Q2 Release 7/21 -- AMR Still in Trouble?

 
Old Jul 19, 10, 3:45 pm
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Q2 Release 7/21 -- AMR Still in Trouble?

Looks like AMR will be in the red....again. Other carriers are all expected to be showing profit, while AMR still struggles with strikes, inefficiencies, and nightmares of pending bankruptcy.

http://www.star-telegram.com/2010/07...exception.html

With most carriers scheduled to report second-quarter earnings this week, Wall Street analysts expect profits to finally take off.

American's parent company, AMR Corp., however, is forecast to post a $10 million loss.

Read more: http://www.star-telegram.com/2010/07...#ixzz0uABKmYEu
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Old Jul 19, 10, 4:06 pm
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Gee...from reading Flyer Talk one would think they are doing such a fine job?
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Old Jul 19, 10, 4:14 pm
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They have GOT to do something NOW about those labor contracts they are strangling AMR to death. I don't know AMR can reduce those significantly/pensions without filing for a Pre-Packaged Bankruptcy. Any ideas????
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Old Jul 19, 10, 4:48 pm
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Originally Posted by CubsFanJohn View Post
They have GOT to do something NOW about those labor contracts they are strangling AMR to death. I don't know AMR can reduce those significantly/pensions without filing for a Pre-Packaged Bankruptcy. Any ideas????
Yea put in a product like CX, SQ or even DL which I believe made money. Oh wait this is AMR disregard.
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Old Jul 19, 10, 5:16 pm
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maybe they can continue to cut flights as other flights add em, thatll help! or continue to have a very weak international network, nearly nada transpacific and downgrade ice cream in int'l J for a 2nd time this year
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Old Jul 19, 10, 5:25 pm
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Originally Posted by mach92 View Post
Yea put in a product like CX, SQ or even DL which I believe made money. Oh wait this is AMR disregard.
The U.S. market wouldn't support a product like CX or SQ.

And what about DL's product is so clearly better than AA's? Are some aspects of it better? Sure. But some are substantially worse.
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Old Jul 19, 10, 5:41 pm
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What is everyone's theory on United's success? E+? PS service? As far as I know, it's not the food...

Delta I attribute to the ease of actually being able to go somewhere. Let's face it, OW is staggering farther and farther behind everyone else
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Old Jul 19, 10, 6:06 pm
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Originally Posted by demkr View Post
What is everyone's theory on United's success? E+? PS service? As far as I know, it's not the food...

Delta I attribute to the ease of actually being able to go somewhere. Let's face it, OW is staggering farther and farther behind everyone else
FWIW,every time I get jealous of DL it's because (as someone that mostly travels ex-SEA) they go where I want to go (non-stop to Europe, more frequent service SEA-JFK, better partnership with AS for west coast travel). Then, when I actually get on the plane, I remember why I don't leave AA (international upgrades, domestic F catering/service/seats/upgrades, good people--believe it or not, international upgrades, ability to upgrade discount economy seats internationally, etc). Agree 100% though that OW is behind both *A and ST in domestic US network reach.
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Old Jul 19, 10, 7:05 pm
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I've said it before an I'll say it again: AA needs a more aggressive leaders in their management.

Don't get me wrong, Arpey and his team were great in making solid financial moves to save AA from bankruptcy. But one can only go so far in being too conservative and in making judgments which further and further slides AA down to mediocrity.

In the past three years, AA has slid from #1 to #3 as DL and NW, then later UA and CO announced mergers. AA had a skim with the breakup of OW earlier this year when JL began to lean toward joining Skyteam which was saved barely at the eleventh hour when a new CEO took office at JAL. And despite this scare and the loss of MU to Skyteam, they're not even talking to Hainan for a potential membership! All in the while DL and UA are taking bold steps in opening up potential routes to Africa, and more direct flights to Europe and Asia.

In this fast paced world we need leaders who aren't afraid to go up a challenge and who are willing to task bolder risks. Simply said: what AA needs to do is to bring in a strong leader like Bob Crandall.
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Old Jul 19, 10, 7:22 pm
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Originally Posted by demkr View Post
What is everyone's theory on United's success? E+? PS service? As far as I know, it's not the food...
I don't know if I'd yet associate the word "success" with United, but over at the UA board lots of folks swear by E+. And some of them seem to be folks who are more than just budget travelers.

UA also does seem to milk E+ for more than just customer loyalty. For those people who don't otherwise qualify for the perk, it finds various ways of selling access to the seats to them on a per trip or I believe a per year basis.

Another factor might be the improved UA international J seats. I wouldn't quite call them top-tier. But they have moved UA past some of the competition. Even though I like LH and NH service better, for instance, I'd now pick UA to NRT or FRA for the better seats. I'm afraid that AA isn't even in that ballgame. Now that IB has gone full-flat in J, I'd go for it over AA even though in most respects it's still inferior to AA.

Of course, I realize that profit or less is usually about more than one or two factors.
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Old Jul 19, 10, 7:27 pm
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It's labor...full stop

As a reward for avoiding bankruptcy, AA has not had the success in renegotiating its labor costs that other carriers have. Management is counting on catch up wage/benefit increases at other carriers to bring their cost levels up to American's. They also think that approval of joint scheduling/pricing with BA/IB will have a very positive effect (for customers, that undoubtedly means higher TATL fares). They certainly are now way behind DL and UA in the quality of their international business class. I've never understood why they introduced the new generation business class seat in a configuration that was inferior to most international carriers at the time of introduction and is now inferior to DL and UA and soon CO.
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Old Jul 19, 10, 7:34 pm
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I am thinking once we see Labor Costs fall signifcantly I think we will see aggressive action by AA hopefully. You can only do so much when you have costs above average.
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Old Jul 19, 10, 8:19 pm
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Profitability

Originally Posted by CubsFanJohn View Post
I am thinking once we see Labor Costs fall signifcantly I think we will see aggressive action by AA hopefully. You can only do so much when you have costs above average.
I posted a few days ago about this but no one responded. Wall Street Journal posted the profitability projections for all airlines which were very positive but AA -0.3%.

All the points by other posters on target.

Asia (not enough connections)

J seats (not competitive)

Alliance upgrades (does not exist)

E+ (forget it) even thought BA has it
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Old Jul 19, 10, 9:09 pm
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Originally Posted by CubsFanJohn View Post
They have GOT to do something NOW about those labor contracts they are strangling AMR to death. I don't know AMR can reduce those significantly/pensions without filing for a Pre-Packaged Bankruptcy. Any ideas????

Well, I agree that AA needs to do something about the labor contracts. But I disagree about what you claim the company needs to do. Have any of you talked with FAs recently about their contract negotiations? They are furious that management took away so much in 2003, and continues to ask employees to give up more and more, basically to work more for less pay and fewer benefits. That's no way to treat a workforce that has stuck by the company for decades!

Those FAs earned those pensions. Current working FAs deserve their benefits for their many years of dedicated service to the company. Period.

(And to rub salt into the wounds, the executives give themselves millions in bonuses and "retention payments" while FAs continue to struggle with their meager salaries.)

Ask any FA and you will get an earful. Or just listen to some galley talk.
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Old Jul 19, 10, 9:24 pm
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Originally Posted by Thunderroad View Post
Another factor might be the improved UA international J seats. I wouldn't quite call them top-tier. But they have moved UA past some of the competition. Even though I like LH and NH service better, for instance, I'd now pick UA to NRT or FRA for the better seats. I'm afraid that AA isn't even in that ballgame. Now that IB has gone full-flat in J, I'd go for it over AA even though in most respects it's still inferior to AA.
Lie fully flat J seats are huge in my book, but keep in mind that as good as DL and US's products are, they are not deployed fleet-wide. Much of what they have in the remainder of the fleet is inferior, seat-wise, to AA.
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