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Thread: Isom announces new financial belt tightening

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    Isom announces new financial belt tightening


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    On Wednesday, according to the Dallas Business Journal he proclaimed that AA is “ending the era of extraordinary capital expenditures”. This apparently means no new fleet additions, which also then means no substantive growth. Apparently, the focus will be on efficiency in the “staffing of pilots and flight attendants” and a reduction of 8-900 million in annual expenses to produce “much stronger cash flow”. You can’t order more replacement aircraft or even a new fleet type without such expenditures.

    Sounds to me like this also means no plans for industry leading labor contracts and wringing the crews out even more when ever possible. So.....an essentially stagnant fleet, continued decline of compensation and QWL for front-line employee groups relative to peers as the others move forward and cinching of the purse strings. Not sure if this applies to fancy new corporate offices, naming sports stadiums or more stock buybacks though. Now, can AA can get there before the arrival of the impending recession? This still leaves the quality of the product in peril though and it will be interesting to see how they motivate such a jaded front-line work force in the future.
    Last edited by Beagleboy; 09-06-2019 at 09:03 AM.

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    It sounds like, 30 minute turns all day, squeeze aircraft and crew utilizarion to the extreme, plus dead heading a lot on last day last leg which plays no factor on the duty day.
    But hey, this is the LLC of mainline airlines. With no growth.
    Footnote, maybe isom should stop all the new hires and dec bonuses at all 3 w/o in using the referral bonus. That should be about 25% of the 8-900 million he wants to save.

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    Quote Originally Posted by ardvark View Post
    It sounds like, 30 minute turns all day, squeeze aircraft and crew utilizarion to the extreme, plus dead heading a lot on last day last leg which plays no factor on the duty day.
    But hey, this is the LLC of mainline airlines. With no growth.
    Footnote, maybe isom should stop all the new hires and dec bonuses at all 3 w/o in using the referral bonus. That should be about 25% of the 8-900 million he wants to save.
    From most reports, pilots are already scheduled close to FAR max limits. The monthly line construction windows x 12 equals at or close to 1000 hours. Still a lot of long layovers at the new industrial complex hotels, so they may tighten that up. Curious to see how any hope of growth at the regionals will pan out considering the state of that segment of the industry. Up against scope as is. Again, few options for any leading moves, just "hunkering down" relying on further efficiecy to pad profits. That doesn't mean more revenue, just hopefully more savings to pay down debt. Over time it might do that provided the economy holds, but that still doesn't help the product. A recipe going forward of following instead of leading or better yet, just hanging on.
    Last edited by Beagleboy; 09-06-2019 at 09:54 AM.

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    Appears 2021 is getting closer...

    Isom said:

    “American is looking down the line at eventually retiring its Boeing 767s and 757s, too, Isom added. Those have an average plane age of 20.1 years and 19.1 years, respectively, according to regulatory filings.

    American is scheduled to have no 767s in its fleet by the start of 2021, according to a July investor update, and the amount of 757s is scheduled to decrease from 34 in 2020 to 24 in 2021.

    Retiring those planes allows American "to become more efficient as an airline in terms of staffing pilots and flight attendants and also ultimately in maintenance and aircraft rotations as well," Isom said.”
    ~Robert Isom~

    Like I’ve been saying...but, more specifics will follow in less than 16 months.

    HINT: "...to become more efficient as an airline in terms of staffing pilots and flight attendants...”🤔
    ~ Isom~
    September 6, 2019
    Last edited by NoOtPilot; 09-06-2019 at 05:49 PM.

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    Some good initiatives here and things that will really help AAG become even more robust. Stronger cash flow is good. It's strong now but the aim is to increase that. And it is absolutely false that stronger cash flow has anything to do with not ordering more airplanes. You will see orders in the future, likely strong numbers of 787's and Airbus along with smaller numbers of the other fleet types.

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    Quote Originally Posted by Dacuj View Post
    Some good initiatives here and things that will really help AAG become even more robust. Stronger cash flow is good. It's strong now but the aim is to increase that. And it is absolutely false that stronger cash flow has anything to do with not ordering more airplanes. You will see orders in the future, likely strong numbers of 787's and Airbus along with smaller numbers of the other fleet types.
    That would mean adding even more debt.

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    What happened to the 3 billion in profits in a bad year that dougie touted, poops, another us air miscalculation

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    Quote Originally Posted by Dacuj View Post
    Some good initiatives here and things that will really help AAG become even more robust. Stronger cash flow is good. It's strong now but the aim is to increase that. And it is absolutely false that stronger cash flow has anything to do with not ordering more airplanes. You will see orders in the future, likely strong numbers of 787's and Airbus along with smaller numbers of the other fleet types.

    Well ya better do something. When your little brother across the street makes $80 Million more on 1/2 the revenue, then it won’t be long before you become the little brother.

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    Quote Originally Posted by RobertRoss View Post
    Well ya better do something. When your little brother across the street makes $80 Million more on 1/2 the revenue, then it won’t be long before you become the little brother.
    Bingo
    __________________________________________________ __

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    Ok, its 11am, still waking up, may I ask who is little brother, sorry for the question.

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    Quote Originally Posted by RobertRoss View Post
    Well ya better do something. When your little brother across the street makes $80 Million more on 1/2 the revenue, then it won’t be long before you become the little brother.
    ...or somebody else’s beotch. Let’s not forget Southwest is actually a profitable airline, whereas AA is a credit card company that just uses airplanes as its sales tool.

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    God I hate fa's that do the sales pitch 3 to 5 times per flight on addition on the ife every time you change what your watching you have to listen to it there.

    House is burning and all they think of is push the credit card.

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    Think of it this way...”INNOVATION”, is the only airline that uses an “AirBooth” to sell its credit cards to survive. Brilliant!

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    Quote Originally Posted by ardvark View Post
    Ok, its 11am, still waking up, may I ask who is little brother, sorry for the question.
    SWA over at Luv Field

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    Quote Originally Posted by Beagleboy View Post
    ...or somebody else’s beotch. Let’s not forget Southwest is actually a profitable airline, whereas AA is a credit card company that just uses airplanes as its sales tool.
    SWA enjoys messin’ around with AA.

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    Thank you

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    Quote Originally Posted by Beagleboy View Post
    ...or somebody else’s beotch. Let’s not forget Southwest is actually a profitable airline, whereas AA is a credit card company that just uses airplanes as its sales tool.
    Let's not forget that AA is a profitable legacy airline with widebodies and international service. Way more potential than just a mostly domestic 737 operator with a few token routes in the Caribbean.

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    I just threw up

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    Quote Originally Posted by Dacuj View Post
    Let's not forget that AA is a profitable legacy airline with widebodies and international service. Way more potential than just a mostly domestic 737 operator with a few token routes in the Caribbean.
    If it weren’t for the credit card, it wouldn’t be. AA’s product is considered marginal by customers and analysts alike. Proof ?

    Look at management’s own statements regarding that and calling customers to offer them miles in the hope they don’t bail.

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    Quote Originally Posted by Dacuj View Post
    Let's not forget that AA is a less profitable relic airline with saturated wide-body and international service. Way more potential to furlough than the largest domestic airline in the World, who has expanded into the Caribbean, Mexico & Hawaii, and will soon be attacking AA’s South American routes.
    Fixed it for you.

    $80,000,000.00 more on half the revenue.
    Last edited by RobertRoss; 09-08-2019 at 06:15 PM.

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