American Airlines Is Too Profitable for Its Own Good

[robbedagain]

Jacobin777 I hear ya on that. I dont care if we merge all i want is my biweekly pay n health benes even if we merge nothi g gonna change esp w fhe same donkeys still stuck in their muddy stalls u knw

 

[jimntx]

Synergy: is t he interaction of multiple elements in a system to produce an effect different from or greater than the sum of their individual effects . Only time will tell if it works out that way. Worldtravler is "cock sure" that it won't. Standby for a very lengthy response from him. It will be a repeat from what we heard from him over and over and over and over and over again. WT your point is understood. Really it is. Lets see in the future how it pans out. If your going to continue to drive your point home then please say something NEW. We don't need to hear the same thing again.

Yeah well, I wouldn't spend any of those synergy dollars just yet. Synergy is one of those B-school speak words that consultants use all the time--especially when the correct answer they ought to give you is "I don't know." Consultants (I used to be one, so I know) are people who steal your watch in order to tell you what time it is.

 

[AAviator]

And, as stated in the article, let's not forget that it is American's unions cheerleading for this merger. The AMR execs did not (and do not) want it. They stand to collect a much larger reward for emerging from BK independently. (And, for some of the upper level management, just below the execs, independent AA means they still have a job.)

I have posted the question several times and no one has attempted to answer...
Where is the money coming from to provide all these goodies that DP promised to the AA unions?

If you apply current AA pay rates to the financial statements of US Airways for the recently past profitable quarters, those profits disappear. DP has promised raises to the AA unions. We already make more money than the pilot and flight attendant unions at US. If the merger goes through, and we get a raise over what we are making now, let me make the wild leap of faith that the US pilots and flight attendants will not stand for being paid less than us. With those kinds of raises paid to ALL pilots and f/as of the merged company the profits not only disappear, the losses skyrocket.

Where is the money coming from?
 
Jim,
You'll never get an answer to your question.  DP absolutely has to make this deal happen for LCC's sake.  
 
AA wil be just fine and continue forward absent a deal.  The jury is out on how durable LCC is as a network player minus AA.
 
p.s. I'm trying to find the LCC poster who claimed AA will liquidate if this deal doesn't happen when I came across your post.  I called them out but they never replied..  

 

[Bob Owens]

"Please, Mr President, let my capitalist overlords merge so that they can exert more market power and charge consumers more, inflicting the very harm the antitrust laws were passed to prevent." [/font][/color]

Have to admit I agree with you on this. I told USAIR management two years ago when we met with them that as a mechanic the last thing I'd want to see is the two worst carriers who treat their mechanics worse than any other carrier becoming a mega carrier that would force other carriers to treat their workers just as bad. So not only is it bad for the consumer who will have to pay more for less it will be bad for workers across the industry who will have to work more for less. As far the the raise, well by the time this merger goes through, lets say Summer of 2014 we will be that much closer to the Midterm wage adjustment, so in exchange for perpetual profit sharing that we would get every year AA has a profit we will get a one time 4% increase that we would get a year later anyway. So we would get maybe $2500 extra for the one year but give up say $1000/year for 6 or more years.

 

[TWU informer]

Have to admit I agree with you on this. I told USAIR management two years ago when we met with them that as a mechanic the last thing I'd want to see is the two worst carriers who treat their mechanics worse than any other carrier becoming a mega carrier that would force other carriers to treat their workers just as bad. So not only is it bad for the consumer who will have to pay more for less it will be bad for workers across the industry who will have to work more for less. As far the the raise, well by the time this merger goes through, lets say Summer of 2014 we will be that much closer to the Midterm wage adjustment, so in exchange for perpetual profit sharing that we would get every year AA has a profit we will get a one time 4% increase that we would get a year later anyway. So we would get maybe $2500 extra for the one year but give up say $1000/year for 6 or more years.

I don't understand why you continue to blame management for the failure of your union. Management is expected to get the most for the least amount possible, and we pay two hours pay per month to counter that at negotiations. You can blame Tulsa, you can blame management, you can blame republicans, you can blame judges, but in my opinion, it is the union you keep remaining involved in and taking an oath of allegiance to that is failing us.

 

[Bob Owens]

Well the fact is no matter what Union we have if the majority are as pro-company as they are in Tulsa we are screwed. Yes we have our company men too, but out here they are the minority. Did the TWU force Tulsa to elect Gary Yingst or John Hewitt? Did the TWU force 74% of Tulsa to approve this deal and pretty much every concessionary deal that was put before them over the last 30 years? (But only if the line took the same cuts) Yes leadership makes a difference but Tulsa chose the leaders they did. I said NO to the International and the Concessions they pushed, the leaders from Tulsa didn't and your peers picked them and chose to follow their lead. Weren't there other candidates through the years that were more militant than those guys, but the membership in Tulsa rejected them? Hewitt was Don's partner, together they had their secret meetings in Tulsa, then along with Title II prevented the line or AFW from even getting a chance to negotiate. They pulled the 767 out of AFW to save heads in Tulsa and get them to pass the deal, AFW had near a perfect record with the 767 and now Tulsa is so far behind that the company has outsourced several of them. So now in addition to the heads lost in AFW Tulsa is going to lose that work and the heads that go with it anyway. Is the TWU responsible for their poor performance? Like you said about blame there is plenty to go around and everybody's hands are dirty. How do we know that should we get AMFA they wont elect the same people with the same mindset? I know when the TWU took over MCI the guys at MCI just ripped the IAM sticker off the door and the same pro-concessionary guys were put in place. A change in Unions did not result in a change of mindset in MCI. I don't argue the fact that this Union has failed us, they have, and I don't support what its done to our profession, but as long as the majority of our class and craft as defined by the NMB say this is the Union we have then I will continue to try and make it do what we need it to do instead of everything the company and the pro-company members in places like Tulsa wants it to do. You have the luxury of sitting on your high ideals of what you feel a Union should be, fine, go for it, but we have to deal with the reality of what it is and find a way to make it something that can get us contracts so we can make it from paycheck to paycheck.


While the Convention had some dissapointments (they pretty much shut Local 591 and 567 out while putting 514 on every committee and made them the face of mechanics at AA) there has been some movement towards changing the way the TWU does things in the four weeks since Lombardo and Samuelson took over, Little, Gordon, Connelly, Gillespie and Gless are gone, we hear more are going, Don Videtich remains and that's very problematic for me, but I have been told that he will have nothing to do with M&R, ironically its the Tulsa Leadership that wants to keep Videtich.

Lombardo I don't really know well, but his track record is good, several years ago I asked Little to remove Videtich and put Lombardo in charge of our negotiations based on the fact that he has pulled the trigger before and it was clear that Don had no intentions on pressuring the company to get us at least industry standard, and Samuelson has been a good leader who for the first time in memory has united Local 100. When the MTA said agree to give backs or they would cut heads he said "No givebacks", they cut heads, which was painful and the Local did what they could for those who were laid off, but within a year they were all back to work, and no givebacks. (Their Health benefits today are better than what we had 30 years ago)) Even though most of the concessions in our book have Gless' name on them we know that Videtich was the man behind the content. If this new leadership feels that sending him back to work under what he crafted is too severe then what does that say about the deal? The Videtich situation could be a make or break for me but for now I will continue to push for changes in this Union. That's what my peers elected me to do. That's who I answer to, who do you answer to?

 

[swamt]

 How do we know that should we get AMFA they wont elect the same people with the same mindset?
 

Bob I know what you mean exactly.  It has happened here at SWA.  However, as you know, at least the membership can remove the people with the same mind set from office and elect someone else in their place without changing the entire union from representation.  As most know out here we just did it at the National Officers level as well as Loc 11 ALR.  It is a lot easier then having to replace the entire representing union like all the other groups have to do that don't have AMFA.  The industrial unions love it this way as they know it is much, much harder to replace the union than it is to replace the officers.  If you guys could replace your officers like we can within AMFA then the union could not keep their yes men on leashes and do exactly what the international tells them to do.  In the end, yes, you can, and you will get those people with the same mindset every now and then.  At least with AMFA they can be removed from their position by the membership very easily rather than trying to remove the entire union from the property.  It is a very, very easy process and can be started by any member in good standings,  think about it...

 

[AMFAinMIAMI]

I don't understand why you continue to blame management for the failure of your union. Management is expected to get the most for the least amount possible, and we pay two hours pay per month to counter that at negotiations. You can blame Tulsa, you can blame management, you can blame republicans, you can blame judges, but in my opinion, it is the union you keep remaining involved in and taking an oath of allegiance to that is failing us.

TWU Informer
 
Pitting the line against the Base is not what most of us here on the line want but it is a Fact that since I have been here at AA the Tulsa Base has decided what the rest of us were to have in our contract, and what we had to suffer under. That cycle needs to stop. If Tulsa wants a change then you need to re-engage and get more involved just one last time. If we can't remove the TWU this time after the IBT/TWU and the companies deals then the M&R of AA deserve what they get. The line cost of living is so much higher, that is the reason there is anomosity between us.
 
The Tulsa base can take a financial hit and for most still get by without another job. But when that happens to us here on the line either its work all the O/T you can or get a second job. I am not saying tulsa should take any pay hit but it is time for you and all the others there to stand up, look at what has happened over the last 15+ yrs and say we have had enough. The TWU must GO.

 

[AMFAinMIAMI]

Well the fact is no matter what Union we have if the majority are as pro-company as they are in Tulsa we are screwed. Yes we have our company men too, but out here they are the minority. Did the TWU force Tulsa to elect Gary Yingst or John Hewitt? Did the TWU force 74% of Tulsa to approve this deal and pretty much every concessionary deal that was put before them over the last 30 years? (But only if the line took the same cuts) Yes leadership makes a difference but Tulsa chose the leaders they did. I said NO to the International and the Concessions they pushed, the leaders from Tulsa didn't and your peers picked them and chose to follow their lead. Weren't there other candidates through the years that were more militant than those guys, but the membership in Tulsa rejected them? Hewitt was Don's partner, together they had their secret meetings in Tulsa, then along with Title II prevented the line or AFW from even getting a chance to negotiate. They pulled the 767 out of AFW to save heads in Tulsa and get them to pass the deal, AFW had near a perfect record with the 767 and now Tulsa is so far behind that the company has outsourced several of them. So now in addition to the heads lost in AFW Tulsa is going to lose that work and the heads that go with it anyway. Is the TWU responsible for their poor performance? Like you said about blame there is plenty to go around and everybody's hands are dirty. How do we know that should we get AMFA they wont elect the same people with the same mindset? I know when the TWU took over MCI the guys at MCI just ripped the IAM sticker off the door and the same pro-concessionary guys were put in place. A change in Unions did not result in a change of mindset in MCI. I don't argue the fact that this Union has failed us, they have, and I don't support what its done to our profession, but as long as the majority of our class and craft as defined by the NMB say this is the Union we have then I will continue to try and make it do what we need it to do instead of everything the company and the pro-company members in places like Tulsa wants it to do. You have the luxury of sitting on your high ideals of what you feel a Union should be, fine, go for it, but we have to deal with the reality of what it is and find a way to make it something that can get us contracts so we can make it from paycheck to paycheck.


While the Convention had some dissapointments (they pretty much shut Local 591 and 567 out while putting 514 on every committee and made them the face of mechanics at AA) there has been some movement towards changing the way the TWU does things in the four weeks since Lombardo and Samuelson took over, Little, Gordon, Connelly, Gillespie and Gless are gone, we hear more are going, Don Videtich remains and that's very problematic for me, but I have been told that he will have nothing to do with M&R, ironically its the Tulsa Leadership that wants to keep Videtich.

Lombardo I don't really know well, but his track record is good, several years ago I asked Little to remove Videtich and put Lombardo in charge of our negotiations based on the fact that he has pulled the trigger before and it was clear that Don had no intentions on pressuring the company to get us at least industry standard, and Samuelson has been a good leader who for the first time in memory has united Local 100. When the MTA said agree to give backs or they would cut heads he said "No givebacks", they cut heads, which was painful and the Local did what they could for those who were laid off, but within a year they were all back to work, and no givebacks. (Their Health benefits today are better than what we had 30 years ago)) Even though most of the concessions in our book have Gless' name on them we know that Videtich was the man behind the content. If this new leadership feels that sending him back to work under what he crafted is too severe then what does that say about the deal? The Videtich situation could be a make or break for me but for now I will continue to push for changes in this Union. That's what my peers elected me to do. That's who I answer to, who do you answer to?

Bob, 
 
You say that you answer to your peers, is that 591 or just JFK?
I for one don't see much change at the local level since you guys have been in office.
The Intl. and the company did away with the Baker letter which closed the line locals, so why aren't you and the other back to the floor at the stations assigned too?
 
You made a statement here about how much more money you make now v/s what you made as JFK's Pres. approx $250.00 more a month I think was the amount you quoted. You guys gave that to yourself without our say so so explain how you answer to us?
 
Change from within Idea is a failure, you should see that. I know you are going to say well someone needs to standup for us, I agree, but you and the other elected officials of 591 need to do a better job of keeping the membership informed as what is actually going on.
The email blast you send to those of us who have registered is only good if people go to the web site and read what is there. You and I both know that NO one does that, in general, just like the union meetings no one goes too. They hate the TWU and are just fed up with the BS. But most are just so reluctant to change and have given up. Most here have the IGM attitude, I am just going to worry about me, NOT my Class and craft or other stations. You know that is how it is here at AA. If you feel that Don V. needs to go then lets try to find a way to force Lombardo to remove him. You and the Line officers should lead the way to do that.
 
I for one don't think that the leadership of the TWU is ever going to change its spots, I think the whole TWU needs to go away.
 
AMFA may or may not be the answer but until we try a different path here at AA the appathy and discord among the membership will be here.
If we bring AMFA here then come election time at AMFA we should be able to place an AA guy at the top and effect change within AMFA as well.
Then our class and craft will have some one in a place of power to help our class and craft. I also think that if the TWU is removed that there will be many from the floor who will step up to help effect a change and rid the stations of the scammers who still side with the company. 

 

[Bob Owens]

Bob, 
 
You say that you answer to your peers, is that 591 or just JFK?
I for one don't see much change at the local level since you guys have been in office.
The Intl. and the company did away with the Baker letter which closed the line locals, so why aren't you and the other back to the floor at the stations assigned too?

Because the bylaws as written by the International stipulated that I would be UB full time. Its not realistic to think that I could do this job and work the floor, we are a local that covers 24 stations in 18 states and around 150 people on payroll with five off base offices with bills and utilities etc in all of them. Yes this pays me $150 more than I was getting as President of 562, and it takes many more hours. The International set the rates in the bylaws they imposed on us, they allowed us to make some modifications we sent many modifications that we felt were necessary for us to run the local such as having chairmen, more than 1 steward per 100 members, recall, and yes higher pay rates across the board. I work 60 to 80 hours a week doing this, I don't work OT or a second job anymore, I cant, but I still have to provide for my family. Would I continue to do this job for less? NO, it would not be fair for me to tell my daughter she cant go to college because I want to be a Union rep. I would have to give it up and go back to working OT and a second job like I did before I became a Union rep. But you as a member have the right to make a motion to change the rates if you feel its too much.  



We have a membership meeting in MIA tomorrow, and you also have a website that's available 24/7. If you don't have answers for your questions then you didn't ask. Its unreasonable for you to expect us to seek out 4300 members on a daily basis and see if they have any questions on anything, some effort has to be made on your part, that's what the website is there for, it has our Emails and phone numbers.
 

The email blast you send to those of us who have registered is only good if people go to the web site and read what is there. You and I both know that NO one does that, in general, just like the union meetings no one goes too.
 

I know that from 562 the website and Email was more effective than anything else we ever tried as far as getting the message out. We have around half signed up, need to get the other half. We have some money coming in from the settlement and may use that as a means to try and get more signed up. Its even better than going to the floor because of days off shifts etc, although hopefully in the future you will see more of us on the floor.

 

If you feel that Don V. needs to go then lets try to find a way to force Lombardo to remove him. You and the Line officers should lead the way to do that.
 

We made that clear, I've since received an Email that he is gone as of this past Friday.

I for one don't think that the leadership of the TWU is ever going to change its spots, I think the whole TWU needs to go away.
 

Well we shall see. So far its only been four weeks since the Convention. Little and his slate are gone, Videtich, and Gless are gone, the company now has to deal with the Presidents instead of the International. Your frustration is understandable, but there have been changes. Communications could be better, and we are working on that but there is only so much you can do in a day. Maybe I will see you in MIA tomorrow at the meeting.

 

[AANOTOK]

Ok Bob, go find out the present and future of our prefunding match. No opinions, just facts!

 

[WorldTraveler]

in another apparent profit-driven decision, AA's JFK-IAH flight is being dropped after the loads on the flight were below AA system averages at average fares in the local market that were below what other carriers were getting in the local Houston-New York City market.

http://airlineroute.net/2013/11/05/aa-jfkiah-jan14/

 

[jimntx]

in another apparent profit-driven decision, AA's JFK-IAH flight is being dropped after the loads on the flight were below AA system averages at average fares in the local market that were below what other carriers were getting in the local Houston-New York City market.

http://airlineroute.net/2013/11/05/aa-jfkiah-jan14/

 
But, but...I thought our strategy on money-losing flights was to increase frequency (see also trans-PAC routes).

 

[MetalMover]

 
But, but...I thought our strategy on money-losing flights was to increase frequency (see also trans-PAC routes).

I guess DL never stops unprofitable routes because they have the best of everything ever in the airline industry and they can make everything peaches and cream and can turn any pumpkin into a magnificent stage coach....blah blah blah.

 

[WorldTraveler]

But, but...I thought our strategy on money-losing flights was to increase frequency (see also trans-PAC routes).

apparently AA doesn't see JFK-IAH as strategically important which is not how they see the Pacific at this point.

It does validate that JFK-IAH is a market that UA likely would have flown if they thought there was value in it. Even without a large hub at JFK, UA has the presence at IAH to make a flight work if they wanted to but AA's cancellation validated that the route isn't viable. Even with a 76 seater, AA needed to raise the average fare on the local a whole lot more than they have.

Let's also be clear that AA is making good network decisions elsewhere... it is the Pacific that has been the focus of what I have posted... but the losses that AA sustained on JFK-IAH pale in comparison to what AA is accumulating in order to build a presence in Asia which may or may not ever be sufficiently large to compete with DL, UA, or a host of Asian carriers.