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I thought AWA was doing good!!!
- Thread starter Realyman
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TWA Dude
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What is up over here is fuel prices, same as (almost) everyone else. CEO Parker has been warning about our earnings since the summer so it's no surprise. What's good is that our cash-on-hand is still very strong and thus should carry us until fuel prices normalize. Furloughs next year? You might as well be predicting the World Series winner for '05 -- you're free to guess but at this point it's meaningless.
AnimalTale
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Realyman said:
I think the reason u thought AWA was doing good was because of the motivation and hype of all the new hires and hopeful applicants enthusiastically waiting to get hired or get a chance to get hired by their favorite Airline (the one that is hiring).. The reality is that AWA has a great managemnt team, that took over from a piece of garbage (FRANKE) former team. With this in mind, Parker has to work some miracles to turn the boat around... ALSO the FUEL prices are killing just about everyone, SWA excluded...
I wish the best for CACTUS...Their loads are always heavy..They have a great niche in PHX but FRANKE, HIGH FUEL PRICES and LOW TIX PRICESmight kill them, along with the rest of the industry. Just a reality.
AnimalTale
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Wow talk about doom and gloom. Watch our 3Q webcast and you will see that we are just fine. Furlough's? What are you smoking? We have 22 airplanes coming next year.
Air Tran lost just as much proportionally as we did. They took a tax credit that we didn't take. It made their net loss look smaller. Look at the pre-tax losses and the size of the two companies.
Yet, no one is predicted the doom of Air Tran.
I think you are wrong about "new hire" hype. Many on Wall Street still regard our stock as underrated. This was one's take on it yesterday:
"With shares near a 52-week low, capacity growth moderating, and a cost structure others airlines salivate over, America West now represents one of our top picks and our sole overweight-rated low-cost carrier," Baker wrote in a note.
Southwest has a great fuel hedge. jetBlue still has some of the lowest costs in the industry. This is why they are doing great.
AWA is not going bankrupt. ATA is a very different situation. They are sitting on very high cost leases on brand new airplanes. They have huge problems pricing their product and managing yields. They are also a large charter company which has its own issues.
Yes, we have issues. We have a lot of debt. We have a high interest ATSB loan. We have an aging fleet of 737's. But our year over year CASM's (excluding fuel) keep getting lower.
I would be concerned about the whole industry right now. Fuel prices represent a crisis no airline is immune to. (well except WN who has $24 fuel hedges).
Air Tran lost just as much proportionally as we did. They took a tax credit that we didn't take. It made their net loss look smaller. Look at the pre-tax losses and the size of the two companies.
Yet, no one is predicted the doom of Air Tran.
I think you are wrong about "new hire" hype. Many on Wall Street still regard our stock as underrated. This was one's take on it yesterday:
"With shares near a 52-week low, capacity growth moderating, and a cost structure others airlines salivate over, America West now represents one of our top picks and our sole overweight-rated low-cost carrier," Baker wrote in a note.
Southwest has a great fuel hedge. jetBlue still has some of the lowest costs in the industry. This is why they are doing great.
AWA is not going bankrupt. ATA is a very different situation. They are sitting on very high cost leases on brand new airplanes. They have huge problems pricing their product and managing yields. They are also a large charter company which has its own issues.
Yes, we have issues. We have a lot of debt. We have a high interest ATSB loan. We have an aging fleet of 737's. But our year over year CASM's (excluding fuel) keep getting lower.
I would be concerned about the whole industry right now. Fuel prices represent a crisis no airline is immune to. (well except WN who has $24 fuel hedges).
Good post Cactus73.
The recovery of the industry will largely depend on the shake-out of the over-capacity situation, irrational pricing by the bankrupt carriers, and of course, fuel. I think AWA has been over rated in terms of financial health, but I guess everything is relative. I think things will get worse before they get better, but AWA is poised to be one of the carriers left standing in the end.
English
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Read this stuff first...
posted by mad691 on another thread.
http://www.azcentral.com/business/articles/1028amwest280.html
AmWest cutting flights, growth plans as profits sink
Dawn Gilbertson
The Arizona Republic
Oct. 28, 2004 12:00 AM
Faced with continuing high fuel prices and low airfares, America West Airlines is cutting some cross-country flights and other unprofitable routes and sharply scaling back its growth plans for next year.
Phoenix travelers will notice few changes, though, as the affected flights are mainly between the East Coast and California and red-eye flights out of Las Vegas.
The Tempe-based carrier announced the cutbacks Wednesday as it released its worst quarterly results in more than a year and reiterated that this quarter's numbers also will be ugly. Combined with big losses at most carriers except perenially profitable Southwest, and Tuesday's bankruptcy filing by fellow low-cost carrier ATA, America West's loss shows the breadth of the industry's woes.
The company posted a loss of $47.1 million for the July-September period, which includes the peak summer vacation season. A year ago, it made $32.9 million in the period. Like most airlines, America West's planes were packed this summer, but profits were hit by the double whammy of sky-high fuel prices and low ticket prices tied to a flurry of new flights in many markets for the first time since Sept. 11, 2001.
The airline's fuel bill, its second-largest expense after labor, jumped 49 percent in the quarter, to $136.3 million. Unlike other businesses, the airline can't pass along the increase to consumers in the form of higher fares because the industry has too many seats chasing too few passengers. America West's sales for the quarter fell 2.3 percent, to $578.5 million. Its revenue per seat, a key industry measure, fell more than 9 percent, to 7.09 cents from 7.82 cents.
The only bright spot was the airline's ultra-low costs, excluding fuel. Like Southwest Airlines, America West has worked feverishly to maintain its low-cost advantage, watching every penny and getting even more productivity out its 13,000 employees.
America West had previously warned of significant losses for the third and fourth quarters, but the results still were far below Wall Street's expectations. Analysts on average were expecting a per-share loss of 63 cents excluding special charges; America West's loss on that basis was $1.22 per share.
The airline's stock, already hit hard this year given the industry's woes, was down by nearly 12 percent at one point Wednesday. It rebounded to close at $4.36, down 7 cents, or 1.58 percent. The shares started the year above $12. One analyst downgraded his rating on the stock from "buy" to "hold" after the results were reported.
America West Chairman and Chief Executive Officer Doug Parker said the company is disappointed that it broke its string of five consecutive quarterly profits and put the blame squarely on factors outside of its control: fuel prices and too many flights.
Practically every airline but Southwest is losing money, with the industry total expected to top $1.2 billion for the quarter. Southwest has been protected on the fuel end by locking in low oil prices through hedging. Most other airlines can't make as aggressive a bet as Southwest did because their credit is not as good.
"If Southwest were paying what the rest of us were paying, they wouldn't be profitable either," Parker said.
Some analysts have pinned at least part of the blame on America West's business strategy. In a recent report, airline analyst Jamie Baker of JPMorgan praised the airline's low costs, but said it "seems incapable of figuring out where best to fly."
In downgrading the airline's stock Wednesday, Merrill Lynch airline analyst Michael Linenberg said, "The company's growth plan is faltering."
Much of the criticism has centered on America West's introduction of transcontinental service, begun a year ago.
It started with service between New York and Boston and Los Angeles and then added San Francisco. Until then, all of its flights went through either its Phoenix or Las Vegas hubs. The company, which chopped it business fares nearly three years ago, saw an opportunity to lure business travelers who were paying $1,000 to fly the route.
The competition, especially from United and American, proved to be brutal. America West made what it called seasonal cutbacks earlier this fall and on Wednesday announced the additional cuts. Beginning next month, it will offer five daily transcontinental flights, down from a peak of 12 this summer, for a reduction of nearly 60 percent. One route, San Francisco-Boston, is being cut entirely.
Even as it cuts back, America West says criticism of the flights has been misplaced because the new flights deliberately represented only a small part of its route system.
"The results we presented today would not be dramatically different" without the transcontinental flights, Parker said.
In addition to those cutbacks, America West plans to reduce its red-eye flights out of Las Vegas, which it had beefed up to get more use out of its airplanes. That spreads the costs over more passengers.
As for next year, the airline cut its growth plans from 8 to 10 percent additional capacity to 3 to 5 percent. It was due to take delivery of five planes in January but now will take four, Parker said.
As long as oil is at $55 a barrel and even struggling airlines are adding service, America West says it plans to be cautious.
"We'll pare back and retrench . . . and not worry as much about the growth at this point and time," he said.
posted by mad691 on another thread.
http://www.azcentral.com/business/articles/1028amwest280.html
AmWest cutting flights, growth plans as profits sink
Dawn Gilbertson
The Arizona Republic
Oct. 28, 2004 12:00 AM
Faced with continuing high fuel prices and low airfares, America West Airlines is cutting some cross-country flights and other unprofitable routes and sharply scaling back its growth plans for next year.
Phoenix travelers will notice few changes, though, as the affected flights are mainly between the East Coast and California and red-eye flights out of Las Vegas.
The Tempe-based carrier announced the cutbacks Wednesday as it released its worst quarterly results in more than a year and reiterated that this quarter's numbers also will be ugly. Combined with big losses at most carriers except perenially profitable Southwest, and Tuesday's bankruptcy filing by fellow low-cost carrier ATA, America West's loss shows the breadth of the industry's woes.
The company posted a loss of $47.1 million for the July-September period, which includes the peak summer vacation season. A year ago, it made $32.9 million in the period. Like most airlines, America West's planes were packed this summer, but profits were hit by the double whammy of sky-high fuel prices and low ticket prices tied to a flurry of new flights in many markets for the first time since Sept. 11, 2001.
The airline's fuel bill, its second-largest expense after labor, jumped 49 percent in the quarter, to $136.3 million. Unlike other businesses, the airline can't pass along the increase to consumers in the form of higher fares because the industry has too many seats chasing too few passengers. America West's sales for the quarter fell 2.3 percent, to $578.5 million. Its revenue per seat, a key industry measure, fell more than 9 percent, to 7.09 cents from 7.82 cents.
The only bright spot was the airline's ultra-low costs, excluding fuel. Like Southwest Airlines, America West has worked feverishly to maintain its low-cost advantage, watching every penny and getting even more productivity out its 13,000 employees.
America West had previously warned of significant losses for the third and fourth quarters, but the results still were far below Wall Street's expectations. Analysts on average were expecting a per-share loss of 63 cents excluding special charges; America West's loss on that basis was $1.22 per share.
The airline's stock, already hit hard this year given the industry's woes, was down by nearly 12 percent at one point Wednesday. It rebounded to close at $4.36, down 7 cents, or 1.58 percent. The shares started the year above $12. One analyst downgraded his rating on the stock from "buy" to "hold" after the results were reported.
America West Chairman and Chief Executive Officer Doug Parker said the company is disappointed that it broke its string of five consecutive quarterly profits and put the blame squarely on factors outside of its control: fuel prices and too many flights.
Practically every airline but Southwest is losing money, with the industry total expected to top $1.2 billion for the quarter. Southwest has been protected on the fuel end by locking in low oil prices through hedging. Most other airlines can't make as aggressive a bet as Southwest did because their credit is not as good.
"If Southwest were paying what the rest of us were paying, they wouldn't be profitable either," Parker said.
Some analysts have pinned at least part of the blame on America West's business strategy. In a recent report, airline analyst Jamie Baker of JPMorgan praised the airline's low costs, but said it "seems incapable of figuring out where best to fly."
In downgrading the airline's stock Wednesday, Merrill Lynch airline analyst Michael Linenberg said, "The company's growth plan is faltering."
Much of the criticism has centered on America West's introduction of transcontinental service, begun a year ago.
It started with service between New York and Boston and Los Angeles and then added San Francisco. Until then, all of its flights went through either its Phoenix or Las Vegas hubs. The company, which chopped it business fares nearly three years ago, saw an opportunity to lure business travelers who were paying $1,000 to fly the route.
The competition, especially from United and American, proved to be brutal. America West made what it called seasonal cutbacks earlier this fall and on Wednesday announced the additional cuts. Beginning next month, it will offer five daily transcontinental flights, down from a peak of 12 this summer, for a reduction of nearly 60 percent. One route, San Francisco-Boston, is being cut entirely.
Even as it cuts back, America West says criticism of the flights has been misplaced because the new flights deliberately represented only a small part of its route system.
"The results we presented today would not be dramatically different" without the transcontinental flights, Parker said.
In addition to those cutbacks, America West plans to reduce its red-eye flights out of Las Vegas, which it had beefed up to get more use out of its airplanes. That spreads the costs over more passengers.
As for next year, the airline cut its growth plans from 8 to 10 percent additional capacity to 3 to 5 percent. It was due to take delivery of five planes in January but now will take four, Parker said.
As long as oil is at $55 a barrel and even struggling airlines are adding service, America West says it plans to be cautious.
"We'll pare back and retrench . . . and not worry as much about the growth at this point and time," he said.
Clyde
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Just my $0.02
I know the industry isn't as healthy as it has been, and there is always doom and gloom talk. Will some make it and some not? Absolutely. Will there always be uncertainty? Yes.
But let's face it: people are not going back to the days of trains and steamships to go across the country and oceans. One thing is certain: there will always be a need to travel by air.
Again, just my opinion.
I know the industry isn't as healthy as it has been, and there is always doom and gloom talk. Will some make it and some not? Absolutely. Will there always be uncertainty? Yes.
But let's face it: people are not going back to the days of trains and steamships to go across the country and oceans. One thing is certain: there will always be a need to travel by air.
Again, just my opinion.
Guppiedriver
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Resume Writer
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I would not count AWA down and out just yet. When Doug Parker took over, just 10 days before 9/11, I have to admit that I was a little unsure of what he could do. At that time, he was only 38 years old. How many airline CEO's are that age, taking over a mutli-billion dollar company?
However, when 9/11 hit, we had only $30 million in the bank and we were burning $1 million a day. Now THAT was doom and gloom!! I remember going to a pilot retirement party in October 2001, wondering if that would be the last time everyone would be together.
Since that time, Parker has turned the operation around, has begun to gain the trust back of the employees, which Franke, and the previous management had all but destroyed, and, in my opinion has done a great job. I would say he is pretty sharp and will do what is necessary to keep the airline afloat.
I will be curious to see exactly what Night Flights they cut back. As stated in the article, most of that flying is for aircraft positioning. If they do cut back Night Flights, I bet it will be on west coast cities. They cannot afford to pay crews to sit in hotels for extended hours on the east coast, nor can they afford to miss the early morning flights out of JFK, EWR and BOS that so many of the business people fly on.
Just my two cents...
Kathy
However, when 9/11 hit, we had only $30 million in the bank and we were burning $1 million a day. Now THAT was doom and gloom!! I remember going to a pilot retirement party in October 2001, wondering if that would be the last time everyone would be together.
Since that time, Parker has turned the operation around, has begun to gain the trust back of the employees, which Franke, and the previous management had all but destroyed, and, in my opinion has done a great job. I would say he is pretty sharp and will do what is necessary to keep the airline afloat.
I will be curious to see exactly what Night Flights they cut back. As stated in the article, most of that flying is for aircraft positioning. If they do cut back Night Flights, I bet it will be on west coast cities. They cannot afford to pay crews to sit in hotels for extended hours on the east coast, nor can they afford to miss the early morning flights out of JFK, EWR and BOS that so many of the business people fly on.
Just my two cents...
Kathy
jon coqtoestone
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Except for the actual hotel room rate, it costs the company $2/hr./pilot to "utilize" them this way. Every 24+ hour layover I've had since Contract '04 went into effect has the "working" days blocked high enough to negate any and all trip rigs, resulting in my "earning" my $2/hr. to sit in a hotel. (At least I'm getting per diem and I don't have to pay for the room . . .)Resume Writer said:
Cheers!
Resume Writer
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What I meant by "afford to pay" was in crew utilization and availability. I can remember many times entire flights being cancelled because there were not enough crews to cover open time or irregular operations because people were sitting around in hotel rooms. They were having to junior assign people and pay them extra to fly trips.jon coqtoestone said:
In addition, there was a compounded problem at one time because of them not planning effectively the number of crews needed for each aircraft. They had some people sitting around waiting for SIM time in the Airbus because, at that time, (not sure about now) there was no Airbus SIM at the company. I worked in scheduling at one time and saw all of this first hand.
There have been many people that have gone through the "head of scheduling" position, and, at my last knowledge, (2.5 years ago) they still had did not have it right.
It also speaks to the hiring of pilots. They should have a hiring pool like many other airlines. Then they are not behind the eight-ball when they realize there are not enough crews. Typical hiring process from start to finish can take anywhere from 4-6 weeks, as many of you know. Forecasting of manpower has never been a strong suit at AWA.
It takes time though to correct problems, and I think they are moving in the right direction. At least Parker has the guts to say money would be lost. He was also honest with us about the position we were in after 9/11.
Compare that with prior management, that swore up until 6 pm on the day bankruptcy was filed that "we have no intention of filing for bankruptcy." In addition, they had a "thumbs up" rally with the employees one day prior to bankruptcy. Many of my friends believed the double-speak and bought thousands of dollars in stock, only to be wiped out the next day.
Just my observations....
Kathy
jon coqtoestone
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Wiskey Driver
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