and still nothing for the peons....

[dfw gen]

http://aviationblog.dallasnews.com/2015/04/brace-yourselves-for-big-airline-earnings.html/

 

[DNTULSA]

This report cannot be correct. AA making more than Delta?
 
Heresy!

 

[jimntx]

AA did not have the burden of upside down fuel hedges which DL and others had.  Delta's fuel hedges cost them over 50% of net income when reporting "adjusted" net income.  Brace yourselves.  Expect a deluge of diatribes as to why AA's net income of over a billion dollars will not save us because we don't fly LAX-SYD, and therefore can not be considered a true international airline.  Or, perhaps why DL's $300 million adjusted net income is really larger than AA's $1+ billion because we have too many new planes on order.
 
(Himself will not be able to refrain from it.  There is an implied negative comment about DL in the article because their adjusted net income was so much lower than AA's.  Therefore it must be challenged, refuted, and expunged from your minds.)

 

[FrugalFlyerv2.0]

 Expect a deluge of diatribes as to why AA's net income of over a billion dollars will not save us because we don't fly LAX-SYD, ........

 
Obviously you have not been carefully reading the resident DL fanboy cheeleader's posts. 
Not flying LAX-SYD is just a very tiny part of AA's problems.  There are, in no particular order, numerous strategic business challenges that all spell doom for AA: 
WN in N.TX, DL & LCCs coming to MIA, Venezuela currency problem, Brazil economy problem, cost of financing new fleet, weakness of all the AA/US hubs, no profit sharing, weakness across the Pacific network, the crappy A321T transcon product, too much upcoming gate/terminal space at LAX, too much domestic network, burden of codesharing with AS, ME3 carriers, lack of a JV and/or ownership stake in a LatAm carrier, no ownership of oil refinery, no top secret super special relationship with CDC, no Chinese partner airline, crappy econ seating reconfiguation on the B777s, crappy CEO/management team, too generous loyalty program, etc. etc. etc. etc.

 

[Phoenix]

Obviously you have not been carefully reading the resident DL fanboy cheeleader's posts. 
Not flying LAX-SYD is just a very tiny part of AA's problems.  There are, in no particular order, numerous strategic business challenges that all spell doom for AA: 
WN in N.TX, DL & LCCs coming to MIA, Venezuela currency problem, Brazil economy problem, cost of financing new fleet, weakness of all the AA/US hubs, no profit sharing, weakness across the Pacific network, the crappy A321T transcon product, too much upcoming gate/terminal space at LAX, too much domestic network, burden of codesharing with AS, ME3 carriers, lack of a JV and/or ownership stake in a LatAm carrier, no ownership of oil refinery, no top secret super special relationship with CDC, no Chinese partner airline, crappy econ seating reconfiguation on the B777s, crappy CEO/management team, too generous loyalty program, etc. etc. etc. etc.

And of course the 8 minutes padded per flight at the LAX hub.

 

[Phoenix]

http://aviationblog.dallasnews.com/2015/04/brace-yourselves-for-big-airline-earnings.html/

The reason the peons don't benefit from insane profits is not that Doug is unable to pay profit sharing, but rather it is because too many peons are negotiating ignoramuses that pay dues to savvy union leaders that capitalize on the fact it is easier to featherbed union leadership positions than to educate ignoramuses about the rewards of negotiating.

 

[UPNAWAY]

I got a 10% raise fairly happy with that!

 

[eolesen]

Keep in mind a single quarter's performance doesn't guarantee profit sharing payouts. But, as noted, bad negotiating can certainly doom them.

 

[Phoenix]

Keep in mind a single quarter's performance doesn't guarantee profit sharing payouts. But, as noted, bad negotiating can certainly doom them.

Financial hard times are always the premise to drastic wage reductions and concessions, but somehow the majority of employees don't have the intelligence or stomach to demand insane record profits should be an adequate premise for industry standard total compensation.

DUI negotiated additional concessions while pulling in record profits.. Over $10B in two years. There is no explantion other than "ignoramuses."

 

[commavia]

On a somewhat related note, AA submitted a filing to the SEC today announcing that Doug Parker will no longer be paid a cash salary, and that 100% of his compensation going forward will be tied to performance:
 
"On April 20, 2015, the Compensation Committee (the “Committee”) of the Board of Directors of American Airlines Group Inc. (the “Company”) adjusted the compensation program for W. Douglas Parker, the Company’s Chief Executive Officer, to provide one hundred percent (100%) of direct compensation in the form of equity incentives effective May 1, 2015, underscoring the Company’s commitment to paying for performance and further aligning Mr. Parker’s interests with those of the Company’s stockholders. As a result, the Company will no longer pay Mr. Parker a cash base salary, and he will not participate in the Company’s annual cash incentive program."
 
Oh, and yes ... AA is doomed.  Praise be to Delta.

 

[topDawg]

AA did not have the burden of upside down fuel hedges which DL and others had.  Delta's fuel hedges cost them over 50% of net income when reporting "adjusted" net income.  Brace yourselves.  Expect a deluge of diatribes as to why AA's net income of over a billion dollars will not save us because we don't fly LAX-SYD, and therefore can not be considered a true international airline.  Or, perhaps why DL's $300 million adjusted net income is really larger than AA's $1+ billion because we have too many new planes on order.
 
(Himself will not be able to refrain from it.  There is an implied negative comment about DL in the article because their adjusted net income was so much lower than AA's.  Therefore it must be challenged, refuted, and expunged from your minds.)

That he defends 
 
but if DL didn't hedge and AA did.....good lord the s**t show that would come from it. 

 

[WorldTraveler]

so Parker can accept his entire salary in stock incentives but he can't pay even 1% of frontline salaries in profit sharing.

If they did, AA employees should be in the upper tier of airline employees but they are not.


not paying profit sharing is a nice strategy to keep AA employees paid below average and has nothing to do with the stated reason of not being a fair or just way to pay AA employees.

and although AA doesn't have hedging losses but it will report lower passenger revenue as a result of lower capacity and lower RASM


and tell us how much Parker made at US.


to cry that he is making less than executives at DL or UA is a crock given how much more he is making compared to what he made at US.

 

[eolesen]

On a somewhat related note, AA submitted a filing to the SEC today announcing that Doug Parker will no longer be paid a cash salary, and that 100% of his compensation going forward will be tied to performance.

This may be a very smart move. Once you've saved a $10-30M for retirement, there's really not much point in being paid cash anymore.

At Parker's income level, the taxes on capital gains are lower than they are on income assuming he holds the stock for at least five years. Otherwise, it's taxed at a normal bracket.

 

[WorldTraveler]

yes, that is true but then let's not frame Parker's move as anything other than a means to maximize his wealth and nothing to do with what is best for AA or its employees.

It was a given that consolidation was going to make the airline industry profitable, AA waited around to file for BK and merge until the situation was ideal for AA to succeed, and everyone wants to believe it was a great turnaround -

"but still nothing for the peons."

 

[FWAAA]

Parker is sitting on about $32 million worth of AAL, and that doesn't count the $100 million or so of additional equity that will vest over the next few years (options, SARs, etc). eolesen is correct - once you have that much wealth, ordinary income is a big unnecessary transfer of cash to the US Treasury. His cash salary was going to be $700k this year, which would put him well within the top bracket.

AA said that its first quarter fuel bill will be about $1.3 billion lower than last year - based on the estimates of a 12% to 13% margin, looks like the fuel savings will just about equal the 1Q profit.