In the past couple of weeks, Delta and United both reported their Q3 2023 financial results. I didn’t write about them, because both airlines did reasonably well and as expected — costs were up, but revenue was also up, and both airlines had good margins, given the strong leisure demand, particularly for premium products and long haul travel.
American is the last of the “big three” to report its Q3 2023 financial resorts, and it’s a very different story at the Fort Worth-based airlines.
In this post:
American reports $545 million net loss
For Q3 2023, American Airlines has reported a net loss of $545 million, compared to a net profit of $930 million in Q3 2022. Here are a few of the major highlights of American’s performance:
- American had record third-quarter revenue of $13.5 billion, almost identical to the carrier’s Q3 2022 revenue
- Excluding net special items, American had net income of $263 million, compared to $478 million in Q3 2022; American primarily recorded a loss due to $983 million in charges related to the carrier’s new pilot labor contract
- American’s operating margin was -1.4%, and excluding net special items, it was 5.4%
- American’s passenger revenue per available seat mile was 16.95 cents in Q3 2023, compared to 18.08 cents in Q3 2022
- American reduced its debt by $1.4 billion in the third quarter, and the airline hopes to reduce total debt by $15 billion by the end of 2025
- American had an average load factor of 84%, and had its best-ever third quarter completion factor (meaning few flights were canceled)
- Compared to Q3 2022, labor expenses increased by 17.4%, while fuel expenses decreased by 16.6%
A mild profit excluding one-time expenses isn’t the worst thing in the world, but American’s situation isn’t looking great. American has virtually the same revenue as the same quarter last year, while expenses are up significantly, and passenger revenue per available seat mile is down.
American’s performance pales in comparison to Delta & United
Recently United Airlines CEO Scott Kirby stated that 98% of total industry revenue growth and 90% of total industry pre-tax profit would come from just Delta and United. That was a pretty clear dig at American, where Kirby used to work. So, how does American’s performance compare to that of both Delta and United for Q3 2023? Let’s focus on some of the most important metrics.
For Delta’s non-adjusted financial results:
- Delta reported net income of $1.5 billion in Q3 2023, compared to $700 million in Q3 2022
- Delta reported revenue of $15.5 billion in Q3 2023, compared to $14 billion in Q3 2022
- Delta reported an operating margin of 12.8% in Q3 2023, compared to 10.4% in Q3 2022
- Delta reported passenger revenue per available seat mile of 17.92 cents, compared to 18.19 cents in Q3 2022
For United’s non-adjusted financial results:
- United reported net income of $1.1 billion in Q3 2023, compared to $940 million in Q3 2022
- United reported revenue of $14.5 billion in Q3 2023, compared to $12.9 billion in Q3 2022
- United reported an operating margin of 12.2% in Q3 2022, compared to 11.5% in Q3 2022
- United reported passenger revenue per available seat mile of 17.01 cents, compared to 17.21 cents in Q3 2022
While American would have earned a mild profit without the one-time payment for its new contract for pilots, the carrier’s results still pale in comparison to those of Delta and United. Delta and United both have double-digit operating margins, while American’s operating margins are less than half of that. And the growth trajectory isn’t good either — American’s revenue was flat, while both Delta and United saw significant revenue growth.
Keep in mind that Q3 2023 is still a strong quarter for international travel, and that’s an area where both Delta and United are stronger than American, especially across the Atlantic. Admittedly it’s only really the first half of the third quarter where transatlantic demand is through the roof.
It’s kind of funny to me how American CEO Robert Isom is trying to paint everything as being perfect, and thinks that the reason American’s stock price is so low is because the airline isn’t doing a good job telling its story. He also states that he’s very pleased with where the airline is from a relative margin perspective. Relative to what airline, Frontier and Spirit?
Bottom line
American Airlines has reported its financial results for Q3 2023, and the airline reported over half a billion dollar loss. That loss can largely be attributed to the one-time bonus that pilots received for ratifying their new contract.
That being said, even when you take that out of the equation, American’s margins are much worse than those of Delta and United. Not only are the margins not great, but American isn’t seeing the growth in revenue that Delta and United have seen. American is just seeing higher costs but not higher revenue. But according to American’s CEO, the company just isn’t doing a good job telling its story. Hmmm…
What do you make of American’s financial results?
AA lacks a brand and strategy. AA tries to be all things to all people - trying to appeal to no frills and premium simultaneously. Can anyone tell me what AA stands for since the AW guys took over? As for strategy, they gave up the NY market. Delta and Jet Blue quickly grew. Their international strategy is - well what is it? The most recent financial reporting adds to the mess they have been...
AA lacks a brand and strategy. AA tries to be all things to all people - trying to appeal to no frills and premium simultaneously. Can anyone tell me what AA stands for since the AW guys took over? As for strategy, they gave up the NY market. Delta and Jet Blue quickly grew. Their international strategy is - well what is it? The most recent financial reporting adds to the mess they have been in for years. Why has the board put up with this? I used to be a real fan, a big fan of AA but watched how they slowly became K-Mart -a non-player. For things to change, senior management has to change.
There is a part of me that wishes I was in charge. AA can definitely turn around.
I distinctly remember Doug Parker saying that the AA-US merger would allow the new AA to be able to compete with DL, the first of the four megamergers (including WN/Airtran) and UA including in global markets.
We could go on for days but Parker's vision has not happened and the table was set on his watch.
Scott Kirby may say alot of things but he is right that DL and UA are the...
I distinctly remember Doug Parker saying that the AA-US merger would allow the new AA to be able to compete with DL, the first of the four megamergers (including WN/Airtran) and UA including in global markets.
We could go on for days but Parker's vision has not happened and the table was set on his watch.
Scott Kirby may say alot of things but he is right that DL and UA are the leaders in the industry. DL just happens to be getting as much growth as UA but at much lower cost and risk. DL also has enormous non-transportation revenue including from its loyalty program and its engine overhaul services (MRO) that other airlines including AA and UA cannot duplicate
Basically the pilots are bankrupting the company
No, management is.
Basically the pilots are bankrupting the company
How, exactly?
How much do the top 5 execs at AA make annually?
Did AA do stock buybacks? How much?
Those that think that AA is at a huge disadvantage because it can't grow internationally as fast as DL or UA are in luck.
UA execs were REPEATEDLY on their earnings analyst conference call asked about UA's capacity plans. UA said "we are not ready to release 2024 capacity guidance" but then went ahead and said that UA would be adding very little if anything over the Atlantic, would be focusing on the S....
Those that think that AA is at a huge disadvantage because it can't grow internationally as fast as DL or UA are in luck.
UA execs were REPEATEDLY on their earnings analyst conference call asked about UA's capacity plans. UA said "we are not ready to release 2024 capacity guidance" but then went ahead and said that UA would be adding very little if anything over the Atlantic, would be focusing on the S. Pacific and Asia, and would be adding very little domestically esp. in the first half.
They also said that they know they need to replace dozens of 767s and 777s this decade. In other words, all of the aircraft they have ordered WON'T be used for growth which means they will spend tens of billions more than competitors for fleet replacement.
They were also asked by an analyst about their revenue at EWR given the flight cuts. UA execs gave their oft repeated statements about replacing regional jet flights with mainline aircraft. The analyst pressed if that meant revenue for their pre-June/July 2023 schedule at EWR could be used to model revenue going forward and UA execs FINALLY admitted that would not be accurate. In other words, a Wall Street analyst got United execs to admit that they are not making up for the revenue they are losing because of the flight cuts at EWR.
My statements that Delta is gaining revenue share in NYC because of the loss of the NEA and because of UA's flight cuts are completely accurate.
UA also acknowledged that they expect to settle with their flight attendants which will certainly increase their costs.
In other words, on point after point, UA execs are backtracking on their rosy previous statements esp. when knowledgeable analysts point out what some like me have seen all along.
AA isn't as bad off esp. relative to UA.
AA has yet to explain its revenue dropoff but UA's fast growth is coming to an end, AA is paying down debt while UA takes it on, and AA is in a similar position to UA in terms of future labor cost increases and both have to take on costs which DL has already incurred.
and AA and UA have similar loyalty program revenue so far year to date.
@Tim, why aren’t you including the fact that DL will also be taking advantage of the NYC slot waivers?
Or that DL has even more 767s to retire without any substantial widebody order to replace them.
UA has 150 firm orders for 787s, plus 50 firm orders for A321XLRs. You don’t think 200 international planes are enough to replace older planes and allow for substantial growth.
Remember what I said about you twisting...
@Tim, why aren’t you including the fact that DL will also be taking advantage of the NYC slot waivers?
Or that DL has even more 767s to retire without any substantial widebody order to replace them.
UA has 150 firm orders for 787s, plus 50 firm orders for A321XLRs. You don’t think 200 international planes are enough to replace older planes and allow for substantial growth.
Remember what I said about you twisting and omitting facts? Remember how I said a fair and total discussion of all facts would help you gain credibility?
@Tim, look at slide 3 of the link below. It details NYC passenger counts. Even with UA’s slot waiver reduced scheduled already in effect for many of the prior 12 months, UA carried over 2.4 million more passengers than DL.
UA’s lead will continue to grow as regional flying is replaced my additional mainline flying and existing mainline flights are upgauged.
This is how you provide data to back up assertions. Please learn...
@Tim, look at slide 3 of the link below. It details NYC passenger counts. Even with UA’s slot waiver reduced scheduled already in effect for many of the prior 12 months, UA carried over 2.4 million more passengers than DL.
UA’s lead will continue to grow as regional flying is replaced my additional mainline flying and existing mainline flights are upgauged.
This is how you provide data to back up assertions. Please learn from this so that you can stop spouting off erroneous or misleading ideas with nothing to back them up.
Is there anything else you’d like me to look up for you?
https://www.panynj.gov/content/dam/airports/statistics/statistics-general-info/monthly-2023/REG_AUG_2023.pdf
first, Mark,
first, Mark, the PANYNJ data is for airport boardings, not local revenue. UA has long connected more passengers through NYC than DL and that hasn't changed.
second, the metric that matters and what I referenced is local market revenue and that does not show up in airport boarding statistics. UA did not implement all of the EWR flight cuts until the fall after they realized that they could not operate the schedule they published...
first, Mark, the PANYNJ data is for airport boardings, not local revenue. UA has long connected more passengers through NYC than DL and that hasn't changed.
second, the metric that matters and what I referenced is local market revenue and that does not show up in airport boarding statistics. UA did not implement all of the EWR flight cuts until the fall after they realized that they could not operate the schedule they published in the summer which was full of cancellations and delays. Read the DOT's ATCR.
Again, read the transcript from the earnings call. UA execs were specifically asked if they are seeing a reduction in EWR revenue as a result of reduced flying and they eventually were forced to admit that analysts would overestimate EWR revenue if they used pre-summer 2023 revenue before the flight cuts.
DL has already said they will use part of their 2023 widebody new deliveries to remove about a dozen older 767s. They will then have a 767-300ER fleet about the same age and size as UA. DL has a couple more 767-400ERs than UA but it isn't clear when either DL or UA will retire them.
UA execs finally admitted they will start retiring 777s this decade.
DL is expected to place a widebody order but will still not have an order book near as large as UA and won't need to come any where close. UA's order book is $35 billion more than DL's - the difference is twice the size of DL's entire order book.
UA also said they will slow growth in 2024 dramatically including to Europe. All of the talk about huge growth is not going to happen even though that is all we have heard from UA fans for years. They will start replacing older aircraft which is what they need to do. They just will be spending far more on fleet than any other airline. Given that DL and UA are making virtually the same profits in the summer, it isn't rocket science to see that UA will take on much more debt than DL.
Tim, UA said growth would be flat just for the first half, not the second half
DL is taking advantage of the same NYC slot waivers that UA is using, so their traffic will also decline, though without the mainline growth UA is using since they don’t have the domestic mainline growth UA has coming online.
Brett Snyder had analysis just a few months ago that detailed how UA is number one in local...
Tim, UA said growth would be flat just for the first half, not the second half
DL is taking advantage of the same NYC slot waivers that UA is using, so their traffic will also decline, though without the mainline growth UA is using since they don’t have the domestic mainline growth UA has coming online.
Brett Snyder had analysis just a few months ago that detailed how UA is number one in local market in many of their hubs, including NYC. It’s 2022 data, but UA and DL were both utilizing slot waivers in that period too, similar to what we’re seeing now, though UA had much more mainline backfill this year than they had in 2022, increasing the lead even more.
Next year will see the start of an additional 787 UA deliveries, before the next batch of 50 start arriving in 2028. Each 767 upgauged to a 787 will mean even more growth without even having to add flights.
https://crankyflier.com/2023/05/04/united-is-getting-aggressive-in-denver-and-it-appears-to-be-working/
a few more things, Mark.
first, DL execs were also asked about NYC on their earnings call and said that there should not be any further flight cuts because they are simply carrying forward the schedule they operated in the summer with a few markets getting fewer frequencies offset by larger aircraft. The A220 is a big reason why DL is able to incrementally increase capacity in NYC from regional jets and that trend...
a few more things, Mark.
first, DL execs were also asked about NYC on their earnings call and said that there should not be any further flight cuts because they are simply carrying forward the schedule they operated in the summer with a few markets getting fewer frequencies offset by larger aircraft. The A220 is a big reason why DL is able to incrementally increase capacity in NYC from regional jets and that trend will continue.
second, look at how is losing share in NYC even by Port Authority numbers and it is AA and B6. These numbers are even before the end of the NEA (it had been ruled illegal by August but the relationship was not yet unwound). DL and UA are both benefitting from AA and B6's own problems in the NE.
Third, the NE includes Boston down to Washington. UA has long said that it intends to shift connecting capacity from EWR to IAD and I am certain they will - but the data including revenue data is for today. UA has alot of airport work to do at IAD and has to add a lot of new flights and banks at IAD in order to accomplish their goal of freeing up EWR flights for local traffic, which, again, I am certain they will do.
The NE also includes BOS and DL is consistently now the largest airline even by the number of flights. the revenue share has grown even faster. While UA probably won't grow its share of the Washington DC market, DL's share of the entire NE is growing not just because of NYC but also because of BOS. DL is connecting more traffic over BOS than some expected and they are talking w/ Massport about a connection between Terminal E and A.
Just as is true in the NE and nationwide, DL and UA are both seeing the same revenue trends and are growing at the expense of other carriers. on the west coast, DL is regrowing SEA and growing at LAX faster than UA. UA specifically said they see strength in the S. Pacific and Asia and DL is adding most of its new international capacity there. While UA talks more openly, DL and UA both see the same things and are growing in the same places. Kirby is right that DL and UA are where the growth in the industry is and will be.
AA has to figure out how to grow and address its perpetual underperformance in international markets. AA is a hybrid between a super-LCC and a somewhat international carrier.
Thank you for using data and engaging in a fact-filled discussion. I participate in airline social media because there are a few people like you that are smart enough to contribute and sites like Ben's are better off when there is less mudslinging and more discussions such as the two of us are having.
Tim, UA didn’t implement any flight cuts in the fall due to the waiver. Like DL, they just continued the schedule that began over the summer when the slot waivers went into effect, the schedule that is similar to the schedule used last year for the 2022 slot waivers, minus all the additional and upgauged mainline UA is running now.
Kirby has also said UA plans significant growth in IAD, potentially doubling the number...
Tim, UA didn’t implement any flight cuts in the fall due to the waiver. Like DL, they just continued the schedule that began over the summer when the slot waivers went into effect, the schedule that is similar to the schedule used last year for the 2022 slot waivers, minus all the additional and upgauged mainline UA is running now.
Kirby has also said UA plans significant growth in IAD, potentially doubling the number of banks. UA will soon substantially grow DC market share in a very wealthy area of the country.
Regarding local NYC traffic, Brett Snyder came out with analysis a few months that detailed how UA is number one in NYC local traffic. Those are 2022 numbers, but the airlines are currently running similar schedules due to the same slot waiver program in effect. The link is below.
Also, 2022 did not see all the UA mainline backfill they’ve seen this year with all of the domestic mainline deliveries, so the lead on all counts will increase, especially with all of their new mainline-capable gates that came online in EWR this year.
Next year sees the start of 100 UA 787 deliveries, before the additional 50 come online in 2028. As each 787 replaces a 767, there will be even more growth without even needing to add flights.
https://crankyflier.com/2023/05/04/united-is-getting-aggressive-in-denver-and-it-appears-to-be-working/
mark,
thank you again for the good discussion. Others could learn from you.
1. I am not and have not argued that DL is at parity with UA in local market REVENUE in NYC; UA has had that lead for years. I am arguing that the gap between the two is closing.
2. I read the CF argue. Brett acknowledges that he does not have a license to access DOT international O&D...
mark,
thank you again for the good discussion. Others could learn from you.
1. I am not and have not argued that DL is at parity with UA in local market REVENUE in NYC; UA has had that lead for years. I am arguing that the gap between the two is closing.
2. I read the CF argue. Brett acknowledges that he does not have a license to access DOT international O&D which is a big part of NYC for all 4 big carriers there.
3. CF is talking about O&D passengers; I am talking about O&D revenue. Even though he didn't label it, you can tell from DEN where UA has long been the number one in local market revenue even though WN outperforms in O&D passengers.
3. UA's NYC revenue lead was heavily helped by Latin America and Asia. DL is growing NYC to Latin America including with seasonal EZE service this winter (which could become year-round just like LAX-AKL and ATL-GIG did) as well as seasonal GIG. UA has flown both routes in the past. UA also is missing alot of O&D revenue because of Russian airspace and not being able to operate PEK, PVG, HKG and BOM. Perhaps the higher weight 787-9s can restore those markets IF frequencies are available but for now, DL has the only Eastern US to China service (DTW-PVG which is increasing from 2X to 3X/week).
If DL starts either JFK-ICN or wins JFK-HND (not certain they will even apply), they could overtake UA from NYC to E. Asia. Guaranteed if both happen unless UA is able to restart NYC-China/HKG. If DL starts JFK-India (possible w/ the next 16 A350-900s that are being delivered), UA will lose yet another revenue distinctive (NYC-India) over DL.
4. DL has proven that it does not need 150 widebodies on order in order to keep growing. Airbus will deliver A330-900s in 2 years if DL orders them; DL will have enough A350s just w/ their present order book to fly all of the potential ULH routes they want. UA still has far more less efficient aircraft in the 777 that need to be replaced than DL.
5. DL is growing BOS faster than UA can grow IAD esp. in the local market. UA's IAD growth will add very little local market revenue in comparison. UA's 4th place position in WAS is notable. DL is the #2 US carrier at DCA and BWI in revenue and may be at IAD as well.
There has been a narrative for months that UA is much larger internationally and will get all of the growth because they have so many more orders and yet DL generated more revenue to Europe in the 3rd quarter with a smaller schedule than UA. DL has enough airplanes on order for 2 solid years of growth plus a little into 2026. Airbus and Boeing will both trip over themselves to win an order for either the A350-1000 or the B787, most likely the -10. DL just has to decide what they are going to do and move forward. They are not missing out on anything.
DL and UA's growth is coming at the expense of other carriers and is just about equal in the size of growth between the two. AA is the loser and is fueling part of DL and UA's premium revenue and NYC growth.
I continue to marvel why anyone outside of PHL, CLT, MIA, DFW, and PHX opts to actually fly American as a choice.
Any mention of Credit Card revenue?
Lord knows I'm giving AA all of my money! Not sure why this happened. I cab tell You as an extreme AA loyalist that I haven't been happy with the "OASIS Project" at all. Using the restroom as a 6 foot 8 inch tall man is actually embarrassing and dehumanizing. Also, some of their partners like CITI, 1-800- Flowers and AAdvantage Shopping are messing up ALOT. And that DOES reflect badly on AA because I only use them because of AA.
No sympathy after they destroyed AAdvantage.
I wonder if American should start partnering with a credit card that has transferable points. Both United and Delta have points that came from other sources, which likely generate some additional revenue.
Wow. I really do control the narrative in the aviation blog comment world when Ben starts the comment section with a comment about me.
No, Ben, I am not a for-profit company so I don't count.
I am glad that you are covering profit season because it does have implications for the industry. You did accurately report facts - which you typically do - and it is far more fun to interact w/ your...
Wow. I really do control the narrative in the aviation blog comment world when Ben starts the comment section with a comment about me.
No, Ben, I am not a for-profit company so I don't count.
I am glad that you are covering profit season because it does have implications for the industry. You did accurately report facts - which you typically do - and it is far more fun to interact w/ your comments than on other sites - although you do attract your share of "low value" posters.
AA simply does not attract the premium revenue that DL or UA gets and DL leads in that category.
DL is the only of the big 3 that has raised salaries for all employee groups. AA and DL are more domestic so the flight attendant raises will disproportionately hurt AA more than UA.
Delta will lead the industry in having the highest labor costs very soon. The rest of the US3 will follow. Delta has alienated its best customers and sent them packing to United. Delta made plenty of money this year flying tourists to Rome, Athens, Barcelona, etc...That's not sustainable.
too bad your commentary isn't backed up by fact.
Check the data which Ben provided in the article.
DL has already raised the salaries of ALL employee groups. AA and UA have yet to settle w/ their FAs. WN has yet to settle w/ either pilots or FAs. Everyone at least of the big 4 EXCEPT DL will see their labor costs continue to grow.
DL specifically said they not only are not...
too bad your commentary isn't backed up by fact.
Check the data which Ben provided in the article.
DL has already raised the salaries of ALL employee groups. AA and UA have yet to settle w/ their FAs. WN has yet to settle w/ either pilots or FAs. Everyone at least of the big 4 EXCEPT DL will see their labor costs continue to grow.
DL specifically said they not only are not seeing the erosion of premium elite revenue because of its SM changes but they are seeing passengers buy up to higher value cards in order to keep their benefits. DL gets more from SM and Amex than any other airline in the world and they only see further growth.
DL and UA have very balanced levels of service around the globe. DL just doesn't fly to some of the high cost to operate ULH destinations or the Arab Middle East. Revenue numbers for DL and UA are very similar; Ben accurately has noted that UA's labor costs are and will be more affected by ULH flying.
Premium leisure travel is doing well and expected to do so. AA simply did not have planes to capture it and still flew half of their transatlantic capacity to non-hub destinations.
The primary difference from a revenue standpoint is that Delta has a much more year balanced network from the ability to generate revenue while AA skews to the winter due to its size in Latin America and UA skews to the summer due to its small size to Florida and Latin America relative to DL and UA.
DL has greater penetration of the top premium revenue markets and is growing in those markets while UA is having to cut back at EWR (NYC).
DL outperformed UA in profits and DL already has incurred costs that AA and UA will have to face.
DL is spending far less to continue to grow than UA because of UA's older, less fuel efficient fleet. UA execs just said they will be planning to retire some 777s as well as 767s later this decade.
DL has already retired its 777s and only need to retire the 767-300ER fleet by the end of the decade.
DL will place another widebody order but it simply does not need to be anywhere near as large as UA in order to continue growing.
Finally, the end of the NEA and AA's distribution technology changes are undoubtedly hurting AA revenue growth even if they aren't ready to admit it.
Robert Isom is a pushover . Too many concessions made to captains and crew. You should lead the industry ; not see what the other major airlines are doing. 787 deliveries are moving at a snail’s pace.
Ben thinks American will reduce debt from $1.4 billion to $15 billion by 2025. Did you catch that ?
it's a typo. AA's credit rating just got upgraded. They are making progress on their balance sheet but it is coming at the cost of slow growth relative to DL and UA.
UA is generating the cash and using its cash stash to avoid taking on a bunch of new debt even as Boeing delivery delays push their capex further out but UA will inevitably spend more on fleet ownership than DL given that both are making very similar profits in the peak periods.
@Tim, you keep repeating that UA is shrinking in EWR when they’re really growing. Yes, flight counts are down due to less regional flying, but they are being replaced with mainline flights, which is why they keep growing passenger counts and increasing their NYC lead over DL.
It’s your constant twisting of facts, this example among the many times you do it, that make you less credible and the butt of jokes that you for some reason perceive as compliments.
Mark,
feel free to provide us with the data to support your claim.
You are free to accuse me of being wrong but if you do you have to use facts.
The simple reality is that UA's capacity at EWR is shrinking faster than it is upgauging.
and to add, Mark, (and Leigh)
I have no doubt that UA WILL make the best use of the number of flights it can operate in NYC but they cut their schedule pretty dramatically from June and July when their on-time was terrible to the late summer and fall when their on-time began to improve.
They simply did not pull in a bunch of new mainline aircraft to replace that capacity. They simply...
and to add, Mark, (and Leigh)
I have no doubt that UA WILL make the best use of the number of flights it can operate in NYC but they cut their schedule pretty dramatically from June and July when their on-time was terrible to the late summer and fall when their on-time began to improve.
They simply did not pull in a bunch of new mainline aircraft to replace that capacity. They simply cut regional jets in order to quickly get their on-time back up.
You should study the DOT's Air Travel Consumer Report. It includes flights by the major cities by carrier. UA had 10,434 mainline and regional carrier flights in NYC (LGA and EWR) in July. DL had 12, 328. Not that long ago, UA by far was the dominant in NYC by flight count. DL now has 1894 or 18% more flights. And while you talk about UA upgauging, DL is doing the exact same thing. UA is simply smaller in NYC relative to DL than it has been since they each merged.
And, btw, the total number of AA flights in NYC (3 airports, like DL) is 6155 - 1/2 of DL's number. AA used to be larger than DL at EWR but now DL is 20% larger than AA even at EWR. And UA doesn't serve JFK so DL is really the best positioned of the big 3 in NYC. UA has 90% of its eggs in the EWR basket while AA is just plain too small to be a meaningful competitor.
Facts are your friend except when they don't say what you want and then apparently YOU just ignore them, if you know them at all
@Mark
American reduced capacity this fall out of EWR and BOS. If you want to travel to the Caribbean or Latin America from Boston those 30 min connections in CLT or PHL are awful. What occasional or leisure traveler would book an itinerary like that ?
"DL specifically said they not only are not seeing the erosion of premium elite revenue because of its SM changes but they are seeing passengers buy up to higher value cards in order to keep their benefits. "
That's based on what? Changes announced barely a month ago, which won't kick in until 2024? But Delta (or Tim Dunn?) is already in a position to make a sweeping statement like this? Hold your horses...
Kredie,
do you not think that DL and Amex aren't capable of tracking IN REAL TIME everything from card cancellations and new card enrollments, card swipes by DL elite type, mileage accrual by elite type and activity?
If not, you are incredibly naive.
Amex and DL are both highly data driven. They poured over all kinds of data before they announced a thing and are refining based on competitive feedback. Even Gary over...
Kredie,
do you not think that DL and Amex aren't capable of tracking IN REAL TIME everything from card cancellations and new card enrollments, card swipes by DL elite type, mileage accrual by elite type and activity?
If not, you are incredibly naive.
Amex and DL are both highly data driven. They poured over all kinds of data before they announced a thing and are refining based on competitive feedback. Even Gary over at VFTW realizes that DL is simply slowing down the arrival at its intended goal.
DL has too many elites, they are thinning the herd, and still have the world's richest loyalty contribution to the company - which they continue to expect to grow.
Everyone wants to think they have the "gotcha" but DL hasn't made a mistake. They are just slowing things down in order to make sure they are not too out of step w/ the rest of the industry - which WILL change.
DL is simply in the best position to implement change but others will follow.
To the question below, I use one user name and respond where the most interesting articles appear first. Ben usually is a tad slower to put stuff out on a particular topic but does higher quality articles with more facts.
CF has the least amount of content but the most data. There is a correlation between the speed at which new articles are posted and the quality of the content.
I can apply my research to each of the sites on which I participate.
I am grateful that you are so careful to pay attention to my work. I TRULY am humbled that I draw so much of the internet's attention.
Re: Undisclosed corporate shills:
If you believe that an author or another user is receiving undisclosed payment for writing on Seeking Alpha, please send evidence to [email protected]
says someone that can't even bother to use their real name.
What they and others can't stand is that someone knows the truth and is willing to speak it.
Timmy: You are DELUSIONAL.
No, Tim, I think you are extremely naive - thinking that everyone would cancel all their upcoming travel the next morning after the changes are announced.
@Tim its because you’re a Delta shilling troll.
Tim Dunn,
As you race through airline/ points blogs to comment in your full time daily routine, assuming identical post times, where is OMAAT in your routine? First, second, middle, last?
I (and I’m sure I speak for everyone) want to be sure I’m getting the freshest Tim Dunn sycophancy, not something warmed over that you’ve already written dozens of other places.
Delta - the world's only PERFECT airline.
The full of effects of Delta's September Skymiles changes will take some time to materialize. By-and-large people have earned status for 2024. People are holding on to Platinum/Reserve DL Amex cards to get MQM boosts, etc, while they can. I have 2 Delta cards, I'm going to keep them until the fee hits next year and cancel. The October rollback will mitigate a bit but Delta has shown their cards and it's not pretty, so no point in sticking with them.
Took me a bit to realize this but it is worth mentioning that tim demonstrates all the tendencies of someone on the autism spectrum.
Obsession
Repeating the same thing over and over
Inability to comprehend simple facts and logic
Spending all day, every day, doing one thing: commenting on blogs (which makes no sense from any sort of economic standpoint)
Just keep it in mind when we all get sick of...
Took me a bit to realize this but it is worth mentioning that tim demonstrates all the tendencies of someone on the autism spectrum.
Obsession
Repeating the same thing over and over
Inability to comprehend simple facts and logic
Spending all day, every day, doing one thing: commenting on blogs (which makes no sense from any sort of economic standpoint)
Just keep it in mind when we all get sick of his nonsense. You won’t convince him of anything because he fills his day saying the same thing dogmatically with an unexplainable obsession with a public company.
People wonder why he does this… just realize the obvious reason. Not trying to be rude to him even
Just know who you’re talking to.
No one else could post what he does, get feedback he does, and take it as a compliment. It’s a different place.
and yet you and others are fixated on me and work endlessly to try to get rid of me.
I won a long time ago. I have you wrapped around my little finger.
Thanks for demonstrating my point. An obsession monitoring comments on what…? An unimportant blog post about a public company’s financials.
The way you respond to this sort of thing demonstrates this even more. You even seem to take pleasure in being wrong.
It’s fine, tim
But people should realize who they’re talking to. It’s not an insult but you should spend time on something more productive.
And I don’t care about getting...
Thanks for demonstrating my point. An obsession monitoring comments on what…? An unimportant blog post about a public company’s financials.
The way you respond to this sort of thing demonstrates this even more. You even seem to take pleasure in being wrong.
It’s fine, tim
But people should realize who they’re talking to. It’s not an insult but you should spend time on something more productive.
And I don’t care about getting rid of you or fixated on you. You randomly mention my name on articles I’m not even on. The fixation is one sided. I don’t need to correct you. I’ve realized who you are.
You just don’t understand financials or aren’t able to comprehend what they mean and I’ve grown tired of trying to correct your endless nonsense. You’re very good at spouting data without knowing what it means. That’s why you spend your time in the shadows of good writers. Forever isolated to the comment section while others go about doing something with their lives
says the person that is doing the exact thing he is accusing someone else of doing.
You and others are obsessed with me. There simply is no denying it.
You’ve been on this site and others all day doing this. I’ve been working all day doing actual work while you’ve been hiding in the comment sections all day.
I’m watching a movie before bed and bored.
But cute try to equate the two.
I don’t mention you out of the blue. Sorry Timmy. That’s just you trying to raise your Harry Potter to fight you. It’s cute but you can be your own Valdemort on your own.
You don’t consume my thoughts. Sleep tight
While the terms sound accurate, this behavior is not really what is considered Autism spectrum disease. Autism is a serious problem without your using it as a joke.
I don’t mean it as a joke. I’m serious
I actually thought about this and think you have a strong point. There was another commenter who always comes in defense of Hilton but he has backed down it seems cos I guess he has more important things to do than comment on blogs about Hilton. Tim Dunn is either being paid for this or is on the spectrum
@Tim, look at slide 3 of the link below. It details NYC passenger counts. Even with UA’s slot waiver reduced scheduled already in effect for many of the prior 12 months, UA carried over 2.4 million more passengers than DL.
UA’s lead will continue to grow as regional flying is replaced my additional mainline flying and existing mainline flights are upgauged.
This is how you provide data to back up assertions. Please learn...
@Tim, look at slide 3 of the link below. It details NYC passenger counts. Even with UA’s slot waiver reduced scheduled already in effect for many of the prior 12 months, UA carried over 2.4 million more passengers than DL.
UA’s lead will continue to grow as regional flying is replaced my additional mainline flying and existing mainline flights are upgauged.
This is how you provide data to back up assertions. Please learn from this so that you can stop spouting off erroneous or misleading ideas with nothing to back them up.
Is there anything else you’d like me to look up for you?
https://www.panynj.gov/content/dam/airports/statistics/statistics-general-info/monthly-2023/REG_AUG_2023.pdf
American is such a weird airline. Talk about a company with no vision, and no desire to seek one.
I couldnt agree more. A truly crappy airline. Please merge with Spirit.
I’m not going to have a lot of sympathy if their loss can be traced to giving into union demands, especially against weak operating performance.
The pilots union at every airline is strong and they had to up their pay in order to retain talent, so you can't attribute Americans loss to it. They haven't settled a new contract with any other work group. Your argument makes no sense
What a stupid statement.
They just still don't have a coherent vision of what they are. Coach experience is akin to that of a LCC. The domestic premium cabins lag behind UA and DL in both soft and hard product while commanding a higher price on many routes. While they may offer the best/most consistent business class product, they lack the planes and have such non-premium configs on the 788's it's a joke.
They want to be everyone's...
They just still don't have a coherent vision of what they are. Coach experience is akin to that of a LCC. The domestic premium cabins lag behind UA and DL in both soft and hard product while commanding a higher price on many routes. While they may offer the best/most consistent business class product, they lack the planes and have such non-premium configs on the 788's it's a joke.
They want to be everyone's airline while not being greAAt enough to be an airline premium pax want to be loyal to
Bingo! DL has made it clear they are focused on being a premium airline. UA is now moving in that direction. Whether it's true or not, that's debatable. However, at least DL and UA have a vision of where they're going.
IMO, AA killed itself with project Oasis. When I saw Oasis, my first reaction was AA decided they were going to be just marginally above ULCC except for the lucky few that purchase or...
Bingo! DL has made it clear they are focused on being a premium airline. UA is now moving in that direction. Whether it's true or not, that's debatable. However, at least DL and UA have a vision of where they're going.
IMO, AA killed itself with project Oasis. When I saw Oasis, my first reaction was AA decided they were going to be just marginally above ULCC except for the lucky few that purchase or get upgraded to first class. Well, when you make your product look like similar to a ULCC, you're only going to be able to command a ULCC fare.
I wonder if they are actually commanding a higher price. It just appears that way. They list a high sticker price for J (which probably fewer are paying as they are de-emphasize corporate contracts) and fill the J cabin with TOD upgrades. Their TOD offers are lower than what I ever see on UA.
AA cut a greater then $900 million check in retro pay to its pilots in Q2 due to the extended length of contract negotiations. Delta cut their retro check in Q1 and United has yet to cut their pilots retro check. Really completely expected and a non story.
Dont lets facts get in the way of a catchy headline and clicks Jack!
Er, no. United booked their charge in Q2.
"Really completely expected and a non story."
Except (as clearly stated, or obviously to anyone reading their financial) even if you exclude the special charge, AA's numbers still severely trail their peers'...
...so, um, yeah-- definitely a story there.
1. AA is lagging in much more International premium flying due to less International flying. That's where the real money is, not flying a consultant from Pittsburg to Charlotte
2. The higher labor costs will start to impact both UA and DL. Their day is coming
3. Demand is softening and passing along fare hikes becomes more difficult without dampening demand even more> But shinny new planes need to earn their cost of...
1. AA is lagging in much more International premium flying due to less International flying. That's where the real money is, not flying a consultant from Pittsburg to Charlotte
2. The higher labor costs will start to impact both UA and DL. Their day is coming
3. Demand is softening and passing along fare hikes becomes more difficult without dampening demand even more> But shinny new planes need to earn their cost of capital which doesn't happen when they are parked in the desert
4. I would imagine as the economy/inflation start to take hold partner come will also take a hit setting up for a double whammy for all airlines that have driven the bottom line through partner, particular credit card income.
These kind of results will be soon be across the industry and might see another round of government bailouts and Chapter 11.
Delta (and to a smaller extent, United) has already had the large increase in labor costs since their pilot contract started earlier this year. Delta has also given pay and benefit improvements to other work groups that the unions at other airlines are trying to negotiate now. I don't like to be the person that says Delta is in a better spot but... for labor costs - Delta has already absorbed a lot of the big increase.
But...but...they just increased their pilot pay and their FA's want more $$. Now how are they going to afford it?
(cue the impending bailout request)
And what would be the basis of the bailout request?
Simple just like before. We employ hundreds of thousands of people directly and indirectly (like MROs) and it would be shame for all those people to lose their jobs. Now the smaller airlines might be thrown to the bankruptcy court but the major 4 and some of the other airlines (JetBlue, Alaska) will most certainly get their bailout.
No bailouts for poor management. That should be dealt with by allowing weak competitors to fail. If the demand is there, Delta and United can pick up DFW, Miami, etc. into their networks.
@George Romey - AA has gone bankrupt before; and it may again. Again, why would the gov’t bail it out (again)? The pandemic is over. The big 4 will not be given bailouts for their current situations. Bankruptcy will occur before any bailout.
Because they will play the thousands thrown out of work card and politicians fearing being cast as "uncaring" will give in. It's happened multiple times since the late 1990s. Not to mention the fear of thousands of people stranded in an airport because a large airline just went out of business. Let's face it, we might as well go back to the CAB days.
Both DL and UA filed for bankruptcy, before AA.
I don’t think anyone’s claiming they deserve a bailout, just that they would try to get one. Airlines have powerful lobbyists, employ lots of people and have no problem being hypocritical in their demands. Not to mention that Texas is a haven for corporate welfare.
I recall two bailouts of the US Airlines, the 9/11 and the COVID ones. Both as a result of world events unrelated to management decisions.
Don't think the strategy of concentrating on domestic and relatedly funneling passengers through DFW and CLT is going to work anymore. That is the clear differential between DL/UA and AA strategy these past two years.
Didn’t Robert Isom once say that American Airlines will never have an operating loss ever again?
It was Doug Parker.
Before or after his second DUI?
Part of this seems like accounting semantics. It seems like recording the expense of the new contract was the primary impact driving this down. I’m too lazy to look, but did DL and UA similarly record these as special expenses in a single quarter?
UA has yet to cut their pilots retro check. But will incur a loss once they do. Delta cut theirs in Q1.
AA couldn’t compete on the profitable European summer due to lack of equipment. It is very clear that retiring all the A330’s and maybe event the B767/757 wasn’t the smartest decision after all. Looks like 2024 will have the same issues. Boeing continues to have issues in delivering planes on time.
Exactly. And the 788's they do have offer the same amount of premium seats as a domestic A321. Huge loss in potential revenue flying only 20 J seats in peak summer vs say some of UA's configurations
pissed of TMC's with firing sales people/ axe approach to NDC is a decent Chunk of this.
AMERICAN IS REPORTING A LOSS FOR TWO REASONS.
#1. EXCEPTIONALLY INCOMPETENT SENIOR & MIDDLE MANAGEMENT. THE LACK OF A REAL PACIFIC ROUTE DIVISION IS A PRIME EXAMPLE.
#2. EXCEPTIONALLY POOR HUMAN RESOURCE MANAGEMENT. I HAVE WORKED THERE 35+ YEARS.
MORALE IS ROCK BOTTOM & MANAGEMENT GOES OUT OF THEIR WAY TO BELITTLE & ACTUALLY SHOW DETEST TOWARDS THE EMPLOYEES.
#3. AS ANYONE SHOULD KNOW ALREADY, AIRLINES ARE AN INCREDIBLY BAD STOCK INVESTMENT.
All three US carriers had comparatively trash margins on the TPAC for the better part of the last decade.
Why is limiting exposure to that (especially at a time when PRC carriers were offering sub $600 fares to almost anywhere in Asia ex-US) a demonstration of incompetence?
Aside from approximately 5 destinations, DL more or less did the same.
Well American should re-think its strategy of moving away from high value business customers. Closure of programs like Airpass and taking other perks away from high margin customers is a mistake
Agreed. Our company was a loyal and exclusive AA customer due to AirPass. They had our money upfront, so we were committed to them. Flights were often equal to or more expensive than cash tickets but the program saved us time and hassle which was valuable to our small company. They could have tweaked the program to make it more profitable for them I’m sure, but instead they decide to fully eliminate it? The changes...
Agreed. Our company was a loyal and exclusive AA customer due to AirPass. They had our money upfront, so we were committed to them. Flights were often equal to or more expensive than cash tickets but the program saved us time and hassle which was valuable to our small company. They could have tweaked the program to make it more profitable for them I’m sure, but instead they decide to fully eliminate it? The changes they are making to BusinessExtrAA and their new business advantage program aren’t enough to keep us exclusive. If they can’t be loyal to their business clients we won’t be loyal back. Our company is now back to price and route shopping and I expect that AA likely won’t be much in our mix anymore.
You mean 40% raises aren't sustainable? Who knew.
So then why give them to management, knowing that labor will rightfully want its due after having taken a haircut during harder times?
Revenue per seat mile has slightly gone down for all US3. Coupled with some other metrics, it might be suggesting the limit of US3 squeezing customers in the domestic market. From Q2 to Q3, I wonder how much of the difference between AAL and DAL/UAL is due to the int'l long haul flying that AAL are hamstrung by thanks to A330/B767/B757 retirement - when UAL and DAL are both taking 787/350 deliveries
Alternative title: "American Airlines Reports Loss, Lags Tim Dunn."
The US industry is coming off its peak profitability. Higher fuel costs, global instability, infrastructure problems and staff shortages (ATC, airports, etc...) are blunting corporate travel which really has to be the bread and butter of the industry, and not "leisure" or "bleisure", or "premium leisure". The revenge travel trend post-pandemic is leveling off and corporate belt tightening is probably going to intensify toward the end of the year into 2024 as budgets are solidified....
The US industry is coming off its peak profitability. Higher fuel costs, global instability, infrastructure problems and staff shortages (ATC, airports, etc...) are blunting corporate travel which really has to be the bread and butter of the industry, and not "leisure" or "bleisure", or "premium leisure". The revenge travel trend post-pandemic is leveling off and corporate belt tightening is probably going to intensify toward the end of the year into 2024 as budgets are solidified. Even mighty Delta won't be able to face headwinds. The LCCs and ULCCs in the US are losing money. More consolidation is on the horizon, albeit a few years away. The US government isn't going to roll over and backstop the industry at levels it did in 2020 again. American has a formidable network and operationally has been running well, but it is spread far and wide and doesn't have the balance sheet to take the company to the next level, just yet. United will find itself with plenty of excess international capacity soon and that's already showing up in their profit warning. Much of its long haul growth is aimed at leisure.
*shots fired*
;=)
THAT’S THE SPIRIT!
Of course he wouldn't respond to this....