Another Analyst Analyzing AMR
- Thread starter Hopeful
- Start date
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #2
Part of this article regurgitates what was said earlier - that AA underperforms its peers and its own network metrics on several key, high profile routes. AA has made several steps to try to correct some of the deficiencies noted - but BK almost always carriers a short-term revenue hit as some perceive a BK company to be less stable and as competitors increase their assaults on the BK carriers' network. As has been noted before, AA is in the unique position of being the only major airline in restructuring right now and, when you combine that with a general decline in capacity due to higher fuel prices, AA is in a very difficult position strategically - it is sandwiched between two much larger, lower-cost megacarriers, a cross-town low fare carrier that has its sights set on AA's home market, and several low fare carriers that have already made it clear they are looking to continue growing in AA's key markets.
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AA really needs only to be able to compete effectively against its key network peers and WN... AA plus those 3 account for more than 85% of US capacity. If it cannot effectively compete against DL and UA on international routes and WN internationally, AA's ability to maintain a valuable franchise going forward is limited. You need only look at US to see that it is competing against lower cost, larger network carriers who translate that into significant profitability advantages.
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Suggestions that AA might not emerge until late 2013 - well over 18 months - make AA's ultimate success even cloudier. Open Skies in Latin America (or limited alliance relationships if markets do not open) and the fall of the Wright Amendment require that AA emerge quickly and prepared to fight the competitive challenges that will make or break AA.
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AA really needs only to be able to compete effectively against its key network peers and WN... AA plus those 3 account for more than 85% of US capacity. If it cannot effectively compete against DL and UA on international routes and WN internationally, AA's ability to maintain a valuable franchise going forward is limited. You need only look at US to see that it is competing against lower cost, larger network carriers who translate that into significant profitability advantages.
.
Suggestions that AA might not emerge until late 2013 - well over 18 months - make AA's ultimate success even cloudier. Open Skies in Latin America (or limited alliance relationships if markets do not open) and the fall of the Wright Amendment require that AA emerge quickly and prepared to fight the competitive challenges that will make or break AA.
