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Thread: AA dropping routes...

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    A net loss of 2 - AA is dropping 11 unprofitable routes and adding 9 that they believe will be profitable, a few of which are in the same spirit as PHL - Budapest, which has been a surprise lucrative route for the airline. It’s a juicy headline, but dropping routes that don’t make money for those that will seems like a pretty good business plan to me.

    Also, UA and DL we all know both have a much better Asian route structure than AA. But take a look at their routes to China, and see which ones they have discontinued in the last year. AA isn’t the only one having trouble in China.

    At least be fair.

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    Quote Originally Posted by Jersdawg View Post
    A net loss of 2 - AA is dropping 11 unprofitable routes and adding 9 that they believe will be profitable, a few of which are in the same spirit as PHL - Budapest, which has been a surprise lucrative route for the airline. It’s a juicy headline, but dropping routes that don’t make money for those that will seems like a pretty good business plan to me.

    Also, UA and DL we all know both have a much better Asian route structure than AA. But take a look at their routes to China, and see which ones they have discontinued in the last year. AA isn’t the only one having trouble in China.

    At least be fair.
    Let’s be fair.

    American has $19.2 billion net debt, which it accumulated primarily by buying almost 500 new aircraft since the 2013 merger. That compares with $9.3 billion at United and $6.2 billion at Delta, according to data compiled by Bloomberg.

    “Obviously, it’s an overhang,” said Chris Terry, a portfolio manager at Hodges Capital Management, which owns American shares. “You’ve got $1 billion in interest expense a year, and have to make sure you can service that debt every quarter.”

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    Quote Originally Posted by Jersdawg View Post
    A net loss of 2 - AA is dropping 11 unprofitable routes and adding 9 that they believe will be profitable, a few of which are in the same spirit as PHL - Budapest, which has been a surprise lucrative route for the airline. It’s a juicy headline, but dropping routes that don’t make money for those that will seems like a pretty good business plan to me.
    I agree, this is a good move. But...........these 11 routes were also routes they previously “believed would be profitable”. AA is at a disadvantage because of less ability to expend $ and resources to expand in one area without being forced to contract in another and may be (or already have been) forced to relinquish profitable flying that is just less profitable.

    Quote Originally Posted by Jersdawg View Post
    Also, UA and DL we all know both have a much better Asian route structure than AA. But take a look at their routes to China, and see which ones they have discontinued in the last year. AA isn’t the only one having trouble in China.

    At least be fair.
    But also, when the pendulum swings back towards China (resolution of the Tariff spat ?), Delta and UAL are in a better position to capitalize. I’ve read more articles on the perceived floundering of AA product and it seems its new found LCC status is becoming a reality with the apparent defection of more higher revenue (business) passengers. IMO, these are all negative trends even if AA is now reacting to try to jack their profits back up with sudden route changes.

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    Quote Originally Posted by Beagleboy View Post
    I agree, this is a good move. But...........these 11 routes were also routes they previously “believed would be profitable”. AA is at a disadvantage because of less ability to expend $ and resources to expand in one area without being forced to contract in another and may be (or already have been) forced to relinquish profitable flying that is just less profitable.



    But also, when the pendulum swings back towards China (resolution of the Tariff spat ?), Delta and UAL are in a better position to capitalize. I’ve read more articles on the perceived floundering of AA product and it seems its new found LCC status is becoming a reality with the apparent defection of more higher revenue (business) passengers. IMO, these are all negative trends even if AA is now reacting to try to jack their profits back up with sudden route changes.
    The explanation.

    *​***​*​​​​*​​**​​****Why can others make ORD–PVG work? Other U.S. carriers have been serving China longer than we have, and they obtained their route authorities prior to 2004. As a result, the provisions their route authorities utilize allow for dormancy of specific routes during weaker demand periods and give them the ability to move service to other gateways if needed. Unfortunately, American does not enjoy that same regulatory or competitive flexibility, which is why we are seeking a dormancy waiver.

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    Quote Originally Posted by Layman View Post
    The explanation.

    *​***​*​​​​*​​**​​****Why can others make ORD–PVG work? Other U.S. carriers have been serving China longer than we have, and they obtained their route authorities prior to 2004. As a result, the provisions their route authorities utilize allow for dormancy of specific routes during weaker demand periods and give them the ability to move service to other gateways if needed. Unfortunately, American does not enjoy that same regulatory or competitive flexibility, which is why we are seeking a dormancy waiver.
    Soooooo.............in general, the vibe is that AA didn’t have the past fortitude and forward thinking ability that their competition did and as a result is now at a disadvantage it must compensate for in ways their competition does not or plead for relief ? If so, I would agree........at least when comparing themselves to Delta and UAL. As for ORD specifically, that hub operation for AA has been downsized by well over half since that time which tends to put such a carrier at further disadvantage. In fact, ORD isn’t the only place this dynamic is in place, a dynamic which by the way may have yet to reveal its full impact in those other places. Specifically, I’m talking about the relinquishment of NY (and to lesser degree BOS) and the all but abandonment of SJU. Additionally, MIA hub revenue is anchored on SA and economic regression there could hit AA especially hard.

    Again, another related consideration regarding China (and other Far East destinations) is the quality of the product perceived by business travelers (a significant percentage of such customers). Any degradation there may just be one of the principle components of lack of ability to generate viability let alone growth in those markets. It’s hard to not see more of a desperate flair in AA’s “adjustments” due to fuel increases as opposed to either the two premier legacies or direct competitor LCC’s considering Parker’s projected profit margins which are being successively ratcheted downward. Curious to see how the winter quarterly reports turn out for the industry, especially AA. A further downward slide in Asia, SA or both will be yet another red flag.
    Last edited by Beagleboy; 08-23-2018 at 09:01 AM.

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    A few industry challenges are hitting American harder than rivals. Market weakness in Latin America, where the Fort Worth, Texas-based airline has the largest presence among U.S. carriers, is one. American has also suffered from unusual discounting by crosstown rival, Dallas-based Southwest Airlines Co., which cut fares...

    “We can’t gloss over it -- we’re not performing day in and day out for our customers as I’d like,” President Robert Isom told company pilots in an Aug. 8 meeting.

    Slower Growth
    American is taking steps to shore up its short-term outlook. It’s joining other carriers in tapping the brakes on expansion this year and next...
    Last edited by NoOtPilot; 08-22-2018 at 10:31 PM.

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    Quote Originally Posted by Beagleboy View Post
    I agree, this is a good move. But...........these 11 routes were also routes they previously “believed would be profitable”. AA is at a disadvantage because of less ability to expend $ and resources to expand in one area without being forced to contract in another and may be (or already have been) forced to relinquish profitable flying that is just less profitable.



    But also, when the pendulum swings back towards China (resolution of the Tariff spat ?), Delta and UAL are in a better position to capitalize. I’ve read more articles on the perceived floundering of AA product and it seems its new found LCC status is becoming a reality with the apparent defection of more higher revenue (business) passengers. IMO, these are all negative trends even if AA is now reacting to try to jack their profits back up with sudden route changes.
    w TF makes you an expert? huh riddle me that one batman extremly tired of the p** poor attitude here. STOP

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    there is no way you could even fly a 175 you barely could make it in asaab

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    Quote Originally Posted by Dacuj View Post
    w TF makes you an expert? huh riddle me that one batman extremly tired of the p** poor attitude here. STOP
    Well, it looks like another night of heavy drinking inevitably vomits itself into this forum. I imagine you will come to about mid-afternoon facedown in front of your laptop (covered in acidic bile) with a pungent wet stain covering most of your pants.

    For the sake of your family, I think it’s time to get some help. It IS a disease and can be overcome.

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    Quote Originally Posted by Dacuj View Post
    there is no way you could even fly a 175 you barely could make it in asaab
    Not sure what an “asaab” is (or even if it could fly), but with what I’ve heard of your check ride history, I don’t think you’re in any position to criticize other pilots airmanship.

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