Wow. USAir is profitable to boot? Doug Parker is a genius and US is so much better than AA! That's amazing. 🙄
No, actually, it's not. If AA had the labor costs of US, AA would save $2.2 billion per year, according to Vaughn Cordle:
http://seekingalpha.com/article/300743-is-bankruptcy-the-best-solution-for-amr?source=yahoo
If AA had that kind of cost advantage, AA would have no problem reporting large profits.
As an example, nonunion jetBlue pilots have a higher pay rate for the A320 and E190 than the East US pilots. US flight attendants enjoy very low pay compared to their legacy peers. Fleet? Agents? Similarly underpaid.
The only reason US has been profitable has been the substantial subsidies provided by the low-paid employees.
let's remember, though, that AA has had access to some of the top markets in the world and they form the basis of its network. Domestically, AA's network was built around NYC, LAX, and ORD - top markets; MIA and DFW were added later but there is no denying that AA has all of the right DNA to generate industry leading revenues. Internationally, they went after LHR and Latin America and have used those acquisitions to built network strength.
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But, AA has been unable to defend its considerable investment in its network from competitors, both low cost and other network carriers.
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With the possible exception of UA - and I would argue that in many ways AA historically had more going for it from a network perspective than even UA's network pre-merger CO, AA had everything it needed to be and remain THE single business airline.
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But the world doesn't stand still and AA's competitors have run circles around AA and continue to do so... while AA has proverbially shut down an engine at 41,000 feet and expected that the flight would continue without event. We all know how that maneuver works.
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US never had the revenue advantage AA had and still has, even if it is rapidly diminishing. US has been and will continue to opportunistically look for ways to grow its revenue base.
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Other carriers which had far less historical access to top revenue markets have grown and continue to grow into the industry's top revenue markets inclduing those formerly dominated by AA. Those airlines' employees are reaping the advantage of their employers focus on obtaining top revenue for the company. For well over a year, AA's revenue performance (RASM growth) has been trailing the industry - largely to DL and UA, fulfilling exactly what was expected that consolidation would result in the ability for larger airlines to better compete for top revenue.
AA's ability to pay premium wages and ensure the success of its employees is directly tied to its ability to maintain and expand its network including defending it from competitive attacks. It is unrealistic for anyone to say or AA employees to believe that they can have industry average pay, let alone industry leading, if AA cannot generate industry average or better revenue and then ensure that AA's revenue base is not eroded by other competitors.
