AMR profit

[Neubyfly]

http://news.moneycentral.msn.com/ticker/article.asp?Feed=PR&Date=20050720&ID=4977186&Symbol=US:AMR

 

[T45Flyer]

Congradulations to all the American Folks out there! Well done.

 

[Captain Overs]

So does that mean some of the employees will get a raise? Oh I forgot,,,the airlines take away during bad times but never reward during good.

 

[tubelcane]

I would hope since they are apparently running skinny now, maybe instead of raises they would start calling some people back. Neither will happen though so what's the hoopin and hollerin all about.

 

[PSL]

Congrats AA/AMR ...

This excerpt I find astonishing ...



During the second quarter, the Company paid $434 million more for fuel than it would have paid with last year's fuel prices.



End of quote ...



The frustrating part for the pilot group is we can provide concessions (hourly pay, benefits, Rigs ...) and it can all be erased with a volatile week in the commodities pit. Talk about having the unconstrained variables be the dominant ones in the competitive pricing model !



I'm curious what my brethren think of the current fare increases ...



In other words, for those ECON majors ... what is the price elasticity of demand in the (1) point to point markets served by a low-cost provider and a legacy carrier (an example might be LAX-SEA or MCO-BWI) ? (2) Are the low-cost carriers trying to bleed the legacy carriers with marginal profit pricing models ?

(3) Are the shareholders of the SWA, Air Tran's, Jet Blue betting that they will win the war of attrition ?



This is the worst I have seen our industry in nearly 20 years ...



I am particularly stumped why the fundamentals in the commodity market having taken a far backseat to emotion, fear and 'illogical exuberance' (I think I got this right ... Fed Chairman Greenspan ... some years ago talking about the tech bubble). I understand the China factor ... but I also look at the supply side of crude (even taking into account the 'possible' refining bottleneck theories and am completely dumbfounded by the escalation of crude. Two weeks ago the price of sweet crude jumped $1.89 in one hour because of a weather forecast (concerning Emily) that by its own admission was tentative at best ... Maybe the new market will be dominated by emotion rather than historical fundamentals ... maybe not.... which I knew because I could make a boatload of $$$ without hearing the TA/RA alerts going into LAX



Whatever the outcome (1 to 2 years) in the oil markets ... if history repeats itself and the price of oil does move our country to alternative means of surface transport (hybrids, ethanol ... etc) ... OPEC is going to experience a collapse of unimaginable magnitude... The Gulf States (read oil states) have very little beyond oil and it just might bite them in the a$$ in a big way.



I'm done ... sorry for the run on ...



Way to go AA...

 

[AMRCostUnit]

Here is the part I like: $3.9B in cash. Up 300m. 75m pension contrubition.

Here is the part I don't like: Regional Affiliates -66m



Unit

 

[COpilot]

Wow Scott!

Great post, you said four paragraphs what I have been trying to explain to co-workers for a year.

 

[aa73]

I would hope since they are apparently running skinny now, maybe instead of raises they would start calling some people back. Neither will happen though so what's the hoopin and hollerin all about.

Recalls should start early next year. Barring anything..uhhh... unexpected.

 

[Hoot R. Hunter]

Recalls should start early next year. Barring anything..uhhh... unexpected.

Like perhaps the boys at CRAAPA delivering the next highly-coveted concessionary crown jewel.....preferential bidding......free of charge, of course. Got to save the company by ourselves, don't ya know.

 

[Stan]

No one is talking about how AMR and CAL both posted profits without the use of fuel hedging. While the only way SWA made a profit was from fuel hedging.

 

[tk855]

Here is the part I don't like: Regional Affiliates -66m


Unit

So what don't you like about this? I am suprised that it is as small as it is! Do you realize what kind of costs the "regional affiliate" is facing regarding the training of AA pilots that have elected flowback? Numerous training cycles have been created due to the contractual right of AA pilots flowing back. Numerous "expensive" training cycles that is.

tk

 

[AA717driver]

I would like to offer to remain on furlough a little longer to try to help AA make even more money. TC

 

[lowecur]

No one is talking about how AMR and CAL both posted profits without the use of fuel hedging. While the only way SWA made a profit was from fuel hedging.

Stan:

Go back and read my thread on SWA profit. Read my last post as a response to Tazman. You will see they would have made a profit without the fuel hedge. The fuel hedge allowed them to pay a larger percentage on profit sharing and tax.

If you just look at it from a fuel hedge perspective it looks to be that way, but when you look at the gross profit - the fuel hedge + smaller tax number + smaller profit sharing, they make around $100M.

 

[zonker]

the only way SWA made a profit was from fuel hedging.

They made a solid forecast that put them in a position to buy those hedges. Sounds like a good business plan to me.

 

[aa73]

Like perhaps the boys at CRAAPA delivering the next highly-coveted concessionary crown jewel.....preferential bidding......free of charge, of course. Got to save the company by ourselves, don't ya know.

All of the union officers I've talked to are HELL-BENT against Pref Bidding. I personally don't think it will fly. Big chunk of our paycheck/time off is thanks to bidding conflicts!

 

[Yank McCobb]

Big chunk of our paycheck/time off is thanks to bidding conflicts!

Sure. Who WOULDN'T want to get paid to sit home and do nothing? It's the American (the country...not the airline) way. Do as little as you can for as long as you can afford it and for as long as you can get away with it. Then one day, when the free ride is over, you are pi$$ed at the world and wonder "what in the he!! do I do now?". Then you stumble through the rest of your life in some ramshackle state becuase you never learned how to make it on your own.

But of course, it was all someone ELSE'S fault.

 

[Groucho]

Great post PSL, praticularly about the commodities market. W isn't doing us amy help in this department. "Quagmire" in Iraq is starting to look like the order of the day and additional Iraq oil will not be on line any time soon, if at all.

A general said "The fact of the matter is we can't lose in Iraq, it's also a fact that we can't win." The oil markets, a worldwide market, senses this and doesn't like the stability in Iraq, Saudia Arabia, and Venezuala for that matter.

 

[aa73]

Sure. Who WOULDN'T want to get paid to sit home and do nothing? It's the American (the country...not the airline) way. Do as little as you can for as long as you can afford it and for as long as you can get away with it. Then one day, when the free ride is over, you are pi$$ed at the world and wonder "what in the he!! do I do now?". Then you stumble through the rest of your life in some ramshackle state becuase you never learned how to make it on your own.

But of course, it was all someone ELSE'S fault.

I think you cracked the code....

However, I am proud to state that, despite never having seen the "free ride" you are talking about, my life is anything but the "ramshakle state" you describe.

And yes, I am 100% against PBS until all of our furloughees are recalled, and then only for something in return.

 

[PHX767]

I'm a volunteer!

To bypass recall until I can hold a 777 slot. In LAX. And hold a line.

Realizing that is a slim chance, I will be happy flying out of my home airport and having a 20 minute commute until age 60.

P.S. NO PBS until all furloughees are recalled! Or in my case, bypassed.

 

[CitationLover]

...And yes, I am 100% against PBS until all of our furloughees are recalled, and then only for something in return.

just curious,

do you feel that way when you or you fellow union brothers grab ALL that open time with 3000 people on the street?

 

[Jeff Helgeson]

Way to take one for he team....

I would like to offer to remain on furlough a little longer to try to help AA make even more money. TC

...but if you really want to help, how about passing along some of those jumbo prawns from the inflight catering. Some of us have protein need!!!

 

[Yank McCobb]

I think you cracked the code....

However, I am proud to state that, despite never having seen the "free ride" you are talking about, my life is anything but the "ramshakle state" you describe.

And yes, I am 100% against PBS until all of our furloughees are recalled, and then only for something in return.

When I said "you", I meant a collective "you" and not you, personally. I was making a generalized statement in which I made some observations. The fact that I quoted a portion of one of your posts was only to set up my comment and not to attack you as an individual.

No need to be so defensive....

 

[PHX767]

just curious,

do you feel that way when you or you fellow union brothers grab ALL that open time with 3000 people on the street?

I'll chime in:

These guys filling up on open time are not helping us get back any sooner. If everyone flew the minimum, how many additional pilots would we need? But everybody has their own comfort level. I'm sure some guys have boats, cars, planes, kid's college, and alimony to pay for.

On the jump seat for my ride home the day before I was furloughed, the guys were busy figuring out how much open time they could pick up. I asked if they condidered not picking up any time 'cause you know we do have these furloughs and all - blank stares in return. Oh well, to each their own.

 

[aa73]

just curious,

do you feel that way when you or you fellow union brothers grab ALL that open time with 3000 people on the street?

Well, in my case I am on reserve so I have no control over how much I fly per month. The average has been 80 hrs out of a max of 85.

However, when I was a lineholder way back when in much happier times, I was perfectly content to fly the line award, and nothing more. Most of them were built to around 75-77hrs (out of 83 for lineholders.)

And finally, yes it irritates me to see all of the picking up of open time. But hey, this is the APA we're talking about... each man for himself, and don't forget to eat your young.

 

[aa73]

When I said "you", I meant a collective "you" and not you, personally. I was making a generalized statement in which I made some observations. The fact that I quoted a portion of one of your posts was only to set up my comment and not to attack you as an individual.

No need to be so defensive....

DEFENSIVE!!! WHADDAYAMEAN, HUH?

j/k. all joking aside, I also wanted to clarify to any of my fellow AA pilots reading this to vigorously understand that PBS is no good until everyone's back AND we get something in return.

No offense taken, peace out.

 

[jetexas]

Here is the part I like: $3.9B in cash. Up 300m. 75m pension contrubition.

Here is the part I don't like: Regional Affiliates -66m



Unit

Shell game. Where'd all that $3.98B in cash and 75M pension contribution come from? They can cook the numbers however they see fit. For some reason, they chose to show Eagle at a loss. It's certainly not due to empty flights.

 

[furloughfodder]

And finally, yes it irritates me to see all of the picking up of open time. But hey, this is the APA we're talking about... each man for himself, and don't forget to eat your young.

HAHA. Yes... eat the young...That is the APA motto. Remember..... APA was the first group of pilots to accept the B-Scale. They invented it with Crandell.

 

[TCAS]

Here is the part I like: $3.9B in cash. Up 300m. 75m pension contrubition.

Here is the part I don't like: Regional Affiliates -66m



Unit

Financial numbers can be spun whichever way you need to spin them to keep your shareholders and financiers happy. In general Wall Street and the banks only care about how AMR is doing. They don't care if Eagle made the profit or contributed to the loss on the BGR-BOS leg or whether AA made the profit or contributed to the loss on the BOS-MIA leg. All the money people want to know is did AMR make money or lose it flying Joe Public on a ticket from BGR-MIA.

It's the employees who get into the details and look to see who's carrying who and where to point the finger of blame. The problem with this is we are never given that information because it can disrupt the spin that AMR wants for the bankers and shareholders. A classic example of this is the line in the most recent SEC filing that attributes a $66 million loss to "regional affiliates." By my count there are 5 regional affiliates. Eagle and Trans States may have contributed $X to the bottom line and Chautauqua, Corportate and Executive could have lost $Y which resulted in a $66 million loss. Who knows? It's just not broken down further to determine what is going on here.

So is it hopeless to expect to untangle the financial web? No, not if you know where to look. The key is finding the matrix where the truth can be found. The answer is that common denominator that you never hear from managements lips when they talk about how the company is doing financially, that is the Department of Transportation's Bureau of Transportation Statistics. The BTS requires the airlines to complete a document each quarter called the FORM 41. The BTS then compiles that information and puts it out so that you, the taxpayer, has an indication on how the US airline industry is performing.

Now to the heart of the matter.... We all keep hearing how bad Eagle is doing. How we're a money pit. Costs are out of control. We're going down the bankruptcy tube, etc.

Let's take a look at the information that American Eagle reported on their Form 41's for 2004

2004 Total Operating Revenue = $1,445,784,000
-- ( In comparison to 2003 = +28.2% )

2004 Total Operating Expenses = $1,226,598,000
-- ( in comparison to 2003 = +28.9% )

2004 Operating Profit = $219,196,000

2004 Net Income = $48,804,000

No matter which way you cut it Eagle was profitable in 2004 or they lied to the US Department of Transportation and the Securites Exchange Commission.

Granted, it was a tougher year in 2004 then it was in 2003 when American Eagle reported an Operating Profit of $177 million which resulted in a Net Income of $60 million.

So how's 2005 going for Eagle? The April issue of Eagle’s company newspaper Connections claimed a "record first-quarter onboard loss" and that "cost per departure has risen and is now higher than the amount of revenue Eagle generates per departure." Sounds pretty bleak, huh? Well, let's take a look at what American Eagle reported to the DOT on it's Forum 41 for the first-quarter of 2005...

Click Here:
http://www.bts.gov/press_releases/2005/bts027_05/html/bts027_05.html

In the first-quarter of 2005 Eagle reported a $54.6 million Operating PROFIT. Only Southwest airlines had a larger Operating Profit for the first-quarter of 2005, but yet all we heard was the doom and gloom in the Connections article. Things that make you go hmmmmm!

The regional affiliates of AMR may actually have a $66 million loss but I can assure you that it wasn't because of American Eagle. I suspect a large portion of it is due to the American Connection agreements. AMR has paid a $23.2 million dollar fine to APA for violating their scope clause with the American Connection reverse code sharing scam. AMR has also paid APA $500,000.00 through June 30, 2005 and is continuing to pay an additional $30,000 per day going forward because of the scope violation due to Chautauqua flying EMB-170's for United Airlines.

It's all about the numbers and how you want them spun!

 

[tubelcane]

AA73 by "all" do you include TWA furloughs also?

PHX767 I had the same experience on my last jumpseat home. The capt. couldn't stop foaming at the mouth about all of the open trips. I'd flown with him before and he knew there were furloughs coming within a week. Well now he's furloughed like most of the rest of us. I hope he choked on all of his open time. Union brothership, that's an oxymoron. It's more like how fast can I stab you in the back. Oh is that your dog over there let me just kick him a few times while you pull the knife from your back.

 

[aa73]

AA73 by "all" do you include TWA furloughs also?

Oh, sure, why not (sarcasm...) Of course! They are furloughed AA pilots just like the rest of them! And a whole bunch of 'em are guys I went to school with.

PHX767 I had the same experience on my last jumpseat home. The capt. couldn't stop foaming at the mouth about all of the open trips. I'd flown with him before and he knew there were furloughs coming within a week. Well now he's furloughed like most of the rest of us. I hope he choked on all of his open time. Union brothership, that's an oxymoron. It's more like how fast can I stab you in the back. Oh is that your dog over there let me just kick him a few times while you pull the knife from your back.

That is typical, and unfortunately I still see it a lot on the line today. Scumbags.