AA and APFA expidite talks

[FrequentFlierCA]

We will be presented with something that apparently gives us a $4-$5/hr raise with some "changes" to work rules. By the time the company jacks up the insurance premiums, etc., I doubt that next January we will even notice that a "raise" was given in July.

Productivity is the name of the game now, so I would expect any increase in compensation to be coupled with increases in productivity; that's where the work rule changes will come in. Not much else they can do from where I'm sitting. I'd be the first to support you if AMR were raking in the billions, but again, that's not where you are.

If my employer was losing money this fast and offered me a stable to small increase for a short duration contract, I'd take it.

 

[AMFAMAN]

Productivity is the name of the game now, so I would expect any increase in compensation to be coupled with increases in productivity; that's where the work rule changes will come in.

Productivity on the maintenance side of the airline is up 37% since the 2003 concessions, and all the company offered us was more concessions and a grocery check. <_<

 

[jimntx]

Productivity is the name of the game now, so I would expect any increase in compensation to be coupled with increases in productivity; that's where the work rule changes will come in. Not much else they can do from where I'm sitting. I'd be the first to support you if AMR were raking in the billions, but again, that's not where you are.

If my employer was losing money this fast and offered me a stable to small increase for a short duration contract, I'd take it.

Thank you so very much for your input. Of course, if AMR's managment had done the ethical, "classy" thing, a la the CEO and President of CO, and foregone any bonusses and salary for the rest of the year, I might be a little more concerned about the company's well-being. However, since Arpey and company had the supreme bad taste to accept a round of bonusses the same day they announced a $328 million loss for the 1st quarter, I hope you will understand that I am currently underwhelmed with my concern for the company.

And, before you launch into a Business 101 lecture about retaining good help, let me say I worked for over 20 years in the Oil Industry/Information Technology field. AMR executives are amateurs at awarding themselves bonusses compared to the Oil company executives. The Difference: the oil companies were (and are) making money hand over fist.

And, since the "new" executive bonus plan is a carbon copy of the last one...i.e., bonusses are tied to stock performance as compared to certain other airlines, not on actual stock performance or on anything weird like COMPANY PROFITS...please excuse my lack of concern.

 

[Boomer]

Agree. While I don't advocate further concessions, I'm surprised that any employees actually think that concession restoration is within the realm of possible outcomes right now. I'm a little surprised that the TWU was offered small signing bonuses and not further paycuts. Same with the FAs.

Realistically (at least IMO), concession restoration wouldn't be offered if AMR were on track to make profits of half a billion this year, let alone now that it's on target to lose perhaps $2 billion or more.

I'm stunned at just how out of touch so many people are. AMR is likely staring down the barrel of a Ch 11 filing within a year, and this one won't be optional - no amount of employee concessions will prevent it. I know lots of employees say with swagger - "bring it on" but I'm also certain that Ch 11 will be an eye-opener to the "I'm voting no if I don't get it all back now" crowd.

FWAA,

If AA were to abstain from BK for the next twelve months while the basket of carriers against which the FURP Babies were based filed BK what would be the outcome?

Since we all know that AMR is allowed to ground, furlough or abandon what they choose: what would stop AMR from consolidating over the next year into a footprint that yields dissproportionate FURP yields shortly before they bail?

The least we can do is demand what they are granted and continue the negotiations process towards NMB release: bankruptcy will remove the FURP payout and force AMR Execs to show the job offers that allow SERP payouts.

 

[wingit88]

Agree. While I don't advocate further concessions, I'm surprised that any employees actually think that concession restoration is within the realm of possible outcomes right now. I'm a little surprised that the TWU was offered small signing bonuses and not further paycuts. Same with the FAs.

Realistically (at least IMO), concession restoration wouldn't be offered if AMR were on track to make profits of half a billion this year, let alone now that it's on target to lose perhaps $2 billion or more.

I'm stunned at just how out of touch so many people are. AMR is likely staring down the barrel of a Ch 11 filing within a year, and this one won't be optional - no amount of employee concessions will prevent it. I know lots of employees say with swagger - "bring it on" but I'm also certain that Ch 11 will be an eye-opener to the "I'm voting no if I don't get it all back now" crowd.

Couldn't agree with you more. Personally, I have no desire to experience Chapter 11. There is no feesible way to get back what we gave up right now, so I am choosing to accept this fact and move on. Although the offer put out there wasn't especially lucrative, it was at least something instead of further slashing our pay. Our frustrations with the company run deep, but I am afraid they will become intolerable if we are faced with a BK outcome. I don't view this as being a wuss, just as being realistic.

 

[Flyboy4u]

Nobody wants to experience Bankruptcy of any kind, however, that being said AMR's mistake was not filing when the timing/Laws were right...Instead, AA decided to do the "correct and honest" thing, and try to avoid such a filing ( At the expense of the workforce )....As we all know, some of us knew prior to BK laws changing, that companies could use these laws as a pure business tatic, file bankruptcy, relieve themselves of much debt, and then emerge free and clear ready to do business....Let's face it TRUMP was the king of this, and he still is a sucess...Now things have changed..with the new laws it's not so easy to file, in fact, I would say AMR is not even close to being able to do so with the amount of cash on hand...You can bet though they will lead all unionized work groups to think otherwise with contracts up for negotiations. I would hope "ALL UNIONS" will not give up, and give in like they have in the past, but things seem to be going in favor of the company, and agianst the workforce again...Why is the APFA so eager to get a contract extension? Gas Prices? They (gas prices) have been going up since the day we gave concessions back in '03..Why didn't we hedge fuel then, when we had the chance? To pay bonus checks to the Execs? Stop this crap... Lets Stand up for what's right. As a wise pilot once said to me...AMR will have to get through 3 unions this next year an that will be almost impossible to do...Well Mr. Pilot...They seem to be doing it with snap, quick contract extensions.

 

[FWAAA]

Nobody wants to experience Bankruptcy of any kind, however, that being said AMR's mistake was not filing when the timing/Laws were right...Instead, AA decided to do the "correct and honest" thing, and try to avoid such a filing ( At the expense of the workforce )....

AA's labor costs are still the highest in the industry (per ASM), so how do you claim that AMR's avoidance of Ch 11 was "at the expense of the workforce?" Your Ch 11 paycuts would have been at least as large if not larger.

As we all know, some of us knew prior to BK laws changing, that companies could use these laws as a pure business tatic, file bankruptcy, relieve themselves of much debt, and then emerge free and clear ready to do business....Let's face it TRUMP was the king of this, and he still is a sucess...

Ch 11 can still be used to relieve debtors of debt. Nothing's changed on that front.

Now things have changed..with the new laws it's not so easy to file, in fact, I would say AMR is not even close to being able to do so with the amount of cash on hand...

You're mistaken. Filing is just as easy as ever. Same petition and same schedules. You and others make too big a deal out of the October 2005 changes to Ch 11.

You're completely mistaken that AMR could not file because of its cash balance. Nothing in the US Bankruptcy Code limits bankruptcy to someone who's run out of cash. Besides, by the end of 2008, AMR's cash balance will be much smaller than today with jetA running over $4/gal.

You aren't a bankruptcy lawyer, and it shows.

You can bet though they will lead all unionized work groups to think otherwise with contracts up for negotiations. I would hope "ALL UNIONS" will not give up, and give in like they have in the past, but things seem to be going in favor of the company, and agianst the workforce again...Why is the APFA so eager to get a contract extension? Gas Prices? They (gas prices) have been going up since the day we gave concessions back in '03..

As I posted before, this time AMR won't threaten bankruptcy - if it comes to it, AMR will simply file. Reason? Concessions won't save AMR from this crisis. If AMR cut wages and salaries by half tomorrow, AMR would likely still post a net loss for 2008 and 2009. Yes, it's that bad. I wouldn't worry about concession demands until after the bankruptcy filing.

Why didn't we hedge fuel then, when we had the chance?

Actually, AMR was hedged in 2003 but had to liquidate its positions to raise cash and because it had neither the free cash nor the good credit rating to continue its long-standing hedging program.

After the concessions were imposed, AMR resumed its hedging. Since then, AMR has been as well hedged as any other legacy airline, none of which gambled as well as Southwest. Since you knew gas was going to almost $5/gal, I assume you made millions betting on the gasoline futures market.

Oil had fallen to under $50/bbl in January, 2007, when the AMR stock hit its high of $41/share. Did you put your money where your mouth is and successfully bet that oil would be almost $140/bbl this week? No? Why not? Everyone knew it was coming, right?

 

[eolesen]

Jim, while the "gesture" by CO's management is to be commended, make no mistake that it is a piece of theatre. CO's pilots aren't nearly as impressed by it as many of y'all seem to be. I can only imagine if Arpey, Garton, etc. were to forgoe their salary for the rest of the year, Lloyd Hill would be standing outside Centerport asking for all of that money to be distributed amongst his membership and to hell with the rest of AMR....


FWAAA, I caught a lot of flack for predicting bankruptcy at $100 oil. I still see it happening as well. Fuel now accounts for 40% of AMR's cost structure, and has replaced labor as the largest expense line item. I fully agree concessions won't make a dent. AMR needed the flexibility to change their business model five years ago, and unfortunately, the unions stayed stuck in a time machine, preferring to hold on tight to workrules built around a business model that came out of a regulated environment.

 

[frontline]

Productivity on the maintenance side of the airline is up 37% since the 2003 concessions, and all the company offered us was more concessions and a grocery check. <_<

Damn right, we created a whole new revenue center for them!

 

[FrequentFlierCA]

Productivity on the maintenance side of the airline is up 37% since the 2003 concessions, and all the company offered us was more concessions and a grocery check. <_<

No argument here. You guys have done some amazing stuff on that front in the last five years, and should be rewarded for it.

 

[jimntx]

Jim, while the "gesture" by CO's management is to be commended, make no mistake that it is a piece of theatre. CO's pilots aren't nearly as impressed by it as many of y'all seem to be. I can only imagine if Arpey, Garton, etc. were to forgoe their salary for the rest of the year, Lloyd Hill would be standing outside Centerport asking for all of that money to be distributed amongst his membership and to hell with the rest of AMR....

Of course, it is just a gesture, though I think it rather condescending of you to characterize it as theater. Whether or not the gentlemen are already millionaires does not diminish the gesture. It was a noble thing to do regardless of whether it affects their financial situation at all. Particularly, when compared to the outrageous behavior of Arpey,et al in accepting bonusses while announcing a major loss on the same day, and following that up with announcements of cutbacks in staff and equipment.

As far as those you use to underpin your statements, I think the operative word is pilots. I notice that you did not note anyone else as being underwhelmed by the "theater."

 

[eolesen]

It's still theatre, Jim. They're posturing to make it harder for the pilots to pull the executive compensation card during negotiations....

 

[AMFAMAN]

No argument here. You guys have done some amazing stuff on that front in the last five years, and should be rewarded for it.

Okay, then I don't think it's much to ask for from the maintenance side for a respectable contract. We have given this company around $1 billion in revenue, and if they had a clue on how to manage an MRO, an unlimited source of revenue. Not to mention again the 37% increase in productivity. Now maybe you can understand that from a mechanic's standpoint, the extension was a slap in the face for all that has been done to date. <_<

 

[FWAAA]

FWAA,

If AA were to abstain from BK for the next twelve months while the basket of carriers against which the FURP Babies were based filed BK what would be the outcome?

I'm not certain, but I assume that the PSP plans would again payout if the peer group files for bankruptcy protection while AA avoids cancelling its stock. AMR would thus outperform the peer group. Even though that makes some of you livid, the shareholders kinda like avoiding Ch 11 if that's possible.

 

[nbmcg01]

I'm not certain, but I assume that the PSP plans would again payout if the peer group files for bankruptcy protection while AA avoids cancelling its stock. AMR would thus outperform the peer group. Even though that makes some of you livid, the shareholders kinda like avoiding Ch 11 if that's possible.

One must remember that filing for BK does not mean contracts are abrogated. IF AA filed, my guess it would be a "pre-pac" with all financing issues, contracts, and vendor agreements already settled. AA (from my armchair) does not want anyone else to have control of "the books".

Whether CALs executive's gesture is theatre or not, there lends a certain amount of credibility to asking the rank and file for "shared sacrifice" when the big brass isn't raking in millions. I think a list of those receiving the bonus compensation should be released as there are many rumors and misinformation (or speculation) about the recipients.

I would guess that the pension issue is high on the list. Freeze current and move to an age weighted 401K with all new employees only being offered the 401K.