AA's London townhouse going, going, gone?

[Buck]

Who ever said this was a secret? Didn't know where it was, but I knew AA had corporate owned housing in LON. There may also still be owned housing in TYO as well. It is a bit unreasonable to expect someone to live in a hotel for 12-36 months, and if you run the cost of leasing out a house or hotel rooms over 19 years, you're probably close to the same costs as owning the house, especially if there are tax benefits for owning the property...

I grant you that, however it is a bit unreasonable to go as long as labor has without a amended contract.

 

[eolesen]

Buck, the two have nothing to do with each other.

Getting pissed off about management housing because you don't have a labor agreement is like me kicking the dog because we ran out of Cheerios...

 

[Buck]

Buck, the two have nothing to do with each other.

Getting pissed off about management housing because you don't have a labor agreement is like me kicking the dog because we ran out of Cheerios...

Well many see it as just hiding assets when the company has claimed the inability to come to industry average pay when everyone had to give in 2003. I am not opposed to the housing, in fact I expected it and more. It is just the appearance of an impropriety. If it was not why are the newsies up in arms so much?

 

[DallasConehead]

One article I read mentioned eight other properties listed under AMR. It did not say where they were located and how much they are worth.

Start at page 58 of Bella Gorens affidavit. Which all of you should have read.

http://www.amrcaseinfo.com/pdflib/4_15463.pdf

 

[Bob Owens]

It's freakin hilarious, Frank. Of all of AA's costly blunders, this is the one that has appreciated since it was purchased in 1992, unlike 75 worthless Fokkers and a couple dozen worthless MD-11s, among many other now-worthless AA management mistakes. And of course execs can't possibly have to stay in a hotel with the commoners - they have to have a luxury residence at their disposal. 😀

Purchased in 1992 for 2.85 million pounds (about $6 million at the time). The great god Crandall was in charge back then, no?

http://www.bloomberg.com/news/2011-12-14/amr-s-luxury-london-townhouse-may-go-in-airline-bankruptcy-sale.html?cmpid=yhoo

If it's now worth $20 million or perhaps $30 million, that was an outstanding investment compared to most of AA's other costly mistakes.

They should have sold it back in 2003 and left us with the holidays that none of the other workers lost.

 

[Bob Owens]

<_< ------ Than comes the question? Are there any other properties AA might have that the employees, and the BK court, are unaware of?----- Say in Paris?

Well we know they own an apartment in manhattan just blocks from an office that AA has as well. Last winter,I was told, a certain easily offended member of management, declared that since he could navigate a few blocks in the city to walk to work that despite a huge record breaking storm that crippled the city for days and killed several people, and the fact that the police would not let people enter the airport because it was closed, that anyone who did not report to work would be marked as absent and it would be a mark against their attendance. In maintenance management had more sense and I believe that after realizing how dumb he was being and pressure from the union he backed off.

It seems that the company also maintains a residence in nearby Howard beach as well. I have to wonder is that is suburban cottage?

 

[Bob Owens]

Who ever said this was a secret? Didn't know where it was, but I knew AA had corporate owned housing in LON. There may also still be owned housing in TYO as well. It is a bit unreasonable to expect someone to live in a hotel for 12-36 months, and if you run the cost of leasing out a house or hotel rooms over 19 years, you're probably close to the same costs as owning the house, especially if there are tax benefits for owning the property...

Sure but a mansion? Why not just a regular flat? They provide at least one residence to the guy running JFK. If we take a job in another city we are on our own. How does this show up as far as compensation?

 

[john john]

I wonder how much it cost to maintain it each month/year.

And taxes

 

[Birdman]

If truth be known this was probably quite common in all the other legacy airline BK's and had little to no effect on labor concessions. What would get under my skin is the discovery of secret properties in exotic locations, payed for by those who are forced to pay compulsory dues and used by those who make 3-4 times our wage.

 

[jimntx]

I agree with the people who say "I understand the need for a London flat, but a luxury townhome????" When it was bought in 1992 for the equivalent of $6 million that was a huge chunk of change then. It would be interesting to know what $6 million in 1992 dollars would be equal to in today's dollars.

I wonder if the IRS will get curious about the uses of the townhouse. Yes, I know that if used while on business, the use is not taxable. But, do you suppose in all those years one or more of the executives might have used it for vacation purposes--which ARE taxable when using corporate facilities? Or, exec is on business (and I'm not talking about ex-pat assignments of a year or more), but the wifey and the kiddos just happen to tag along.

London is not a cheap city to visit. I was trying to plan a short trip to London for a special occasion. The cheapest lodging I could find that wasn't out in the boonies was a bed and breakfast for the equivalent of $200/night!

 

[FWAAA]

I agree with the people who say "I understand the need for a London flat, but a luxury townhome????" When it was bought in 1992 for the equivalent of $6 million that was a huge chunk of change then. It would be interesting to know what $6 million in 1992 dollars would be equal to in today's dollars.

Don't have any UK inflation numbers, but according to the BLS, USA inflation means that $6 million in 1992 is equal to $9.7 million today:

http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=6000000&year1=1992&year2=2011

I wonder if the IRS will get curious about the uses of the townhouse. Yes, I know that if used while on business, the use is not taxable. But, do you suppose in all those years one or more of the executives might have used it for vacation purposes--which ARE taxable when using corporate facilities? Or, exec is on business (and I'm not talking about ex-pat assignments of a year or more), but the wifey and the kiddos just happen to tag along.

How common is it that multi-billion corporations fail to properly account for the use of real estate by highly paid employees? Arpey and other top execs get positive space (in First Class, no less) for themselves and their families. Wonder if they've failed to properly account for the income tax treatment of airfare?

 

[Buck]

If truth be known this was probably quite common in all the other legacy airline BK's and had little to no effect on labor concessions. What would get under my skin is the discovery of secret properties in exotic locations, payed for by those who are forced to pay compulsory dues and used by those who make 3-4 times our wage.

Bad Dog Spot, Down, Bad Bad Dog, I said sit.

 

[jimntx]

Don't have any UK inflation numbers, but according to the BLS, USA inflation means that $6 million in 1992 is equal to $9.7 million today:

http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=6000000&year1=1992&year2=2011


How common is it that multi-billion corporations fail to properly account for the use of real estate by highly paid employees? Arpey and other top execs get positive space (in First Class, no less) for themselves and their families. Wonder if they've failed to properly account for the income tax treatment of airfare?

Oh, I'm not disputing that it goes on everywhere. (After all, I worked for a major oil company for many years. AMR execs are amateurs at feathering their nests.) But, when the government decides to take action, the "but everybody's doing it" defense tends not to work in court. And, the government believes that setting an example with one miscreant will make the others behave. Not so, but they still believe it will work.) As far as the pos space, I think it is already reported because the government taxes and fees have to be paid whether or not it is pos space or non-rev.

 

[care2purchasefood?]

Don't forget AMR also has an apartment on the Upper East Side of Manhattan and a hotel in Caracas. This just gets better!

 

[FWAAA]

Oh, I'm not disputing that it goes on everywhere. (After all, I worked for a major oil company for many years. AMR execs are amateurs at feathering their nests.) But, when the government decides to take action, the "but everybody's doing it" defense tends not to work in court. And, the government believes that setting an example with one miscreant will make the others behave. Not so, but they still believe it will work.) As far as the pos space, I think it is already reported because the government taxes and fees have to be paid whether or not it is pos space or non-rev.

I'm not alleging that it goes on everywhere or that "everyone does it." I truly doubt the highly paid management crooks at AA are dumb enough to cheat on their taxes, especially for chump change like this would represent and I doubt that any low-level tax compliance person at AA is willing to overlook any taxable (and reportable) income relating to the personal use of luxury residential property in London. But I forgot - they're management and thus are presumed to be tax cheats on top of their other moral failings. 😀