It’s notable that not a single analyst, commentator, blogger, newsman or businessman really is enamored of American Airlines’ plan for improving revenue.  The plan, at the top level, is:  Farm out more flying, try harder at our embattled hubs, rely on our Oneworld relationship.

What is continually pointed out is that working harder and doing more isn’t a plan.  Relying on partner international airlines to provide feed isn’t very solid and where it has been deployed as a strategy, it hasn’t yielded the projected results.  There are few new partnerships American can engage in at this point as well.  They’ve done that work already.

American Airlines has a real problem in several of its hubs.  JFK aka New York City is under assault by Delta and United and American is losing more and more traffic there.  LAX really isn’t a hub and it too is under lots of competitive pressure.   In Chicago, American is #2 against United at O’Hare airport and it is seeing its traffic decline there, too.  Southwest is nipping at American from the bottom side by deploying routes out of Midway Airport that offer a real alternative to the businessman traveling to or from Chicago.

Yes, they have Dallas / Fort Worth.  American is, by far, the dominant airline at DFW airport and it shows in the fares offered from DFW today.  However, other airlines (Virgin America, JetBlue) smell blood and are entering the market place with a service product that is highly attractive to businessmen.  Southwest Airlines will slip its leash at Love Field in about 2 years and then American really feels pressure from Southwest at two of its hubs.   It’s also the hub with the most expenses.  Labor is senior at that hub and recalcitrant at best.  You can’t expect American Airlines to maintain its dominance there either.  It will remain the major airline there but its share of the marketplace can be expected to decline rapidly over the next 2 years and then its routes will be under assault from all directions.

There is a reason why Delta put a large parcel of flights on the DFW-La Guardia route.  They can compete on that route and American is limited in how it can respond.  Creditors won’t be amused at American Airlines losing money on those routes to fight off competition.

American has other things against it as well.  Its IT system is aging.  Its service product is substandard even to LCC carriers.  It’s fleet is old and while it will be renewed, much of that renewal doesn’t take place for several years yet.  Its website is atrocious and can’t even let a person pre-pay a checked baggage online if a customer so desires.  There is no ancillary revenue strategy (there are ancillary revenue products in place but no strategy to truly win passengers.)  It’s an airline that, today, is designed to offend passengers and no one is talking about how that gets fixed.

That’s the reason everyone continues to contemplate a US Airways / American Airlines merger.  The US Airways team has done all that despite being hamstrung with labor woes and inferior hubs.  They know how to make it work and the competitive landscape makes American Airlines hubs in certain areas look much more attractive when someone else is running the game.

I think we’ll start to hear real talk of mergers with US Airways in about 2 months.  It won’t take long for creditors to lose their patience at this point.

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