I agree, the business model is poor. Fares are still too low, and don't adequately cover costs. Niche carriers like Spirit and Ryanair are ****ing off passengers with these stupid incidental charges, like for carryons, blankets and other stuff. AA and other majors need to raise their fares to cover costs---period, instead of employees taking pay/benefit cuts to subsidize low fares. In what other industry do employees take the hit to ensure low expenses for consumers???

One conclusion I can draw from this inability of AA and others to pass along higher costs to consumers in the form of ticket prices is this: There are still too many airlines, dumping cheap seats on a volatile market.

 

there it is! the fares have not been raised for many years. and you're right it is time to thin the herd. just hope the team i'm on doesn't get thinned. not looking too good right now.

 

What even more funny about these quotes from newark and olympic is all I heard from the guests on MSNBC and CNBC was how labor was killing AMR. You would think these liberal jewels would point out some more relevant reasons like the wonderful financing cost their upper management signed up for.

 

Bingo. If revenues don't cover expenses either your pricing is wrong or there is too much supply. Airlines have spent decades trying to cut each other's throat for a few points of market share, one blip in the market and razor thin margins turn to a loss.

As someone else mentioned, the herd is getting thinned because of this, as painful as it may be liquidation might help the "collective" more than any other solution.

 

Sounds like our pre bankruptcy forced investment in DAL preferred stock. If memory serves correctly, it was converted to common stock on Christmas Eve no less, and went from $72/share to ($7/share?). Yeah, I have THAT T-shirt too...

 

Get out of debt. You know that new car you were thinking about financing? Yeah, well don't. Gonna upgrade to that big house? Better fund your own retirement plan first.

 

November 30, 2011
American Airlines Seeks to Shed Planes, Engines
By REUTERS

(Reuters) - American Airlines wants to shed unwanted leases for 24 aircraft and engines as the third-largest U.S. carrier begins cutting costs after filing for bankruptcy.

AMR Corp, the parent company, said it has a large number of aircraft on order, and breaking leases on older equipment will allow it to speed up its fleet renewal.

American Airlines was the lone major U.S. carrier to avoid bankruptcy in the past decade. The company now seeks to catch up to competitors by using Chapter 11 to bring down labor and fixed costs.

The company said in court documents that it leased the equipment, mostly McDonnell Douglas DC-9 planes, when it anticipated greater demand for air travel.

However, "with the ongoing downturn in the economy and in travel, these same aircraft and engines have little if any marketable value and are no longer necessary to the debtors' operations."

It did not say in court papers how much it would save by shedding the leases.

American Airlines and the attorney who filed the papers did not immediately return a call seeking comment.

The company has a fleet of more than 600 jets.

The airline said the majority of the equipment has already been taken out of service and is stored in New Mexico.

The case is In re AMR Corp, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

(Reporting by Tom Hals in Wilmington, Delaware, editing by Dave Zimmerman)

 

Actually, the industry has been exercising uncommon restraint wrt fares as of late. With all the capacity cuts that DAL and others have been effecting, they have at least remained constant. Even "The Low Fare Carrier" has not been using THAT particular phrase for at least a year, because it simply isn't true. The incidental charges that you complain about are basically what is saving the industry right now, and are very very smart. None of those fees go to the gubbamint. That all goes right to the bottom line of the carriers. I don't know about you, but I would much rather DAL keep the fares lower and charge for bags than to raise the fares, carry free baggage and pay more taxes.. but that's just me. Carrying bags for free might resonate well with the consumer, but it is leaving millions of $ on the table. (It won't continue forever) AS far as carriers dumping cheap seats, I don't think you are seeing any of the legacies doing this, and the smaller carriers that are are niche players that really don't affect the overall picture that much.. unless I am missing something you are seeing..?

 

The first thing is not allow upper management to collect their retirement or any lump sum payments within 3 yrs prior of a bankruptcy and not until they exit bankruptcy. Also, spare me the board members argument, i would argue that is who the shareholders should go after.

 

Exactly...this could thin out the herd and could possibly prevent overselling flights and thus preventing airlines from having to pay out vouchers to those who get bumped/volunteer to get bumped. Granted it's one idea within thousands that could help get AA out of the hole. My 2 cents though...