AA Management and Cargo Airlines

[Bob Owens]

About ATA
Founded in 1936, the Air Transport Association of America, Inc. (ATA) is the nation's oldest and largest airline trade association, representing the leading U.S. airlines. ATA airline members and their affiliates transport more than 90 percent of U.S. airline passenger and cargo traffic. Headquartered in Washington, D.C., the association's fundamental purpose is to foster a business and regulatory environment that ensures safe and secure air transportation and permits U.S. airlines to flourish, stimulating economic growth locally, nationally and internationally.

ATA Airline Members

ABX Air, Inc. (GB) Federal Express Corporation (FX)
AirTran Airways (FL) Hawaiian Airlines (HA)
Alaska Airlines, Inc. (AS) JetBlue Airways Corp. (B6)
American Airlines, Inc. (AA) Southwest Airlines Co. (WN)
ASTAR Air Cargo, Inc. (ER) United Airlines, Inc. (UA)
Atlas Air, Inc. (5Y) UPS Airlines (5X)
Continental Airlines, Inc. (CO) US Airways, Inc. (US)
Delta Air Lines, Inc. (DL)
Evergreen International Airlines, Inc. (EZ)


Well it seems that the spokesenitity for the entire industry considers Cargo airlines to be airlines as well as cargo airline executives. The only reason why AA and some others dont want us to bring UPS and Fed Ex into the mix is becasuse they now pay a lot more than AA does.

 

[MERV]

You can't compare operating cost because they don't carrier paxs that's different between them. You only can compare amount of skill labor to ours because they do same amount of work on jet A/C as we do. So we should get paid for at knowledge/skills we have. UPS had PAXs service for few year as a charter but got out. Only they know how much it cost to operate as a passenger carrier.

“Our passenger service was discontinued in 2001; our competitors were seating close to 200 people per aircraft. For us to remain competitive, we would have had to invest long-term in the venture. Instead, we decided to discontinue the service and focus on our core business of parcel delivery.â€￾ Said Spalding.

The UPS Way
http://www.airliners.net/aviation-articles/read.main?id=66

 

[eolesen]

There goes Bob, trying to pick and choose who is a peer and who isn't....

If you add in UPS and FDX, then you also need to factor in the rates paid to the guys at Evergreen, Atlas, and Astar... But since Evergreen also operates as a MRO, it would effectively wipe out whatever value you'd get from adding in UPS and FDX...

 

[Hopeful]

There goes Bob, trying to pick and choose who is a peer and who isn't....

If you add in UPS and FDX, then you also need to factor in the rates paid to the guys at Evergreen, Atlas, and Astar... But since Evergreen also operates as a MRO, it would effectively wipe out whatever value you'd get from adding in UPS and FDX...

Kind of like AA comparing executive compensation to those who pay more rather than less.

Bob is just playing the corporate game of justifying compensation!

 

[Bob Owens]

There goes Bob, trying to pick and choose who is a peer and who isn't....

Thats right, who should determine who my peers are, YOU?

Peer:a person who is equal to another in abilities, qualifications, age, background, and social status.

So I would be looking at mechanics who work on a full time basis with an average of at least 20 years working on heavy turbine aircraft for one of the top ten carriers.

If you add in UPS and FDX, then you also need to factor in the rates paid to the guys at Evergreen, Atlas, and Astar... But since Evergreen also operates as a MRO, it would effectively wipe out whatever value you'd get from adding in UPS and FDX...

No, I dont. I picked the 10 biggest carriers that operate heavy turbine aircraft that operate scheduled service and primarily employ mechanics on a full time basis. I dont think any of your carriers fit that definition.None of them are top ten. Top ten is pretty much the norm, probably because our whole system of math is based on ten, which could have to do with the fact we have 10 fingers and toes, maybe the guy who made up the list at AA and you only have eight fingers and toes so a list of eight makes more sense to you but I'll stick with the top ten.

 

[eolesen]

Whatever, Bob. I'm guessing the whole concept of different operating models as described in the other thread was lost on you as well.

 

[MCI transplant]

Whatever, Bob. I'm guessing the whole concept of different operating models as described in the other thread was lost on you as well.

<_< ------ I really shouldn't get in the middle of this,----- but, I believe Bob understands the difference in operating models. But what his point is is that an airplane is an airplane no matter if it's carrying cargo, or passengers. And those who maintain those airplanes do the same work, therefore should be compensated similarly!!!----- Seems like a simple, stright forward concept to me!!! :huh:

 

[BoeingBoy]

And those who maintain those airplanes do the same work, therefore should be compensated similarly!!!----- Seems like a simple, stright forward concept to me!!! :huh:

It is a simple concept. Problem is that companies are different - some can afford to pay more than others. AA could pay it's mechanics/pilots/etc the same as UPS or FedEx but would be in bankruptcy pretty quickly. Without looking it up again, I think UPS paid it's employees about $5 billion more than AA had total revenue last year. AA definitely wouldn't last long with multi-billion dollar losses every year, while UPS has the revenue to pay that much and still make a few billion in profits.

Jim

 

[BoeingBoy]

It is a simple concept. Problem is that it runs headlong into the fact that companies are different - some can afford to pay more than others. AA could pay it's mechanics/pilots/etc the same as UPS or FedEx but would be in bankruptcy pretty quickly. Without looking it up again, I think UPS paid it's employees about $5 billion more than AA had total revenue last year. AA definitely wouldn't last long with multi-billion dollar losses every year, while UPS has the revenue to pay that much and still make a few billion in profits.

Jim

 

[Hopeful]

<_< ------ I really shouldn't get in the middle of this,----- but, I believe Bob understands the difference in operating models. But what his point is is that an airplane is an airplane no matter if it's carrying cargo, or passengers. And those who maintain those airplanes do the same work, therefore should be compensated similarly!!!----- Seems like a simple, stright forward concept to me!!! :huh:

Save your breath, MCI....

The people here defend a company who took $.01 (THAT'S ONE PENNY PER YEAR LONGEVITY) from our hourly rate.

There is only a simply concept when the company plays the propaganda game when they wish to screw employees. Unless of course you are the priviliged few at the top.

 

[MCI transplant]

It is a simple concept. Problem is that companies are different - some can afford to pay more than others. AA could pay it's mechanics/pilots/etc the same as UPS or FedEx but would be in bankruptcy pretty quickly. Without looking it up again, I think UPS paid it's employees about $5 billion more than AA had total revenue last year. AA definitely wouldn't last long with multi-billion dollar losses every year, while UPS has the revenue to pay that much and still make a few billion in profits.

Jim

<_< ------ Jim, Good point.---- But if that's the case, and the work is the same, what you, and AA management, are saying is that it's employees should shoulder a greater financial burden because of the short falls, or failures, of management!!! Maybe AA should focus on flying more Cargo!!?--- But than again, that's not labors function, to make those decision's, now is it? ----- It's a simple concept!------ "Equal pay,for equal work!"

 

[FWAAA]

<_< ------ Jim, Good point.---- But if that's the case, and the work is the same, what you, and AA management, are saying is that it's employees should shoulder a greater financial burden because of the short falls, or failures, of management!!! Maybe AA should focus on flying more Cargo!!?--- But than again, that's not labors function, to make those decision's, now is it? ----- It's a simple concept!------ "Equal pay,for equal work!"

Employees shouldn't aspire to share in their employers' poor fortunes. But the reality is that wealthy or profitable employers can easily pay their employees more money than struggling employers. Having worked for TWA during some of its financial troubles, this is no revelation for you, right?

Look at all the regional airlines that attract those willing to accept low wages. And I don't think it's the lack of a union that keeps their pay low. For many years, the non-represented Delta employees made about the same money as their represented counterparts at the other big airlines. So why doesn't that boost the wages at the low-paid regionals?

Housekeepers can make more money if they work for celebrities or executives than if they work for middle class laborers. From what I hear, high class call girls charge more than back alley whores. And even lower on the scale, some lawyers charge $60/hr and others charge upwards of $1,000/hr for their time.

It's an understandable goal of unions to try to equalize wages so that nobody lags behind even if their employer is unable to charge as much as other employers, but it's an unsustainable state. Over the long-term, the passengers at FedEx and UPS pay very profitable fares (all those overnight envelope thingies mentioned by BoeingBoy earlier) while most of the passenger airlines struggle to charge break-even fares to SLF even when we're not in a recession. If airline mechanics could boost their pay to $50/hr or $60/hr, they'd live high on the hog for a while. Until their employers went broke, that is, and couldn't pay it anymore.

 

[Bob Owens]

Employees shouldn't aspire to share in their employers' poor fortunes. But the reality is that wealthy or profitable employers can easily pay their employees more money than struggling employers. Having worked for TWA during some of its financial troubles, this is no revelation for you, right?

My guess is that most of the TWA guys now look back and say they should have stuck to full pay till the last day instead of letting Ichan get rich off their labor. They would have restarted their careers years sooner and started rebuilding their seniority and pensions instead of working for less.

Look at all the regional airlines that attract those willing to accept low wages. And I don't think it's the lack of a union that keeps their pay low. For many years, the non-represented Delta employees made about the same money as their represented counterparts at the other big airlines. So why doesn't that boost the wages at the low-paid regionals?

Wrong, people accept jobs at the regionals so they can gain the experience needed to get hired by the majors. Most of the majors require five years of experience on turbine aircraft before they will hire you. Where do you think mechanics and pilots come from?As the wages go down at the majors less and less young people show up at the regionals because they see no future in Aviation.

Housekeepers can make more money if they work for celebrities or executives than if they work for middle class laborers.

Because they dont have unions.

From what I hear, high class call girls charge more than back alley whores. And even lower on the scale, some lawyers charge $60/hr and others charge upwards of $1,000/hr for their time.

Well thats like saying that First Class and Coach are the same, they are both just seats right?

It's an understandable goal of unions to try to equalize wages so that nobody lags behind even if their employer is unable to charge as much as other employers, but it's an unsustainable state. Over the long-term, the passengers at FedEx and UPS pay very profitable fares (all those overnight envelope thingies mentioned by BoeingBoy earlier) while most of the passenger airlines struggle to charge break-even fares to SLF even when we're not in a recession. If airline mechanics could boost their pay to $50/hr or $60/hr, they'd live high on the hog for a while. Until their employers went broke, that is, and couldn't pay it anymore.

SWA pays more and charges less. In fact they pay more across the board so we arent just talking mechanics here. If a company that enjoys the benifits of economies of scale cant outpay smaller competitors then they are grossly mismanaged and agreeing to work for less will only create a management addiction for more and more concessions. We become enablers of ineptitude and the end result will inevitibly be the failure of the company. Better to let the company fail while working for a wage that allows you to save and prepare than sink into debt propping up inept management. They will still walk away with their millions while we end up broke and too old to start again.

 

[MCI transplant]

<_< ------ FWAAA, Having worked for TWA, I, and others on this board who have, do have a "unique" insight into employee's subsidizing incompetent Managemental decisions! At one time TWA had a fairly large Cargo Operation, with Aircraft dedicated to Cargo exclusively in the early 1970's, but gave it up because they didn't think there was any money to be made from it!------ TWA's employees took concession after concession, just to keep the Airline flying. It failed because of bad Management, and the greed of one man in particular. Not because it's employees priced them out of the market!!----- I hate to see AA go down that same path!!! And as of today it looks like it's doing just that!!!

 

[BoeingBoy]

But if that's the case, and the work is the same, what you, and AA management, are saying is that it's employees should shoulder a greater financial burden because of the short falls, or failures, of management!!!

Well, I'm not saying it's fair for employees to shoulder the load. Unfortunately, employees represent the only large expense that is reducible outside bankruptcy. The people selling the fuel aren't going to sell it below cost, the airplane leasors or EETC holders aren't going to give 10-20% off just to help any airline, etc. they're all trying to make a profit too. So where else is there to cut expenses by billions of dollars so AMR employees can be compensated like UPS or FedEx employees?

Again, you can't compare a passenger airline with a freight airline. With rare exceptions (AS comes to mind because of all the isolated places they serve in Alaska) a passenger airline with a few freighters has a hard time competing with the big freight carriers - there's not all the ground infrastructure to give door to door service or enough markets served to draw the required customer base. That leaves the USPS contracts (belly cargo) and high priority items where next day delivery is too long to wait (human organs for transplant) as the majority of "freight" for passenger airlines. USPS contract go to the lowest bidder and high value fast transit shipments go to whoever has the nonstop (if anyone between the airports required) or the quickest routing (when connections are the only option) Before FedEx, UPS, and DHL got big it was different, but that was then and this is now.

Since my earlier posts I've looked the info up again. For 2009 UPS's employee compensation (pay + benefits) was $5.7 billion more than AMR's total revenue. FedEx's fiscal year differs from the calendar year by one month (July 1 to June 30) making an annual calendar year comparison impossible, but for their 2nd quarter (Sep 1 through Nov 30) their employee compensation was $1.6 billion less than AMR's total 4th quarter revenue but AMR's fuel bill alone was almost $1.5 billion of that difference - throw in food cost and the difference disappears and there still facility rent, aircraft costs, landing fees, maintenance materials/equipment/supplies, commissions, credit card fees, etc to pay. Maybe you can tell me where AMR is supposed to get the money to compensate their employees as much as either UPS or FedEx.

"Raise fares" is a good sound bite answer but the low cost carriers set the fares at the low end in every market they're in and the legacy competition sets the fares at the high end (charge more than the competition and guess what many/most of the high yield business fliers will do). For every successful fare increase, there's 2,3,4 unsuccessful attempts because one or more of the other legacies don't go along. So what's your solution?

Jim