AMR CEO ridicules possible USAir bid
02-04-2012 | 12:34 PM
#11
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From: A319/20/21 FO
1. AA isn't even the largest carrier in 3 of its 5 "cornerstone" markets.
2. CLT is one of the highest-yielding hubs in the US, and the fourth-largest airline hub in the world.
3. US is strongly profitable at present. AA just lost more money in one month than US lost in 2008, one of the worst years in industry history.
Horton ought not cast too many stones ...
2. CLT is one of the highest-yielding hubs in the US, and the fourth-largest airline hub in the world.
3. US is strongly profitable at present. AA just lost more money in one month than US lost in 2008, one of the worst years in industry history.
Horton ought not cast too many stones ...
02-04-2012 | 12:44 PM
#12
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Yup. The airline that regional pilots say "i'll wait till someone else is hiring"
02-04-2012 | 06:01 PM
#13
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The people holding the money, however, might not really be as amused, when someone is fighting the consolidation mantra. Still, they also want to be the daddy after BK: exit first, buy later, be in charge. This might work.
Where Horton might be going completely off the reservation, however, is when he also rejects the capacity discipline mantra that it so fashionable among analysts and creditors. In a Bloomber article dated today, he said:
"... American’s 2011 order for 460 new jets and overseas alliances with carriers such as British Airways would help the airline resume growing profitably even as rivals plan to hold the line on expansion in the next several years. 'This is not speculative,' Horton said. This is something that is already teed up.'... Recent cutbacks in seating capacity weren’t a strategy for making money, he said. American will rework labor contracts to loosen restrictions on what size planes its pilots can fly and on the partnerships it can forge with other U.S. carriers to share flight codes, bringing in more passengers, Horton said..."
It's important to understand that a lot of the creditors/shareholders in other airlines that went through CH11, and at AMR, are probably the same. I don't think this is the song they want AMR to sing.
I see no reason AMR wouldn't exit from a position of strength, unless they mismanage their reorganization. This demonstartion of hubris is strike two, if you're looking at it strictly from an investor perspective. The "cornerstone" strategy hasn't been resonating with that crowd, especially after they took a bath on equity, and for creditors about to take a haircut.
In my mind, this is the first serious hint AMR might botch their CH11.
02-04-2012 | 06:22 PM
#14
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Consolidation has gotten so far in this industry, it seems it is as much about retaining and increasing ones passenger base as it is about which hub is better. An AA/US merger doesn't may not give AA a bunch of exciting hubs or intl routes, but it most certainly is a big boost to their passenger base in a time where DL, UA, and WN are setup better in that regard domestically and it removes a chunk of revenue from UA and Star. There is value in that,despite Horton's comments. Management comments, particularly early in the process are more often about them retaining control than they are about what could be best for the company. When DL management similarily rebuffed Parker, they didnt actually have a plan something that is largely forgotten because they successfully scrambled one together that was in fact much better for them. Contrast that with say ACA management who got themselves into a pinch with UA as a result of their own previous decisions. UA basically was willing to keep the flying as long as management was changed which was essentially represented by the Mesa bid after others like SkyWest declined to get involved. Mgmt successfully co-opted employees and others to reject the Mesa bid in favor of becoming Independence an outcome that is probably just fine by most pilots but certainly wasn't in e best interest of ACA as going concern. Short version: just because Horton says it's a bad idea early in the process, doesn't mean it has anything to do with what's best for AA. Keep your eyes open AA people and be careful who dance with on any given day.
02-05-2012 | 04:08 AM
#15
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From: 737 FO
02-05-2012 | 04:52 AM
#16
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Airline Filed Emerged
American 11/29/2011
Continental 12/3/1990 4/27/1993
America West 6/27/1991 8/25/1994
US Airways #1 8/11/2002 3/31/2003
United 12/9/2002 2/1/2006
US Airways #2 9/14/2004 9/27/2005
Delta 9/14/2005 4/30/2007
Northwest 9/14/2005 5/31/2007
This second chart asks the question about how long American Airlines would stay in bankruptcy court if its visit lasts as long as that of its most recent predecessors:
Airline Days in bankruptcy If American stays that long
US Airways #1 232 7/18/2012
US Airways #2 378 12/11/2012
Delta 593 7/14/2013
Northwest 624 8/14/2013
Continental 876 4/23/2014
United 1150 1/22/2015
America West 1155 1/27/2015
02-05-2012 | 05:13 AM
#17
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From: 747
The conversation here is quite interesting. There are those who want to take AA to task for not going into BK back in 2003. No credit is given for the hard work by our company and its employees to fight through the roughest decade in airline history. Clearly the data below shows most of AA competitor's used the BK process early, and some often to drive their cost down. Now folks here who don't have a clue how to run an airline or any other major enterprise are postulating about what AA's future will be, and who it should have as a strategic partner if any. We will indeed emerge from BK as a strong competitor and I say it will be awesome! Time will show who's right!
Airline Filed Emerged
American 11/29/2011
Continental 12/3/1990 4/27/1993
America West 6/27/1991 8/25/1994
US Airways #1 8/11/2002 3/31/2003
United 12/9/2002 2/1/2006
US Airways #2 9/14/2004 9/27/2005
Delta 9/14/2005 4/30/2007
Northwest 9/14/2005 5/31/2007
This second chart asks the question about how long American Airlines would stay in bankruptcy court if its visit lasts as long as that of its most recent predecessors:
Airline Days in bankruptcy If American stays that long
US Airways #1 232 7/18/2012
US Airways #2 378 12/11/2012
Delta 593 7/14/2013
Northwest 624 8/14/2013
Continental 876 4/23/2014
United 1150 1/22/2015
America West 1155 1/27/2015
Airline Filed Emerged
American 11/29/2011
Continental 12/3/1990 4/27/1993
America West 6/27/1991 8/25/1994
US Airways #1 8/11/2002 3/31/2003
United 12/9/2002 2/1/2006
US Airways #2 9/14/2004 9/27/2005
Delta 9/14/2005 4/30/2007
Northwest 9/14/2005 5/31/2007
This second chart asks the question about how long American Airlines would stay in bankruptcy court if its visit lasts as long as that of its most recent predecessors:
Airline Days in bankruptcy If American stays that long
US Airways #1 232 7/18/2012
US Airways #2 378 12/11/2012
Delta 593 7/14/2013
Northwest 624 8/14/2013
Continental 876 4/23/2014
United 1150 1/22/2015
America West 1155 1/27/2015
02-05-2012 | 05:26 AM
#18
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I think it's a bitter pill to swallow, but I also view things from where I sit as a B767 Captain. I overlay it with the changes in place at DAL, UAL, US and others that have gone through the BK process. Clearly, the negotiations have just gotten under way, and we should know more in the next 3-4 weeks.
Ultimately, we will have a cost structure that makes us as competitive if not more so than DAL and UAL. The pain extends to every part of our company and no one is spared!
There is no return to the glory days, if there ever were any. My read of airline history shows that this cyclical pattern has affected the industry since it's inception.
Now, there's only the way forward. How we get there is up to every employee at AA.
02-05-2012 | 05:31 AM
#19
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CEO's don't directly denigrate another carrier/CEO like that just for kicks. This is Horton's "keep American my American" speech to rally the troops around his plan. US are the barbarians at the gate de jour. Their pay rates are scary, and it appeals the the little bit of Nordstrom-pilot pride in all of us. 
Capt H
Capt H
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