US airlines are performing as well as they ever have, thanks primarily to a combination of low oil prices, a fairly stable economy, and lack of competition. The "big three" US carriers have introduced fee after fee after fee, just because they can. Nonetheless you'd think that airlines would realize that these are "good times,"…
Continue reading: American’s CEO Claims The Airline Will Never Lose Money Again
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"The lack of hubris" should be "Complete Hubris"
Appreciate the stories as always!
@ Mike C -- Whoops, thanks. That's what I get for blogging from a 14 hour flight while exhausted. Fixed.
Parker has always had a lot of hubris. Perhaps the only airline exec that exceeds him was Harding Lawrence from Braniff but he was off the scene in 1980. In some small way, airline profit/loss has stabilized in the long-term. With that said, if we do have another terrorist event, like 9/11, it is likely the US government would bail out the airlines like they did back then. Fuel prices are likely to stay relatively low for the foreseeable future due to supply/demand. The airlines have consolidated about as much as they will be able to. So that leaves us with the question what is the biggest threat in the intermediate term 5-10 years an external event like 9/11 or a severe downturn in the economy?
Rest assured, that statement will be pulled out in every union contract negotiation when AA tries to cry poverty during hard times.
What an amazingly non strategic thing to say.
Americans are stupid. They vote against their long term self interests time and again. That is the only reason why american never lose money.
Agree with Mark. Crowing about your cards is just myopic and arrogant. This will bite him in the ass someday.
Not suprising, the failed empire was nothing more than a business. Hustlers and hucksters all trying to get ahead economically. No narrative other than: get money. What a Sad and Shallow existence. americans
Yes the oil price on it's own is likely to stay low into the early 20.
Problem is political developments, say a shooting war between Iran and Saudi involving that trashes a lot of infrastructure in the Gulf would send the price up fast.
Venezuela production is so small these days, that even if it was to fail 100% it would take a very long time to use up world stockpiled supplies.
Nigerian production is also quite small, but the country is also quite unstable.
Simply put large portions of the world oil comes from areas with political instability
A lot of businesses are moving towards teleprescence/video-conferencing and similar technology and trying to cut down on travel expenses. Business travelers are where airlines make their money (at least thats my understanding). This over the top claim by Parker cannot hold true forever.
I wouldn’t expect him to say anything different in the current economic climate. I sure stock prices went way up after the boast.
I'm getting increasingly frustrated by the lack of attention people pay to subtleties between similar, but different, words nowadays.
Solely going by your quote, he did NOT claim that AA would never lose money again, he said he THINKS they won't. That may seem similar, but the meaning is completely different.
There are countless things I "think" are going to happen without having the certainty to definitively claim it.
@Callum, i'm sure the author saw it but sensationalist titles get more clicks.
Dougy Boy, Keep right on pushing your boastful, insensitive approach to the absolute limit. Those "new" 30 inch seats are gonna help you lose money. Actual humans are slotted in like file folders. Try emptying that plane in an emergency.
And the service on AA has gotten so bad, there is nothing much to persuade us to fly them.
Of course, Doug, you will have such a gigantic compensation package under your arm that, really, who gives a damn about passengers and employees, right? The little people...just not 30 inch little.
Let's see: Southwest, Alaska, Amtrak, Frontier... no JetBlue out here and not much Delta. With United and AA on the no-fly lists, there is not a lotta choice. Ah the total triumph of unregulated competition. Hurrah!
@debit. You are welcome to write in Russian as you native language. I can understand it just as well.
Yeah that's why they don't care what kind of service they provide, they ignored the complains of their customers. It's in their head, they will never lose money
Parker has really been playing the ‘America First’ card a lot lately, since his recognition from the President on Twitter. It’s not surprising he’s using this language at all. This language of false confidence and ignorance of market shifts is dangerous, and should be ignored.
Because he will be out by or at the next downturn whenever it happens. So no reason not to make the claim.
Based on the last couple of quarters, AA's financial returns continue to fall behind Delta and United. We will see if this continues, but there's anecdotal evidence that certain parts of AA's network are underperforming and AA does not have a compelling business strategy to address this other than Mr. Parker making arrogant statements such as how good the product is despite evidence to the contrary. AA's focus is on the 70% of its customers who fly cheap and account for 50% of its revenues, but the remaining customer base represents more revenue per passenger. So given AA's mantra lately of doing everything it can to devalue its best customers, this will show up much quicker in the bottom line. After last quarter's earnings, Mr. Parker indicated that he was not interested in comparisons to the competitors. That was pretty telling.
@ Omar
That quote is flat wrong.
This is the correct quote, attribution, and date.
"Not even God himself could sink this ship.”
— Employee of the White Star Line, at the launch of the Titanic, May 31, 1911
Who can blame him in an industry where execs with half a brain run their corporation in the ground and the gov comes with money covered in a bow? Airline ceos are some of the dumbest around but yet they keep pulling gold parachutes because the industry is too big to fail. AA brings in the losers from us airways then wonders why their airlines a shot show. Um idk they ran us airways in the ground. Maybe that's a hint.
@AAplatforlife....absolutely correct. They run a subpar airline as it is. Since a year or two now They are deltas red headed step child who sooner or later comes around.
and one month later: http://www.miamiherald.com/news/business/article181084836.html