AMR's costs are too high because their debt and liabilities are too high. That's going to be dramatically reduced in bankruptcy court. AMR does not have a revenue problem. Compared to the size of AMR, Delta produces LESS revenue.

Carl

OUCH!!

Carl

AMR 2010 Revenue - $22.17B with 78,250 employees

DAL 2010 Revenue - $31.75B with 80,000 employees

DAL's revenue per employee was higher in 2010.

In keeping with the thread's recent "woe is me, wish I were somewhere else" tone...everyone in that video is an actual IcelandAir crewmember, it was done for their annual crew ball :eek:.

The 78,250 employees you list includes thousands of furloughed employees. That's why you shouldn't use the number of "employees" to judge the size of a company. Comparing revenue generation per employee is typically only used to measure relative employee productivity. The only data point that accurately measures the size of a company is its Total Assets found on the Consolidated Balance Sheet. For DAL, that is $43 Billion. For AMR that is $24.7 Billion. Thus the comparable multiplier is 1.74. For example, take the AMR assets of $24.7 billion and multiply it by 1.74 and that equals the $43 Billion of DAL assets.

Now for the revenue comparison for the latest quarter ending 9/30/2011:

DAL revenue = $9.8 Billion, and AMR revenue = $6.4 Billion. If you take $6.4 Billion and mulitply it by 1.74, you get $11.1 Billion. Thus DAL should have earned revenue of $11.1 Billion on a relative corporate size comparison. But Delta only earned $9.8 billion. That's $1.3 Billion LESS in revenue than what AMR was able to earn based on its relative size.

If you say AMR has a revenue problem, then DAL has an even bigger revenue problem.

Carl

Agree, it does sound that way and we do need a partner in SA badly...the investment secures that and should be a growth position with GOL growing quite rapidly since the collapse of Varig...

Cheers
George

By Tim Hepher and Robert Evans

GENEVA (Reuters) - Airlines worldwide face over $8 billion in losses next year if Europe's politicians fail to get to grips with the region's debt crisis, the industry's leading trade group warned on Wednesday.

A collapse of efforts to shore up the euro and prevent a new shock to the global banking system would hit air transport across the globe and cripple the Asian profit machine which has led the industry's recovery since 2009, Geneva-based IATA said.

"The biggest risk facing airline profitability over the next year is the economic turmoil that would result from a failure of governments to resolve the euro zone sovereign debt crisis," said Tony Tyler, Director General of the International Air Transport Association.

"Such an outcome could lead to losses of over $8 billion, the largest since the 2008 financial crisis," he added.

Even in the best-case scenario, Europe's airlines face losses in 2012 and the gap between the industry's haves and have-nots is expected to widen.

Asian carriers are seen soaking up new demand and North American airlines should gain as capacity cuts allow them to raise prices, but European airlines will lose out -- especially in a worst case scenario for the euro.

IATA, which represents 240 of the best-known airlines carrying 84 percent of global traffic, cut its central forecast for 2012 industry profits to $3.5 billion from $4.9 billion.

Its 2011 profit outlook was unchanged at $6.9 billion.

Until now, aviation has been relatively optimistic about its prospects as Europe teeters on the edge of recession, with rising demand in Asia and capacity restraint in North America seen boosting profits and driving talk of a two-speed market.

75% of all statistics are made up on the spot. And.. you can prove ANY argument with statistics.

I also agree.

Historically the big problem of the US airlines has been a revenue problem.
In the past, high yield fares offset what is now considered a high cost structure.

With the historic yield and revenue streams gone, most US carriers started accruing debt. As a result most US airlines have pretty substantial debt positions. It is the servicing of that debt that has required an increasing larger share of the revenue stream.

Delta is approaching both angles. Paying down debt has reduced the cost of servicing that debt. Creating new revenue streams has helped supplement the depressed revenue from ticket sales...

AMR was burning through cash in excess of $300M/month.
With a dwindling supply of cash on hand, There was no way to solve that problem either through revenue of debt position improvements.

I feel bad for our brothers at AA. I disagree with the position that the pilot contract had much bearing on the filing, one way or another.

Cheers
George

Devil's Advocate: Gol pays their pilots very low. In my own little mind, I always worried about this scenario in many dimensions. Maybe I worry about our future becoming much like the "cruise/shipping" industry. IMHO, GOL is a threat to us because they can do our flying for less labor costs.

TEN