A Profitable Year for All But One Major Airline

Discussion in 'Blogstand' started by tom911, Feb 14, 2011.  |  Print Topic

  1. tom911
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    tom911 Gold Member

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    With ticket prices increasing faster than costs, 2010 proved to be a nicely profitable year for U.S. airlines. Except AMR Corp.’s American Airlines.
    Among major carriers, American was the sole money-loser last year, recording net losses of $471 million. American’s revenue didn’t grow as much as its big-airline rivals. Mainline passenger revenue increased 11.5% last year for American, but the other seven major airlines averaged a 16% increase, according to numbers I crunched from airline year-end results.
    American’s operating costs increased at a slower rate than other major airlines, but it already has the highest costs in the industry. It cost American an average 12.6 cents to fly one seat one mile last year, but only 12 cents per available seat-mile at United and 11.3 cents per ASM at Delta. And while it cost American 12.6 cents to fly a seat one mile, it only collected 10.9 cents in passenger revenue for each seat flown one mile. See the problem? That’s too big a gap for cargo, frequent-flier mile sales, regional airline partnerships and other revenue to close.
    http://blogs.wsj.com/middleseat/2011/02/14/a-profitable-year-for-all-but-one-major-airline/
     
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  2. TRAVELSIG
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    TRAVELSIG Gold Member

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    I like the question "See the problem?". I am sure the board of AMR does.
     
  3. tom911
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    Labor issues are still on the table there. If any of the unions are released by the National Mediation Board they could give a 30 day strike notice.
     
  4. Westsox
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    Westsox Gold Member

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    The numbers are too complicated to crunch, but I believe AMR is the only remaining Legacy Carrier that has not experienced some form of bankruptcy. Bankruptcy has allowed debt restructuring and union contract concessions that allowed profitability at the other airlines. The numbers in the article do not mean that AMR is run less effectively than the others, only that their operating costs are slightly higher.
     
  5. mht_flyer
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    mht_flyer Gold Member

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    They obviously haven't charged enough fees :)
     

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