AA loses $10.7 million in second quarter

[DallasConehead]

AA needs to file BK and be done with it !!!

This statement is laughable. This myth that we would do better in BK is ridiculous. Check with the people over at the BK carriers, see how their pension is, if you think PBGC will pay you 100%, your dreaming. See how their retiree medical is, if they ever get to retire at all. The fact is, BK carriers shed alot of costs, including OH facilities through contact gutting and pensions. AA cash is nearly all borrowed. Do I think BK is in our future? I hope not, but the leadership here is prone to making decisions that don't make sense. I would think first before tipping over the apple cart.

 

[frontline]

I agree Conehead. These people who always talk so tough about letting AA go ahead and file, they don't know what they are talking about. The reality of the situation would be a lot worse than they imagine, for the reasons you stated.

I have worked too hard for too long to see part of my retirement thrown away on a stupid gamble by inept TWU leaders. Get us a raise, don't break the company doing it, and move forward. End of story.

 

[Bob Owens]

That $100k of extra revenue per employee you're so fond of talking about doesn't really exist. Increased fuel prices since 2003 absorbed most of it and the remainder was absorbed by the huge net loss of 2003 - on a per employee basis, there isn't any of that mythical $100k per employee to spend on anything.

Wrong , it does exist and its right there on those 10Ks you are so fond of. You are talking about profits, not revenue, AMR is bringing in over $100k more REVENUE per year per employee than they were before we took the concessions, I'm suprised at you!

These are off the 10K.

Revenue Employees
2001 18969 12900
2002 17420 10960
2003 17440 9640
2004 18645 9210
2005 20712 8840
2006 22563 8660
2007 22935 8550
2008 23766 8410
2009 19917 7890

Revenue in millions
Employee in tens

 

[Bob Owens]

This statement is laughable. This myth that we would do better in BK is ridiculous. Check with the people over at the BK carriers, see how their pension is, if you think PBGC will pay you 100%, your dreaming. See how their retiree medical is, if they ever get to retire at all. The fact is, BK carriers shed alot of costs, including OH facilities through contact gutting and pensions. AA cash is nearly all borrowed. Do I think BK is in our future? I hope not, but the leadership here is prone to making decisions that don't make sense. I would think first before tipping over the apple cart.

How many people out there owe more than they have in cash? At this moment I have exactly $23 cash, I owe a lot more than that so I guess you could say that $23 is borrowed.

If this TA goes through the only thing that we have that those who went BK dont have is a DB Pension (except CAL who went twice they have both a DB and 401K match) , and until we get there its just a promise, its at risk. Look at all the other promises AA has broken with the help of our union, you are the one thats dreaming if you think that one will be kept. My advice, put whatever you can in your 401K and focus on earning enough so you can put away enough.

Do I want AMR to file BK? No. Should I be willing to make sacrifices in order to try and prevent that? NO."Que Sera Sera". The fact is no matter what we do we have no control over whether or not AMR files so we should get as much out of this place while it exists.

If you want to help AA just do your job to the best of your ability. You gain no equity in the company by discounting your labor. You would do just as well burning your cash as agreeing to work for less.

 

[Birdman]

Do I want AMR to file BK? No. Should I be willing to make sacrifices in order to try and prevent that? NO."Que Sera Sera". The fact is no matter what we do we have no control over whether or not AMR files so we should get as much out of this place while it exists.

If you want to help AA just do your job to the best of your ability. You gain no equity in the company by discounting your labor. You would do just as well burning your cash as agreeing to work for less.

Right on! In 2001 we got a decent raise and for the next 2 years watched the compAAny mismanaged to near bankruptcy. They pushed the reset button in 2003. We should push reset to 2001.

 

[FrequentFlierCA]

How was AA mismanaged 2001-2003? Those were a couple of the worst years the airline industry has ever seen, with DL, NW, UA and US all going Chapter 11. The fact that AA didn't is indicative of several things, but mismanagement is not one them.

 

[Bob Owens]

Somehow AA managed to post a $10.7 million dollar loss.
They blamed it on higher fuel prices and labor costs.

OK, Fuel ate up $334 million of the extra $785 million they brought in YOY. Labor costs went up $16 million We haven't recieved raises in two years so we know where those increased labor costs didnt go. How much in bonuses were paid to the execs? $6.5 million, so lets say labor costs went up $9.5 million. Most likely all of that went to managemnt as well.

My guess is that maintenance labor costs went down based on the fact that we lost around 500 people off the headcount YOY.(A savings of $32.5 million) I believe that Title 1 is now around 9500.



They brought in $785 more this year than last but fuel ate up $334 million, (785-335=451)
So after fuel and labor and Exec Bonuses they still had $435 more to play with than last year.

Last year they lost $319 million, (435-319=116).

That left $116,000,001 that the company had to burn off in order to show a loss. They burnt off $126.7 million.Where did it go?

Here's some of the things that went up

Net Debt went down but interest expense went up- by $65 million- 18.4% increase
The banks are loving AMR!

"Other" operating expenses went up by $34 million-5.9% increase
(They could have hid the $10.7 million there easlily enough.)

Aircraft Rentals (didnt the fleet shrink?) went up by $19 million- 14.9%

Maint M&R (winglets, new interiors etc)went up by $26 million-8.3%

Other Rentals and Landing fees went up by $14 million-3.9%

Commisions, Booking and Credit Card exp(there go them banks with their hand in the till again)- went up $41 million-19.5%, ok some of that reflects all the increased ticket sales and revenues handled by the credit card companies(ie Banks), the Banks are loving AMR!.

Thats $199 million in increases right there, but as you can see all these expenses went up but the company is only looking at labor costs, which for M&R went down and fuel.

As you can see the banks are seeing huge increases through Interest payments, up 18.4%, Aircraft rentals up 14.9%, , and Credit Card Fees, up 19.5%. All double digit increases yet the airline is only crying about labor! If those costs were flat AA would have showed a $125 million dollar profit!!

Like I've said many times before, dont worry about profits and losses, if the people that own AMR (the Banks) give our executives bonuses for losing money why should you worry and accept less? Anything you give up will simply go back to the Banks, either through higher Lease payments, interest payments, Credit card fees you name it, no matter how much of a loss they show the banks are still loving AMR and laughing every time we accept concessions in order to save AMR!

 

[Bob Owens]

How was AA mismanaged 2001-2003? Those were a couple of the worst years the airline industry has ever seen, with DL, NW, UA and US all going Chapter 11. The fact that AA didn't is indicative of several things, but mismanagement is not one them.

Are you serious? Our headcount was at its highest point ever during that period. Our Local was up to around 1200 members(now we are just over 800). There were so many people here that there was ZERO OT. If you are not paying any OT then you have too many people on payroll.

Thats just one example of AA poor management.

 

[1AA]

Any pay raise we get if this T/A passes will go to higher taxes, higher medical premiums and co pays, so what are we really getting in real money? But not to worry because AA does not worry even after posting a loss they still reward themselves. Its all on paper. All the other carriers made money but AMR lost money. Something is not right here. Maybe the next quarter will show improvement. I hope so because I am tired of hearing the doom and gloom from AMR and our union.

 

[The Goose]

Are you serious? Our headcount was at its highest point ever during that period. Our Local was up to around 1200 members(now we are just over 800). There were so many people here that there was ZERO OT. If you are not paying any OT then you have too many people on payroll.

Thats just one example of AA poor management.

Bob:

That was the buildup to the present "Concessions for Jobs" problem/program we now have.

With the TWU's assistance, the company's spends no more than "X" amount on labor and has more than enough personnel to handle any given need, and the employment kept artificially high (necessitating lower wages and benefits) in order to funnel more dues to the Totally Worthless Union.

... a, let's not forget for a second the numbers under the heading of "Labor Cost" also includes the useless executives' pay and perks.

I cannot speak for the line, but re: Overhaul (bases), 30-50% of the personnel could go away and those left could put out the same amount of work IF they'd simply do what they're supposed to do for 5 or 6 hours per day. Unless one is outside in the Okiehoma heat, nobody breaks a sweat over this..

Once upon a time, unions realized the contracts they had cut both ways. This has long been forgotten at American and that's where our pay and benefits went.

I've said the above numerous times but now that there's a new kid on the block (AMP) let's hope those who are elected to office (assuming AMP becomes our new bargaining agent) are given enough insight by themembership to see and correct the problem.

 

[OgieJFK]

Bob, didn't AA lose money on how they hedged for fuel the last two quarters? I thought I read AA paid $92 and it was at $79 at the time I read it. I wonder if we hired another XXX amount of management to fix the problem.