joeyE

Dallas49er

I see, and accept your well thought out point! On this topic, I'm just sensitive to insensitive bashing for the sake of bashing.

Back on topic:Its a "copycat" business. Other than high employee morale and no unions to stir the pot, what does DL do that AA can't steal, replicate, and heaven forbid, improve upon?

joeyE

lobo411

Exactly. Shareholder democracy is an interesting myth, but it's really nothing more than a way of rationalizing (at best) or concealing (at worst) the fact that corporations are fundamentally anti-democratic. FT isn't the place for a discussion of political philosophy, of course, but I can't help but chuckle when people ask why AA shareholders put up with management. It's like asking why North Korean concentration camp prisoners put up with Kim Jong Un!

shaddie

wingnuthead

As a prisoner of EWR and UA for the past few years, UA is anything but organized, and their agents can be just as obnoxious and aggressive as all the others. Dozens of UA flights and AA flights in the past couple of years and candidly, its all the same. Stressed people putting customers into aluminum tubes and hoping no one freaks out and starts yelling. 99.93% of passengers never complain, they just suck it up and get to their destination, get off the plane, and go about their business.

spin88

You hear day in and day out the aviation stock-market analysts and their ilk arguing that "everyone buys on price." Parker, and UA under Smisik bought into this view. The Hunter Keays of the world told them to cut service quality, and in an oligopoly they would have out-sized results. After Smisik was fired - not for incompetence or a failed vision, but because he was a crook - UA before Kirby took total charge started to move back into a more consumer friendly airline, before reverting, and in my limited experience is now tied with AA as the worst airline, with AA having the additional distinction of having a worse operational performance.

The financial results speak for themselves, and are about what you would expect. Many folks buy on price, but when they have a bad experience - which is much more likely on AA or UA, will often avoid that carrier in the future. Some flyers are in fortress hubs, or are stuck in corporate deals. But the most valuable fliers of all - those who give you average yields that allow you to have a 9.7% operating margin (Delta) vs. 5.2% (UA) or 3.5% (AA) in the best economy for airlines since the late 90s - are flyers who are not strictly price sensitive and respond to better NPS scores/reputation/service quality.

On a connecting flight, I am very happy to give DL $100-200+ more than I am willing to give UA/AA (and I usually fly in domestic F on work). Like probably 90% of people, I personally have a "who much is too much extra" point, which lead me to just fly on four PE tickets to Europe and back, AA was $2000, the only real other option at the time I bought was AF at $2400. Delta could not give me the PE routing I needed (they are late to the PE game...) but no doubt, had they had a decent option at $2200 or $2300 I would have popped for it vs AA, and avoided the risk (which became reality) of how horrible of an airline AA has become. And had LH or another decent European carrier like SAS had decent PE options, I would have paid them more than I paid AA. But the bottom line is I am ONLY flying AA where it is substantially cheaper.

Multiply me by 20,000,000 (some willing to only fly AA if its $50 cheaper, some $500) and you have the difference in yield. Delta is able to sell tickets at each price point for a little more on some seats, and ends up with fuller planes near the end, where it can then charge higher prices to those who need last minute tickets that extra revenue is the difference.

Cledaybuck

Are you talking about DL? Has something changed recently? Because that is not my experience at all.

Alex_I

- Or better yet study how JAL boards planes quickly and runs the operation on time.

Her are my $0.02 why AA is poorly managed:
1) The crews (pilots and FAs) are not continuing the same journey but change (at least sometimes) planes and even split between different flights. So if one flight is delayed but FAs are scheduled to work on two different flights after that, then the delays would simply multiply and grow exponentially during the day.
2) If you cut the number of gate agents and ground crew to the bare minimum there is often no one to meet incoming planes. It is now typical to seat on tarmac for 15-30 min after the landing before getting to the gate. Sure, mechanical delays at the gates contribute to that but AA management of incoming planes is unacceptable. Do not assign the gates ca. 6 hrs before departure. Allow for some flexibility as typically done by European airlines. This is a simple optimization problem that could be solved in real time. I would often here from a pilot something like" "Folks, we arrive 30 min earlier from NRT and now have to wait for our gate to open". Sure, but AA knew 12 hrs ago the exact time (down to 1-2 min) when the plane would land once it took off from NRT.
3) On one of the last flights of 737-MAX I took the plane was scheduled to spend about 45 min in BWI after coming from MIA and turning back. The plane arrived on time but GAs were struggling to deplane everyone and board the full plane for on-time departure. That scheduled turn-around time was simply unrealistic.
4) On my last red-eye from SEA FA in F apologized for lack of pre- departure beverages. The catering finally arrived ... 10 min before departure.
5) I personally know several GAs and FAs who decided to retire after the merger. Today the front desk agents have little clues for anything non-standard. Training is definitely lacking.

exwannabe

I can not speak for UA, but the current DL process for larger flights is somewhere between a complete mess and a massive gate lice infestation.

I almost prefer the China airlines where you know others will not abide by the rules so can just treat iit as a scrum from the get go.

Antarius

There are plenty of other threads to gripe on and I have. That is not the purpose of this thread, and unless you somehow know me better than myself...

I do not have a financial position in AA anymore, yes. However doesnt mean I wouldn't want to again later with changes made. And regardless, none of this materially changes my original question- why are AA investors seemingly okay with taking a beating.

Dallas49er

I see a unicorn in my front yard! And rumor has it that a pig has just been cleared for landing at DFW! And Lobo411 and I actually agree on something!

The apocalypse is nigh!

MiamiAirport Formerly NY George

The purpose of this thread is how can AA habitually financially fall well behind its 3 major competitors and the CEO keep his job? Aside from the bad customer experiences discussed endlessly here on FT it's a very valid question.

Visconti

Probably because the majority stock ownership these days are held mostly through mutual funds (purchased via 401ks/403bs, etc...), etfs and various other pension funds. This will remain the status quo, unless or until Activist hedge funds get involved.

Antarius

If the only issues were boarding, food and seats, that would be one thing. DL has pretty lousy seat pitch in F, yet people aren't screaming about it as 1. The stockholders are really happy with the financial performance 2. Their on time metrics are good.. and several other reasons.