EricR
Posts: 1226
Joined: Mon Jul 26, 2010 4:15 pm

Re: AA Q2 2018 earnings

Fri Jul 27, 2018 2:44 am

Folks....AA is NOT cutting capacity at any hubs, and they never such on the call. AA said they were cutting their capacity GUIDANCE. They will still be GROWING capacity in Q3 by 3.3% and GROWING capacity in Q4 by 1.6%, they will just be growing at a smaller rate than previously announced.

This thread is a text book example about erroneous news spreads. The OP properly states “cuts capacity GUIDANCE” and inserts links containing this information, yet it is clear that many of you did not read this and just decided to respond to a previous post.
 
Austin787
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 5:07 am

With their fleet count remaining flat the next few years, growing a hub means cuts at another hub. I can see more cuts coming to JFK, maybe LGA, as AA grows DFW, CLT, PHL, etc further.
 
grbauc
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 5:22 am

chrisp390 wrote:
Would it be possible for AA to lift their operation in PHX and move it to DFW? It seems like it would make DFW a stronger hub by doing so.



NO NO NO NO NO NO NO. NOT enough WESTCOAST AA OPTIONS DON"T TAKE AND MAKE LAX the only option.
 
grbauc
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 5:28 am

ScottB wrote:

They should if it doesn't make money -- or if they'd make more money with the aircraft at DFW/CLT/LAX. PHX is problematic because it offers few unique benefits to the network and AA is unlikely to ever achieve dominance in the market. WN is the market leader in most head-to-head non-stop markets from PHX and AA rarely achieves an appreciable revenue premium (if not a deficit) over WN outside of hub-to-hub markets. G4 is in enough smaller markets from AZA that AA can't use high fares on regional jets to small markets to prop up the hub.



I guess and wait for the AS merger for some or any kind of west coast presence. NEW FLASH LAX has much has I love it is not a real option for MANY.
 
grbauc
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 5:38 am

Osubuckeyes wrote:
Most of AA's capacity at PHX is strong O&D markets, and AA hubs... I believe PHX-Cali/Hubs make up about ~150 or so of the daily flights. I have a hard time imagining there is a significant amount AA can cut without being detrimental to the overall operation. Additionally, since the merger AA has actually added some West Coast/Rocky Mountain markets to add to the PHX portfolio. Lastly, I have to believe any significant AA cuts would be fairly quickly back filled by WN or others.


DELTA. the silly comments about PHX I have to guess are from people that don't live out here in the western half of the US to understand why and what the roll PHX/LAX serve. They work together and since we see no Focus cities popping up and hubs opening up PHX roll is too big.
 
AAplat4life
Posts: 318
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 11:22 am

The market actually took AA’s earnings report positively and is still giving Parker the benefit of the doubt. After all it was still a profitable quarter and the 3rd quarter is the big one. Yet given its size, AA is less profitable than its competitors, particularly since it increased wages after the merger. Revenues are up, but now returns are below Delta (the clear leader in the U.S. industry) and even United. I am not convinced that PHX is the problem for AA, or that redeploying aircraft there to other hubs will make AA more profitable. Nor am I convinced that adding more flights to DFW and CLT is going to make AA materially more profitable. But clearly there are parts of AA network that are simply not producing sufficient returns,
 
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cathay747
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 2:20 pm

cm642 wrote:
tphuang wrote:
cm642 wrote:
Here we go with the PHX scenario again. AA would be stupid to give up PHX, that would leave room for other carriers like SW, F9, and B6 as well as DL and UA to move in and believe me they would. If AA dehubbed PHX it would be a godsend for these other carriers, especially since DL & UA are being super aggressive with their expansions!

huge difference between dehubbing and making some cuts. PHL had some cuts after merger and now it's growing again.


Which is what was expected, it's had some cuts and was right sized but is also beginning to grow again but everyone keeps bringing up the doom and gloom scenario of it being completely dehubbed every time there's a thread involving AA.


Yes, exactly, as I was pointing out above.

What people seem to not be understanding is that when an airline talks about reducing their capacity GUIDANCE, that means they're either deferring deliveries of new aircraft (which AA has already announced), or speeding up retirements of older aircraft, possibly both at the same time. And shifting aircraft to more profitable flying is not going to mean closing down PHX as a hub...it means they're going to downgauge some frequencies or maybe even entire routes from mainline to RJ flying, which AA has been doing here and there at PHX...or cut a frequency or two here or there, like when AA reduced PHX-DTW from 3x daily to 2...so clearly 3x daily must not have been profitable, probably because DL was eating some of their lunch (to be expected), but reducing to 2x daily makes it profitable, retains a presence in what I'm sure is a somewhat important market for AA and retains brand-loyalty on the route for their large FF base here at PHX. All of this is right-sizing the hub & fine-tuning it.
Try a Little VC-10derness
 
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cathay747
Posts: 1115
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Re: AA Q2 2018 earnings

Fri Jul 27, 2018 2:22 pm

EricR wrote:
Folks....AA is NOT cutting capacity at any hubs, and they never such on the call. AA said they were cutting their capacity GUIDANCE. They will still be GROWING capacity in Q3 by 3.3% and GROWING capacity in Q4 by 1.6%, they will just be growing at a smaller rate than previously announced.

This thread is a text book example about erroneous news spreads. The OP properly states “cuts capacity GUIDANCE” and inserts links containing this information, yet it is clear that many of you did not read this and just decided to respond to a previous post.


THANK YOU for saying this. You're spot on.
Try a Little VC-10derness
 
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Polot
Posts: 9471
Joined: Thu Jul 28, 2011 3:01 pm

Re: AA Q2 2018 earnings

Fri Jul 27, 2018 2:24 pm

cathay747 wrote:
EricR wrote:
Folks....AA is NOT cutting capacity at any hubs, and they never such on the call. AA said they were cutting their capacity GUIDANCE. They will still be GROWING capacity in Q3 by 3.3% and GROWING capacity in Q4 by 1.6%, they will just be growing at a smaller rate than previously announced.

This thread is a text book example about erroneous news spreads. The OP properly states “cuts capacity GUIDANCE” and inserts links containing this information, yet it is clear that many of you did not read this and just decided to respond to a previous post.


THANK YOU for saying this. You're spot on.

Without knowing exactly the words used, that doesn’t mean capacity at some hubs won’t/can’t be cut. They could shift from growth spread evenly across all hubs to larger growth at specific hubs and minor cuts at others. AA may have previously been planning to grow hub A 1% and grow hub B 2%. Now they may be shrinking hub A 1% and growing hub B 2.5%. Still overall growth in the system, but hub A would be smaller (received cuts) than before.
 
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tlecam
Posts: 1442
Joined: Tue Jul 23, 2013 1:38 pm

Re: AA Q2 2018 earnings

Fri Jul 27, 2018 3:53 pm

EricR wrote:
Folks....AA is NOT cutting capacity at any hubs, and they never such on the call. AA said they were cutting their capacity GUIDANCE. They will still be GROWING capacity in Q3 by 3.3% and GROWING capacity in Q4 by 1.6%, they will just be growing at a smaller rate than previously announced.

This thread is a text book example about erroneous news spreads. The OP properly states “cuts capacity GUIDANCE” and inserts links containing this information, yet it is clear that many of you did not read this and just decided to respond to a previous post.


THis is a great post, and I am one of the guilty ones. Cuts to planned capacity growth is not the same as cuts to capacity.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
alasizon
Posts: 1931
Joined: Sat Apr 28, 2007 8:57 pm

Re: AA Q2 2018 earnings

Fri Jul 27, 2018 3:54 pm

Polot wrote:
[
Without knowing exactly the words used, that doesn’t mean capacity at some hubs won’t/can’t be cut. They could shift from growth spread evenly across all hubs to larger growth at specific hubs and minor cuts at others. AA may have previously been planning to grow hub A 1% and grow hub B 2%. Now they may be shrinking hub A 1% and growing hub B 2.5%. Still overall growth in the system, but hub A would be smaller (received cuts) than before.


The call explicitly stated that the material impact to PHX, MIA & PHL would be negligible. The growth for the rest of the year except the holiday season is already loaded and planned into the system. For 2019, their guidance may be down but that doesn't mean cuts.
Manager on Duty & Tower Planner
 
grbauc
Posts: 1444
Joined: Sat Mar 28, 2015 9:05 pm

Re: AA Q2 2018 earnings

Sun Jul 29, 2018 8:25 am

Polot wrote:
cathay747 wrote:
EricR wrote:
Folks....AA is NOT cutting capacity at any hubs, and they never such on the call. AA said they were cutting their capacity GUIDANCE. They will still be GROWING capacity in Q3 by 3.3% and GROWING capacity in Q4 by 1.6%, they will just be growing at a smaller rate than previously announced.

This thread is a text book example about erroneous news spreads. The OP properly states “cuts capacity GUIDANCE” and inserts links containing this information, yet it is clear that many of you did not read this and just decided to respond to a previous post.


THANK YOU for saying this. You're spot on.

Without knowing exactly the words used, that doesn’t mean capacity at some hubs won’t/can’t be cut. They could shift from growth spread evenly across all hubs to larger growth at specific hubs and minor cuts at others. AA may have previously been planning to grow hub A 1% and grow hub B 2%. Now they may be shrinking hub A 1% and growing hub B 2.5%. Still overall growth in the system, but hub A would be smaller (received cuts) than before.



Well this news gives us the Answer to how they will grow without cutting.

redwingspilot wrote:
Per company update on fleet plans

​‌‌​​​‌‌‌​​‌​​​​​‌​‌‍We announced some fleet news July 26, including spreading out deliveries of our Airbus A321neos and changing some aircraft retirement schedules.

The biggest change is delaying 22 A321neo deliveries originally scheduled for 2019, 2020, and 2021. The A321neo is a new-engine version of the A321 aircraft we fly today, and we are still getting our first ones early next year as planned. The new delivery plan has us receiving 17 A321neos next year, 15 in 2020 and 18 in 2021. The deferred aircraft will arrive beginning in 2024.

Our fleet plan is constantly evolving to make sure we have the right mix of aircraft arriving at the right time. By delaying some A321neos, we can spread out those deliveries and the costs that go with them.

Other changes announced today:

    We have 10 Boeing 757s based in Phoenix and currently used for Hawaii flying. We had previously planned to retire them in early 2020. Now they’ll retire in late 2019 instead, to be replaced by new A321neos, which will be ETOPS certified.


    We are adding eight leased A319s to our fleet, and we’ll keep 14 Embraer E190s a year longer than previously planned. Those E190s will now retire in 2020 instead of 2019. We’re also retiring 15 fewer B737-800s in 2020 than we had planned. Adding A319s and keeping those other aircraft longer will help cover for the delayed A321neos and previously deferred B737 MAX 8s. Those planes will also help us handle the flying we are adding at our hubs such as DFW, CLT and ORD.


Some of these changes, such as retiring the 10 PHX-based B757s sooner, help to simplify our fleet by reducing the number of subfleets. This is an ongoing effort at American that reduces costs and is good for customers, who can expect a more consistent experience, and team members, who will have a less complex fleet to manage and fly.
 
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millionsofmiles
Posts: 300
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Re: AA Q2 2018 earnings

Sun Jul 29, 2018 8:33 am

Where are the leased A319s coming from?
 
khinstorff
Posts: 98
Joined: Wed Apr 12, 2017 5:43 pm

Re: AA Q2 2018 earnings

Sun Jul 29, 2018 11:04 am

millionsofmiles wrote:
Where are the leased A319s coming from?


On the fleet thread, a handful of folks said F9.
 
redwingspilot
Posts: 130
Joined: Wed Aug 12, 2015 5:37 pm

Re: AA Q2 2018 earnings

Sun Jul 29, 2018 4:23 pm

khinstorff wrote:
millionsofmiles wrote:
Where are the leased A319s coming from?


On the fleet thread, a handful of folks said F9.


Yes it is Frontier
 
winginit
Posts: 2555
Joined: Sat Feb 23, 2013 9:23 pm

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 4:24 pm

A pretty scathing review of American Airline's 2Q 2018 earnings from The Motley Fool's Adam Levine-Weinberg yesterday. Not saying I agree or disagree with some of his more subjective conclusions, but he's objectively well versed on the industry:

https://www.fool.com/investing/2018/07/ ... inues.aspx
 
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tlecam
Posts: 1442
Joined: Tue Jul 23, 2013 1:38 pm

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 4:45 pm

A few anecdotes:

Macquarie raised their outlook to "outperform" yesterday.

I was looking at historical stock performance of UAL, DAL, AAL and XAL (NYSE airline index).

UAL and DAL are clearly outperforming AAL.

On a one year basis, XAL is down about 3%. UAL is up 19%; DAL is up 11%. AAL is down 21%.

On a two year basis, everyone is up, but UAL is up 67%, DAL is up 46%, and AAL is up 15%. XAL is up 21%.

These are all point in time snapshots, so don't read into this too much, but it's clear that AAL's stock is underperforming its closest peers and the airline index in general. Macquarie is probably indicating that AAL's stock has been punished too much relative to performance and is worth more.
BOS-LGA-JFK | A:319/20/21, 332/3, 346 || B:717, 735, 737, 738, 739, 752, 753, 762, 763, 764, 787, 772, 744 || MD80, MD90
 
Boof02671
Posts: 1626
Joined: Sun Jul 10, 2016 12:15 am

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 4:50 pm

winginit wrote:
A pretty scathing review of American Airline's 2Q 2018 earnings from The Motley Fool's Adam Levine-Weinberg yesterday. Not saying I agree or disagree with some of his more subjective conclusions, but he's objectively well versed on the industry:

https://www.fool.com/investing/2018/07/ ... inues.aspx

Adam Levine has a serious bias against AA and owns Delta stock.

He is always bashing AA.

He’s not a reputable source of information, he never writes anything positive about AA.

Adam Levine-Weinberg owns shares of Delta Air Lines. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
 
LHUSA
Posts: 786
Joined: Wed Aug 24, 2005 10:15 am

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 4:55 pm

Boof02671 wrote:
winginit wrote:
A pretty scathing review of American Airline's 2Q 2018 earnings from The Motley Fool's Adam Levine-Weinberg yesterday. Not saying I agree or disagree with some of his more subjective conclusions, but he's objectively well versed on the industry:

https://www.fool.com/investing/2018/07/ ... inues.aspx

Adam Levine has a serious bias against AA and owns Delta stock.

He is always bashing AA.

He’s not a reputable source of information, he never writes anything positive about AA.



That all may very well be the case, but many/most of the negative observations are based on actual black and white results. Relative to its peers, AA under-performed in Q2.
 
Boof02671
Posts: 1626
Joined: Sun Jul 10, 2016 12:15 am

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 5:01 pm

Look at everything he has written about AA.
 
winginit
Posts: 2555
Joined: Sat Feb 23, 2013 9:23 pm

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 7:05 pm

LHUSA wrote:
Boof02671 wrote:
winginit wrote:
A pretty scathing review of American Airline's 2Q 2018 earnings from The Motley Fool's Adam Levine-Weinberg yesterday. Not saying I agree or disagree with some of his more subjective conclusions, but he's objectively well versed on the industry:

https://www.fool.com/investing/2018/07/ ... inues.aspx

Adam Levine has a serious bias against AA and owns Delta stock.

He is always bashing AA.

He’s not a reputable source of information, he never writes anything positive about AA.



That all may very well be the case, but many/most of the negative observations are based on actual black and white results. Relative to its peers, AA under-performed in Q2.


Exactly. Just look at the chart below - there's no bias there

Image

Boof02671 wrote:
Look at everything he has written about AA.


Are there specific claims that you take issue with? For the most part he seems to structure his claims and analysis around objective facts and figures.
 
Sydscott
Posts: 3425
Joined: Thu Oct 30, 2003 11:50 am

Re: AA Q2 2018 earnings

Tue Jul 31, 2018 10:49 pm

winginit wrote:
LHUSA wrote:
Boof02671 wrote:
Adam Levine has a serious bias against AA and owns Delta stock.

He is always bashing AA.

He’s not a reputable source of information, he never writes anything positive about AA.



That all may very well be the case, but many/most of the negative observations are based on actual black and white results. Relative to its peers, AA under-performed in Q2.


Exactly. Just look at the chart below - there's no bias there

Image

Boof02671 wrote:
Look at everything he has written about AA.


Are there specific claims that you take issue with? For the most part he seems to structure his claims and analysis around objective facts and figures.


Yet that same information can be used in a more objective manner by other analysts.

https://seekingalpha.com/article/419105 ... t-surprise
 
HPAEAA
Posts: 1112
Joined: Mon May 08, 2006 7:24 am

Re: AA Q2 2018 earnings

Wed Aug 22, 2018 3:13 am

So a little late to this, but listening to the call & the reoccurring trend i hear in the comments is that they missed the boat in marketing fares to the bottom of the revenue spectrum (i.e. the basic economy wasn't competitive) & that they can't compete with competition (markets they've added were in hubs with competition).... Over all what i hear is they only want fortress hubs & the rest will be trimmed... If they can't compete on product, do we just expect a shrinking organization?
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