goldengate

http://www.thestreet.com/story/11191...ot-merger.html

I come across a lot of articles on American and obviously don't think many are worth discussing as they recap a lot of what we have discussed here about their business model, Arpey's vision, etc, but I think the above article does a really nice job of succintly summing up American's strategy going forward, which is starting to make a bit of sense even to this SFO-based flyer (hi demkr, behave on this thread, ha ha). Obviously American is going to need a lot more than some new planes to compete in the future, but as this piece falls into place, I for one am beginning to understand their strategy and see how the pieces are falling together, from an expanded One World (welcome Malaysia) to ATI with BA and JAL.

I think the article also does a nice job of summing up the challenges that continue to face "our" airline of choice.

Thought my fellow FT'ers might enjoy the read as well.

FWAAA

I agree; Ted Reed finally wrote a decent article about AA. Previously, I have maligned him as a clueless doofus - in past articles, the giant chip on his shoulder (AA must have wronged him in the past) has been front and center. In this article, the chip doesn't show its face.

Blumie

Thanks for posting this. It is a good summary. Of course, it won't stop people on this board from thinking that they could run a better airline.

dayone

Even worse are the captains of industry FT who think that they could run a better AA, as evidenced in several of the following posts.

MiamiAirport Formerly NY George

While I agree that AA certainly showed a future looking attitude with this massive a/c order, I'm still not sold that it will be the key to the Company's future. Most heavy business travelers, particularly global, see air travel as part of the job. (They certainly would have no desire to spend time posting on FT.) Their preference is getting there and back asap, particularly on International long haul, and on one flight.

True, when you fly OW your status allows you many of the same goodies you get with AA. But it still might mean a connection and the inability to use SWUs to upgrade, really important if your company forces you to ride in the back.

Time will tell if the JVs can compete against the massive routes of UA and DL.

alien

Interesting supplemental from Mr. Reed concerning the pilots:

http://www.thestreet.com/story/11192...act-talks.html

ByrdluvsAWACO

Given all the strategic blunders and consistent loses every quarter, I see no evidence that the "captains" of AA can run an airline either.

This article points out AA's lack of strategic vision and poor execution.

3Cforme

Nor do I. Anybody can buy or lease aircraft. Boeing or Airbus, faced with a 300-unit order from Delta or United, isn't going to say, 'Sorry. We're sold out.'

Bmoney

I think its funny that buying 460 new airplanes will somehow solve their baseline issues of labor and route management. Unless AA can cut pilots pay through this supposedly new pilot contract, new planes whether they are paper or not, doesn't mean squat to a PNL statement. They are still bleeding money each month and in the end, these new planes will not lower their cost structure to justify such a large commitment.

Once again AAs management have shown that clearly they are lacking some sort of knowledge that the other legacy airlines have demonstrated.

formerstarQB16

Actually purchasing new planes will have a very positive affect on the P&L Statement. However, the Balance Sheet and Cash Flows are a whole 'nother issue. But judging by the comments of Horton (""minimal or no capital expenditure," noting that "it doesn't put our balance sheet at risk.") it appears that the financing/leasing terms are good for AA... at least in the short-term. I'm guessing Management is betting this will buy them enough time to sort through labor issues, all while improving an aging fleet.

NYBanker

Thanks for sharing.

The biggest thing that jumped out at me was OW's lack of a mainland Chinese carrier. Increases in Chinese pax travelling abroad is one of the most meaningful trends for the industry over the next 20 years; being as well positioned as possible to capture as much of traffic will prove critical.

The infrastructure fund that I am part of owns several airports (all Asia/Pacific) and the early signs of this trend are crystal clear. We now have a team of people at our main airport whose sole function is to call on Chinese carriers to make sure we get the biggest share of their growth (which so far is going very well for us).

Supersonic Swinger

Slightly OT but there is speculation that Qantas are considering some sort of venture in Shanghai in conjunction with the 'Kangaroo route' (Australia - Europe). Qantas have some big announcement about their international operations due on the 24th of August.