Obamanomics Takes Down AA

[CrusaderFrank]

American Airlines is slated to become the next major victim of Obama's Failed Economic Ideas.

American Airlines shares tumble 18 percent on outlook | Reuters

"Airline stocks were down broadly on concerns that a weak economy will drain travel demand and hit fares this autumn."

Airline stocks were down broadly on concerns that the Obama economy will drain travel demand and hit fares this autumn....corrected

 

[waltky]

Shares drop 81%...

American Airlines files for Chapter 11 protection
29 November 2011 - American Airlines' parent company AMR Corporation has filed for Chapter 11 bankruptcy protection.

Shares in the airline plunged immediately they resumed trading on Tuesday and closed 81% down. They are now worth 31 cents each. The company expects the airline to continue to operate as normal throughout the bankruptcy process. Speculation about AMR's financial position surfaced in recent weeks after cost-cutting negotiations failed. AMR said agreements with its workforce forced it to spend $600m (£384m) more than other airlines on staff costs. The airline employs 78,000 staff worldwide and operates out of five major US hubs. Chapter 11 refers to a section of the US Bankruptcy Code. It protects a company from its creditors, giving it time to reorganise its debts or sell parts of the business. American Airlines was the only one of the major US airlines operating international routes not to file for bankruptcy after the September 11th terrorist attacks. Its competitors have successfully used bankruptcy to restructure their labour contracts and cut costs.

Changes at the board

The company also announced that Gerard Arpey, the Chief Executive of AA has retired and would be replaced by the company's president, Thomas Horton. Mr Horton said the board had unanimously decided to file for bankruptcy on Monday night. He announced that American would be looking to change its employees' terms and conditions. "We plan to initiate further negotiations with all of our unions to reduce our labour costs to competitive levels," he said. David Bates, president of the Allied Pilots Association conceded that employment terms would change. "The 18-month timeline allotted for restructuring will almost certainly involve significant changes to the airline's business plan and to our contract."

Mr Horton insisted that the company would emerge in more robust health: "I am confident American will emerge even stronger as a global leader known for excellence and innovation." He added that during the restructuring the airline would reduce its flight schedule in the US "modestly" with a corresponding reduction in staff. Mr Horton said no single factor had led to the decision to file for Chapter 11 but the company needed to cut costs. He pointed to weak demand and high fuel prices, which have risen more than 50% in the last five years.

British Airways

British Airways operates an international partnership with AA on transatlantic routes and are both part of the One World alliance. American also has a joint venture with Japan Airlines. British Airways' parent company IAG said in a statement: "We have every confidence in the future of American Airlines. We are pleased they are taking this step which shows commitment and determination. The statement added: "Our joint business, which is a revenue sharing agreement, continues to operate as usual."

Reversal of fortunes

American Airlines was the world's biggest airline three years ago but has since fallen behind Delta and United after they bought out other airlines. Delta filed for bankruptcy in 2005 and United was one of the first to do so in 2002. Unlike other major US airlines, AA has not returned to profit in the last two years. AMR Corporation lost $162m in the third quarter of 2011 and has reported losses in 14 of the last 16 quarters. The global economic crisis has had a huge impact on the airline industry in general. Ashley Steel, transport expert at KPMG, thinks travel companies will have to adapt as businesses and individuals cut costs and fly less. "This will create more pressure on governments and regulators to allow airlines to merge cross border," he said.

BBC News - American Airlines files for Chapter 11 protection

 

[CrusaderFrank]

Wow.

So Failed Stimulus, deficits bigger than any Reagan budget and Soviet style central planning is bad for the US economy.

Wow.

Never saw that coming

 

[Mad Scientist]

Inb4 Libs blame TEA Party and Bush!

 

[Avatar4321]

I'd hardly blame Obama for AA. Airlines have been having issues for decades.

the current TSA, much of which was implimented under the Bush administration has probably hurt the Airlines.

But Obama certainly hasnt been helping things...

 

[Teals_Of_Wonder]

well, did they charge $2.00 a minute to poop in their smelly restrooms?

 

[Vel]

I'd hardly blame Obama for AA. Airlines have been having issues for decades.

the current TSA, much of which was implimented under the Bush administration has probably hurt the Airlines.

But Obama certainly hasnt been helping things...

If we consider what has happened to fuel prices under Obama, I'd say he can receive a fair amount of blame. Can you image the difference we'd see in our economy if the energy sector were able to expand?

 

[Middleoftheroad]

Wow.

So Failed Stimulus, deficits bigger than any Reagan budget and Soviet style central planning is bad for the US economy.

Wow.

Never saw that coming

nice try but this has nothing to do with Obama.
AA has declared bankruptcy because, since 9/11 all other major airlines have declared bankruptcy, which allows for a company to resize cheaply, trimming overhead, allowing them to be leaner and more profitable.
I'm not sure if you know this, but in business, when all of your competitors have a clear advantage over your company, its not a good thing for your company.

 

[Baruch Menachem]

Blaming this on Obama is reaching a bit. He is not responsible for everything.


Of course, to hear him and his defenders tell it, he is not responsible for anything. He just deserves credit when they go right, but Buuuuuuuuush is to blame when they go wrong.

 

[Vel]

Average gas prices December 29, 2008

Average gas prices--November 28, 2011

 

[Sirkarl101]

Well lets see if I understand this. Everyone chooses to blame each other on a unique situation in a time like no other. How in the hell can anyone equate what is happening globally to situations that existed in 1920 or 1940 or 1960 or 1970 or 2000 or 2002, come on you people have NO idea what is going on in this country as we are not permitted to know. Ignorant are the people and power and wealth is gained through such ignorance. We are all piss ants that are permitted to exist as long as we are needed.

Here we are doing exactly as planned. Arguing among ourselves about who made our lives shit. The answer is we did by playing into the game that is stacked against us and doing nothing to remove the assholes who are playing together to screw us.

Politicians are breaking laws all the time. They do not get punished accordingly. They may lose their job.

 

[Truthmatters]

Nope it was deregulation that caused this mess

 

[Middleoftheroad]

Average gas prices December 29, 2008

Average gas prices--November 28, 2011

Your an idiot stop picking and choosing dates you know are misleading.
Average gas prices

edit* for July 2008

 

[Jackson]

I thought the title of this thread was "Obamanomics takes down African Americans." Going to bed.

 

[CrusaderFrank]

Yeah, you guys are so fucking smart, it's not like higher gas prices affects the economics of the airlines.

 

[Middleoftheroad]

Yeah, you guys are so fucking smart, it's not like higher gas prices affects the economics of the airlines.

check my link frank and see that gas prices are now 80 cents cheaper then they were before the recession started.

 

[Vel]

Average gas prices December 29, 2008

Average gas prices--November 28, 2011

Your an idiot stop picking and choosing dates you know are misleading.
Average gas prices

edit* for July 2008

LOL. Before you start tossing words like "idiot" around, you might want to check your own post for errors. Try "you're". Also, proper punctuation and capitalization go far in helping you call others idiot without proving yourself to be one.
As to the dates I chose, I simply picked the last month before Obama took over and compared it to the most recent data ( today ) available. It is certainly not my fault that gasoline prices have DOUBLED since Obama took office.

 

[Vel]

Yeah, you guys are so fucking smart, it's not like higher gas prices affects the economics of the airlines.

check my link frank and see that gas prices are now 80 cents cheaper then they were before the recession started.

That doesn't change the fact that gasoline prices are now DOUBLE what they were when Obama took office.

 

[Middleoftheroad]

Average gas prices December 29, 2008

Average gas prices--November 28, 2011

Your an idiot stop picking and choosing dates you know are misleading.
Average gas prices

edit* for July 2008

LOL. Before you start tossing words like "idiot" around, you might want to check your own post for errors. Try "you're". Also, proper punctuation and capitalization go far in helping you call others idiot without proving yourself to be one.
As to the dates I chose, I simply picked the last month before Obama took over and compared it to the most recent data ( today ) available. It is certainly not my fault that gasoline prices have DOUBLED since Obama took office.

Anyone who knows anything knows that the only reason gas prices were so low was because most of the world was in crash mode at that time. The was panic everywhere and the price of comodoties and stocks were plummeting, so this leads us two one of three conclusions. Either,
A) you know absolutely nothing about comodoties and stocks
B) you were purposefully trying to mislead everyone or
C) you are blaming Obama that the economy of the entire world is not still crashing

Honestly, no one here cares about punctuation. It is a tool for those who have lost their point and are trying to change the subject. Sorry it was late last night and I had been drinking. The point still stands.

 

[Baruch Menachem]

Nope it was deregulation that caused this mess

you realize that Deregulation of ticket prices took place back in 1978? When Carter was president? People born back then have kids in high school now? How can something that happened almost two generations ago be blamed for something that is happening now? Surely they have learned to move with the times. Or They deserve to be broke.