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enilria
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What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 2:24 pm

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?
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 2:37 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 2:41 pm

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.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 2:48 pm

AA will be a dangerous animal after ch 11. Sleeping giant with 450+ aircraft entering the fleet before the end of the decade
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 2:59 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:02 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:02 pm

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.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:04 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:20 pm

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?
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:24 pm

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.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:24 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:25 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:27 pm

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!
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:28 pm

What Will Post-Ch11 AMR Look Like?

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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:29 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:32 pm

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.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:33 pm

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.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:43 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:43 pm

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...
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:45 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:47 pm

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.
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LipeGIG
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:47 pm

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.
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PlaneAdmirer
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:52 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 3:53 pm

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.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:01 pm

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.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:02 pm

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.

Not to mention 100+ 757s.

Quoting enilria (Thread starter):
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 a lot depends on how AA handles employee relations. Everyone across the board is about to take a hit, even after making big concessions in the mid 2000s. Management has to come up with some strategy that gives employees hope for a better tomorrow. If they don't, employees will just pass their misery on to the customers.
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STT757
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:03 pm

They're going to be parking / returning a lot of aircraft;

http://www.aa.com/content/images/res...craftLessorsLendersandTrustees.pdf

I'm going to stick with 100 by 2013.
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ual777
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:04 pm

Quoting hiflyer (Reply 5):


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.

Why on earth would AMR give Republic flying? They are a competitor.

Quoting PlaneAdmirer (Reply 22):

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.

Just what this business needs...more crap regional jobs.
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Alias1024
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:16 pm

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. There will almost certainly be an increase to codesharing and 70 seat regional flying, but I have my doubts about 100 seaters at regionals.

My guess would be at least 100 70 seat aircraft. Around 50 replace ERJs and the remainder replace MD-80s. All the hubs remain, with some trimming at each as further MD-80 and ERJ retirements take place. Much of this lost capacity will return later in the decade with Airbus and Boeing deliveries.

I don't see a merger as necessary since they will likely be able to increase codeshares with AS and B6. The labor situation at US is too messy to throw another labor group in the mix. I think they try their hardest to turn away any advances from US.

And yes, IAG will own a solid minority of the post bankruptcy AMR.

I really feel for the employees at AMR. The next couple years are going to be tough.
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:31 pm

Quoting commavia (Reply 23):
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,
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...

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 smaller than the ultimate plan. The fact that they are saying a few hours into this that they plan to shrink at all smells of PR positioning. I think you will see a significant cut in size mostly driven by the need to get rid of all these old airplanes. As I have said, fuel is as big a problem for AA as labor cost is. AA is uncompetitive in terms of fleet fuel burn. The way to fix that is to get new planes which they plan to do, but they can only get rid of the old planes in Ch11 so they need to get rid of the old planes immediately and then grow back as deliveries come. The only way I see that all working out is to close a hub and ORD is the most likely candidate. I cannot imagine them scaling back DFW or MIA. The rest is small potatoes.

Quoting commavia (Reply 23):
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 LipeGIG (Reply 21):
Agreed. And they have the Eagle divesture which will take the Embraers.

It won't be divested now. The only reason they were doing that was to ditch the Embraers and Eagle would have been a unprofitable husk only kept afloat by above market contracts with AA for feed. Now they will use Ch11 to gut Eagle of the ERJs and either keep it with 70-90 seaters or simply shut it down. I do think there will still be 50 seaters in the AA network, but their likely best case is that they are operated on prorate by somebody like Skywest and carry no risk to AA. There is no more than 50 airplanes of flying that might work like that IMHO.

Quoting PlaneAdmirer (Reply 22):
Why not as part of the process get a Republic, Skywest, ExpressJet, or Mesa bid against Eagle for the flights?

That will happen, but if they get scope relaxed to allow E190s they might want them at Eagle. Hard to say, though.

Quoting commavia (Reply 23):
especially IAG

My understanding is that total foreign ownership can't exceed 20% so I presume IAG will take that entire stake. I can totally imagine this scenario...

AA says they will close without equity from IAG which requires allowing a 50% stake.
Congress debates the change.
US Airways offers to buy AA avoiding the need for the change.
IAG agrees to a 20% stake and denies the US bid.

That could easily play out.

Quoting commavia (Reply 23):
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.

I'm not talking next week. If AA gets scope relaxation or something else that gives them a big competitive advantage, you could see UA/DL filing again in 5 to 7 years.

Quoting GentFromAlaska (Reply 24):
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.

ORD was just rated by Newsweek, Worst U.S. Airport. It is not impossible that DFW could replace ORD, but it gives up a lot. I think it leads to a merger.

Quoting Revelation (Reply 25):
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.

Not to mention 100+ 757s.

They are not as fuel inefficient per seat, but yes. Nearly the whole AA fleet is cr@p for fuel and is a good part of the reason they are in this mess.

Quoting ual777 (Reply 27):
Why on earth would AMR give Republic flying? They are a competitor.

I can imagine RJET shutting F9 and using the planes to allow AA to ditch more old airplanes.
 
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DeltaMD90
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:34 pm

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 fleet, why would they draw down profitable hubs to sustain a non-profitable hub? This is Ch 11! This is drastic! It will hurt. Everyone keeps saying cornerstone cornerstone... well they are in Ch 11, probably with some blame going to this strategy. I see them revamping this strategy, possibly without a cornerstone. DFW and MIA are obviously safe. I doubt AA would shut down JFK or LGA, just too important of a market. LAX probably isn't the most important, but I'd see it staying. But ORD... I don't care how many contracts they have, Ch 11 hurts and ORD may be the place where it hurts the most. UA is a much stronger #1, and WN can't be helping the situation. Just like DL @ DFW in 2005, I see AA killing ORD. I guess I just contradicted my first sentence  

Oh, and why is STL still a 'hub'? I'd say it's a 95% chance that the poor STL hub is going down...
Ironically I have never flown a Delta MD-90 :)
 
commavia
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:35 pm

Quoting Alias1024 (Reply 28):
I don't think scope will go away entirely.

No, but it will be dramatically more flexible than the SCOPE clause in place today - I think most would agree on that.
 
ual777
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:40 pm

Quoting Alias1024 (Reply 28):
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. There will almost certainly be an increase to codesharing and 70 seat regional flying, but I have my doubts about 100 seaters at regionals.

There will be an increase in 70 seaters, but I strongly doubt they will get 90 seat scope relief.

Quoting Alias1024 (Reply 28):

My guess would be at least 100 70 seat aircraft. Around 50 replace ERJs and the remainder replace MD-80s. All the hubs remain, with some trimming at each as further MD-80 and ERJ retirements take place. Much of this lost capacity will return later in the decade with Airbus and Boeing deliveries.

I think they will end up with 100-150 70 seaters.

Quoting enilria (Reply 30):

I can imagine RJET shutting F9 and using the planes to allow AA to ditch more old airplanes.

And what airplanes would be going to AA pray-tell?

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.

Why on earth would you wish that on the employees? Do you have any idea how many lives would be destroyed if AA had unlimited 90 seat scope relief?

Regional pilots in the US are some of the lowest paid in the world.

AA pilots were not overpaid. Where AA pilots were hurting the company was in efficiency. However, they are just a small part of the equation.
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ADent
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:43 pm

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 leases. Looks like AA has only 2 transpac and 1 trans Atlantic flights from LAX, so no huge loss and they will probably need those aircraft elsewhere.

Or let NY go, just like pre-merger UA did. Partner/code share with B6.
 
threeifbyair
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:45 pm

Quoting GentFromAlaska (Reply 24):
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.

MIA is extremely valuable for Central and South America. Many routes have zero/minimal competition. Cargo is huge. LAX is my guess for downsizing - competition is fierce since no airline has a dominant position.

AA owns DFW. Why would it abandon its strongest position?

Quoting Revelation (Reply 25):
Not to mention 100+ 757s.

The 757 is still the best aircraft for a lot of missions and will be for 5-7 more years. Many of the Latin America and Caribbean routes ex MIA, certain transcons, Hawaii, etc. However, AA doesn't need all 121 frames - FedEx is probably getting a offer ready...
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:46 pm

Quoting ThreeIfByAir (Reply 35):
However, AA doesn't need all 121 frames - FedEx is probably getting a offer ready...

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 until they are retired.
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ozark1
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:47 pm

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 AMR will go back to the FA union and offer some kind of retirement package to get rid of the old crabby ones? I cannot recall what happened after UA or DL went Chap 11. Did this immediate kind of downsizing happen? (By immediate i am saying, perhaps, by next spring?). Is this Chap 11 filing any different than those two? If they are parking lots of planes then surely furloughs are imminent.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:50 pm

Quoting william (Reply 10):
Some please tell me what WOULD prevent from US Doug Parker not merging with AA

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 GIANT hole in the US network. If AA doesn't have the midwest hub anymore, they are less useful to US, AND US could jump in and build their own ORD presence in AA's wake.

PHX, ORD, PHL, and CLT would be a pretty dang good hub setup.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:50 pm

Quoting enilria (Reply 17):
DAL will have a huge nationwide WN hub in a couple of years. AA should be preparing for that while they go through Ch11.

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 every flight that WN wants to operate beyond the current Wright Amendment limit, it will have to cut a flight from within the limit.

So, while WN can start flying to SEA, SFO, LAX, LAS, FLL, ATL. ORD, and LGA, it has to cut flights to HOU, SAT, MSY, OKC, MCI, and ABQ.

Now, think about this one. How much faster will AA retire the MD-80 fleet now than say back during the summer, when the Airbus/Boeing narrowbody order was announced?
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:50 pm

Quoting ozark1 (Reply 37):
The fact that most of you indicate a pretty rapid downsizing.

I think there will certainly be a downsizing. How big and how rapid remains to be seen.

Quoting ozark1 (Reply 37):
Do you forsee layoffs because of that?

Absolutely yes. And the downsizing will only be the beginning of it. Downsizing will cause layoffs, but so will the changes that are about to come to AA's union contracts: more productivity, more outsourcing, less SCOPE restrictions, etc. Sadly, all of that is going to add up to thousands of jobs, I suspect.

Quoting ozark1 (Reply 37):
Do you think AMR will go back to the FA union and offer some kind of retirement package to get rid of the old crabby ones?

Doubtful. At this point, it's all about money, and the company won't be able to expend any of it unless absolutely necessary.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:53 pm

Quoting ozark1 (Reply 37):
The fact that most of you indicate a pretty rapid downsizing. Do you forsee layoffs because of that?

Oh yeah. I'm not a betting person but I'd bet on that.

Quoting ozark1 (Reply 37):
Do you think AMR will go back to the FA union and offer some kind of retirement package to get rid of the old crabby ones?

I'm sure they'll try and get rid of old FAs, but I'm sure the incentive wouldn't be that great for a carrier in Ch 11
Ironically I have never flown a Delta MD-90 :)
 
delta2ual
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:54 pm

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.

   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.

Quoting enilria (Thread starter):
If AA emerges with super-low costs

It depends on what "super low costs" mean. I doubt AA will emerge with costs on par with JetBlue or AirTran. They will be more competitive within their peer group. They offer too many services (various aircraft types, huge FF program, Admirals clubs, international flying, hub and spoke system, assigned seating, food on longer flights,2 or 3 classes of service) to have costs as low as an LCC. Plus, I would think they would want to keep up service standards to match their oneworld partners, as much as possible.

Quoting enilria (Reply 17):
Imagine this scenario. AA gets scope wiped away and can now have E190s at Eagle or Skywest.
Quoting HiFlyerAS (Reply 19):
Now that AA management is writing all the new contracts

First, management is not "writing the contracts". After working through two bankruptcies, I can assure you that the judge looks at proposals that provides not only the survival of the airline, but one that ensures creditors get as much as possible, the company can be competitive, and the employees receive fair treatment, i.e. as few layoffs as possible. No judge is going to give AA everything they want. Scope will most assuredly be relaxed to match other carriers, but I highly doubt it will be completely abolished, thus allowing AA to outsource almost all of their domestic flying and cut thousands and thousands of jobs. It just won't happen.
From the world's largest airline-to the world's largest airline. Delta2ual
 
threeifbyair
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 4:54 pm

Quoting STT757 (Reply 36):
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 until they are retired.

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 I can't imagine there would be many airlines interested.
 
delta2ual
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:20 pm

Quoting enilria (Reply 30):
If AA gets scope relaxation or something else that gives them a big competitive advantage, you could see UA/DL filing again in 5 to 7 years.

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 as almost all employees are non-union. I know this didn't help them before, but I think this team would make the hard decisions and do what it had to to avoid BK again. UA OTOH, is another story. But I even doubt they would have to do it again, seeing the employees know how much worse it could be. I'm sure if it got to that point, they would do what is necessary to avoid having their contracts renegotiated again in BK. As someone who has lived through 2 BK's, (and lost my pension) I can tell you it really sucks!
From the world's largest airline-to the world's largest airline. Delta2ual
 
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Stitch
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:30 pm

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 recent years and maintained operations throughout the process.

Airbus and Boeing both appear to have structured their most recent narrowbody and widebody orders with a C11 filing in mind, so there should be no real impact on scheduled deliveries.
 
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:36 pm

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 was actually the AA MD-80's that always parked in the A Concourse at SLC that caused me to look at a plane back in 1991 and for the very first time say to myself "Wow, planes are gorgeous". I've had the aviation bug ever since. Yet to this day I have never once set foot on an American Airlines plane...because their fares were always higher, in some cases, MUCH higher, than their competitors. I could never afford them.

One thing I hope for is that as AA's costs get lower due to this bankruptcy, their fares will become moe competitive, because I'm no richer now than I was in the past, and I still want to accomplish that childhood fantasy of flying on one of the silver MD-80s from AA. I hope that day will come soon.

I never liked AA's management or corporate attitude, but I'll be darned if AA didn't spark my love of aviation. I hope they do NOT get bought out, and do emerge stronger. Just get me on an MD-80 while they're still around.
 
ultrapig
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:38 pm

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 off or worse off today? I believe it would have been better off and would it have been in good enough shape to compete with the other large carriers?
 
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STT757
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:41 pm

Quoting ultrapig (Reply 46):
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 off or worse off today? I believe it would have been better off and would it have been in good enough shape to compete with the other large carriers?

Even if AA never acquired TWA they would be still in the same situation.
Eastern Air lines flt # 701, EWR-MCO Boeing 757
 
atrude777
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:44 pm

Quoting DeltaMD90 (Reply 31):

Oh, and why is STL still a 'hub'? I'd say it's a 95% chance that the poor STL hub is going down...

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 the Hubs and Focus Cities--
LAX, ORD, DFW, MIA, JFK, LGA and DCA

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

You among many others predict WN going to DFW, and right now WN CANNOT and will NOT go to DFW without sacrificing a lot of their flying at DAL because of the rules. For every flight at DFW, WN must give up a gate, I don't see WN entering DFW at all unless AA completely shuts down and liquidates and WN moves all ops over to DFW.

Under the current situation WN cannot go to DFW.

As for STL--Post CH 11

I see STL-LAX being dropped, if STL loses it's pilot base situation through BK, AA can now send RJ flying to ORD/DFW and the other hubs, since currently Mainline flying must occur at STL due to the Pilot Base.

I do see Pilot Base closing for STL during CH 11.

Quoting ckfred (Reply 38):

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 every flight that WN wants to operate beyond the current Wright Amendment limit, it will have to cut a flight from within the limit.

WN is still WAY under it's max capacity. WN can add a lot more flights without cutting anything right now out of DAL.

It will go down from 32 Gates to 20, of which WN gets 16, and UA/DL/AA gets 4.

WN currently has 127 Daily flights, and with 16 gates they can go up to 160 daily (Average 10 flights per gate). WN will not be cutting much if anything.

Alex
Good things come to those who wait, better things come to those who go AFTER it!
 
ozark1
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RE: What Will Post-Ch11 AMR Look Like?

Tue Nov 29, 2011 5:44 pm

Quoting ultrapig (Reply 46):

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, would have been substantially reduced, i.e. no STL base, no very senior employees to have to pay, but today would have happened at some point, due to the historical animosity between the pilots and management.

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