AMR''s loss = JetBlue gain

While it''s true that JB''s cost advantages are killing us, there is something very unique about JB. In years past customers would maybe fly start ups once and would return to the majors when fares would be matched. Majors in the past were indeed "full service" and the benefits of frequent flier miles and flying a financially strong company would normally kill the start ups. The tide has been turned, customer perception is that JB offers a far superior product to the majors, and of course they are a much more stabile company. Also as JB expands this will help to keep their costs a bit in check, it''s a growth plan
somewhat like Crandall''s "growth plan". If we continue to be such an anti-customer airline (lack of Aadvantage award seating devaluing the reason for flying AA, 100.00 fees versus 25.00 on JB and 00.00 on WN, fleecing the business passenger with outrageous walk up fares,I could go on.) even Chapter 11 may not work.
 
----------------
On 5/5/2003 9:25:48 AM Resman1 wrote:

While it's true that JB's cost advantages are killing us, there is something very unique about JB. ----------------​

If we're a truely going to reinvent AMR, AArprey may want to signal a truce with JBLU and bring them into the fold, (OneWorld? at least on the Northeast anyway). Wishing them any 'ain't going to work. The foreign Majors will begin making money sooner, because their exposure to Domestic Discount carriers, ie. Easyjet and Ryanair is around 20% versus AA's 40%.

A change is our Ad agency, wouldn't hurt either. Making AA cheaper to fly, shouldn't cheapen AA's image to our better paying customer.

We are a full-service airline first and foremost.
 
----------------
On 5/5/2003 9:25:48 AM Resman1 wrote:
While it''s true that JB''s cost advantages are killing us, there is something very unique about JB. In years past customers would maybe fly start ups once and would return to the majors when fares would be matched.
----------------​

Leisure customers will always choose on price. To them it usually doesn''t matter if its jetBlue or American Airlines that takes them to their destination. So, if JB and AA offer the same price the leisure customer will chose the carrier that has the available seat at the low price on a date/time they want to travel (or close to it). Whether there is MRTC or liveTV etc. doesn''t really matter.

Ofcourse, JB, SW, Airtran, Spirit, Song, Tango, Zipp etc. are not for everybody. For some customers first&business class, assigned seating, airport lounges/clubs do matter and they are willing to pay a premium price for it. However, in an economic slump there are less people flying and those that are flying have to consider price/cost of a ticket.


----------------
The tide has been turned, customer perception is that JB offers a far superior product to the majors, and of course they are a much more stabile company.
----------------​

JB is still a novelty. It will eventually wear off. This does not mean that JB will go away (like PeiplExpress for example), but in a few years JB will be just another airline. Today JB is still expanding (as witnessed by their new airplane order). However, at some point in the near future JB will run out of markets to expand into, and will fade into the background and become another airline serving another city.

Also, when the economy improves, airlines such as AA will start earning huge profits again and not be on the brink of chapter 11. Then AA will again have the perception as a financially strong and stable company.
 
----------------
On 5/5/2003 1:17:41 PM Winglet wrote:

AA''s not going to last until then. Even with the biggest slashing of employees and wages, it''s CASM is still WAY high.

JB kicked Carty''s butt and is in the process of kicking Arpey''s as well. We haven''t seen ANYTHING out of Arpey that give ANY hope that AA will survive. There is still no business plan except for UAL to die, the economy to recover dramatically, and to command a 30% premium on ticket prices . . . none of which is going to happen.

Not much of a business plan if you ask me.

----------------​

Somehow the situation at UAL isn''t that great even under the protection of chapter 11. Sure, waiting for UAL''s demise isn''t the greatest plan, but it is a plan and you can''t say mamagement wasn''t trying.

I still maintain that the novelty of JB will eventually wear off, their expansion will stop and they will become just another airline. JB isn''t for everybody, LCC''s aren''t for everybody. There are people who will not fly a LCC even with leather seats and TV. And more importantly, JB will only serve a few markets (big cities) where their business plan works, so JB will not be an option for everybody.

IMHO the economy will improve, AA will do fine and the novelty of JB will wear off.
 
AA's not going to last until then. Even with the biggest slashing of employees and wages, it's CASM is still WAY high.

JB kicked Carty's butt and is in the process of kicking Arpey's as well. We haven't seen ANYTHING out of Arpey that give ANY hope that AA will survive. There is still no business plan except for UAL to die, the economy to recover dramatically, and to command a 30% premium on ticket prices . . . none of which is going to happen.

Not much of a business plan if you ask me.
 
----------------
On 5/5/2003 1:27:15 PM FrugalFlyer wrote:

----------------
On 5/5/2003 1:17:41 PM Winglet wrote:

AA''s not going to last until then. Even with the biggest slashing of employees and wages, it''s CASM is still WAY high.

JB kicked Carty''s butt and is in the process of kicking Arpey''s as well. We haven''t seen ANYTHING out of Arpey that give ANY hope that AA will survive. There is still no business plan except for UAL to die, the economy to recover dramatically, and to command a 30% premium on ticket prices . . . none of which is going to happen.

Not much of a business plan if you ask me.

----------------​

Somehow the situation at UAL isn''t that great even under the protection of chapter 11. Sure, waiting for UAL''s demise isn''t the greatest plan, but it is a plan and you can''t say mamagement wasn''t trying.

I still maintain that the novelty of JB will eventually wear off, their expansion will stop and they will become just another airline. JB isn''t for everybody, LCC''s aren''t for everybody. There are people who will not fly a LCC even with leather seats and TV. And more importantly, JB will only serve a few markets (big cities) where their business plan works, so JB will not be an option for everybody.

IMHO the economy will improve, AA will do fine and the novelty of JB will wear off.


----------------​


FrugalFlyer;

I would have agreed with you, about the B6 "novelty" scenario, if this was a different time.(Pre-9/11)

But if there''s ANYTHING that ALL of us can "get through our thick heads(on this board), it''s the fact that 9/11 CHANGED EVERYTHING(in this industry), FOREVER !!!!!!!!!

B6 is here to stay.
B6 is "eating away" at AA(in the NY area) like the "ebola virus", and will continue to do so for a very long time.

B6 has 1 hub "JFK"
B6 just bought a Shi* load of planes, that WILL be flown out of"JFK" !!!!

BUT,
Do we(AA) cut back our schedule "significantly" ??
Answer: "NO" !!!!!!

Instead AA tries to keep as many stations/employees working
as possible, instead of SHRINKING this "GD" company(like Crandall did), and we(sadly) will see that the "non shrinking" approach will be, at the very least a BK-11,if not a "near'' liqiudation.

Like everything else at AA, Time will tell.

This is one time that I hope I''m wrong, but I doubt it.

NH/BB''s

Ps, Just for "good measure", Amtrak has taken "mucho" business away from the airlines in the northeast corridor.
 
----------------
On 5/5/2003 4:05:11 PM NewHampshire Black Bears wrote:

BUT,
Do we(AA) cut back our schedule "significantly" ??
Answer: "NO" !

Instead AA tries to keep as many stations/employees working
as possible, instead of SHRINKING this "GD" company(like Crandall did), and we(sadly) will see that the "non shrinking" approach will be, at the very least a BK-11,if not a "near'' liqiudation.

Like everything else at AA, Time will tell.

This is one time that I hope I''m wrong, but I doubt it.
----------------​
You have posted numerous times that you think that AA should shrink its way to survival. Exactly what would you propose that AA do with all those expensive airplanes that would be grounded if the JFK operation were shrunken?

Is it possible that flying them for whatever fares AA is able to command is causing AA to lose less money than simply parking them?

Last year you were real high on JFK - what happened?

My prediction (and I don''t hope I''m wrong) is that AA is going to survive, eventually complete the new JFK terminal and then dominate NYC.

I may be wrong - but I wasn''t wrong about loading up on AMR as it hit bottom.
 
----------------
On 5/5/2003 4:15:33 PM FWAAA wrote:


----------------
On 5/5/2003 4:05:11 PM NewHampshire Black Bears wrote:

BUT,
Do we(AA) cut back our schedule "significantly" ??
Answer: "NO" !

Instead AA tries to keep as many stations/employees working
as possible, instead of SHRINKING this "GD" company(like Crandall did), and we(sadly) will see that the "non shrinking" approach will be, at the very least a BK-11,if not a "near'' liqiudation.

Like everything else at AA, Time will tell.

This is one time that I hope I''m wrong, but I doubt it.
----------------​
You have posted numerous times that you think that AA should shrink its way to survival. Exactly what would you propose that AA do with all those expensive airplanes that would be grounded if the JFK operation were shrunken?

Is it possible that flying them for whatever fares AA is able to command is causing AA to lose less money than simply parking them?

Last year you were real high on JFK - what happened?

My prediction (and I don''t hope I''m wrong) is that AA is going to survive, eventually complete the new JFK terminal and then dominate NYC.

I may be wrong - but I wasn''t wrong about loading up on AMR as it hit bottom.

----------------​
Construction on the JFK terminal has restatred already.
At $20,000 per year less the least they could do is put our names on some of the bricks!
 
----------------
On 5/5/2003 4:15:33 PM FWAAA wrote:

----------------
On 5/5/2003 4:05:11 PM NewHampshire Black Bears wrote:

BUT,
Do we(AA) cut back our schedule "significantly" ??
Answer: "NO" !

Instead AA tries to keep as many stations/employees working
as possible, instead of SHRINKING this "GD" company(like Crandall did), and we(sadly) will see that the "non shrinking" approach will be, at the very least a BK-11,if not a "near'' liqiudation.

Like everything else at AA, Time will tell.

This is one time that I hope I''m wrong, but I doubt it.
----------------​
You have posted numerous times that you think that AA should shrink its way to survival. Exactly what would you propose that AA do with all those expensive airplanes that would be grounded if the JFK operation were shrunken?

Is it possible that flying them for whatever fares AA is able to command is causing AA to lose less money than simply parking them?

Last year you were real high on JFK - what happened?

My prediction (and I don''t hope I''m wrong) is that AA is going to survive, eventually complete the new JFK terminal and then dominate NYC.

I may be wrong - but I wasn''t wrong about loading up on AMR as it hit bottom.

----------------​

FWAAA;
Your right, I was high on JFK, and I still am INTERNATIONALLY, and TRANSCON.
I should clarify my statements about "shrinking".
I think AA should shrink to "STABILITY", not profitability(for the time being)
I honestly think that AA will lose MORE money(during these BRUTAL times) with a larger system, than a smaller system.
We''re flying trips out of LGA to MCO, and TPA, while "everybody and their sister" is doing the same thing.
My point.
Stick to out strenghts(SP?).
LGA to MIA/ORD/DFW/STL,
EWR to MIA/ORD/DFW/STL/LAX,
JFK to MIA/SJU/LAX/SFO, plus all international flying, "ONLY".
Fly "less" trips per day, using 757''s out of LGA and EWR, and same thing out of JFK, except using widebodys out of JFK.
Do this until the "bleeding" at least show''s signs of stopping. Speed up the (already announced) retirement of some of these S-80''s, and mabey the A-300''s. This economy is NOT going to turn any day soon, and Passengers ARE NOT flying as frequent since 9/11. The new JFK, was concieved BEFORE 9/11, and JET BLUE. In all likelyhood, a project "that big", may NEVER be needed.
Wait until B6 starts flying to DFW, or possibly ORD.
Then what ??
I realize that a lot of people(on this board) get VERY tired about my constant reference''s about Crandall.
But the guy PROVED that his way(especially during the toughest of times) WORKED !!!!!!

NH/BB''s
 
Thats funny you mention the Palm Tree flights Bear,those flights are loaded to the gills here.

Believe what you will, people are flying.They seem to be more afraid of paying too much for a ticket than anything else.

The lightest flight I''ve seen in the past week has been YYZ,and even that is starting to creep back up.
 
Yep, shrink the airline. That's the ticket. TWA tried that and we know how that worked.
What Crandall did worked but in that time, in that economy, pre Jet Blue, pre Air Tran and to an extent, pre SWA. Not to mention a brand new contract that had the newly introduced "B" scale, and beaucoup PT. C'mon Bear. Remember this...SWA and Jet Blue are salivating at the thought that AA, DL or UA will HAVE to pull down operations just so they can step into the market. We ain't in friendly waters and there are more than just sharks circling.
 
----------------
On 5/6/2003 3:39:03 AM rampguy wrote:

Yep, shrink the airline. That''s the ticket. TWA tried that and we know how that worked.
What Crandall did worked but in that time, in that economy, pre Jet Blue, pre Air Tran and to an extent, pre SWA. Not to mention a brand new contract that had the newly introduced "B" scale, and beaucoup PT. C''mon Bear. Remember this...SWA and Jet Blue are salivating at the thought that AA, DL or UA will HAVE to pull down operations just so they can step into the market. We ain''t in friendly waters and there are more than just sharks circling.

----------------​
I believe that it is still a capacity problem, just too many seats. I am not that familiar with the route structure or how our competitors are placed in that structure. However the B-scale is still alive, it is now called OSM at the maintenance bases. Before this T/A, American had a labor wage advantage and now that advantage is greater than ever before. UAL has closed two maintenance bases and laid off 1,800 mostly mechanics. Is this Americans attempt to compete?
 
----------------
On 5/5/2003 11:13:54 PM NewHampshire Black Bears wrote:

FWAAA;
Your right, I was high on JFK, and I still am INTERNATIONALLY, and TRANSCON.
I should clarify my statements about "shrinking".
I think AA should shrink to "STABILITY", not profitability(for the time being)
I honestly think that AA will lose MORE money(during these BRUTAL times) with a larger system, than a smaller system.
We''re flying trips out of LGA to MCO, and TPA, while "everybody and their sister" is doing the same thing.
My point.
Stick to out strenghts(SP?).
LGA to MIA/ORD/DFW/STL,
EWR to MIA/ORD/DFW/STL/LAX,
JFK to MIA/SJU/LAX/SFO, plus all international flying, "ONLY".
Fly "less" trips per day, using 757''s out of LGA and EWR, and same thing out of JFK, except using widebodys out of JFK.
Do this until the "bleeding" at least show''s signs of stopping. Speed up the (already announced) retirement of some of these S-80''s, and mabey the A-300''s. This economy is NOT going to turn any day soon, and Passengers ARE NOT flying as frequent since 9/11. The new JFK, was concieved BEFORE 9/11, and JET BLUE. In all likelyhood, a project "that big", may NEVER be needed.
Wait until B6 starts flying to DFW, or possibly ORD.
Then what ??
I realize that a lot of people(on this board) get VERY tired about my constant reference''s about Crandall.
But the guy PROVED that his way(especially during the toughest of times) WORKED !!!!!!

NH/BB''s

----------------​
Well the only way they can get rid of the A-300s is BK. They have leases that they have to honor till 2007, I think.

More than likely its the same with the MD-80s.

Does it cost more to pay for them and have zero income by parking them in the desert or do they lose less by flying them at a loss where there is some income?

With UAL sticking around it seems that we may end up in BK anyway.
 
----------------
On 5/6/2003 3:39:03 AM rampguy wrote:

Yep, shrink the airline. That''s the ticket. TWA tried that and we know how that worked.
What Crandall did worked but in that time, in that economy, pre Jet Blue, pre Air Tran and to an extent, pre SWA. Not to mention a brand new contract that had the newly introduced "B" scale, and beaucoup PT. C''mon Bear. Remember this...SWA and Jet Blue are salivating at the thought that AA, DL or UA will HAVE to pull down operations just so they can step into the market. We ain''t in friendly waters and there are more than just sharks circling.

----------------​

Rampguy;

Do you think that with all those new a/c B6 bought, that they''re going to "wait" until AA pull''s down their schudule??

As you say, "there are more than just sharks circling" !

(Hypothetically), what are we going to do if/when B6 announces service from JFK-DFW ??
(Yes I realize that it''s a "royal pain", to get out to JFK, but the "Jet-train"(monorail) will be finished soon.

Think about it !
B6 has only "1" hub(JFK), and they just bought a shi* load of new a/c.

I think it would be harder to woo a pax. off B6 to AA(with a new fare structure), than it would be to "pry" him off WN !!
(There''s something about that "new car smell-Leather")

Unless B6 runs into labor(union) problems, down the road(And in NY, They WILL), I see B6 doing "what they want to, when they want to".

Another "hypo", if you will.
Say we go into BK-11 in the next 6 months. Obviously we''ll be in there because we still bleeding profusely(SP?). Will we "THEN" say that AA should have cut MUCH DEEPER ???

Stay tuned, (sadly) I think we''re about to find out !!

OOP''s I forgot, we''ve got a Corperate GIANT named Gerard Arpey at the helm.

God help us !!!!!!!

NH/BB''s
 
----------------
On 5/6/2003 8:04:30 AM NewHampshire Black Bears wrote:

Do you think that with all those new a/c B6 bought, that they''re going to "wait" until AA pull''s down their schudule??
----------------​

Quoting from the announcement of the JetBlue aircraft purchase:

"The newly ordered aircraft will be delivered starting in 2004 and running through 2011."

The first aircraft is at least a year away... the entire order is 8 years until completion. Think of how much can change in this industry, in this economy, and at AA in a year.

AA could be back on the rise if the economy continues to improve post-Iraq. Demand can get back to levels where the present capacity could be sustained.

Depending what the courts do, AA could be in bankruptcy, or gone. Another airline could go tango-uniform (there are more people in trouble than just UAL).

A year is a long time. It''s been less than 20 months since September 11th, folks.

I have to agree with LGA Fleet Service and rampguy; this is the WORST time to surrender market share. Retrenching at this point could very well make the airline lose so much territory as to become unviable, especially in highly competitive markets like the NYC area.

----------------
Buck said:

I believe that it is still a capacity problem, just too many seats. I am not that familiar with the route structure or how our competitors are placed in that structure.

----------------​

If you don''t have all the information, how can you criticize any of the decisions made by the people who do have the information (i.e. management?) Maybe the decisions they are making that seem absurd to you have something to do with a factor you don''t know about?

TANSTAAFL
 
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