Merger Relief for American Airlines: April 24, 2012

[wings396]

wings,
you appear really fixated on proving me wrong... so let me say once again that I was indeed wrong that AA would emerge from BK as a standalone. The AMR board clearly decided that was not in their best interest.

But let's also be clear that one of the major factors had to be the continuing labor unrest at AA and the operational problems of last fall which ended AA's string of RASM improvements. US labor had nothing to do with that and its not even clear that Parker's proposal was necessarily better. AA labor made it clear they wanted the current management team out and would rather work for Parker. The creditors couldn't risk that the company would destroyed by labor and Parker has demonstrated an ability to get employees to work for well-below average wage rates while keeping a lid on labor unrest. He has turned US around but US is not generating financial returns at the top of the industry and US wouldn't be doing anywhere near as well as they are if they had to pay higher wages.
It is precisely for that reason that the ability of the new AA to do anywhere close to as well as US is highly suspect given that Parker has agreed to a lot of pay increases in order to win support for the merger - or at least he has promised them.
At the same time, competitors are increasing their attempts to win over AA's best corporate clients in its most lucrative markets - that is why the DL/VS deal matters to AA.

But, yes, I was wrong about AA and US agreeing to merge because I didn't expect AA employees would be willing to sabotage the company's financial performance in order to gain what they wanted. They did, the board decided enough was enough, and it is now up to Parker to make it all work.

yes, robbed, UA does fly EWR-HKG as well as ORD and SFO. While DL is much stronger in Japan, UA is much stronger in China and HKG. After UA bought Pan Am's Pacific routes, they focused a lot of attention on developing China and HKG routes. It has paid very nicely for them.
Cathay also flies JFK-HKG. Add in that NYC-HKG is a long flight in a highly competitive market and it is far from certain that DL will decide it is worth it or necessary to start JFK-HKG.

But his also highlights the difficulty in starting routes to Asia where there are virtually no flights that are under 12 hours except from SEA. You then have double crewed aircraft, 777s or 747s, and you burn lots of fuel. "breaking into Asia" is a whole lot more difficult solely because of the very high costs to operate in the region.
I do believe that the new AA's best chances for East coast to Asia flying is from PHL.
But the same principle that makes AA strong in MIA-Latin America is the same one that makes them weak in LAX and NYC to Asia; the market in the largest cities is divided between several carriers and DL and UA both are far stronger overall to Asia which means they will do well in those cities to Asia. That is also why UA does so much better than AA from ORD to Asia; even if AA and UA are on equal footing domestically, UA's strength overall in Asia makes it far, far harder for AA to succeed in ORD-Asia. AA's best chances to do well in regions where it is weak are from its own fortress hubs. So, for Asia, it is from DFW and PHL, but DfW-Asia is long and what you gain in local traffic, you add in distance. PHL-Asia works just as well for east coast-Asia as DFW-Asia.

The merger will contribute more to int'l growth at PHL to Latin America and Asia.

I along with the OP who has pointed out your wrongs, only enjoy doing so due to your sheer arrogance. You have been dead wrong about the entire US/AA thing in many cases, and now you don't like it all being brought to the surface. I seem to recall when you even viewed the AA BK to be another golden opportunity for Delta to prosper, and you went as far as to salivate over the possibility of Delta getting their hands on DFW & MIA, remember that" I believe that you recently said that you would be happy to be a mere 25% right with predictions of how things end up a few years following the merger, 25% Really? I think that everyone walking on this earth can claim to be right 25% of the time, heck even I'm right almost half of the time. We have gone back and forth, and will never see eye to eye, that's a given. I'm going to be conservative in saying that about 99.5 % of your posts lead to Delta along with how inferior the other airlines are in comparison to them. Just because Delta is doing everything right in your eyes at this time, doesn't mean that their competitors can't & won't in due time. Please remember that nobody stays on top forever, be it a person, as sports team, or a company. I'm not saying that Delta is going to go down the tubes, but I am saying that at some point UA & AA will get running on all cylinders, and be on equal ground. While Delta may be king in NY today, and AA is weak in the Pacific region, that can and most likely balance out over the next few years.

 

[WorldTraveler]

You can call it arrogance if you want but you and a whole lot of people can’t seem to grasp that I actually worked in the network area of an airline and know how it all works. Even though I haven’t done it in a number of years and don’t work in the airline industry now or anything related to it now, I didn’t forget how to do my job. I am very certain that if it comes down to knowing dangerous goods procedures for the ramp, you would beat me hands down in knowledge… but no one wants to talk about that kind of stuff.
As much as you would like to think otherwise, I have been very right about AA and US for years, including most elements of the merger. The mere fact that you and others have taken a few quotes out of context and attempted to say “gotcha” shows that you either really don’t understand what the discussion is about or are so driven to prove me wrong that you will try hoping you can sway the crowd, most of whom aren’t trained in network and financial related aspects of the airline industry.
What I didn't get right is that AA would emerge as a standalone but then I didn't expect AA labor was so determined to get out their present management that they would thwart AA's financial recovery.

This website never asked if I or anyone else had specific knowledge about specific aspects of the airline industry which they would then use to exclude me from certain discussions or stick a red flag next to my name as a warning to others. You will coexist on this and other internet forums when you realize that you can encounter all kinds of people with all kinds of experience on an internet chat forum and you really have no idea regarding their qualifications or background.

Life is not fair – and neither is the airline industry. It is a business and in the free market, business
IS SUPPOSED TO BE intensively competitive. The airline industry has always been that way. DL has long had a very competitive spirit about it – which is why it has grown from a small regional airline in the southeast to one of the largest airlines in the world.

TO be really blunt, AA may never return to its former position in NYC and they may never grow to have the size necessary to compete in Asia. But equally true is that DL is not likely to ever be of a size large enough to challenge AA in Latin America or UA will have much of a presence in the SE US. Each carrier has to decide what strategically matters and then decide how to work with what they have. For now, DL has demonstrated that growing its presence in NYC, at the direct expense of AA and US over the past 10 years, has allowed them to grow their revenues far faster than other network carriers.

DL grew its presence in NYC because it recognized what CO had done at EWR; DL just happened to realize it couldn’t do exactly what CO did because LGA and JFK work differently than EWR, but LGA and JFK also are larger local airports and they also happened to be major operations for AA and US, two carriers which have struggled for a number of years against other competitors, making them ripe for DL to grow its revenue at their expense. As much as you want to think “it will all work out down the road,” DL’s aggressiveness in establishing its position in NYC is precisely why they may well ensure that AA and US together may never grow to a size large enough to be a threat to DL’s position in NYC.

It is absolutely true that nobody stays on top forever, but you need only look at airline history to realize that DL has done a far better job of recognizing changes that are coming in the industry, adapting to them, and doing it faster than other carriers to DL’s benefit.

As much as you want to think that AA and UA will eventually catch up to what DL is doing, they have had an almost equal amount of time to do so - 7 plus decades - yet DL has continued to grow at AA and UA's expense.

DL has firm plans that are taking place right now to increase its revenue while at the same time reducing its cost and strengthening its balance sheet while AA and UA have presented nothing anywhere close
But you don't have to believe my interpretation because the stock market assesses the value of companies and on that basis, DL is far ahead of its peers in the US airline industry and is a much more valuable airline than the vast majority of airlines in the world. The market recognizes that DL is doing things right.


Instead of taking that reality as a personal attack on you, recognize that AA/US has its own strengths, that the airline industry is intensely competitive and AA/US have to be capable of winning based on their own merits today (not history), and other carriers including key competitors DL, UA, and WN will continue to aggressively look for opportunities to grow their business at the expense of AA/US.

That is life and that is business. And it is not personal, as much as you want to think it is.

 

[wings396]

That's a good portion of your problem WT, YOU don't think that anyone here can grasp anything with the exception of YOU. Do you think that you are the only poster here who has a working knowledge of the industry? You have no idea of who people who post on here really are, or what their positions may be. As much you you have made yourself believe that you are a self proclaimed airline expert, you are not.
As I have stated MANY times, IF you were half what you thought you are, I'm sure that you would be sitting in the HDQ of some airline.
From what I know at this point, you never even achieved anything near that level during your time at Delta, why not? How could they have overlooked an airline prophet like you? I don't recall hearing your name mentioned by Horton, Parker, or the UCC during the press conferences about the merger, did they miss out on your high level of knowledge too? Give it a break already, long boring posts do not make and industry expert.,

 

[LD3]

I am very certain that if it comes down to knowing dangerous goods procedures for the ramp, you would beat me hands down in knowledge… but no one wants to talk about that kind of stuff.

If an aircraft went down due to a hazmat problem I bet you would be talking about it....and probably tell rampers and us ex freight dawgs the correct procedures....

 

[WorldTraveler]

If an aircraft went down due to a hazmat problem I bet you would be talking about it....and probably tell rampers and us ex freight dawgs the correct procedures....

wrong... and you can read thru my history but I generally have not participated in operationally related questions because it has been years - decades - since I was anywhere near the operation; I don't comment on what I don't know.
Problem is that a lot of other people think that because they work at an airline, they understand aspects of an airline that are well beyond their area of training or experience.

That's a good portion of your problem WT, YOU don't think that anyone here can grasp anything with the exception of YOU. Do you think that you are the only poster here who has a working knowledge of the industry? You have no idea of who people who post on here really are, or what their positions may be. As much you you have made yourself believe that you are a self proclaimed airline expert, you are not.
As I have stated MANY times, IF you were half what you thought you are, I'm sure that you would be sitting in the HDQ of some airline.
From what I know at this point, you never even achieved anything near that level during your time at Delta, why not? How could they have overlooked an airline prophet like you? I don't recall hearing your name mentioned by Horton, Parker, or the UCC during the press conferences about the merger, did they miss out on your high level of knowledge too? Give it a break already, long boring posts do not make and industry expert.,

You simply get thru your head that there are people who don't make a career at one company or one job. The vast majority of Americans will work at multiple companies during their lifetime and will likely change the entire focus of their job more than once.
Airline workers largely don't understand that concept because the union-based system does not encourage people to move jobs and protects their ability to stay in one job for a very long time - far longer than most other Americans stay in one job.

You can't grasp the concept that there are people in the world who CHOOSE to move on to other careers and move companies even though they did their job well, received promotions, and oculd have stayed if they wanted to.

You can't grasp that this forum is not a closed forum for active airline employees only.

Yes, I actually do grasp the concept that other people do understand the economics of the airline industry - and there are very much people on here who demonstrate what is involved in the business of aviation.

But I also see a whole lot of defensiveness from people just like you when I talk about the real dynamics of the airline industry - and the fact that you and others only fly off the handle without being able to coherently respond to the facts that I have put on the table gives me all the indication I need to know who knows what they are talking about and who doesn't.

This is an open forum. There are people on here who understand the economics of the airline industry far better than you. And there are people like me who have very accurately talked about the financial and revenue problems at AA for years. I have also been very accurate in giving credit to US and AA where they have made progress but you haven't heard or have chosen to ignore it because if you did you would have to acknowledge that I really do know what I am talking about.

You are free to believe what you want but I intend to continue participating in this forum in the manner that I choose to do so.

If it means acknowledging the successes of one carrier at the expense of another, so be it. If it means chronicling the promises which you thought you would receive and believed in as part of this merger only to find they haven't occurred, so be it as well.

And if it bugs the crap out of you that DL has done a better job at building a viable airline in the US than any other airline, then you should probably stop arguing with me and go talk to Wall Street because they are the ones that have valued Delta far higher than any other airline in the US and also making DAL one of the most highly valued airlines in the world.

The airline industry is highly competitive and that is the reality of the industry in which you work. And it is in that context that your company has to figure out how to make this merger work.

I am not about to pretend otherwise or hesitate to write about what the reality of the industry which is out there for anyone who wants to see it.

 

[wings396]

I don't give a ratts arse what Delta has done, you are the one that lives and breathes by every move they make. Nothing wrong with moving into another career, as I have a trade that I work in during my time off as well. My point here is your endless industry knowledge that you CLAIM to have, and letting it go to waste. You may talk a good show, but apparently it didn't impress anyone at Delta enough to move you up to HDQ. I have a pretty good inside knowledge of Delta much to your shock, enough to know that they tend to promote from within pretty high up the ladder. Surely anyone as smart as you would have made it further than you did. Sure you can use the movin on excuse all you want, but not everyone is buying it. Maybe you moved on, because they didn't move you up, is that it? All if your long winded posts impress nobody except yourself. At times I think that you just write all of this stuff because you like to read your own stories. As much as I have tried to stay clear of your posts, I have found it unbearable to see just how superior you think you are when addressing people on here...
Grasp That.

 

[Kev3188]

I don't comment on what I don't know.

That's not true.

 

[WorldTraveler]

feel free to cite quotes

I don't give a ratts arse what Delta has done, you are the one that lives and breathes by every move they make. Nothing wrong with moving into another career, as I have a trade that I work in during my time off as well. My point here is your endless industry knowledge that you CLAIM to have, and letting it go to waste. You may talk a good show, but apparently it didn't impress anyone at Delta enough to move you up to HDQ. I have a pretty good inside knowledge of Delta much to your shock, enough to know that they tend to promote from within pretty high up the ladder. Surely anyone as smart as you would have made it further than you did. Sure you can use the movin on excuse all you want, but not everyone is buying it. Maybe you moved on, because they didn't move you up, is that it? All if your long winded posts impress nobody except yourself. At times I think that you just write all of this stuff because you like to read your own stories. As much as I have tried to stay clear of your posts, I have found it unbearable to see just how superior you think you are when addressing people on here...
Grasp That.

if you have been at HP/US for as long as you have been, why aren't you the CEO? Apparently you don't have what it takes?
The logic you apply that I didn't move up because I apparently didn't have what it takes is equally as ridiculous as thinking that you should be the CEO because you stuck around for 30 years. Neither makes any sense.

You can't grasp that I moved on from the airline industry PRECISELY because I see what it is and I didn't want to invest another 15 years of my life waiting to get out. I left because I want to do something else completely. Not on the side. Completely out.
I'm glad you have a side job. Lots or airline employees do.
I wanted OUT in order to do other things my life and I am quite happy with what I am doing now and wouldn't turn back. But even if you left US today, you would still know more about ramp operations than I ever would. You can't grasp the concept that you don't have a lock on the airline industry just because you receive a paycheck from an airline and you don't all of a sudden possess knowledge for an area that you never worked in, esp. moreso than someone who actually did.... and those jobs ARE done at airline HDQ's - not on the field.
The way you demonstrate that I do not have a lock on knowledge in the discussions that take place on here is to participate in those same discussions using facts and knowledge. You have all too often resorted to name calling and personal attacks instead of countering with real information. Perhaps if you were a whole lot less worried that someone actually knows something more than you and participated in the topic at hand, you would indeed be seen as equally knowledgeable.... and I would welcome your participation.

There are people who can indeed intelligently and factually respond to what I post - and I participate because they are here.

That's not true.

feel free to cite examples, but where you and I have butted heads here is over your ongoing assessments of DL as being so hard on its employees. Out of 80K employees, I am sure there are many who aren't happy - but in a democratic process, there aren't enough of them to decide they want something other than a direct employee - employer relationship.
Your clear goal appears to have been to replicate the employee-employer relationship at DL that you had at NW. I am very happy you had a fulfilling career at NW, but that world doesn't exist anymore. DL runs its business as it sees fit and on a number of levels does it far better than any other airline in the US or the world. Your peers have consistently said they want no more unions on DL property; just like so many conversations on here involving other employee groups at other airlines, many pilots at DL aren't happy w/ ALPA. IN the middle of all this dissatisfaction that so many airline employees have w/ their labor representatives and what those representatives have achieved, DL has chosen to pay its people above average compared to their peers -and most recently has increased pay at faster levels than for any other airline employees in the US. The vast majority of people are far more motivated by money than intangibles which is why DL employees have chosen not to be further represented by unions and are allowing DL to be far more ahead of its peers than it has been at any time in its history.

I am sorry to have become your chief online opponent; but I can't sit back and allow you as a near singular voice to make statements about DL than I could about the potential for an AA route from MIA-TLV which are contrary to fact. You have enormous potential to gain what you want and I would DAP to help you achieve it. Your quest for a larger role for labor is not likely to come at DL, however.
And it is precisely because I understand and understood the culture and business practices of DL that I could say with certainty what I did about the outcome of DL's labor representation processes.

If you would like to cite other examples of where I have talked outside of my league and been wrong, please feel free to post it.

The same thing is just as true regarding network/financial issues in the industry including beyond DL.

And, wings, it doesn't really matter what you think of DL or not but it remains that DL is an archrival of both AA and US - it was before the merger and it is even more so now.

You and your peers can talk all you want about what AA/US will accomplish and I wish you well in doing so.
But the airline industry is not youth soccer where everyone goes home w/ a prize. Some WILL lose and some will win at other's expense because that is the way life really works.
DL completed a merger with NW easier and faster than any other large merger had been done before and in so doing DL has gained a first mover advantage over its peers. DL is moving onto a whole new set of strategic initiatives to counter the mergers that other carriers are still working thru, including AA/US which doesn't even have government approval. While you talk about the strength AA/US will have in the future, DL has already (I learned that lesson, Josh )bought equity stakes in foreign airlines in three key AA markets, gained the largest position at both LGA and JFK in a transaction that US agreed to and which makes it impossible for AA/US to ever regain the position they once had or gain parity with DL, and is refleeting the airline to move more capacity to mainline, which customers prefer and which will reduce DL's costs further and faster than what its peers can do. AA/US still has hundreds of 50 seat jets to dispose of and is way behind DL in terms of large RJs or mainline 100 seat aircraft.

That is the reality of the industry in which you work and you have to compete in that arena. If you want to pretend that isn't the truth, go right ahead - but as long as you or others want to talk about something besides internal labor issues and employee benefits, you should expect I will be here to participate as well.

All the best to both of you. (edited by moderator)

 

[wings396]

That's the difference between you and I. While you claim to be an industry know-it-all, I have never gone that route. Being that I have been in the business for a good many years, I do feel that I have a good insight as to what goes on, but don't go tossing a bunch of back-patting crap all over the place such as yourself. While I have never claimed to be upper management or CEO material, you have flung enough BS around as if you know more than they do. By your own accord, you are way smarter that Parker, know more that those who are on the UCC, and have even fooled yourself into thinking that you are on par to be Anderson's lap-boy. Another thing that makes you a smug-azzed know it all, is the way you view those peasants below your level. You know, those unionized rampers who are stuck in a dead end career, and don't have enough smarts to move on regardless of how bad things may get. You do recall saying that don't you?

 

[eolesen]

And some people wonder why the DL forum died?

On the other board I moderate, we'd call this forum cancer.

 

[mistified]

And some people wonder why the DL forum died?

On the other board I moderate, we'd call this forum cancer.

Now that was funny!

 

[mistified]

Here is another funny one that applies here on occasion. Also contributes to forum cancer.

"As he was talking I found myself agreeing with him and told him so.
He spent the next ten minutes telling me I was wrong."

 

[robbedagain]

ten min to explain to you you were wrong.. wow thats a long time to explain to someone they are wrong

 

[mistified]

wings,
... so let me say once again that I was indeed wrong that AA would emerge from BK as a standalone. The AMR board clearly decided that was not in their best interest.


But, yes, I was wrong about AA and US agreeing to merge because I didn't expect AA employees would be willing to sabotage the company's financial performance in order to gain what they wanted. They did, the board decided enough was enough, and it is now up to Parker to make it all work.

Wow!
I am beginning to have faith again.

 

[usa1]

http://www.thestreet.com/story/11878556/1/airlines-prepare-for-takeoff.html

Once the AMR-U.S. Airways deal goes through, we'll be in a new world order,

B)