JammyBritton27
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AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 11:46 am

Revenue grew 2.7% YoY to $12 billion.
Adjusted pre-tax income rose more than 5% to $1.1 billion.
Adjusted EPS grew 10% YoY to $1.82.
PRASM grew 4% to 15.22 cents.
TRASM increased by 3.5% to a record 16.54 cents, 11th consecutive quarter of growth.
"The American fleet currently includes 24 MAX aircraft with an additional 76 aircraft on order, of which seven were scheduled to be delivered in the second quarter. The company now estimates that the cancellations in the second quarter negatively impacted pre-tax income by approximately $175 million."

https://news.alphastreet.com/american-a ... aal-stock/
 
MIflyer12
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 12:03 pm

Solid? In Net Income it's less than WN made - on twice the revenue. Compare margins to carriers that have already released 2Q earnings: DL, UA, B6, WN.
 
sagechan
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 12:09 pm

MIflyer12 wrote:
Solid? In Net Income it's less than WN made - on twice the revenue. Compare margins to carriers that have already released 2Q earnings: DL, UA, B6, WN.


They beat EPS estimates and had decent YoY increases despite MAX and mechanics issues. Solid is not wrong on internal comparisons. That said, they are still lagging on a lot of measures versus industry competitors and that's not good. Could easily have been a lot worse.
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Rdh3e
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 12:45 pm

CASM-ex up nearly 5%, wow. Even with MAX issues that is astounding.
 
chonetsao
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 12:51 pm

I really want to understand what went wrong with AA, is it due to the mentality of HP/US management style, or is it due to a perfect storm of all things gone wrong from the dispute with wifi provider to the debacle of premium seats manufactures to the MAX delays?
 
cledaybuck
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:01 pm

LAXdude1023 wrote:
jumbojet wrote:
MIflyer12 wrote:
Solid? In Net Income it's less than WN made - on twice the revenue. Compare margins to carriers that have already released 2Q earnings: DL, UA, B6, WN.


whoa, 1st reply and already a comparison. I attempted that in the UA thread and got lambasted. See folks, its common place in quarterly earnings reports. Keep the comparisons coming...


A new thread that compares all three should be started.

I would like a thread that compares all US airlines.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
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tlecam
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:02 pm

Different types of analysis get mixed in these threads:

- Comparison to prior year, AA only (improvement? worse?)
- Performance against guidance and analyst estimates/expectations, AA only
- Comparison against competitors, same quarter.

All three are valid and useful, but for different purposes.
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
 
SteelChair
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:02 pm

chonetsao wrote:
I really want to understand what went wrong with AA, is it due to the mentality of HP/US management style, or is it due to a perfect storm of all things gone wrong from the dispute with wifi provider to the debacle of premium seats manufactures to the MAX delays?


I'll go with "HP/US management style," but confess i don't really know.
 
TWFlyGuy
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:27 pm

SteelChair wrote:
chonetsao wrote:
I really want to understand what went wrong with AA, is it due to the mentality of HP/US management style, or is it due to a perfect storm of all things gone wrong from the dispute with wifi provider to the debacle of premium seats manufactures to the MAX delays?


I'll go with "HP/US management style," but confess i don't really know.


I agree to some degree but I think losing Kirby was more detrimental. It seems, to me, that AA's plans these days are to focus on competing with the LCC/ULCCs vs UA/DL. The fleet issues this year are certainly an issue but I don't see a competitive strategy to compete for the customers DL & UA are fighting for. They seem to be focused on strategies that fend off Spirit, Allegiant, Frontier.
 
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DL747400
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:46 pm

The MAX grounding is certainly a negative factor dragging down earnings, but so is the AA leadership team.

Simply put, AA made the wrong choice and now they are paying for it. They should have shown DUI Dougie the door and promoted Kirby. AA's earnings are now in part reflecting the results of that decision and will continue to do so for a long time to come.
Last edited by DL747400 on Thu Jul 25, 2019 1:50 pm, edited 1 time in total.
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AEROFAN
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:48 pm

TWFlyGuy wrote:
SteelChair wrote:
chonetsao wrote:
I really want to understand what went wrong with AA, is it due to the mentality of HP/US management style, or is it due to a perfect storm of all things gone wrong from the dispute with wifi provider to the debacle of premium seats manufactures to the MAX delays?


I'll go with "HP/US management style," but confess i don't really know.


"...It seems, to me, that AA's plans these days are to focus on competing with the LCC/ULCCs vs UA/DL. The fleet issues this year are certainly an issue but I don't see a competitive strategy to compete for the customers DL & UA are fighting for. They seem to be focused on strategies that fend off Spirit, Allegiant, Frontier.


Not sure this is 100% correct: There was an article I read yesterday in another airline blog that spoke of AA placing F on its LAX/TYO route as there is increased demand for F and J on this route.
 
LHUSA
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:49 pm

The market isn't very happy, down 5% ATM
 
Scarebus34
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:56 pm

AA is such a disaster at this point. They’re certainly having an identity crisis and need to figure it out sooner rather than layer.
 
UpNAWAy
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 1:58 pm

Rdh3e wrote:
CASM-ex up nearly 5%, wow. Even with MAX issues that is astounding.


They said it is MAX and "operational difficulties", so the 20+ additional aircraft out of service everyday and the 100+ related cancellations, probably covers most all of that.
 
MSPNWA
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 2:16 pm

Not bad considering they are the facing the double whammy of the MAX and the maintenance issues. There's plenty of room for improvement.
 
EALL1011
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 2:24 pm

chonetsao wrote:
I really want to understand what went wrong with AA, is it due to the mentality of HP/US management style, or is it due to a perfect storm of all things gone wrong from the dispute with wifi provider to the debacle of premium seats manufactures to the MAX delays?


Exactly. It's a double-whammy of poor dollars-and-cents and brand identity management from HP and an absolutely horrible understanding of how to run an airline from the NW cast-offs from the NW/DL merger that DL was smart enough to boot out the door.
 
9w748capt
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 2:27 pm

DL747400 wrote:
The MAX grounding is certainly a negative factor dragging down earnings, but so is the AA leadership team.

Simply put, AA made the wrong choice and now they are paying for it. They should have shown DUI Dougie the door and promoted Kirby. AA's earnings are now in part reflecting the results of that decision and will continue to do so for a long time to come.


Agree with the first part, DUI Dougie needs to be gone, but I'd much rather have the Horton team back that penny pinching Kirby.
 
MKIAZ
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 3:14 pm

MSPNWA wrote:
Not bad considering they are the facing the double whammy of the MAX and the maintenance issues. There's plenty of room for improvement.


Their real problem is the cost side. Doug is no doubt using the US/HP LCC-ish cost cutting method, but that only goes so far (and it's very apparent with things like meals, ground amenities).

Shortly after the merger, I was flying with a PM-US legacy America West crew and the very old and very loud flight attendant was talking to a passenger about the merger (loud enough for the whole F cabin to hear). She was happy that she was finally after 30 years getting paid "what she deserved".

They basically threw money at all the employees to accept the merger. In addition they kept tons and tons of management "bloat" from the mergers. The employees basically have the airline by the balls.

It would be one thing if they got lots of productivity for the high pay (like say WN), but it seems like all they get is an alternating cycle of requests for more $$$. Now it's maintenance. Next it'll be pilots. Then ground staff, then FA's, then maintenance again ect. And even outside their MX issues, the management is not executing well to utilize the employees to perform operationally like say DL.
 
UpNAWAy
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 3:21 pm

Some of the Investors call highlights:

The big surprise in the numbers was on the Revenue side, better than expected. Corp Rev & Bookings up, Cargo down 15%. Pacific revenue positive, Japan, HKG strong, China weak, Latin American rebounded and will be the best performer Internationally for the 3rd quarter. Domestic strong and looks to stay that way. QANTAS JV, route announcements coming soon, value to be a Billion and half to start. QF announced yesterday new flights to ORD & SFO.
DFW Ramp ups (increased flying) margins very encourage, above system averages at start up (very unusual). CLT & DCA ramp up benefits will start being seen next year and into 2021.
If anything else interesting comes up in the QA will add...
 
golfingboy
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 3:37 pm

I think a part of the problem AA is facing is they want to stick with what they know (i.e. grow DFW, CLT and DCA) that works now, but not gradually changing the business to capture market share and growth opportunities.

DL is aggressively expanding into new focus cities, UA is in growth mode with a strong focus on expanding domestic capacity, and WN keeps adding new markets (i.e. Hawaii).

AA had a great opportunity with the merger, but their arrogance is slowly costing them and the results are lagging UA/DL/WN. They were the biggest airline in the world and they were the leader across many metrics. Metric by metric they are losing their market leadership and there will be a point in the future if they do not turn things around they will be a distant third trying to play catch up.

They are not investing in the technology that desperately needs investment (poor app, poor harmonization across systems, etc.), they are not being smart with their product investments (putting too much weight on the cost side of things), they are not investing in positioning themselves for potential growth areas (staying comfortable), they are not investing in empowering their employees or customers to make decisions (adding more restrictions not flexibility), and the list goes on.

This is what happened to United under Jeff Smisek and if I had to be honest what Jeff did with PANYNJ was probably the best thing that has happened to UA in this decade. This gave UA the opportunity to have a clean slate and change the company’s direction for the better.

I sincerely think this is what needs to happen at AA before they fall too far behind DL/UA. This is not a solid earnings IMHO - they continue to fall further and further behind their competitors. Benchmarking against yourself is ok for short term objectives but benchmarking against the industry is what should be used to measure progress against long term objectives.
 
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tlecam
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 4:03 pm

I'll have to spend more time with the RASM/CASM and enplanements data, but one thing that did jump out to me was that the increase in passenger enplanements was larger than virtually all other metrics. Perhaps there's more regional flying to make up for the MAX issues?

Total Mainline & Regional 2019 2018 Change
Revenue passenger miles (millions)   62,658   60,779   3.1 %
Available seat miles (millions)   72,322   72,893   (0.8)%
Passenger load factor (percent)   86.6   83.4   3.2pts
Yield (cents)   17.57   17.56   0.1%
Passenger revenue per ASM (cents)   15.22   14.64   4.0%
Total revenue per ASM (cents)   16.54   15.97   3.5%
Passenger enplanements (thousands)   55,464   53,060   4.5 %
Aircraft at end of period   1,579   1,559   1.3 %
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
 
Brickell305
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 4:23 pm

golfingboy wrote:
I think a part of the problem AA is facing is they want to stick with what they know (i.e. grow DFW, CLT and DCA) that works now, but not gradually changing the business to capture market share and growth opportunities.

DL is aggressively expanding into new focus cities, UA is in growth mode with a strong focus on expanding domestic capacity, and WN keeps adding new markets (i.e. Hawaii).



I don't think it's a case of them wanting to stick with what they know, it's more of them being resigned to that. If they were in a better financial situation, they almost certainly would be looking at expansion opportunities and/or at the very least looking to remain competitive in important markets such as NYC (I do give them credit for their recent push in LAX). With their sub-average results as of late, they've been forced to retreat to their hubs. Grow DFW, CLT, DCA because those are the places that are keeping them afloat currently.
 
tphuang
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 4:37 pm

AAL is not having a great couple of years, but there is also a little too much beating down on them here. They are making effort to make the product better for elites. I don't see how their premium product is not competitive with DL/UA. They seem to do well in corporate market. At least according to JonNYC, they've won a lot of corporate clients in LAX, which is as competitive as they get.

AA right now is just doing what DL has done so well over the years, which is to strengthen their most profitable hubs. UA is doing the same thing. DL merged the earliest, so they have completed strengthening their hubs when AA/UA was still dealing with trying to merge operations. All the airlines are run by relatively smart people. DP is not as stupid as people say. MY biggest disappointment is their cuts to NYC, which have gutted their ff here. I wouldn't be surprised if by 2021, they are not achieving industry average margins again.
 
ABEguy
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 4:48 pm

Considering the max cancelations, mechanics slow down, and a complete beating DFW has taken storm wise lately, I think it’s a pretty decent quarter.
 
Boof02671
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:07 pm

tlecam wrote:
I'll have to spend more time with the RASM/CASM and enplanements data, but one thing that did jump out to me was that the increase in passenger enplanements was larger than virtually all other metrics. Perhaps there's more regional flying to make up for the MAX issues?

Total Mainline & Regional 2019 2018 Change
Revenue passenger miles (millions)   62,658   60,779   3.1 %
Available seat miles (millions)   72,322   72,893   (0.8)%
Passenger load factor (percent)   86.6   83.4   3.2pts
Yield (cents)   17.57   17.56   0.1%
Passenger revenue per ASM (cents)   15.22   14.64   4.0%
Total revenue per ASM (cents)   16.54   15.97   3.5%
Passenger enplanements (thousands)   55,464   53,060   4.5 %
Aircraft at end of period   1,579   1,559   1.3 %

Is the counting regional jets?

As AA has 965 mainline aircraft.
 
PhilMcCrackin
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:24 pm

AA is having an identity crisis in terms of their product. They want to reduce it down to ULCC levels in terms of actual product, but they still think they can compete with DL, UA and WN for yields. It seems they’re finally realizing that the customers aren’t stupid and they’ve gone a bit too far with the penny pinching in the aircraft interiors. If you want to be Spirit, be Spirit, but don’t think you’re going to command legacy fares for your bare bones product.

I used to be the biggest fan of AA and dutifully flew them for over a decade, but I’ll only fly them now when there’s no other choice for a direct flight, beings that I live in an AA hub city. I’d much rather fly WN or DL. At least with WN, I know that I can purchase the cheapest ticket and still get treated like a human being.
 
Sancho99504
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:26 pm

9w748capt wrote:
DL747400 wrote:
The MAX grounding is certainly a negative factor dragging down earnings, but so is the AA leadership team.

Simply put, AA made the wrong choice and now they are paying for it. They should have shown DUI Dougie the door and promoted Kirby. AA's earnings are now in part reflecting the results of that decision and will continue to do so for a long time to come.


Agree with the first part, DUI Dougie needs to be gone, but I'd much rather have the Horton team back that penny pinching Kirby.

Penny pinching Kirby? It's long been suggested that Oscar Munoz is just a puppet and Kirby is running the show over there, which has led UA to be more competitive with DL than the bottom of the pack. Not sure Kirby was the problem. Kirby has been gone for a while and AA is still trying to find new and creative ways to cut costs.
kill 'em all and let God sort 'em out-USMC
 
Brickell305
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:38 pm

tphuang wrote:
AAL is not having a great couple of years, but there is also a little too much beating down on them here. They are making effort to make the product better for elites. I don't see how their premium product is not competitive with DL/UA. They seem to do well in corporate market. At least according to JonNYC, they've won a lot of corporate clients in LAX, which is as competitive as they get.

AA right now is just doing what DL has done so well over the years, which is to strengthen their most profitable hubs. UA is doing the same thing. DL merged the earliest, so they have completed strengthening their hubs when AA/UA was still dealing with trying to merge operations. All the airlines are run by relatively smart people. DP is not as stupid as people say. MY biggest disappointment is their cuts to NYC, which have gutted their ff here. I wouldn't be surprised if by 2021, they are not achieving industry average margins again.

I think it's been a mixed bag (and that's being generous) for elites. On the plus side, they've invested in flagship lounges and premium economy. On the down side, they've reduced pitch in both economy and business, their catering has worsened, their miles have less value, it's harder to score upgrades, they are less reliable operationally. IMO, the improvements they've made only benefit some elites while the declines have affected all elites and non-elites.
 
Austin787
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:38 pm

9w748capt wrote:
DL747400 wrote:
The MAX grounding is certainly a negative factor dragging down earnings, but so is the AA leadership team.

Simply put, AA made the wrong choice and now they are paying for it. They should have shown DUI Dougie the door and promoted Kirby. AA's earnings are now in part reflecting the results of that decision and will continue to do so for a long time to come.


Agree with the first part, DUI Dougie needs to be gone, but I'd much rather have the Horton team back that penny pinching Kirby.

I don't think Kirby would be any better. I'll go as far to say I'd rather have Jeff Smisek over Parker as CEO.

Problem is, AA failed to fix the real issues (subpar app and operations) and instead took cost cutting to the extreme, where it appears to be costing them revenue.
 
alasizon
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:38 pm

Boof02671 wrote:
tlecam wrote:
I'll have to spend more time with the RASM/CASM and enplanements data, but one thing that did jump out to me was that the increase in passenger enplanements was larger than virtually all other metrics. Perhaps there's more regional flying to make up for the MAX issues?

Total Mainline & Regional 2019 2018 Change
Revenue passenger miles (millions)   62,658   60,779   3.1 %
Available seat miles (millions)   72,322   72,893   (0.8)%
Passenger load factor (percent)   86.6   83.4   3.2pts
Yield (cents)   17.57   17.56   0.1%
Passenger revenue per ASM (cents)   15.22   14.64   4.0%
Total revenue per ASM (cents)   16.54   15.97   3.5%
Passenger enplanements (thousands)   55,464   53,060   4.5 %
Aircraft at end of period   1,579   1,559   1.3 %

Is the counting regional jets?

As AA has 965 mainline aircraft.

The bolded portion clearly says Mainline & Regional so its pretty obvious they are counting both. Not to mention, you know AA only has 965 Mainline aircraft, did you think they just randomly tacked on an additional 614 planes and hoped nobody would notice?

tlecam wrote:
I'll have to spend more time with the RASM/CASM and enplanements data, but one thing that did jump out to me was that the increase in passenger enplanements was larger than virtually all other metrics. Perhaps there's more regional flying to make up for the MAX issues?


The Regional Only section of the release showed an 8.1% increase in revenue ASMs and a 10.8% increase in RPMs. Most of that is likely driven by DFW900 as well as expanded schedules/frequencies in CLT, PHL & PHX YOY.

UpNAWAy wrote:
Some of the Investors call highlights:

DFW Ramp ups (increased flying) margins very encourage, above system averages at start up (very unusual). CLT & DCA ramp up benefits will start being seen next year and into 2021.
If anything else interesting comes up in the QA will add...

The fact that the additions to DFW came in above system average means that they are feeling pressure elsewhere as operating margin was only up 0.3% despite the expansion at DFW accounting for more than half (by rough estimates) of the increase in ASMs. That is concerning and my guess is ORD & PHL are feeling the pressure.
Last edited by alasizon on Thu Jul 25, 2019 5:43 pm, edited 1 time in total.
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9w748capt
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:39 pm

tphuang wrote:
AAL is not having a great couple of years, but there is also a little too much beating down on them here. They are making effort to make the product better for elites. I don't see how their premium product is not competitive with DL/UA. They seem to do well in corporate market. At least according to JonNYC, they've won a lot of corporate clients in LAX, which is as competitive as they get.



That's exactly the problem - AA's premium product is definitely competitive. I'd say their 77W J class is the most comfortable way to cross the Atlantic, and right up there with CX and the like transpacific (of course the soft product and FA attitudes are a whole different can of worms). The issue is they've made their domestic product so horrible that it drags the whole AA name down. Oasis F? Really? Which genius thought of that nonsense?

Meanwhile DL continues to kick butt and take names despite "wasting money" on built-in IFE. Coincidence?
 
Brickell305
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:40 pm

PhilMcCrackin wrote:
AA is having an identity crisis in terms of their product. They want to reduce it down to ULCC levels in terms of actual product, but they still think they can compete with DL, UA and WN for yields. It seems they’re finally realizing that the customers aren’t stupid and they’ve gone a bit too far with the penny pinching in the aircraft interiors. If you want to be Spirit, be Spirit, but don’t think you’re going to command legacy fares for your bare bones product.

I used to be the biggest fan of AA and dutifully flew them for over a decade, but I’ll only fly them now when there’s no other choice for a direct flight, beings that I live in an AA hub city. I’d much rather fly WN or DL. At least with WN, I know that I can purchase the cheapest ticket and still get treated like a human being.


This sums it up perfectly.
 
tphuang
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:42 pm

9w748capt wrote:
tphuang wrote:
AAL is not having a great couple of years, but there is also a little too much beating down on them here. They are making effort to make the product better for elites. I don't see how their premium product is not competitive with DL/UA. They seem to do well in corporate market. At least according to JonNYC, they've won a lot of corporate clients in LAX, which is as competitive as they get.



That's exactly the problem - AA's premium product is definitely competitive. I'd say their 77W J class is the most comfortable way to cross the Atlantic, and right up there with CX and the like transpacific (of course the soft product and FA attitudes are a whole different can of worms). The issue is they've made their domestic product so horrible that it drags the whole AA name down. Oasis F? Really? Which genius thought of that nonsense?

Meanwhile DL continues to kick butt and take names despite "wasting money" on built-in IFE. Coincidence?

I don't see how the 36 inch fc on DL is better than the ones on aa. They are making some adjustments to the max seats to make it better. There is no reason it can't be competitive with what's out there.
 
9w748capt
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:44 pm

tphuang wrote:
9w748capt wrote:
tphuang wrote:
AAL is not having a great couple of years, but there is also a little too much beating down on them here. They are making effort to make the product better for elites. I don't see how their premium product is not competitive with DL/UA. They seem to do well in corporate market. At least according to JonNYC, they've won a lot of corporate clients in LAX, which is as competitive as they get.



That's exactly the problem - AA's premium product is definitely competitive. I'd say their 77W J class is the most comfortable way to cross the Atlantic, and right up there with CX and the like transpacific (of course the soft product and FA attitudes are a whole different can of worms). The issue is they've made their domestic product so horrible that it drags the whole AA name down. Oasis F? Really? Which genius thought of that nonsense?

Meanwhile DL continues to kick butt and take names despite "wasting money" on built-in IFE. Coincidence?

I don't see how the 36 inch fc on DL is better than the ones on aa. They are making some adjustments to the max seats to make it better. There is no reason it can't be competitive with what's out there.


It's more than just seat pitch. DL's narrowbodies are just as dense, yet they don't get nearly the flak for that as AA does. Probably because DL does literally everything else better. Except their FFP which is debatable.
 
MSPNWA
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:46 pm

9w748capt wrote:
Coincidence?


Yes, because the theory and evidence confirms it.

I find it amusing that people continuously point to product this or revenue that for AA when the financials show that their high cost is the real problem.
 
ABEguy
Posts: 69
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 5:54 pm

PhilMcCrackin

You’re a hundred percent entitled to your opinion, and you vote with your $. My experience has been different than yours. I was just on a 737 oasis, granted in economy plus. Plenty of legroom (I’m 6’3”). Seat cushion was fine and comfortable. Phone holder worked fine though i had to tweak it a bit to keep it from pushing the power button. WiFi was fast and uninterrupted. Live tv available (didn’t watch). Nothing about the hard product screams cheap or not up to par with dal swa UAL. Unless of course a tv screen is a deal breaker for you. It’s not for me.
Now the 757! My a$$ was numb getting of that thing. I can’t believe people endure TATL on those things. Luckily they’ll be getting replaced with the bus soon.
 
tphuang
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 6:06 pm

9w748capt wrote:
tphuang wrote:
9w748capt wrote:

That's exactly the problem - AA's premium product is definitely competitive. I'd say their 77W J class is the most comfortable way to cross the Atlantic, and right up there with CX and the like transpacific (of course the soft product and FA attitudes are a whole different can of worms). The issue is they've made their domestic product so horrible that it drags the whole AA name down. Oasis F? Really? Which genius thought of that nonsense?

Meanwhile DL continues to kick butt and take names despite "wasting money" on built-in IFE. Coincidence?

I don't see how the 36 inch fc on DL is better than the ones on aa. They are making some adjustments to the max seats to make it better. There is no reason it can't be competitive with what's out there.


It's more than just seat pitch. DL's narrowbodies are just as dense, yet they don't get nearly the flak for that as AA does. Probably because DL does literally everything else better. Except their FFP which is debatable.


So they had some initial deployment issues but it's going to get resolved. Jonnyc talked about some of the changes they were planning. Aa does value it's high yielding customers. I have never had any issue with fc experience on aa. Their 737-800 fc product is actually pretty good.
 
apodino
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 6:28 pm

Interesting Tidbit is that Parker and Isom claim that the regional operation is doing better from an operational standpoint than Mainline. In ways that is good, and in other ways its very concerning.

Everything else has already been said. Wall Street obviously not impressed, but it looked like the stock was ramped up the past couple of days to set up some shorting.
 
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tlecam
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 6:33 pm

Boof02671 wrote:
tlecam wrote:
I'll have to spend more time with the RASM/CASM and enplanements data, but one thing that did jump out to me was that the increase in passenger enplanements was larger than virtually all other metrics. Perhaps there's more regional flying to make up for the MAX issues?

Total Mainline & Regional 2019 2018 Change
Revenue passenger miles (millions)   62,658   60,779   3.1 %
Available seat miles (millions)   72,322   72,893   (0.8)%
Passenger load factor (percent)   86.6   83.4   3.2pts
Yield (cents)   17.57   17.56   0.1%
Passenger revenue per ASM (cents)   15.22   14.64   4.0%
Total revenue per ASM (cents)   16.54   15.97   3.5%
Passenger enplanements (thousands)   55,464   53,060   4.5 %
Aircraft at end of period   1,579   1,559   1.3 %

Is the counting regional jets?

As AA has 965 mainline aircraft.


Title - "Total Mainline and Regional".
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
 
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tlecam
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 6:41 pm

tphuang wrote:
AAL is not having a great couple of years, but there is also a little too much beating down on them here. They are making effort to make the product better for elites. I don't see how their premium product is not competitive with DL/UA. They seem to do well in corporate market. At least according to JonNYC, they've won a lot of corporate clients in LAX, which is as competitive as they get.

AA right now is just doing what DL has done so well over the years, which is to strengthen their most profitable hubs. UA is doing the same thing. DL merged the earliest, so they have completed strengthening their hubs when AA/UA was still dealing with trying to merge operations. All the airlines are run by relatively smart people. DP is not as stupid as people say. MY biggest disappointment is their cuts to NYC, which have gutted their ff here. I wouldn't be surprised if by 2021, they are not achieving industry average margins again.



I agree with this. The NYC sitaution isn't ideal, but due to the US/DL deal at LGA, the alternative wasn't all roses either. The biggest impact, IMHO, of the decision to scale back and not battle it out in NYC is that it gave DL a systemwide competitive leg up; their financial performance has improved as a direct result of AA scaling back.

However, AA is still a formidable presence in the northeast. Even with all the norhteast feeder flights disappearing ex-BOS, they are still flying 738s and 321s very frequently to their hubs. DL has a marginally larger marketshare, even after all their BOS investment. As Commavia (whom I miss on these boards!) would say, AA's demise in the northeast is somewhat overstated.
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
 
UpNAWAy
Posts: 526
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 7:05 pm

apodino wrote:
Interesting Tidbit is that Parker and Isom claim that the regional operation is doing better from an operational standpoint than Mainline. In ways that is good, and in other ways its very concerning.

Everything else has already been said. Wall Street obviously not impressed, but it looked like the stock was ramped up the past couple of days to set up some shorting.


That was also in the context of them implementing improvements late last year and early this year for both Eagle & Mainline but they cannot see the benefits on mainline yet due to the other issues.
 
Cointrin330
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 7:44 pm

Labor-Management and other operational issues aside for the moment, the unease with American Airlines is the company's unrelenting risk-averse stance, combined with a myopic management team inherited through the US Airways merger. Merging with US Airways was far from ideal, but it was the only choice for AA and US. US Airways was always a terrible airline, with mediocre service, acrimonious labor-management relationships and a textbook case in mergers that were badly executed. The AA/US merger from an operational perspective went smoothly, but it reinforced AA's traditional stance to stick to markets where it has less competition, drive away LCC were possible from its biggest hub markets, and shy away from visible efforts to make the passenger experience an industry stand out in a positive way. The decade AMR spent avoiding bankruptcy (2001 to 2011) was also a mistake. American needs to create the illusion that it is doing more to differentiate itself from the pack. Amazingly, it doesn't, and one of many reasons it has long lost its position as the industry's bell weather.
 
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spinotter
Posts: 603
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Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 8:15 pm

Is someone going to post a thread with a comparison of AA/DL/UA/WN financial/operational figures for 2019Q2? It would be something I'd really be interested to read.
 
Miamiairport
Posts: 239
Joined: Tue Apr 10, 2018 8:14 pm

Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 8:59 pm

After witnessing and in some cases suffering through AA operational messes this summer I can only assume Parker and company have one primary goal. And that is for the FAs to collect as many Barclays credit card applications in flight.
 
winginit
Posts: 2558
Joined: Sat Feb 23, 2013 9:23 pm

Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 9:14 pm

Stock came completely off the rails. Down 8.5% today
 
Brickell305
Posts: 694
Joined: Sat Jun 24, 2017 2:07 pm

Re: AAL posts solid Q2 results despite 737 Max grounding

Thu Jul 25, 2019 9:20 pm

Miamiairport wrote:
After witnessing and in some cases suffering through AA operational messes this summer I can only assume Parker and company have one primary goal. And that is for the FAs to collect as many Barclays credit card applications in flight.

Well that's the one area that they're making money so I don't blame them.
 
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DL747400
Posts: 728
Joined: Mon Sep 01, 2008 4:04 pm

Re: AAL posts solid Q2 results despite 737 Max grounding

Fri Jul 26, 2019 1:38 am

9w748capt wrote:
Agree with the first part, DUI Dougie needs to be gone, but I'd much rather have the Horton team back that penny pinching Kirby.


I'm asking, since I really don't have a good feel for what it was/is like on the inside at AA beyond what my AA friends tell me. Was Kirby really all that bad? Or was he simply doing and saying everything in lockstep with his boss Dougie?

My theory is with any possible allegiance to Dougie gone, what we are seeing now from Kirby at UA is the real Scott Kirby. With Oscar as a figurehead, I see UA under Kirby's leadership continuing to recover lost ground, leaving Dougie and team to figure out how to fix the mess they've made of AA.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
Boof02671
Posts: 1626
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Re: AAL posts solid Q2 results despite 737 Max grounding

Fri Jul 26, 2019 1:58 am

Kirby was let go for reasons not involved with running AA.
 
VS11
Posts: 1456
Joined: Mon Jul 02, 2001 6:34 am

Re: AAL posts solid Q2 results despite 737 Max grounding

Fri Jul 26, 2019 2:23 am

I don't get the Doug Parker bashing either. I like AA now much better than under previous leadership. Their attitude changed for the better. However, their debt situation is giving me headaches. They are paying $275m in interest a quarter. Their long-term debt increased by $656m since end of 2018 to $21.22b beyond the $3.4b due this year . They seem to be rolling over debt by issuing new debt but it keeps growing.
 
golfingboy
Posts: 48
Joined: Tue Aug 05, 2008 5:03 pm

Re: AAL posts solid Q2 results despite 737 Max grounding

Fri Jul 26, 2019 2:28 am

winginit wrote:
Stock came completely off the rails. Down 8.5% today


Check out Spirit - SAVE.

If 8.5% is off the rails what is 23.7% :shock: a bit off topic but I am a little surprised there isn’t a thread about Spirit’s whopping on the markets today. 7-8% anticipated increase in CASM with flat TRASM in 3Q sent them spiraling.

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