Flights to Cozumel about to get more expensive

[cvchief]

ITA is showing some tuesdays and wednesdays at $395 in june,last night was in the $500 range.yesterday was able to nab a bwi to vegas for $153 dollars,today is $390.

And so continues the eternal question of, "How does airline ticket pricing work?"..... I will check again today....

 

[Mike]

From what I heard and read AA was the last of the larger (and many smaller) airline companies that hadn't filed for BK in recent history. They did so purely to shed people and reorganize (with hopes of a possible merger with U.S. Airways).

The financial guys were adamant that AA's only reason was to shed people, flights and expensive leases on older planes (they have huge orders for new planes) as well as dump pension plan costs they were looking at paying in the future.

When they filed for BK they had 4.1 billion dollars in cash in the bank (google it). There was a term the financial guys used to describe these funds but basically the 4.1 billion was not encumbered in any way, it was cold hard cash.

So in a few years, when they emerge from BK they will be a totally different airline, the pension plan will have been dumped on the U.S. Pension Benefit Guarantee Corp where the pensions will be cut to a fraction of what was promised to the people that worked there all through the years.

There was an interview of one employee that had worked for one of the other big airlines for 35 years and after the BK courts got done his pension was cut (after 35 years of service) to around $200.00 per month.

It's basically using the BK laws as legal thievery. They have already announced in the last couple days they are laying off 13,000 employees just to start with. They aren't going anywhere unless they get taken over in a merger or hostile takeover.

AA has lost 10 billion dollars since 2001. Their financial problems are real. They'll need to shed around 2 billion a year in expenses to be competitive.

Unfortunately low ticket prices and lots of airlines don't go together. Ticket prices have to be higher than we want in order to support so many airlines or you have to get rid of some airlines, either way ticket prices have to raise. Airlines simply can't lose money forever by selling cheap tickets. Recessions thin the herd, Sears and Office Max are not far from having to go away either, as is RIM the company that makes Black Berrys. I don't really subscribe to conspiracy theories, the realities are more in line that companies need to be profitable to remain in business, not much more dark or mysterious then that.

 

[AggieDiver]

I'm going down in March via Continental. Booked last August. I paid about $420 RT lax-czm-lax. The price today for the same flights is $893.

Spring Break demand has alot to do with that. Kids going to Mexico usually don't book that far in advance. Just about any place you go will be cheaper if you book 6 months or more in advance when you can look for a cheap airfare. When it gets down to a month or so out, you are going to pay what they ask.

 

[Prop Joe]

American Airlines(AMR)...
I spoke with a consultant that works for AMR. He told me a big reason they declared was to get out of some real bad plane leases. All leases in fact are gone, good and bad. They were making lease payments on Fokker F100's, Airbus A300's and MD-80's that are parked and have been parked in the desert for years. The people signed those leases should lose their job for their lack of knowledge. Gerard Arpey must have been the ringleader as he has stepped down as CEO. They have not flown those F100's for a dozen years or so. Nobody wants F100's and they were bound contractually to the leases. When AMR filed for bankruptcy those lease payment obligations go away. They really need to park those fuel thirsty MD-80's they are currently flying as well. They cannot park those things quick enough. The new, more fuel efficient, 737-800's are still being delivered. I really like the MD-80 for my wife and I as we have the two seats on the left side to ourselves. There are much more efficient planes out there though (737-800).
Eagle has has also returned all of the ATR-72-212A's, that were out of DFW,to the leasing company. That leaves the ATR72-210's out of SJU that I will continue to work on. Hopefully Eagle will get some new ATR's out of this reorganization. The ATR72-600 looks as nice as they come as far as a commuter turbo-prop. They have nice interiors for the passengers along with uprated engines for added passenger cargo loads. The Dash 8 Q400 is a nice plane but burns almost as much fuel as a jet for its jet like speed.
Another thing that made tickets jump is the disappearance of Mexicana. I do see that AeroMexico is operating a direct flight to CZM from ORD now to compete with the other airlines. This will help level the field for the market I'm in. Fuel will continue to hammer the airlines plans for making any profits near term IMO.

 

[azscubadude]

AA has lost 10 billion dollars since 2001. Their financial problems are real. They'll need to shed around 2 billion a year in expenses to be competitive.

Unfortunately low ticket prices and lots of airlines don't go together. Ticket prices have to be higher than we want in order to support so many airlines or you have to get rid of some airlines, either way ticket prices have to raise. Airlines simply can't lose money forever by selling cheap tickets. Recessions thin the herd, Sears and Office Max are not far from having to go away either, as is RIM the company that makes Black Berrys. I don't really subscribe to conspiracy theories, the realities are more in line that companies need to be profitable to remain in business, not much more dark or mysterious then that.

Here is a quote and link to the whole article I quoted from, there are many more just like it.

Call it whatever you like, but amassing that much cold hard cash for the purpose of filing BK was a well thought out plan for exactly the purposes I mentioned before.

Full article link

Dec. 5 (Bloomberg) -- AMR Corp.’s $4.1 billion in cash, the most ever for a U.S. carrier entering bankruptcy, may help the parent of American Airlines preserve its independence. Filing for Chapter 11 with that much in cash and short-term investments strengthened the third-largest U.S. airline company’s control over its fate, unlike peers that restructured in the last decade, said James M. Higgins, an analyst at New York-based Ticonderoga Securities LLC.

Filing was very smart because they still sit on $4 billion in cash, Shaked said. Some other airlines waited way too long.

 

[Mike]

Having that much cash on hand will allow them more latitude in controlling their destiny in bankruptcy and fending off unfavorable take over attempts. It still doesn't change the very real problem of being unprofitable and what to do about it.

 

[theduckguru]

http://blogs.wsj.com/bankruptcy/201...rican-eagle-hires-bain-to-review-labor-costs/

The pension regulators just put $12 million in liens against planes AA was holding in central America outside the sham BK. The boys at Bain Capital are being paid 1/2 a million a month for their expertise in screwing over the employees in this deal.

From what I heard and read AA was the last of the larger (and many smaller) airline companies that hadn't filed for BK in recent history. They did so purely to shed people and reorganize (with hopes of a possible merger with U.S. Airways).

The financial guys were adamant that AA's only reason was to shed people, flights and expensive leases on older planes (they have huge orders for new planes) as well as dump pension plan costs they were looking at paying in the future.

When they filed for BK they had 4.1 billion dollars in cash in the bank (google it). There was a term the financial guys used to describe these funds but basically the 4.1 billion was not encumbered in any way, it was cold hard cash.

So in a few years, when they emerge from BK they will be a totally different airline, the pension plan will have been dumped on the U.S. Pension Benefit Guarantee Corp where the pensions will be cut to a fraction of what was promised to the people that worked there all through the years.

There was an interview of one employee that had worked for one of the other big airlines for 35 years and after the BK courts got done his pension was cut (after 35 years of service) to around $200.00 per month.

It's basically using the BK laws as legal thievery. They have already announced in the last couple days they are laying off 13,000 employees just to start with. They aren't going anywhere unless they get taken over in a merger or hostile takeover.

 

[k374]

LAX-CZM is coming up as $650 YIKES!! :shocked2: I paid $380 RT when I went last time in March 2010, $650 is insane (71% increase). Looks like I will not be going to the Scubaboard invasion