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Thread: How to say,”United is kicking our Butt.”

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    Registered User NoOtPilot's Avatar
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    How to say,”United is kicking our Butt.”


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    Politically correct...
    United said that American should not be granted a dormancy waiver for the Chicago-China flights it recently stopped flying, saying in a regulatory filing that other airlines should get a shot at those route allocations.
    In October, American Airlines filed a dormancy waiver with the U.S. Department of Transportation for its 14 weekly Chicago-China routes.

    American said it was facing "difficult market conditions" for the routes, which include seven from Chicago to Beijing and another seven from Chicago to Shanghai. Unfavorable conditions have outpaced passenger demand, the Fort Worth-based airline said.

    facing "difficult market conditions" for the routes,🤥
    I always tell the truth. Even when I lie.

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    Is that not what airlines do daily, compete?

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    Quote Originally Posted by ardvark View Post
    Is that not what airlines do daily, compete?
    Theoretically.

    However in the case of AA, the last decade has been really a demonstration of the opposite. They’ve apparently abandoned the idea of direct competition in favor of more of a ‘circling the wagons’ defensive posture. The New York market which Delta and Jet Blue share, San Juan, ORD, including the recent abandonment of China ops and shifting more flying to their regionals shows the mainline AA product is actually in retreat. AA’s hope of sustained adequate profitability considering their debt requires low fuel prices, cheap labor and grinding what they do have 24/7 or as close to that as possible. But historically, corporations (especially airlines) in retreat usually don’t fare well over the long-term.

    It’s no wonder they have cancelled and/or deferred mainline jet orders and options as the increasingly more cloistered markets they serve are already saturated. I’m not sure what new markets outside their stronghold hubs could do for them considering their product is becoming increasingly unappealing to higher revenue business flyers. The good news is they definitely will continue to have low-cost labor that is from many reports by AA pilots already being over-worked. More good news is that apparently many of their future pilots really don’t care as in the case of many flows who still are targeting AA as their primary and not a back-up. For many, especially junior, you could go to FedEx or UPS and actually do as much day flying. If fuel costs go back down and no other trigger spirals the industry into its next downturn any time soon, they can kick the can for years, but eventually the chickens will come home to roost. They may be able to trim their debt somewhat during such a stretch if it’s long enough, but that won’t change the quality of their product or their labor woes, both inexorably intertwined. AA’s destiny in many respects appears to be all but certain and it’s the ‘Walmart’ model of being huge, but mediocre. Mediocrity can be profitable though, but only with a cheap cost structure.

    Did Parker not get the nickname “Dollar Store Doug” by I believe the pre-merger US Airways pilots ? You don’t work for someone like that for industry leading wages or conditions. In fact, I wouldn’t be surprised to soon see greeters at their hub terminals saying, “welcome to American Airlines” on the way in and “thanks for flying American Airlines” on the way out.
    Last edited by Beagleboy; 11-06-2018 at 11:15 AM.

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    Quote Originally Posted by ardvark View Post
    Is that not what airlines do daily, compete?
    AA is not competing with other airlines on long-haul routes. The ORD-China routes were dropped in capacity from 777-300s to 787s, eliminating first class and about half the business class seats, which is where the vast majority of the revenue comes from. Combine that with a rapidly declining on-board experience (worse food, taking out seat-back TVs while Delta is adding them, smaller and more uncomfortable seats, etc. etc.), a customer service experience that's maybe a half step above Spirit, and it's no wonder AA was losing money on those routes. Ask anyone who has flown business class or better on any Asian airline (save maybe the Chinese ones) and they will tell you that AA is their last choice to go to the far east. Even United is leaps and bounds ahead of AA on Asian routes, and that's saying a lot. Don't expect AA to keep those China routes, especially with who's at the reigns right now.

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    Wow, awesome analogy. Could you also please explain why Delta pulled out of Hong Kong completely? And why United pulled out of LAX-SIN market?
    Last edited by DumbWithNumbers; 11-06-2018 at 12:51 PM.

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    Quote Originally Posted by DumbWithNumbers View Post
    Wow, awesome analogy. Could you also please explain why Delta pulled out of Hong Kong completely? And why United pulled out of LAX-SIN market?
    Regarding Delta, isn't that one route out of SEA ? Same with UAL ? At any rate, neither are hardly the wholesale fleeing history of the withering AA.

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    Last I checked AA 263, AA 127, AA 183 and AA 181 were still operating daily. While they sure are downgrade from B777-200ER, they never operated B777-300ER on these markets either. This doesn’t mean AA is not weak in China though. They are simply running after money, like me. 😀

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    Quote Originally Posted by DumbWithNumbers View Post
    Last I checked AA 263, AA 127, AA 183 and AA 181 were still operating daily. While they sure are downgrade from B777-200ER, they never operated B777-300ER on these markets either. This doesn’t mean AA is not weak in China though. They are simply running after money, like me. ��
    Looking at AAG's Q3's profit numbers (especially compared to Delta and United), I'd say they need to run faster. As for running after money, for those planning to flow to AA, also compared to the others, I think they are running in the wrong direction.

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    If it’s really that bad, I wonder when Board Members will get rid of Doug Parker. Perhaps, next year, when, if he won’t be able to deliver on his promise of increase of $1B more revenue and cost reduction by $300m.

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    Quote Originally Posted by DumbWithNumbers View Post
    If it’s really that bad, I wonder when Board Members will get rid of Doug Parker. Perhaps, next year, when, if he won’t be able to deliver on his promise of increase of $1B more revenue and cost reduction by $300m.
    To deliver that, no way he can give decent contracts to BOTH mechanics and pilots (and due to F/A's "me too" will end up having to throw them some more goodies as well). Kick the can, but if Delta and UAL pilots get deals further ahead of already trailing AA pilots and Parker hems, haws and says "aw shucks" with his open collar guy next door shtick ? Bad scene at AA as everyone will see through that at AA front-line labor. Then there's servicing that debt at well over a billion and almost that much for pilot pensions. Don't forget LAX upgrade, new corporate HQ, etc.. Seems to be spending like a drunken sailor, but hyy it's all "good" debt, right ? What do Parker's latest promises mean ?

    It means that candle has two ends burning, not one. Another billion in revenue mostly through their already saturated hubs ? I know adding seats in the Group II aircraft is much of that plan, but at the same time, they are removing seats from RJ's for scope. Less catchment to transition to mainline. I have doubts as Parker made past claims that have already fallen short, so what else is new ? Revenue on one side and expenses on the other, but will that translate to profit ? He's aiming high, but his aim so far hasn't proven all that inspiring. Like I said............who knows, maybe he'll pull a rabbit out of the hat. Even if he does and meets those metrics, the AA product is no better as AA front-line service labor will be in the gutter by then.

    But...........perhaps I am just a pessimist.
    Last edited by Beagleboy; 11-06-2018 at 02:56 PM.

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    You lost me to your long post here again. But I agree Parker has significant challenges. As for expenses, they were approved by board after he was able to convince board with the ROI on such investment. As for hub flying, DFW and CLT are the main stays, DCA is the cash cow from government. And yes, we might see significant CRJ7 replacing 50 seaters with its 65 seats, just like Deltas and United E-175SC (70 seater). See we are in agreement here.

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