AMR Corp dropped to its lowest closing stock since 28-Mar-2003, following attempts to end a five-year deadlock with a contract proposal that offers pilots smaller pay increases than they had requested (Bloomberg/Dallas Business Journal, 15-Nov-2011). The proposal was posted on American Airlines’ labour website after a day of negotiations following a weekend break. The carrier is reportedly trying to increase the pressure on pilots to approve a tentative agreement by the end of the week. Two contracts presented late on 14-Nov-2011 included pay raises and job protection for pilots in exchange for increased productivity and operational flexibility.
AMR Corp's share price drops to record low after pilots review labour contract offer
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Although each airline has offered a nuanced interpretation of domestic trends, the general consensus is that dynamics began to improve in Aug-2016 as close-in yields started to strengthen. After enduring tough conditions in Latin America driven by Brazil’s recession, American and Delta posted positive passenger unit revenues (PRASM) in their Latin entities in 3Q2016, and expect further improvement. Higher industry capacity is creating challenges for those airlines in the Atlantic and Pacific, but generally it seems that the path of unit revenue declines in those regions should moderate progressively.
Delta is aiming to post positive PRASM early in 2017, and American believes it can reach a positive result in total unit revenues in 1H2017. For now United is not offering a specific time period for a reversal of negative PRASM, but feels confident it is heading in the right direction, given the changing dynamics in certain areas of its network.
Air New Zealand defends Australia-USA transit market as Qantas plans further USA growth with 787-9s
Air New Zealand is turning up the volume. For years the airline had a tidy, under-the-radar business carrying transit passengers between Australia and the US over its Auckland hub. Air NZ is now directly targeting the Australia-USA market with a sales and marketing push that includes an advertising campaign called "Better Way to Fly". CEO Christopher Luxon said in a statement that "capturing just a little bit more of that market would see hundreds of thousands more Aussies flying with us to North and South America...Many Australian travellers still think of us as a trans-Tasman carrier and that’s a perception we’re determined to change."
The shift that Air NZ envisages is being sought now – and not five or even 10 years earlier – largely because of external factors and competition. Air NZ's marketing may suggest an opportunistic push, but the reality is Air NZ is on the defensive. In the Australia-Americas market competitors have lowered their costs, adding city pairs, product improvements and significant capacity growth. 2017 and 2018 are expected to mean even more growth as a resurgent Qantas adds 787-9 services between Australia and the US, and in particular – to Dallas.