Cuts permanent

[Hopeful]

http://biz.yahoo.com/ap/080909/american_capacity.html?.v=1

 

[Skymess]

http://biz.yahoo.com/ap/080909/american_capacity.html?.v=1

Wow. That's something I have been wondering about. So, the capacity reduction is permanant. Hmmm. Wonder if attrition will eat up our FA overage in the next year or so or if people will take another leave?

 

[wingit88]

Wow. That's something I have been wondering about. So, the capacity reduction is permanant. Hmmm. Wonder if attrition will eat up our FA overage in the next year or so or if people will take another leave?

That's a good question. Even with the new planes being phased in, there will still be overages with all work groups.

 

[FrequentFlierCA]

I don't think it's wise to characterize these as "permanent". They are "permanent" as long as oil is over $100 and demand remains soft. But I'm sure the round of cuts before the 1990s profit run were also viewed as "permanent" at the time.

Bottom line: if demand grows significantly, AA will grow with it.

 

[kirkpatrick]

Bottom line: if demand grows significantly, AA will grow with it.

Exactly. "Permanent" simply means those AC aren't coming back. But with all the 737's coming in the next couple of years, the company has a lot of flexibility as to how many more 80's to dump and when to dump them.

MK

 

[Pain at the Pump]

Exactly. "Permanent" simply means those AC aren't coming back. But with all the 737's coming in the next couple of years, the company has a lot of flexibility as to how many more 80's to dump and when to dump them.

MK

Back to HORTON'S hypothetical consolidation comments, the Only carrier he's talking about is BA !

(or perhaps pieces in a Fire Sale)
(though I always hold out hope for Alaska)

 

[FWAAA]

Back to HORTON'S hypothetical consolidation comments, the Only carrier he's talking about is BA !

(or perhaps pieces in a Fire Sale)
(though I always hold out hope for Alaska)

I don't want AA to buy (and subsequently dismantle) Alaska. I like AS being around with a viable network just like it is now. I get full AAdvantage miles (although upgrades are a small problem). AA currently gets all the benefits of AS without having to buy them.

 

[Maark767]

I don't want AA to buy (and subsequently dismantle) Alaska. I like AS being around with a viable network just like it is now. I get full AAdvantage miles (although upgrades are a small problem). AA currently gets all the benefits of AS without having to buy them.

AA buys and then dimantles airlines because it keeps the competition down. After all these years and seeing this happen more than once, it makes sense for AA to do this..... AA will continue to have more control over it's market share.

 

[CubsFanJohn]

I don't think it's wise to characterize these as "permanent". They are "permanent" as long as oil is over $100 and demand remains soft. But I'm sure the round of cuts before the 1990s profit run were also viewed as "permanent" at the time.

Bottom line: if demand grows significantly, AA will grow with it.

I agree with you on that one. I could see some International Growth in the shortterm once the 738's come for MIA-Central/Northern South America flying. But I kind of think for now AA is playing it smart on this one, because I for one wouldn't be surprise if Oil goes up again and the economy still isn't that hot.

 

[eolesen]

Buying airlines as a way to eliminate competition is like using the lawn mower to get rid of dandelions or nutgrass...


I see the cuts only being as permanent as the current contract negotiations. Not defending that as a negotiating tactic, but as long as union members are stuck without being able to upgrade, get off reserve, or move off midnights, history has proven that they start to twice about the hard-line positions and rhetoric coming from their leadership....

 

[FWAAA]

Exactly. "Permanent" simply means those AC aren't coming back. But with all the 737's coming in the next couple of years, the company has a lot of flexibility as to how many more 80's to dump and when to dump them.

MK

That's the way I read Horton's comments. No doubt with oil back to about $100 (and noises that it's gonna go lower), many people are wondering if airlines will have second thoughts about grounding all those planes and laying off all those employees. Horton was simply killing any stray hopes that AB6s might stick around longer with oil down 30% from its highs.

I expect AA to announce "rolling orders" for about 36 738s each year, one year at a time, beginning about a year from now for delivery in 2011, to keep up the 2009-10 pace of about three per month. That way, if things go south in a big way, AA is only on the hook for three dozen 738s (as opposed to announcing an order for 100+ all at once). And eventually, when the new 787-style 737-replacement (the rumoured carbon-fibre narrowbody) is announced, AA can order a slew of those.

 

[CubsFanJohn]

I know people will give me a bunch of grief for this comment, but I actually think AA is smart to do this rolling order thing, I'd much rather be on the hock for only 36 738 then 100 738's if something were to happen. Now hopefully once they can order 787 they will start with an order for like 25-30 and then using the rolling order approach.

 

[jimntx]

I'm not one to say I told you so, semicolon however comma...

Nonetheless, I still don't think that the delivery of the new a/c will mean a restoration of lost ASMs. I think they will ground additional a/c (MD-80s) as the new 73s come on line.