AA Bites Back Again

Derg

New Arizona, Il Duce/Warlord
Staff member
Dear Mr. Neidelman,

American Airlines is a company that you really don't wanna mess with.

That t-shirt with the flag that says "Don't Mess with Texas" is something you need to keep in mind. Ask any other airline that tried to go head to head with American and they've whipped them like a red headed stepchild.

Your pal,

Doug Taylor
 

BobDDuck

Island Bus Driver
Neidelman? Do you mean Neeleman? JetBlue CEO? (or I am just completly out of the loop today?) If you do, the interesting thing that I think is going to happen is the fact that every other airline that has gone against AA has been managed using conventional wisdom. Neeleman (who by the way has ADD and is proud of it) probably doesn't even realize the potential problem in what AA is doing to his airline. And because of that he may not bail out as soon as AA is hoping. Conversly he could do what he has done in the past at Morris Air and with OpenSkies and sell out for a whole heck of a lot of money and run like a puppy with it's tail between it's legs.

Ethan
 

Derg

New Arizona, Il Duce/Warlord
Staff member
Dear Mr. Neeleman,

P.S. - Sorry for jacking up your name.

Love, Doug Taylor
 

Cherokee_Cruiser

Well-Known Member
I don't get Jetblue... they slice their fares to 'beat' the competition (American) but do they realize that when it comes to VOLUME, American has a much greater position?

I mean Jetblue is solely attacking using their JFK-Florida and west coast markets... which consist of what? 80% of their market?

AA's JFK-Florida and west coast is only what? 10-15 maybe 20% of their whole market...

so who can 'live longer' in the low fare pricing???

American! Cause' that's right, they have MANY other markets to make up big time.



Bottom line, DO NOT screw AAround with American!!!
 

FL270

New Member
The difference is that JetBlue can make a PROFIT flying those routes at those prices, and will continue to do so. AA will lose a fortune in an attempt to drive JetBlue from the market, and they'll ultimately be unsuccessful. I lived in DFW during the Vanguard flap ... for those that don't know the story, Eagle flew about five round trips a day in the Saab 340 between DFW and Wichita (ICT). Well, in comes upstart Vanguard and they decide to fly a couple round trips a day DFW-ICT in the 737. AA fights back ... they go from five Saabs to about a dozen Fokkers a day at super-cheap fares (below Vanguard's break-even). Eventually Vanguard leaves the market, and AA goes back to a half-dozen Saabs on the route.

The difference between Vanguard and JetBlue is monumental. So is the difference between AA then and AA now. AA needs not to kill itself fighting for those passengers that are a very small portion of its revenue. Instead, they need to focus on reminding people about the things they can provide that JB can't ... frequent flyer awards to Hawaii or Europe, service to a couple hundred destinations JB doesn't serve, etc. Right now AA is cutting off their nose to spite their face. That does nothing except make you bleed out.

FL270
 

Joshua949

New Member
If I had my own airline I most likely wouldn't mess with AA b/c I wouldn't want my airline to be devoured.

By the way, AA will be announcing 4th quarter results tomorrow (Wednesday).
 

stuckingfk

Well-Known Member
I am going to have to agree with FL270 on this one. American should concentrate on providing its passengers the frills that JetBlue doesn't.

I have a question for anyone who can answer. Did AA receive government funding post 9/11 do keep afloat? Was JetBlue also given money?

I don't think JetBlue took any money and seeing that AA can't post a profit even with the accountants doctoring the ledgers, they shouldn't be offering these cheap fares because they will just go farther into debt.

This reminds me of a little history, Great Britain (AA) trying to mess with the then forming U.S. (JetBlue). This should remind that even if you are old and established, you can get your butt kicked. If my history is wrong, please someone tell me.

Sorry AA, I think you are making a bad decision.
 

FL270

New Member
Yes, AA got 9/11 government money. I don't think JetBlue did, but I'm not certain of that. Even if they did, it was in substantially smaller quantities, of course.

The "Big Six" have to realize that they can't be all things to all people anymore, and figure out a business plan that will allow them to make a profit under that paradigm. Killing your profit margin to get a few more passengers that are paying $69 on JetBlue anyway is not the way to go.

This is one of the reasons I'm a Continental fan ... they are doing the things that are right for CONTINENTAL, not trying to out-Southwest Southwest. All the other airlines are cutting meal service or selling food on planes, Continental still serves (free) food on 2-3 hour flights at mealtime. Why? Because they determined that's what worked for them. They're making slim profits right now, but they'll be higer when the price of jet fuel comes down again.

FL270
 

stuckingfk

Well-Known Member
[ QUOTE ]
Jetblue already had their ass kicked out of Atlanta by Delta...

Let's not discard the fact that AA could damage Jetblue.

[/ QUOTE ]


Lets look at that for a second. I think that was the best decisions they have made. Realizing that they were losing money in ATL, they pulled out and decided not to beat a dead horse like so many other airlines do. Now they are using those extra planes for a thriving market in Boston.

If I worked for JetBlue, I would be glad they are making financially sound decisions now to avoid filing for Chapter 11 ever. Most other airlines make the changes after Ch. 11, which is stupid in my opinion.
 

BobDDuck

Island Bus Driver
Another thing to consider is the pension plan that AA is stuck with right now. They are having to pay out huge amounts of money to keep their pensioner's supplied. JetBlue at this point has no pension plan to pay (they haven't been around long enough to have anyone retire). I know it sounds sort of small, but the pension of an airline is a HUGE liability. Look at it this way. Last year when USAir emerged from chap 11 one of the ways they did it was by defaulting on their pension plan. Of course the US Government picked up the tab (through the PBGC, a sort of government insurance company for corporate pension plans that default). USAir was the largest single user of the PBGC in a year that included Enron, WorldComm and others. So the fact that this is an expense to AA and not to B6 is one more reason that I think AA is attacking more then they can take right now. I know in the past AA has had success going head to head with other airlines, but I think that (to steal a line from the auto industry) this isn't your daddy's airline.

Ethan
 

Icaro

Well-Known Member
[ QUOTE ]
Dear Mr. Neeleman,

P.S. - Sorry for jacking up your name.

Love, Doug Taylor

[/ QUOTE ]

For some reason this really cracked me up.
 

Kingairer

'Tiger Team' Member
Go AA. I hope the classic carriers start fighting back and stop letting the LCC walk all over them. Im glad Delta got them out of Atlanta and I hope AA sticks it to them in JFK.
 

Derg

New Arizona, Il Duce/Warlord
Staff member
[ QUOTE ]
[ QUOTE ]
Dear Mr. Neeleman,

P.S. - Sorry for jacking up your name.

Love, Doug Taylor

[/ QUOTE ]

For some reason this really cracked me up.

[/ QUOTE ]

I'm glad someone got my joke!

My attempts over the past week to drop the humor bombs all...well..bombed!
 

mrivc211

Well-Known Member
You know what Irealized for the first time- No matter what happens, we're all pilots. We're in this together. What ever is best for us all is what we should fight for. American, United, Delta, and other majors have typically paid their pilots well. I went into this profession for the love of flying. Now that I have devoted countless days and nights to it, and have yet to contribute many more, I feel that I deserve good pay for the sacrifice.
If you don't realize this yet, you are a FOOL!
I see resentment in the corporate community as well as the military sector. Many corporate and military dudes always applaud the LCCs because they think the mainline guys don't deserve the $200K+/year salaries.

If pilots stuck together and held a standard at the regional level or the LCCs we wouldn't have this problem. However, in the real world, theres always some desperate guy(scab) willing to take that job for almost nothing. Everyone sticking together and holding out for better pay is an unrealistic goal.

All I can say is I hope the LCCs fail because I grew up dreaming that I'd be flying the mainline carriers some day! Why would anyone of you WANT to work for any less money with all the sacrifice and hard work your putting into this profession?

Zoltan!
 

kellwolf

Piece of Trash
LCC will fail when Wal-Mart fails. I love working for SWA, but let's face it, we are the Wal-Mart of the skies. It's not a bad thing, it's our niche. I don't want to see ANY airline fail. For one thing, that just ups the competition for the few jobs out there, and for another it decreases the competition for pax which will eventually start driving prices up.

I like having the choices that are out there right now. If I want to fly x-country with only a pack of oreos and some fruit snacks b/w Orlando and Orange County, CA, I can (and have, I had to beg to get off the plane for food when we stopped in PHX). If I have some extra $$$ to burn on the frills of a meal service and in-flight entertainment, I like having that option as well.

Another part of JetBlue's profits has been their payment agreements with Airbus. Pretty much most (if not all) payments are deferred until this year I think. Look to see those profits starting to slide if that's true.
 

IrishSheepdog

Sitting in the median
[ QUOTE ]
If pilots stuck together and held a standard at the regional level or the LCCs we wouldn't have this problem. However, in the real world, theres always some desperate guy(scab) willing to take that job for almost nothing. Everyone sticking together and holding out for better pay is an unrealistic goal.

All I can say is I hope the LCCs fail because I grew up dreaming that I'd be flying the mainline carriers some day! Why would anyone of you WANT to work for any less money with all the sacrifice and hard work your putting into this profession?

[/ QUOTE ]

Your reference to a scab is incorrect. Scabs cross picket lines. Check out the definition.

You also should check out the comparison in pay rates for the LCCs versus the legacy carriers. You'll find that some LCCs are actually have higher pay rates than the legacies. SWA for example. ATA as well.

Check it out here: http://www.apapdp.org/ or http://www.airlinepilotcontracts.com/
 

Derg

New Arizona, Il Duce/Warlord
Staff member
[ QUOTE ]
LCC will fail when Wal-Mart fails.

[/ QUOTE ]


SWA, JBLU, etc are LCC's because they don't serve most of the US. Cherry pick some routes and voila!

The moment that you can fly SWA from Billings MT to Salt Lake City, or from Los Angeles to London-Gatwick, the "L" part of the acronym will become a "M" (medium) or a "H" (high) and it's just a plain old airline without assigned seating and no meal service.

People tend to leave this stuff out, but it needs to be addressed. The reason why the 'evil legacy carriers' have higher costs is because we have a more robust network of services. Delta can fly you from Butte, MT to Honolulu, HI in one stop if you'd like. That's a pretty high cost route.

Anybody and his uncle can (and does!) fly you from LAX to LAS.
 

jergar999

Yoke Pumper!
One other thing to consider is that without feeds from legacies and regionals LCC's couldn't fill the planes. Doug is right here, the success of the LCC's is at least partially dependent on other airlines.
 
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