Gerard Arpey

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Gerard Arpey
Chairman and CEO
Safe Harbor
Please note that many statements will constitute forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which constitute the Company's
expectations or beliefs concerning future events. These matters are subject to a number
of factors that could cause actual results to differ from our expectations. These factors
include, but are not limited to, domestic and international economic conditions; fuel
prices; general competitive factors including, but, not limited to, government regulations
and regulatory approvals; uncertainty in domestic or international operations; potential
industry consolidation and alliance changes; outbreaks of a disease (such as the H1N1
virus, SARS or avian flu) that affects travel behavior; acts of war or terrorism; our ability to
access the capital markets; and changes in the Company's business strategy, any of
which could affect our actual results.
Additional information concerning these and other factors is contained in our Securities
and Exchange Commission filings, including but not limited to our quarterly report on
Form 10-Q for the quarter ended March 31, 2010 and our annual report on Form 10-K for
the year ended December 31, 2009.
Industry Return on Equity
40
Net Income
30
Shareholders Equity
$ Billions
20
10
0
(10)
(20)
(30)
(40)
ROE:
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
11%
(50%)
NM
NM
NM
NM
NM
19%
NM
NM
Source: Company Filings. Includes AA, DL, NW, CO, UA, US, WN. NM = not meaningful
Industry Capacity
% Change in Domestic Capacity vs. 2005 (ASMs)
5%
0.4%
0%
(5%)
(1.4%)
(3.8%)
(10%)
(10.0%)
(9.7%)
2009
2010e
(15%)
2006
Includes network, regional, and LCC capacity
2007
2008
Our Cornerstones
ORD
LAX
NYC
DFW
MIA
Our Cornerstones
U.S. Metropolitan Area Population
(Millions)
New York
19.0
Los
Angeles
12.9
Chicago
9.6
Dallas –
Fort Worth
6.3
5.8
5.7
Philadelphia Houston
Miami
5.4
5.4
5.4
Atlanta
Washington
Source: US Census Bureau
4.5
Boston
oneworld
• 800 Airports
• Nearly 150 Countries
• 9,000 Daily Departures
• 550 Airport Lounges
• 340M Passengers/Year
• 2,500 Aircraft
London
Largest 15 Premium Airports
(Premium Passengers / Day)
4,000
3,000
2,000
1,000
-
2009 CRS booking data, adjusted to carrier reported traffic
oneworld Tokyo Network
Tokyo Haneda
oneworld Hubs
Largest 15 Premium Airports
(Premium Passengers / Day)
4,000
3,000
2,000
1,000
-
2009 CRS booking data, adjusted to carrier reported traffic.
Premium Seats
Share of Premium Capacity (Seats)
oneworld
17%
16%
21%
20%
SkyTeam
4%
19%
Star
Unaffiliated
10%
26%
34%
32%
24%
18%
15%
5%
13%
60%
38%
JFK
35%
LHR
Sources: OAG Summer 2010 Schedule and Seatguru.com
LAX
42%
NRT
50%
HKG
Strengthening Our Network
• Cornerstone Strategy
– NYC, LAX, ORD, DFW, MIA
• Joint Business Agreements &
Antitrust Immunity
– British Airways / Iberia
– Japan Airlines
• Building Alliances & Partnerships
– oneworld
– New partnerships
$500+
Million
Yr/Yr Unit Revenue Growth
10%
5%
0%
(5%)
(10%)
AA
(15%)
Industry (Ex. AA) 1/
(20%)
2Q08
3Q08
4Q08
1Q09
2Q09
1/ Industry is defined as AA, CO, CL, UA and US. Data is Consolidated PRASM.
2/ UA PRASM includes baggage, ticketing and change fees
3Q09
4Q09
1Q10
Q1 Mainline Absolute Unit Revenue
10.5 ¢
10.4 ¢
10.2 ¢
10.0 ¢
9.9 ¢
9.9 ¢
9.8 ¢
UA 2/
CO
DL
9.5 ¢
9.0 ¢
8.5 ¢
8.0 ¢
7.5 ¢
AA
US
1/ Source: SEC Filings. Mainline 1Q10 PRASM.
2/ UA PRASM as reported for Q1 is 10.75 ¢. Adjusted for $52 MM FFP benefit and approx. $230 MM of ancillary revenue
2Q10 Entity Mix Impact
April/May Yr/Yr PRASM Growth
40%
30%
AMR
Over-weighted
40%
30%
20%
20%
10%
10%
0%
0%
-10%
-10%
-20%
Central/
South
America
Domestic
Caribbean
-20%
AMR
Under-weighted
Asia
Outside
Japan
Europe
Regional
1/ Source: OAG 2010 capacity schedule
2/ Over/under weighted classification determined by AA entity weight relative to OA
Your Choice
Growing Ancillary Revenue
2.5
2.2
2.0
1.9
2.0
2006
2007
2.3
$ Billions
1.7
1.5
1.5
1.0
0.5
0.0
2004
2005
2008
2009
Cost Control
Full Year Unit Cost (Excluding Labor / Fuel) 1
Rank
2003
2004
2005
2006
2007
2008
2009
1
DL
DL
AA
AA
AA
AA
AA
2
AA
AA
DL
DL
DL
DL
DL
3
US
UA
US
US
US
UA
UA
4
CO
US
CO
NW
NW
US
US
5
UA
CO
UA
UA
UA
CO
CO
6
NW
NW
NW
CO
CO
1. Unit costs defined as stage length adjusted operating costs excluding special items, fuel and salaries, wages benefits.
Industry Labor Contracts
Contract Amendable Year
AA
DL/NW
UA
CO
US
WN
FL
Pilots
2008
2012
2009
2008
2009
2011
2005
Flight Attendants
2008
2011
2010
2009
2011
2012
2008
Mechanics
2008
2009
2008
2011
2012
2013
Fleet Service Clerks
2008
Agents
2010
2009
2011
2011
2010
2009
2012
2012
40
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