Stop whining, please, and let AA's mgmt do their job!
whether you realize it or not, the airline industry is in really deep sh*t right now. Believe it or not, airlines are public companies whose main purpose is to provide a certain return on invested capital to their shareholders. Your whining and *****ing about meal and service cutbacks, and all kinds of management decisions we've witnessed in the last few days can at best be dismissed as puerile.
Anything AA's mgmt does is wrong, right? They just can't get it right, can they. Even a gesture of goodwill, which makes perfect business sense BTW, such as extending top tier status for next year to some of the airline's best customers gets heavily criticized by some of the selfish petty f*ck*rs (who've already renewed their tier status), who if they were smart enough would realize the airline needs all the help and support they can get.
That said, are you all really so naive as to think that Don Carty and AA's mgmt just got up one morning and decided to cut back on some routes and services, etc just because they were in the mood to do so? These guys have people working for them whose job is to build complex financial models for best- and worst-case scenarios given a certain number of parameters. In the present environment, fixed costs and operating leverage desperately need to be reduced before the airline burns through all its cash. It's either that, or Chapter 11, at which point y'll can kiss your EXP/platinum/titanium status good bye, forget about FC upgrades for your fat asses, and start booking your next trips on Southwest.
BTW, one thing US airlines really need to do is to stop this FC-upgrade nonsense. You should get into FC or biz class only if you pay for it. Period. We estimate that airlines like AA could boost their operating margins by a good 0.5-1.0% if they really focused on a premium product and stopped filling their premium cabins with elite FF freeloaders who or whose companies have never paid for an FC seat.
I know I'll get flamed for this, but hey, what the hell.....
[This message has been edited by BA Premier (edited 09-29-2001).]
And contrary to some of your beliefs, people who work the call center aren't necessarily stupid. Do you honestly believe that people who work on the front lines of a business are NOT in a position to see room for improvement?
Peter Drucker said, "One has to assume, first, that the individual human being at work knows better than anyone else what makes him or her more productive...even in routine work the only true expert is the person who does the job."
My point is, all employees, customers and suppliers are in a position to see ways to cut costs and increase revenue. Whining, (a.k.a. making suggestions and stating opinions) can be resources.
And finally, the second to last paragraph of Carty's "An Airline in Crisis" (http://www.amrcorp.com/aaincrisis.htm) says "Moreover, we need everyone’s ideas on how we can reduce costs, increase efficiency, and run a better operation. We need ideas on how we can persuade our fellow Americans to return to the air."
Sounds like Carty and his team think that suggestions (call them what you will) have some value.
d
[This message has been edited by Doppy (edited 09-30-2001).]
Whining doesn't stop AA management from doing their jobs. In fact, if they bother to read FlyerTalk they may get additional insights that they may have missed.
More information, opinions, data can only help to make better decisions.
Censorship limits options.
Foul language demeans the writer and his audience.
hey Don, I think you need to read BA premiers original message at the top of this thread again.. *smile*
Hi Benoit.
Read BA's original message the first time through. Second time didn't improve it. Disagreed with it then, still do.
My point stands. Nickel-and-diming customers simply won't cut it in this crisis. Wrong approach.
And for a service business, it's risky to call customers' complaints "whining" -- even in good times. In this economy, it borders on madness. I was never a Crandall fan, but I gotta believe he'd know better than to follow this path.
Looking at AA's behavor since 9/11, it's apparent to me that most of the cost-cutting steps were already planned. The closing of CTO's, ACs, PLT centers, and layoffs are not things you come up with in < 2 weeks. AA was already planning to make these cuts, and they just used 9/11 as cover.
Exactly, I feel AA is hiding behind this tragedy. AA is cleaning house at their employees and customers expense. And just exactly how much tax payers "bail out" money did AA get?
I'm sorry but he is quite correct. If you seriously believe that BA offer "lots" of upgrades run along and read the BA Board where the noise level over the lack of operational upgrades is practically deafening.
Try getting a mileage upgrade anywhere on BA in Europe. It simply dies not exist.
Well according to ABN AMRO, AMR and DAL are actually in good shape
afang, I replied to your similar post re: the ABN AMRO rating upgrade in this thread. (http://www.flyertalk.com/forum/Forum71/HTML/005822.html) So here's the Reader's Digest version of my previous reply:
Securities analysts also said that the likes of drkoop.com, garden.com, and CMGI were in "good shape" not too long ago...
That said, are you all really so naive as to think that Don Carty and AA's mgmt just got up one morning and decided to cut back on some routes and services, etc just because they were in the mood to do so? These guys have people working for them whose job is to build complex financial models for best- and worst-case scenarios given a certain number of parameters. In the present environment, fixed costs and operating leverage desperately need to be reduced before the airline burns through all its cash. It's either that, or Chapter 11, at which point y'll can kiss your EXP/platinum/titanium status good bye, forget about FC upgrades for your fat asses, and start booking your next trips on Southwest.
BA - I think most of the criticism has been precisely at those moves that serve to make AA more like Southwest. If you're not going to get better service, then why go with a "full service" line?
Face it, people are here on this board because for the most part because they've chosen AA. If you think it's unfair to criticize, or question the effect of managements's actions on the longer term traveller - then I wonder who's side you're on. Travel will not cease in this country, but if you send all your loyal customers (who are usually the ones that pay the most as well) over to LUV (all else being equal - or on the way to equal), they AA may very well cease to exist.
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UAL free since the last millennium - and planning to stay that way!
[This message has been edited by fholt (edited 09-30-2001).]
[This message has been edited by freeupgrade (edited 09-30-2001).]
Having said that, the content of your post would have been more effective if you kept the tone and lost the bad language, one has to keep things "PC" for our North American colleagues http://www.flyertalk.com/forum/smile.gif
Many years ago I was the FC for a small international carrier (three guesses from my user name) that was being crushed by competition from AA (beyond the gateway and predatory pricing, overwhelming amounts of fare filings etc).
One thing I learned then that still holds true now. Love them or hate them, AA management are hard assed smart airline business people.
As someone pointed out, AA have started making tough decisions already. Some may be justifiable based on Sep 11, others may have already been in the works and used Sep 11 as an excuse. We can second guess them all we like, but one thing is for sure.....they are doing whatever they do because they feel it is in the best interests of AMR shareholders. Whilst that is not necessarily the same as the best interests of AA FF'ers, the two are not mutually exclusive, time will tell.
To close off, the move that has caused the most whining is the extension of elite benefits. My 2c on this is that this will add to customer loyalty and focus frequent flyers on their 2002 travel plans so they can stay elite for 2003. This is SMART...most businesses are already writing off the balance of 2001 as impossible to save, so why not make moves that optimise the upturn in 2002 ?
As for the language of BA Premier this is a free forum and even though it sounds harsh to alot of people. i think he/she has the right to post them.
Oh and one more thing AA's upgrade is not really free unlike CO or NW. you do have to earn them once you hit elite level, and also you can always purchase them online...
Edited to add the upgrade thing.
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Albert
[This message has been edited by afang (edited 10-01-2001).]
Most important is that the airlines keep flying at a reasonable cost. This seems to be happening. Competition will set the level of service as we move forward.
Oct 2nd, three moves :
1 : Double miles promo for the next 6 wks
2 : Mileage Award specials
3 : NetSaaver fares....have you seen the latest ones ? I have never seen more than two or three Int'l NetSaavers out of MIA, there are a whole lot on this list, including $149 to GCM, which is incredibly low.....
As I said before, AA Mgmt are tough aviation people, if any airline can get through the current economic crisis and emerge stronger, it is AA, and that is to the benefit of all of us AA ff'ers
At what point is a suggestion/critisicm posted on this board really going to stop AA management from "doing their job"? Do you feel that postings on FT are causing Carty and Gunn to sit around the offices like deer trapped in the headlights of an oncoming car? Don't be absurd.
Nothing posted here is going to stop them from doing their jobs. However, it is possible that they would look at FT as a gauge by which to meausre how their measures are viewed by some of their most profitable customers. In which case, I would argue that open feedback -- of *all* types -- is exactly what they need in order to do their jobs.
If I were the CEO of a company, and my best customers were unhappy about changes, I'd want to know about it. Do you think that the powers-that-be at AA don't want to know what people thing, and how the changes are going to affect their travel and spending patterns?
Oh, and as for the 0.5-1.0 revenue increase from only allowing pax to fly in FC if they pay for it, sorry, that's hooey. I work with people who manage a lot of air travel a year. If their employees could not upgrade to FC, they wouldn't fly. The companies will not stomach the current FC domestic fare structure, and the employees who do 100k miles per year will not sit in coach. These employees would simply stop commuting, or do so much less frequently without the upgrades. The net result is that the airlines would lose a substantial number of Y fares.
Furthermore, did it ever occur to you that some of us do realize what a mess AA is in right now, and really do care what happens to AA? Why do you think I have continued to call AA with constructive suggestions on how they might generate more revenue - even though in May I was told no? By the way, I might add all of the PLT Desk agents thought the ideas were good, and said they would pass them along anonymously.
As far as flying Southwest, I hate to break it to you - I have continued to patronize AA faithfully since 9/11, despite the fact I am very traumatized every time I get on a plane because of what happened.
Thank you for your insights.
Operational upgrades are hard to come by on most airlines--. Mileage upgrades can only be used with full fare tickets but BA is not the only airline that has this rule.
The main reason why (IMHO) BA limits upgrades is becuase they are British and think only certain people should be allowed in the premium cabins(please do not take any offense here--I have a relative living in England who has done very well for himself but his neighbors still refuse to talk to him becuase he "earned" his money).
I would agree that BA runs a tighter ship with its rules on who sits in the premium cabin but that does not make them any more profitable.
In the whole vast scheme of things, I could care less--one way or the other--about recent decisions regarding elite status, etc. I'm primarily concerned about one thing--having AA around to fly on in the coming weeks and months. As an AMR shareholder, I'm also concerned about return on my investment.
So let's set aside the nitpicking for a minute and focus on the real issue at hand: can AA save itself?
Your argument, while well presented, presumes that the policies adopted by Carty and the board are the only options at their disposal, and that they didn't have a choice. I think that's a shaky premise. I'm not an economist, and I don't play one on TV, but I think it's safe to say that at times like this, a company has two tools to work with to bring things around: it can cut costs and (not "or") it can increase revenue. To effectively remedy the situation, AA (or any company, for that matter) has to do both--all the cost cutting in the world won't alter the fact that people aren't using your product. And all attempts at revenue generation in the world won't stem the kind of financial bleeding the airline industry is experiencing. To date, I have only seen AA cutting costs; I have seen no attempt by AA to increase revenue.
From reading the threads on the subject, I do agree with you about the whining aspect, and about the naivete involved with elites who think that they can singlehandedly tell the AA board how to turn the airline around with specific complaints, suggestions, etc. Taken individually, it's just that--selfish, whining and silly. Taken collectively, however, I'd argue that those posts are at the very least illustrative of the fact that AA is failing at any attempt (if there even is one) to augment cost cutting with revenue generation--that is, by not only keeping its customer base but by trying to expand it.
To wit, your idea that "In the present environment, fixed costs and operating leverage desperately need to be reduced before the airline burns through all its cash" makes that point. Who says that "burning through" an implied fixed amount of cash is the only option? Why not at least try to increase your available cash at the same time? If it's a matter of striking a delicate balance between the two (and I think it is), AA has done nothing of the sort. As a shareholder who (for better or worse) has entrusted my investment to AA's board, I think that's a valid criticism. I certainly don't think they "woke up one morning " and decided to slash and burn. Indeed, they've seen this coming for a long time now, or at least, I hope they have. Unfortunately, a near-cataclysmic event has given them the opportunity to implement their "worst-case" plan.
If there's one complimentary thing to say about AA's board throughout all of this, it's this: They have identified what they feel to be the best solution to the problem, and are sticking to it, come hell or high water. Time will tell if they've made the correct choice, and I hope they have, but I have my doubts.
[This message has been edited by SuperSlug (edited 09-30-2001).]
"Net SAAver Weekend Getaway Fares will not be offered this week." Guess the geniuses in AA management can't decide if they'll have any extra seats this week! Any opinions here?
With closed CTO's, no food, recommended airport arrivals 3 hours in advance, and all the other passenger-attracting changes lately, AA figures that low fares can be a thing of the past. "We'd rather fly empty than keep fares where they were a month ago. Let's just lay folks off instead!"
A seat with a discount passenger in it is better than an empty seat. Is someone at AA afraid that there'll be a lot of sellout flights this week?
Look at AA's SEC filings, and pay special attention to their balance sheets. As of June 30th, AA had close to $3.3B in cash and accounts receivables, and only $1.6B in expected outflow. The biggest outflow of cash for AA last quarter was the money they put into the stock market.
From even a cursory review of their balance sheets, AA is in no danger of going bankrupt for at least a year, because that's how much operating capital they have on hand.
Looking at AA's behavor since 9/11, it's apparent to me that most of the cost-cutting steps were already planned. The closing of CTO's, ACs, PLT centers, and layoffs are not things you come up with in < 2 weeks. AA was already planning to make these cuts, and they just used 9/11 as cover.
So pardon me if I reserve my sympathy for the people AA is laying off and don't expend any for AMR. They are goign to come out of this crisis just fine, but we can't say the same for either their former employees or customers.
This board is about expressing opinions and ideas. It you disagree with someone's statements you are welcome to add your comments to to contrary. However, four letter name calling is unnecessary and not tolerated. Please use the manors your mother taught you as a child.
I think you should consider the fact that peoples comments come from their knowledge base and experiences. Not everyone may understand all issues to the same degree.
Your First class only for people who paid for it is one of the main reason why the US airline industry has gotten into so much trouble---greed in pricing the premium cabin. In 2000 there were 5 different fare hikes for business/full fare coach tickets. With Prices reaching upwards of $12000 for a first class ticket what do they expect. Air Canada is reducing the size of their first class cabin becuase they can make more money selling more coach seats. AA devotes half of their 3 cabin aircraft to business and first---if they were serious about bringing back customers they would lower the premium fares and the number of seats in these cabins. Southwest will be the only airline to post a profit in the third quarter and they do not offer a premium cabin--just a bunch of really cheap fares!!!!! Your statement that BA only puts full fare passengers in its first cabin is not true. There are lots of back end discounting that BA does---even half off a first fare is good money to them--they also allow lots of mileage and VIP upgrades.
AA, the rest of the airlines and Boeing were in deep trouble before the 11th (just look at the August load factors)--many of these cuts were in the works but AA decided to lay all of the blame on 9/11 so they could get around many of the union contract rules. Shame on AA for not being more honest with their employees and customers.
Thanks for some real-world insight. Haven't seen enough of that on this thread lately.
AA will *not* survive by alienating its traditional revenue base and failing to develop a new one.
Want to cut costs? Schedule a CRJ on transcon s; just touch down in a couple backwater airports for refueling. Hire FAA minimum of FAs with minimum training and Arby's cashier pay levels, and staff the cockpit with C-scale castoffs from TWA.
No jetways, just portable stairs (pax can hoist their own luggage into the cargo area as they board).
This cuts costs better than Air Scrooge could manage. Only problem is, nobody will fly in the **** things.
The math is simple, folks:
No passengers = no revenue.
To maintain anything like 80 percent of AA's enormous system, the company's gotta deal with the fact that air travel is a *service* business.
I've been on a few AW flights were I've seen Craig Barrett (Intel CEO) sitting in coach - and other Intel employees in FC (upgrades). If your company's travel policy is the norm for American business, then the whole upgrade game makes sense.
If, on the other hand, more business flyers have a company policy similar to Intel's, then one has to question the value of these perks in getting and retaining pax.
Just as "quality" was the corporate buzzword of the '80's, "cost" (or price) became the motto of the '90's (and still is). I would believe that there are more flyers out there (whether individuals or companies) who make their choice of airlines based solely on cost than the majors (other than LUV) would like to admit. Wall street must agree to a point; otherwise, why would the market cap of LUV be more than that of AMR, UAL and DL combined (at lease it was a couple of months ago - the last time I checked)?
As for myself, I check the AA board because AA has become my carrier for a couple of reasons: living in Dallas, and the fact that I can get 200,000 miles a year with them without a paid ticket.
As for my language, it may or may not be strong, depending on one's point of view. However, it's not nearly as offensive as many of the idiotic statements about AA's mgmt (people who have been having to take some very difficult business decisions) that I've come across in the past week or so.
Finally. regarding your suggestions to AA to "maximize their revenues", did it occur to you that perhaps what may have seemed like a sensible suggestion to you may not be a viable option in terms of returns on capital for an airline with 805 planes in the air? Sure, PLT desk reps may agree with you, but, to be frank, if any of those people had a clue as to how to run a complex multi-billion dollar business like an airline, do you really think they would be working 10-hour shifts as call-center reservations agents?
May I say that only yesterday I had mail from a lady who does not post here any more, (call her the Goddess if you will) and I really cannot hint more than that. She is appaled at the outcry on this Board. She uses whining because that is what it is. AA is nearly bankrupt and given the loads the cash flow could easily fail to cover the repayments that the banks are going to demand.
I would state that AA have just this year swallowed TWA in all its faded glory, and that cost a fortune. Had it allowed it just to collapse (as Delta eventually did with PanAm) the assets would have gone for a song. This is why, maybe unlike you I am less impressed with the decisions that have eminated from Fort Worth, Dallas or where ever. The whole emphasis now is on survival. Unlike BA, AA is hampered with a technologically aged fleet on its domestic flights. They still fly a lot of MD80s which are getting long on tooth, and the 727 which is getting on for 30 years old. Internationally they have a much more modern and efficient. However, efficient or not, AA90 left ORD for LHR with 35 pax in Y, 5 in J, and 2 in F one knows that this is cannot go on for long.
I strongly suspect that this will cause AA and other airlines management to make some really tough decisions. Elite status will be earned by flying at premium rates as at BA and only those who pay for First Class will get it. Indeed maybe this will be the end of First Class and a form of Business Class domestically. At this time anything, even the worst is possible. If this management have taken steps and can weather this crisis, I for one am prepared to endure the present. For certain, nothing will ever be the same.
Mad4Miles, BAPremier's mother probably taught him manners rather than manors, and if he talks like an adult then so be it. I thought that we were all adults here. Content is more important than style I always find.
[This message has been edited by PAUL PALMER (edited 09-30-2001).]
[This message has been edited by PAUL PALMER (edited 09-30-2001).]
I have checked fares consistently since 9/11, and on any of the routes I would normally fly, the fares are no less than before 9/11 and often times more! So, let me see, I'm already paranoid about flying again, and you're taking away all the comforts and valued services that make flying pleasant, while making the flying experience more inconvenient (point taken that this may not be able to be avoided, but still counts) offering me no incentive to fly with your airline anytime soon. Hmmmmm.....sounds like a plan for self-destruction to me!
P.S. AA, when I do decide I need to fly again, you can be sure it will be with my redeemed AAdvantage miles instead of a paid fare, since you refuse to offer any form of a reasonable sale.....offer me a good fare sale and I will gladly save my miles and buy the ticket.
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