aaden
Posts: 775
Joined: Mon Jan 09, 2006 9:49 am

AA Shrinking?

Fri Jun 09, 2006 2:14 pm

AA is sending md-80s to the desert and sending some twa 757s back to the leaseors. and seem to be cutting routes all the time. if people are fkying more and more then why is Aa cutting routes? do they have any plans to expand?
why is co,southwest and delta expanding and AA shrinking

[Edited 2006-06-09 07:16:23]
 
USPIT10L
Posts: 1870
Joined: Tue Mar 28, 2006 12:24 am

RE: AA Shrinking?

Fri Jun 09, 2006 2:19 pm

AA is right-sizing their market, as has been said many times previously. AA has tons of money-making routes, particularly to LHR, NRT, and Latin America. There is no need for AA to pursue money-losing ventures when they have plenty of growth opportunities within their own system. After all, do you know of any other legacy airline that has NEVER filed for Chapter 11? No, because AA is the only one.
It's a Great Day for Hockey!
 
TWAtwaTWA
Posts: 134
Joined: Mon May 15, 2006 5:18 pm

RE: AA Shrinking?

Fri Jun 09, 2006 3:19 pm

Right now, it seems that AA is trying to cut the fat from its route map, and maximize the routes that make money, and consolidate flights. I am a frequent flier, and have personally witnesseda dramatic increase in capacity for almost every flight in the past 1.5 years on AA.

AA tries its best (for a large beurocratic legacy) to make smart business moves. It has made several surprising moves in the past that were remarkable business moves. For example, a quote about Dallas based Legend Airlines in 2001 from wikipedia:

"The airline is best remembered for trying to bypass the Wright Amendment which limits long-range passenger service into Love Field. Since the airline flew 56-seat planes, below the Wright Amendment limit that restricted passenger travel through Love, they could fly to airports outside the amendment's defined range. The airline flew 56-seat aircraft out of Love to Los Angeles International Airport and Dulles International Airport in Washington, among others. American, in turn, re-configured a number of its Fokker F100 jets to 56 seats so that it could compete. "
http://en.wikipedia.org/wiki/Legend_Airlines

AA soon drove Legend Air into bankruptcy because people would rather fly from Love Field in an all-business class jet with seats sold at economy prices on a Legacy airline! It was too good to be true, and AA sold out all its flights and ate up Legend's customers. As soon as Legend went out of business, the party quickly ended, AA cut all its Love field flights and then it was business as ususal.

Some would argue that the AA-TWA merger was a harsh business move by AA to shore up the central USA hub market and to reduce competition.

I respect the business machine that pushes AA into the future, and believe the current consolidation in AA flights is a carefully calculated manoever.
We're your kind of airline. Uh, I mean, We *were* your kind of airline.
 
Carpethead
Posts: 2566
Joined: Mon Aug 02, 2004 8:15 pm

RE: AA Shrinking?

Fri Jun 09, 2006 5:46 pm

AA has no aircraft on short-term delivery, this includes AA Eagle too.

I think I read that they will be adding a few extra seats on the MD-80 as a result of removal of galley space. A few seats multplied by 300 or so MD-80s is the equivalent of adding a few aircrafts and this is before AA can decide to bring the stored MD-80s back to service.

Any chance AA Eagle will be interested in re-introducing some props?
 
PRAirbus
Posts: 687
Joined: Wed Apr 20, 2005 11:59 pm

RE: AA Shrinking?

Fri Jun 09, 2006 9:41 pm

AA is shaping its right size based on market conditions, they are still the world's largest, with the largest fleet by far. They are doing the right thing at least they are not bankrupt.
 
FlyPNS1
Posts: 5272
Joined: Wed Dec 01, 1999 7:12 am

RE: AA Shrinking?

Fri Jun 09, 2006 9:53 pm

Quoting AAden (Thread starter):
why is co,southwest and delta expanding and AA shrinking

As a minor correction, DL is not expanding. While they are adding many new routes, they have cut far more capacity out. In fact, DL is currently shrinking far faster than AA.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA Shrinking?

Fri Jun 09, 2006 10:20 pm

Quoting USPIT10L (Reply 1):
AA has tons of money-making routes, particularly to LHR, NRT

unfortunately, their SJC-NRT route was a big money loser and being cut after 15 years.... Sad
"Up the Irons!"
 
goingboeing
Posts: 4727
Joined: Sat Dec 04, 1999 1:58 am

RE: AA Shrinking?

Fri Jun 09, 2006 10:54 pm

Quoting AAden (Thread starter):
if people are fkying more and more then why is Aa cutting routes?

Because people are flying more and more on loss leader fares. If you cut supply to match the profitable demand, you can make money. That's what AA is doing. Smart move, IMHO.
 
dartland
Posts: 514
Joined: Wed Apr 20, 2005 5:09 am

RE: AA Shrinking?

Fri Jun 09, 2006 11:19 pm

Quoting Carpethead (Reply 3):
I think I read that they will be adding a few extra seats on the MD-80 as a result of removal of galley space. A few seats multplied by 300 or so MD-80s is the equivalent of adding a few aircrafts and this is before AA can decide to bring the stored MD-80s back to service.

Indeed. Seat density programs go through 2007. As a result, their ASM decline is not that big, while their block hour decline is larger.
 
thebry
Posts: 333
Joined: Tue Jan 03, 2006 7:50 am

RE: AA Shrinking?

Sat Jun 10, 2006 10:30 am

Quoting Jacobin777 (Reply 6):
unfortunately, their SJC-NRT route was a big money loser and being cut after 15 years.... 

Yet another shrewd decision. I flew the AA128 / AA129 flights between SJC / NRT frequently (once a quarter) and will miss the convenience. However, the plane was rarely ever at 70% passenger capacity. Why waste a big bird like the 772ER on such low yields? It'll do American better service on a new route.
 
COewrAAtysAZ
Posts: 149
Joined: Sat Jun 10, 2006 10:15 am

RE: AA Shrinking?

Sat Jun 10, 2006 10:43 am

AA is, as they are said to be, the largest airline in the world. With that comes a very large network. Therefore, their reductions are only aligning themselves to the size of comparable airlines. I can tell you from firsthand knowledge and experience, the reductions are working and load factors are looking good.
Continental Airlines: Trabajar con empe�?��?�±o, Volar con Pasi�?��?�³n
 
ltbewr
Posts: 12423
Joined: Thu Jan 29, 2004 1:24 pm

RE: AA Shrinking?

Sat Jun 10, 2006 10:58 am

Like all other airlines, AA has to figure out which routes and aircraft are worth running and those that are not then make sound business decisions. The decisions being made here are good airline management, the kind needed today. Let WN and others take the cheapskates and the tourists and AA will cater to the business traveler first, adjusting to todays demands. It is better today to be a bit undersized than a bit oversized in the airline world. With AA's yeild management programs I am quite sure they have figured it out to their advantage.
 
flydreamliner
Posts: 1928
Joined: Sat Jan 07, 2006 7:05 am

RE: AA Shrinking?

Sat Jun 10, 2006 12:59 pm

AA is simply making a correction for decreased market demand in a number of their routes. Periodically airlines can do this. Often this is done in bankrupcy procedings, but AA is wise enough to trim their fat while they are still in good health. AA has some of the best routes going, but as the world's largest airline, they also have routes that have more capacity than demand, and so they are cutting the overall capacity of the airline, and re-allocating to increase efficiency and cut costs - without any residual impact on revenues. It's smart. They are working on greater profitability, that's what the capacity decrease is about.
"Let the world change you, and you can change the world"
 
Alitalia744
Posts: 3777
Joined: Thu Mar 30, 2000 8:22 am

RE: AA Shrinking?

Sat Jun 10, 2006 1:14 pm

Quoting Goingboeing (Reply 7):
Because people are flying more and more on loss leader fares. If you cut supply to match the profitable demand, you can make money. That's what AA is doing. Smart move, IMHO.

Intersting, when AA does it you say "Smart Move." Yet bitched about Delta's doin the same thing...

Go figure.
Some see lines, others see between the lines.
 
jacobin777
Posts: 12262
Joined: Sat Sep 11, 2004 6:29 pm

RE: AA Shrinking?

Sat Jun 10, 2006 1:37 pm

Quoting Thebry (Reply 9):

Yet another shrewd decision. I flew the AA128 / AA129 flights between SJC / NRT frequently (once a quarter) and will miss the convenience. However, the plane was rarely ever at 70% passenger capacity. Why waste a big bird like the 772ER on such low yields? It'll do American better service on a new route.

yah..I can see why the are ending this route...is a money loser... Sad

sad to see what SJC has happened with AA.... Sad

I was hoping to fly them out of SJC next spring..guess that won't happen ...now I'll have to connect @ LAX...
"Up the Irons!"
 
jetdeltamsy
Posts: 2688
Joined: Tue Nov 14, 2000 11:51 am

RE: AA Shrinking?

Sat Jun 10, 2006 1:52 pm

Quoting AAden (Thread starter):
and seem to be cutting routes all the time. if people are fkying more and more then why is Aa cutting routes?

AA is tranferring many marginal routes to American Eagle, which operates with much lower costs than mainline.

Yes, AA is flying less, including the Eagle additions. But they are flying smart, not maintaining routes for prestige.
Tired of airline bankruptcies....EA/PA/TW and finally DL.
 
ckfred
Posts: 4734
Joined: Wed Apr 25, 2001 12:50 pm

RE: AA Shrinking?

Sat Jun 10, 2006 2:37 pm

There are several factors that AA has addressed over the past few years.

First, STL was not a profitable hub, with the number of flights TWA operated. It just didn't have enough O&D traffic. Prior to September 11th, having another hub in the Midwest made sense, because ORD had a miserable summer in 2000. Due to frequent thunderstorms, flights were constantly late or cancelled. Having another hub 300 miles away would have allowed AA to reroute connecting passengers and even get O&D passengers into and out of ORD.

With the decline of traffic after September 11th and the low level of O&D traffic, downsizing STL made sense.

Second, because of the frequent delays at ORD, the FAA mandated that all airlines reduce operations. AA and UA cut more flights, because of their hubs. Some of AA's flights out of ORD were shifted to DFW, but reducing the number of daily flights has allowed AA to gain some pricing power on fares, particularly for O&D traffic at ORD.

Third, AA retired the Fokker fleet. AA wasn't happy with the Fokker from the day the first plane was delivered. My assumption was that the fleet was coming due for C-Checks, so retiring them made a lot of sense financially.

On routes that had Fokkers, Eagle took over some or all of the flying, because flying solely MD-80s either meant too many empty seats or too few frequencies. Obviously, there are elite flyers who are upset at losing upgrade opportunities. Destinations such as MSP, ATL, and HPN carry a lot of business travelers, but AA had to get the right number of seats, at the right times.

With 27 MD-80s stored in the desert, AA can pull some or all of them out, if it feels that they can be flown profitably, and get additional capacity rather quickly. ORD is supposed to have a third east-west runway by 2008, and changes in technology for landing systems may allow the FAA to increase the hourly arrival rate before the new runway is completed. When ORD can accept more traffic, AA is perfectly capable of adding flights, if the demand is there.

By the same token, AA has 47 737-800s scheduled for delivery after 2010. My understanding is that delivery dates can be pushed forward, if AA wants them.

So, AA is very capable of adding more planes, if it needs more capacity. For AA, it's simply making sure that extra seats will be filled at fares that generate profits.
 
goingboeing
Posts: 4727
Joined: Sat Dec 04, 1999 1:58 am

RE: AA Shrinking?

Sat Jun 10, 2006 5:34 pm

Quoting Alitalia744 (Reply 13):

Intersting, when AA does it you say "Smart Move." Yet bitched about Delta's doin the same thing...

Show me that one. There are two things I bitched about Delta...filing bankruptcy, then selling tickets for less than it costs to fly them. AA hasn't filed bankruptcy and...this is important...they are doing things to control costs other than popping into bankruptcy court to throw out anything obligations they don't want. Anything that keeps them competing AND out of bankruptcy is a good thing.
 
dfwmzuri
Posts: 219
Joined: Sat Nov 19, 2005 6:34 am

RE: AA Shrinking?

Sat Jun 10, 2006 9:28 pm

Quoting LTBEWR (Reply 11):
Let WN and others take the cheapskates and the tourists and AA will cater to the business traveler first

Isn't tourism a huge business? I'm sure AA management and AA Vacations would love to "cater" to more tourists and cheapskates!
 
DesertAir
Posts: 1270
Joined: Sat Jan 28, 2006 1:34 am

RE: AA Shrinking?

Sat Jun 10, 2006 9:39 pm

How we view the AA moves depends on service to your local airport. AA has frequent service here in Tucson for those flying to the midwest, south and east...they have frequent service to DFW and ORD. There have been no flight cuts except for seasonal adjustments. Their pricing here is reasonable. I often compare prices for routes-for example SMF-ORD-TUS...Delta and UA were over $500 while AA came in at $347 which included a non-stop on the ORD-TUS leg.
 
chris133
Posts: 220
Joined: Thu Oct 13, 2005 10:41 am

RE: AA Shrinking?

Sat Jun 10, 2006 10:56 pm

Quoting LTBEWR (Reply 11):
Let WN and others take the cheapskates and the tourists

So let me get this straight, your a cheapskate if you want to fly coast to coast for $310 as opposed to $1500 walkup fare. Well for the %90 of us "regular" people who have to work everyday for a living i would rather put that $1200 to better use like putting my kid through college, paying my morgage and feeding my family.