Another US red flag?

no, I get your point. It is precisely the environment that some carriers have created w/ labor that has made it impossible for their employees to recoup what has been lost.

All carriers work under the same laws.... the results have been very different for each airline group.

Yes but the law is applied differently to airline unions than everyone else. Only airline unions are compelled by the courts to continue to provide the debtor their product under terms set solely by the debtor. Like I said, if they can do this to us then why cant they force Exxon, a corporation owned by many shareholders, to provide the debtor fuel set at whatever price the debtor decides they want to pay? Some would say that workers can quit the Union if they dont like it, well a shareholder is free to sell their stock if they dont like it. The owners of the company get the same option the workers get in that case, walk away as an individual.

The question is do the debtors rights supercede the rights of creditors and to what degree? Was it the intent of the government to isolate airline workers from all other workers and creditors in a punaitve way when they added 1113? There is no indication of that in the language, just fanciful extrapolations from some deluded judges looking to score points with other rich powerful people. Does the court really have the right to compell unions to continue to provide labor under terms never agreed to? If so then what differentiates our property rights, and our right to collectively leverage our property to secure maximum returns from that of shareholders of corporations such as Exxon, who have more than quadrupled what they charge for their product and is the main source of financial distress for the industry? It should also be noted that this has been a period of record profitability for the oil business and the oil business enjoys substantail tax breaks from the people of the United States. In other words they have a debt to society, even more so than airline workers.

There is no way such unequal treatment can be Constitutional, if it is then we need a new Constitution, or at least new interpretors. The RLA says that if the company unilaterally changes terms we can strike. To get around that the Judge claimed that in Bankruptcy that the contract never existed, so Airline workers, not Rail workers who are covered under the same Law, have to start negotiations as if there never was a contract. By doing so he skirted the RLA and created his own law and his own set of rules, exclusive to airline workers. Thats legal rubbish, even a layman like me can see that. What the Judge is doing is not contract abrogation, its contract annullment. BK law allows for abrogation not annulment, if all contracts were annulled in BK then there would be no grounds for equity stakes by any of the creditors because no contract ever existed. But there is, even with airline unions. There are standards for annullment, the contracts have to be illegal, how can a Judge say that a contract thats been in place and amended over decades all of a sudden, simply because they filed BK becomes illegal?



All I can say is I hope those Judges choke on their Turkey!!

The point of my post is that all airline workers are faced with this dilemma, and what are the Unions that take our money going to do about it?

I say the AFA has set a strike vote. The whole industry should shut down Christmas week and stay out until the President steps in and guarantees that the whole process, from Section 6 negotiations and the standards to declare an impasse right through ensuring that in bankruptcy we are either treated like rail workers under the RLA or like Hostess workers under the NLRA, not as second class citizens without the rights of either. USAIR and all the other airlines should be prevented from using BK as a means to get what they could not get at the bargaining table. The RLA has a process to deal with such situations that has worked for over 85 years. Airline workers are more productive than ever before but instead of enjoying the benefits of increased productivity they are being penalized by a set of laws that create an unfair advantage for the Airlines.

Remember in order for you to get to your family we have to be away from ours.
 
Are you that hung up on what my response to you may be? I am able to put all of this BS out of my mind in favor of enjoying the holiday with family, unlike many others. I have come to the conclusion that there will always be differing opinions on here, and I'm not going to consume my life on things that I nor you for that matter have any control over. When Horton or Parker come knocking on your door asking what you want them to do, please let us all know.
 
AAviator,

I'll respond to your posting. I am not trying to be contrary to the spector of a profitable well ran stand alone AA. I am simply going to ask "How long will it take AA to produce the extra 14 billion in revenue to let it compete with DL and UA?"

AA may be somewhat successful in the short term with lower costs. But as time goes by, as the other two mega carriers and a well ran profitable plethora of smaller airlines, including US, deliver their competitive response to the new AA it seems like the odds of AA turning the airline world on its head become greater.

Doesn't AA have anti trust immunity with JAL and IAG? AA metal will not be flying the far flung reaches of the planet because that will be done by the partners. The only time I ever see AA crews in Europe is in London and a smathering of a few other cities. Your crews constantly complain about only overnighting in London as you are nothing more than the trans atlantic commuter airline for BA/Iberia.

AA's transpacific flying is only the Tokyo version. So AA is king of the south american route for the time being. With all due respect I just don't see how a four corner strategy out of hub cities already saturated with competition and a big gaping hole in your US east coast route map is going to help you generate the 14 billion that would put AA on par with the revenue of DL and UA.

Those new airbus a/c had better arrive with a quickness and had better be booked to capacity on every single flight out of the same four hubs or AA will be headed right back into BK at some point.

I know you have a great disdain for US but our future is quite bright even without AA. I don't understand why you are so hell bent on seeing AA go through the BK process and come out of it with a doomed plan of having a revenue disadvantage, but yet offering all of the same costly ammenities of the mega carriers. In other words trying to keep up with Joneses without having the resources to do so. The new standalone AA will still be unable to connect most of the east coast customers with the ease of US, DL or UA because it lacks the southeast mid atlantic.

Whatever happens I wish you much success and a Happy Turkey Day. Let's eat.
 
I am not trying to be contrary to the spector of a profitable well ran stand alone AA. I am simply going to ask "How long will it take AA to produce the extra 14 billion in revenue to let it compete with DL and UA?"

I have no idea how long it will take, but I'm certain that it will take a lot less time than it will for US to generate the extra $25 billion in revenue so that US can compete with UA and DL.

AA may be somewhat successful in the short term with lower costs. But as time goes by, as the other two mega carriers and a well ran profitable plethora of smaller airlines, including US, deliver their competitive response to the new AA it seems like the odds of AA turning the airline world on its head become greater.

So far this year, AA has increased unit revenue much faster than has US or UA. And that's before the new, lower costs even kicked in.

Doesn't AA have anti trust immunity with JAL and IAG? AA metal will not be flying the far flung reaches of the planet because that will be done by the partners. The only time I ever see AA crews in Europe is in London and a smathering of a few other cities. Your crews constantly complain about only overnighting in London as you are nothing more than the trans atlantic commuter airline for BA/Iberia.

This past summer, AA flew 19 daily flights to London from 7 different gateways. US flew two flights to London from two gateways. Paris? In peak summer season, AA flies daily to CDG from five different gateways. Since the ATI was approved, AA has increased its TATL flights, both to London and other cities. More TATL have already been announced to begin next spring and summer. Yes, US flies to a few cities not served nonstop by AA.

AA's transpacific flying is only the Tokyo version. So AA is king of the south american route for the time being. With all due respect I just don't see how a four corner strategy out of hub cities already saturated with competition and a big gaping hole in your US east coast route map is going to help you generate the 14 billion that would put AA on par with the revenue of DL and UA.

You really should look at AA's schedule before posting about it. AA flies five daily flights to Tokyo and three daily flights to China (ORD-PVG, ORD-PEK, LAX-PVG). That's eight 777s to Asia every day. ICN starts next year. AA will never have its own metal to SIN, BKK, TPE, etc. There aren't enough slots at either Tokyo airport for AA to duplicate the UA or DL hubs, but there's no need to. That's the value of a joint business agreement with JAL. Remind us again how many flights US flies to Asia every day?

Those new airbus a/c had better arrive with a quickness and had better be booked to capacity on every single flight out of the same four hubs or AA will be headed right back into BK at some point.

I know you have a great disdain for US but our future is quite bright even without AA. I don't understand why you are so hell bent on seeing AA go through the BK process and come out of it with a doomed plan of having a revenue disadvantage, but yet offering all of the same costly ammenities of the mega carriers. In other words trying to keep up with Joneses without having the resources to do so. The new standalone AA will still be unable to connect most of the east coast customers with the ease of US, DL or UA because it lacks the southeast mid atlantic.

You may be right. If you are right, then US is in a very dire situation, as it has no Asia, just two (soon to be three) flights to London and one (soon to be two) flights to Brazil. No Asian presence at all, very little in S America and a decent TATL schedule. Doug gave away the valuable NYC assets (LGA slots) for some magic beans (DCA slots and some cash). If AA is headed back to Ch 11 without a merger with US, then US is on death's door without a merger with AA.

Compared to AA, US has a very small presence in all major west coast population centers like SAN, LAX, SFO and SEA, so adding US to AA brings AA almost no additional strength in those key TPAC O&D gateways. US is big in PHX, which doesn't feature a single overseas flight on US metal. PHL is a huge city with lots of business, but not a single US metal flight to Asia, not even Japan. A merger with US would bring a lot of underpaid employees who would demand (and get) immediate raises to bring them up to AA's payscales. Right off the bat, that would make the US side unprofitable, so there had better be billions in "synergies" to help pay for it or else the combined airline will be right back in Ch 11.
 
... snip

Those new airbus a/c had better arrive with a quickness and had better be booked to capacity on every single flight out of the same four hubs or AA will be headed right back into BK at some point.

... snip

Opinion: There will be a combination (AA and another carrier - MAYBE US) and within 2-3 years after combining another bankruptcy filing to complete the assault on USA mechanics. This will have to be copied by other carriers as their costs will be too high, by comparison to the new combo.

New aircraft, stiffing the workers, and bonuses around - that's what it's all about. As long as the workers' "representation" is sufficiently bought off, they'll sell the bill of goods as a good deal for the workers - exactly as they have in the past. The trouble is this time all that will be left is the airline functions that can't be outsourced such as pilots and FAs, and of course the "management" types to suck up unearned bonuses - all else will go south of the border or to Riceland.

Get out of the industry now and beat the rush later on - there is life after the airlines as the skills are readily transferable. Perhaps jobs outside aviation don't pay as much but other industries aren't set up to self-destruct as are the airlines.
 
AAviator,

I am simply going to ask "How long will it take AA to produce the extra 14 billion in revenue to let it compete with DL and UA?"

Is that what its all about? Seeing which carrier can generate the most revenue? So whats all this talk about profits then? WN brings in what, $10 billion? But they always make a profit, I guess they have it all wrong.

One thing you have right is AA is doomed. Merging with US would only make things worse though.
 
Bob,
I don't disagree that the RLA is a tool which has been used to keep airline salaries down after BK by some airlines... but it still means that not every airline, those who have been thru BK or not, do not use the same business plan.
And yes it is all about revenue. All the unions in the world don't do any good and the company - union or not - cannot pay salary increases if the revenue doesn't support it.

The reason why WN has been so successful for so long is that they were able to continue to grow revenue.... sure enough as soon as they merged, the excess capacity slowed their revenue growth so they decided to slow growth, warn employees the gravy train of pay raises was over, and do all they could to keep the FL employees from getting into the higher paying WN system.

CO succeeded because it grew revenue and its employees' salaries grew - even if off ofa very low BK base.

In the post 2000 BK group of airlines, DL's employees have done the best among their peers w/ salary increases becaues DL has been fanatically aggressive in seeking new revenue sources.

You could say the same thing about B6.

A solid business plan can overcome a multitude of labor issues.

I have been warning for years on this forum and others about the revenue losses which AA has suffered. And while FWA takes pride in AA's turnaround, that growth came to a halt w/ the operational problems of September because AA's unit revenue may have grown but the total revenue dropped quite significantly on a reduced capacity.

Shrinking has never worked to return a carrier to profitability.

The only path to labor security is from a company that has a solid business plan... and there should be no fears for employees who understand and are able to deliver on their company's solid business plan.
That means the employees are not at fault if the business is not performing but for those who happen to be fortunate enough to work for well-run companies, there is no need to use every legal trick to keep employee salaries at the bottom of the barrel or threaten them w/ no future.
 
Bob,
I don't disagree that the RLA is a tool which has been used to keep airline salaries down after BK by some airlines... but it still means that not every airline, those who have been thru BK or not, do not use the same business plan.
And yes it is all about revenue. All the unions in the world don't do any good and the company - union or not - cannot pay salary increases if the revenue doesn't support it.

The reason why WN has been so successful for so long is that they were able to continue to grow revenue.... sure enough as soon as they merged, the excess capacity slowed their revenue growth so they decided to slow growth, warn employees the gravy train of pay raises was over, and do all they could to keep the FL employees from getting into the higher paying WN system.

CO succeeded because it grew revenue and its employees' salaries grew - even if off ofa very low BK base.

In the post 2000 BK group of airlines, DL's employees have done the best among their peers w/ salary increases becaues DL has been fanatically aggressive in seeking new revenue sources.

You could say the same thing about B6.

A solid business plan can overcome a multitude of labor issues.

I have been warning for years on this forum and others about the revenue losses which AA has suffered. And while FWA takes pride in AA's turnaround, that growth came to a halt w/ the operational problems of September because AA's unit revenue may have grown but the total revenue dropped quite significantly on a reduced capacity.

Shrinking has never worked to return a carrier to profitability.

The only path to labor security is from a company that has a solid business plan... and there should be no fears for employees who understand and are able to deliver on their company's solid business plan.
That means the employees are not at fault if the business is not performing but for those who happen to be fortunate enough to work for well-run companies, there is no need to use every legal trick to keep employee salaries at the bottom of the barrel or threaten them w/ no future.
Problem with that theory is AA's revenues have increased YOY. In 2003 they had 120,000 employees and around $17 billion in revenue, in 2011 they had around 80,000 employees and $25 billion in revenue. They nearly doubled the revenue per worker without outsourcing.
 
you've used that argument for years but failed to acknowledge huge increases in costs, predominantly for fuel.

The reality is that all airlines worldwide have had to deal with higher fuel costs which have indeed cut into what the money that could be used to pay employees.

And yet there are airlines that have managed to increase revenue more than the increase in the cost of fuel which has allowed airline employees to benefit while other airlines have not done as well.

Looking at only part of the equation or even one or two items even on one side of the equation will never result in a proper understanding.

AA and US have to do a much better job of growing revenues in order for their employees to have the hopes of a future that includes industry average or better compensation and the potential for compensation growth.

AA's improvement in unit revenue performance has come after years of trailing the industry and most recently unit revenue has only improved while total revenue has shrunk.
US has done an average or better job at improving revenues but it has not been enough to begin to bring average compensation among US employees up to industry average levels, even if some US employee groups are doing better than others relative to industry average.

And AA and US mgmt has used and will continue to use divisive tactics and the unique characteristics of the RLA that you note in order to hold compensation levels down... until AA and US grow total revenues faster than costs enough to even begin to think about increasing employee compensation, they have no choice but to exploit features of the RLA.

In contrast, airline employees who are receiving improved compensation at other airlines are receiving those benefits because their employees have business plans that are generating the revenues necessary to allow labor to benefit... and so far, labor at those airlines have been able to receive some compensation improvements even though industry average compensation and employment numbers are still worse off than it was years ago.
 
Looking at only part of the equation or even one or two items even on one side of the equation will never result in a proper understanding.

Agreed, that means looking beyond fuel as well.

Seems that some would have us believe that the oil companies are the only ones squeezing the airlines for money. While wages have shrunk fees to banks, and profits to banks through bonds they own for airports and leasing companies have gone up. Despite a 30% reduction in flights landing fees went up, not down. You would think that if you had 30% less airplanes and fewer flights that landing fees would go down, that means they pay a lot more than they used to. How are those increases in costs justified other than "They can do that"? Sure just tell the workers that these are forces that cant be controlled and get them to believe that everyone is getting squeezed but in reality some parties, the big boys, banks, oil companies etc are making a killing, increasing their profits while making sure that the cash cow continues to show losses, this was they can get more from us. Like I said, AA cut its fleet and headcount by over 30% and increased their revenues by more than 68% yet still managed to claim bankruptcy. Sure fuel went up, but not only did the wage rate go down but the number of wage recipients also plummeted.

You and others may come here and try and convince us that those are costs that cant be controlled but the fact is the whole system, and all the revenue is dependant upon our labor. We dont work and nobody gets their money because the airlines wont be able to give it to them. The whole thing is a scam. When/if workers in this industry ever wake up and do shut the system down for a while then all of a sudden all the things that we were told could not be negotiated will all become negotiable. AA brought in nearly $8 billion more in 2011 than they did in 2002, and they did it with 40,000 less employees, all of that extra money, from the extra revenue to the savings from labor (roughly another $3billion) didnt go to the oil companies and none of it went to the employees who remained. Other hands are dipping into the till. "Follow the money".
 
Didnt that happen in 1967? When all the major airline workers struck?

Unfortunate the laws are against the airline workers and I doubt the union leadership or the members have the guts to do it. But it needs to happen.
 
Agreed, that means looking beyond fuel as well.

Seems that some would have us believe that the oil companies are the only ones squeezing the airlines for money. While wages have shrunk fees to banks, and profits to banks through bonds they own for airports and leasing companies have gone up. Despite a 30% reduction in flights landing fees went up, not down. You would think that if you had 30% less airplanes and fewer flights that landing fees would go down, that means they pay a lot more than they used to. How are those increases in costs justified other than "They can do that"? Sure just tell the workers that these are forces that cant be controlled and get them to believe that everyone is getting squeezed but in reality some parties, the big boys, banks, oil companies etc are making a killing, increasing their profits while making sure that the cash cow continues to show losses, this was they can get more from us. Like I said, AA cut its fleet and headcount by over 30% and increased their revenues by more than 68% yet still managed to claim bankruptcy. Sure fuel went up, but not only did the wage rate go down but the number of wage recipients also plummeted.

You and others may come here and try and convince us that those are costs that cant be controlled but the fact is the whole system, and all the revenue is dependant upon our labor. We dont work and nobody gets their money because the airlines wont be able to give it to them. The whole thing is a scam. When/if workers in this industry ever wake up and do shut the system down for a while then all of a sudden all the things that we were told could not be negotiated will all become negotiable. AA brought in nearly $8 billion more in 2011 than they did in 2002, and they did it with 40,000 less employees, all of that extra money, from the extra revenue to the savings from labor (roughly another $3billion) didnt go to the oil companies and none of it went to the employees who remained. Other hands are dipping into the till. "Follow the money".
Bob,
others have posted w/ explicit clarity here the breakdowns of where AA's increased revenue has gone.... I'm certainly not arguing that AA should have been able to increase pay to their employees, but you fail to accept that costs for most of the services and products which AA has to buy beyond labor have gone up.

Landing fees? The cost of operating an airport doesn't go down significantly just because there are 30% fewer flights. Unless whole terminals are shut down, the same amount of runways and buildings have to be maintained. Same police and fire department has to be there. Besides, the majority of AA's airport costs are at its largest hubs which have not significantly shrunk beyond STL. AA's cuts have come predominantly at smaller airports.

And what invariably gets lost in all of these conversations about costs it health care costs in the US have doubled over just the past ten years... and that impacts EVERY part of the economy... and health care costs continue to rise.

AA employees were insulated from many of the health care cost increases but AA has continued to see its costs increase.

But the focus, once again, is short-sighted if it only focuses on costs because costs can indeed increase, including labor costs, if revenue goes up faster. Other airlines are facing the same cost increases but still increasing labor.

The bottom line is that AA's revenue, esp. in the domestic market, continues to decline while int'l revenue is not close to growing at a rate fast enough to make up for domestic revenue losses.

July domestic traffic data shows that AA's loss of traffic in NYC is 7%, second only to US which gave up scores of slots at LGA. NYC is AA's former headquarters and one of the cornerstones... if AA's domestic traffic at NYC is falling at a much faster rate than the industry average and of its peers, then it makes it much, much harder to increase revenue elsewhere in order to even think about increasing employee salaries.
And AA's domestic traffic losses for July are still twice the rate of the industry.
AA, like every other US airline, is more domestic than int'l. If they can't increase revenues in the domestic market - even off of a smaller traffic base, then there is no way that employees will ever have a chance of seeing pay increases.

AA MUST figure out how to compete successfully in EVERY market segment in which it competes if its employees can see increased salaries - and that is exactly what they should expect they will receive.

The industry is littered w/ examples of employees who decided to withhold their services only to see their jobs be eliminated.
Not every airline employee will see the same situation as you you do and thus will not be motivated to take the actions you want them to take.

Unless everyone in the industry faces the same dire future, you will not find universal support to do what you think should be done.
 
Didnt that happen in 1967? When all the major airline workers struck?

Unfortunate the laws are against the airline workers and I doubt the union leadership or the members have the guts to do it. But it needs to happen.

IAM - UAL, TWA, NW, National, EAL, struck for 43 days in 1966: 7/8/66 - 8/19/66

TWU - AA struck for 21 days in 1969: 2/27/69 - 3/19/69
 

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