Delta’s mismanagement help AA big?!?!
 

This candid interview from www.planebusiness.com can be viewed in whole on the APC American Forum.

American Airlines' New Chief Revenue Officer Vasu Raja Dishes On Capacity, The Old AMR, And Why You Need To Zig When Others Zag

PBB: So why did you guys decide to zig, when everyone else decided to zag?

Vasu: Well, you know, we were looking at all of this like everybody else and Scott [Kirby] was talking about having to shrink and everybody was expecting us to take out a lot of capacity as well. At the time, early on, that thinking made sense.

But then, we start looking around and hey, credit to Zed [Brian Znotins, VP Network and Schedule Planning]. I mean, he came and said, look, "Our break-even load factor at $35 fuel is like 25%. But then when fuel went into the tank – that number dropped to 9%.

So then we began to look at what other people were doing with their schedules. So we looked at Delta and United – and both airlines completely ****-canned their hubs. They literally broke all of their connectivity.

And it was at this point that we were also just about to go cut a ton of capacity.

But instead, what we did was, we actually went in and completely rebuilt our hub structures.
Go pull up any set of O&D markets. Take a look.
And guess what happened. In May, load factors got bigger.

For June, we’re looking at a system load factor of 55%, but in our [core] domestic system, our load factor is runnning at 70%.

There’s already a post on the entirety of this article...

AA has no choice but to go big or go home with their debt load.

I also find the 25% LF highly suspect. They are also still burning nearly double the daily cash burn we are at DL. Let's see how it works out in a year.

I think American is right. Jet fuel is $1.08.

if y’all are only burning 20 million a day that’s impressive all things considered.

im sure that 25% load thing is a gimmick. I’m sure somewhere on some route it is but definitely not system wide.

The last update we got was about 2 weeks ago and I think the statement our CFO made was we are well under our goal of being at $30M/day by the end of June...or something to that effect.

They are lying. AAL is is very bad shape, they are giving away seats. That 25% load factor quote is so far from reality it’s absurd. The pilots I know at AAL are extremely nervous about a BK. Credit default swaps on AAL still trading high. Market thinks a BK is at least 50% probability. It’s like they are in the hole big time at the casino and now doubling down. Covid magically disappears they are golden but that’s less likely each passing day.

This is the truth.

If their plan works it can pull them back from the brink. If they're wrong they'll go bankrupt.

55% chance of defaulting on debt within 12 months.

99% chance of defaulting on debt with 60 months.

And the Delta egos were better then the rest keeps on beating!!!! Odd how in that AA thread I don’t see anyone bashing delta during these times. How are those green slips and profit sharing these days? The little bit that Delta had that was better aren’t around in a down turn either. Wish everyone the best but have to laugh at some of you all. Stereotypes alive and well. “How’s the ride.”

Sorry you're upset about us quoting market stats on the probability of AA defaulting on debt. I think your anger is misplaced. You should take your frustration out on the Wall Street guys. Perhaps try to convince them that everything is awesome.