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

[FWAAA]

Does anyone have a breakdown of labor costs based on unionized groups?

I don't, but Bob Herbst and Swelbar keep track of those things, along with comparisons to the other airlines. And of course AA has those numbers.

When the company says labor is too high, do they mean all of labor or is it just the mechanics, F/A's, Fleet Service or Pilots?

I don't know for certain, but I'd bet that the discussion is generally always that the total labor costs are too high. When I talk about AA's labor costs being too high, I'm almost always talking about the aggregate labor costs. Of course, like night follows day, Bob Owens or someone else always chimes in with specifics about their work group's wages as "proof" that AA's total labor costs are not out of line with the competitors (despite the glaring logical deficiency in their post).

 

[Buck]

I don't, but Bob Herbst and Swelbar keep track of those things, along with comparisons to the other airlines. And of course AA has those numbers.


I don't know for certain, but I'd bet that the discussion is generally always that the total labor costs are too high. When I talk about AA's labor costs being too high, I'm almost always talking about the aggregate labor costs. Of course, like night follows day, Bob Owens or someone else always chimes in with specifics about their work group's wages as "proof" that AA's total labor costs are not out of line with the competitors (despite the glaring logical deficiency in their post).

Ok but I am looking to see where the unionized groups are compensated, compared to their peers. Exp. AA mechanics make X and UAL Y. My opinion is that the mechanics of AA are some the lowest paid in the industry, commercial airlines, not MRO's, and surly not General Aviation.

 

[Kellerguy]

Does anyone have a breakdown of labor costs based on unionized groups?

When the company says labor is to high, do they mean all of labor or isit just the mechanics, F/A's, Fleet Service or Pilots?

They mean all labor as a percent of CASM, cost per available seat mile.

I would use what they put up on the AA negotiations website, since that will be the source data the creditors will likely use and it is there online for everyone else to see. If you look there, I think you'll see the targets in in all three labor groups. I'll probably get bashed for saying this on here, but that is the one that singularly adds the most to the CASM measure.

As for M&E it looks like LINE is 13.5% over the stated low cost UA and the last base proposal was about 4.7% over. While that looks like a reachable figure to achieve, if they don't get what they need out of the pilots, M&E and F/A will be further hit to match CASM rates. As an aside, the one I have heard through the years that just kills AMR is the pilot agreement.

Something to consider though is that those figures do not include WN JBLU AK. Also these figures include labor only and not include medical, dental, pension and other benefits.

 

[WorldTraveler]

Ok but I am looking to see where the unionized groups are compensated, compared to their peers. Exp. AA mechanics make X and UAL Y. My opinion is that the mechanics of AA are some the lowest paid in the industry, commercial airlines, not MRO's, and surly not General Aviation.

unfortunately, Buck, there isn't enough publicly available information to be able to pinpoint everything w/ certainty. Remember that companies themselves do exchange labor cost information but labor groups do not have access to that same information - some of which are related to benefit costs which only the company knows based on actual usage - and the companies do not have to report to the government to be able to compare with accuracy.
.
AA's peers and are always will be DL, UA, and WN who with AA constitute more than 85% of the capacity in the US and who most overlap AA's system.
.
If you can w/ some reasonably degree of accuracy know where AA stands relative to its peers, you will know the comparisons that most matter to AA mgmt - and now their creditors.
Knowing where AA stands relative to competitors other than that group is "nice to know" but if AA can successfully compete against its most direct peers, it will be fine.

 

[paul1]

Does anyone have a breakdown of labor costs based on unionized groups?

When the company says labor is to high, do they mean all of labor or isit just the mechanics, F/A's, Fleet Service or Pilots?

http://www.aanegotiations.com/MechanicsWages.asp

http://www.aanegotiations.com/apaWages.asp

http://www.aanegotiations.com/JointWages.asp

http://www.aanegotiations.com/apfaWages.asp

Buck also note that for mechanics UA is voting on there T/A again right now and results should be know 12/29/11. If they pass there T/A we (AA) will be 2nd from the bottom even according to AA own data. So once they take are retiring medical and pension we will be well below everyone else. I think AA will keep maint. in house, but it will change alot i.e. 24/7 weekend coverage hiring of more osm or asm. The maint needs to be done one way or another. Hopefully they see it makes since to keep most of the work done in house. With the hiring of more osm's it will be cheaper than the mro's and they (AA) keeps the quality of the work.

Plus also one base will go I think most likely AFW (they wanted to sell that place before they even opened it IIRC) Just my two cents

http://www.aanegotiations.com compare pension and other info for all work groups

 

[texasreb]

http://www.aanegotiations.com/MechanicsWages.asp

http://www.aanegotiations.com/apaWages.asp

http://www.aanegotiations.com/JointWages.asp

http://www.aanegotiations.com/apfaWages.asp

Buck also note that for mechanics UA is voting on there T/A again right now and results should be know 12/29/11. If they pass there T/A we (AA) will be 2nd from the bottom even according to AA own data. So once they take are retiring medical and pension we will be well below everyone else. I think AA will keep maint. in house, but it will change alot i.e. 24/7 weekend coverage hiring of more osm or asm. The maint needs to be done one way or another. Hopefully they see it makes since to keep most of the work done in house. With the hiring of more osm's it will be cheaper than the mro's and they (AA) keeps the quality of the work.

Plus also one base will go I think most likely AFW (they wanted to sell that place before they even opened it IIRC) Just my two sense

http://www.aanegotiations.com compare pension and other info for all work groups

The only thing going for AFW is they are getting more planes out ontime than Tulsa. The new vp showed is the numbers in the base visit around november. It could be a lie, but even back then before bk he said that this could make a difference.

 

[TWU informer]

The only thing going for AFW is they are getting more planes out ontime than Tulsa. The new vp showed is the numbers in the base visit around november. It could be a lie, but even back then before bk he said that this could make a difference.

Ask the guys from MCI what they were telling them right up to the bad news.

 

[wrencher]

Ask the guys from MCI what they were telling them right up to the bad news.

Yes they pulled out the charts said what a wonderful job we were doing then a few months went by then said we are shutting you down and sending the work to Tulsa. All I heard was crap on this web about our own union brothers helping the company justify this decision, people like Bob Owens saying how expensive it was to fairy those planes up here little did he know that most of them came and went on revenue flights and when they didn't it was because they were 2-3 days early so they could not schedule it because they had so many downed 76's out of service elsewhere. Kind of ironic though that those same individual had little to say on our behalf when that work went to Timco. Not to slam Bob too hard though I thank him for keeping us informed somewhat and he does have a thankless job. Yes we went through bankruptcy twice and now I hope you realize now that we as well as you guys had very little to do with the BK you just hang on now and hope your not judged by the same standards you judged all of us. If it's one thing you can learn is that anything is possible keep your eyes and ears open and be ready to fight like hell because even in both our BK's we managed to keep our retire medical. I don't see a handfull of locals comeing together int this TWU on this issue.OH by the way Terminated Frozen meant the same thing when they FROZE our pension plans but it took some 5 years for the IAM to step up and let us in their retirement plan so if the company convences the TWU to sell us out of our pensions lets get a union in here and contribute to their plan just a thought.

 

[FWAAA]

Ok but I am looking to see where the unionized groups are compensated, compared to their peers. Exp. AA mechanics make X and UAL Y. My opinion is that the mechanics of AA are some the lowest paid in the industry, commercial airlines, not MRO's, and surly not General Aviation.

I agree with you. There's no debate that your hourly pay rate lags most of the other airlines, both freight and passenger.

 

[Hopeful]

I am a little baffled at the title of this post..."AA WON'T CUT LABOR COSTS AS MUCH AS HORTON WOULD LIKE."....

I don't get it, Horton is the boss now, I would imagine he will get what he wants as far as labor goes.

 

[tech2101]

Does anyone have a breakdown of labor costs based on unionized groups?

When the company says labor is to high, do they mean all of labor or isit just the mechanics, F/A's, Fleet Service or Pilots?

 

[Bob Owens]

Money is no object to these folks Bob I know they where paying less for MCI and the planes were comeing in on revenue flights and people like you were spatting off about the cost of fairy flights and such, now we are closed and the people displaced all over the system haveing to commute and take a pay cut for by the way we are at the bottom of the seniority thing so and haveing to listen to this same shi$$$$ how much are they paying for DWH vs MCI ??? Really don't care you don't have to answer it's over heard Delta wants the DWH hanger back have you heard anything? When is the TWU going to work for it's members vs looking at it from the companies percpective?? Did you or the TWU get the cost saveings associated with the closeing of MCIE? Youv'e never anwered me.

If a 767 is routed on to a trip where they normally fly an MD80 and it goes in with 50 passengers it could be called a revenue trip, but is it?

Have not heard anything about Delta wanting the hangar back.

No I never got the cost savings of closing MCIE , perhaps Gordon Clark or other officers from that Local may have it. My guess is it's not that much once they factor in what they are paying for DWH and the continued lease payments for the facilities in Kansas City.

 

[Bob Owens]

I don't doubt that you will fight to get a payraise in bankruptcy, but I see contract abrogation in your future, and I predict that there are sufficient workers, including mechanics, at AA that the airline won't shut down. Some individuals may choose to leave, but many will stay.

I don't doubt that DL isn't seeing the savings it expected. After all, it's a nonunion shop and can change work rules and pay at its option, limited only by the willingness of its mechanics to work for Delta-dictated terms. Rather telling that the company that enjoys the greatest flexibility with its maintenance workforce is not as pleased with its outsourcing.



I don't think AA will exit bankruptcy with its total labor costs "considerably higher" than DL or UA, but it looks like you agree with Jamie Baker. Now that retro is not going to happen, all those guys who were waiting around to collect it will no doubt leave, right?

Delta pays their workers more than AA and word is out that another increase is on the way.

Sure, once we get our retro those guys will leave. Now they are also sticking around to make sure that the pension and retiree medical isn't voted away as well.

 

[Bob Owens]

Are you still under the impression you have any leverage left?...

You have one tool left in the box with which to "shut the place down", Bob.

Separation, be it retirement or resignation. Quit. Gamble on the claim there's a shortage. You always say you can find other gainful work making more than AA pays (which entirely begs the question of why you stick around)...

You can also try to slow down, but i suspect you'll have an injunction even faster, since there is always a way to get someone's attention while in Ch.11...

That's it, until the revised terms, be it imposed or consensual, come up for renewal. Trying to pretend you have anymore control over the situation is just delusions. And don't say we didn't warn you about the downsides of bankruptcy while you were thumping your chest about how much better you'd have been in 2003....

Well in order in increase the likelihood that other carriers will be hiring you have to shut down this one first, then the others will hire as they fill in the void. Like EAL and Pan Am. When those two shut down other carriers scooped up their workers.

 

[Hopeful]

Sure, once we get our retro..........

This I gotta see!!!!!!!!!!!