AA CEO Arpey Comments on Possible AE Sale, JBV w/ BA/IB/JL, LAX/JFK Hubs, More...

Discussion in 'American Airlines | AAdvantage' started by DestinationDavid, May 19, 2011.  |  Print Topic

  1. DestinationDavid
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    Transcript of Arpey's comments to shareholders at meeting in Los Angeles on 5/18/2011.

    Nothing groundbreaking, but interesting if you want to take the time to read through it.

    LINK.

    Excerpts:

    "The number of 737s in our fleet will surpass the number of MD-80s in the second half of next year."

    "Turning to our long-range widebody aircraft, we recently announced that we have exercised options for two additional Boeing 777-300 aircraft, to be delivered in 2012 and 2013, bringing the total number of new 777s on the way to five. These airplanes will complement the 42 787 Dreamliners we have scheduled for delivery, beginning in 2014 -- and we also have options for 58 more of those next-generation long range airplanes."

    "I know most of you are aware that we have been evaluating a different ownership structures for our regional carrier.....Our evaluation, which is ongoing, has included many scenarios, including spinning off the enterprise to our shareholders, selling the company to third parties, or retaining ownership while still diversifying our regional feed network."

    "While we acknowledge that having the highest labor costs in the industry has hurt our relative financial performance, it’s important to bear in mind that we have leveraged the unmatched experience and know-how of our team to contain, and in many cases reduce, American’s non-labor costs throughout our operation. In fact, our cost per available seat mile, when you take labor out of the equation, is among the best of the network carriers, and has been for some time."
     
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  2. chanp
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    chanp Silver Member

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    I hope their flight plan 2020 works. I wonder how much it costs to get lighter cargo containers compared to what it will save.
     
  3. Tenmoc
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    Tenmoc Gold Member

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    Thanks for the post David.
     
  4. tommy777
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    Interesting. I don't think new long haul planes themselves are going to put AA in to the black. Read an interesting comment on one of the worlds most insightful newsletters I receive Plane Business Banter

     
  5. DestinationDavid
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    More comments out of Boston from AA CFO Bella Goren, pretty much echoing Aprey's comments from LA yesterday which might be of interest. AA's top brass seems to be holding the line that profitability is achievable with reduced fuel and plane improvements, even though it seems most analysts aren't supporting that idea.

    LINK.

    I don't see where the author notes that the MD80 phase out is being "accelerated" though, it's not supported by anything quoted in the post.

    Excerpts:

    "'Certainly unsatisfactory.' That's how American Airlines' CFO Bella Goren described her airline's financial performance for 2010, even though the loss of $389 million dollars represented a billion dollar improvement over the airline's 2009 financial results."

    "Goren blamed the poor financial results in 2010 on increased costs, highlighted by a fuel bill that was $850 million higher than 2009. During the first quarter of 2011, Goren said the airline's fuel costs were 24% higher than the previous year."

    "One way American is combating higher fuel costs is by "rapidly replacing older MD-80 aircraft with new Boeing 737s which are 35% more fuel-efficient than the aircraft they are replacing," according to Goren.At the same time, Goren said American is renovating the interiors of their 757 fleet. The airline will also be unveiling new interiors for the 737s next week in Dallas."

    "Internationally, American and its oneworld alliance partners plan to focus most heavily on 'the top four global airports for premium travel -- London Heathrow, New York Kennedy, Los Angeles and Hong Kong,' Goren told the audience."
     
  6. chanp
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    chanp Silver Member

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    Reading some more today, I see LAX is a cornerstone of their plan, as their meeting was there as well. . Internationally, I think it's weak, domestic is ok. LHR, NRT and now PVG are the only major intl destinations. Be nice if they could add some more intl destinations from LAX. I'd like to see hkg, syd, fra, del/bom (if the new 777s could make it) etc..
     
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  7. FlyMeToTheLooneyBin
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    I'd like to see LAX-HKG too on AA metal.

    Also, why are they renovating the interiors of the 737s? Didn't they just update all the seats in F there?
     
  8. Tenmoc
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    Tenmoc Gold Member

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    Tommy. I know you didn't write to quoted post but you have to be careful using seat miles as a measure of a service operating well. There is of course a tipping point where when you cut frequency enough you drive away more revenue than you recover in unspent costs.

    People often use this to bash Amtrak as well where the only result would be cutting all service to make any money. Of course this is not true.
     
  9. garyst16
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    garyst16 Silver Member

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    LAX-JFK is a money loser for AA? How can that be? I have flown this route many times over the last few years and the aircraft are relatively full.
     
  10. DestinationDavid
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    I'm not saying I agree that there is evidence to support that LAX-JFK is a money loser (there's been debate elsewhere about the research methodology), but full flights don't always equal profit. I can sell all the seats for 50K but if it costs me 70K to operate it.....
     
  11. aamilesslave
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    aamilesslave Silver Member

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    This seems to be a reference to new aircraft deliveries with the new Boeing Sky interior. Existing aircraft will not be retrofitted (not possible).
     
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  12. Tenmoc
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    I just got a twitpic from AA saying their fleet is expanding, check back on Monday. More options being picked up? or delivery of something?
     
  13. DestinationDavid
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    We're playing the guessing game here.
     

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