American Airlines Group Inc President Scott Kirby said during a transportation conference on Tuesday that hundreds of travelers now flying low-cost Spirit Airlines Inc from Dallas to Las Vegas used to be American's passengers.
"There is a big segment of our customer base - not all of it - but a big segment of our customer base that shops on price. And we need to compete for those customers as well," he said.
At the same conference, the chief financial officer of United Continental Holdings Inc, John Rainey, broadly echoed that sentiment.
Oil is up another 1%, airlines are now officially in a airfare war, so you have the best of both worlds to short all airlines. AAL will trade down to $40 today.
Earnings estimates would need to be cut at least %40. So for 2015, estimates would be more like $5.85 vs $9.79 & 2016 would be more like $4 vs $7.61 So with a generous pe of 7 that would put fair value of AAL between $28 low to $41. Still way over value.
on AAL for only $199. They even have a offer where you buy 3 round trip tickets, they will throw in 1 for FREE. That's a pretty good price right? LOl.....
Just like Ebola I made a killing shorting this dog. Still laughing you fool? LOl...
EIA Petroleum Inventories
EIA Petroleum Inventories:
Crude -2.7M barrels vs. -1M consensus, -2.2M last week.
Gasoline -2.8M barrels vs. +0.7M consensus, -1.1M last week.
Distillates -0.6M barrels vs. +0.1M consensus, -2.5M last week
Southwest Airlines Co. said Tuesday that it may increase capacity as much as 8 percent this year, up from 7 percent previously, while JetBlue Airways Corp.’s projected range is 7 percent to 9 percent and Spirit Airlines Inc. anticipates a 31 percent jump.
Having more tickets on sale crimps airlines’ pricing power, and pressure on fares is showing up in gauges such as passenger revenue from each seat flown a mile. That measure has fallen for three consecutive quarters for the North American industry, according to data compiled by Bloomberg.
American Airlines Group Inc. will “compete aggressively” against discount carriers that are piling on added seats and then cutting fares to keep planes full, Chief Executive Officer Doug Parker said.
“We’re not going to lose customers on price,” Parker said Tuesday in an interview at Bloomberg’s New York headquarters. “We’re not going to give anyone else an advantage and allow them to expand at a rate that takes away customers and is not good for our shareholders.”