American/USAir-why not now?
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PITbull
Veteran
- Dec 29, 2002
- 7,784
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You are right about that...and this thread should all be about AA. But, I just can't stand to look at anyone write about how one airline is better than another post BK, when they have all used the BK card to get out of their obligations, no less.
I had alot of respect for AMR for not following in the same pattern as the other carriers, but heck, how could they compete???
I am on here to express, with all due respect to the AA employees, that I understand how painful this is for all of them..believe me, I get it. And I implore them not to feed into USAirways bs that they will fair better by throwing their support behind US Airways for a merger, when US Airways is the KING of BK. There is no way that US Airways will spare AA employees pension plans to stay frozen. AA, at this point, needs to get their house in order and merge from this thing already, with no interference from the "peanut gallery" touting in the media how they made hundreds of millions this quarter, and how special they are... but then, can't get a T/A ratified by their own f/a group...for cry;in out loud again.
As long as deregulation is alive, so will merger-mania.
To date 3 Democratic Presidents Carter, Clinton, Obama and 3 Republican Presidents Reagan, Bush 1 and 2 have sat in the Oval Office and watched a great industry dissolve, with what in mind ?
Answer: To give cheaper fares to the masses, aka Voters. And it ain't gonna change anytime soon.
So hang up those wings, that screwdriver, and that apron and dust off the resume...
To date 3 Democratic Presidents Carter, Clinton, Obama and 3 Republican Presidents Reagan, Bush 1 and 2 have sat in the Oval Office and watched a great industry dissolve, with what in mind ?
Answer: To give cheaper fares to the masses, aka Voters. And it ain't gonna change anytime soon.
So hang up those wings, that screwdriver, and that apron and dust off the resume...
jimntx
Veteran
I'm surprised I haven't seen anything on Airline Forums about a new codeshare/JV between Emirates and Qantas--particularly since Qantas is a member of OneWorld. (I admit it may have been posted and I just missed it, but...) A friend asked me last week how "the agreement between Emirates and Qantas is going to affect OneWorld?" I hadn't heard anything about an agreement.
It seems that Qantas and Emirates have something more than a codeshare going. All Europe-bound Qantas customers from Australia and other parts of Asia will fly Qantas to Abu Dhabi, and then fly Emirates from there to Europe
http://finance.yahoo...-111434800.html
There's not much in the linked article, and another article from the Guardian had most of the content removed, but it does mention that Qantas and IAG (BA and IB) have terminated a 20+year agreement. Doesn't sound good for OneWorld.
Correction: It was posted in Frequent Flyers forum the day it was announced (Sept. 6th). http://www.airlineforums.com/topic/54241-frequent-flyer-boon-in-qantas-emirates-link-the-west-australian/
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #67
Pit,
Yes, CO filed for Bk in 1983 and then again in 1990 both cases heavily influenced by the leadership of Frank Lorenzo.
I don’t commend ANY company for filing for BK… but after its 2[sup]nd[/sup] BK, CO brought in a management team that rebuilt the airline and created a 20 year run of being a successful growing enterprise.
CO was one of the first airlines post deregulation that survived BK not once but twice and managed to successfully restructure.
As much as all of us HATE bankruptcy, it is a part of the law in the same country that created deregulation of the airline industry.
Chapter 11 has existed for years under the premise that saving a failing company by allowing a company to restructure its debts and obligations via stock in the reorganized company so that the company can continue operating. If the company failed completely, then there would be a complete loss of ALL of the jobs, economic impact etc.
The huge rise in BKs during deregulation is directly attributable to the growth of low fare carriers who pushed fares down and capacity up using costs that were much lower compared to their legacy peers who could not adapt as quickly.
Someone posted an interview w/ Crandall on the DL forum (not sure what it has to do w/ DL, Mikey, other than a few words about maintenance outsourcing but AA “stuff” manages to seep onto other forums). Most of us would agree w/ him that deregulation has been a failure in the amount of BKs that it has generated and the loss of salary/benefits for airline workers.
But deregulation in the US did occur – and many countries decided they do not want to copy the US’ example of airline deregulation and have been far more careful in letting unbridled market forces to rule. India probably had the most US-like form of deregulation and the industry there has been in chaos for years…. With a carrier or two now likely on the verge of collapse since they don’t have US-style BK laws. (note that some airline employees in India haven’t been paid for six months or more)
WN is simply not in the same league as other US airlines because they did not accumulate the debts and responsibilities that the network carriers had going into BK including defined DB pension plans, facilities – including maintenance bases – throughout the country that did not reflect their current networks , and aircraft leases that also did not reflect their current networks.
But there have been US LEGACY airlines that have managed to successfully restructure and whose employees have not remained w/ BK wages.
Thus the focus must be on what companies have successfully restructured their businesses AND allowed employees to share in the success of the restructured company vs. those that have not…
After two BK filings, CO employees DID benefit in the company’s restructuring and success although CO employee average salaries were far lower than its network carrier peers, in part because CO rapidly grew and added employees at the bottom of the pay scales and had far lower retirement costs.
In the 2000 era of BKs, you know what employees have gained back some of what they lost and who has not.
My point is and will remain that DL employees have begun to regain some of what they lost in BK faster than any other airlines’ employees.
I assert now and have for years that the issue is NOT union vs. non-union but rather how well a company is run = post BK or not.
CO was well-run after BK2 and it was less unionized than AA, UA, NW etc but more so than DL.
DL was and remains one of the least unionized global airlines but DL has aggressively grown the company using revenue generating like NYC and international growth as well as non-employee cost cutting moves like the refinery and reduction in small RJs.
WN used its unique business plan to create markets that other carriers left untouched using its highly productive workforce.
All three carriers paid their employees as good as or better than their peers, even if some of the “legacy” costs such as retirement and legacy costs were different.
I am VERY concerned - and have said it for months - that AA’s business plan will not create the revenues that CO and DL used to turn their companies around post BK or that WN used to ensure high pay.
I am VERY concerned that AA’s BK will be just like US’ where labor bears a disproportionately large percentage of the total price of restructuring and AA employees – whether merged w/ US or not – and where labor is locked into BK wages for years and years.
Many AA labor leaders RIGHTLY fear that AA could keep their BK contracts for close to a decade while other carriers’ employees will have moved far beyond AA’s costs – widening the gap that ALREADY exists.
I agree w/ you that Parker or US mgmt will have little incentive to increase the pay of AA-US’ merged workforce, esp. after he gets his hands on the revenues from AA. He could also keep AA and US’ labor groups in the same divided, low paid state that he has used on US employees.
My desire is that ALL airline employees be well paid. Some of the structural issues such as excess capacity and too many carriers are being resolved.
Yet, if BK is used to keep employees at bottom-of –barrel wages for years on end by mgmt teams that cannot grow revenue so they “punish” employees, then the industry truly is worse off than before deregulation.
Yet, the evidence remains that there are carriers who have managed to grow and adapt, even after BK, and whose employees do fare better than other employees post-BK.
Jim,
Air Berlin just signed a multilateral codeshare agreement with AF-KL and Etihad. Not sure how it all fits together w/ oneworld and specifically AA but carriers are becoming less and less interest in making a commitment to an alliance in favor of agreements w/ carriers that can provide the greatest financial returns in a specific region. Air Berlin obviously thinks AF/KL is of more help in Europe (and vv) than the help they can get from AA/BA/IB….
Yes, CO filed for Bk in 1983 and then again in 1990 both cases heavily influenced by the leadership of Frank Lorenzo.
I don’t commend ANY company for filing for BK… but after its 2[sup]nd[/sup] BK, CO brought in a management team that rebuilt the airline and created a 20 year run of being a successful growing enterprise.
CO was one of the first airlines post deregulation that survived BK not once but twice and managed to successfully restructure.
As much as all of us HATE bankruptcy, it is a part of the law in the same country that created deregulation of the airline industry.
Chapter 11 has existed for years under the premise that saving a failing company by allowing a company to restructure its debts and obligations via stock in the reorganized company so that the company can continue operating. If the company failed completely, then there would be a complete loss of ALL of the jobs, economic impact etc.
The huge rise in BKs during deregulation is directly attributable to the growth of low fare carriers who pushed fares down and capacity up using costs that were much lower compared to their legacy peers who could not adapt as quickly.
Someone posted an interview w/ Crandall on the DL forum (not sure what it has to do w/ DL, Mikey, other than a few words about maintenance outsourcing but AA “stuff” manages to seep onto other forums). Most of us would agree w/ him that deregulation has been a failure in the amount of BKs that it has generated and the loss of salary/benefits for airline workers.
But deregulation in the US did occur – and many countries decided they do not want to copy the US’ example of airline deregulation and have been far more careful in letting unbridled market forces to rule. India probably had the most US-like form of deregulation and the industry there has been in chaos for years…. With a carrier or two now likely on the verge of collapse since they don’t have US-style BK laws. (note that some airline employees in India haven’t been paid for six months or more)
WN is simply not in the same league as other US airlines because they did not accumulate the debts and responsibilities that the network carriers had going into BK including defined DB pension plans, facilities – including maintenance bases – throughout the country that did not reflect their current networks , and aircraft leases that also did not reflect their current networks.
But there have been US LEGACY airlines that have managed to successfully restructure and whose employees have not remained w/ BK wages.
Thus the focus must be on what companies have successfully restructured their businesses AND allowed employees to share in the success of the restructured company vs. those that have not…
After two BK filings, CO employees DID benefit in the company’s restructuring and success although CO employee average salaries were far lower than its network carrier peers, in part because CO rapidly grew and added employees at the bottom of the pay scales and had far lower retirement costs.
In the 2000 era of BKs, you know what employees have gained back some of what they lost and who has not.
My point is and will remain that DL employees have begun to regain some of what they lost in BK faster than any other airlines’ employees.
I assert now and have for years that the issue is NOT union vs. non-union but rather how well a company is run = post BK or not.
CO was well-run after BK2 and it was less unionized than AA, UA, NW etc but more so than DL.
DL was and remains one of the least unionized global airlines but DL has aggressively grown the company using revenue generating like NYC and international growth as well as non-employee cost cutting moves like the refinery and reduction in small RJs.
WN used its unique business plan to create markets that other carriers left untouched using its highly productive workforce.
All three carriers paid their employees as good as or better than their peers, even if some of the “legacy” costs such as retirement and legacy costs were different.
I am VERY concerned - and have said it for months - that AA’s business plan will not create the revenues that CO and DL used to turn their companies around post BK or that WN used to ensure high pay.
I am VERY concerned that AA’s BK will be just like US’ where labor bears a disproportionately large percentage of the total price of restructuring and AA employees – whether merged w/ US or not – and where labor is locked into BK wages for years and years.
Many AA labor leaders RIGHTLY fear that AA could keep their BK contracts for close to a decade while other carriers’ employees will have moved far beyond AA’s costs – widening the gap that ALREADY exists.
I agree w/ you that Parker or US mgmt will have little incentive to increase the pay of AA-US’ merged workforce, esp. after he gets his hands on the revenues from AA. He could also keep AA and US’ labor groups in the same divided, low paid state that he has used on US employees.
My desire is that ALL airline employees be well paid. Some of the structural issues such as excess capacity and too many carriers are being resolved.
Yet, if BK is used to keep employees at bottom-of –barrel wages for years on end by mgmt teams that cannot grow revenue so they “punish” employees, then the industry truly is worse off than before deregulation.
Yet, the evidence remains that there are carriers who have managed to grow and adapt, even after BK, and whose employees do fare better than other employees post-BK.
Jim,
Air Berlin just signed a multilateral codeshare agreement with AF-KL and Etihad. Not sure how it all fits together w/ oneworld and specifically AA but carriers are becoming less and less interest in making a commitment to an alliance in favor of agreements w/ carriers that can provide the greatest financial returns in a specific region. Air Berlin obviously thinks AF/KL is of more help in Europe (and vv) than the help they can get from AA/BA/IB….
Hey World Traveler good, but you missed the biggest catalyst in airline deregulations.. The Internet.. The Internet was never figured in when deregulation was launched by President Jimmy Carter, and Nerd Alfred Kahn simply beause the internet barely existed.
No one had smart phones and iPads back then.
No one in their right minds figured that a hand held device could destroy so many lives, so many professions.
Airlines have the largest slice of the pie labeled " Labor " because aircraft need big money for skilled professional and maintenance.
Nowadays people can book the lowest fare anywhere, even while driving their cars passed the allowable speed limit.
Just click and it's done, no regard for brand name, just give me a seat, because regardless of where I fly, that's all I'm getting these days, a seat ( hopefully one attached to the floor ).
Yep, old Jimmy the farmer let the horses out or the barn and into the wild.
Now try to get them back.
No one had smart phones and iPads back then.
No one in their right minds figured that a hand held device could destroy so many lives, so many professions.
Airlines have the largest slice of the pie labeled " Labor " because aircraft need big money for skilled professional and maintenance.
Nowadays people can book the lowest fare anywhere, even while driving their cars passed the allowable speed limit.
Just click and it's done, no regard for brand name, just give me a seat, because regardless of where I fly, that's all I'm getting these days, a seat ( hopefully one attached to the floor ).
Yep, old Jimmy the farmer let the horses out or the barn and into the wild.
Now try to get them back.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #69
The internet has clearly changed air transportation but only because providers have allowed it become a commodity not unlike corn and beans and oil that are traded on global exchanges... as long as a basic level of quality for the product is maintained, corn is corn.
The US network airlines have done a poor job of differentiating their product while battling low fare carriers on price.
There are carriers globally who recognize the value of having a differentiated product and gain financial benefits from it.
OTOH, US carriers are the masters of creating loyalty through loyalty programs - and AA started the process. Don't for one minute doubt how many people are loyal to AA and to each network carrier because of their loyalty programs, esp. the most valuable/highest paying passengers.
The US network airlines have done a poor job of differentiating their product while battling low fare carriers on price.
There are carriers globally who recognize the value of having a differentiated product and gain financial benefits from it.
OTOH, US carriers are the masters of creating loyalty through loyalty programs - and AA started the process. Don't for one minute doubt how many people are loyal to AA and to each network carrier because of their loyalty programs, esp. the most valuable/highest paying passengers.
jimntx
Veteran
True, but in a move to cement that loyalty, AA started giving automatic upgrades (with no mile deductions from the members account) to ExecPlats. A number of them have quit buying FC seats--especially if they have been cleared to pre-select exit row seats. If there is space available, they get a F/C seat for a coach price. If not, well, exit row is not too bad, and they get a free drink (and snack if flight is long enough) anyway.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #71
yep... that is how the US network airlines have created loyalty among their best customers by offering a product that the low fare carriers cannot. First class in the US domestic market is largely about retaining loyal fliers... it isn't needed on int'l routes to anywhere near the same degree, although FC/BC is offered as part of corporate contracts and even for the most loyal int'l passengers.
The network carriers have created mechanisms to leverage their advantages among the most loyal customers... but they also have done a poor job of creating loyalty for the vast majority of the public (with respect to numbers though not necessarily revenue) who are not brand loyal.
Good companies continue to work to create brand loyalty among all customers.... the greater the loyalty, the more reward that is provided. For many passengers, they don't qualify for bigger rewards because they haven't shown much loyalty.
For them, the internet will be one of the biggest factors in helping decide who they fly with.....
but it should be remembered that pre-deregulation, airlines essentially charged the same fares so air travel has never been terribly differentiated.
The network carriers have created mechanisms to leverage their advantages among the most loyal customers... but they also have done a poor job of creating loyalty for the vast majority of the public (with respect to numbers though not necessarily revenue) who are not brand loyal.
Good companies continue to work to create brand loyalty among all customers.... the greater the loyalty, the more reward that is provided. For many passengers, they don't qualify for bigger rewards because they haven't shown much loyalty.
For them, the internet will be one of the biggest factors in helping decide who they fly with.....
but it should be remembered that pre-deregulation, airlines essentially charged the same fares so air travel has never been terribly differentiated.
British Air is willing to buy stake in AA if Horton asks.
http://blogs.star-telegram.com/sky_talk/2012/10/british-airways-ceo-reiterates-his-willingness-to-invest-in-american.html
http://blogs.star-telegram.com/sky_talk/2012/10/british-airways-ceo-reiterates-his-willingness-to-invest-in-american.html
jimntx
Veteran
Which would fix which particular problem of the myriad problems we have? We've got $4billion in the bank. An infusion of cash is one thing that is NOT needed. Remember, U.S. law still prevents IAG from having a controlling interest. And, what benefit is it to IAG to own a minority interest in AMR? We already have a ATI/JV agreement with them.
And, let's not forget that Qantas (another OW member) has just split the blanket with IAG on codeshares to/from Europe and Southeast Asia. I'm not sure how this is going to affect OW, but I don't have a feeling that the effect will be good.
jimntx, you are absolutely right. We do not need more cash, we need Congress to get off it's butt and change the law. The U.S. airline industry is almost fatally damanged. We need mergers with international partners to be allowed if we are ever going to thrive again.
jimntx
Veteran
The existing merged airlines in Europe have not exactly set the world on fire financially--especially, the AF/KLM combo. IAG (British Airways and Iberia) has had its own struggles. What advantage is it to IAG to take on AMR when we are losing money hand over fist, and the management/employee relationship goes from bad to worse on a daily basis? (BA has had its own labor problems, thank you.)
The fact that Qantas has ended its codeshare agreements with BA/IB to go with Emirates on Southeast Asia to Europe routes could mean that maybe OW is starting to pull apart. This would not be happening if everyone was happy with the financial results of the Alliance.
The fact that Qantas has ended its codeshare agreements with BA/IB to go with Emirates on Southeast Asia to Europe routes could mean that maybe OW is starting to pull apart. This would not be happening if everyone was happy with the financial results of the Alliance.
