Dont call me Shirley
Veteran
- Aug 20, 2002
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At the risk of helping this thread turn even more AA related, how many times will AA take over an airline and then dismantle it? How much is left of AirCal, Reno Air, and TWA?
This airline could collapse.
- Thread starter deltawatch
- Start date
At the risk of helping this thread turn even more AA related, how many times will AA take over an airline and then dismantle it? How much is left of AirCal, Reno Air, and TWA?
Absolutely, there was a combination of factors. However, it is clear that 9/11 was THE overriding factor. Airlines had NO traffic for a number of days. Airlines had substantially less traffic for the better part of a year. And, yes, there were already structural cost/revenue issues in the airline industry. However, we should not minimize the global impact of 9/11 -- it took a terrible toll on the airline industry.
9/11 was a tragedy for the airline industry. It was a tragedy in the sense that it took 4 planes and hundreds of lives in the air...thousands on the ground. THAT is a tragedy.
Truth is, though, that the industry had crumbled prior to 9/11 and that was just another bump...the final in a string of more significant ones. You're right...9/11 did shut down the airways for three days...the first time that has EVER happened. That was a HUGE expense. But that was a blip. The impact of 9/11 was felt for a short period. However...the items I listed above were far larger and longer-lasting (most, such as the Internet, biz pax choosing not to fly, and a struggling economy have actually maintained or gotten stronger in the past couple of years.) My point is that 9/11 did not force AA to dismantle swaths of TW...the other economic factors seem to have. So in a way (and without knowing the facts that the executives at the time of the deal know), I am actually sticking up for AA (can't believe it) but saying that please...do not blame 9/11. THAT is not the negative factor that has brought the industry to its knees. 9/11 was a side dish for an already-served feast of negative stimuli to the airline industry.
WorldTraveler
Corn Field
- Dec 5, 2003
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I hate it when I'm aware from the board for several days...just means I have several bases to cover...
1st...Holly Hegeman is sensationalistic which is why she has little credibility. I would argue that any of the investment house airline analysts are far more objective rather than subjective in their discussions.... and I have witnessed a panel discussion involving Holly and several other analysts.
2nd... 5th freedom rights are certainly valuable. The reason why DL pulled down Frankfurt was because they were serving it very inefficiently w/ a token presence in a major airline's hub. Yes, it is always more efficient to connect a passenger if he can be carried nonstop but there are a number of cities that were served from Frankfurt and are still not part of the DL operated route system because they are too thin to be served nonstop from the US. DL served most of the FRA hub w/ 120 or so seat 727s with utilization that was less than six hours per day using pilots that deadheaded for their intra-Europe flights from the US. Contrast that with NW and UA's 5th freedom routes in Asia and DL and NW's 5th freedom routes to India which are largely beyond the nonstop range of aircraft from the US, there is a strong local market, all carriers are on good competitive position relative to their competitors, and aircraft and pilots similar to the transoceanic aircraft are used. Those 5th freedom routes are profitable and will be maintained or new markets will be opened even if US airlines are able to fly them nonstop.
Third,Fly, Yes, the legacy carriers have done everything imaginable to alienate their customers. It's bad enough to take something away but it's even worse to charge for it. However, many but certainly nt all of the fees are intended to level the full-service for a dime mindset that customers have from the legacy airlines because that's what they have known for decades. ie. it is not possible for the legacy airlines to continue to distribute their flights through every CRS/GDS and compete w/ the ultralow fares that LCCs offer. Requiring passengers to pay a fee to talk to a res agent is cruel but it is working to force passengers to the web which is the cheapest distribution channel and where most LCCs have received the majority of their bookings for years.
Finally, the whole premise of the topic title is sensationalistic. DL's very combative bankruptcy judge proclaimed this week that she believes based on expert testimony that current DL management is competent and that the company will more than likely successfully restructure. The problem is the damage that was done to the company for seven years but DL is no more likely to disappear than any other legacy airline.
We've now been through the histrionics that every legacy airline would disappear since that is what airlines in C11 usually do. Times have changed and airlines have learned to use C11 as a tool to reduce costs and allow themselves to better compete just as has been done by other industries for quite some time. It is highly UNLIKELY that any of the current major legacy airlines will liquidate but they very well may choose to combine w/ each other at some point if that is in their best business interest. For now, however, no combinations will occur until the industry has stabilized. No one is going to buy a sick company; even the healthiest companies are that way because they know how to manage their business which includes staying aware from mergers and acquisitions which are very risky and very costly.
1st...Holly Hegeman is sensationalistic which is why she has little credibility. I would argue that any of the investment house airline analysts are far more objective rather than subjective in their discussions.... and I have witnessed a panel discussion involving Holly and several other analysts.
2nd... 5th freedom rights are certainly valuable. The reason why DL pulled down Frankfurt was because they were serving it very inefficiently w/ a token presence in a major airline's hub. Yes, it is always more efficient to connect a passenger if he can be carried nonstop but there are a number of cities that were served from Frankfurt and are still not part of the DL operated route system because they are too thin to be served nonstop from the US. DL served most of the FRA hub w/ 120 or so seat 727s with utilization that was less than six hours per day using pilots that deadheaded for their intra-Europe flights from the US. Contrast that with NW and UA's 5th freedom routes in Asia and DL and NW's 5th freedom routes to India which are largely beyond the nonstop range of aircraft from the US, there is a strong local market, all carriers are on good competitive position relative to their competitors, and aircraft and pilots similar to the transoceanic aircraft are used. Those 5th freedom routes are profitable and will be maintained or new markets will be opened even if US airlines are able to fly them nonstop.
Third,Fly, Yes, the legacy carriers have done everything imaginable to alienate their customers. It's bad enough to take something away but it's even worse to charge for it. However, many but certainly nt all of the fees are intended to level the full-service for a dime mindset that customers have from the legacy airlines because that's what they have known for decades. ie. it is not possible for the legacy airlines to continue to distribute their flights through every CRS/GDS and compete w/ the ultralow fares that LCCs offer. Requiring passengers to pay a fee to talk to a res agent is cruel but it is working to force passengers to the web which is the cheapest distribution channel and where most LCCs have received the majority of their bookings for years.
Finally, the whole premise of the topic title is sensationalistic. DL's very combative bankruptcy judge proclaimed this week that she believes based on expert testimony that current DL management is competent and that the company will more than likely successfully restructure. The problem is the damage that was done to the company for seven years but DL is no more likely to disappear than any other legacy airline.
We've now been through the histrionics that every legacy airline would disappear since that is what airlines in C11 usually do. Times have changed and airlines have learned to use C11 as a tool to reduce costs and allow themselves to better compete just as has been done by other industries for quite some time. It is highly UNLIKELY that any of the current major legacy airlines will liquidate but they very well may choose to combine w/ each other at some point if that is in their best business interest. For now, however, no combinations will occur until the industry has stabilized. No one is going to buy a sick company; even the healthiest companies are that way because they know how to manage their business which includes staying aware from mergers and acquisitions which are very risky and very costly.
So now it is 'histrionics'? Last year, when Delta wasn't in BK, it was an all but done deal that United would never emerge because of this.
I think these are the types of posts that have made you lose your credibility. You were unusually cruel to the UAL employees, always dangling your little facts over us to .....what? ......make us feel bad? Not sure. Now Delta gets their turn and unfortunately they are the current "weakest link". We shall see if they can make it but currently things don't look well.
This entire industry almost seems like a game of musical chairs. Who will be left out when the music stops?
WorldTraveler
Corn Field
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My dear, the point is clearly that the industry somehow manages to find a new disc jockey in order to keep the music going.
In all,honesty, I wasn't any harder on UA than other analysts. Besides, it got your goat enough to make you fight harder so you should be thankful to me.
You forgot to answer me about lunch... and remember I'm a very sensitive man and CANNOT stand rejection.
WorldTraveler
Corn Field
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Piney,
good to see you playing over on the DL board. stay for a spell.
You hit it right on the head when you say that Holly probably said what she said to generate hype which is exactly what I've said.
You are correct that the legacies aren't there but I think you vastly underestimate the huge work the legacies have done in lowering costs and revamping their business model. And remember that most of the LCCs have been sheltered from reality by fuel hedges that will not exist for more than a few more months except for at WN. We are quickly moving into a period where comparisons between ALL US carriers will be much more valid because the legacies have and are reworking their business models while the LCCs are being forced to compete on a much more equal basis.
And as for the statement that DL's numbers don't show much improvement, I beg you to go back and review them and rework URINALYSIS. Just for a summary statement, for the 3rd quarter, DL's YOY operating margin was halved from -10 to -5 and that quarter included only 2 weeks in bankruptcy. And DL would have shown an operating profit of more than $150M if fuel prices had been constant. Revenue was up by 9% and fuel constant costs were down 6%.
DL is very much moving in the right direction.
Check here:
http://investor.delta.com/edgar.cfm?DocType=Quarterly&Year=
good to see you playing over on the DL board. stay for a spell.
You hit it right on the head when you say that Holly probably said what she said to generate hype which is exactly what I've said.
You are correct that the legacies aren't there but I think you vastly underestimate the huge work the legacies have done in lowering costs and revamping their business model. And remember that most of the LCCs have been sheltered from reality by fuel hedges that will not exist for more than a few more months except for at WN. We are quickly moving into a period where comparisons between ALL US carriers will be much more valid because the legacies have and are reworking their business models while the LCCs are being forced to compete on a much more equal basis.
And as for the statement that DL's numbers don't show much improvement, I beg you to go back and review them and rework URINALYSIS. Just for a summary statement, for the 3rd quarter, DL's YOY operating margin was halved from -10 to -5 and that quarter included only 2 weeks in bankruptcy. And DL would have shown an operating profit of more than $150M if fuel prices had been constant. Revenue was up by 9% and fuel constant costs were down 6%.
DL is very much moving in the right direction.
Check here:
http://investor.delta.com/edgar.cfm?DocType=Quarterly&Year=
MMB
Senior
WorldTraveler
Corn Field
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plunging is a bit inaccurate. actually, quite a bit.
Revenue for the legacies began to fall apart in the beginning of 2001, just nine months before 9/11. There was hardly a plunge in the making. Legacy carriers went into a tail spin after 9/11 because they had to pull so much capacity out of the system since people were not flying; airlines do not shrink very well at all and thus losses started to accumulate. Union's failure to recognize what was happening didn't help matters either. And all the while the LCCs were poised and ready to jump in after 9/11. One particular airline had just digested a long-dying carrier which caused significant harm to that AAcquirer.
While I certainly don't want to give terrorists credit for landing a torpedo in the side of the airline industry, that is what they did. Financial statements support such an assessment.
Revenue for the legacies began to fall apart in the beginning of 2001, just nine months before 9/11. There was hardly a plunge in the making. Legacy carriers went into a tail spin after 9/11 because they had to pull so much capacity out of the system since people were not flying; airlines do not shrink very well at all and thus losses started to accumulate. Union's failure to recognize what was happening didn't help matters either. And all the while the LCCs were poised and ready to jump in after 9/11. One particular airline had just digested a long-dying carrier which caused significant harm to that AAcquirer.
While I certainly don't want to give terrorists credit for landing a torpedo in the side of the airline industry, that is what they did. Financial statements support such an assessment.
B
B.O.B.
Guest
WRONG! From my sources AA is planning on parking the TWA 757's next year sometime. As for the TW MD80's...What a piece of s**t! :blink:
That is why AA/AS is a bad idea. The AirCal and Reno routes have been turned over to Eagle. Only a few stil remain on AA's route structure. LAS is the only big city that remains for AA. LAX-LAS and SJC-LAS (not even sure if SJC-LAS still operates) and that's about it.
If AA did buy AS, it would be great for additional aircraft, but not for the routes. BAD IDEA!
You are incorrect. ALL former TWA employees , the 20,000 that came to work for AA and all those who retired from TWA before AA bought the assets, get retirement medical benefits from AA. The 20,000 who came to work at AA were grandfathered onto the active AA plan. They get exactly what a nAAtive gets. Those TWAers who retired before the asset purchase have to pay $90 a month for one person or $180 for two if they are under 65. If they are over 65 it is $130 for one person or $260 for two if I remember correctly. The only ones that MIGHT not get it is the TWA management that came to work for AA. A while back, AA took away retiree health care for AA management. I can't see AA giving retiree health care to former TWA managers (now AA managers) while denying "nAAtive" management the same benefit. And I believe that the benefit can be used at age 55 (although I haven't read all the requirements closely).
Flawed analysis. AA parted with $625 million in cash and assumed over $3 billion in liabilities. Plus they had to pay enormous integrations costs (paint the planes and put them on the AA certificate. airport signage, uniforms, etc). And bringing the TWA people to AA wages and benefits cost AA over $200 million a year. AA only got about $225 million for Worldspan. So Worldspan did not even pay for half of AA's initial cash outlay. TWA a white knight? No way. AA would have been just fine without TWA. In fact, they would have had a much stronger balance sheet without it. But it is now time to get back on topic.
MCI transplant
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<_< As a matter of fact,the average age of TWA's fleet at the time of the buy-out was less than that of aa! As for the 757's, aa has threatened to put them on the ground 4 years ago because they're powered by Prat engines!! But guess what? They're still flying! Is your source of info.the same as TWU informer????
The leases on the remaining ex-TWA 757s expire in 2007.<_< As a matter of fact,the average age of TWA's fleet at the time of the buy-out was less than that of aa! As for the 757's, aa has threatened to put them on the ground 4 years ago because they're powered by Prat engines!! But guess what? They're still flying! Is your source of info.the same as TWU informer????
