix?

What about the dilution (increase in mile points needed) for Loyalty program participants to use AAdvantage reward miles, could miles only be redeemed on the LCC?

Obviously I am missing something here?

 
blink182
Posts: 5272
Joined: Mon Oct 18, 1999 3:09 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 7:56 am

Here's an idea, Carty & Crew take pay cuts. The top brass at AMR Corp make unbelievable amounts of money, they can afford to take a large pay cut, not the FA who is making $25,000.

My questions are: What type of aircraft? What will you call the LCC? Most importantly, what markets will you operate in and how are you sure this will guarantee profits?

blink
Give me a break, I created this username when I was a kid...
 
HlywdCatft
Posts: 5232
Joined: Mon Jan 29, 2001 6:21 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 8:02 am

**Oh no.....damn, I've sold my TWA 763 from Herpa a week ago.....
Well, let's wait and see**

Damn dude, that could be worth something. I hung onto my Schabak Eastern L1011 and Pan Am A300
 
CannedSpam
Posts: 449
Joined: Fri Feb 04, 2000 8:18 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 10:02 am

Ok Blink, and how much would be saved on an annual basis if only Carty and Crew took pay cuts and not the FA or any other labor group? A few million? How does that compare to a annual cost savings of 1.8 billion that are needed. Are you suggesting that Carty and Crew are not taking cuts?

Once again, the media has taken statements out of context. AA is not looking to create another airline within an airline like Song, MetroJet, Delta Express, Continental Lite, United Shuttle... yadda yadda yadda. The statement was only meant to suggest that all avenues for financial recovery are being looked at. There will be no Song or Shuttle in AA's future and there will be no difference in brand recognition than there is today within the AMR family.
 
LV
Posts: 1546
Joined: Mon Jun 04, 2001 6:02 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 11:51 am

I know, base it at RDU and call it Midway....lol
 
flyboy36y
Posts: 2897
Joined: Sun Mar 19, 2000 1:45 pm

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 11:58 am

They can call it CheAAp...
 
ha763
Posts: 3168
Joined: Mon Jan 06, 2003 5:36 pm

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 12:45 pm

Blink182

In late Sept 2001, Don Carty gave up his salary for the rest of the year and bought 40,000 AMR shares. It worked out to be about $193,000 for those last 3 months. Or almost 8 of the yearly wages of a $25,000 FA.
 
FlyingTexan
Posts: 2998
Joined: Tue Jan 07, 2003 8:30 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 1:09 pm

They can call it CheAAp...

Good one, Flyboy36y. I say San Juan based El CheAApo would be better.

IMHO, the way AA acts/operates, they are a LOW COST CARRIER!!!

JR FlyingTexan
"Wouldn't your boss like to fly home nonstop at 4:30 on a Friday afternoon?" -Airline Exec to Congressional Staffer
 
ual777contrail
Posts: 2914
Joined: Sun Feb 17, 2002 11:33 am

RE: AA To Launch Their Own LCC?

Thu Feb 13, 2003 4:03 pm

American will be bankrupt by April, they will sit back and watch everyone else sink or swim. Then when AA tries to start their own? They will sink.

and as far as the comment about carty and his goons not taking paycuts? What crap, F/A's have a choice in life, they choose to be waitresses in the sky vs. Land locked or on the ground. They make pretty damn good money for someone who has to make drinks and push a cart up and down an aisle.
they get what they deserve, stop slamming upper management, your starting to sound like us here at UNITED.LOL


ual 777 contrail
 
milemaster
Posts: 994
Joined: Tue Mar 20, 2001 10:19 am

RE: AA To Launch Their Own LCC?

Fri Feb 14, 2003 2:40 am

What crap, F/A's have a choice in life, they choose to be waitresses in the sky vs. Land locked or on the ground. They make pretty damn good money for someone who has to make drinks and push a cart up and down an aisle.

lol. Oh man.. here it comes..

Soon this board will be slammed with FA's opening cans other than softdrink cans.

Who is online