Originally Posted by
FlyPurdue
Normally BK is used to address a cost issue, not a revenue issue - I still wonder what levers would be used to further reduce cash burn without shrinking into oblivion. Also Wall Street has been obsessed the past few years with capacity discipline - thinking it creates pricing power. Unfortunately in the leisure space, you still have to compete against your irrational competitors (NK/F9/Norwegian...). In that world, market share / size is key, because you can’t just charge more in economy because DL/AA are ‘full service.’ AA tried that when NK was aggressive in DFW, and AA was taken to the cleaners.
I still thought it was a good presentation, and helpful to hear the other side.
unfortunately, I think the next levers that AA could pull to lower costs will involve parking planes (777s and older airbii) and closing hubs. Not sure what else they could do. Not saying this will happen, but absent a recovery I think this is the route all majors will go
maybe if contracts are coming up with regional carriers they could not be renewed, but that’s about it that I can think of