AMR Loss expected.

[goodgirl37]

Yet again you try to hijack a thread. Try sticking to the subject. If you want to flame bait your bankruptcy and AA union theories do it on another thread.

Oh someone is upset that she was proven wrong.... same story FAMikey... whine, whine, whine, - same old story..... Teacher, teacher, teacher!!!!

 

[frontline]

Yes, it's time for Restore and More, and AMR management to take a pay cut. Shared Sacrifice remember?

And the loss is large, as expected. So large that our company can't sustain its infrastructure like MCI. And idiots like you want to "restore and more" while people are losing jobs. How greedy do you look now with 800 jobs going and you banging on about a big raise. Disgusting.

 

[Hopeful]

And idiots like you want to "restore and more" while people are losing jobs. How greedy do you look now with 800 jobs going and you banging on about a big raise. Disgusting.

So people are "idiots" because they expect something back in exchange for 6 years of "pain?"
How dare YOU, frontline?
Did you call the upper crust " names depicting greed" for accepting their "bonus compensation" all these years?

People have a right to their opinions without being called "idiots!"

 

[Boomer]

S&P takes AMR, American, off credit watch

"...The service said AMR had taken a number of steps to improve its liquidity, raising $5 billion in cash and financing.

"These actions, and initial signs of improving airline traffic and yield trends, have allayed our concerns over the company's near-term liquidity outlook," S&P said..."

Improved credit standing, declining costs, improved yields, smaller footprint, reduced employment: someone tell me again why the TWU M&R Employees shouldn't expect to benefit from the gains to the same extent that AMR Management has enriched themselves by some $300,000,000.00?

2009 TWU Outrage over Executive Bonuses: Google Search "Executive Bonuses, American Airlines" Reuters.

 

[Hackman]

And the loss is large, as expected. So large that our company can't sustain its infrastructure like MCI. And idiots like you want to "restore and more" while people are losing jobs. How greedy do you look now with 800 jobs going and you banging on about a big raise. Disgusting.

The fact is company man that AMR had no business buying TWA in the first place, among the many poor business decisions by your management hero's the employees had to pay for.

I'm not greedy, just want the promised "Shared Sacrifice" by management, or my contract restored with raises. What's "disgusting" is your apparent belief that it is fine for AMR management to reward themselves to the tune of 300+ million while crying poor mouth for the past 6 years of record concessions all union work groups continue to "enjoy".

It must be hell living on your knees.

 

[Boomer]

2009 TWU Outrage over Executive Bonuses: Google Search "Executive Bonuses, American Airlines" Reuters.

When you access the article you find the following:
"...www.americanexeccheck.com..."

Go to : American Airlines Executive Pay Check and match the heads of publiclly traded companies against their compensation.

Improved credit standing, declining costs, improved yields, smaller footprint, reduced employment: someone tell me again why the TWU M&R Employees shouldn't expect to benefit from the gains to the same extent that AMR Management has enriched themselves by some $300,000,000.00?

Just read USAVIATION.COM: Boston, it appears that AMR is ceeding another market which will again improve credit standing through declining costs, improved yields, smaller footprint and reduced employment.

Shouldn't the TWU UNION Employees that allowed such moves through the concessions of 2003 be allowed to participate in what others say is a strategic realignement that positions the company for future growth?

 

[Bob Owens]

And the loss is large, as expected. So large that our company can't sustain its infrastructure like MCI. And idiots like you want to "restore and more" while people are losing jobs. How greedy do you look now with 800 jobs going and you banging on about a big raise. Disgusting.

Are you claiming that they would keep infrastructure they didnt need if we worked for less? If so then what happend to the 40,000 jobs that are no ;longer here? We've taken a 40% paycut and 40,000 people are gone!

Now how many jobs are going this time? 800? Well I think the number was bigger for the Fall of 2008 but how many people actually "lost" their jobs then?

I see all those 737s are still on order. Things cant be that bad if they can afford to get all them new airplanes.

 

[eolesen]

Unlike you and your 20 year old compact car that you hold onto, AA has to replace its aircraft. Customers don't notice as much as long as you upgrade the interiors occasionally (something AA lagged in with the 757 and MD80 fleets), but you still can't ignore the changes in engine technology and efficiency. The fuel savings alone justified the expense of fleet replacements at both CAL and ALK. Look at the cost per seat mile of airlines from 3Q, and AA stands out near the bottom. It's not just labor costs, but also due to the disadvantage they have in maintaining an older fleet, and the poor fuel economy relative to other carriers operating mostly NG fleets. With oil back to over $80/bbl, it's gonna be even more important to park the MD80's soon.

AA tried to make lemonade with regard to having too much maintenance capacity. For the past three years, they've tried to be successful with third party maintenance. It didn't work. Just like MRTC and all the other management failures y'all like to point out from time to time. So, they're cutting their losses and closing MCI. And yes, they're trimming back field maintenance. But, that's management's job. Figure out the most cost effective way to get things done, and if necessary, consolidate or move the work. It may not line up with where the most senior/experienced guys are, but "they've always done it that way" isn't a good enough reason to stick with the status quo.

The unshakable fact is AA's fleet is smaller than it was in 2001. Someone was going to lose their job if there wasn't replacement work to pick up the slack. The replacement work never materialized.

 

[The Goose]

Unlike you and your 20 year old compact car that you hold onto, AA has to replace its aircraft. Customers don't notice, but the cost of fuel savings alone justified the expense of fleet replacements at both CAL and ALK. When you look at the cost per seat mile of airlines from 3Q, AA stands out near the bottom, in large part due not just to labor costs, but more likely due to the disadvantage they have in maintaining an older fleet, and the poor fuel economy relative to other carriers operating mostly NG fleets.

AA tried to make lemonade with regard to having too much maintenance capacity. For the past three years, they've tried to be successful with third party maintenance. It didn't work. Just like MRTC and all the other management failures y'all like to point out from time to time. So, they're cutting their losses and closing MCI. And yes, they're trimming back field maintenance. That's their job. Figure out the most effective places to do maintenance, and move the work. It may not line up with there the senior guys are, and it might not make sense to you because they've always done it that way, and now they're not, but the fact is that AA's fleet is smaller. Someone was going to lose their job if there wasn't work to pick up the slack.

Of course, you're always welcome to place your pro-management spin on things, but from where most of us sit, AMR and the local (mis)management in TULE did everything in their power to ensure any attempt at third party maintenance was a failure.

One item that riles me in particular were the winglet mods.

People were solicited to volunteer from the TULE organization for a mod to the S-80s changing to a glass cockpit (the acronym escapes me). These people, not necessarily from the hangers or anywhere else where they brought additional needed skillsets, were given cursory training in what was to be their jobs. When that was completed, the stupid SOBs that make up American's TULE (mis)management force decided those people could handle a major structural modification as well - ie, adding the winglets. So many misdrills and other errors accumulated, APB revoked American's preferred provider status to install their winglets, cutting us out of a lot of business thanks to the extremely stupid SOBs you consider friends and defend here on a regular basis.

There is no defense nor excuse for that manner of stupidity when many peoples' jobs hang in the balance, not to mention supposedly running a business for the stockholders' benefit. The entire upper management "team of twits" and the Board of Directors is guilty of malfeasance and should be removed by the stockholders. Fat chance of that happening, though.

The management types that decided to use people not skilled in the task at hand - major structural modification - should not only have been fired, but placed in Iron Maidens by the TULE main gate for all to see.

 

[eolesen]

Whatever, Goose. I don't consider AMR management "friends" by any means, but they're not the dumbest group in the bunch as you purport on a daily basis. I'll still maintain that the business to be gained in the third party market wasn't enough to justify the risk or the costs involved. What exactly does APB's revoking of preferred provider status really mean -- does it rule out AA from bidding to install winglets for other APB partners, or does it just mean that APB won't be steering business towards AA? Either way, it's a moot point with the MCIE closure.

Since Ralph locked up the BOS thread, I'll add what I was going to post there because it's mildly relevant to the topic here as well...


In this pricing environment, sitting on the sidelines in hotbeds like BOS and NYC might not be such a bad thing.

AA knows they can't compete on price in BOS and make the same amount of money as B6, VX or WN. Likewise at JFK. Matching B6 and DL frequency for frequency and route for route is a losing proposition right now.

As long as they can maintain some equilibrium and offer enough frequencies in the right places and times to keep the mileage whores happy enough not to defect to VX or B6, it's not worth getting into the pissing contest between DL and B6 or VX. Keep the business travelers happy -- at the end of the day, they're the ones keeping you in the air, not the $39 back of the bus crowd.

Now you will probably say that AAs CASMs are higher than SWA (but they are lower than most of its competitors) to which I will reply you are not considering the "all other things equal"......

The base data is normalized for differences in stage length and seat density, but here's how AA really stacked up in the 3Q:

Cxr	Ex-FL	 Labor	Ex-F
AA	4.6		 4.1		8.7
CO	5.4		 3.2		8.6
UA	5.2		 3.2		8.4
US	5.2		 3.0		8.2
DL	4.8		 3.2		8.0
AS	3.5		 3.0		6.5
B6	3.5		 2.0		5.5
WN	2.6		 2.4		5.0
FL	3.2		 1.6		4.8

Ex-FL = Expenses per available seat mile minus fuel/labor
Ex-F = Expenses per available seat mile minus fuel

CO, UA and US aren't too far behind AA, but there's a pretty big gap between the LCC's and legacies.

Fuel's on the rise again, and the rate of increase should be about the same for everyone except for AA --- they've got the most fuel inefficient fleet compared to everyone else, so they're going to see a higher cost than the other guys.

 

[Bob Owens]

The base data is normalized for differences in stage length and seat density, but here's how AA really stacked up in the 3Q:

Cxr	Ex-FL	 Labor	Ex-F
AA	4.6		 4.1		8.7
CO	5.4		 3.2		8.6
UA	5.2		 3.2		8.4
US	5.2		 3.0		8.2
DL	4.8		 3.2		8.0
AS	3.5		 3.0		6.5
B6	3.5		 2.0		5.5
WN	2.6		 2.4		5.0
FL	3.2		 1.6		4.8

Ex-FL = Expenses per available seat mile minus fuel/labor
Ex-F = Expenses per available seat mile minus fuel

CO, UA and US aren't too far behind AA, but there's a pretty big gap between the LCC's and legacies.

Fuel's on the rise again, and the rate of increase should be about the same for everyone except for AA --- they've got the most fuel inefficient fleet compared to everyone else, so they're going to see a higher cost than the other guys.

Thats just one quarter, no big deal. You dont base your business plan on one quarter. The fact is over a several year period AA enjoyed lower CASMS than most of its competitors, even the ones who went BK, now with all of their labor groups in extended negotiations all of a sudden things change.

If our fleet was so inefficient then how come we weathered 2008 better than most of the industry? Maybe our fleet would be more efficient would if they didnt screw up the MD-80 winglet mods.

The fact remains AA labor costs arent the problem, AAs mechanics wages arent the highest, not even close. If they are losing money the problem lies elsewhere.

 

[DLFlyer31]

Thats just one quarter, no big deal. You dont base your business plan on one quarter. The fact is over a several year period AA enjoyed lower CASMS than most of its competitors, even the ones who went BK, now with all of their labor groups in extended negotiations all of a sudden things change.

It's not just one quarter. The numbers eolesen has presented have been true for many years now.

His numbers show that if you EXCLUDE labor, AA is reasonably competitive with other legacies. However, AA's labor costs are still 20-30% higher than any legacy competitor....and even worse if you compare against LCC's. You may not like to hear that truth, but it's the truth.

And AA mechanics may not be the highest paid, but there's far more to labor cost than just paycheck. You'll notice that WN has some of the highest paid employees, yet their labor CASM is still quite low. It's called productivity. Of course, productivity is a two way street....it's both the fault of management (how they run the airline) and labor (work rules).

 

[Hopeful]

And AA mechanics may not be the highest paid, but there's far more to labor cost than just paycheck. You'll notice that WN has some of the highest paid employees, yet their labor CASM is still quite low. It's called productivity. Of course, productivity is a two way street....it's both the fault of management (how they run the airline) and labor (work rules).

Tell me,,,how do YOU determine a mechanic's productivity?
We're on the job 8 hours a day giving on time departures and making sure the aircraft depart safely. What does a SWA mechanic do on the line that the rest of us don't? Clean the lavatories and mop the floors?

 

[FWAAA]

Thats just one quarter, no big deal. You dont base your business plan on one quarter. The fact is over a several year period AA enjoyed lower CASMS than most of its competitors, even the ones who went BK, now with all of their labor groups in extended negotiations all of a sudden things change.

The bolded portion has no basis in fact. It's not just one quarter, it's the continuation of a long-term trend. Bob Herbst's numbers (isn't he an AA Captain?) show that AA had the lowest CASM of the legacies only in 2004, once the concession savings had fully kicked in, and were middle-of-the-pack or higher in every other year; in 2008, AA's CASM had risen to the highest among the legacies except for NW:

http://www.airlinefinancials.com/uploads/08_lg_CH_15-32.pdf (see Chart #22)

If our fleet was so inefficient then how come we weathered 2008 better than most of the industry? Maybe our fleet would be more efficient would if they didnt screw up the MD-80 winglet mods.

AA weathered the fuel price spike better than most of the industry primarily because of AA's superior fuel hedging skills. Unlike many others, AA did not hedge as much at the top of the market. Long before WN became well-known for its fuel hedging prowess, AA was hedging fuel successfully. 2005-08 was no exception. I didn't know the MD-80s had a winglet designed for them - given the small incremental fuel savings, it would make more sense to buy 738s with their demonstrated 35% greater fuel efficiency per ASM.

The fact remains AA labor costs arent the problem, AAs mechanics wages arent the highest, not even close. If they are losing money the problem lies elsewhere.

You're partially correct. At current levels, AA's mechanic' wages are not the problem. The real problem is that overall, AA's labor expenses per asm are the highest in the industry, primarily because of the lack of pilot productivity (on average, they fly fewer hours than any other legacy pilots) and the relatively expensive FAs (who don't get any more productive no matter how many years of experience they possess).

AA's current problem is lack of revenue, not its cost structure, and not labor expenses. Two years ago, AA made a decent net profit during the boom. If the economy recovers and business travel returns, AA could profit at today's wage expenses.

 

[FrequentFlierCA]

AA's current problem is lack of revenue, not its cost structure, and not labor expenses. Two years ago, AA made a decent net profit during the boom. If the economy recovers and business travel returns, AA could profit at today's wage expenses.

I agree for the most part, although I do want to add that AA would not be able to profit - even in a boom - with the wage demands currently on the table from the unions. Competitors like B6 and VX have driven fares down permanently on some routes (LAX-JFK for example). Those price declines include premium fares, largely thanks to VX's pricing model.

So while lack of revenue is the problem of the year, if the union negotiators get 100% of what they want high costs will be the problem of 2010.