I agree with about 90% of what you said. I think I can understand their philosophy on not hedging fuel. There were a lot of people out there who thought it was going to drop even further and (so far) it hasn't. The $50 range seems to be the floating level that they can't break away from. OPEC tries to cut capacity and BAM those US wells start opening up and flooding the market again. Not to mention under the Trump administration the environment is going to be the casualty in that War. I think OPEC is finished?
I understand the philosophy of buying back shares but I just think enough was enough on that. Time to start paying down that debt even if it is low interest. I'd also like (of course) to see them contribute more to shoring up the underfunded Pensions again. I don't think they have to begin making those payments again till 2018 but it would be nice to see a few hundred Mil put in this year.
I think when Delta goes to revitalize they're going to have to pay a lot more for interest rates if they use credit? That AA order during the BK was brilliant long term. 30% less fuel burn on all those new birds will really help the bottom line just in case somehow there is an unexpected fuel spike.
While I don't agree with everything Parker and team have done looking back on their History up to today, I wouldn't have invested in US if I didn't have confidence in their abilities and been able to look at them outside the eyes of an employee (Which even though I may be slammed for this I like what they've been doing in that area pretty much too so far)
as far as hedging...for oil to have gotten down to $20/barrel or less, this would have signified a world-wide economic contraction, less revenue/income for aa that erases fuel savings from $30/barrel to $20/barrel or less.
it would have been bold to do at $30/barrel, wall street loves certainty and fuel would have been a set cost. since aa was recently out of BK, i'm not sure if hedging would have added x-amount of basis points to the rate.
one way or another, the fuel situation got little play in the media at BK time, as corporate america and it's news outlets, prefer to blame labor for corporate america's shortcomings. the same occurred with the automakers, congress (especially repubs) pointed fingers at the uaw, the CEOs (under oath) pointed the finger at skyrocketing medical costs and the whole matter was dropped as big pharma, for-profit hospitals and health insurance companies rule the roost in political circles.
we live in the greatest nation where american ingenuity has dismantled a seemingly omnipotent energy bloc that used oil as a political tool to some extent. our industry was slammed on 9-11, our economic futures put into jeopardy...this shale oil revolution is our savior.
as far as the rest, yes...one has to look at it from an investor's angle and from an employee's angle. the money spent on stock buybacks was incredible, tantamount to delta's spending on it's profit sharing program. parker was incredulous to the fact that aal got no love from wall street, while the employees where wondering where the company's love for us was at.
it's our turn now and we'll see if parker comes through.
In fairness to your crew I believe some managers were predicting something in the 5% range
i asked him again about this and it was clear he got confused about the 5% figure.
when aa said it would be 5% of the company's pre-tax profit, many of us knew immediately it would be meager, compared to everyone else. no real high expectations.
