AA's currency impairments

[WorldTraveler]

AA's Latin America RASM was down 11.7%, more than double what DL reported.

you can tell us what other factors went into that decline but Venezuela isn't the whole reason.

BTW, AA's Latin America revenue based on DOT filings (SEC might be somewhat different) was $6.2 billion.

knock 10-11% off of that and add in $700 million in currency impairments and you are talking well over a billion dollars.

the Latin America situation is a serious threat to AA's health, even if the currency issue really just reduces former earnings

 

[jcw]

That's right it is down but with it being down they actually made more money that DL showing their network is more resilient than DLs

To bad you don't understand that AA is outperforming DL

 

[WorldTraveler]

incorrect.

DL generated more revenue in the last quarter - and burned less fuel - than AA's.

DL's pre-tax/gross operating profit was higher than AA's.

AA's net profit was higher as a result of not accounting for taxes and not paying profit sharing.

 

[diamondcutter]

incorrect.DL generated more revenue in the last quarter - and burned less fuel - than AA's.DL's pre-tax/gross operating profit was higher than AA's.AA's net profit was higher as a result of not accounting for taxes and not paying profit sharing.

This is GREAT, once again WT is in a tailspin today !!!! He has not even read our TA to realize we WILL be compensated better! I find it interesting that no one agrees with you , and when you are proven wrong you change your narrative and change the subjects!! Know that everyone is on to you and credibility!! PLEASE TELL US WHY YOU WERE KICKED OFF AIRLINERS.NET!!

 

[WorldTraveler]

you are running scared regarding the possibility that AA FAs will find out that DL FAs will receive about $200 million more in compensation than what AA and the APFA modeled in their contract.

this thread is about currency impairments and even on a broader scale, AA's financial situation.

AA's currency at risk right now amounts to $700 million regarding Venezuela alone.

Argentina is not even accounted for in that figure now even though AA has already restricted sales of tickets in Argentina to 90 days.


AA's Latin RASM was down 11.7% in the most recent quarter on a Latin network that grosses $6.5 billion in annual revenue. Reducing that revenue by 11.7% and combining that with potential currency impairment could affect AA's Latin Americas to the tune of $1.5 billion.

no other carrier faces anywhere close to that kind of revenue risk in one global region.

 

[diamondcutter]

WT , TELL US WHY YOU WERE KICKED OFF AIRLINERS.NET!!!

 

[WorldTraveler]

because people didn't want to hear things that made them uncomfortable and what they didn't want to hear.


you do realize that one of my major themes on a.net was about AA's declining revenue performance in NYC and its overall deteriorating financial situation.

guess what? I haven't been on a.net for years and yet AA has continued to shrink in NYC relative ot its peers and AA's revenue performance overall still is behind its peers.

once again, AA is the only one of DL and UA that had negative RASM in all 3 global regions for at least the past 2 months, AA's domestic revenue growth was lower than DL, UA, or WN's, and a year after proclaiming that AA would be the world's largest airline, DL, not AA holds that title based on revenues.

harp on what happened on a.net if you want.

this board has a much more open approach to dissenting opinions.

 

[diamondcutter]

They did not want to hear things that made them uncomfortable because you hijack every thread and the grew tired of it and your DL rants at every turn. No one agrees with you , we can't all be wrong everytime !!! Which leads to your narrsisim , your condescending attitude and your need prove you opinions as fact!!

 

[jcw]

Not really - aa has many things to work on - what people don't want to hear is constant bashing, you have done it to JB, AA, etc you never let up and when DL under performs you rationalize it away

It's you you has the issue otherwise you won't spend so much time unhinged blasting AA

Remember AA made more money and DL margin is down 47%

I guess you got tired of copy paste - to much work for you

It's great the strategies DL are executing before long they will drive their profitability even lower


Go DL go DL go DL

 

[WorldTraveler]

I am not the only one who recognizes that DL is not afraid of cutting its short-term earnings performance in order to build long-term value... all of the items I noted which are reasons why DL underperformed AA fall under that category.

"Companies sometimes focus on growing their top-line (Sales or Revenues) more than their bottom-line i.e. Earnings or Net Income. Investors should look at revenue growth to understand a company's ability to grow its market share, and earnings growth to look at the company's ability to generate returns. Comparing revenue growth to earnings growth helps understand a couple of items: (1) A company's focus on gaining market share vs. generating profits and (2) How additive or dilutive the revenue performance has been to earnings. DAL-US' year-on-year change in top-line compared to the same period last year of 7.12% is better than its change in earnings which was -73.92%. The company's performance this period suggests a focus on the top-line at the expense of bottom-line earnings"

http://seekingalpha.com/article/2596985-delta-air-lines-inc-analysis-of-q3-earnings?uprof=45

AA is pushing short-term earnings growth before the impact of a number of major financial risks to AA become obvious, including the cost of merging the two companies, long-term investments in employees, and market changes such as in Latin America and N. Texas which afar eclipse what is taking place at other airlines.

 

[DNTULSA]

T,
 
I think what you are saying in a long winded way is that Delta meant to do that.  (underperform AA)
 
Why doesn't Delta snatch you back up? You could be the corporate cheerleader!

 

[WorldTraveler]

no, DL is building its business regardless of what the competitive impact is.

DL invested in its business by paying profit sharing and taking a charge now to ground the 744s, even though that will take several years to do.

DL accounted for taxes; while anyone that gets a tax on paying or accounting for taxes is lucky, it isn't luck that lasts for ever.

again, AA is focused on pushing its net earnings up as quickly as possible - and they are succeeding.

but AA still faces significant risks that other carriers do not; the Latin America revenue declines are new while the Venezuela situation was known and is just as significant.

 

[jcw]

Right AA outperformed DL despite the headwinds it faced - so what your saying is the AA team is out doing DL glad you finally agree

It's good you have come to some sensibility

 

[Glenn Quagmire]

T,
 
I think what you are saying in a long winded way is that Delta meant to do that.  (underperform AA)
 
Why doesn't Delta snatch you back up? You could be the corporate cheerleader!

When Delta does that it is because they are looking long term. Just like with AA and Asia?

Oh wait, that is foolish because it is not Delta.

And there is no way Delta would have him back. They already made that payment to make him go away. It was a lifelong buyout so he would leave. After all, he was on the revenue management team that led them to bankruptcy, and as soon as he leaves, they become a top performer.

Correlation or coincidence? You decide.

 

[FWAAA]

again, AA is focused on pushing its net earnings up as quickly as possible - and they are succeeding.

Huh? On an apples to apples basis, Delta's 3rd quarter profits were 33% greater than AA's profits. DL earned $1.6 billion pre-tax, excluding special items and AA earned a measly $1.2 billion, excluding special items.

AA's 3rd quarter profits were significantly smaller than AA's 2d quarter profits (20% smaller), even though the 3rd quarter is typically the most profitable. Obviously, the increase in labor costs and the sharp decline in some revenues impacted AA's earnings.