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American Airlines is the one to watch in 2010
Could 2010 be the year for American Airlines? Well, it's hard not to see the light at the end of the tunnel after a decade of unusual airline severity. The market was shaken several times by terror attempts – including the attacks of 9/11 – economic pressures from the dotcom meltdown and the recent financial sector only made matters worse. Energy prices hit some peaks along the way, which, according to Joseph Lazzaro of our sister site, BloggingStocks, determines the fate of the U.S. airline sector.
But, AA in particular? The guys with the flight attendant who through a nutter over orange juice?
The stock is up 90% since June. To most travelers, this is not just irrelevant, but boring ... until you think about how these matters can impact your experience on an airline. When a company is profitable, it has an easier time serving its customers. And, employees tend to relax a little bit, as profits and stock prices tend to be good signs that jobs won't be disappearing (at least not in large amounts).
Also, I use stock price as a proxy for intangibles, like brand strength, customer loyalty and other factors that are hard to quantify. At the end of the day, the price determined by investors takes all this stuff into account, giving customers and passengers a feel for how the airline is likely to treat it.
So, cast aside the recent high-profile debacles of this airline, including its recent runway faux pas in in Kingston, and think to the future. After all, everyone's screwed up. United has its guitar-playing victim, and Northwest (and, as a result, Delta) watched a plane overshoot a destination. In a business where every player is scraping the bottom of the barrel, American may rise above, even if only slightly.
So, cast aside the recent high-profile debacles of this airline, including its recent runway faux pas in in Kingston, and think to the future. After all, everyone's screwed up. United has its guitar-playing victim, and Northwest (and, as a result, Delta) watched a plane overshoot a destination. In a business where every player is scraping the bottom of the barrel, American may rise above, even if only slightly.
Filed under: North America, United States, Airlines
Reader Comments (Page 1 of 1)
JR Dec 28th 2009 12:43PM
I tend to think that AA will rise once again as it is the only legacy not plagued by past bankruptcy baggage. If it's labor contracts can be sorted out in a cost effective manner and the airline is granted immunity, I think AA can muddle through the remainder of this downturn and come out much stronger in the end.
Jay Miami AA Feb 25th 2010 6:36PM
In response to your post ,American has taken millions from it's employees! That's why they are doing so good.
They would be even in better shape if the board of Directors wasn't taken milions a year in their pockets. They neglect the flying public, maintenance gets written up 4 to 5 times before it gets fixed, and instead of settling the labor contracts, they would rather stall it for as long as they can.
The employees want the money they gave up in 2002. It it wasn't for them the AA would be still ok. They are so good at hidding the money. The flight attendant work so many hours, it's not even funny! The flight crew are paid when the door of the aircrafts are closed and the brakes of the aircrafts are released. If an aircraft is parked at a self-guiding gate, the do not get anything. Try working up to 21 hrs in a day !
The employees are the face of AA, and without them
they would be nothing today. The pilot got pretty must everything back, the ground employees are also in negotiation. American could make so much more money if only they would value more their employees.
There's so much more that the media is told that's not not even true. If the board of directors take millions a year, that's what could be invested in proper aircraft maintenance, upgrade, catering , and current employee wages. The salaries are back to the late 90'. The cost of living keeps increasing , not going down.
When a group of airline workers gets a 10-20 % salary increase in 5 years. It's asbolutely nothing, considering that taxed are taken out, medical, union dues, ect! Also AA wants to take and take everytime a contract is negotiated.
AA has a good product, but even a one, if the labor contracts were settled. Then the customers need to be well cared for. Then AA will have a bright light at the end of the tunnel. The secret for American is odd domestic flights, and lots of international flying. The sharehoders know that AA is milking cow.
Jake Dec 29th 2009 3:06PM
I can understand how AA is more profitable, every time I fly on them it seems like they can boast the most experienced planes in the air. How many of their fleet are still MD Super 80s exactly?