Analyst Jamie Baker says AA won't cut labor costs as much as Horton would like

[2ndGENAMT]

If the world were good for nothing else, it is a fine subject for speculation.
William Hazlitt

 

[Buck]

When we get piled upon one another in large cities, as in Europe, we shall become as corrupt as Europe.​

Tom,​

 

[BoeingBoy]

Jim,
I jumped into this conversation to correct the notion you and others have had that AA is the only carrier that has pension costs...

Not what I said, is it. Since every big airline has "pension costs" - either DB or DC plans - it would be absurd of me to say that. I've admitted my error of omission about CO's ongoing DB pensions, but besides them AA is the only other carrier that has the open-ended cost of DB pensions (for now, likely not after bankruptcy). Not DL/NW, not PMUA, not US, not WN, not B6, etc, who either froze, terminated, or never had DB pensions. If you're claiming that that's wrong, who else did I omit that has an ongoing DB plan?

You do understand the funding differences between an on-going and a frozen DB plan I hope. When DL froze it's DB plans, a 17 year clock started - DL has 17 years to make up the underfunding. AA, with it's ongoing plan, has 5 years to make up the the actuarial underfunding and could be contributing to it's DB plans 50 years years from now. That is the problem AA (and UA for the former CO DB plans) faces that no other airlines face.

Jim

 

[WorldTraveler]

..

The DB pension plans are obviously a large cost that none of the competition has.
..
Jim

Of course we are talking about DB and not DC plans. And I provided the quote which you made and which you have danced around for about 5 pages of responses.
I acknowledge your admission that you excluded CO's plans... which are now the responsibility of UA so they remain real costs.
But it also does not change that AA is NOT the only carrier that has DB expenses and.... anyone who has had even one eye open knows the rest....
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but the real crux, Jim, is that you like others on here wanted to claim that AA was in such a unique position - regarding this subject, one that was disadvantaged. They argued how noble it was that AA hadn't filed BK despite having made some of the same cuts - if not deeper than their formerly BK peers - and some of their peers, namely DL, had larger CURRENT pension costs. Your argument, like theirs, would have had merit if AA were stable and could have survived with its cost structure as is - but it has been apparent for months if not years that AA was not viable - so the notion that AA was bearing a burden the others did not have is rather meaningless unless there was some evidence that AA was handling it better than its peers.
Given that AA's own labor cost disadvantage estimate is LESS THAN the amount of losses the company has sustained and will sustain, then there are clearly other cost and revenue issues - and given that there is about a $2B gap in profitability (even adjusted for size) between AA and its closest network peers DL and UA, there are issues far bigger than the pension plans that have to be addressed.
Given that AA would have never made it to the point when DL's pension funding had to be brought up to standard, then it makes the argument about the supposed burden AA carried all the more irrelevant.
But that still doesn't mean the pension plans will get a pass - just that they will be a high profile item even though the total cost savings will probably be fairly small unless they are terminate
But, as you well know, if AMR terminates the pension plans, they will be subject to enormous claims from labor and the PBGC - and so the decision whether to freeze or terminate the plans will be driven by how large the cost savings will be to the reorganized company vs. what the company will have to give in claims to creditors for the other items on its cost reduction proposal.
Right now, since AA has committed to a very costly refleeting strategy that will save alot of operational costs in the future but will add very large amounts of indebtedness (in the form of leases) to its balance sheet, the likelihood is that they will be more inclined to reduce long term indebtedness balancved against claims on the estate and be willing to increase costs somewhat over the long term.
Thus, I believe it is more likely than not that the majority - if not all of AA's pension plans will be frozen, not terminated... and they will be just 5 years beyond DL on the pension refunding process, even though it is still very possible that DL's pension payments may exceed AA's for many years.
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By the way, 700, DL's pension funding costs in the two most recent years were much higher than they were in 2008, DL's first full year out of BK and the year the stock market was last at its peak . DL's pension funding this year is hundreds of millions of dollars higher than it would have been if the stock market had remained at higher levels - less than $200M increased to more than $600M.... and that is also why it is very hard to know if AMR will indeed choose to FREEZE its plans. Had the stock market declined like it did BEFORE DL exited, they might have come up with a very different decision regarding funding.
Given that 2012 does not look like it will be a very decent year for global equity markets, there is little upside in whatever forecasts AMR might make about its pension plans.

 

[eolesen]

I think HT needs a bigger shovel... the hole he's already dug isn't big enough for his ego...

 

[WorldTraveler]

I think HT needs a bigger shovel... the hole he's already dug isn't big enough for his ego...

since you supposedly have me on ignore and you wrote HT, I'm presuming you aren't referring to me.
Besides, I haven't been the one adding a qualifier to every new post in order to to try to make my argument valid.
.
But then I am sure I am no fan of yours since I have shot holes in plenty of your supposed "truths"... which is presumably why you decided to ignore me even though you really can't.
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but I also shot holes in the all those theories of the moral superiority of AA's previous position - and now Jim is trying to hold out as the last man standing for a position that is no longer defensible... and most of us saw wasn't defensible months if not years ago.
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Just a tip to you and Jim... if you try to turn the discussion into personal one-ups-manship, you invariably stop arguing valid points - and that is where I win the discussion.
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As with you, I gave Jim to acknowledge that his position wasn't true - but instead he has filled his position full of qualifying statements - half of which he still can't counter.
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The point remains that one key sentence in post 126 was incorrect despite the fact that Jim refused and refuses to acknowledge his error.

 

[Buck]

since you supposedly have me on ignore and you wrote HT, I'm presuming you aren't referring to me.
Besides, I haven't been the one adding a qualifier to every new post in order to to try to make my argument valid.
.
But then I am sure I am no fan of yours since I have shot holes in plenty of your supposed "truths"... which is presumably why you decided to ignore me even though you really can't.
.
but I also shot holes in the all those theories of the moral superiority of AA's previous position - and now Jim is trying to hold out as the last man standing for a position that is no longer defensible... and most of us saw wasn't defensible months if not years ago.
.
Just a tip to you and Jim... if you try to turn the discussion into personal one-ups-manship, you invariably stop arguing valid points - and that is where I win the discussion.
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As with you, I gave Jim to acknowledge that his position wasn't true - but instead he has filled his position full of qualifying statements - half of which he still can't counter.
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The point remains that one key sentence in post 126 was incorrect despite the fact that Jim refused and refuses to acknowledge his error.

It would appear that the one-ups-manship is already owned............

I believe I was wrong in the 60's ?

 

[BoeingBoy]

Of course we are talking about DB and not DC plans. And I provided the quote which you made and which you have danced around for about 5 pages of responses.

And of course you know better than I what I meant by "the DB plans".... Such all seeing, all knowing omnipotence... 😛

Jim

 

[jimntx]

On a lighter note...stock up at $0.56/shr in after hours trading. Bonusses all around for the execs!

 

[eolesen]

Kev put it best a couple days ago on the DL forum -- Half Truther will continue to play "post until I win" until the cows come home...


Jim, it's just not worth your time or effort to feed his compelling need for self-importance... HT has already killed off any meaningful discussion on the DL forum, but fortunately there's a more consistent core of people here who see thru and don't put up with his BS.

 

[chris perry]

Kev put it best a couple days ago on the DL forum -- Half Truther will continue to play "post until I win" until the cows come home...


Jim, it's just not worth your time or effort to feed his compelling need for self-importance... HT has already killed off any meaningful discussion on the DL forum, but fortunately there's a more consistent core of people here who see thru and don't put up with his BS.

My long time attorney and friend, gave me some advice one time. He said believe about 20% of the conversation when people argue ,80% is just Ego spilling out...
This just remined me of that. Not to disrespect anyone here....

 

[WorldTraveler]

now, people, it's about character... it's a rare commodity today.
Jim had the option to admit he was wrong but continues to dance around looking for an opening.
Jim also said that he can't stand to be shown up - which pretty well says there is a healthy dose of pride at work... and we all know that pride cometh before the fall.
If you're wrong, admit you're wrong or at least have the good sense to move on and shut up.
Not surprisingly E did the very same thing until he was nailed against the wall enough time that he decided he would pretend to ignore - yet he can't.... which makes his statements about ignoring rather laughable.
Kev at least has the good sense to know when to walk away. There are others who frequent this forum who are knowledgeable and still manage to walk away if they are not shown to be correct.

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The issue is character, people. The discussions here are vehicles to shine the light very brightly on the character that each of us have. Some people have character and others do not.
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If you want to discuss items such as facts that are either black or white, then you shouldn't be surprised if you are proven wrong and someone corrects you.
If you want to discuss opinions, then no one can tell you that yours is wrong.

 

[Kev3188]

???

Walk away from what?

 

[WorldTraveler]

???

Walk away from what?

walk away from the discussion when it is clear that the facts that are being presented are contrary to one's position....
in your case, you know when to quit arguing... such as in the current DL thread about pay raises and RIF processes.... or at least you said you didn't intend to carry on. DL's process is legal, is not different from what they can do in any other state, and a union cannot stop an RIF.
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In BB's case, he not only won't admit that the original statement he wrote that AA is the only carrier that has pension costs - and thus why they are uncompetitive - is factually wrong. He has attempted to bend and modify the argument, and pretend no one else knew the context in which his statement was made rather than admit his statement as originally made was incorrect.
Now he is going around looking for other posts I have written trying to challenge them - just like he has done before - but he doesn't change that he said he doesn't want to be shown up by someone else.
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If people want to talk to people one on one, then they can control whether they are challenged on the basis of the accuracy of what was presented.
However, if someone wants to post something that can be factually determined to be right or wrong, then they shouldn't be surprised if they are challenged when they say something wrong.
In reality, the internet is a mirror or society as a whole - whatever flaws or faults we have in real life are magnified by the internet - and a discussion board like this. For most of us, we don't know each other here and don't really care whether someone likes what we post or not - while some people do know each other but behave in ways they never would in real person.
It becomes each individual's choice whether they want to use the power of the internet for their own personal good, the good of society, or whethey they want to simply perpetuate who they are in real life to a far greater degree online.
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Returning to the topic at hand, an analyst has said that they do not expect to see AA reduce its costs to levels comparable with DL and UA... and given that DL has pension costs that are both now higher and will be higher for many years than AA, the whole idea that pension costs is a significant source of AA's cost problem is just not accurate.

 

[enough already]

walk away from the discussion when it is clear that the facts that are being presented are contrary to one's position....
in your case, you know when to quit arguing... such as in the current DL thread about pay raises and RIF processes.... or at least you said you didn't intend to carry on. DL's process is legal, is not different from what they can do in any other state, and a union cannot stop an RIF.
.
In BB's case, he not only won't admit that the original statement he wrote that AA is the only carrier that has pension costs - and thus why they are uncompetitive - is factually wrong. He has attempted to bend and modify the argument, and pretend no one else knew the context in which his statement was made rather than admit his statement as originally made was incorrect.
Now he is going around looking for other posts I have written trying to challenge them - just like he has done before - but he doesn't change that he said he doesn't want to be shown up by someone else.
.
If people want to talk to people one on one, then they can control whether they are challenged on the basis of the accuracy of what was presented.
However, if someone wants to post something that can be factually determined to be right or wrong, then they shouldn't be surprised if they are challenged when they say something wrong.
In reality, the internet is a mirror or society as a whole - whatever flaws or faults we have in real life are magnified by the internet - and a discussion board like this. For most of us, we don't know each other here and don't really care whether someone likes what we post or not - while some people do know each other but behave in ways they never would in real person.
It becomes each individual's choice whether they want to use the power of the internet for their own personal good, the good of society, or whethey they want to simply perpetuate who they are in real life to a far greater degree online.
.
Returning to the topic at hand, an analyst has said that they do not expect to see AA reduce its costs to levels comparable with DL and UA... and given that DL has pension costs that are both now higher and will be higher for many years than AA, the whole idea that pension costs is a significant source of AA's cost problem is just not accurate.

Geez! What a pompous, narcissistic ass. I have him on ignore, but it's like being told to not look at an eclipse. I just sometimes have to touch that "view it anyway" link to see what arrogance. Is being displayed...