AA - not good news

[LR45JI]

AA says they are loosing a large portion of theie passengers to SWA, JetBlue, AirTran,...etc....

Just curious how much the fracionals have hurt them? We have aound 2,700 owners @ NJA; Flight Options has about 900 or so and then there is Flexjet, Citation Shares, etc....

When I was working at Eagle years ago AMR said that about 80-85% of their revenue came from the guys riding up front. Well, the folks we are carrying, instead of taking the First Class seat has to be hurting!!!

As AA restructures their fleet, hubs, schedules etc.... they have already warned that connection time will increase...etc, etc... I'm willing to bet more First Class folks will jump ship to a fractional operator....

 

[banned username 2]

AA says they are loosing a large portion of theie passengers to SWA, JetBlue, AirTran,...etc....

Just curious how much the fracionals have hurt them?

Probably a lot more than they want to believe... and you are right, as connection times increase and such, it will drive away even more business travelers....

Fractionals and Corporates are going to thrive (relatively) in this environment...

IMHO...

 

[HA25]

Fractionals?

A. Having flown fractional before, I will tell you that they are hurting the majors, that is for sure. The fact is if there were now fractionals. that revenue would be going to AMR/DAL/UAL etc...

HOWEVER... EJA is on the verge of a significant pay raise to bring them "Closer" to the pay scale of the jets they actually fly. They are also seeking important workrule improvements that they very much deserve. This will dramatically cut into the profits (that have yet to be realized on an operating basis) at EJA.
EJA makes all of their money selling planes right now, and this is not going to help them.

B. AMR has one thing on their side, assets and cash (and unlike UAL, no $900 million debt payment due in a couple of months). This is why they are taking a long term fix approach that will result in a downsize of the company (bad news for me). They can afford to bleed cash longer than their rivals, BUT that will all be null and void if all of their rivals are in Ch11. This will give them all signifcant cost advantage over AMR and they will take advantage of it and grow.....when times get good, AMR will be left holding smaller market share and therefore less revenue, so I hope Don knows what he's doing. He is taking a new approach, he wants to focus less on revenue and more on cost......i.e. downsize....

I predict 2005 before they hire again.

 

[publisher]

business

As someone more in tune with the management side of this problem than some of you, I want to say up front that management gets paid to make these kind of tough decisions.

Don Carty has been tough and fair since the beginning. He has shown the leadership qualities that David Siegel is also starting to show.

In addition, I would suggest that Godon Behtune showed these same qualities some years back with the bankruptcy of Continental.

They have played by the rules and hand dealt and are doing an admireable job.

This is why American was in the best shape before 9/11 and will be coming out of the recession.

 

[pilotsgirl320]

Reuters quote

"Most job cuts will begin in October and will be widespread across the system, an American executive said. About 40 percent will come from the ranks of pilots and flight attendants. The job cuts will be complete by March 2003" Reuters

They already have hundreds of pilots furloughed from 9/11.

 

[AAflyer]

Publisher,

You are right, they do get paid. To the toon of around 4 million dollars (forbes; carty is the 204th highest paid CEO and currently the #1 paid airline CEO) Glad to know that while more of my over paid brothers are hittting the street he and upper managment get a raise.

They have been fair. Would that explain why Carty appointed G. Arpey to oversee daily operations while he went to DC to lobby congress on abolishing the Railway labor Act, and making Scope clauses illegal.

Leadership qualities. Would that explain why between AA,AE,TWLLC there are close to 367 oustanding grievances for contract violations. Would those be the same qualities that have tried to pit labor groups against each other. Would these leadership qualities explain why AMR has one of the worst labor relations in the industry.

Last but not least, Oh wise one. Can you gurantee me AMR will come out on top. That must be some crystal-ball you have. What color shirt do I have on?

I have read many of your posts, this was not one of your better ones, maybe I would just stick to flying airplanes.

Regards,
AAflyer
(aka: overpaid mainline guy who has no clue)

 

[eaglefly]

A lot of AA's domestic future will involve more 70-seat RJ's (and probably 90-seaters too). The APA has been successful in limiting Eagle, but has failed to address the new threat. American Connection. They have the ability to fly ANY SIZE aircraft to ANY DESTINATION in ANY FREQUENCY with an UNLIMITED FLEET SIZE.

Eagle will remain at its current size (but may go all jet and adjust route structure), but there's nothing APA can do about Connection with "reverse code-sharing".

AMR management has already hinted of "things to come" in the near future involving this issue. The thing to come WILL be the 70 (and 90-seat) RJ NOT flown by mainline. The 550 announced is just the start over the next several years. AMR wants the EMB-170. It hits the market early next year and will be flying everything the F-100's used too.

You can deny it, but if you do you're living in denial.

 

[JetPilot500]

That is correct, CEO's make a lot of money, it is a fact of life. They have a lot of responsibility, more than any pilot, so they make more. You want the best of the best at the helm of your company, therefore you have to pay for it. They are responsible for not just your job, but for all of the investors too. It is the way the world works. Their job is to make money for investors. If it means shrinking the company so they can offer some earnings per share, than that is what they have to do. It sure beats the alternative, BANKRUPTCY!

I too got furloughed after Sept 11, and I was very sad to see my job go away. But, I picked myself up and moved forward. The industry is doing what it has to do to survive right now.

Airlines will NOT make money paying the salaries that the unions demand. The industry has changed. Unions must change. Management must change. The way they do business has to change.

Everything is gonna have to adjust here. Things cannot, and will not be as they were. They can't, and it just might take the loss of a few big airlines like US Airways and United to prove that point.

Good Luck to all,
Jetpilot500

By the way: I highly recommend the book, "Who Moved My Cheese." Its a short book that talks about dealing with Change.

 

[publisher]

reponsibility

I can understand the perspective offered by AAFlyer.

The fact is though that the CEO of an airline is reponsible to a good many more people than flight crews.

The first and foremost responsibility is to see that the corporation survives and that the assets are protected. Second is to generate a return for the shareholders.

From a business perspective, it is ludicrous that the labor rules of todays modern airlines are covered by the Railway Labor Act. Even the name is absurd. Secondly, scope from a business standpoint does not work as evidenced by many posts on this board. It is an artifical barrier that fails the test when inserted into a supply and demand market place/

Frankly, I think AA has gone overboard to comply with the rules and in their approach to doing so has showed how stupid this thing is.

I stick by what I said. AA is well run and go compare them with United. During these times, they had to give labor raises so that they could ask for concessions. That is certainly a novel approach.

 

[LR45JI]

This is a nasty, rotten business.

--Robert Crandall
American Airlines, 1994