American Stock Under $4?

The economy is doing funny things, and so is American Airlines (AMR). Yesterday the stock price dropped below 3.90 a share at closing leaving AMR with a Market Cap of under $1.25 Billion. It is understandable that the entire market is still a little skiddish of the debt plan that the government concocted, but the problem at American is much worse.
American Airlines 737 at RDU
American 737

In 2000, AMR purchased TWA for a total of $782 Million using $500 Million in cash to fund the deal. AMR shares were trading at $34 the day the deal was announced. What happened to 90% of the value of AMR?

Under Robert Crandall’s watch, American was an aggressive growth company that ran afoul of the DOT once or twice in order to block competitors from gaining routes. Today under Gerard Arpey, American has walked away from nearly all of its investment in Reno Air, leaving the routes to Southwest Airlines (SWA), and then walked away from Long Beach leaving routes to upstart Jet Blue.

From 1998 to 2003 Don Carty was the CEO of American while the stock slid from a high of about $38 to $11 about the time he was ejected by the board. Clearly the board took the steps they should have. So what is happening now?

Since Sept 11, 2001 Mr. Arpey has used high costs as his excuse for everything. The spirit of competition at American is all but gone and the market knows it.   How else could Southwest Airlines be worth $ 7 Billion vs. American’s paltry $1.25B and American did almost exactly double the revenue.

Gerard Arpey has not been the CEO that American needs, he hasn’t had the chain smoking enthusiasm for the Airline business that Robert Crandall brought, or the tattoo yielding LUV that Herb brought to Southwest. In fact instead of being out cheerleading the enthusiasm of the new 400+ aircraft purchase, he has been nearly unseen according to most American employees at the Dallas Hub located just minutes from the headquarters.

Labor isn’t the problem at American Airlines, the leadership is. The longstanding gap between labor and management at American could have been welded shut when Mr. Arpey took over the carrier from Don Carty. Instead labor pay cuts and increasing management bonuses have only deepend and widened the chasm Mr. Arpey must cross to restore the ailing carrier.

Recently at the opening of Terminal two at San Francisco International Airport, you could see the problem first hand. Richard Branson of Virgin American showed up and brought along his space ship and astronaut Buzz Aldrin to speak about the future. Mr. Arpey sent a 1940’s era DC-3 that left a trail of oil on the gleaming new tarmac and a few retired instructor pilots. Mr. Arpey was nowhere to be found.

American DC-3 at SFO
American DC-3 Leaving its mark at SFO

The recent good news of American buying 420 new airplanes is slightly reminiscent of the deal that Robert Crandall struck to buy the current MD-80 fleet at a super discount and grow the airline. The difference was he had all the labor deals in his pocket first. According to the press releases recently by the mechanics and flight attendants, Mr. Arpey is nowhere close to having these agreements.

With a looming pilot shortage and pilot pay that is among the lowest in the industry, sources say that American is getting less than 20% of its furloughed pilots returning to work. Where does Mr. Arpey plan to get the 4000 plus new pilots to fly the 420 new airplanes?

The bottom line is American is generating twice the revenue, and half of the gross margin of Southwest and is valued by the market at one seventh of its competitor Southwest. Is the board ever going to do anything besides approve another bonus for Mr. Arpey? In many markets, American’s competitive answer to Southwest has been the much smaller, slower and less efficient jets of American Eagle and that just doesn’t fly. Even under $4.00 Mr. Arpey hasn’t given us a reason to buy.


  1. its about time someone told the real reasons why this airline is being flushed down the toilet–from a 28 year employee at american airlines—arpey horton de valle garton reading they all must go

  2. Check that stock price when Carty was replaced. I had shorted it many times including below $5.00 during that period. Now it has finally run out.

  3. You are correct, it was under $3.00 just before Mr. Carty got the axe from the board. Article corrected, thank you for helping us get the facts right!

  4. Thank you for pointing out the glaring truth. To clarify, the problem is simple: Crandall cared about the airline and wanted it to succeed, Carty did his best to destroy the unions and take a good share of what Crandall left behind. Arpey is in it only for himself. He can,and most likely will, bankrupt the company, take his $25million parachute(5 times his annual compensation)and walk away, He’ll have another job within a week. He doesn’t care if 70,000 employees get the axe and end up homeless. I’m fairly certain that his underlings,Garton,Horton et al, are pretty much the same way. greedy corporate thugs.

  5. Finally, an article that tells the absolute truth! How refreshing! As one of those AA Flight Attendants, I am frustrated, angry, and sad that the airline I was so proud to be a part of, has lost it’s way. Unfortunately, I don’t see anything changing in the near future.

  6. you better buy it. i am an aa flight attendant and i know of a bunch of good things that are going to happen in the next 3 to 6 months

  7. Brian, All of us would love to hear some good news. The announcement that AMR will keep another $2.5 Billion of debt when it spins off American Eagle along with the expected $600 Million or more in losses this year keep us wondering. As analysts we can only look at the facts. There is no question that Mr. Arpey missed a fnatastic opportunity when he took over to bring labor to his side. Instead he continued with the bonus program that led to Mr. Carty’s departure and has failed to negotiate successfully with any of the three major unions from what we can find. If you have anything to contradict that information please share it with us, until then we have to stick to our analysis that AMR is still a “Sell” in our book.

    See this article about the AMR Debt if you haven’t heard it. AMR wants eagle to fly at the expense of American is what we see.

  8. Brilliant! Best editorial on the realities of American Airlines i’ve ever seen. Save for the fact that the executives have never made more in bonuses in the history of the airline in the midst of terrible performance, including the board of directors… The author hit all points with pinpoint accuracy.

  9. When an article gets it this right, Im going to have to read the Beach Street News more often!

  10. Hey..What’s Crandall up to? With his personality type I’m sure watching his airline being mugged and raped must be killing him. Bring him back!!

  11. As a 25 year captain for AA I have to say this piece was spot on.

    Mr. Arpey has been a puzzling CEO to say the least. About 2 weeks ago the airplane that we were to use was taken by Mr. Arpey so that he could be on time for his flight to his vacation home to Providenciales, Turks and Caicos. Our passenger were delayed 2 hours and 58 minutes while we waited on a new aircraft, but Mr. Arpey got to vacation house on time.

    Later, I spoke to the crew of that flight. Mr. Arpey did not acknowledge, speak to or even look at any flight attendant or passenger on that flight. A strange “leader” indeed.

  12. It’s important to note, Editor, that Arpey was actually the architect of the company’s 2003 restructuring, he along with Jeffery Brundage.

    The “Turn-Around Plan” was implemented in 2001, before 9/11, and executed in late 2002 after the company finished compiling date on a low-cost carrier labor comparison AMR did in an effort to align American with Southwest. The strategy behind it was outlined in Gerard Aprey’s 1982 Thesis. In it, Mr. Arpey theorized that the only way to get real concessions from organized employees was to get the unions to promote doom and gloom so that the employees would believe that all would be lost if they didn’t concede immediately. In American’s case, the threat of “imminent bankruptcy” was used to terrorize employees.

    In short, court depositions showed that there was no bankruptcy threat; that the unions knew about the bonus plans for executives, but were sworn by letters of confidentiality from telling employees; that the $1.8B demanded from employees annually was nothing more than a plug-and-play figure from that low-cost carrier labor comparison; that the voting mechanism had a security flaw that allowed anyone with a Seniority List and knowledge of the loophole in security to vote for whomever they wanted; and that a senior attorney by the name of Anne McNamara, who resigned from AMR in January of 2003 but was re-retained as a consultant for the months of February-April, joined the Board of the AAA in January of 2003, the balloting company responsible for counting votes cast by employees during the Restructuring.

    In closure, Crandall knew how to run a company. All this group knows is how to lie to employees and steal fro them. A house built out of crAAp will always remain crAAp.

  13. Oh yes right on! It’s also happening to other companies, and further more to our own country. Everyone is hypnotized. Nothing is going to happen except perhaps a bankruptcy
    The state of our world…

  14. Alas, we see the truth in prind after all these difficult years.

    Years of watching the media spoon fed the same lies as the employees. Yet the media didn’t bother to check the facts before printing.

    Arpey assumed that if he hacked away at the labor contracts, that all would blissfully fall in line without him having to actually learn how to run an airline. Not so.

    Why we all can’t understand is, why in the world has the board allowed thes incompetant idiots to stay on the property?

    We need “Uncle Bob” back for some head rolling, truth telling and ultimately airline building!

  15. Ex TWA er 34 yrs. You people still do not see the problem and never will. Vote Democratic like your union says. It got you Obama and the economy is in a BIG hole.
    But the real problem is you pay dues to have a contract on time but it comes many years later and you blame the company. Try blaming the people you pay your dues to. What are you paying for if they cannot do anything but take the dues money?
    If I were the union I would shut down the entire airline REGARDLESS of the consequences. Pull yourself up by your boot straps and do something. The whining is useless.

  16. As I type this AMR is $3.68 share.
    I suggest the union buys the airline with all the dues money we put into it and then run it. Where else is that money going? Is it just laying around? Who better to run the airline then the employees that know what it is about and the glorious unions?

  17. Geoff,
    The board does nothing because they get paid regardless.
    Why rock the boat when you gain nothing from it?
    If the company went bankrupt do you know what happens to the CEO and board of directors? Two things come to mind from other companies doing the same.
    1. They get paid more money to stay on so there is an orderly transition.

    2. They retire with all benefits.

    Sooo why rock the boat????

  18. Watch for my book to be released very soon.
    Relating to my 27 year career, I discuss the safety, maintenance, training, and morale problems at Toxic AAirlines.
    More serious emergency landings in the last seven years than all others together.
    Captain “shopping” poorly maintained aircraft.
    Why they call a member of senior management by the nickname “BBQ”.
    Punitive fuel program for pilot’s that request additional fuel.
    Over 35 employee suicides since 9-11, several of which were pilots.
    I name names, dates, times, and places, all fully documented.
    It will be a best seller!

  19. I think that No one seems to listen anymore. Starting with the Managers at AA up to Arpey, seem to go day by day rolling the dice just to get through their shift. Employees are trying to get things done right to help the airline become profitable so that sooner or later. They could see a pay raise. Why not? The problem seems to me that Arpey does not care about anything except his wallet, ego and family. That is the difference. Crandle treated this airline like it was his baby. He loved AA and protected the company and the people at the same time. Seems to be a ruler, not a leader. People trying to raise their families and pay for collage is really what we the employees are after. Times are getting tougher. We need real leadership now.

  20. It just about killed me to see my husband retire early as a pilot for AA (over 25 years service)! Now how glad I am he got out before things totally fall apart!

  21. Mr. Crandall was a good leader and an exceptional bussiness man that had a vision to expand and take care of both himself and his workers that made his salary. He did not try to stay away form the ones that were hia pay check. It seems that greed ahs overtaken all of the bussiness that we have today. Mr Crandall could and would talk to even those who were new to the operations and try to see their ideas to help both the company and the employee. He was a great CEO

  22. My question is this, How do we get Arpy out of his position and others like him (Horton)? Is it through the share holders? We need to remove the cancer before it ruins the airline for good and we then become another Pan Am or TWA, etc……..

  23. I echo Captain X’s leaving early, I left after 26 years from my dream job because of the “writing on the wall”. No one in management cares about anything but their own paycheck. In most cases we have the epitome of the “peter principal”, no one in upper management has any idea of what they are doing. I had no choice but to leave 11 years early just to be sure I had my pension. The future was too bleak to take a chance. After Crandall left, management systematically had destroyed my dream job. I have found another job flying and the joy has returned to my passion. I wish the best for the remaining employees–but the current management is incapable and incompetent.

  24. Back in 2003 American Airlines became so desperate all unions needed to give up concessions so we can survive all 3 major unions fell for that B.S. Now we the empoloyees after 8years of concessions we are the ones who went bankrupt,forclosures,employees losing their house,and atop of everything the financial burden this has cause our familys into divorce and seperation,i work in Aircraft Maint Dept this the first time in my life i have seen so many employees getting divorce losing their family for one reason ,the greed of money its sad deppressing cause their was a time i wore the AA patch with pride now after 19 years thrown away,but the companys attitude will always be “at least you have a job”

  25. Hey Gerard!! Remember what name you used when you said the following comment?….. “I’m not an airline destroyer, I’m an airline builder” NO? Let me help you, does FRANK LORENZO
    ring a bell???

  26. Let us know when the book comes out, send us a copy and we’ll review it here for your new fans. – Ed

  27. During the research for the article, we found that Gerard Arpey’s Father, James “Jim” Arpey was the VP of Operations and Technical Services for Frank Lorenzo at Continental (Flight International Magazine 29 Mar 1986).

  28. Share price $3.63 on 8/19/11 Wait until it falls 50 cents more. Then if your president is not re-elected by the unions
    I would recommend a buy….

  29. The funny thing is when Crandall was CEO, everyone hated him. FA’s remember 1993? Pilots remember 1997? The fact was he was a great CEO, however, people did not like his honesty.

    The fact is yes, the leadership is greedy, but candidly, the employees are just as greedy. It is a shame how people live beyond their means, and get wrapped around the spokes as their poor planning gets them in a bind. This is not germane to just AA, it is epidemic in American society.

    I left after 15 years, because the employees that REALLY want to get the job done, are too few and far between. I would have never imagined leaving AA 25 years ago when I started. Now I can imaging AA joining the likes of Eastern and Pan Am.

    I work for a company now where the CEO is a true servant leader. Totally selfless in the decisions that are made, yet there are still employees that will complain, about the company.

    I say to those who can do it better, pick up the flag and march foward. Choose your destiny, don’t let your destiny choose you.

    Best of luck to my former colleagues at AA!

  30. May 2010, 25 year retired AA Captain. Have not missed AA, the employee groups pit against each other by management, or the senior management bonus program. Happy to be away for over a year with my A&B lump sum. I was a post ’83 hire who took the job but did not care for the senior pilots selling the profession. Those same pre ’83 hires told me the best airline job was the one from which you could successfully retire, so I did. One of my First Officers said it was time to retire when you have enough and you have had enough. Arpey was at AA during the Crandall years and I saw no reason to give him either a 6 month honeymoon to show his skills or a 30% pay and benefit advantage, especially since he lined his pockets with the savings. The traditional AA routes that did not go to Eagle wound up at the St Louis experiment. Arpey’s Dad worked for Lorenzo? Interesting, a Lorenzo/Crandall student. All of the airlines I interviewed with in the early ’80s have changed, most are gone and the employees have paid dearly for the profession. In my opinion, the APA was too concessionary and did not do a very good job protecting the pay and working conditions of the AA pilots. I feel lucky to be able to finish a career before the airline went away. There are all kinds of job opportunities outside of the industry and there is life after AA. Good luck and stay safe!

  31. No one in mgmt (board also) wants to upset the apple cart.
    These vermin get paid and bonuses no matter what happens. I am retired and fear when these thieves do file BK. Then they will have again ****** me once again. How do you people look in the mirror?

  32. After 23 years with American I have received over 50 stiches in several diff location I have had 3 surgeries, I have been forced to give over 100,000 dollars in the last 8 years to line Arpey and his idiot underlings pockets. Now I am wondering how much longer AA is gonna be around.its time we as Union members to STAND UP and take back Our company before its to late

  33. Hey Jack – TWA er 34 years. Just a refresher – The economy was in the tank when Dem. Obama took over from Republican Bush who inherited a surplus from Dem. Clinton and managed to squander with 2 unpaid wars and a monstrosity drug bill for big Pharma. The unions are the only ones standing in the way of the “haves and have not” (elimination of the middle class) which good ole Grover Norquist has been working on since the Reagan years but has just recently been making the media circuits and openly bragging about it.

  34. It’s impossible to be this incompetent. There is no doubt in my mind that they are destroying the company and the lives of the employees and their families. Every decision made by anyone above low level management (this meaning level 4 and above) is the exact opposite of common sense.
    Ramp Crew Chief 22 years

  35. There is a hazard here if it goes to $3.00 or less again, and that is a hostile takeover. Remember those? My research is starting to indicate that the value of AMR at $3.00 might not be the company, it is the pieces. Just the savings on the aircraft purchase makes an $800 Million dollar purchase a smoking bargain. Bankrupt the company (shareholders get zilch), clear the debt, sell the aircraft and positions. At some point an outside investment group has to be looking at this. The biggest aircraft order ever, without an ability to fly the planes is really and entirely different asset. If you want to buy at $3.13 it is an interesting gamble. On the investors side, Mr. Arpey does have 2.7 Million plus (SEC 10-K Filing) shares to protect. – SN

  36. Former AAer – I think you have hit on the core of Emerson’s Essay on Compensation which was written many years before man was flying. Essentially, it is in the best interest of the entire group to grow and build the company, management and employees alike. Herb Kelleher while at Southwest and Gordon Bethune while at Continental both started in the direction and more importantly acted in the best interest of everyone. They were still very well compensated and were able to grow their companies. – SN

  37. Arpey and Board do not care…excellent article. Pilots will not fly these new airplanes w/o a contract. Management either has a plan..or more then likely dumb as rocks. They have not actually purchased anything. Just alot of BS It is so sad to see this once great airline falling apart. remeber Eastern?? Management does not care about employees or customers. Arpey needs to GO!

  38. The newest management, is the worst in 28 years. Its all to clear whats going on, but is this all we can really do to help ourselves is bitch,? There must be something that one could come up with to help the poor bastards like us to solve this problem.. Everyone I work with is so stressed out that it makes it really hard to enjoy work at all, It did not used to be this way!! Theres just to much info. out on our current problems.. I think that the current management team is just skimming whats left of a failing airline and the work forces are just caught in the middle some how knowing whats going on we cant seem to make any differance either way while they are clearly robbing us blind. Im currently seeing a doctor and explaining this and the doc just shakes his head in disbelief!! How much time off do you need? he asks!!

  39. As a retired AA employee…1968 seniority…it is interesting to read the above comments re Mr Crandall and his near walk on water leadership during his tenure, as well as the compliments and love for the man while he was the helm. True enough that he accomplished a great deal and ran a great company. I don’t think it was so much as love for AA as it was he took his job as CEO very seriously and he held everyone accountable for their duties and responsibilities. In other words, he earnmed his salary. He had an uncanny ability to talk intelligently with all employees about their job whether it be pilot, flight attendant, ticket agent, mechanic, etc, etc. All that being said he was not very well liked because of his professionalism and lack of desire to pay more than the market rate for service performed. The unions hated him. Management feared him as well because woe to you if you did not know something you were supposed to know or not do something you were supposed to do. Don’t misunderstand…this isn’t a condemnation of the man. I think he was a great leader and kept the company focused on managing/reducing costs and keeping the company profitable. It’s also true that top level leadership has to be approachable an communicative with field and operational personnel. To be aloof and withdrawn is inexcusable. Bonuses and unearned pay and benefits add to the downfall, espexially when the company is on hard times. That holds true for all levels of employees…management, non management, and union. Let’s say you ran a business…a bus company… And you were having a hard time controlling expenses. Is practical and responsible to award yourself bonuses when your company is struggling? If so, then greed, as mentioned above, pretty much describes your actions. How about unions? Say your bus drivers do a good job and are paid very well. Do you think it is a good idea at the conclusion of each labor contract to increase their pay and reduce their work hours as well as increase their benefits? Simply stated, you will be paying them more for less productivity. Does this make good business sense? If you had a service company doing a job for you once a week and they said you now had to pay them more for the same service, and now they would provide the same service every other week, woud you think this is a good deal? Isn’t this what upper management does with bonuses and other benefits? Isn’t this what union represented labor does with pay me more and work me less contracts? The problem and solution is company wide. The source for both is in the mirror. Employees need more Pride in their work…Personal Responsibility In Daily Effort.

  40. vivian ervin
    Reading your previous take on matters is not relevant!
    Why do you look back years ago. Obama ran on the change platform. What happened? He has been in office for 2 1/2 yrs.
    To go back in history is not working any more. How long do we blame Bush for two wars when we now have 3 wars with BO?
    What happened to securing the borders with BO and the U.S. Attorney general Eric Holder? The AG is suing the states of Texas, Arizona and New Mexico because they are trying to keep illegals and human trafficking and drugs out of our country. The fed will not do it.
    As of late S. Carolina is being sued because Boeing is transferring work to that state from Washington. Say what?
    The unemployment mounts and the economy sucks.
    The only thing for sure is paying those union dues…
    Tell me if you ever received a union contract on time?
    If not tell me how many years later you received it.

  41. Thank you, Scott, and other’s, victimized by their personal greed and ego.
    Still a ‘work in progress’ on the exact title – they are literally,(“sr mgmt”) such an easy and large target of immoral, illegal, and un-ethical behaviors!
    We’ll be in touch soon.

  42. vivian ervin

    This is what your union sponsored Democrats got for you. Time for a reality check, no??

    Federal Stimulus Funds for Nevada’s Green-Industry Grows Trees, But Few Jobs

    By Pete Griffin

    Published August 22, 2011

    The Clark County Urban Forestry Revitalization Project was given $490,000 of stimulus money.

    A federal stimulus grant of nearly $500,000 to grow trees and stimulate the economy in Nevada yielded a whopping 1.72 jobs, according to government statistics.

    In 2009, the U.S. Forest Service awarded $490,000 of stimulus money to Nevada’s Clark County Urban Forestry Revitalization Project, aimed at revitalizing urban neighborhoods in the county with trees, plants, and green-industry training.

    The project produced only 1.72 full-time jobs.

    According to, the U.S. government’s official website related to Recovery Act spending, the project created 1.72 permanent jobs. In addition, the Nevada state Division of Forestry reported the federal grant generated one full-time temporary job and 11 short-term project-oriented jobs.

  43. HEY, HDQ

  44. I am so glad I retired from AA. But in the 70’s I worked for Braniff. Crandall was instrumental in their demise. I worked for AA for 20yrs, I always liked what I did for a living, but I never liked who I did it for.

  45. Jack,

    You can trash APFA all you want, but you sound like a resentful former TWA flight attendant. AA would never have bought TWA if your former employer wasn’t a financial disaster itself. Funny how you TWA F/A’s thought AA was your night in shining armour until you didn’t get your bidding seniority. I guess being at the top of the pay scale wasn’t good enough. You really should try to move on.

  46. patti

    If you think I was a flight attendant then you know not of what you say.
    My take on you is a staunch union member or union rep.
    I was a mechanic and inspector. I am 72 yrs. old and only wish to try to enable you people from the many years of wisdom I have gained being at TWA.
    Many of you post what can we do? As individuals, NOTHING!!
    That is why you have a union. What did the I.A.M. do for me? NOTHING. Contracts were years late. Wages reduced and pensions frozen. When contracts were signed I would check your contract book. Your contracts were always better.
    The fastest way to resolve your disputes, wages and grievances is to propose a ballot vote on lowering your union dues. That’s right!! Take it or leave it.
    You see, there is no reason to rock the boat if your getting good wages. The same for the good wages the AMR ceo and board are getting. They gain zero if they pay you more. Always follow the MONEY!! Union and company.
    ps. I volunteered to speak to the TWA flight attendants regarding them getting the I.A.M. to represent them. They refused.

  47. American Airlines Raises the Barre with Ballet Hispanico Sponsorship
    10:00a ET September 7, 2011 (PR NewsWire)

    American Airlines has signed a cultural partnership agreement with Ballet Hispanico to become the Official Airline of the leading Latino dance company in the United States. Ballet Hispanico, which seeks to explore, preserve and celebrate Latino cultures through dance, has performed for more than 2 million people with a repertory of more than 100 works.

    Because American Airlines has been a strong supporter of New York’s arts and cultural community, as well as its Hispanic communities, for decades, it is fitting that American and Ballet Hispanico are joining in this valuable partnership. As the Official Airline of Ballet Hispanico in New York, American Airlines will receive visibility and signage throughout the performances that are part of the 2011-2012 season.

  48. This should help the employees

    American Airlines Partners with Choir Academy of Harlem
    9:30a ET September 8, 2011 (PR NewsWire)

    American Airlines, which has served the New York market for more than 80 years, has formed a partnership with the Choir Academy of Harlem through the PENCIL program. PENCIL builds and supports customized relationships between business leaders and principals to inspire innovation and transform public schools. Choir Academy, located in New York City, serves students in grades six through 12 with programs in three music majors – choral music, instrumental and dance.

    To kick off the school year, American donated 36 recycled and refurbished computers, along with printers, monitors, mouses, and cables, to the faculty and students of Choir Academy. The computers will allow the teachers to implement digital music technology programs, and access to the Internet will allow students to research colleges and prepare for standardized tests.

  49. Hmm – It is getting close, There are some definite hazards still. We are clearly in the gambling zone because nothing has really changed. In fact August traffic was off more than some other airlines. Couple that with the large number of early retirements reported on Yahoo finance, and things could still be getting worse. AMR representatives told Yahoo Finance that the Pilot retirements would not cause problems. Reports of cancelled 777 flights are appearing on several social media sites. It can’t be cheap to park a 777 and tell 200 plus people to go home.

  50. WASHINGTON — It’s not just millionaires who’d pay more under President Obama’s latest plan to combat the deficit.

    Air travelers, federal workers, military retirees, wealthier Medicare beneficiaries and people taking out new mortgages are among those who would pay more than $130 billion in government revenues raised through new or increased fees.

    Airline passengers would see their federal security fees double from $5 to $10 for a nonstop round-trip flight and triple to $15 by 2017, raising $25 billion over the coming decade. Federal workers would face an additional 1.2 percentage point deduction from their paychecks to contribute $21 billion more for their pensions over the same period. Military retirees would pay a $200 fee upon turning 65 to have the government pay their out-of-pocket Medicare expenses.

  51. AMR credit outlook downgraded at Moody’s
    8:05a ET September 20, 2011 (MarketWatch)
    WASHINGTON (MarketWatch) — Moody’s Investors Service downgraded the credit outlook for American Airlines parent AMR Corp. to negative as it takes on more debt to modernize its fleet. Over the medium term, AMR earnings are likely to remain weak because of the high cost of jet fuel and potentially tepid growth in travel demand, the credit-rating service said late Monday. With few assets left to tap for financing AMR will likely rely on its unrestricted cash balance — $5.2 billion as of June 30 — to help meet a portion of the $3.1 billion of debt due through year-end 2012. Accordingly, that could leave the balance at below $4 billion by the end of next year.

  52. With few assets left to tap for financing AMR will likely rely on its unrestricted cash balance and employee union contracts……

  53. Forget what I said a month ago or so. The best way to play the stock is to short it. That means you are betting that it goes down & if it does you make money. Read below….

    Unlike many analysts today, I believe an AMR bankruptcy is inevitable,” said Bob Herbst, an independent airline analyst and founder of A court-supervised reorganization is likely within the next two to three quarters, he said.

  54. The Fort Worth, Texas-based carrier has been in negotiations with unions representing its pilots, flight attendants and ground crews for more than four years.
    Did that say 4 yrs.?

    Great unions…

  55. The real decline in AMR is the way the industry is structured. Any time a NEW airline wants in they pay their employees less. They start off with no union and no contracts.
    What Bo should do for you is keep any NEW start ups out of the competition. You paid enough to him from your union dues. Get your monies worth.
    2nd thing he should do is revise the cooling off period so you do not wait years for your money and a contract.
    3rd thing that needs to be done is not sign a contract that does not have a cost of living increase clause.
    After 34 yrs. at TWA I get a $721 month pension. It never adjusts. 30 yrs. fighting the I.A.M. for the cost of living features equaled ZERO increase.

  56. The over under has been moved from $2.00/share to $1.00 per share as we learn about AA playing shell games with engines in storage, aircraft off the books, and moving money to other companies held under a different stock symbol. At this point, Jack you are probably right about the short. I don’t think the creditors will allow for a bankruptcy as they are becoming aware of the shell game. If they are protected with shares in the other companies, then AA will file as soon as they have employee contracts tied up and can blame the employees. Look at the media for Eastern and Continental. It wasn’t bad management, it was the Mechanics at Eastern that caused the liquidation. The 1983 bankruptcy was a result of “all labor unions” and the Pilot Strike is commonly thought to have been the issue at Continental in 1983 even though it occurred after the bankruptcy as the Pilots protested their court appointed pay.

  57. AMR $1.91 share 11/15/11
    Pilots contract stalling shares. The pilots will settle
    so we should have a little pop. Enough to make a few bucks anyway…
    Go unions…….Kill the company.

  58. Editor
    As of today, 11/21/11 AMR – $1.71 sh.
    No pilot contract after 5 yrs.? What has the union been doing all these years. You paid for Obama now use him!!!
    If it was like my I.A.M. they are living high off the hog with payed for food and lodging and expenses. Your dues money.
    Ask yourself. Are you better off now then you were 5 yrs. ago?


  60. At this time it is clear that AMR had planned to use bankruptcy regardless of union agreements. Since two of the three unions had offers from AMR for small raises in exchange for productivity increases, it is clear that labor wasn’t the only thing that management was paying attention too. With a significant shortage of pilots beginning in 2015, AMR and all the majors airlines are about to find themselves in new territory.

    The recent Quantas lockout was about the exact same issue, jobs and use of off shore employees. AMR can now unwind some very expensive leases with ERJ airplanes and push those pilots into American in order to delay the decrease in the the pilot population.

    The big issue at AMR is leadership. Gordon Bethune led Continental out of a similiar situation. Can Mr. Horton do it? The playbook is simple, cut executive pay, stop bonuses until employee receive theirs first and genuinely lead from the top. Mechanics were the supposed end of Eastern Airline, but employee departures began the day Mr. Lorenzo took over. Pilots who crossed the lines “saved” Continental according to some. Where will those pilots come from now? The number of new commercial qualified pilots pales in comparison to the number of pilots approaching mandatory retirement at 65. Mechanics are in a similar situation as trade schools produce fewer qualified Airframe and Power plant licensee’s each year.

    Mr. Horton has his hands full and like many analysts, We will be looking at Mr. Hortons direction as a leader. Without leadership from the top, AMR is not worth the paper the stock is written on.

    When Allan Mulally took over at Ford, he showed vision and direction. More importantly, he showed leadership when stayed the course while others said it couldn’t be done. We called Ford a buy then, and believe it is still a long term buy/hold. Keep an eye on what Mr. Horton says and does before writing off AMR.

    Bet on leaders, company’s need them.


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