AA needs $1 billion more in savings!

[MOUNT KISCO]

It's long past time for the cost-cutting Bull#### to end.


AA is too large to be efficient at the bottom line, route cuts have to be made domestically where profit is minimal, outsourcing and more wage concessions loom.

 

[Bob Owens]

American, a unit of AMR Corp. (AMR.N: Quote, Profile, Research), is "looking under every rock" for cost-cutting opportunities to offset record high fuel prices, said Gerard Arpey on a Webcast of a Bear Stearns Global Transportation Conference.

Didnt Don Carty and Arpey already do that? Dont you remember how back in 2002 they said that they would only go to the employees as a "last resort" for cost savings? They claimed they slashed costs by a whopping $200,000,000, or in other words-1%, then demanded that we take a 25% cut in compensation.

They looked under every rock and all they could come up with was $200 million, then they demanded $1.8 billion from us.

So using 2003 as a guide here is what we can expect this time around.

In order to reach their goal of cutting cost by $1,000,000,000, a goal they must acheive in order to keep them in complaince with the covenants on the extra $4,000,000,000 in extra cash they are sitting on (costing a couple of hundred million a year in intrest) the company will claim that they found $100 million in savings, then demand another $900,000,000 from us.And Jim Little will claim that we have to save the company no matter how much it hurts, as he sits back and collects his doubled paychecks.

 

[NewHampshire Black Bears]

Addressed to Former ModerAAtor !!

"E",

Lets get "REAL" serious here, with each other !!!!!!!!!!!!!

Cabin turns. After lil' johnny has spilled his bag of cheerios(from home) and ground them into the rugs, how in HEL* are the F/A's suppose to deal with that ??

Perhaps F/A mikey, and jimntx should invest in their own personal "hoakie", and pack it in their flight bags, to start their trips ??

Don't EVEN get me started on the lav's !!!!!!!!

For the F/A's, picking up the "heavy's" is one thing(seat pockets/newspapers), and even pillows and blankets.

My ol' grandmother had an ol' saying. "You can roll a 8 inch pie crust, until the cows come home, BUT you'll NEVER get it to cover a 10 inch pie plate" !!!

OK, "E", now lets talk about where the $$$$ "IS" going to come from.

Unless OIL goes down(and with the A$$ HOLE in DC, NOTHING is going to go down for another 2 1/2 years), the $$ will come from shutting down MORE mainline stations,( I would NOT want to be in stations like BDL/BWI/MSY/DTW/MCI/ELP/SAT/AUS/TUS/ABQ/SAN/SEA) and turning them over to A/E, WHO, can do it VERY nicely with an A/C like say a EMB-190.

And yes, "Here I go AGAIN". ....... "uncle" Bobby vowed, he would NOT chase domestic Nickles and Dimes, and would fly Mainline hub/hub...Transcons, and International "ONLY" !!!

My friend, I AWAIT your reply.

Respectfully,

NH/BB's

 

[Oneflyer]

Addressed to Former ModerAAtor !!

"E",

Lets get "REAL" serious here, with each other !!!!!!!!!!!!!

Cabin turns. After lil' johnny has spilled his bag of cheerios(from home) and ground them into the rugs, how in HEL* are the F/A's suppose to deal with that ??

Perhaps F/A mikey, and jimntx should invest in their own personal "hoakie", and pack it in their flight bags, to start their trips ??

Don't EVEN get me started on the lav's !!!!!!!!

For the F/A's, picking up the "heavy's" is one thing(seat pockets/newspapers), and even pillows and blankets.

My ol' grandmother had an ol' saying. "You can roll a 8 inch pie crust, until the cows come home, BUT you'll NEVER get it to cover a 10 inch pie plate" !!!

OK, "E", now lets talk about where the $$$$ "IS" going to come from.

Unless OIL goes down(and with the A$$ HOLE in DC, NOTHING is going to go down for another 2 1/2 years), the $$ will come from shutting down MORE mainline stations,( I would NOT want to be in stations like BDL/BWI/MSY/DTW/MCI/ELP/SAT/AUS/TUS/ABQ/SAN/SEA) and turning them over to A/E, WHO, can do it VERY nicely with an A/C like say a EMB-190.

And yes, "Here I go AGAIN". ....... "uncle" Bobby vowed, he would NOT chase domestic Nickles and Dimes, and would fly Mainline hub/hub...Transcons, and International "ONLY" !!!

My friend, I AWAIT your reply.

Respectfully,

NH/BB's

I don't really see the 300 regional jet order to replace the S-80 coming any time soon. AA is pretty much stuck with what they have for the time being.

Explain again, why Southwest F/A can clean the cabin but AA F/A can't? Southwest planes always look clean to me.

 

[flyboymd8]

The problem with handing stations over to Eagle is that they do just as bad of a job as AA. When I got furloughed, I spent a year at EAgle flying the CRJ out of ORD. Eagle schedules 30 min turns out of ORD, and we couldn't hold for catering. We departed many times(about 30-40%)with dirty airplanes without basic catering such as coffee. So again it might be cheaper to hand the station over to Eagle, but keeping the customer happy isn't going to happen if cost cutting takes front seat and customer service becomes some sort of a bottom priority.
As I have said before, you can't address only one side of the cost and revenue equation, both have to be addressed, yes AA has raised fares, but they need to raise more. You can't keep going to employees to subsidize fuel. It shows that AA management doesn't have the answers to the revenue side. Any idiot can come in and slash and cut. Earning your keep comes in increasing revenue while keeping cost managible.

 

[Nor'Easta]

Explain again, why Southwest F/A can clean the cabin but AA F/A can't? Southwest planes always look clean to me.

It's Contractual!

 

[Connected1]

Didnt Don Carty and Arpey already do that? Dont you remember how back in 2002 they said that they would only go to the employees as a "last resort" for cost savings? They claimed they slashed costs by a whopping $200,000,000, or in other words-1%, then demanded that we take a 25% cut in compensation.

They looked under every rock and all they could come up with was $200 million, then they demanded $1.8 billion from us.

The numbers were: $2B in non-labor savings, $200M in vendor concessions, and $1.8B in labor contract negotiations...a total of $4B. Since that time, another set of non-labor-contract savings have been layered over the $4B...something like an additional $700M in each of 2005 and 2006. So, if you're keeping score at home, that's about $5.5B of cost savings since 2002 of which about 1/3 was contract-related. No contractual negotiations have taken place since 2003 and the contracts aren't even amendable until 2008.

 

[FWAAA]

Didnt Don Carty and Arpey already do that? Dont you remember how back in 2002 they said that they would only go to the employees as a "last resort" for cost savings? They claimed they slashed costs by a whopping $200,000,000, or in other words-1%, then demanded that we take a 25% cut in compensation.

They looked under every rock and all they could come up with was $200 million, then they demanded $1.8 billion from us.

So using 2003 as a guide here is what we can expect this time around.

In order to reach their goal of cutting cost by $1,000,000,000, a goal they must acheive in order to keep them in complaince with the covenants on the extra $4,000,000,000 in extra cash they are sitting on (costing a couple of hundred million a year in intrest) the company will claim that they found $100 million in savings, then demand another $900,000,000 from us.And Jim Little will claim that we have to save the company no matter how much it hurts, as he sits back and collects his doubled paychecks.

Mr Owens, you're a great guy and all, but this post is just full of factual errors, plane and simple.

1. The big, bad mangement only demanded $1.6 billion from organized work groups, not $1.8 billion. The other $200 million came from management and nonunion work groups. And yes, vendors agreed to about $200 million in rate cuts, etc.

2. "Extra $4 billion in cash." You obviously know very little about the liquidity needs of a $21 billion business. Your numerous uninformed posts about the AMR unrestricted cash balance make this very clear. Have you called Horton to set him straight on this gross incompetence? I'm certain he's waiting for you to help him manage the cash better.

3. "costing a couple of hundred million a year in interest"?? Huh? Even if AMR did have an "extra $4 billion" in cash (it most certainly is not "extra"), your $200 million allegation would require that AMR be paying 5 points more in interest than this cash is earning for AMR. You really think that's the case? YOU may be paying that kind of interest rates on YOUR loans, but AMR is not. The spread between what AMR is paying to hold that cash and what it earns on that cash is probably more like a percent or two. Not 5 points.

You may have missed the Number One reason that AMR is holding that $4 billion plus in unrestricted cash: Unless Congress and the President agree to allow AA to stretch out its pension underfunding (without requiring a plan freeze, as the current bills provide), the 2007 minimum required contributions will exceed $2 billion (compared to the 2006 minimum contributions of $250 million). That's from the first quarter 10-Q. Other reasons include fuel that might hit $3/gallon later this year. And this year's scheduled debt principal retirements. And this year's capital spending budget.

But since you've got all the answers about how to better manage AMR's money than any of its high-priced CFOs, I can't figure out why you haven't applied for that job. AMR has been thru a few CFOs in recent years - why not get the resume ready?

 

[Bob Owens]

Mr Owens, you're a great guy and all, but this post is just full of factual errors, plane and simple.

1. The big, bad mangement only demanded $1.6 billion from organized work groups, not $1.8 billion. The other $200 million came from management and nonunion work groups. And yes, vendors agreed to about $200 million in rate cuts, etc.

1.6 plus .2 =1.8 right? Did I say anything about organized labor being the only ones who took concessions?

2. "Extra $4 billion in cash." You obviously know very little about the liquidity needs of a $21 billion business. Your numerous uninformed posts about the AMR unrestricted cash balance make this very clear. Have you called Horton to set him straight on this gross incompetence? I'm certain he's waiting for you to help him manage the cash better.

How many other $21 billion business sit on $4 billion in cash?

3. "costing a couple of hundred million a year in interest"?? Huh? Even if AMR did have an "extra $4 billion" in cash (it most certainly is not "extra"), your $200 million allegation would require that AMR be paying 5 points more in interest than this cash is earning for AMR. You really think that's the case? YOU may be paying that kind of interest rates on YOUR loans, but AMR is not. The spread between what AMR is paying to hold that cash and what it earns on that cash is probably more like a percent or two. Not 5 points.

So you are claiming that AMR can get loans at very low rates despite the fact that they have not shown a substantial yearly profit in five years and have lost billions of dollars? I would think that with $20 billion in debt already, several profitless years, billions in losses and a near miss at BK that AA would be close to paying credit card rates in intrest. On paper all are are risky, when the banks take risk they charge for it.

You may have missed the Number One reason that AMR is holding that $4 billion plus in unrestricted cash: Unless Congress and the President agree to allow AA to stretch out its pension underfunding (without requiring a plan freeze, as the current bills provide), the 2007 minimum required contributions will exceed $2 billion (compared to the 2006 minimum contributions of $250 million).

Yea, like I'm really going to believe that they are sitting on all that money so they can pay up on our pension. If that happens they will simply bail out of the pension, having all that cash on hand would not help AAs position if that should happen.

That's from the first quarter 10-Q. Other reasons include fuel that might hit $3/gallon later this year. And this year's scheduled debt principal retirements. And this year's capital spending budget.

But since you've got all the answers about how to better manage AMR's money than any of its high-priced CFOs, I can't figure out why you haven't applied for that job. AMR has been thru a few CFOs in recent years - why not get the resume ready?

Because, I dont play golf with Arpey.

 

[Bob Owens]

The numbers were: $2B in non-labor savings, $200M in vendor concessions, and $1.8B in labor contract negotiations...a total of $4B. Since that time, another set of non-labor-contract savings have been layered over the $4B...something like an additional $700M in each of 2005 and 2006. So, if you're keeping score at home, that's about $5.5B of cost savings since 2002 of which about 1/3 was contract-related. No contractual negotiations have taken place since 2003 and the contracts aren't even amendable until 2008.

We all know those numbers are crap. Let me ask you something, when the numbers were put forward as to how to meet the labor savings we were shown a list that included concession or the equivelent number of jobs eliminated. well the company got both, they got the concessions to reach the number plus they eliminated more than the number of jobs to meet the number, so how are they counting that cost savings? Why are we only being credited with $1.6 billion? Seems to me that they got at least 3.2 billion from the unions, and it appears they did the same to the non-union workgroups so thats .4 billion. So the total reduction in labor costs, both represented and unrepresented comes out to $3.6 out of your $4 billion.

 

[JS]

How many other $21 billion business sit on $4 billion in cash?

Um, lots of businesses? Even banks "sit" on cash. It's not the end of the world for them.

So you are claiming that AMR can get loans at very low rates despite the fact that they have not shown a substantial yearly profit in five years and have lost billions of dollars? I would think that with $20 billion in debt already, several profitless years, billions in losses and a near miss at BK that AA would be close to paying credit card rates in intrest. On paper all are are risky, when the banks take risk they charge for it.

Hold off on applying for CFO if you are planning to pay 19.6% interest on a secured loan for AMR. You might get fired.

Yea, like I'm really going to believe that they are sitting on all that money so they can pay up on our pension. If that happens they will simply bail out of the pension, having all that cash on hand would not help AAs position if that should happen.

who knows

Because, I dont play golf with Arpey.

It's worth a try; costs you nothing other than a 39 cent stamp. But don't include your plans to get a Discover card and charge AMR's fuel on it. Your resume might find its way to the circular file. At least try to get an interview so you can wow them with your great ideas.

 

[Skymess]

Explain again, why Southwest F/A can clean the cabin but AA F/A can't? Southwest planes always look clean to me.

That's easy. It's because American Airlines FAs are not Southwest Airlines FAs. We don't want to be either. If we did, we would have applied to Southwest.

It's kind of the same thing as regional jet vs. mainline. If pilots and FAs at AA wanted to fly regional garbage planes we would have applied to American Eagle.

It might not be what you want to hear but it is good to know when trying to design a productivity model that simply won't work. AA FAs don't clean planes and they won't do it right even if you manage to get AAPFA to agree to it.

 

[PlayTheOdds]

I'd bet that if they were responsible for cleaning prior to deplaning, flight attendants would do a lot better job at collecting trash prior to landing.

If you guys don't mind I would really like to throw a flag here.

You don't fly much do you FM? I'm sure AA operates much like NWA, I would like to say the problem is not with the F/A's cleaning prior to landing. The problem lies with the passengers. I have never seen such a case where people are so rude and careless about someone else’s property. On every flight I have been an the F/A's get on the PA and tell the passengers that they will be coming by to collect all the trash to please collect it up including unwanted papers and magazines and to please remove any trash from the pocket in front of you. Only about a third of the passengers will actually do it. What is the deal with them sticking the gum everywhere? That’s just nasty. A charter flight? That’s just guaranteed to come back destroyed. Passengers are as rude about trash as they are their carry-ons.

 

[jimntx]

My glamorous world, and welcome to it!

 

[Ken MacTiernan]

SCAB, "I'm sure AA operates much like NWA,"

Listen SCAB, aka PTO, AA doesn't operate like NWA because AA doesn't employ SCABs, or cowards, such as yourself. Now, crawl back under the cloak of shadow you post from.