American Airlines lost $192 million in February and there is virtually nothing there to blame on the bankruptcy.  You can even see significant cost reductions where you would expect to see them.

And that’s the rub.  Costs are the 1st half of the equation.  If you don’t solve for the second half, you’re done.

That second half is revenues which do not reflect any work done in the last year to improve them.  To the contrary.

Once more, this is why I strongly believe that Doug Parker & Company are the right choice for leading the merged US Airways / American Airlines.  It’s also why I strongly believe that Tom Horton should be leaving when this merger deal closes.  This bankruptcy reorganization reflects emphasis on cost cutting only.

Anyone who believes the rebranding effort that was rolled out in January was an effort to improve revenues has got to look at the bigger picture.

A new aircraft livery and logo doesn’t attract customers.  And it’s the fallacy many “finance” people make.  Customers come to your business because you have a good or great service offering at a value oriented price.  Period.

And the US Airways team understands that.

Filed under: Airline News, Mergers and Bankruptcy by ajax
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