Originally Posted by alfaromeo

Carl,

The first rule of holes is when you are in one, stop digging. You stated unequivocally that DEBT was the problem for American and you stated unequivocally that their bankruptcy was about debt and you stated unequivocally that AMR's debt load was double Delta's. I merely asked for you to provide some proof of these statements. As usual, you just launch personal attacks, bluster about some more, and then launch some more personal attacks.

Let's address the first question, this is what an airline analyst had to say:

• "In 2011 AMR should lose $1.140 billion while Delta should earn $775 million, a pretax difference of $1.9 billion. As the table clearly shows, were AMR to magically have total seat mile costs equal to Delta, it would only close one-third of the profitability gap versus Delta. We have chosen Delta as the comparison standard since LCC is a much shorter hop carrier and the UAL data may be distorted by the ongoing consolidation of data for Continental and United."
  
• "The bigger issue for American is, by far, its inability to generate unit revenues, or revenues per available seat mile, equal to its competitors. The table below compares AMR unit revenue performance to Delta. Were AMR to generate passenger revenues per seat mile at the level of Delta, the gap between these two carriers would shrink by $910 million or 50 percent more than the gap on the cost side of the equation."

I can't get the tables to post but they just show in a table format the numbers listed above. Everyone in the industry knows that American has a revenue problem. They will only be able to shed a small portion of their debt in Chapter 11, because most of their debt is secured and most of their secured debt is backed by aircraft. You do understand Carl that if AMR rejects EETC's they lose the aircraft right? They don't get to wipe out the debt and keep the jets.


So in the last few years AMR revenue has dropped below industry performance. Why is that? Almost every analyst will tell you that their total network is much too small. Their own network is too small and their code shares and alliances are too small. They are losing business traffic to Delta and United, mostly Delta. That is why we are outperforming the industry in RASM momentum and AMR is underperforming. That is why AMR has to do something to make their extended network bigger or they need to fragment. They can't operate in no man's land like they are now. They used to be the big dog and now they are the little dog. That dog ain't hunting.



Now you bring out the big guns, Southwest. You say without code shares Southwest should be bankrupt. I have news for you Carl. Southwest's PRASM is light years behind us. They are light years behind us because their extended network and operating model do not attract business travelers. You do know that one round trip ticket in business class on your whale will just about buy out the entire cabin of a Southwest 737, right. They make money because they operate with a lower cost model. They serve about 80 cities total, they use one fleet type, they run an extremely lean staffing model (yes their pilots fly more hours than we do, it's a fact) and they don't care if it takes someone 9 hours to go from Baltimore to Kansas City.


In fact, Southwest has recognized that their cost model is slowly rising and they are now adapting their network to try increase their PRASM performance. They are talking about adding international, adding Hawaii, they are buying bigger aircraft, and they are trying to entice more high fare passengers to book with them. So Southwest management would be the first to tell you that it is absolutely true that their PRASM performance is so far below ours because our extended network, including code shares and alliances, dwarfs theirs. They survive because they have much lower costs also. Get it.



So Carl, please prove to me that AMR's bankruptcy is all about debt. For you to claim that, you should at least have some numbers, they are all available on Edgar. Or are you going to admit that you just made up your analysis and you made up your numbers.


No, I think you will make more personal attacks and then claim I am on FPL (I'm on vacation) and then make more personal attacks.