USAirways Purchases Domain Name for AA Merger

[gabby]

Not at all. Their labor rates on $ per seat mile are the highest, as well as the fuel bill. Nothing at all "ecomomic" about them. They produce lower "segment" costs, but unless there's a sweet spot of revenue (enough) on any given segment, they are extremely uneconomic at current fuel prices.

Think about it.. If they were so great, why hasn't LUV and B6 and Spirit taken to them with a vengeance? Economics.

Smaller aircraft make sense in some markets. But with fuel where it is, the smaller you go, the more money you lose. Airlines want scope relaxed so that they can pay regional rates vs. mainline rates to the operators.

Still confused. If labor rates and fuel are the highest then why does management want to relax scope? Today we are talking about 50 seaters not being economical. Tomorrow the argument will be that the 70 seaters aren't efficient.
You maybe correct that per seat mile the RJ's cost more. But we can do our own math and see what each seat costs per mile.
The CRJ 200 burns approx 2400lbs/hour. So 50 people to fly for one hour is 48 pounds per person per hour. Or 7.16gallons/pax. or $23.64 each.
A 70 seater (actually 63) burns 3000/hour or 47 pounds per person. Or 7.01gallons/pax. or $23.14 per person per hour.

So a $.50 difference per person per hour.

Now if you can come up with the numbers for a 737 or 321 that would help compare the apple to apples. Keep in mind that the smaller cities enable the company to have more flexibility with costs. Remember the crew meetings back in the fall with Doug P? He even said that while he believes we have too many 50 seaters they allow the company to have more control over costs because the lack of competition in smaller cities. Explains why Vegas is hard place to make money.

I just don't believe what management says. On one hand they want to get rid of 50 seaters and say we have too many of them and 2 months later they sign a contract with SkyWest to fly out of PHX with 50 seaters. Then AA goes BK and they want relaxed scope. All signs point to regional airlines being more profitable.

 

[usa1]

I just read that us airways is temporarily dropping SJO STT SXM. Our passengers will be rebooked on american airlines.

 

[usa1]

Fall 2012 Schedule.

 

[Phoenix]

....Most positions in the company are paying at or near the industry average. Pilots and FA's would be an exception due to their refusal to agree on a contract....

Refusal? That assumes the company is offering an industry average contract.

 

[Move2CLT]

Refusal? That assumes the company is offering an industry average contract.

Or that the pilots have a union competent enough to get one.

 

[AAviator]

Why can't the LCC folks answer basic question???????

Probably because your questions are flawed. Your assumption that US had the highest costs in the industry is not accurate. Perhaps you are basing this on a CASM formula which does not take into account an adjustment for stage length of flights. US, with many more short haul flights than our competitors will show a higher casm but when you factor in the adjustment for stage length we are the lowest of the legacy carriers.



gaucho99, you can stop chasing your tail any time now. CASM is your operating costs divided by asm's. That value gets a little cloudy when carriers report performance.. excluding fuelI see what you're trying to say, but any adjustment to this is really an empty bag. Sure, put a DAL and LCC A320 wing tip to wing tip and fly them empty across a 500 mile course and the leg flown by LCC will cost less -on that leg-. This is only because the the LCC pilots will be paid less. The total snapshot is generated as it applies to the carriers specific network. LCC doesn't have the luxury of saying, "well our costs would be lower if we flew longer legs". That sentiment is meaningless. Want to really make your head spin?

Start reading around page 10:
http://www.planestats.com/Files/20110203_OW_2011_Airline_Economic_Analysis_APC_included.pdf

Its always fun to slice and dice the data, but where the rubber meets the road, as measured by the D.O.T.:
http://www.bts.gov/press_releases/2012/bts011_12/html/bts011_12.html#table_09

Read table #10.

And for Yield, have a look at table# 18.



True, some of our lower costs come from lower labor costs but it is not as significant as most people would assume. When US was seeking to merger with DL, I did a little investigating and found out I was paid more at US than my counterparts at DL. Most positions in the company are paying at or near the industry average. Pilots and FA's would be an exception due to their refusal to agree on a contract.

You have low labor costs. Thats the extent of "low cost" at LCC.

In my opinion, a US-AA combination would beat an AA stand alone hands down. But I don't see a hostile take over. I believe AA will be on board with the merger be it prior to emerging from bankruptcy, or shortly thereafter.

Ah,... no. But one can always hope. I hope AA has a good future. One that includes LCC is certain to be very problematic and debilitating

 

[AAviator]

And there is a big part of the problem. Assume that mechanics, fleet and agents are paid similarly at both airlines. AA's bankruptcy term sheets presented to the pilots and FAs do not cut their payrates by any substantial amounts. Scheduling and workrule changes (resulting in headcount reductions) account for the bulk of the wage savings. Even after Ch 11, AA's pilots and FAs will earn thousands of dollars more per year than US pilots and FAs. From where does Doug Parker propose getting the money to raise the pay of US pilots and FAs to the AA levels if the airlines are combined? AA's revenues? That will simply transform a profitable post-Ch 11 AA into a money-losing AA.

Spot on.

 

[AAviator]

Now what? You're right there with USA320Pilot, usa1, etops1, ets.etc...

AA + LCC NO WAY!!!!

I do know a few things for sure US is not in bankruptcy and is not near insovency. Contracts are being settled. F/A duty rigs and pay will soon be much better than AA currently has. To name a few.

Feel better?

AA, on the other hand, is not any where near having its' house in order and is insolvent I find it humorous that you continue to brag about your pay, how smug.

I'm not bragging. I do think I'm underpaid. I think LCC pilots are underpaid too. Our costs are high, but yours are even higher on a casm basis.




I guess it's true pride comes before the fall. Wow, I am so glad that I am not you.

Me too.


Maybe you can paint the "LCC and AA no way!!!" slogan on the side of those really modern MD-80's if it will make you feel any better about the condition of your company or your future paycheck.

Not a bad idea. Virgin did something like that on their A330's when AA and BA first applied for ATI like 100 years ago.

It will have to be pretty soon though. The 738's are rolling in and the A319/321's start piling in next year.

So once again let me reiterate that AA cannot ignore US's 13 billion in revenue that it needs to be able to compete with UA and DL.

Sure we can. A better question would be: where is LCC going to get the revenue to compete with DL and UA? A lower cost AA is a big problem for US too.


US has a modern fleet that when combined with AA's future orders from Airbus and Boeing will give it a fleet that is newer on average than the rest. US has a very valuable, attractive portfolio of slots at slot controlled ariports. US still has enough slots in the NY market when combined with the AA slots to put AA on par with DL in the New York market. US has a very good hub operation out of PHL that is very competitive with UA in EWR. US has a succesful hub in CLT. AA, on the other hand has yet to make it's first dollar out of the southeast (remember RDU,BNA).

Can you say Miami?

I think your eye sight is a bit myopic about the pilot scenario playing out at US. Yes, it is a hell of their own making. And yes, they and the courts will have to bare the brunt of the burden to straighten it out. But, that is only part of the dynamic. Unfortunate, yes. US has yet to see the spat with pilots stop the company from combining the two networks and continuing operations. A merger with US has less regulatory issues than with DL. You should be so lucky to combine with US. The other alternatives for your company are less than appealing.


<chuckle> You've been flying with chip too much.

They are:
1.) AA languishes because it does not have the size to compete with DL and UA, thus it does not have enough revenue generation and must seek BK reorganization a second time further weakening AA.

What about the 460 new jets that are still coming?

A little alternative point of view for you.
http://www.aviationplanning.com/Images/AMR%20Bankruptcy%20-%20Time%20For%20Reality.pdf
(page 9)

 

[AAviator]

Maybe a US/AA route system would be radically different than you think? Radically changing your numbers. I could see 25% or more of the US Airways system going away, which is 25% of what you, DL and UA need. I can also see the newer US fleet easing the AA aging fleet problem, saving them many millions ..... I also think wall street has more confidence in Parker than Horton. That's why the cash is lining up in PHX.

On another note .... the US - DL, LGA - DCA slot swap indicates to me that there's nothing going on with a DL, US merger.

Parts of LCC make sense to me.. 75% is a stretch.

If you're really suggesting radical change (you did say radically twice), what does that say about your confidence LCC's current form?

Also, if its simply an exercise of redeploying capacity, organic is the way to go. 460 new shiny ones on the way, with fresh, smiling, entry level paid, new bodies. AA's going to have the youngest fleet in five years.

We've got a long road ahead of us, and I don't have 100% confidence in our illustrious leaders. Far from it, but given the choice between a deal with LCC and what I'm seeing so far, it's an easy choice.

 

[AAviator]

Still confused. If labor rates and fuel are the highest then why does management want to relax scope?

Pure and simple. Low labor rates.

 

[gabby]

Pure and simple. Low labor rates.

In one post you say "Their labor rates on $ per seat mile are the highest" then you say Low Labor Rates in your above post.

Your starting to sound a lot like management. What is it? Cheaper to have regional jets or not?
You may say that the 50 seaters are $.50 more expensive than the 63 seaters but you do have one more F/A. So the costs are about equal. If anything the CRJ 200's have a winning edge. Don't believe anything management tells you. If the regional jets weren't making them money we wouldn't have 60% of our flights using them.

 

[usa1]

Parts of LCC make sense to me.. 75% is a stretch.

It's been all down hill for AA since your failures in BNA and RDU. US/CLT is the answer ..... And maybe the AA employees will not want to make the personal financial sacrifices necessarily move forward on the shiny new planes. And the new planes ..... they are right out of the old "Screw Labor 101" play book. Dangle some shiny new toys in front of the simpletons and promised them world if they will give up everything?

 

[Phoenix]

And there is a big part of the problem. Assume that mechanics, fleet and agents are paid similarly at both airlines. AA's bankruptcy term sheets presented to the pilots and FAs do not cut their payrates by any substantial amounts. Scheduling and workrule changes (resulting in headcount reductions) account for the bulk of the wage savings. Even after Ch 11, AA's pilots and FAs will earn thousands of dollars more per year than US pilots and FAs. From where does Doug Parker propose getting the money to raise the pay of US pilots and FAs to the AA levels if the airlines are combined? AA's revenues? That will simply transform a profitable post-Ch 11 AA into a money-losing AA.

You have assumed that airline money is made over a long period rather than by pumps and dumps. Setting up the circumstances that might result in the next threat of bankruptcy is irrelevent to an airline manager, who won't be around to see it (neither will he be around to take advantage of it).

 

[Phoenix]

Parts of LCC make sense to me.. 75% is a stretch.

If you're really suggesting radical change (you did say radically twice), what does that say about your confidence LCC's current form?

Also, if its simply an exercise of redeploying capacity, organic is the way to go. 460 new shiny ones on the way, with fresh, smiling, entry level paid, new bodies. AA's going to have the youngest fleet in five years.

We've got a long road ahead of us, and I don't have 100% confidence in our illustrious leaders. Far from it, but given the choice between a deal with LCC and what I'm seeing so far, it's an easy choice.

They are replacement jets and you won't get most of them. In five years you will be lucky if all your furloughs are back (smiling not so much).

 

[etops1]

I'm scratching my head on your response...

You say: "The above sums it up".. Next, you answer my question with: "I don't know". Then you say: "IMHO, US really has nothing to lose by going full throttle after AA. Why not?"





Welllll,
If US succeeds in a hostile buyout of AA, all those problems are in your lap.


Now what? You're right there with USA320Pilot, usa1, etops1, ets.etc...

AA + LCC NO WAY!!!!Listen douche bag . Don't mention me on #### you post . I have been pretty quiet these past few weeks and will continue to be until if and when something is announced . Stop being so f 'n arrogant . Prick .. You keep talking your trash .. Neither you nor I know what will happen . Stop acting as if you do . You don't know jack S#it .