After massive loss, AA goes on huge spending spree

[Mr. Big Dog 10,747]

American Airlines is losing money because their fleet is the oldest and the least fuel efficient among it's peers putting the company at a severe disadvantage when fuel prices go up. What does American Airlines do in the face of these losses? Cut, cut, cut? No, sir. What they do is spend, spend, spend to get fit for tomorrow and gain a competitive advantage by turning it's oldest and least efficient fleet into the youngest and most efficient. And they don't just spend a little. No, sir. They go all out placing the largest ever order for new planes in history acquiring at least 460 new planes and potentially more than twice that number.

And to make matters worse, fully unionized, socialist Airbus is getting the lion share of the orders (260 out of 460) and an even larger share of the options placed for future purchases (365 out of 465). But we know that unions destroy business, yes? Funny how Airbus outperforms Boeing despite their competitive disadvantage stemming from their high degree of unionization. Or could it be that unions aren't the culprit?

American makes 'largest aircraft order' in history

Airline is buying at least 460 new planes over next five years from Boeing and Airbus

FORT WORTH, Texas — American Airlines is buying at least 460 new planes over the next five years in what it calls the biggest airline order in history. And in a victory for Airbus, it's splitting the work between the European plane maker and Boeing.

American said Wednesday it will buy 260 planes from Airbus and 200 from Boeing Co. It expects the new, more fuel-efficient planes to provide much-needed savings on fuel costs. American's current fleet is among the least fuel-efficient in the industry.

AMR Corp., American's parent, also announced that it plans to spin off its American Eagle regional-flying subsidiary as a separate company.

The twin announcements overshadowed AMR's news that it lost $286 million in the second quarter, as rising fuel prices wiped out gains in revenue. The loss equaled 85 cents per share. Wall Street was expecting a loss of 77 cents, according to FactSet.

In recent weeks, the airline industry was riveted by the drama of Airbus and Boeing making competing bids to overhaul American's fleet. American currently flies and all-Boeing fleet.

In discussions that lasted long into Tuesday night, American decided to buy 200 planes from Boeing's 737 family of workhorse single-aisle planes, with deliveries starting in 2013. Half are expected to be equipped with updated, more fuel-efficient engines. The airline said it will take options for another 100 737s.

American also will buy 260 planes from Airbus's A320 series with deliveries starting in 2013, and take options and purchase rights for 365 more. Starting in 2017, American will get the first of 130 copies of a new Airbus plane called the A320neo — for new engine option — which Airbus claims will be 15 percent more fuel-efficient than current jets when it goes into service in late 2015.

American will also take options and purchase rights for up to 465 additional planes through 2025, mostly from Airbus.

Airbus CEO Tom Enders called American's decision "a strong vote of confidence in our product in the important North American market." Airbus is part of European Aeronautics Defence & Space Co.

With American paying more than $3 a gallon ($.80 per liter) for fuel, the search for better fuel efficiency helped drive the company's plane-buying decision.

American's fleet of more than 600 planes averages about 15 years in age, among the oldest in the U.S. airline industry. One-third of the fleet consists of fuel-guzzling McDonnell Douglas MD-80 aircraft.

"The plan was to replace those MD-80s over seven or eight years," said Mike Boyd, an aviation consultant who studied American's fleet for its pilots' union. "Well, American can't wait that long, not with fuel over $3 a gallon. They've got to unload those MD-80s."

In a statement, AMR's Chairman and CEO Gerard Arpey said American "expects to have the youngest and most fuel-efficient fleet among our peers in the U.S. industry within five years."

The need for fuel-efficiency was evident in AMR's second-quarter results. Revenue rose to $6.11 billion from $5.67 billion a year ago, thanks to higher fares and fees. But American's fuel bill rose 33 percent — an increase of $547 million from the same period last year, outstripping the gain in revenue. Fuel has overtaken labor as the airline's biggest expense.

American has used Airbus planes before, although only a few dozen of them — it grounded the last one in 2009. When American intensified plans to overhaul the fleet a couple of years ago, Chicago-based Boeing was seen as the favorite.

In recent months, Boeing has publicly debated whether to put a new engine on the 737 or take the more radical and costly but perhaps rewarding move of developing an entirely new plane. Airbus, meanwhile, was forging ahead by taking hundreds of orders for the A320neo.

[Harsh_77 718]

I have no idea how the executive management gets away with things like this, they should had been buying planes all the time retiring the old planes.

Its just a smoke screen created by executives, for years they would not buy anything and show that money as profit and keep on making huge bonuses and then all of the sudden they would go place a huge order and still continue to get a huge bonus at end of year coz now they will tell the share holders and board they are thinking ahead for company and they have vision.

Executives should had this vision long time back about upgrading the fleet.

[Obama 2012 1,714]

American Airlines is losing money because their fleet is the oldest and the least fuel efficient among it's peers putting the company at a severe disadvantage when fuel prices go up. What does American Airlines do in the face of these losses? Cut, cut, cut? No, sir. What they do is spend, spend, spend to get fit for tomorrow and gain a competitive advantage by turning it's oldest and least efficient fleet into the youngest and most efficient. And they don't just spend a little. No, sir. They go all out placing the largest ever order for new planes in history acquiring at least 460 new planes and potentially more than twice that number.

And to make matters worse, fully unionized, socialist Airbus is getting the lion share of the orders (260 out of 460) and an even larger share of the options placed for future purchases (365 out of 465). But we know that unions destroy business, yes? Funny how Airbus outperforms Boeing despite their competitive disadvantage stemming from their high degree of unionization. Or could it be that unions aren't the culprit?

Amazing how you're trying to convince yourself that government spending is the same as private sector spending.

[Mr. Big Dog 10,747]

I have no idea how the executive management gets away with things like this, they should had been buying planes all the time retiring the old planes. Its just a smoke screen created by executives, for years they would not buy anything and show that money as profit and keep on making huge bonuses and then all of the sudden they would go place a huge order and still continue to get a huge bonus at end of year coz now they will tell the share holders and board they are thinking ahead for company and they have vision.

Executives should had this vision long time back about upgrading the fleet.

True, they've failed to invest for far too long living off their past investments. They haven't kept pace with their peers and are now at a competitive disadvantage held back with yesterday's technology and yesterday's resources. Faced with these facts, what does the business do? Cut back on investments and double down on their reliance on yesterday's technology and resources? Or do they realize that the only way to get back into the game is to take a massive step forward, divorcing itself from yesterday's technology and resources and making a huge investment into the company's future? It's the latter, isn't it? Past mistakes notwithstanding, they are making sound decisions for the company's future.

I wish that this country would take similar steps to regain it's competitiveness.

Amazing how you're trying to convince yourself that government spending is the same as private sector spending.

Amazing how you just forgot that you are consitently making just that connection comparing the public budget to a family or business budget.

[Obama 2012 1,714]

Amazing how you just forgot that you are consitently making just that connection comparing the public budget to a family or business budget.

#1 - If our government was a company, it would have been put out of business 15 years ago.

#2 - American Airlines isn't deeply in debt and still actually posts a profit during certain quarters.

#3 - American Airlines doesn't force your pocket book open and pry money out of it for them to function. Their sales/revenue come from people choosing to use their service and their 'debt' if any comes from another private entity, not the taxpayers.

#4 - If a business was in the amount of debt the US Government was in, they'd file for chapter 11 protections and then possibly be forced to sell off some of their company and liquidate some of their assets.

I do say the government should be treated like a business or a household. However it's far from being treated like one and to try and make that comparison now by asking for more spending is ridiculous and you know it.

[Mr. Big Dog 10,747]

#1 - If our government was a company, it would have been put out of business 15 years ago.

#2 - American Airlines isn't deeply in debt and still actually posts a profit during certain quarters.

#3 - American Airlines doesn't force your pocket book open and pry money out of it for them to function. Their sales/revenue come from people choosing to use their service and their 'debt' if any comes from another private entity, not the taxpayers.

#4 - If a business was in the amount of debt the US Government was in, they'd file for chapter 11 protections and then possibly be forced to sell off some of their company and liquidate some of their assets.

I do say the government should be treated like a business or a household. However it's far from being treated like one and to try and make that comparison now by asking for more spending is ridiculous and you know it.

Paul, you can't see the forest for the trees. Our country, much like many businesses, is competing in a global economy. The fact is that we have lost in terms of competitive advantage over the last few decades. The question is, how do we regain some of that advantage? With investments into technologies and resources of the future or with subsidies for those of the past? With investments into a better educated workforce or by scaling back on the investment into tomorrow's workforce? With investments into a competitive infrastructure or by letting our infrastructure crumble? I think the answers are clear.

[Zero Sum 305]

If the model works in an enterprise, it works period. Very good and astute observations, Big Dog. You should add 'Very' to your name, btw.

[mawilson 2,133]

American Airlines is losing money because their fleet is the oldest and the least fuel efficient among it's peers putting the company at a severe disadvantage when fuel prices go up. What does American Airlines do in the face of these losses? Cut, cut, cut? No, sir. What they do is spend, spend, spend to get fit for tomorrow and gain a competitive advantage by turning it's oldest and least efficient fleet into the youngest and most efficient. And they don't just spend a little. No, sir. They go all out placing the largest ever order for new planes in history acquiring at least 460 new planes and potentially more than twice that number.

The difference is, they're not spending my money. If their plan fails, they will go out of business and your grandchildren will not have to pay for their mistakes.

[Obama 2012 1,714]

Paul, you can't see the forest for the trees. Our country, much like many businesses, is competing in a global economy. The fact is that we have lost in terms of competitive advantage over the last few decades. The question is, how do we regain some of that advantage? With investments into technologies and resources of the future or with subsidies for those of the past? With investments into a better educated workforce or by scaling back on the investment into tomorrow's workforce? With investments into a competitive infrastructure or by letting our infrastructure crumble? I think the answers are clear.

Competing? Us? According to the EPA, FDA, Law that effect small businesses that shouldn't, etc. Competition isn't what the US does anymore. Competition left here a long time ago for more relaxed regulations that's aren't extreme in nature.

[Mr. Big Dog 10,747]

The difference is, they're not spending my money. If their plan fails, they will go out of business and your grandchildren will not have to pay for their mistakes.

That is true. And yet, they recognize that there's no path to becoming compretitve than to take a massive step forward renewing their aging fleet. It's that or close up shop. They've fallen behind and need to get back into the game. That takes a massive investment. Same is true for the country. We've dug ourselves into a hole by neglecting what has made this country a leader, by neglecting what gave us our competitive advantage. I don't understand how anyone can believe that will get out of that hole if we just keep on digging.

[mawilson 2,133]

That is true. And yet, they recognize that there's no path to becoming compretitve than to take a massive step forward renewing their aging fleet. It's that or close up shop. They've fallen behind and need to get back into the game. That takes a massive investment. Same is true for the country. We've dug ourselves into a hole by neglecting what has made this country a leader, by neglecting what gave us our competitive advantage. I don't understand how anyone can believe that will get out of that hole if we just keep on digging.

I don't think we dug ourselves into a hole because we neglected our infrastructure or education system.

[Obama 2012 1,714]

I don't think we dug ourselves into a hole because we neglected our infrastructure or education system.

We dug ourselves into a hole by letting the Banks and an Underground investment market drag us to hell.

On top of that creating a regulatory system that makes extremely difficult for a small busines to rise up and be competitive.

[Mr. Big Dog 10,747]

Competing? Us? According to the EPA, FDA, Law that effect small businesses that shouldn't, etc. Competition isn't what the US does anymore. Competition left here a long time ago for more relaxed regulations that's aren't extreme in nature.

Ah yes, the EPA. This evil job-killing machine. You're a good Republican, Paul. Here's some perspective on the EPA:

Clean water doesn't kill jobs

By Diane Roberts, special to the Times

In Print: Sunday, July 17, 2011

t's not the Bush tax cuts, the Wall Street bailouts, the credit crunch or those two off-the-books wars (remind me: why'd we invade Iraq again?). No, it's clean water. That's why America's in a recession.

Clean water is the reason so many citizens find it hard to put food on the table. But — praise Big Ag and Ayn Rand! — U.S. Rep. John Mica, R-Winter Park, has come to save us from that crypto-communist, job-destroying Environmental Protection Agency and once again make America safe for the pollutigarchy.

He has pushed a bill through the House of Representatives that rips the guts out of the Clean Water Act and throws the bloody entrails into the nearest lake. Without a permit.

HR 2018, the "Clean Water Cooperative Federalism Act of 2011," which passed 239-184 last week, overturns 40 years of progress. It forbids the EPA to require that states meet minimum water quality standards.

If a state feels like dumping noisome chemicals or raw sewage into a river, everybody downstream is out of luck. The dredge-and-drain-happy Army Corps of Engineers (the people who build lousy levees in New Orleans and issue permits to tear up endangered sea grasses in Florida), will be able to do whatever they like without regard to frivolous concerns such as public health.

The nation can return to those heady days when capitalism reigned unfettered by bunny-hugging, water-testing, hippie-wuss socialism, and America was on one heavy toxic trip.

The Clean Water Act used to be a point of pride for Republicans. Before President Richard Nixon signed it into law in 1972, hog and chicken farmers could hurl as much critter waste as they liked into Chesapeake Bay, never mind the dead shellfish. In 1970, around 30 percent of drinking water samples from around the country tested several times higher in chemical effluent than recommended for human consumption. The Hudson River teemed with carcinogenic PCBs, piped in courtesy of General Electric. Ohio's Cuyahoga River was so full of petrochemical waste it actually caught on fire.

As for Florida, it was polluter paradise. In 1969, Lake Thonotosassa in Hillsborough County scored the largest fish kill ever recorded — 26 million — thanks to laissez-faire chemical discharges from four food processing plants.

And remember Lake Apopka? Rep. Mica should: It's Florida's third-largest freshwater body and only a few miles west of his Winter Park home. From the 1940s on, it was a filthy unregulated soup of pesticide and animal poop, a stew of nitrates so deadly that in 1981 it was finally declared a Superfund site. Tower Chemical Co. saw fit to dispose of its excess DDE, an endocrine disruptor, in the lake, causing severe health disorders in local farmworkers, bird kills, sexual disorders and some very weird mutations in alligators.

You may be wondering why Mica wants to turn the clock back to when you could practically walk across Lake Apopka on dead bass and thick algae, back to when you smelled the Fenholloway River 10 miles before you saw it. Well, he's mad at EPA for having the temerity to try to regulate nutrients — fertilizer — in Florida waters. HR 2018's co-sponsor, Democratic Rep. Nick Rahall, is mad at EPA because they're holding up permits to blow off the tops of mountains in his home state of West Virginia.

Seems a bunch of scientists have found out that when you blast the crown of a good-sized hill to get at the coal lurking in there, you end up choking streams and springs with noxious waste, killing off the aquatic life, ruining habitat and likely contributing to birth defects. Before the Clean Water Act, the drinking water hundreds of miles south in Alabama would get contaminated by coal waste. As a famous Floridian once pointed out, water will run downhill — and it doesn't stop at the state line.

Republicans (and a few Democrats in states where polluter sugar daddies such as the Koch Brothers cough up big campaign contributions) now refer to the EPA as a "job killer."

The expression is no doubt meant to trigger subconscious images of gray-faced psychos smiling as they strangle kittens or smother babies. This is a psychological disorder: "EPA Derangement Syndrome." It impairs the ability to reason, causing the victim to forget all his or her sixth-grade science.

In a floor speech last year, Montana congressman Denny Rehberg said ominously, "Every living person is now a source of pollution by exhaling CO2 and water vapor. Every breath you take, every word you utter, is now subject to EPA regulation."

Presidential candidate Michele Bachmann is convinced EPA is behind a conspiracy to force us to buy squiggly light bulbs. Not to be outdone, congressman Mica accuses EPA of conducting a "regulatory jihad."

Florida's Republican overlords and their Big Bidness handmaidens (or is it the other way around?) spout a lot of paranoid rubbish, especially whenever they see a TV camera.

Barney Bishop, head honcho of Associated Industries of Florida and polluter BFF, claims that EPA administrator Lisa Jackson "thinks she talks to God," while the citizens and lawyers who sued EPA in 2007 to make them enforce the law are "communist-inspired."

Bishop describes himself as a "lifelong Democrat," which would make sense if his life were lived in, say, the 1850s. He needs to read up on the current ideals of the Democratic Party (hint: they do not include poisoned water).

He and Rep. Mica might also work on their math: Implementing the modest numeric nutrient standards set out in the consent decree for Florida will not cost $700 a year per household.

That silly number comes from a couple of industry-funded studies that assume — incorrectly — that the EPA will require use of reverse osmosis to clean up our water. The real cost is less than $70 a year. But what are a few factoids between friends? As Bishop once lamented, "How clean does the water have to be, anyway?"

How clean, indeed. No matter what the pollutigarchy says, EPA has not acted dictatorially or hastily. After all, the states have known since 1998 they had to develop real, measurable standards.

EPA has also given the state extra time to get it together, even though there's green algal slime even now blanketing much of the St. Johns and Caloosahatchee rivers and nitrates cloud our once crystalline springs.

Mica's pet bill means to return us to the bad old days. While it will probably die in the Senate, it will no doubt resurface next year. And the year after.

If Republicans take the White House in 2012, we'll have to start boiling our drinking water. In the meantime, John Mica's constituents should ask him why he's willing to risk Florida's waters — essential to our tourist industry, essential to our very lives — back to a time when rivers burned and lakes stank of death.

Diane Roberts is author of Dream State, a historical memoir of Florida. She teaches at Florida State University.

[Obama 2012 1,714]

Ah yes, the EPA. This evil job-killing machine. You're a good Republican, Paul. Here's some perspective on the EPA:

Republican? You have me confused with someone else.

It's not all about 'water' with the EPA and you know it. On top of that you post a hack/tin-foil hat article to back up your argument? Seriously? Dog, you're better than Steven is on that...

[Mr. Big Dog 10,747]

Republican? You have me confused with someone else.

It's not all about 'water' with the EPA and you know it. On top of that you post a hack/tin-foil hat article to back up your argument? Seriously? Dog, you're better than Steven is on that...

Well, you keep repeating so many Republican talking points that I think you'd fit in real good with that crowd.

And I know that the EPA isn't all about clean water but that's one of the sticking points with that agency over there on the right. The opinion I posted there is not exactly a hack piece. It's an opinion and it reflects quite accurately where we've been, why the EPA was created and what it has since accomplished in regards to clean water. There hasn't been a river on fire in decades.