American Airlines

Even in bankruptcy protection American Airlines continues to grow important Brazilian market

Although American Airlines is cutting capacity and aircraft as part of its bankruptcy protection proceedings, it is continuing to grow its important presence in Latin America with new routes and capacity upgrades. American is the largest carrier between North America and Latin America, achieving the highest yield in the market compared to any other US carrier. Latin America is also American's highest-yielding market.

American has announced 18 new frequencies to Latin America in its Southern Hemisphere winter schedule, including a new daily route between Miami and Manaus from Jun-2012. It is also plans to begin operating in June on a year-round basis five additional flights per week on Dallas-Sao Paulo, four additional flights on Miami-Belo Horizonte and two additional flights on Miami-Brasila – all of which were previously only operated during the peak Southern Hemisphere summer months.

Non-stop US-India market continues to shrink with American Airlines ending Chicago-Delhi service

The number of carriers operating direct service between the US and India will decline to two – Air India and United – from 01-Mar-2012 when American Airlines ends its sole service to India, a daily service between Chicago O'Hare-New Delhi. The cancellation of the unprofitable routes comes as American rationalises its network as part of its bankruptcy filing. The carrier stated that the service is being cancelled due to the “historical financial performance of the route and its future outlook given the global economic climate and high oil prices.” The poor financial performance on the route, American's longest at 7484 miles, relates to the impact on yields of competitive pricing as American was able to consistently report high load factors on the route over the past 12 months. 

Bankruptcy may save American Airlines, but what will save the US airline industry?

American Airlines (AA) will take the well-trodden bankruptcy protection path: lower labour costs, dispose of old aircraft and reduce or eliminate its pension scheme. By most accounts, bankruptcy protection will help AA return to profitability, just as it did for its counterparts last decade. But there is a larger problem in the US industry, and bankruptcy will not fix it.

American Airlines charts a course through bankruptcy

Last week’s Chapter 11 filing by American Airlines (AA) and American Eagle (AE) parent AMR marks the end of the post-deregulation period as well as possibly signalling the beginning of the end of US legacy consolidation as many believe the shedding of American’s baggage will position it for the US industry’s final merger with the only other independent legacy, US Airways (LCC).

Across the board the feeling is this is the best thing for both AMR and the US industry because it means more capacity cuts. Delta and United are expected to be the principal beneficiaries. JP Morgan expects a 10% capacity cut from American, which translates to a USD1.4 billion, or 1-3% revenue jump for United, Delta Air Lines, US Airways, Alaska Airlines, Southwest and JetBlue in 2012. US Airways was already slated to benefit from the capacity cuts of competitors this quarter.

American Airlines-US Airways merger might be necessary, but is it a good match?

American Airlines' (AA) bankruptcy has renewed discussion of the inevitability of an eventual merger with the other single in the room, US Airways. While perhaps expedient, is it a good match? A closer look at the shared dowries is in order.

American Airlines goes broke: Can a 'national' airline be allowed to fail?

As American Airlines becomes the last major US airline to seek Chapter 11 Bankruptcy protection, the issue of airline reconstruction and the basic role of airlines in the national economic and social equation remains a very real one for policy makers. In this timely article, Chris Lyle of Air Transport Economics gives a Canadian perspective.

The vast majority of the world’s airlines are today privately owned. This includes most former “national” carriers which have been turned over by their governments to private ownership. And yet, in an era of globalization and transnationalism, when it comes to economic regulation, the “flag” carriers are still mollycoddled with a lean towards jingoism.

There are two principal reasons why this happens. The first is provisions in national law and notably in the vast majority of bilateral air services agreements which preclude majority ownership and effective control of a carrier from one country by parties from another country.