BigMac
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True.
How about word of grounding them in September, before delivery of the 37's, due to fuel costs ?
MD-80 Parked
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How about word of grounding them in September, before delivery of the 37's, due to fuel costs ?
Mr.Robot-tow
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Also I might add with the 4/29/08 article with CEO of AA Gerald Arpey article posted on CNN.Money Fortune 500 website,some analysts are saying that American is burning through about 3.3 million dollars a day now.The 1Q loss of 328 million shows that American cannot stop losing money this year.Note also this 1Q reflected also the sale of 90% of American Beacon for around 480 million dollars.The airline is reporting a 4% cut in flying this year,but I have heard that,that is being revised also. I think Holly Hegeman over at PlaneBusiness.com put it real blunt saying "Those unable to make profit on their business will burn cash until they either fiqure it out or run out of cash and things to sell off,or oil price's significantly reduce."American waited to late to start replacing their MD-80 fleet I think.For they thought they could re-engine the MD-80 fleet at one point,this proved in my opinion a fatal mistake by the CEO,CFO at American.It should have started right after the restucturing,while fuel was lower,union contracts were well off in the distance,and their balance sheet was getting better with building cash reserve,when it top 3.8 billion they should have taken build slots off the Boeing floor for 737 series A/C.With 1/3 to 1/2 of it's fleet eating profit on each route today,the next 2Q will really show the impact.One would ask did they causing the MD-80 grounding to mask the 2Q loss,or not to use 1 week of jet-fuel hedge.The sale of American Eagle is only for helping the balance sheet in the 3Q and 4Q and hide so to speak the true loss damage fiqure to come this year.He does not what to start a panic with the banks he deal's with day to day.For they could change their rates and term's real fast causing a takeover or merger or a BK filing by AA.He states also that AA would be comfortable without merging.But I think AA will join a very close allience with BA and CA soon,though it will not look on paper as a merger it will behave like a merger.This all depends on the ruling from justice and the annoucement from the Dept of Transportation,over in Brussel last week.That being that they will relax foreign ownership of US carrier's.Today oil is climbing through 129.00 a barrel as I speak.
captianamerica
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Well T. Boone Pickens also contributed to Tuesday's move; the billionaire oil investor predictedcrude will hit $150 a barrel in 2008 in a CNBC interview.
http://www.forbes.com/2008/05/20/briefing-...artner=yahootix Seems he knows oil will just keep going... Then you have the "House passes bill to sue OPEC over oil prices" http://news.yahoo.com/s/nm/20080520/pl_nm/congress_opec_dc.. What do you think this will do?? kinda like throwing sticks at the hornets nest.... I do believe your right though, massive layoff are near, better get your sh*t in-order .Already been through it the last time.Not sticking around again though after the second time around...
http://www.forbes.com/2008/05/20/briefing-...artner=yahootix Seems he knows oil will just keep going... Then you have the "House passes bill to sue OPEC over oil prices" http://news.yahoo.com/s/nm/20080520/pl_nm/congress_opec_dc.. What do you think this will do?? kinda like throwing sticks at the hornets nest.... I do believe your right though, massive layoff are near, better get your sh*t in-order .Already been through it the last time.Not sticking around again though after the second time around...
NewHampshire Black Bears
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Well it appears that everyone who's spoken here, is in agreement, that BIG cuts are coming.
(sadly it's a NO brainer)
For those of you NOT around before 1983, please pay close attention.
(When/If they really get serious) NO carrier can re-invent itself better tha AA !
Though Not exactly the same situation(1980-1983/2008), there ARE a lot of similiarities.
As they did back then, AA needs to "jettison" every bit of oil burning dead weight as possible.
They can do this by utilizing every 34/40/44/50/70 seater, and/737/757/767/777/A-300 to its Maximum profit level possible, by the Fall/08 scedule !!
Using BDL as an example, it's been almost 2 years, that HDQ replaced S-80's BDL/ORD with RJ's.
OK.
Then do it on some of the MANY trips from LGA/ORD, or PHL/ORD.(AA was making GOOD $$ on the BDL/ORD trips with the S-80's)
If there are real money making trips, on any route that operates with a S-80,....than OK, it stays.
If the "80's make up (say) 50% of AA's total daily ops, .....then get real GOD DAM creative, and get the 50% down to(say) 33%, then make the resulting cuts.
Y E S, I realize a 1/3 cut in capacity is HUGE, but if it's necessary, then....JUST DO IT !!!!!!
As the new 737's come on line, then start adding capacity back to the overall schedule.
How many times on here, I've heard the BULL SH!T, .."That you can NOT shrink to profitability"
Well guess what. CRANDALL DID IT, back in 83'....and we ALL know how AA thrived going into the rest of the 80's and 90's
And OH by the way, our competition will be in a similiar boat, but with many more holes allowing water to come rushing in.
Bottom line, we OUTLAST everyone else to the point that someone goes belly up.(think....extra(say) 757's suddenly become available in a fire sale)
Once Industry capacity is reduced, then, and ONLY then, are the 80's brought back on line, just long enough for a replacement "37 to arrive.
The Industry at least(now) is in a position that Constant Incremental fare hikes WILL Stick .
To a certain extent, it doesn't matter how much Fuel becomes,.............since it has a MORE detrimental $$$ effect on at least two other carriers.
As for DL/NW,...........Anderson/Steenland may REGRET the day that they did a LARGE merge during this HIGHLY uncertain financial period.
"LETS RUMBLE" !!!!
(sadly it's a NO brainer)
For those of you NOT around before 1983, please pay close attention.
(When/If they really get serious) NO carrier can re-invent itself better tha AA !
Though Not exactly the same situation(1980-1983/2008), there ARE a lot of similiarities.
As they did back then, AA needs to "jettison" every bit of oil burning dead weight as possible.
They can do this by utilizing every 34/40/44/50/70 seater, and/737/757/767/777/A-300 to its Maximum profit level possible, by the Fall/08 scedule !!
Using BDL as an example, it's been almost 2 years, that HDQ replaced S-80's BDL/ORD with RJ's.
OK.
Then do it on some of the MANY trips from LGA/ORD, or PHL/ORD.(AA was making GOOD $$ on the BDL/ORD trips with the S-80's)
If there are real money making trips, on any route that operates with a S-80,....than OK, it stays.
If the "80's make up (say) 50% of AA's total daily ops, .....then get real GOD DAM creative, and get the 50% down to(say) 33%, then make the resulting cuts.
Y E S, I realize a 1/3 cut in capacity is HUGE, but if it's necessary, then....JUST DO IT !!!!!!
As the new 737's come on line, then start adding capacity back to the overall schedule.
How many times on here, I've heard the BULL SH!T, .."That you can NOT shrink to profitability"
Well guess what. CRANDALL DID IT, back in 83'....and we ALL know how AA thrived going into the rest of the 80's and 90's
And OH by the way, our competition will be in a similiar boat, but with many more holes allowing water to come rushing in.
Bottom line, we OUTLAST everyone else to the point that someone goes belly up.(think....extra(say) 757's suddenly become available in a fire sale)
Once Industry capacity is reduced, then, and ONLY then, are the 80's brought back on line, just long enough for a replacement "37 to arrive.
The Industry at least(now) is in a position that Constant Incremental fare hikes WILL Stick .
To a certain extent, it doesn't matter how much Fuel becomes,.............since it has a MORE detrimental $$$ effect on at least two other carriers.
As for DL/NW,...........Anderson/Steenland may REGRET the day that they did a LARGE merge during this HIGHLY uncertain financial period.
"LETS RUMBLE" !!!!
WingNaPrayer
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mr peabody
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Hey Yall
How about this, AA parks x amount of S80's, takes over the Eagle CRJ, NO MORE SCOPE MESS,buys/acquires more CRJ 700/900 series, i believe they are somewhat readily available, (Horizon and Mesa)EMB 170/ 190 series also a possibility.Less fuel burn , reduce capacity, increase demand for fewer seats , increase ticket price to a level to atleast cover the costs of moving pax from point A to point B. just a thought . Fire away.
How about this, AA parks x amount of S80's, takes over the Eagle CRJ, NO MORE SCOPE MESS,buys/acquires more CRJ 700/900 series, i believe they are somewhat readily available, (Horizon and Mesa)EMB 170/ 190 series also a possibility.Less fuel burn , reduce capacity, increase demand for fewer seats , increase ticket price to a level to atleast cover the costs of moving pax from point A to point B. just a thought . Fire away.
eolesen
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I was obviously wrong about a bankruptcy filing at $100 oil. The good news there is that fare hikes were fast and furious. My $8000 RT in J to France from last year jumped up to $10K this month. But it's not going to work forever -- I chose to fly in Y instead... That's been the trend with other directors in my company, and I suspect it will be the case with other companies. A full Y fare is just as flexible and I already get club access, so paying 2x or even 3x just to get the bigger seat and a little more food isn't gonna happen with a lot of folks. If I'm hungry, I'll schlep some Whataburger and a bag of trail mix onboard with me and piss off those sitting around me who didn't think that far ahead...
I've said it before -- AA's just too damn big for its own good....
Time to bring the fleet down to about 500 shells. Park the 762's and AB6 and get out of the domestic/Carib widebody business altogether if it can't be flown by a 763 that can double in the international operation.
The argument about cargo being able to float the passenger boat is obviously going to come up with someone, but if FDX and UPS are warning about profit drops, then cargo can't be as lucrative as it was with jet-a at a third of the price it is today...
As mwa said, park the S340's and 140's and 135's, and start to park some of the older E145's. Eagle can't avoid the pain.
I've said it before -- AA's just too damn big for its own good....
Time to bring the fleet down to about 500 shells. Park the 762's and AB6 and get out of the domestic/Carib widebody business altogether if it can't be flown by a 763 that can double in the international operation.
The argument about cargo being able to float the passenger boat is obviously going to come up with someone, but if FDX and UPS are warning about profit drops, then cargo can't be as lucrative as it was with jet-a at a third of the price it is today...
As mwa said, park the S340's and 140's and 135's, and start to park some of the older E145's. Eagle can't avoid the pain.
E, I'll bet you that AA will not file BK. I do not believe there is anyone in Sr. Mangt. that wants or will tolerate the Court having a "peek" or control of the "books". If it costs half of the "heads" now working, so be it.
NewHampshire Black Bears
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I agree that AA may be too big.
Park the 762's ..... Why? Are you saying that they are less profitable running JFK/LAX, then certain S-80 trips flying routes @ 1:30 hrs ??
As far as A/E, why can't they pick up some of the S-80 slack, while those gas hogs go on a one way trip to the "sand pits" ?
The higher and faster oil goes up,................the better for AA, because a few carriers will be "throwing in the towel BEFORE AA, which equals avaialable a/c for sale..CHEAP(think 757's perhaps)
MCI transplant
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<_< -------- Hey Bears! What I'm thinking is people are thinking too near term. If the price of oil continues it's climb, and I don't see any reason why it wouldn't, what happens a year from now when oil hits $200+ a barrel? I've got my thoughts on the subject, what's yours?
jimntx
Veteran
N, can I hav a piece of that action with you? I agree wholeheartedly. However, I would add that it ain't just the BK court they don't want peeking at the books. Possibly even more than the court, I think they shudder at the thought of the unions and certain creditors getting a look-see.
My guess is that if AMR ever files bankruptcy it will be because we are teetering on the precipice of Chapter 7, not just Chapter 11.
LGA Fleet Service
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They won't file Chapter 11 after pumping millions into the pension plans over the years.If they were going to file, it would have been in '03.
Hand the PBGC a basically fully funded pension? I don't think that'll fly.
Hand the PBGC a basically fully funded pension? I don't think that'll fly.
Don't get me wrong - I wasn't criticizing you. I thought it was a reasonable prediction. Of course you made it when I was cheerleading for oil to hit $100, hoping that it would drive a stake thru the heart of the weaker carriers that were still in Ch 11. I was certainly wrong, as everyone (the six legacies) was able to keep flying thru $100/bbl oil.
Agreed. As I have posted numerous times, AMR's $9 billion plus pension fund helps keep its pension costs low. For the last few years and for now, AMR's annual contributions are much cheaper than the alternative (defined contribution plans).
At some point, that probably changes.
But for now, the AMR pension boogeyman is a figment of the imagination among the ignorant who specialize in peddling fear.
Shame on them.
A bankruptcy termination of a pension plan faces a high burden - one that UA, US and DL were able to accomplish - only because those airlines had huge required contributions in the short term and they lacked the cash to make those contributions. AMR was NEVER in that boat and was thus able to keep its pensions.
