|
AA in trouble?
|
Lots of pilots retiring on the news, too! They don't want to lose their pensions in bankruptcy like all the other used-to-be "majors"... :(
|
And they've just signed a giant order... :ugh:
|
Oh Yeah
In 1990, AA became the world's largest airline with more than USD $1b in cash reserves. They're stock price was $88 per share. Today they have very nearly the highest costs in the industry, are third-largest, despite their huge fleet and bloated payroll; stock price:$2 and change, and is probably over-valued at that.
What we have here is a grotesquely obsolete business model. |
Does anyone really understand airline economics?
|
Dear SFi145
Do I understand economics? No, but a good way to make a small fortune in aviation is to start with a large one! :) |
What I don't understand is that the current market capitalization of AMR (AA's parent) is $663 million dollars. This is about the price of 2.5 B777s. Yet among its 619 aircraft AA has 47 B777s - doesn't make any sense to me. So presumably most of the fleet is actually leased from other companies.
|
As Stelios from EasyJet once said. |
What we have here is a grotesquely obsolete business model. |
Say what you want, but unions are killing the industry.
|
net worth
according to company figures via bloomberg, AMR's net fixed assets (cast - depretiation of all their assets, mostly aircraft) was $15.1bn as at 30 June 2011. long term debt was 10bn and other long term liabilities was another 10bn. there was also 1.8bn of short term debt.
what do you think the stock should be worth now? |
In 1990, AA became the world's largest airline with more than USD $1b in cash reserves The media keeps quoting that the reasons for its continuous losses is due to its high labor wages . However if you look at the pilot payscales ( not sure about flight attendants and mechanics ) as quoted on APC they dont seem to differ much from that of other legacies ( for eg : Delta ) Question How many think that AMR's reason for continuous losses is due to its High Labor wages ? Or is it due to something else like say old airplanes ( they have too many Maddogs flying around ) |
In general airline losses are due to one thing- they sell their tickets too cheaply!!!!
This is the only business that sells a lot of their product - mostly economy seats - below cost. And try and recover the loss on business class and freight. Sure - its due to stiff competition - but other industries also face competitors and I dont see them selling their product below cost.:ugh: |
cash
as at 30 June cash was 318 mil and short term investments was 4.8bn BUT on the other side of ledger there is 9.7bn of short term liabilities which includes the 1.8bn of short term debt.
just putting the facts out there... |
Home Alone
If you remember the movie "Home Alone"....the characters played by Joe Pesci and Daniel Stern....the idiot burglers....well, that is typical airline management.
We can argue all day and all night about unions this and unions that....but, with management like the burglers in "Home Alone"... well, what the hell do you expect!!!!! |
Say what you want, but unions are killing the industry. Wages are about 40% of what they were 20 years ago at AA, adjusted for inflation. Executives get the credit when companies are successful. They get the blame when they're not. American Airlines flight attendants protest bosses' executive bonuses at JFK airport BY LORE CROGHAN DAILY NEWS STAFF WRITER Wednesday, April 20, 2011 American Airlines flight attendants picketed at JFK Airport Wednesday to protest fat bonuses for their bosses in the face of big losses for their carrier. About 30 workers and retirees waved signs saying "Bonuses for Failure?" and chanted "Down with corporate greed" on the sidewalk across the roadway from American Airlines' terminal. Drivers of some passing cars honked to show solidarity with the flight attendants, many dressed in their navy-blue work uniforms. "The top people have a lot of nerve taking their bonuses," said demonstrator Connie Patrick, 62, of Newtown, Conn., who has worked as a flight attendant for the airline for 43 years. "They're a bunch of Bernie Madoffs." The top five execs have reaped $100 million in bonuses since 2005, while the carrier lost more than $4.2 billion. In 2003, the flight attendants agreed to cuts in pay and benefits worth $340 million annually, which they say kept American out of bankruptcy. "We were promised when American got back on its feet that we would share in the profitability," said another protestor, Marilyn Catania, 60, of Rockville Centre, L.I. "But only the top people get the money. "I had hoped to retire by now, but I'm going to have to work a few more years," said Catania, who's been an American flight attendant for 40 years. The carrier's flight attendants earn $30,000 to $40,000 per year, which puts them in the middle of the pack on pay among the major airlines, said flight attendant Raymond Lewis, 40, of Stroudsburg, Pa., who's a rep for their union, the Association of Professional Flight Attendants. "A regular work schedule is 75 to 80 hours a month, but most people I know in New York can't live on that," said flight attendant Jan Gadd, 44, of the lower East Side. "Most work at least 100 hours; I know people who work 140 hours to make ends meet." The union issued a mock "14-count indictment" of their bosses charging "managerial incompetence" and "moral bankruptcy." Protests were also held at LaGuardia Airport and nine other airports nationwide where the carrier has a presence. It employs nearly 18,000 flight attendants. Their union has been in labor contract negotiations for three years. The union bought a half-page ad in Wednesday's USA Today that trumpeted, "Wall Street greed is alive and well at American Airlines," and debuted a TV commercial that takes aim at American's CEO, Gerard Arpey. After the protests, a company spokeswoman defended the bonuses and offered a hopeful word about labor negotiations. "Performance-based compensation plans are considered good corporate governance," Missy Cousino said in a statement. "We remain committed to working with all the unions to reach agreements addressing the needs of both parties that are in the long-term best interests of the company and all of its employees," she added. |
Correct me if I'm wrong...
but, isn't American the only remaining major airline in the U.S. that still offers a defined-benefit pension plan?
If this is correct, could it be possible that management is playing with the numbers to get rid of the pension liability? Others did this..... |
What trouble?
The senior execs got their 100M in bonus payout so no trouble. Isn't that how their job performance/success is measured?
|
Quote: Say what you want, but unions are killing the industry. Except they're not. Wages are about 40% of what they were 20 years ago at AA, adjusted for inflation. Executives get the credit when companies are successful. They get the blame when they're not. Quote: American Airlines flight attendants protest bosses' executive bonuses at JFK airport BY LORE CROGHAN DAILY NEWS STAFF WRITER Wednesday, April 20, 2011 American Airlines flight attendants picketed at JFK Airport Wednesday to protest fat bonuses for their bosses in the face of big losses for their carrier. About 30 workers and retirees waved signs saying "Bonuses for Failure?" and chanted "Down with corporate greed" on the sidewalk across the roadway from American Airlines' terminal. Drivers of some passing cars honked to show solidarity with the flight attendants, many dressed in their navy-blue work uniforms. "The top people have a lot of nerve taking their bonuses," said demonstrator Connie Patrick, 62, of Newtown, Conn., who has worked as a flight attendant for the airline for 43 years. "They're a bunch of Bernie Madoffs." The top five execs have reaped $100 million in bonuses since 2005, while the carrier lost more than $4.2 billion. In 2003, the flight attendants agreed to cuts in pay and benefits worth $340 million annually, which they say kept American out of bankruptcy. "We were promised when American got back on its feet that we would share in the profitability," said another protestor, Marilyn Catania, 60, of Rockville Centre, L.I. "But only the top people get the money. "I had hoped to retire by now, but I'm going to have to work a few more years," said Catania, who's been an American flight attendant for 40 years. The carrier's flight attendants earn $30,000 to $40,000 per year, which puts them in the middle of the pack on pay among the major airlines, said flight attendant Raymond Lewis, 40, of Stroudsburg, Pa., who's a rep for their union, the Association of Professional Flight Attendants. "A regular work schedule is 75 to 80 hours a month, but most people I know in New York can't live on that," said flight attendant Jan Gadd, 44, of the lower East Side. "Most work at least 100 hours; I know people who work 140 hours to make ends meet." The union issued a mock "14-count indictment" of their bosses charging "managerial incompetence" and "moral bankruptcy." Protests were also held at LaGuardia Airport and nine other airports nationwide where the carrier has a presence. It employs nearly 18,000 flight attendants. Their union has been in labor contract negotiations for three years. The union bought a half-page ad in Wednesday's USA Today that trumpeted, "Wall Street greed is alive and well at American Airlines," and debuted a TV commercial that takes aim at American's CEO, Gerard Arpey. After the protests, a company spokeswoman defended the bonuses and offered a hopeful word about labor negotiations. "Performance-based compensation plans are considered good corporate governance," Missy Cousino said in a statement. "We remain committed to working with all the unions to reach agreements addressing the needs of both parties that are in the long-term best interests of the company and all of its employees," she added. |
What I don't understand is that the current market capitalization of AMR (AA's parent) is $663 million dollars. This is about the price of 2.5 B777s. Yet among its 619 aircraft AA has 47 B777s - doesn't make any sense to me. So presumably most of the fleet is actually leased from other companies. |
| All times are GMT. The time now is 14:16. |
Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.