AA's CFO says Integration going well

[Bob Owens]

AA is cutting employees every day, or rather employees are severing themselves from AA every day. Not to worry, again the synergies have not been put in place, once they are there will be fewer jobs, but like at UAL, DL and SWA they probably wont have to lay off any mechanics.
 
 
Parker is doing everything he can to alienate his employees, at least on the ground side. He comes in and takes away the flex week (new employees only get one week a year VC for the first five years and we lag the rest of the industry pretty much through out our career by at least a week), eliminates inspectors, steals our prefunding match (he took away the sick bank from non-union workers as well) and has not kept one promise that he made when he wanted support for his grand scam, not that I thought he would.
 
As I said two years ago, I'm against the merger, the last thing I wanted to see was the largest carrier in the country based on busted union contracts, the two worst employers in the industry, an oppressive, greedy, dishonest management team that only knows how to destroy Airlines and not build them, that's simply wants to squeeze whatever they can for as long as they can and walk away from the huge mess they created with billions of our dollars stuffed in their pockets. (They are trying to turn this whole thing into a giant America West with a twist of post BK NWA)
 
Despite all that AA will show profits, huge ones, the pity is if he wasn't so punitive to the people who worked for him it would probably be even more profitable than it will be, but I guess not screwing over everyone would simply take the fun out of it for these people. Its what they do best and they love their job.

 

[WorldTraveler]

Bob,
First, let me say that I have read your posts for years and generally agree with your assertion as to where the industry is going on a large scale basis as well as your perspective at American.

You have a perspective which I can't begin to have and I read and appreciate what you write because of it.

Contrary to what you might think, I do not write what I write to tick off AA employees and fans here.

To the contrary, I have highlighted for years the challenges that AA has faced - ALWAYS WITH THE DESIRE that AA become the best airline it can be.

The reason why I have criticized AA is because I have seen them be content to give up opportunities to strengthen themselves financially in order to pursue strategic goals which are hard to understand in terms of long-term profitability.

Just as you have a perspective with maintenance, I have a financial and strategic perspective that allows me to read things such as traffic reports in ways that I am sure most airline employees do not see.

It bothers me a great deal to hear you say that AA seems to be trying to do all possible to get mechanics to leave - but it actually does square quite well with what I see. AA is clearly moving from being predominantly in-house maintenance with older aircraft to newer aircraft that are heavily maintained by outsourced maintenance. AA's former mgmt. started the process but it was clear that Parker would accelerate it.
And the real cost savings from those new aircraft doesn't come from the fuel savings -which other carriers can come close to duplicating - but from the vastly reduced maintenance costs. And you and I both know that the only way to realize those cost savings is to have a lot less maintenance staff.


But Parker still has more mechanics - and other workgroups - than he wants long -term so not only can he avoid dealing with that overage by flying more flights than the market might support - but he can also try to expand AA's network in the process.

Regarding your question of whether DL achieved the benefits of its merger in six months, the answer is clearly no.

Yet it is surprising that many of the people who jeered DL's cuts at CVG and MEM even under the justification of growing NYC and SEA are some of the very ones that argue that AA won't cut jobs. And DL has had multiple early out opportunities since the merger - and has easily had more than 5,000 employees leave under early outs alone.

So, yes, it is realistic to expect that the process will take time to work out.

but you can also go back and look at traffic and financial reports (DOT and in-house) and look at how other carriers did relative to growth and capacity and realize that AA is approaching this merger very differently.

The reason why I highlight issues such as AA's Pacific strategy but also the increased Atlantic flying is because the whole story needs to be told, not just about cost cuts and low pay which you talk about but also regarding revenue generation - which AA mgmt. clearly and solely controls.

I want to see you and your peers increase their salaries and I want to see AA reach the levels of the best in the business in many perspectives... I absolutely am not opposed if AA becomes larger or more profitable than DL.

But when AA's strategic choices - some of which may not fully have become evident - cost you and your peers pay raises and AAL stock the ability to perform as well as other airlines, then I think the issues do need to be raised.

 

[swamt]

AA is cutting employees every day, or rather employees are severing themselves from AA every day. Not to worry, again the synergies have not been put in place, once they are there will be fewer jobs, but like at UAL, DL and SWA they probably wont have to lay off any mechanics.
 
 
Parker is doing everything he can to alienate his employees, at least on the ground side. He comes in and takes away the flex week (new employees only get one week a year VC for the first five years and we lag the rest of the industry pretty much through out our career by at least a week), eliminates inspectors, steals our prefunding match (he took away the sick bank from non-union workers as well) and has not kept one promise that he made when he wanted support for his grand scam, not that I thought he would.
 
As I said two years ago, I'm against the merger, the last thing I wanted to see was the largest carrier in the country based on busted union contracts, the two worst employers in the industry, an oppressive, greedy, dishonest management team that only knows how to destroy Airlines and not build them, that's simply wants to squeeze whatever they can for as long as they can and walk away from the huge mess they created with billions of our dollars stuffed in their pockets. (They are trying to turn this whole thing into a giant America West with a twist of post BK NWA)
 
Despite all that AA will show profits, huge ones, the pity is if he wasn't so punitive to the people who worked for him it would probably be even more profitable than it will be, but I guess not screwing over everyone would simply take the fun out of it for these people. Its what they do best and they love their job.

You are right on Bob.  Always have been.  Hope the rest of the employees will see the light one of these days...

 

[WorldTraveler]

here's what Kirby said about exactly what we were talking about:


"In the Trans-Atlantic, Kirby said, capacity growth has been close to 10% and revenue per available seat mile has been "flattish." American will slightly reduce trans-Atlantic capacity in the fourth and first quarters, he said, but "we've seen less action from others."

In particular, he said, Virgin Atlantic is adding trans-Atlantic capacity. Virgin said two weeks ago that it will increase its trans-Atlantic service, inaugurating London Heathrow-Detroit service, adding flights to New York and Los Angeles and boosting seasonal service to Atlanta. Delta (DAL_) owns 49% of Virgin.

"It's a little concerning to us," Kirby said. "We did what was right for our business and what was right for our joint venture with capacity. (But) you have Virgin growing in their markets. If that trend continues, we can't cut capacity just to create the ability for others to grow in some of our markets."

"A Virgin Atlantic spokeswoman did not respond to requests for comment."

"Speaking of American's principal joint venture partner, Kirby noted that "British Airways generates almost twice as much revenue per seat mile in premium as does American -- clearly they are doing something we can learn from." But he was largely mum when asked whether American is strengthening its ties in Seattle with Alaska (ALK_) , which is battling Delta's effort to expand its Seattle hub."
http://www.thestreet.com/story/12882823/1/american-air-our-industry-is-great-but-for-congress-and-virgin.html?puc=yahoo&cm_ven=YAHOO

hmmm... watching your LF drop by 4 points in a peak summer month because you added more capacity than the market could absorb is what you call doing what is right for your JV? or removing it from London and dumping in into continental Europe and Ireland is supposed to be good for you but your competitors aren't supposed to do the same thing?

hey, Scotty, you're playing in the big leagues now. This ain't America's Worst.

oh, and now we know why AA doesn't fly its own aircraft from BOS to LHR and the number of AA flights from NYC has been reduced relative to BA.