Analysts - AA to benefit most for oil drop, DL least

[700UW]

And dont forget AA is generating record profits, even more then your uber delta.

 

[WorldTraveler]

AA GENERATED larger profits because they didn't pay profit sharing or account for taxes.

neither are viable long=term strategies

but Parker has never demonstrated that he knows how to run an airline for the long-term anyway.

 

[700UW]

Thats why Wall Street and the creditors wanted him, he is a numbers guy, going back to his start at AA, then going to NW, then HP, then US and now AA.
 
Too bad your jealous, he is raking in millions and delta paid you to leave, and you took the money and ran.

He is a CEO, you are not, and never will be.

 

[robbedagain]

parker never demonstrated the know how to run an airline?  
 
Lets see here...
 
Started at AA   then on to NW  then became CEO of HP as one of the (if not the youngest) CEO in the airline industry
 
Merged HP with US   and then later on with AA and is currently running the new AA
 
making millions  
 
Now tell us why you were paid to leave  dl

 

[WorldTraveler]

Thats why Wall Street and the creditors wanted him, he is a numbers guy, going back to his start at AA, then going to NW, then HP, then US and now AA.
 
Too bad your jealous, he is raking in millions and delta paid you to leave, and you took the money and ran.
He is a CEO, you are not, and never will be.

and none of that says that he has been able to run an airline for long-term success.

He is a dealmaker in the airline industry - and he does that well.

but he snatched up US using their financial stresses and then turned US into a low service, low employee pay legacy carrier.

The AA merger is the exact same type of deal... again, no evidence whatsoever that he intends to enhance what AA is but rather cheapen it and the welfare of its employees. absolutely no evidence to the contrary.

and specific to this topic, AA might well end up better off than other carriers because of the lack of hedges - but that advantage could last for only one quarter - and still be more than offset by currency losses which other carriers will either not have or not have to anywhere near the same amount.

and after that AA will still have the highest debt and revenue production that so far has yet to match the best in the business - and greater growth of competition across AA's key markets than any other carrier.

it is far from certain how AA will end up.

I have absolutely no aspirations of doing that to any company or group of employees.

 

[commavia]

It is certainly true that, all else being equal, lower fuel prices disincentivize investment in new aircraft to replace older, less fuel-efficient aircraft.  But, as already alluded to, there are a lot of other elements to the equation than just fuel and ownership cost - including maintenance, and revenue-generating potential, and AA obviously has done lots of sensitivity analyses on how the NPV of new jets changes as fuel prices change.  And thankfully, AA has enormous flexibility with both the older aircraft it retires and newer aircraft it inducts, and isn't carrying around the weight of fuel hedges and/or a refinery to wipe out many of the benefits of lower fuel prices.
 
Some may say that Doug Parker doesn't know how to run an airline - but at least he knows when to dump fuel hedges instead of vertically integrating into an oil refiner.
 
But yeah - AA is still doomed, though.

 

[700UW]

He didn't snatch up US, Bruce Lakefield CEO of US approached HP and US raised all ththe funds.

Why do you spread misinformation once again?

 

[WorldTraveler]

no one said that AA is doomed. sorry that you have to throw your emotions into the equation.

other carriers can and do neutralize those other variables... including maintenance. the fact that DL can maintain its fleet for less than other carriers is precisely one of the reasons why an older fleet works for DL.

and even though you keep repeating it over and over, the refinery is profitable and lower crude prices don't make the refinery less profitable.

and as much as AA might want to crow about its lack of fuel hedges, you need to consider that DL has had a fuel price advantage to the industry that amounted to between 5 and 10 cents/gallon for over a year.

Parker's "win" for not hedging has to overcome the advantage that DL had for multiple quarters before you can say that Parker's strategy worked .

 

[NYer]

revenue is what a company generates as a result of selling its services or products.

Fuel hedges are an offset to a cost item.

Fuel hedges do not affect revenue per se.
 

 
Fuel prices are a concern because if it's price, compared to what others are paying, you can add more capacity on certain routes which raise revenue. If you pay substantially more than another airline you may cut capacity which lowers revenue.

 

[WorldTraveler]

sorry, but that is not the way it works.

If your costs are higher than your peers, you are at a disadvantage.

airline pricing is highly transparent which means no one really gets an advantage - unless they serve a market that others don't or don't serve as well.

that is why after all of the iterations of service changes and airlines within airlines, the most clear way to raise revenue is to have a disproportionately number of seats compared to your competitors in the same market. that is why airlines typically get revenue premiums in their own hubs and WN uses the same strategy by serving markets where it can be the dominant carrier.

because a cost disadvantage is not usually restricted to just one market, if an airline has a cost disadvantage, they have it across their entire network - and eventually having higher costs results in loss of share to other carriers and ultimately the need to shrink.

that is exactly the phenomenon that took place with AA in NYC. they had a cost disadvantage relative to their competitors and ultimately repeatedly cut schedules.

 

[CMH_GSE]

no one said that AA is doomed. sorry that you have to throw your emotions into the equation.other carriers can and do neutralize those other variables... including maintenance. the fact that DL can maintain its fleet for less than other carriers is precisely one of the reasons why an older fleet works for DL.and even though you keep repeating it over and over, the refinery is profitable and lower crude prices don't make the refinery less profitable.and as much as AA might want to crow about its lack of fuel hedges, you need to consider that DL has had a fuel price advantage to the industry that amounted to between 5 and 10 cents/gallon for over a year.Parker's "win" for not hedging has to overcome the advantage that DL had for multiple quarters before you can say that Parker's strategy worked .

Ok, so let me get this straight.
The lower fuel prices hurt AA because they have newer jets that use less of it and costs less to maintain and Delta has older jets that uses more of it and costs more to maintain, DL winning, got it.

OPEC dumping oil on the market like its water so they don't lose market share doesn't move the needle at Trainer at all, got it.

You claim DL had a 5 to 7 cent per gallon advantage for over a year. Well, that's been evaporating and accelerating in the opposite direction at a rather rapid rate, care to expound on THOSE numbers? Or will you take a pass for now because it's just not a good look for DL?


Please keep posting btw, you are entertaining as hell.

 

[robbedagain]

aint it amazin  how dl can do no wrong yet no other air carrier can do no right??????    its just soo incredible how dl is the perfect airline with no issues       just simply amazin

 

[jcw]

it's very possible they are right but it is also possible they don't have enough facts to know.AA will likely have a fuel hedge benefit but AA has yet to deal with the currency issue in Venezuela that gets worse with every dollar in fuel price drop in the US.AA will not see any money from Venezuela and other Latin economies have currency issues as well - both impairments and changes in valuation. Add in increased competition and all of the fuel hedge gains that the other carriers hold will not amount to the amount of revenue loss that AA will face.Trainer works just as well at lower crude oil input prices as it does with larger prices. Further, Trainer is intended to affect the crack spread - something lowering crude oil prices doesn't touch.what makes less sense is spending tens of billions of dollars on new aircraft that won't deliver the fuel savings compared to M80s and older 737s.

There is no one who has the facts right except WT

 

[WorldTraveler]

Ok, so let me get this straight.
The lower fuel prices hurt AA because they have newer jets that use less of it and costs less to maintain and Delta has older jets that uses more of it and costs more to maintain, DL winning, got it.

OPEC dumping oil on the market like its water so they don't lose market share doesn't move the needle at Trainer at all, got it.

You claim DL had a 5 to 7 cent per gallon advantage for over a year. Well, that's been evaporating and accelerating in the opposite direction at a rather rapid rate, care to expound on THOSE numbers? Or will you take a pass for now because it's just not a good look for DL?


Please keep posting btw, you are entertaining as hell.

you only find it entertaining because you twist what I have said into something which isn't even the truth.

I never said that AA won't have a fuel price advantage or benefit the most from falling fuel prices.

other airlines with hedges will clearly pay a price for those hedges.

what you can't seem to understand or admit is that new airplanes have a whole lot less value with low fuel prices because low fuel prices are a big part of the justification for replacing older aircraft.

after the hedge losses wear out - which could be in as little as a quarter, AA still will be saddled with debt that is far larger than what other carriers have and won't go down regardless of fuel prices.

and you also don't seem to grasp that Trainer is a refiner, not a producer. it buys crude at whatever price is on the market. the producers will be hurt by lower crude. Trainer will buy at whatever price crude is on the market.

and you still can't seem to grasp or admit that AA also has currency hedge losses that are as big if not bigger than fuel hedge losses. While you and analysts relish the thought of seeing DL and other airlines take fuel hedge losses, AA has failed to say how it will deal with its currency losses. Other carriers are simply not near as exposed to Venezuela and have currency hedges in their other markets such as Japan which will minimize currency hedge losses there.


Get rid of the attitude and understand the facts. AA will have a fuel hedge benefit but a currency hedge loss. It will be the opposite for other carriers. AA will be paying more for new aircraft regardless because they are spending more on new aircraft than any other airline. The value of buying those new aircraft will be reduced with low fuel prices -which are not likely to be permanent but could well persist for several years based on what analysts say.

 

[jcw]

Really have you ever read your posts and how you twist everything - you can't have it both ways it's either an advantage or not

But once again only DL can have advantages so every airline should give up

Can we convert the AA board to a DL board so we can have two boards promoting how wonderful DL is I don't think there is enough cheerleading for DL on how it is better on everything