John Sindreu

speaker

195 appearances 4 recordings 1 series first heard Feb 2018 last heard Mar 2019

John Sindreu’s voice in public audio — every appearance, attributed to the second.

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WSJ Your Money Briefing · Investor Interest in American Airlines Won't Take Off · 29 Oct 2018 podcast

which is that they've been collecting a lot of revenues from business and premium cabin.

In sort of the airline business model, in the end, business sort of cabins are what create the bigger margins, right?

You don't get that much extra space, but because you're sort of segmenting for people that often travel on a company budget, they pay more money just for a few more luxuries.

So this is like, if airlines could fill the whole plane with just, you know, the business cabin,

cabin, they would do that.

But unfortunately, there isn't normally enough demand.

But all three major US carriers have been seeing this demand go up.

The difference being that Delta and United as well, they've sort of developed very agile ways for people to quickly upgrade between the time that they've bought the ticket and the time they're checking in.

And they've sort of been seeing a lot of, you know, good revenue growth there.

And for example, Delta

you know, has been cashing in very handsomely on having a mobile app that does that.

Whereas Americans still, again, like, you know, their CEO was telling analysts the other day that, well, you know, they're aware that they have this issue, but, you know, they have a lot of things to solve from their merger in 2013.

They haven't gone around to it and they don't really have the infrastructure or the logistics or the software to do this yet to the same extent.

So again, it doesn't mean that this company is a bad company, but what we try and argue a little bit in the column is that just because the stock has fallen a lot does not mean that it is necessarily much better value than the other companies that not only have this room to maneuver if things go wrong because maybe a downturn is around the corner and we don't realize and these companies just have less debt than American does,

But also, the immediate future, if the American economy continues to do well, is brighter precisely because they've already got in place the way to profit from this more exuberant economy and people upgrading to premium seats.

Well, absolutely.

But, you know, also big boats are harder to turn, or in this case, big airplanes are harder to turn.

And, you know, I think that the real issue that sort of has caught their logistics a bit off guard has been the emergence of like these third party, you know, websites and businesses that sort of sell you tickets online.

And what they don't have is sort of a way to directly link that to you as a customer being able to do these upgrades between the time of purchasing the ticket and the check-in, which is the moment where you might be feeling, oh, I'm a bit tired from work and I've got to do this trip.

Why not?

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