460 jets ordered

[WorldTraveler]

too bad the members of this forum can't vote down the articles that are posted here saying the same things I do...
but it does validate what I am saying when other industry analysts are now saying what I have been saying for quite some time... and apparently I'm not the only one who seems to think it is appropriate to compare AMR's results to its largest network carrier peers, esp. since AA, DL, and UA have all worn the "world's largest airline" monikor at some point over the past couple of decades.

 

[odie01]

I guess the 3 x 5 postcard we received in the mail touting the largest aircraft order and greenest fleet in history, is false advertising. Did the pilots have to go through their international to get such contract language approved? Let's hope their's a secret letter of agreement burried in our little blue book of forbidden knowledge,that states we will do the maintenance on this historic fantacy order of stealth airplanes.

 

[Hackman]

too bad the members of this forum can't vote down the articles that are posted here saying the same things I do...
but it does validate what I am saying when other industry analysts are now saying what I have been saying for quite some time... and apparently I'm not the only one who seems to think it is appropriate to compare AMR's results to its largest network carrier peers, esp. since AA, DL, and UA have all worn the "world's largest airline" monikor at some point over the past couple of decades.

What arrogance. The same things you say? Why is it just what you say? It's all about what one chooses to read, and I'd rather read articles produced by reputable published analysts (who still are full of it) instead of big-headed douche-bags like yourself that continuously pat themselves on the back.

I vote to keep you over on the Deltoid board where you belong, where you can sing your praise only for The Deltoid Mothership to your hearts content.

The truth that goes well beyond the press release..... The Whole truth always comes out.... What an a$$..

 

[Frank Szabo]

American Airlines Order Turns To Dismay
By Darren Shannon
Washington

The fanfare was loud and generated the desired attention, but now that the euphoria has subsided it is apparent that AMR Group’s deals with Airbus and Boeing to overhaul American Airlines’ narrowbody fleet are more wishful thinking than concrete achievement ... snip

Ain't it the truth. Evidently, the BOD thinks their golden boy can cajole the pilots into flying without a contract or type agreement. I'm sure the pilots would be happy to provide AA with such an agreement if they felt the company was trustworthy but alas - trust is in rather short supply these days and the price of said trust will be at a great premium for the rank and file all union groups.

Byhaps if the different union admin groups (the peers of the twu's "international") started spreading bankruptcy threats/rumors ...

 

[Hopeful]

Ain't it the truth. Evidently, the BOD thinks their golden boy can cajole the pilots into flying without a contract or type agreement. I'm sure the pilots would be happy to provide AA with such an agreement if they felt the company was trustworthy but alas - trust is in rather short supply these days and the price of said trust will be at a great premium for the rank and file all union groups.

Byhaps if the different union admin groups (the peers of the twu's "international") started spreading bankruptcy threats/rumors ...

Who's to say that the pilots are NOT close to an agreement regarding a new fleet? Been chattting with a few pilots here and there and their responses were divided between being tight lipped and being open by stating the company wants them to fly more hours. None of the pilots I spoke to had a problem with flying mores hours at increased rates.

 

[WorldTraveler]

of course the pilots will fly more for more money... but the reality is that AA needs labor contracts that deliver more productivity - in other words more flying for proportionately less money....

What arrogance. The same things you say? Why is it just what you say? It's all about what one chooses to read, and I'd rather read articles produced by reputable published analysts (who still are full of it) instead of big-headed douche-bags like yourself that continuously pat themselves on the back.

I vote to keep you over on the Deltoid board where you belong, where you can sing your praise only for The Deltoid Mothership to your hearts content.

The truth that goes well beyond the press release..... The Whole truth always comes out.... What an a$$..

You know, I’ve been listening to this “you’re not really an expert” because you won’t reveal your credentials” line for years now… but it hasn’t changed the fact that I have demonstrated for years that I know what drives the airline industry. The truth is the truth regardless of how inconvenient it is to hear or who says it.
I don’t pretend that I am the only one that "get it" – there clearly are people that have a great deal of understanding as well… but we all see it from our own perspectives and with our own biases – so ultimately it comes down to who can strip away their biases enough to get to the truth of the industry.
The journalists and industry experts have also weighed in on many occasions over the past 8 years or so that I have participated in airline discussion forums – but I take justifiable pride that I have identified a number of key issues and trends long before other supposed experts weighed in, only to have them write on the same issues later on…..
Most recently, and with respect to AA, I have been writing for over a year as each quarter’s financial results come out that
AA has a revenue problem that is far bigger than the labor issue that so many believe to be key– because AMR mgmt wants them to believe that is the root of AA’s problems. Sure enough there have been a number of “expert” articles about AA’s revenue issue using statistics that some would just as soon not look at – even if they are the benchmark that everyone who understands the business uses as the basis for performance
AA mgmt has touted for years that they didn’t need to merge – and yet the evidence is growing – and I have said it for years – that size DOES matter – and we are now seeing that AA can’t and won’t cut capacity to the degree that others are despite rising costs and soft demand – and AA’s performance reflects it. The “experts” are now recognizing that AA might be in a strategic corner now and really can’t compete with the likes of DL and UA and their respective alliances which are larger than AA – and both continue to chip away at the historic corporate revenue which has been a key part of AA’s business model.
While there were a whole lot more people here who could see past the excitement of new airplane orders - 773ERs and now the narrowbody orders – people like me quickly pointed out that new airplanes don’t solve the strategic issues that AA has and until they are solved, AA’s future is even more precarious than before because now they go from huge to enormous levels of debt.
No, arrogance is having had to listen to AA fans tout AA’s moral superiority in not filing for BK while they have simultaneously and repeatedly mocked other airlines who clearly did understand what needed to be done to turn their companies around and did it anyway –and are now positioned to survive if not thrive in the rough and tumble environment that is today’s airline industry. Meanwhile, AA has been on a long and steady downward decline....
You see these conversations are between people – using airlines as the point of reference for the discussion. My beef is not with American Airlines and I surely wish them no harm – I have repeatedly said that my brother works for them.
But some of those people who didn’t hesitate to trash every other airline while telling us who “righteous” they are might want to find out what condiments you use with humble pie… because the airline industry is at an inflection point and there will be losers. Those who were so certain of their own positions and the failure of others might be in for a rude awakening.
And while there have clearly been winners and losers in the industry with all kinds of fans, the AA company fan club has been some of the most arrogant on the web. Maybe this period of difficulty that AA is passing through will bring those folks back to the earth where the rest of us live. And for those people – interestingly here mostly labor supporters – who can see the company for what it is – I can only wish them the very best in the very uncertain ride that is ahead of them.
Other companies have gone through difficulties and their fans and employees have survived, albeit with scars - and most see the world far more circumspectly now.

Ain't it the truth. Evidently, the BOD thinks their golden boy can cajole the pilots into flying without a contract or type agreement. I'm sure the pilots would be happy to provide AA with such an agreement if they felt the company was trustworthy but alas - trust is in rather short supply these days and the price of said trust will be at a great premium for the rank and file all union groups.

Byhaps if the different union admin groups (the peers of the twu's "international") started spreading bankruptcy threats/rumors ...

careful, Frank. The union could get in serious hot water by spreading rumors that could materially affect the company... don't go there - it's not worth it. Besides Wall Street analysts will make all the comments necessary and they can do it based on actual data.....

but it should be noted that WN just reported their financial results and their domestic RASM growth for the quarter was one of the worst in the industry - AA and every other network carrier did far better on their domestic systems.
WN says they will be cutting capacity and for the first time in decades may not be growing for a while... Arpey was right in that some of AA's competitors would have their own financial performance issues that would alleviate some of the pressure on AA. that is true about some airlines....and slowing WN down is certainly good news for AA.

 

[Hopeful]

of course the pilots will fly more for more money... but the reality is that AA needs labor contracts that deliver more productivity - in other words more flying for proportionately less money....

[quote/]

So the pilots should give the company 10 hours more a month for FREE?

How about the executives give back a week or two pay a year to help the company out....?

Oh, I forgot, they're getting ready to lose their homes because AA's stock is near toilet value.

 

[fltguymk]

http://finance.yahoo.com/news/American-Airlines-order-deal-theflyonthewall-3247437535.html?x=0&.v=1

The deal is not done yet!

 

[Buck]

of course the pilots will fly more for more money... but the reality is that AA needs labor contracts that deliver more productivity - in other words more flying for proportionately less money....


You know, I’ve been listening to this “you’re not really an expert” because you won’t reveal your credentials” line for years now… but it hasn’t changed the fact that I have demonstrated for years that I know what drives the airline industry. The truth is the truth regardless of how inconvenient it is to hear or who says it.
I don’t pretend that I am the only one that "get it" – there clearly are people that have a great deal of understanding as well… but we all see it from our own perspectives and with our own biases – so ultimately it comes down to who can strip away their biases enough to get to the truth of the industry.
The journalists and industry experts have also weighed in on many occasions over the past 8 years or so that I have participated in airline discussion forums – but I take justifiable pride that I have identified a number of key issues and trends long before other supposed experts weighed in, only to have them write on the same issues later on…..
Most recently, and with respect to AA, I have been writing for over a year as each quarter’s financial results come out that
AA has a revenue problem that is far bigger than the labor issue that so many believe to be key– because AMR mgmt wants them to believe that is the root of AA’s problems. Sure enough there have been a number of “expert” articles about AA’s revenue issue using statistics that some would just as soon not look at – even if they are the benchmark that everyone who understands the business uses as the basis for performance
AA mgmt has touted for years that they didn’t need to merge – and yet the evidence is growing – and I have said it for years – that size DOES matter – and we are now seeing that AA can’t and won’t cut capacity to the degree that others are despite rising costs and soft demand – and AA’s performance reflects it. The “experts” are now recognizing that AA might be in a strategic corner now and really can’t compete with the likes of DL and UA and their respective alliances which are larger than AA – and both continue to chip away at the historic corporate revenue which has been a key part of AA’s business model.
While there were a whole lot more people here who could see past the excitement of new airplane orders - 773ERs and now the narrowbody orders – people like me quickly pointed out that new airplanes don’t solve the strategic issues that AA has and until they are solved, AA’s future is even more precarious than before because now they go from huge to enormous levels of debt.
No, arrogance is having had to listen to AA fans tout AA’s moral superiority in not filing for BK while they have simultaneously and repeatedly mocked other airlines who clearly did understand what needed to be done to turn their companies around and did it anyway –and are now positioned to survive if not thrive in the rough and tumble environment that is today’s airline industry. Meanwhile, AA has been on a long and steady downward decline....
You see these conversations are between people – using airlines as the point of reference for the discussion. My beef is not with American Airlines and I surely wish them no harm – I have repeatedly said that my brother works for them.
But some of those people who didn’t hesitate to trash every other airline while telling us who “righteous” they are might want to find out what condiments you use with humble pie… because the airline industry is at an inflection point and there will be losers. Those who were so certain of their own positions and the failure of others might be in for a rude awakening.
And while there have clearly been winners and losers in the industry with all kinds of fans, the AA company fan club has been some of the most arrogant on the web. Maybe this period of difficulty that AA is passing through will bring those folks back to the earth where the rest of us live. And for those people – interestingly here mostly labor supporters – who can see the company for what it is – I can only wish them the very best in the very uncertain ride that is ahead of them.
Other companies have gone through difficulties and their fans and employees have survived, albeit with scars - and most see the world far more circumspectly now.




careful, Frank. The union could get in serious hot water by spreading rumors that could materially affect the company... don't go there - it's not worth it. Besides Wall Street analysts will make all the comments necessary and they can do it based on actual data.....

but it should be noted that WN just reported their financial results and their domestic RASM growth for the quarter was one of the worst in the industry - AA and every other network carrier did far better on their domestic systems.
WN says they will be cutting capacity and for the first time in decades may not be growing for a while... Arpey was right in that some of AA's competitors would have their own financial performance issues that would alleviate some of the pressure on AA. that is true about some airlines....and slowing WN down is certainly good news for AA.

Right or Wrong, you World Traveler should write a book about the airline industry. Oh wait a minute you already have, here on this forum...

 

[FWAAA]

So the pilots should give the company 10 hours more a month for FREE?

WT didn't say that, and I don't think the company has proposed it, either. And I'm no apologist for WT.

If pilots and FAs agree to more contract flexibility that permits AA to schedule them to work more hours, AA could agree to a modest raise of their hourly pay (for all their hours) and still get a cost-neutral contract. How? Fewer bodies getting the expensive benefits (medical and retirement). AA could divide those savings among the remaining employees (giving them higher pay, presumably making them happier) and not increase its costs dramatically.

And, of course, if AA outsourced more maintenance work (perhaps to $2 - $5/hr overhaul employees in SAL), AA could certainly afford to pay the remaining mechanics wages that more closely resemble those at UPS, WN and FedEx. That would make a lot of people happy (AMTs in NYC, MIA, LAX, CHI, BOS and others) and would make a lot of people very, very angry (especially workers in Tulsa).

 

[Frank Szabo]

careful, Frank. The union could get in serious hot water by spreading rumors that could materially affect the company... don't go there - it's not worth it. Besides Wall Street analysts will make all the comments necessary and they can do it based on actual data.....



(my previous comment)

Ain't it the truth. Evidently, the BOD thinks their golden boy can cajole the pilots into flying without a contract or type agreement. I'm sure the pilots would be happy to provide AA with such an agreement if they felt the company was trustworthy but alas - trust is in rather short supply these days and the price of said trust will be at a great premium for the rank and file all union groups.

Byhaps if the different union admin groups (the peers of the twu's "international") started spreading bankruptcy threats/rumors ...

What are you talking about? Kindly note the rather generous use of the two letter word "IF".

IF my interest were in spreading rumors, I certainly wouldn't bother doing so on this piddling board.

The twu is already in enough "hot water" (bedding down with the company while collecting dues from its membership) if someone would simply take them to task (and court) over it. It's called DFR.

 

[Buck]

WT didn't say that, and I don't think the company has proposed it, either. And I'm no apologist for WT.

If pilots and FAs agree to more contract flexibility that permits AA to schedule them to work more hours, AA could agree to a modest raise of their hourly pay (for all their hours) and still get a cost-neutral contract. How? Fewer bodies getting the expensive benefits (medical and retirement). AA could divide those savings among the remaining employees (giving them higher pay, presumably making them happier) and not increase its costs dramatically.

And, of course, if AA outsourced more maintenance work (perhaps to $2 - $5/hr overhaul employees in SAL), AA could certainly afford to pay the remaining mechanics wages that more closely resemble those at UPS, WN and FedEx. That would make a lot of people happy (AMTs in NYC, MIA, LAX, CHI, BOS and others) and would make a lot of people very, very angry (especially workers in Tulsa).

And, of course, if AA outsourced more maintenance work (perhaps to $2 - $5/hr overhaul employees in SAL), AA could certainly afford to pay the remaining mechanics wages that more closely resemble those at UPS, WN and FedEx. That would make a lot of people happy (AMTs in NYC, MIA, LAX, CHI, BOS and others) and would make a lot of people very, very angry (especially workers in Tulsa).

It is not just $2 - $5/hr. it is also getting there and back. With fuel at the level it has been, there is more cost to the whole issue. I am for the disparity of the line maintenance wage to that in OH. However the company and it's twin, the TWU are going to come to some kind of agreement as to how many aircraft would go to SAL and the wage difference between the line and OH. I believe that the current T/A has an economic scale which places TULE at zero economically and places like NYC, MIA, LAX, CHI, BOS on a scale based on government disparities for the costs of living in these locations. They main issue is that the TWU and the company are going to have to do whatever it takes to keep the TWU on the property or things could change. As for line premiums, I believe that the line mechanic should receive a small amount to cover the conditions they work in. Although while the line works in adverse weather year around, OH continues to work in the heat of Okla. and TX. So again, the line needs a premium, but not at the cost of preventing a contract. As for Tulsa, they make up most of the mechanic and related and are believers of slogans and T-shirts. What I do not understand, is why the TWU has not cut the throats of those who have yet to be hired or a new "B-scale".

 

[Frank Szabo]

... snip

What I do not understand, is why the TWU has not cut the throats of those who have yet to be hired or a new "B-scale".

One has to get them hired then hose them as many of the "yet to be hired" wouldn't consider AA in the first place were the twu and company honest with them. Give 'em a chance to work their "magic".

I'm curious as to the level/quality of mechanic the company is "finding many of" that would consider going to school for their tickets then settling for far less, holiday and vacation-wise, than is available in most other industries. Except for the nearly non-existant/supposed "flight benefits", even Quick Trip has AA beat all to hell after putting in some time with the company.

Would you say what WAS taught in MBA/CPA school IS working for the company?

Where else can one get to see this level of entertainment on a daily basis and get paid to watch it? Even Las Vegas ain't got nothin' like this.

 

[FWAAA]

It is not just $2 - $5/hr. it is also getting there and back. With fuel at the level it has been, there is more cost to the whole issue.

I agree, fuel costs to ferry airplanes is an issue, but wage savings can more than pay that extra expense.

AA says a narrowbody heavy C check happens every 5-6 years and takes 20,000 to 30,000 man-hours to accomplish.

Assuming that the Salvadoran hack-shop employees take twice as long as the skilled AA AMTs, the fact that they work for next to nothing covers that cost as well. WN manages to ferry some planes to SAL for overhaul and WN doesn't even serve SAL - AA serves SAL and can route its narrowbodies there the same way it routes planes to TUL. Heavy C checks are rare but expensive events, which is completely different than line maintenance.

I am for the disparity of the line maintenance wage to that in OH. However the company and it's twin, the TWU are going to come to some kind of agreement as to how many aircraft would go to SAL and the wage difference between the line and OH. I believe that the current T/A has an economic scale which places TULE at zero economically and places like NYC, MIA, LAX, CHI, BOS on a scale based on government disparities for the costs of living in these locations. They main issue is that the TWU and the company are going to have to do whatever it takes to keep the TWU on the property or things could change. As for line premiums, I believe that the line mechanic should receive a small amount to cover the conditions they work in. Although while the line works in adverse weather year around, OH continues to work in the heat of Okla. and TX. So again, the line needs a premium, but not at the cost of preventing a contract. As for Tulsa, they make up most of the mechanic and related and are believers of slogans and T-shirts. What I do not understand, is why the TWU has not cut the throats of those who have yet to be hired or a new "B-scale".

Good points. I liken line maintenance to buying milk for the kids. Milk is heavy and perishable, so it wouldn't matter if milk cost just $0.25/gal in SAL or another part of the world - I can't buy it halfway around the world and carry it home. Wouldn't matter to me if it were that cheap at a store 200 miles away - the gas costs would wipe out the savings of driving several hours to buy a few gallons every few days. Line maintenance is very similar - it has to be purchased where the planes are each day/night.

But heavy overhaul? That's akin to buying jewelry or electronic toys. Small and liight and I can buy it in China or anywhere else I'm traveling if I find a good deal (taking into account US customs duties/taxes/etc) because the workers make much less money (especially applicable to jewelry). AA flies its widebodies all over the world and just like UA/CO and DL/NW, some of those heavy overhauls could happen in HKG, SIN, PVG, etc.

AA flies its narrowbodies all over the northern half of the western hemisphere, and some of those places (like SAL) feature very low-paid workforces that, given enough time, can hack apart an airplane and put it back together again for lower total cost than the highly skilled AMTs in places like Tulsa, Fort Worth and, until recently, Kansas City. There's plenty of domestic shops that, given some lead time, could chop apart an AA narrowbody and reassemble it - like in Mobile, Alabama or Indy. And even though those guys make more money than the SAL employees, they are cheaper than paying AA employees anything like UPS or WN wages in Tulsa or Fort Worth to do the same work.

 

[Bob Owens]

I agree, fuel costs to ferry airplanes is an issue, but wage savings can more than pay that extra expense.

AA says a narrowbody heavy C check happens every 5-6 years and takes 20,000 to 30,000 man-hours to accomplish.

Assuming that the Salvadoran hack-shop employees take twice as long as the skilled AA AMTs, the fact that they work for next to nothing covers that cost as well. WN manages to ferry some planes to SAL for overhaul and WN doesn't even serve SAL - AA serves SAL and can route its narrowbodies there the same way it routes planes to TUL. Heavy C checks are rare but expensive events, which is completely different than line maintenance.



Good points. I liken line maintenance to buying milk for the kids. Milk is heavy and perishable, so it wouldn't matter if milk cost just $0.25/gal in SAL or another part of the world - I can't buy it halfway around the world and carry it home. Wouldn't matter to me if it were that cheap at a store 200 miles away - the gas costs would wipe out the savings of driving several hours to buy a few gallons every few days. Line maintenance is very similar - it has to be purchased where the planes are each day/night.

But heavy overhaul? That's akin to buying jewelry or electronic toys. Small and liight and I can buy it in China or anywhere else I'm traveling if I find a good deal (taking into account US customs duties/taxes/etc) because the workers make much less money (especially applicable to jewelry). AA flies its widebodies all over the world and just like UA/CO and DL/NW, some of those heavy overhauls could happen in HKG, SIN, PVG, etc.

AA flies its narrowbodies all over the northern half of the western hemisphere, and some of those places (like SAL) feature very low-paid workforces that, given enough time, can hack apart an airplane and put it back together again for lower total cost than the highly skilled AMTs in places like Tulsa, Fort Worth and, until recently, Kansas City. There's plenty of domestic shops that, given some lead time, could chop apart an AA narrowbody and reassemble it - like in Mobile, Alabama or Indy. And even though those guys make more money than the SAL employees, they are cheaper than paying AA employees anything like UPS or WN wages in Tulsa or Fort Worth to do the same work.

One question, why do foriegn carriers and competitors still send OH work to American carriers such as AA or Delta or UAL whenever they can? North American didnt pack up and send their Aircraft to El Salvador because they felt they could get it done cheaper, AA sent them packing because they had too much of our own work to do. Delta reportedly got into a bind with a European carrier after they tried to subcontract out a heavy check that carrier had contracted Delta to do, the carrier demanded that Delta mechanics do the work because thats what they were paying for. If all that cheap skilled labor is just sitting out there waiting for work on planes from the US why would foriegn carriers still send work into the US, still send work to AA, Delta and UAL?

Last time I checked more aviation work was still being sent into the US than sent out.

Another thing you leave out of your theory is capacity. How many more checks could those places do with the facilities and manpower available? And, since the majority of the growth is projected to be outside the US, especially Asia, who is to say that in a few years they dont do what AA and other American carriers have often done in the past and tell their 3P customers that they simply dont have the capability to continue to provide them service? You say there's plenty of places to do the work but I doubt that. Who would maintain capacity just for the sake of maintaining capacity? It's not nearly as easy to ramp up as you make it out to be, building the hangars is the easiest part, getting the skilled labor is where the challenge lies. Our skills are portable and this industry is still getting less and less attractive. It took NWA nearly two years at one of the most advantageous of times as far as having a surplus of mechanics, nearly every carrier had hundreds of mechanics on the street. Even then, the fact is NWA is now gone and they never did return to their former self before Delta took them over. That well is pretty much dry. The overwhelming majority of those who left are not coming back. Sure they can hire people with mechanical abilities that dont have an A&P and try and get them to work but the fact is those people, since they invested nothing, are even more likely to leave the industry, and of course the only way they are going to get them is to increase wages.

and some of those places (like SAL) feature very low-paid workforces that, given enough time, can hack apart an airplane and put it back together again for lower total cost than the highly skilled AMTs in places like Tulsa, Fort Worth and, until recently, Kansas City.

Sure but time is money as well, isnt it? An aircraft sitting on the ground continues to cost money.

One last thing, you keep comparing what chop shops both domestic and foreign pay their workers as if we have to meet that in order to be competative when in fact the more relevant figure is what do those shops charge per hour and how many hours do they get charged for? If the guy in Tulsa gets paid the UPS rate of $50/hr but can accomplish the task in one hour and the chop shop charges the book rate of three hours for the job and charges AA $150 then does it really matter that the guy in the chop shop is only getting $25/hr? Dont forget that I and many others have worked in those shops at one point or another and thats how it goes. Even if the job took one hour if the book says its a three hour job thats what the customer gets charged.