AA parent company filing Chapter 11. Will this bring airfare back down at all?

[Globaliser]

AA did the honorable thing by NOT filing bankruptcy until they were finally almost forced to by a combination of factors.

This is what annoys me most about Chapter 11. AA worked hard - very hard - to avoid going into Chapter 11 despite the really rough decade that we've had. But now, they've finally had to do it because all its big competitors cheated by abusing Chapter 11 - in some cases, more than once.

[6rugrats]

 

CNBC ran a "behind the scenes" series on AA. A JFK-LAX flight using a 767 made a profit of about $200 *for the entire flight*, not per passenger. Most profit on any commercial flight is from full-fare passengers and cargo.

 

I remember that show and that particular episode, which came to my mind also while reading this thread.

[greatam]

I remember that show and that particular episode, which came to my mind also while reading this thread.

 

It was just on CNBC again last week. I wish more people would see it. Maybe, just maybe, they would understand how thin margins are in ANY transportation business (airlines, trucking, limos/private bus services and taxis) with the tremendous volatility of fuel and the economy. 2-3% clear profit is about average. If you make 5% in transportation, you are doing REALLY, REALLY well.

[Keith1010]

People seem to want the cheapest flights and then do not understand why the airlines lose money or cut back on services.

 

When people say they want the cheapest cruises that worries me as I don't want to see the cruise lines become what the airlines have become.

 

Keith

[frugaltravel]

Funny how the tarmac rule and subsequent rant got into this thread. Obviously the $900K fine to American Eagle wasn't the reason for the bankruptcy, which was already admitted. In fact, the tarmac rule has been an almost non-issue since it was implemented. Remember before the rule came into effect how certain posters were crying about how so many flights would be canceled, passengers would be stranded for days waiting for open seats on full flights, blah, blah, blah? Well, surprise of surprises, none of that happened. Very, very few >3 hour tarmac delays, even fewer fines, no huge spike in flight cancellations. Airlines found a way to deal with the issue, plain and simple.

[frugaltravel]

How many think the $900,000 American Eagle was just fined by the transportation dept had something to do with this??? Thank you, the American people, for the darn STUPID tarmac rule.

 

IIRC, the American Eagle plane was on the tarmac for slightly over 4 hours. Uncomfortable, yes. BUT AA brought snacks and drinks for everyone AND they even had the "porti potty" pumper come out once. The tower in Chicago would tell them to take off (when the clouds cleared and the rain/lightning stopped) and then tell them to stay put. It was a weather related incident-truly a force majeure happening. Can no one in the USA stand being a "little uncomfortable" for a few hours???

 

Unfortunately you didn't recall correctly. It was not just one plane, it was 15. And $250K of the fine will be given to passengers in the form of vouchers and miles, which in reality cost an airline very little (historically such vouchers get a very low usage rate).

 

http://money.cnn.com/2011/11/14/news/companies/american_eagle_fine/index.htm

[Globaliser]

Very, very few >3 hour tarmac delays, even fewer fines, no huge spike in flight cancellations. Airlines found a way to deal with the issue, plain and simple.

No "huge spike", but more cancellations nonetheless.

 

And, therefore, more passengers inconvenienced than before the rule came into effect.

 

But then, if we're living in a world where people can't sit quietly on an aircraft for three or four hours without kicking up a fuss, frankly we're only getting what we deserve. Personally, having sat through many 3-4 hour tarmac delays, I really can't see what the problem is.

[alidor]

Sitting on a tarmac is always inconvenient and boring but sitting on a tarmac after a prolonged period of time with no food, no water and bathrooms plugging up, is a whole other story. If the airlines even bother to step up with some sense of service to remedy a bad situation, the laws wouldn't have to be written. Seems simple common sense doesn't usually come naturally to the airline industry.

[frugaltravel]

No "huge spike", but more cancellations nonetheless.

 

And, therefore, more passengers inconvenienced than before the rule came into effect.

 

But there is nothing to prove that any such increase in cancellations were directly related to the tarmac rule. Or if there is, I haven't seen it.

[Globaliser]

But there is nothing to prove that any such increase in cancellations were directly related to the tarmac rule. Or if there is, I haven't seen it.

Likewise, if a rule comes into effect designed to eliminate long tarmac delays, whereupon long tarmac delays go down, there's also nothing to prove that the decrease was directly related to the rule.

 

However, those who know how airline operations work, and who see how airlines have always carried out tactical cancellations in anticipation of weather and similar events, predicted that there would be more tactical cancellations in order to avoid long tarmac delays.

 

And lo, there duly came to pass an increase in tactical cancellations.

[frugaltravel]

Likewise, if a rule comes into effect designed to eliminate long tarmac delays, whereupon long tarmac delays go down, there's also nothing to prove that the decrease was directly related to the rule.

 

However, those who know how airline operations work, and who see how airlines have always carried out tactical cancellations in anticipation of weather and similar events, predicted that there would be more tactical cancellations in order to avoid long tarmac delays.

 

And lo, there duly came to pass an increase in tactical cancellations.

 

The number of cancellations doesn't really show at all that it has anything to do with the tarmac rule. In fact, so many people opposed to the rule predicted way more cancellations, which never happened. I guess we will have to agree to disagree, not to mention whenever someone uses extreme words like "always" and "never", they are almost always wrong:D

[Globaliser]

... not to mention whenever someone uses extreme words like "always" and "never", they are almost always wrong

:confused: Not in this context, in which it's about as extreme as saying that airlines have always diverted some flights from airports when the weather has gone beyond limits.

 

Tactical cancellations have always been a fact of life. Just last night it happened again, with a number of tactical cancellations of flights to the UK because of the anticipated effect of the border control staff strike today.

[FlyerTalker]

People seem to want the cheapest flights and then do not understand why the airlines lose money or cut back on services.

Entitlement 101?? It's the replacement for Econ 101.

 

But there is nothing to prove that any such increase in cancellations were directly related to the tarmac rule. Or if there is, I haven't seen it.

Try these links, so you can see the relationship:

 

Story from Cranky Flyer - HERE

Tarmac Rules website - HERE

GAO Report - HERE

[Globaliser]

For anyone who's interested in the usual kneejerk sniping about the inevitable golden parachute etc when CEOs leave their companies, I commend this NYT article:-

A C.E.O.’s Moral Stand

 

By D. MICHAEL LINDSAY

Published: November 30, 2011

 

IT seems that every week we hear of a C.E.O. who earned millions from a golden parachute after demonstrating poor business judgment or cutting thousands of jobs with no financial downside for executives. These stories feed the fires of the Occupy movement growing all over the world.

 

But on Tuesday, we heard something different. American Airlines, once the largest airline in the United States, declared bankruptcy. This is not surprising news for the beleaguered airline industry; what is different is what is emerging from the wreckage. Gerard J. Arpey, American’s chief executive officer and chairman, resigned and stepped away with no severance package and nearly worthless stock holdings. He split with his employer of 30 years out of a belief that bankruptcy was morally wrong, and that he could not, in good conscience, lead an organization that followed this familiar path.

 

...

[Taxguy77]

You would be darn hard pressed to even get to Alaska, let alone any place else in the world on WN.

 

WN may be good for somethings but they sure are not a WORLD airline with all the perks and benefits and alliances. Just NO comparison.

 

You're right, and they never pretend to be.

I said it when they were limited to Texas, and I'll repeat it now, The fastest bus service in Texas.

[Taxguy77]

No "huge spike", but more cancellations nonetheless.

 

And, therefore, more passengers inconvenienced than before the rule came into effect.

 

But then, if we're living in a world where people can't sit quietly on an aircraft for three or four hours without kicking up a fuss, frankly we're only getting what we deserve. Personally, having sat through many 3-4 hour tarmac delays, I really can't see what the problem is.

 

You obviously are not a smoker. I quit smoking due to other reasons, but really considered not flying places when the airlines went no smoking.

You also don't have back problems or leg problems. Be thankful.

[Globaliser]

You obviously are not a smoker. ...

You also don't have back problems or leg problems.

Nevertheless, if you can't deal with the first 3 or 4 hours, how are you going to deal with the next 8, 10 or 20 hours of the flight?

[frugaltravel]

Nevertheless, if you can't deal with the first 3 or 4 hours, how are you going to deal with the next 8, 10 or 20 hours of the flight?

 

I think you hit the nail on the head. The extra 3-10 hour tarmac delays just multiply the issues at hand. A 3-8 hour flight might be tolerable, even a 15+ hour flight JFK-HKG, but if you have a huge tarmac delay to boot, it can easily become intolerable. (oh, and what flight is 20 hours long?)

 

Tarmac delays generally mean remaining buckled in your seat with no chance to stand, unless the captain gives clearance (which has happened on ONE of my longer tarmac delays, but no others). In the air during the flight passengers can generally get up and move around. Big difference IMHO.

 

I personally always travel with a snack and water. I know from experience that most passengers don't. Airlines generally don't have enough supplies on board to serve everyone something during a long tarmac delay then to also serve them again in the air, especially on the domestic flights that this rule applies to. Passengers get antsy with being strapped in their seats, not being able to really move for 3+ hours, and having nothing to drink (eating shouldn't be that big of an issue, but it is for most Americans, sadly!).

 

I still maintain that the sky didn't fall when the new tarmac rules were put into effect. The airlines dealt with the situation. In fact, it was a relatively non-issue, except for some pundits guessing if it had an effect or not (and none of them, even from FlyerTalker's links, could really base any conclusions on any quantifiable facts).

 

Fortunately you don't fly that much within the USA, so this rule will rarely if ever affect you. Consider yourself lucky. I consider myself lucky that the airlines have a measuring stick now since it was glaringly obvious they could not self-police themselves.

[DanJ]

I think you hit the nail on the head. The extra 3-10 hour tarmac delays just multiply the issues at hand. A 3-8 hour flight might be tolerable, even a 15+ hour flight JFK-HKG, but if you have a huge tarmac delay to boot, it can easily become intolerable. (oh, and what flight is 20 hours long?)

 

 

I think if you stuck a several hour delay at the front end of a east coast to Asia flight, they would probably end up cancelling the flight because of hours of service regulations on the crew.

[MANURULES]

(oh, and what flight is 20 hours long?)

 

 

Singapore to Newark is close to 19.

[new salt]

I suspect that a lot of the problems reflect a loss of commander's discretion over the years. If things are explained to pax and they are kept updated on delays I always found that they would put up with a great deal. If they are told to feel free to move around the cabin, use their mobiles etc and if soft drinks and water are served then most people are remarkably patient. But to hold people on an aircraft for hours without offering any liquid refreshment while the toilet tanks fill up and the cabin environment becomes increasingly dire (Air India in the UK recently) is unacceptable and warrants regulatory action.

[Globaliser]

(oh, and what flight is 20 hours long?)

SYD-SIN-LHR is more than 20 hours, and SIN-LHR is more than 14 hours in itself. And if departure from SYD has been delayed by three or four hours, you can be guaranteed that when you get to SIN, the airline will do its utmost to turn the aircraft in under 60 minutes, so you're basically pretty much turfed off the aircraft and shepherded straight back into the gate lounge (because that's where security is done at SIN).

 

As for being buckled in, what about those flights when turbulence has meant being buckled in for three or four hours at a stretch? These probably happen more often than flights with long tarmac delays.

I still maintain that the sky didn't fall when the new tarmac rules were put into effect. The airlines dealt with the situation.

As has been pointed out, the airlines have dealt with the situation by increasing the number of tactical cancellations. The number of long tarmac delays and the number of tactical cancellations have decreased and increased, precisely what was predicted.

 

Whether or not that's a good thing depends on your point of view, and on whether you're really afraid of the four-hour tarmac delay. None of us wants a tarmac delay - personally, I very much prefer it if I can be decanted back into the lounge to wait whenever there's a problem - but I'll bet that the people to whom it's most likely to happen would rather take the four-hour tarmac delay than the hassle of a cancellation, even if "an increase in the number of cancellations" is a story that is not sexy enough to attract the attention of the meedja.

[spongerob]

Globaliser, you are always the voice of reason.

...since it was glaringly obvious they could not self-police themselves.

I fly more often than I care to, and I'm not a huge fan of any particular airline. Generally I think that they do the best they can in most cases; on those occasions where I have had a reason to complain it was usually because of an individual employee's attitude or incompetence.

 

I have experienced tarmac delays; in every case it was because of an FAA decision related to weather either at the departing airport or at the destination. In most cases the delays were weather related, and a couple of times the reason for a departure delay after pushing back was due to a lack of landing slots (not gates) at the destination.

 

In one of the highly publicized cases that resulted in the regulations that some tout, the airline desperately wanted to disembark their passengers but were not allowed to do so because of security rules, union policies, and a general lack of management of change procedures amongst all parties.

 

I also witnessed a lengthy delay at DFW where arriving aircraft waited to be marshaled into their gates and departing flights that had been boarded waited for push-back and marshaling because the union called an emergency "study session".

 

The knee-jerk reaction that sought only to punish airlines in the case of lengthy delays has resulted in increased inconvenience and cost to passengers as a result of tactical cancellations. Those who ignored, and continue to ignore, the real costs of poorly thought out regulations are paying the price for their actions whether they can bring themselves to admit it or not.

[Zach1213]

Singapore to Newark is close to 19.

SQ21, Newark to Singapore, is blocked at 18h40. Due to winds, it can definitely go longer. I saw last week it was going past 20 hours!

[Zach1213]

People seem to want the cheapest flights and then do not understand why the airlines lose money or cut back on services.

 

When people say they want the cheapest cruises that worries me as I don't want to see the cruise lines become what the airlines have become.

 

Keith

Not only that, but people only look for the cheapest fare, which means the airline must increase ancillary fees such as bag fees, which most passengers will have to pay because they want to save $5 on the fare versus gaining loyalty with one airline, which will in turn cause them to not have to pay any bag fees. I have never, ever, ever paid a bag fee and I travel at least half the year, always flying (never driving...well maybe 1-2 times a year).

 

It just has to be remembered how thin the margins are. As mentioned, American Airlines made $200 for an entire flight on JFK-LAX...they're not the big, bad, greedy airline that many people make them out to be. In fact, none of them are...they are trying to compete while still covering their costs, which is difficult. The airlines, many of them in the US at least, are finally starting to turn a profit...finally. But we're one gas spike or 9/11 away from that being turned back around. Yes, I want to save my money when I fly, but I also understand that airlines need to make money, lest they become Aeroflot America's and are all government run industries. You really think that $100 fare from Chicago to Orlando covers your costs of paying off the aircraft, paying for fuel, paying for ground crew, paying for pilots and flight attendants, paying for landing fees, etc.?

 

Maybe it's the MBA in me but I want the airlines to do well in a business sense. If they can find a common ground where they don't charge us an asinine amount while still being able to cover their costs, build/update their fleet and even pull a profit, that would be great.