Antarius

Don't want to make this a thread about why AA is bad but how it continues to be so without changes.

AA is underperforming in the following ways
1. Operationally
2. Financially
3. Stockholder value wise
4. Employee and customer satisfaction

Why are the shareholders still ok with what is going on? Would like to discuss why the shareholders haven't pushed for changes yet and if there is something holding them back.

jerryss

AANYC1981

Dr. HFH

Just out of curiosity, what was your methodology in determining that AA is underperforming operationally, financially, with regard to stockholder value and employee and customer satisfaction?

Every year, the Wall Street Journal and Drucker Institute assemble a list of the top 250 most effectively managed companies. Primarily, they measure 1) Customer Satisfaction, 2) Employee Engagement and Development, 3) Innovation, 4) Social Responsibility, 5) Financial Strength and 6) overall effectiveness. Guess which airline came out at the top of the rankings for 2018. There are plenty of things that, IMO, AA does wrong; but, apparently, when an objective standard is applied, it seems to get a lot right.

DenverBrian

Or perhaps just marginally better than others. This is a ranking. One can be top-ranked and still horribly rated. @:-)

MSPeconomist

Antarius

1. Operationally - See DOT records. Downright terrible
2. Financially - DL is minting money while AA is only a fraction of that in the black due to Barclays and Citi. WN has half the revenue and the same profits.
3. Stockholder value - AA stock is the absolute sector laggard.
4. Employee engagement - See lawsuit with IAM-TWU and colossal cluster in terms of MX delays.

I'm not sure what the WSJ is doing, but by every other metric, AA is the sad sore thumb of late. AA also was the Air Transport World airline of the year, but I'm putting limited stock in that too.

AA's stock price accurately reflects investor sentiment in how it is being run. However, it seems beyond people liquidating the holdings, the investors (presumably institutional) are asleep at the wheel beyond that.

Antarius

To the first questions - no. But I will. To the second - AA's stock price isn't doing so hot either. I can understand if AAL was printing money while people complained, that shareholders wouldn't care. But financially AA is a mess, operationally in the red and barely in the black thanks to credit cards, despite DL posting billion dollar quarterly profits.

As an investor, I would be furious. I don't own any AA stock personally, but other comparable situations, I'm casting my vote at the shareholder meeting to kick people out.

IADCAflyer

Just off the top:
lowest net income of the Big 3
lowest earnings per share
Stock down nearly 18% in past 12 months; DAL is up about 17%; UAL is up nearly 30%

No one can doubt that its an operational mess this summer - between MAX issues and MTC threats.

sethMCOflyer

I think you could be really jumping the gun here, he wasn't nearly that far off on his $60 stock price by Nov 2018 bet. At least $5B of profit per year is right around the corner just like he promised.

Expectations aside, I don't think he's done poorly aside from the way too ambitious public declarations.

flyingeph12

I am not an AA shareholder, so I can't really say why Parker is still around. But who would replace him?

Also, thinking back to the situation at UAL a few years ago, didn't it effectively take an investigation into corruption before Jeff Smisek was forced to resign?

GeraldHouse

Because his golden parachute would likely put them in the red. Better to BBQ him at the board meeting.

mikesyr18

All one has to do is look at the stock price. January 2018... The stock was trading at $58.47. July 2019... The stock is trading at $32.46 even through the stock market is at or near a record high.

If I were a shareholder, I'd vote to oust Parker as well.

lobo411

Because shareholders don't matter. Corporations are run by and for management.

mikesyr18

I hope that's sarcasm.