AA forecasts $800 Million revenue from cargo in 2014

[robbedagain]

Frugal   I sent you a pm regarding your 2 questions.  
 
Im not really surprised about AF and LH having lower profit outlooks vs US carriers..    

 

[Kev3188]

$800M really isn't much to get excited about. Sure, it's a lot of zeroes, but do the math...

There are ~180 widebody flights between the two certificates, plus another ~70 operating with narrowbodies into markets where there's a demand for overnight freight.

$800M is entirely attainable if every widebody carries $11,000 in revenue freight, and each narrowbody carries $5,000.

Can't say that is a very lofty goal, guys. Sure, it's soaking up belly space that would otherwise go empty, but it certainly undercuts the old adage that "cargo pays the way" we hear so often...

 
I hear ya, but at the same time, it's also a nice counter to the "AA will collapse under it's own weight" theme we hear so often...

 

[commavia]

I hear ya, but at the same time, it's also a nice counter to the "AA will collapse under it's own weight" theme we hear so often...

 
No, no, no - you have it all wrong.  AA won't collapse under its own weight - it will collapse under the weight of the competitive onslaught from Delta.  Did you not hear that Delta is expecting $801M in cargo revenue this year?

 

[FWAAA]

AA/US carried $685 million in cargo revenue last year, slightly ahead of the year before.

No, as is far too typical of you, your reading of the AA financial statements is faulty and unreliable.  I don't know if it's intentional or you're just incapable of reading the financial statements and adding the numbers.   
 
In 2013,  AA reported $676 million in cargo revenue, and US reported $154 million in cargo revenue, for a total of $830 million.   The $800 million estimate for 2014 that sparked this thread is consistent with the recent past where cargo yields and volume are down for all USA-based legacy passenger airlines.   
 
Anyone as experienced as you should be able to read that the $685 million figure was the total of pmAA for the full 12 months plus post-merger US from December 9 thru December 31.    It's clearly explained in the heading of that page.   
 
Attaining $800 million should be child's play given that the combined entity brought in $830 million in 2013.    And we all know that AA walked away for tens of millions (or was it hundreds of millions) of cargo revenue between JFK and LAX, handing it all to your former employer.    

 

[WorldTraveler]

no, it's not typical.

and you are right.

it's that AA chose to present its revenues in the AAG SEC filing separate from US.

see page 60 of the annual SEC filing dated 2/28/2014.

So tell me, what is the great news if AA/US gained $830 M in cargo revenue last year and it will be $800 M this year?

and since AA can't predict competitive or the general economic climate, it is very possible that there will actually be a whole less cargo than the $30M that the entity will be down if the industry goes down the tubes - which is what could very well happen by the end of the year?

And then those new flights to PVG and HKG on top of DUS, DUB, and who knows what else that are still losing money will lose even more money while AA tries to fill the bellies of those aircraft?

is that about right?

no, Kev, if AA collapses it will be because it HAD to expand its network and decided to launch bunches of new flights in regions where it wasn't making money to begin with.

or perhaps more likely Parker will decide the game can't be played like he thought and he'll end up having to send out several thousand layoff notices as he parks a bunch of aircraft that we was trying hard to avoid doing.

 

[Hope777]

returning somewhat remotely to the topic at hand, several int'l airlines have warned that there is overcapacity not just in the passenger market but also in the air cargo sector of the business.

This from the WSJ today after Air France warned about lower earnings just a few weeks after LH did the same thing.

"The airline already was struggling with weakness in its cargo operations and Venezuela where the government has withheld funds from carriers and the currency has been devalued.

"Lufthansa, Air France-KLM's German rival, last month reduced its full-year earnings outlook by 33% to about €1 billion and said it would fail to meet a profit target for next year blaming pricing weakness, labor unrest, and a drag from its cargo operations. Lufthansa's Chief Executive Carsten Spohr is set to unveil new measures to improve profitability on Wednesday."

It is hard to believe that the industry issues including Venezuela debt and overcapacity in the passenger and cargo sectors won't affect AA.

http://www.bloomberg.com/news/2014-07-08/american-air-sees-strong-demand-as-rivals-cite-weakness.html?cmpid=yhoo

 

[WorldTraveler]

bull excrement.


from the article you linked.

"While some airlines have added seating on trans-Atlantic routes, “capacity has been increasing in response to demand,” he (parker) said, not being piled on recklessly to chase market share. " (since AA is still 3 out of 3 among TATL carriers and has to pull a bunch of capacity that flies to Star hubs that we know won't work anymore).

if 6.6% more TATL capacity is supposed to be rational, demand based additions while saying that others are making poor choices, then it will become very obvious that he is full of it.

and of course he doesn't address the fact that AA has a MINUS 25% negative profit margin in the Pacific during the winter right before AA launched 2 of the longest transpacific flights from the US to Asia.

 

[700UW]

And lets see he is the CEO of the largest airline in the world and always has been a numbers guy back to his days at AA and NW.
 
And lets see you are a long time retiree from UBER DL who draws a frozen retirement check.
 
Hmm, who has more experience, knowledge and education?

 

[WorldTraveler]

doesn't matter who I am or who he is.

For AA to say that it is seeing no weakness when every other airline that has commented about the industry says there is at least some softness raises red flags from an airline that says they are truly global.

but if AA really is sitting on markets that don't have any demand softness, then it just means that other carriers will shift their capacity into AA markets.

it isn't that hard to figure out that airplanes are movable factories and if someone is seeing strong results while others are struggling, those moveable factors will move.

it is the way the industry works.

so if AA wants to blow smoke today, they better save it up for the rainy day that will come.

UA is not cancelling flights to Europe, DL isn't warning alongside AF and LH because they want to erode the stock market.

they are saying and doing what they are doing because there is industry weakness.

if AA doesn't see it now, they will sooner or later... cuz that is the way the airline industry works.

as for education, I've got Parker beat hands down.

I also have more wisdom. I've never spent a night in a jail or even been arrested.

 

[FrugalFlyerv2.0]

bull excrement.


from the article you linked.

"While some airlines have added seating on trans-Atlantic routes, “capacity has been increasing in response to demand,” he (parker) said, not being piled on recklessly to chase market share. " (since AA is still 3 out of 3 among TATL carriers and has to pull a bunch of capacity that flies to Star hubs that we know won't work anymore).

if 6.6% more TATL capacity is supposed to be rational, demand based additions while saying that others are making poor choices, then it will become very obvious that he is full of it.

and of course he doesn't address the fact that AA has a MINUS 25% negative profit margin in the Pacific during the winter right before AA launched 2 of the longest transpacific flights from the US to Asia.

You're so predictable, ofcourse you would say BS since it doesn't fit your narrative (DL uber alles).
 
Did you also note from the article, ofcourse you have, but conveniently now forget, part of the reason AK/KL and LH warned about profits is competition from the Persian Gulf carriers to which USA-based airlines (including the one in ATL) are not as exposed?
 
The rest of your posts you're starting to sound like a parrot:
squawk ......  "#3 out of 3" ...... squawk "negative profit margin on the Pacific"  ....... squawk "DL uber alles" ........ squawk ...

 

[WorldTraveler]

did you also read that AF and LH as well as DL said there are capacity issues over the Atlantic - US to Europe - which the Gulf carriers don't serve?

it's not my narrative... it is what they said.

let me know where you got the DL uber alles cuz it ain't from my posts.

 

[FrugalFlyerv2.0]

For AA to say that it is seeing no weakness when every other airline that has commented about the industry says there is at least some softness raises red flags from an airline that says they are truly global.
 
... .... ...
 
UA is not cancelling flights to Europe, DL isn't warning alongside AF and LH because they want to erode the stock market.

 
Aren't you contradicting yourself?
 
AA says future is looking ok
DL and UA also saying the same (by their action/inaction)
but if LH and AF/KL are worried - well then it ofcourse must mean that AA is lying ....... 
 
Or are you now spinning out of control to make you narrative sound good.

 

[FrugalFlyerv2.0]

No, as is far too typical of you, your reading of the AA financial statements is faulty and unreliable.  I don't know if it's intentional or you're just incapable of reading the financial statements and adding the numbers.   

He's just rounding off the numbers, ya know, it makes the "Whole Truth" that much easier to 'grasp'

 

[WorldTraveler]

read the last sentence you quoted from me SLOWLY.

UA is cancelling flights/markets to Europe and DL, AF, and LH are WARNING - not because they are trying to take down the stock market but because it is real.

I'm spinning nothing out of control.

If AA really is not seeing weakness, then it raises questions of how much they see because you can't call $200 million/year losses flying the Pacific as healthy demand.

And it isn't just an investment.

And if even in Europe, AF LH and DL with stronger continental European systems are seeing overcapacity but AA is not with its more UK centered network, then it just means capacity will move to the UK because that is what the industry does.

further, if it is a continental Europe problem - and economists are concerned about slowing growth in Germany - then it argues all the more that the US capacity in former Star hubs is even less likely to work after the summer.

Parker can see he doesn't see weakness but when his competitors say that they are seeing it in markets where they have long been far stronger, it is highly doubtful that AA is not seeing it - if he bothers to look.

And, again, even if AA is immune now, AA's turn will be coming in October when WN launches several dozen new flights from DAL in AA's top markets, Virgin America throws in a couple dozen more, and WN and B6 do the same thing at DCA over the next couple months.

but I'm sure Parker doesn't see any of that.

so, again, tell me the story here if AA/US carried $830M in cargo last year and will pull off $800M this year?

 

[FrugalFlyerv2.0]

If AA really is not seeing weakness, then it raises questions of how much they see because you can't call $200 million/year losses flying the Pacific as healthy demand.

And it isn't just an investment.

And if even in Europe, AF LH and DL with stronger continental European systems are seeing overcapacity but AA is not with its more UK centered network, then it just means capacity will move to the UK because that is what the industry does.

further, if it is a continental Europe problem - and economists are concerned about slowing growth in Germany - then it argues all the more that the US capacity in former Star hubs is even less likely to work after the summer.

And, again, even if AA is immune now, AA's turn will be coming in October when WN launches several dozen new flights from DAL in AA's top markets, Virgin America throws in a couple dozen more, and WN and B6 do the same thing at DCA over the next couple months.

but I'm sure Parker doesn't see any of that.

so, again, tell me the story here if AA/US carried $830M in cargo last year and will pull off $800M this year?

 
Using your math, $200 million is, as you said, just a rounding error - Post#15 http://www.airlineforums.com/topic/57357-aa-forecasts-800-million-revenue-from-cargo-in-2014/?p=1101374
So why are you all worked up about AA in the Pacific?  Care to spin that?
 
Also, if US/AA has overcapacity to * hubs on continental Europe, what is stopping them from shifting that to the UK?  Afterall, as you say:  capacity will move to the UK because that is what the industry does.  Advantage AA   loser DL  
 
Rest of you post, you're squawking / repeating the same old stuff like a parrot.  I won't write a 1000+ word post to respond to WN + Wright Amednment and winning in N. TX and DCA beacuse it's been covered in other threads - but you conveniently chose to ignore that and keep on repeating you DL uber alles narrative.  Yaaaawwwn!
 
But hey, keep on telling spectator what he wants to hear.  Afterall your career at DL spanned 3 decades *** and you know better than a CEO.
*** 22 years