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D L X
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 1:56 pm

afcjets wrote:
JAMBOJET wrote:
Under this flawed logic of selectively picking line items to make an inaccurate point, it’s also accurate to note delta had $9,647 in passenger revenue in 4Q18 but $9,652 in operating expense: lost money doing their core business.

https://d18rn0p25nwr6d.cloudfront.net/C ... 89752a.pdf

But stats can be manipulated easily just as you’ve done to try to make it look like AA lost money in 2018, which it didn’t.

Assigning all 4Q cost (and none to cargo) to passenger revenue to come up with a “AA lost money in 4Q18 but delta made money in 2018” comment is just flawed logic.


Once again it's totally accurate that American lost money flying passengers in 4Q18 during a year Delta made over $6 billion and I never made it look like American lost money for the full year. Even more accurate is the point dstblj52 makes and I was wrong, Cargo did not make AA profitable 4Q18:

"On 68.3 billion seat miles for the quarter that suggests a loss flying passengers of $423 million. Add back though the $264 million earned from cargo during the quarter and flying planes appears to have lost $159 million. (An accounting rules change adopted for 2018 causes American to recognize more money for award travel, making this figure look better than it would have without required ASC 606 changes.)

At the airline’s Media and Investor Day in September 2017 CEO Doug Parker declared that the airline would never lose money again and strictly speaking American Airlines Group didn’t lose money, but what many people think of as their core business of flying passengers did.

During that same event Parker promised that the airline would always earn between $3 billion and $7 billion per year. They barely managed it in 2017, the year it was promised, and they failed to hit that target in 2018 (even excluding ‘net special items’ they were only able to crawl up to $2.8 billion). That’s in what’s largely the best of times, before the world economic growth starts slowing in advance of possible recession."

https://viewfromthewing.com/earnings-re ... t-quarter/

AFCJets,

No one is saying you are misQUOTING statistics. We are saying your misUSE of those statistics is dishonest. Your misAPPLICATION of statistics is dishonest. And your misCOMPARISON of statistics is dishonest.

You're not even being original. You're quoting Gary Leff, who is himself dishonest.

Parker said AA wouldn't lose money. AA didn't lose money. Quit trying to defend a dishonest analysis.
 
Miamiairport
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 2:21 pm

Seems to me a CEO would always include qualifying/safe harbor wording in such a statement. For example, "barring an unforeseen external event that would significantly impact air travel we don't not expect to lose money again."
 
D L X
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 2:27 pm

Miamiairport wrote:
Seems to me a CEO would always include qualifying/safe harbor wording in such a statement. For example, "barring an unforeseen external event that would significantly impact air travel we don't not expect to lose money again."


Probably a good idea, but in the grand scheme of things, only fanboys of competing airlines are going to complain that he said this when the entire industry is facing wipeout from a pandemic.
 
afcjets
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 4:32 pm

D L X wrote:
AFCJets,

No one is saying you are misQUOTING statistics. We are saying your misUSE of those statistics is dishonest. Your misAPPLICATION of statistics is dishonest. And your misCOMPARISON of statistics is dishonest.

You're not even being original. You're quoting Gary Leff, who is himself dishonest.

Parker said AA wouldn't lose money. AA didn't lose money. Quit trying to defend a dishonest analysis.


There is nothing dishonest when I am telling you exactly what I am comparing. The reason I compared them to Delta for the entire year is because I knew their profit for the whole year without having to look it up. I read the article in the NYT or similiar last year and had no idea who Gary Leff is but his article came up first when I searched for a link before I posted. No one should be original when reporting financial performance so not sure what your point is. Where exactly is Gary being dishonest?
 
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LAXintl
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Re: Updated: American Airlines Business & Finance Discussion

Mon Sep 28, 2020 4:52 pm

AA closed its $5.477bil loan at 3.87%, 500mil more than initially expected. As of Friday, it withdrew $550 million of the loan, bringing its debt to $42 billion.
They will seek to get up to $2 billion more in October depending on how the Treasury allocates extra funds left over.

Side note - one of the provisions of the airline loan program is that, in accepting the funds, they agree that the DOT can order them to provide air service to cities, so their scheduling flexibility will potentially be reduced.
From the desert to the sea, to all of Southern California
 
slcdeltarumd11
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 6:03 pm

Really not a big deal. He was pretty much just bragging for Wall Street and it came back to bite him. He never thought it would happen so soon. No different then someone saying they are a great skier and falling on their way to the lift people are not perfect just happened sadly so soon and so drastic. He was basically just saying they had normal operations down to a science
 
MIflyer12
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 6:34 pm

slcdeltarumd11 wrote:
He was basically just saying they had normal operations down to a science


You can't even give him that. Rank 2019 margins for the ten major U.S. carriers. Look at on-time performance, IDB, or baggage handling failure rates. It wasn't covid that broke AA.
 
onwFan
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 7:49 pm

D L X wrote:
Miamiairport wrote:
Seems to me a CEO would always include qualifying/safe harbor wording in such a statement. For example, "barring an unforeseen external event that would significantly impact air travel we don't not expect to lose money again."


Probably a good idea, but in the grand scheme of things, only fanboys of competing airlines are going to complain that he said this when the entire industry is facing wipeout from a pandemic.

Well said. This is one of those threads purely for the satisfaction of having in place at least one AA bash thread on the first page.
 
OB1504
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 9:34 pm

slcdeltarumd11 wrote:
He was basically just saying they had normal operations down to a science


Anybody who flew AA in the summer of 2019 could tell you that was absolutely not the case. They made money in spite of themselves but then again it was very hard to lose money anymore until the pandemic wiped out demand.
 
wrongwayup
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 9:40 pm

A lot of sarcastic comments around our office when that quote broke. "That's it; Doug Parker called it! We're at the top!"

Nothing against Doug specifically, and I absolutely agree that consolidation among network carriers and LCCs has been great for industry health overall, he's been in this business long enough to know better than to say something like that!
 
airtran737
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 10:36 pm

Doug has AAG full steam ahead towards Chapter 11 this winter. Think about how all of the other airlines have signed some sort of deal to hold off on furloughs. Not AAG. Only Piedmont has come out and said that they don't have to furlough. AA, MQ, and OH are all on track to send thousands to the streets on 10/1. Doug and Bob know exactly what they are doing in running AAG into the iceberg. They will file and slash more costs making them the leader. United will follow suit and the industry will suffer for a decade.
Nice Trip Report!!! Great Pics, thanks for posting!!!! B747Forever
 
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spinotter
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Re: Doug Parker Statement About AA Never Posting Losses Again

Mon Sep 28, 2020 11:33 pm

onwFan wrote:
D L X wrote:
Miamiairport wrote:
Seems to me a CEO would always include qualifying/safe harbor wording in such a statement. For example, "barring an unforeseen external event that would significantly impact air travel we don't not expect to lose money again."


Probably a good idea, but in the grand scheme of things, only fanboys of competing airlines are going to complain that he said this when the entire industry is facing wipeout from a pandemic.

Well said. This is one of those threads purely for the satisfaction of having in place at least one AA bash thread on the first page.


That is not the only, or even the principal reason for a thread like this. It was foolish and unwise for Parker to make such a statement; everyone agrees to some extent with that. Did the universe take offense and send Covid-19 to us in order to punish AAG and Parker? No, but it happened and he cannot deny what he said. The pandemic, climate disasters in the making with aviation putting out CO2 with the best of us, different strategies and results in taming the pandemic - and American Airlines will never again lose money! It encapsulates a lot of what is happening and what is wrong with our world in 2020.
 
D L X
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Re: Doug Parker Statement About AA Never Posting Losses Again

Tue Sep 29, 2020 12:13 am

afcjets wrote:
D L X wrote:
AFCJets,

No one is saying you are misQUOTING statistics. We are saying your misUSE of those statistics is dishonest. Your misAPPLICATION of statistics is dishonest. And your misCOMPARISON of statistics is dishonest.

You're not even being original. You're quoting Gary Leff, who is himself dishonest.

Parker said AA wouldn't lose money. AA didn't lose money. Quit trying to defend a dishonest analysis.



There is nothing dishonest when I am telling you exactly what I am comparing. The reason I compared them to Delta for the entire year is because I knew their profit for the whole year without having to look it up.


So you knowingly compared revenues on AA for passengers in one quarter to profits for all business units on DL for a year? And you don’t know why that’s dishonest?

afcjets wrote:
I read the article in the NYT or similiar last year and had no idea who Gary Leff is but his article came up first when I searched for a link before I posted. No one should be original when reporting financial performance so not sure what your point is. Where exactly is Gary being dishonest?

Gary Leff compared overall cost of flying to just the revenue generated by passengers, as if that were the only way the planes make money. You compounded that by comparing the whole revenue of DL to it.
 
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lightsaber
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Re: Doug Parker Statement About AA Never Posting Losses Again

Tue Sep 29, 2020 9:39 pm

Discuss the topic, not other users. This is your warning.
Winter is coming.
 
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NWAESC
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Doug Steenland to join B.O.D. at American

Thu Oct 08, 2020 9:42 pm

Former NW CEO DOug Steenland is set to join AA's board.

http://news.aa.com/news/news-details/2020/American-Airlines-Names-Douglas-M-Steenland-to-its-Board-of-Directors-CORP-EXEC-10/?utm_source=News_Alert&utm_medium=email&utm_campaign=Newsroom_Alerts

I'd like to think people can change, but I also can't forget that he greenlit a pamphlet encouraging workers to dumpster dive.

Refresher here: https://www.npr.org/templates/story/sto ... Id=5693397

Good luck AA'ers!
"Nothing ever happens here, " I said. "I just wait."
 
dstblj52
Posts: 521
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Re: Doug Steenland to join B.O.D. at American

Thu Oct 08, 2020 9:55 pm

NWAESC wrote:
Former NW CEO DOug Steenland is set to join AA's board.

http://news.aa.com/news/news-details/2020/American-Airlines-Names-Douglas-M-Steenland-to-its-Board-of-Directors-CORP-EXEC-10/?utm_source=News_Alert&utm_medium=email&utm_campaign=Newsroom_Alerts

I'd like to think people can change, but I also can't forget that he greenlit a pamphlet encouraging workers to dumpster dive.

Refresher here: https://www.npr.org/templates/story/sto ... Id=5693397

Good luck AA'ers!

Are they planning to union bust? That is what doug steeland is most known for that and bankruptcy filings so he is an odd choice to bring on board
 
NYCAAer
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Re: Doug Steenland to join B.O.D. at American

Fri Oct 09, 2020 6:24 am

NWAESC wrote:
Former NW CEO DOug Steenland is set to join AA's board.

http://news.aa.com/news/news-details/2020/American-Airlines-Names-Douglas-M-Steenland-to-its-Board-of-Directors-CORP-EXEC-10/?utm_source=News_Alert&utm_medium=email&utm_campaign=Newsroom_Alerts

I'd like to think people can change, but I also can't forget that he greenlit a pamphlet encouraging workers to dumpster dive.

Refresher here: https://www.npr.org/templates/story/sto ... Id=5693397

Good luck AA'ers!


This is like some sort of sick joke. How about adding Carl Icahn and Frank Lorenzo to the Board while they’re at it? Was he the one who also fired all the mechanics at NW?
 
Italianflyer
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Re: Updated: American Airlines Business & Finance Discussion

Sun Oct 11, 2020 1:06 am

Is Suzanne Boda still at AAG? They made quite the team at NWA :(
 
MrPeanut
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Re: Updated: American Airlines Business & Finance Discussion

Sun Oct 11, 2020 2:04 am

Parker and Steenland both worked together at Northwest from 91-94.
 
KlimaBXsst
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Re: Doug Steenland to join B.O.D. at American

Sun Oct 11, 2020 3:14 am

NYCAAer wrote:
NWAESC wrote:
Former NW CEO DOug Steenland is set to join AA's board.

http://news.aa.com/news/news-details/2020/American-Airlines-Names-Douglas-M-Steenland-to-its-Board-of-Directors-CORP-EXEC-10/?utm_source=News_Alert&utm_medium=email&utm_campaign=Newsroom_Alerts

I'd like to think people can change, but I also can't forget that he greenlit a pamphlet encouraging workers to dumpster dive.

Refresher here: https://www.npr.org/templates/story/sto ... Id=5693397

Good luck AA'ers!


This is like some sort of sick joke. How about adding Carl Icahn and Frank Lorenzo to the Board while they’re at it? Was he the one who also fired all the mechanics at NW?


Y I K E S
——

Honestly, American as a brand is not going anywhere. Even if it is Allegiant-fied, by a private equity firm seeking to capitalize upon the upheaval of Covid, and a divestiture of assets of others attempting to profit on a majors downfall.

American is huge. Even a combined: Allegification, Alaskafication, Jetbluification, Skywestisfication, and Republification of its assets would still leave an American, just with different owners and friendly codesharing partners and strategic business interests as it readjusts to new realities.

American MintificAAtion still leaves AA American!

Assets:

American “Brand”
Envoy regional network
AA’s Frequent Flyer Program
DFW hub
MIA hub
ORD hub
CLT hub
PHX hub

Look above and below for this may be a bumpy ride.
Aesthetically the A 340 got it right!
 
KlimaBXsst
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Re: Updated: American Airlines Business & Finance Discussion

Sun Oct 11, 2020 3:16 am

Note: Don’t think pro Southwest, Delta, Spirit,and United Capitalists, would not attempt to seize the day too!
Aesthetically the A 340 got it right!
 
aaway
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Joined: Tue Oct 21, 2003 2:07 am

Re: Doug Steenland to join B.O.D. at American

Sun Oct 11, 2020 3:58 am

dstblj52 wrote:
NWAESC wrote:
Former NW CEO DOug Steenland is set to join AA's board.

http://news.aa.com/news/news-details/2020/American-Airlines-Names-Douglas-M-Steenland-to-its-Board-of-Directors-CORP-EXEC-10/?utm_source=News_Alert&utm_medium=email&utm_campaign=Newsroom_Alerts

I'd like to think people can change, but I also can't forget that he greenlit a pamphlet encouraging workers to dumpster dive.

Refresher here: https://www.npr.org/templates/story/sto ... Id=5693397

Good luck AA'ers!

Are they planning to union bust? That is what doug steeland is most known for that and bankruptcy filings so he is an odd choice to bring on board


IMO, Steenland is there primarily for one of two reasons: if (when) American files BK, he will be in position to either (B) temporarily helm the airline, or (B), head the BoD search committee for new executive leadership to helm AA. His past airline CEO experience will be valuable in either scenario.

Even if Parker were to stay after a BK filing (and I don't think Parker stays), such a search would have to be conducted independently of any influence by, or input from Parker.
"The greatest mistake you can make in life is to continually be afraid you will make one." - Elbert Hubbard
 
usflyer msp
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Re: Updated: American Airlines Business & Finance Discussion

Sun Oct 11, 2020 5:31 am

You all need to stop with the hysterics. Doug Steenland is 70+ years old, he is not interested in being the CEO of an airline again. He does have operational knowledge and contacts that could help AA but that is about it.
 
smartplane
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Re: Updated: American Airlines Business & Finance Discussion

Sun Oct 11, 2020 3:25 pm

usflyer msp wrote:
You all need to stop with the hysterics. Doug Steenland is 70+ years old, he is not interested in being the CEO of an airline again. He does have operational knowledge and contacts that could help AA but that is about it.

Agree. The Board want his experience, and / or a condition of recent finance / rollovers.
 
apodino
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Re: Updated: American Airlines Business & Finance Discussion

Mon Oct 12, 2020 8:41 am

usflyer msp wrote:
You all need to stop with the hysterics. Doug Steenland is 70+ years old, he is not interested in being the CEO of an airline again. He does have operational knowledge and contacts that could help AA but that is about it.

Even so, this is not a good look as far as the employees go and it does not help morale among an already demoralized work group. One of the main problems Doug Parker has had since the merger is labor peace, and bringing in a guy like Steenland doesn't help. Another issue with American is American already employs a large number of former Northwest managers in its ranks as they hired most of the guys Delta put on the street after the merger. Bringing in the former CEO of Northwest won't help with the perception that AA leadership is basically trying to recreate Northwest airlines with AA paint on the side.

One other thing I have researched. AA does not have anybody from Labor on its board of directors. Both Delta and United do.

Doug Parker talks a good game and he sounds so positive when he talks. However the actions say otherwise, and AA got so stingy with their retirement package, very few in the company took it, which will leave them with higher labor costs than carriers such as Delta and Southwest who did convince a lot of senior guys to retire. Here is an article from over the weekend on the AA situation.

https://viewfromthewing.com/the-american-airlines-bankruptcy-scenario/
 
BarrenLucidity
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Re: Updated: American Airlines Business & Finance Discussion

Mon Oct 12, 2020 11:17 am

KlimaBXsst wrote:
Note: Don’t think pro Southwest, Delta, Spirit,and United Capitalists, would not attempt to seize the day too!


As a guy in CLT I would personally welcome a second full service player at CLT. We pay the highest fares in the country due to the stranglehold.

I'm guessing they're going union busting though because it's cost them an arm and a leg during the pandemic.
 
Cointrin330
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Re: Updated: American Airlines Business & Finance Discussion

Mon Oct 12, 2020 11:51 am

BarrenLucidity wrote:
KlimaBXsst wrote:
Note: Don’t think pro Southwest, Delta, Spirit,and United Capitalists, would not attempt to seize the day too!


As a guy in CLT I would personally welcome a second full service player at CLT. We pay the highest fares in the country due to the stranglehold.

I'm guessing they're going union busting though because it's cost them an arm and a leg during the pandemic.


Not going to happen so long as AA is around. CLT is a one trick pony. The hub works because the operational costs to support it are lower and the O&D traffic is driven largely by multinationals with a sizable CLT footprint who need international reach.
 
ScottB
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Re: Updated: American Airlines Business & Finance Discussion

Mon Oct 12, 2020 1:25 pm

usflyer msp wrote:
You all need to stop with the hysterics. Doug Steenland is 70+ years old, he is not interested in being the CEO of an airline again. He does have operational knowledge and contacts that could help AA but that is about it.


Jerry Grinstein was 72 when he took over at Delta before their bankruptcy. Steenland isn't quite 70 yet.

More importantly, Steenland was running NWA throughout their bankruptcy, up until the Delta merger -- so he has the experience and expertise to conduct a relatively successful bankruptcy reorganization.
 
Boston757
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Re: Updated: American Airlines Business & Finance Discussion

Mon Oct 12, 2020 5:24 pm

In regards to AAs VEOP package to employees. AAs package was right in line with United and Delta. With that being said, with that being said this is another issue going on . When LAA/LuS merged the most senior employees are now from LUS. In the fAs group most senior fas lost up to 2,000 numbers. The senior LUS fas over 65 yrs old can take Social Security and their retirement from The PCGB. The very senior ones that didn’t take the VEOP were vested do they are receiving aprox $1,800 a month. Plus they are working making between $60,000-$80,000. Why would they leave. Life is good, they hold the most senior trips all over the world they never flew to and trade between each other, they are only required to work 40hrs. LAA senior fas have lost a lot seniority and aren’t as old. They also can Not collect their pension until they retire. LAAs pension are frozen and intact. Most of the AA employees that took the VEOP are from LAA . About the longer leaves, the amount of hours are enough to pay all premiums and include a 401k match and contribution. I do believe AA had at least 30,000 more employees on the property than Delta. Not sure what it now. Anyway, there is the more to the story.
 
usflyer msp
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Re: Updated: American Airlines Business & Finance Discussion

Mon Oct 12, 2020 6:45 pm

ScottB wrote:
usflyer msp wrote:
You all need to stop with the hysterics. Doug Steenland is 70+ years old, he is not interested in being the CEO of an airline again. He does have operational knowledge and contacts that could help AA but that is about it.


Jerry Grinstein was 72 when he took over at Delta before their bankruptcy. Steenland isn't quite 70 yet.

More importantly, Steenland was running NWA throughout their bankruptcy, up until the Delta merger -- so he has the experience and expertise to conduct a relatively successful bankruptcy reorganization.


Steenland was at NW for 17 years and did lots of things beyond bankruptcy. He was part of a team that prevented a bankruptcy in the early 90's, he saw the carrier through the aftershock of 9-11 and saw several successful years. He has plenty of experience beyond bankruptcy.
 
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NWAESC
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Re: Updated: American Airlines Business & Finance Discussion

Wed Oct 14, 2020 12:23 pm

Italianflyer wrote:
Is Suzanne Boda still at AAG? They made quite the team at NWA :(


I believe she recently retired.

I'm sure I'm in the minority, but I always kinda liked her- she had a penchant for making managers sweat that you had to respect.
"Nothing ever happens here, " I said. "I just wait."
 
avek00
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Re: Updated: American Airlines Business & Finance Discussion

Wed Oct 14, 2020 12:58 pm

usflyer msp wrote:
ScottB wrote:
usflyer msp wrote:
You all need to stop with the hysterics. Doug Steenland is 70+ years old, he is not interested in being the CEO of an airline again. He does have operational knowledge and contacts that could help AA but that is about it.


Jerry Grinstein was 72 when he took over at Delta before their bankruptcy. Steenland isn't quite 70 yet.

More importantly, Steenland was running NWA throughout their bankruptcy, up until the Delta merger -- so he has the experience and expertise to conduct a relatively successful bankruptcy reorganization.


Steenland was at NW for 17 years and did lots of things beyond bankruptcy. He was part of a team that prevented a bankruptcy in the early 90's, he saw the carrier through the aftershock of 9-11 and saw several successful years. He has plenty of experience beyond bankruptcy.


During his time at NWA, Steenland helped develop and mature what became the most sophisticated Joint Venture in the airline industry (NWA/KLM). Pre-pandemic, AA was relatively slow and conservative in unlocking the full potential of JBA agreements. Going forward, the JBAs will necessarily play a larger role in American's life, and Steenland may bring some high-level insights on how to accomplish this.
Live life to the fullest.
 
rising
Posts: 190
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Re: Updated: American Airlines Business & Finance Discussion

Wed Oct 14, 2020 2:06 pm

apodino wrote:
usflyer msp wrote:

Doug Parker talks a good game and he sounds so positive when he talks. However the actions say otherwise, and AA got so stingy with their retirement package, very few in the company took it, which will leave them with higher labor costs than carriers such as Delta and Southwest who did convince a lot of senior guys to retire. Here is an article from over the weekend on the AA situation.

https://viewfromthewing.com/the-american-airlines-bankruptcy-scenario/


The other thing in American's favor is it's fleet. The renewal is essentially complete. I believe UALs average fleet age is about 16, Delta around 15, where AALs is about 11.

They could go two decades with minimal changes.

Talk about once-in-a-century bad luck. It's a cruel world. Had they kept $!5b in cash for this type of rainy day, management not only would have been panned, they probably would be sued. Everyone would have thought they were nuts. $8b was always the amount that everyone thought would see them through the worst of worst events. And they had that much. Even Delta, which seemingly has done everything right since at least 2009, would never get away with keeping $15b in the bank.

I think the reason you are seeing Parker, Kelly, and Kirby in front of the cameras together, is because this is not a crisis of poor management. I suppose you could debate the timing of the fleet renewal that AA did, but all carriers were profitable. This is a generational event.

The industry has to be united.
If it doesn't make sense, it's probably not true.
 
phxa340
Posts: 1132
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Re: Updated: American Airlines Business & Finance Discussion

Wed Oct 14, 2020 2:18 pm

rising wrote:
apodino wrote:
usflyer msp wrote:

Doug Parker talks a good game and he sounds so positive when he talks. However the actions say otherwise, and AA got so stingy with their retirement package, very few in the company took it, which will leave them with higher labor costs than carriers such as Delta and Southwest who did convince a lot of senior guys to retire. Here is an article from over the weekend on the AA situation.

https://viewfromthewing.com/the-american-airlines-bankruptcy-scenario/


The other thing in American's favor is it's fleet. The renewal is essentially complete. I believe UALs average fleet age is about 16, Delta around 15, where AALs is about 11.

They could go two decades with minimal changes.

Talk about once-in-a-century bad luck. It's a cruel world. Had they kept $!5b in cash for this type of rainy day, management not only would have been panned, they probably would be sued. Everyone would have thought they were nuts. $8b was always the amount that everyone thought would see them through the worst of worst events. And they had that much. Even Delta, which seemingly has done everything right since at least 2009, would never get away with keeping $15b in the bank.

I think the reason you are seeing Parker, Kelly, and Kirby in front of the cameras together, is because this is not a crisis of poor management. I suppose you could debate the timing of the fleet renewal that AA did, but all carriers were profitable. This is a generational event.

The industry has to be united.


One could argue the reason that AA is doing so poorly financially is because their average fleet age is around 11 ... it takes a lot of precious capital for AA to get those shiny new jets.
 
BNAMealer
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Re: Updated: American Airlines Business & Finance Discussion

Wed Oct 14, 2020 2:27 pm

phxa340 wrote:
rising wrote:
apodino wrote:


The other thing in American's favor is it's fleet. The renewal is essentially complete. I believe UALs average fleet age is about 16, Delta around 15, where AALs is about 11.

They could go two decades with minimal changes.

Talk about once-in-a-century bad luck. It's a cruel world. Had they kept $!5b in cash for this type of rainy day, management not only would have been panned, they probably would be sued. Everyone would have thought they were nuts. $8b was always the amount that everyone thought would see them through the worst of worst events. And they had that much. Even Delta, which seemingly has done everything right since at least 2009, would never get away with keeping $15b in the bank.

I think the reason you are seeing Parker, Kelly, and Kirby in front of the cameras together, is because this is not a crisis of poor management. I suppose you could debate the timing of the fleet renewal that AA did, but all carriers were profitable. This is a generational event.

The industry has to be united.


One could argue the reason that AA is doing so poorly financially is because their average fleet age is around 11 ... it takes a lot of precious capital for AA to get those shiny new jets.


Yes, but they weren't so great even before the pandemic because their product is subpar and they are poorly managed. AA desperately needs new management if they want to come out of this better.
 
Miamiairport
Posts: 735
Joined: Tue Apr 10, 2018 8:14 pm

Re: Updated: American Airlines Business & Finance Discussion

Wed Oct 14, 2020 2:57 pm

phxa340 wrote:
rising wrote:
apodino wrote:


The other thing in American's favor is it's fleet. The renewal is essentially complete. I believe UALs average fleet age is about 16, Delta around 15, where AALs is about 11.

They could go two decades with minimal changes.

Talk about once-in-a-century bad luck. It's a cruel world. Had they kept $!5b in cash for this type of rainy day, management not only would have been panned, they probably would be sued. Everyone would have thought they were nuts. $8b was always the amount that everyone thought would see them through the worst of worst events. And they had that much. Even Delta, which seemingly has done everything right since at least 2009, would never get away with keeping $15b in the bank.

I think the reason you are seeing Parker, Kelly, and Kirby in front of the cameras together, is because this is not a crisis of poor management. I suppose you could debate the timing of the fleet renewal that AA did, but all carriers were profitable. This is a generational event.

The industry has to be united.


One could argue the reason that AA is doing so poorly financially is because their average fleet age is around 11 ... it takes a lot of precious capital for AA to get those shiny new jets.


Pre merger AA was flying around a lot of old planes-A300, 762, MD80s. Many had become maintenance nightmares. This was a result of the cost saving initiatives in the early 2000s when AA when every other airline was trying to avoid Chapter 11 and avoided taking on new a/c. AA steadfast refused to go into Chapter 11 but by 2008/2009 needed to renew its fleet. Further fleet renewals came about once AA entered Chapter 11.

If AA hadn't renewed it's fleet they'd be stuck with god awful old a/c and think how uncompetitive that would have made the airline.
 
ScottB
Posts: 7109
Joined: Fri Jul 28, 2000 1:25 am

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 3:02 am

Miamiairport wrote:
If AA hadn't renewed it's fleet they'd be stuck with god awful old a/c and think how uncompetitive that would have made the airline.


You mean, like, Delta?
 
Miamiairport
Posts: 735
Joined: Tue Apr 10, 2018 8:14 pm

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 1:34 pm

ScottB wrote:
Miamiairport wrote:
If AA hadn't renewed it's fleet they'd be stuck with god awful old a/c and think how uncompetitive that would have made the airline.


You mean, like, Delta?


The difference was that over the years DL (and NW) kept their planes in top shape. AA did not and by 2008 a/c going out of service was becoming a big issue. I remember those days. It was a crap shoot particularly with the A300s and 762. It wasn't unusual to have an a/c go out of service, be moved to another a/c and then have that one go out of service. Plus AA did not have the a/c they needed for International expansion, thus the 773s, 788s and 789s.
 
OB1504
Posts: 3987
Joined: Tue Jul 27, 2004 5:10 am

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 8:46 pm

Miamiairport wrote:
AA did not and by 2008 a/c going out of service was becoming a big issue. I remember those days. It was a crap shoot particularly with the A300s and 762. It wasn't unusual to have an a/c go out of service, be moved to another a/c and then have that one go out of service.


That sounds like the AA of today. I’m surprised that with a reduced schedule they still manage to have double aircraft swaps.
 
Tack
Posts: 130
Joined: Thu Oct 04, 2018 11:13 pm

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 9:26 pm

BNAMealer wrote:
phxa340 wrote:
rising wrote:

The other thing in American's favor is it's fleet. The renewal is essentially complete. I believe UALs average fleet age is about 16, Delta around 15, where AALs is about 11.

They could go two decades with minimal changes.

Talk about once-in-a-century bad luck. It's a cruel world. Had they kept $!5b in cash for this type of rainy day, management not only would have been panned, they probably would be sued. Everyone would have thought they were nuts. $8b was always the amount that everyone thought would see them through the worst of worst events. And they had that much. Even Delta, which seemingly has done everything right since at least 2009, would never get away with keeping $15b in the bank.

I think the reason you are seeing Parker, Kelly, and Kirby in front of the cameras together, is because this is not a crisis of poor management. I suppose you could debate the timing of the fleet renewal that AA did, but all carriers were profitable. This is a generational event.

The industry has to be united.


One could argue the reason that AA is doing so poorly financially is because their average fleet age is around 11 ... it takes a lot of precious capital for AA to get those shiny new jets.


Yes, but they weren't so great even before the pandemic because their product is subpar and they are poorly managed. AA desperately needs new management if they want to come out of this better.


Subpar product? I fly AA 4-8 times a month. I’ve been EP for the last 6 years. I switched to AA from DL. There is no difference, to me, in the “product” between AA and DL. I’d go as far to say no difference between AA/DL/UA. In fact the service that I have personally received from AA over the last 6 years has exceeded the service I got from DL. YMMV. But your statement of a sub par product isn’t based on fact, it’s subjective. Now, poorly managed? I can’t argue with you. Numbers don’t lie. But for me they’re better, service wise, than DL and UA.
 
BNAMealer
Posts: 947
Joined: Sat Jul 27, 2019 8:03 pm

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 9:44 pm

Tack wrote:
BNAMealer wrote:
phxa340 wrote:

One could argue the reason that AA is doing so poorly financially is because their average fleet age is around 11 ... it takes a lot of precious capital for AA to get those shiny new jets.


Yes, but they weren't so great even before the pandemic because their product is subpar and they are poorly managed. AA desperately needs new management if they want to come out of this better.


Subpar product? I fly AA 4-8 times a month. I’ve been EP for the last 6 years. I switched to AA from DL. There is no difference, to me, in the “product” between AA and DL. I’d go as far to say no difference between AA/DL/UA. In fact the service that I have personally received from AA over the last 6 years has exceeded the service I got from DL. YMMV. But your statement of a sub par product isn’t based on fact, it’s subjective. Now, poorly managed? I can’t argue with you. Numbers don’t lie. But for me they’re better, service wise, than DL and UA.


I agree to some extent about there being little difference among the US3, but the project Oasis F seats speak for themselves. That had to be one of the most tone deaf decisions I’ve ever seen. Economy is almost the same across all the US3, but AA is slightly worse IMO. And it’s not just their plane product: their main hubs are sub-optimally configured compared to their competitors and their on time performance, while not as bad as last summer, is still bad. This affects the overall “product”. I’m glad you’ve had good experiences, but there is a reason they can get a revenue premium like DL.

And I say this as someone who thinks AA should be the premier US airline, but their incompetent management/BOD is holding them back.
 
Pi7472000
Posts: 217
Joined: Fri Apr 27, 2018 3:26 pm

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 10:08 pm

Tack wrote:
BNAMealer wrote:
phxa340 wrote:

One could argue the reason that AA is doing so poorly financially is because their average fleet age is around 11 ... it takes a lot of precious capital for AA to get those shiny new jets.


Yes, but they weren't so great even before the pandemic because their product is subpar and they are poorly managed. AA desperately needs new management if they want to come out of this better.


Subpar product? I fly AA 4-8 times a month. I’ve been EP for the last 6 years. I switched to AA from DL. There is no difference, to me, in the “product” between AA and DL. I’d go as far to say no difference between AA/DL/UA. In fact the service that I have personally received from AA over the last 6 years has exceeded the service I got from DL. YMMV. But your statement of a sub par product isn’t based on fact, it’s subjective. Now, poorly managed? I can’t argue with you. Numbers don’t lie. But for me they’re better, service wise, than DL and UA.


It is based on fact. Delta always out performs AA in all customer service surveys and in DOT statistics. Delta is a much better run airline in terms of customer service and care. Even during a Pandemic AA will pack you in and not keep the middle seat open. Delta keeps middle seats open. AA reminds me of the Frontier of the big 3.
 
rising
Posts: 190
Joined: Thu May 13, 2010 12:59 pm

Re: Updated: American Airlines Business & Finance Discussion

Thu Oct 15, 2020 11:41 pm

Miamiairport wrote:
ScottB wrote:
Miamiairport wrote:
If AA hadn't renewed it's fleet they'd be stuck with god awful old a/c and think how uncompetitive that would have made the airline.


You mean, like, Delta?


The difference was that over the years DL (and NW) kept their planes in top shape. AA did not and by 2008 a/c going out of service was becoming a big issue. I remember those days. It was a crap shoot particularly with the A300s and 762. It wasn't unusual to have an a/c go out of service, be moved to another a/c and then have that one go out of service. Plus AA did not have the a/c they needed for International expansion, thus the 773s, 788s and 789s.


UAL was similar. I remember an interview where Jeff Smisek would gripe about his frustration with the pre-merger UAL aircraft. Just a steady stream of heartburn, eating into the new UALs reliability. They got out of Chap. 11 in 2006, and then in 2008, the economic crisis. Not much of any renewal going on or major fleet investment, in fact a slew of retirements and really using Express as the crutch. Remember the days of the CRJ200 from DEN-ATL?

To be sure, we're not talking about safety maintenance. No one would or was skimping on safety. But reliability items with over the years snowball and create a major issues.

Think about AA trying to get through and win on the other side of the pandemic with a bunch of MD80s.

In my view, this is the one thing of only a very few going for them at the moment. I wish them luck. They'll need it.
If it doesn't make sense, it's probably not true.
 
Tack
Posts: 130
Joined: Thu Oct 04, 2018 11:13 pm

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 12:52 am

Pi7472000 wrote:
Tack wrote:
BNAMealer wrote:

Yes, but they weren't so great even before the pandemic because their product is subpar and they are poorly managed. AA desperately needs new management if they want to come out of this better.


Subpar product? I fly AA 4-8 times a month. I’ve been EP for the last 6 years. I switched to AA from DL. There is no difference, to me, in the “product” between AA and DL. I’d go as far to say no difference between AA/DL/UA. In fact the service that I have personally received from AA over the last 6 years has exceeded the service I got from DL. YMMV. But your statement of a sub par product isn’t based on fact, it’s subjective. Now, poorly managed? I can’t argue with you. Numbers don’t lie. But for me they’re better, service wise, than DL and UA.


It is based on fact. Delta always out performs AA in all customer service surveys and in DOT statistics. Delta is a much better run airline in terms of customer service and care. Even during a Pandemic AA will pack you in and not keep the middle seat open. Delta keeps middle seats open. AA reminds me of the Frontier of the big 3.


Meh, my experience with DL is just so so, that’s why I switched to AA. DL Customer Service is close to AS, but AS beats them all. However my expectations, even as an EP aren’t as lofty as some of the Anetters on here. So again, YMMV because service is subjective. As for FC? All the majors, have 37 inches of pitch. I will grant you MCE, on an AA Oasis jet sucks. But the exits are still very good. Blocking center seats is Ridiculous. AS does this too, and from a business stand point, I’d argue it’s a poor strategy when yields are bottom of the barrel. In terms of management? This is where AA is sorely lacking. Their inability to be even be in the same zip code of profitability as DL is just stupid. And as this thread has pointed out, that needs to change Quickly, if it’s not already too late. Last year, Pre Pandemic, my best Biz and FC Intl flights on AA were some of the best I’ve had save for my QR trips. Again subjective, but this year I’ve had AA reach out to me more than ever before to ensure they were meeting my flying needs.
 
ScottB
Posts: 7109
Joined: Fri Jul 28, 2000 1:25 am

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 4:27 am

rising wrote:
Think about AA trying to get through and win on the other side of the pandemic with a bunch of MD80s.


I really don't understand the hate for the MD-80s. Yeah, the last five rows of economy suck, but the five-across seating means fewer middle seats and the front of the plane is very quiet. If you maintain the aircraft well and keep the interiors fresh it's a solid performer. Paid-off aircraft can be very useful for providing flex capacity on peak days or in high-traffic seasons without operating half-empty flights on low-demand days.

Having old, paid-off aircraft in the fleet allows for flexibility. If a recession (or pandemic) strikes, the planes can be parked or retired without eating expensive lease costs. If business is good, you accept the higher operating costs because you're also getting higher yields in the business.
 
usflyer msp
Posts: 3884
Joined: Tue May 23, 2000 11:50 am

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 5:03 am

ScottB wrote:
rising wrote:
Think about AA trying to get through and win on the other side of the pandemic with a bunch of MD80s.


I really don't understand the hate for the MD-80s. Yeah, the last five rows of economy suck, but the five-across seating means fewer middle seats and the front of the plane is very quiet. If you maintain the aircraft well and keep the interiors fresh it's a solid performer. Paid-off aircraft can be very useful for providing flex capacity on peak days or in high-traffic seasons without operating half-empty flights on low-demand days.

Having old, paid-off aircraft in the fleet allows for flexibility. If a recession (or pandemic) strikes, the planes can be parked or retired without eating expensive lease costs. If business is good, you accept the higher operating costs because you're also getting higher yields in the business.


In the case of the MD-80, there were some avionics upgrades required by the FAA that were not cost effective for this fleet type so they had to be retired, no matter what. This is why DL got rid of theirs (and the MD-90's) so quickly as well.
 
ScottB
Posts: 7109
Joined: Fri Jul 28, 2000 1:25 am

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 2:19 pm

usflyer msp wrote:
In the case of the MD-80, there were some avionics upgrades required by the FAA that were not cost effective for this fleet type so they had to be retired, no matter what. This is why DL got rid of theirs (and the MD-90's) so quickly as well.


As with the 747-400 (fuel tank inerting), whether a modification is cost-effective depends on how long the airline plans to keep the aircraft in service. The MD-90s were planned to be retired by the end of 2022, not this year.
 
User avatar
vhtje
Posts: 1224
Joined: Sat Jan 10, 2009 12:40 pm

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 3:29 pm

ScottB wrote:
rising wrote:
Think about AA trying to get through and win on the other side of the pandemic with a bunch of MD80s.


I really don't understand the hate for the MD-80s. Yeah, the last five rows of economy suck, but the five-across seating means fewer middle seats and the front of the plane is very quiet. If you maintain the aircraft well and keep the interiors fresh it's a solid performer. Paid-off aircraft can be very useful for providing flex capacity on peak days or in high-traffic seasons without operating half-empty flights on low-demand days.

Having old, paid-off aircraft in the fleet allows for flexibility. If a recession (or pandemic) strikes, the planes can be parked or retired without eating expensive lease costs. If business is good, you accept the higher operating costs because you're also getting higher yields in the business.


This a.net.

If DL buy clapped out secondhand aircraft, or continue to fly their aircraft beyond 20 years, it's a sign of excellent DL management: owned aircraft are cheaper to operate, doncha know?

If AA do the same, it's AA's terrible management and a sign that AA is definitely going to collapse in the next 6 months.

Like I said, this is a.net, where DL can do no wrong, and AA can do no right. The constant DL fanboyism is beyond tiresome.
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
UpNAWAy
Posts: 700
Joined: Thu Aug 11, 2016 12:42 pm

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 3:50 pm

People that thinks Delta gets a revenue premium for product should get a perma ban IMHO. that has never, ever been the case in aviation. Delta's revenue premium exist because their Hubs are the least competitive among the majors, i.e. more of a fortress.
 
ScottB
Posts: 7109
Joined: Fri Jul 28, 2000 1:25 am

Re: Updated: American Airlines Business & Finance Discussion

Fri Oct 16, 2020 7:32 pm

vhtje wrote:
This a.net.

If DL buy clapped out secondhand aircraft, or continue to fly their aircraft beyond 20 years, it's a sign of excellent DL management: owned aircraft are cheaper to operate, doncha know?

If AA do the same, it's AA's terrible management and a sign that AA is definitely going to collapse in the next 6 months.

Like I said, this is a.net, where DL can do no wrong, and AA can do no right. The constant DL fanboyism is beyond tiresome.


AA's expensive fleet renewal is part of why they're in their current financial situation. DL has been more conservative in their fleet planning and it has paid off. It certainly does not help matters that AAL bought back just under $13 billion of its shares since 2013 while sitting on the highest debt load in the industry.

And I'm arguing that maybe a fleet strategy more similar to DL would have been good -- not that when AA does what DL does, it's bad.

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