incitatus
Posts: 2700
Joined: Wed Feb 09, 2005 1:49 am

Will American Will Break Even In 2005

Wed May 18, 2005 11:53 pm

With several rounds of fare increases and higher load factors, it seems that AA will be able to break even in 2005 if oil stays in the $48-$50 range.
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qxq400
Posts: 250
Joined: Thu Dec 23, 2004 1:42 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 1:50 am

If any of the majors (AA,UA,DL,NW,CO) I think AA will have the best shot of breaking even.I have heard that they have giving some of the wages back to the employee's that they took.No other major is doing that right know.
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padcrasher
Posts: 1815
Joined: Tue Aug 10, 2004 6:17 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 2:01 am

There is no chance of that at the oil prices you mention. They lost $1.61 a share already this year and are expected to lose $4.71 for the year.
 
QQFLYER28
Posts: 58
Joined: Sat Nov 20, 2004 1:09 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 2:36 am

Quoting Padcrasher (Reply 2):

Yeah Padcrasher but if oil continues to fall below $48, like it has in recent days, their chances of making a profit go up dramatically.
 
incitatus
Posts: 2700
Joined: Wed Feb 09, 2005 1:49 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 2:36 am

Quoting Padcrasher (Reply 2):
There is no chance of that at the oil prices you mention. They lost $1.61 a share already this year and are expected to lose $4.71 for the year.

Check your source because the press release on the first quarter said $1.00 loss per share.
If oil stays at first quarter levels, AA's fuel bill will be 4.5 billion USD over the year. The average oil price for first quarter was about $52. It's gone already lower and today is trading in the $47's. For every dollar the price goes down there is a big impact in the final result. I think this difference is enough to erase the loss expectation.
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commavia
Posts: 9741
Joined: Mon Apr 25, 2005 2:30 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 2:36 am

Quoting Incitatus (Thread starter):
With several rounds of fare increases and higher load factors, it seems that AA will be able to break even in 2005 if oil stays in the $48-$50 range.

Not likely. The best shot AA has is to break even on an operating and net earnings basis in the second quarter, the seasonally strong summer travel season, but will almost definitely lose money on both an operating and net earnings basis for the year (although they will likely come pretty close to breakeven on operating earnings).

Quoting Qxq400 (Reply 1):
If any of the majors (AA,UA,DL,NW,CO) I think AA will have the best shot of breaking even.

I agree. AA is the closest to profitability of all the legacy carriers.

Quoting Qxq400 (Reply 1):
I have heard that they have giving some of the wages back to the employee's that they took.No other major is doing that right know.

Yes. All US employees just got a 1.5% raise. Sure, it is miniscule, but a lot better than what employees at most other carriers are contending with, not to mention that AA is still fully funding their pension obligations.
 
incitatus
Posts: 2700
Joined: Wed Feb 09, 2005 1:49 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 4:12 am

I have estimates for which average oil price for the remainder of the year other network carriers would break even.
Continental breaks even if oil goes to $42 and stays there. Northwest and United break even with oil at $28, and Delta with oil at $10.  eyepopping 

Chance of AA breaking even... >50%?
Chance of DL breaking even... hopeless.
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aanyc
Posts: 129
Joined: Wed May 11, 2005 3:51 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 4:23 am

Quoting Commavia (Reply 5):
Quoting Qxq400 (Reply 1):
I have heard that they have giving some of the wages back to the employee's that they took.No other major is doing that right know.



Quoting Commavia (Reply 5):
Yes. All US employees just got a 1.5% raise. Sure, it is miniscule, but a lot better than what employees at most other carriers are contending with, not to mention that AA is still fully funding their pension obligations.

The 1.5 % raise was a contactual obligation for the flight attendants. Also, it in no way comes close to the 33 % wage and benefit give backs from 2 years ago.
 
commavia
Posts: 9741
Joined: Mon Apr 25, 2005 2:30 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 4:45 am

Quoting AANYC (Reply 7):
The 1.5 % raise was a contactual obligation for the flight attendants. Also, it in no way comes close to the 33 % wage and benefit give backs from 2 years ago.

Would you rather be taken another pay cut and losing your pension? Believe me, I recognize (more than you can imagine) just how many sacrafices all AA employees have had to make, but I think -- on balance -- that AA employees should consider themselves pretty lucky. Yeah, your measely 1.5% raise doesn't come close to giving back what you had to give up, but I bet that the total value of your compensation -- salary, medical, pension, etc. is greater than most comporable compensation packages for FAs at other airlines (UA and US, specifically).
 
AASTEW
Posts: 418
Joined: Sat Oct 06, 2001 10:47 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 6:06 am

My contractual raise amounted to .40 cents. Maybe I can purchase my dream home now...lol

I do have to agree with most, AA will probably be the first to return to profitability amongst the majors. Some of the cost cutting measures that many on this site laughed about seem to be helping a little.

AASTEW @LGA
 
commavia
Posts: 9741
Joined: Mon Apr 25, 2005 2:30 am

RE: Will American Will Break Even In 2005

Thu May 19, 2005 6:09 am

Quoting AASTEW (Reply 9):
My contractual raise amounted to .40 cents. Maybe I can purchase my dream home now...lol

LOL - let's hope it only get's better from here, though!

Quoting AASTEW (Reply 9):
Some of the cost cutting measures that many on this site laughed about seem to be helping a little.

All the little stuff adds up! Who can forget the $40,000 First Class olive?  Wink

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