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Thread: AA Downbeat Revenue Forcast

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    AA Downbeat Revenue Forcast


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    Looks like AA has revised their revenue forecast downward due to fare pressure........and just when they are adding seats to planes and planning a 2.5 % capacity increase this year. Normally, airlines reduce capacity to boost fares. Sounds either backward or just a wrong guess by AAG. Perhaps just out of sync with the typical airline industry cycle ? AA share price down twice as much as Delta and United. If AAG does a 180 and cuts capacity for Fall as at least one noted analyst expects (which probably wouldn't be good for the flow), will they still continue their latest Less Room Throughout Coach move ?

    - Interest rates set to rise.
    - Fuel costs climbing.
    - Concern about Global/Domestic economy with Trade Wars escalating.
    - Section 6 coming for AA pilots (who won't see a dime anytime soon, but adds uncertainty for investors).
    - BIG pension payments (without increased revenue, it will gouge cash on hand).

    Just a few of the pressures that all increase costs and/or reduce revenue and that's trouble. Add humongous debt (Oh Lordy !) and that's even more of a concern. If AA cannot enjoy an increased fare environment and shrinking to higher profits doesn't work, then they're in a catch-22 situation. Has AA really played the right cards buying back all those shares and acquiring monster debt ? As long as revenue is strong, they can kick the can, but what happens when revenue plummets ? Also, how do you pay off all that debt in a down cycle ?
    Last edited by Beagleboy; 07-11-2018 at 12:30 PM.

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    I see what you did there... with the Lord Humongous reference.

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    Quote Originally Posted by xpanterica View Post
    I see what you did there... with the Lord Humongous reference.
    Yoda say you most wise owl on high branch with beady eye.

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