AMR Corp., whose principal business is operating American Airlines, reports a $375 million loss in the first quarter today, and tries to spin it positively.
"Thanks in large part to the efforts of our employees we also continued to improve our customer dependability," said the company's proud CEO, Gerard Arpey, who seems to believe that the rest of the planet understands whatever that is supposed to mean.
The loss comes even though oil prices are down sharply. "While lower fuel prices have provided a significant buffer against falling demand in 2009, the struggling economy and capital markets remain significant challenges for American and the rest of the industry," said Arpey, in the no-shit-Sherlock observation of the day (so far).
Let's look at the numbers to see the real "challenge:"
In March, American's revenue passenger miles were down about 10.8 percent over March 2008. Like its competitors, American has been frantically trying to shrink its system, and reduced capacity 8.2 percent domestically and 1.1 percent internationally. But the cuts in capacity were exceeded by a plunge in demand. In March, 9.9 percent fewer people boarded American flights. For the first three months of this year, American's revenue passenger miles were off over over 12 percent, and the number of passengners boarded was down 11.8 percent.
This occurred despite generally lower fares across the board.
Here's my own quarterly report for most major network carriers:
You are not looking at "challenges." You are looking at a verdict. The economy is obviously a huge factor, er, I mean "challenge." But you are also looking at a conclusion by a great many Americans that air travel, with the arrogance of the airlines and the indignities of the airport-security ordeals, is no longer worth the hassle, at least not to the extent that it has been for 25 years.
These desperate fare sales, and the lack of strong public response to them, are the herald of the day of reckoning. Airlines, you have made people hate you. The good times will not roll again, even when the good times roll again elsewhere.
An era is ending.