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Another US red flag?

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

And since then, how much money has the AFL-CIO and these Unions contributed to political campaigns and lobbying to "protect" our rights, only to view the truth is we have lost our rights to legally win at this game, so why not return to the illegal and make some gains?

At what point do we stop the charade and begin to take a stand?
Never, because the appointed leaders are not suffering along with us the workers.
 
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.

Bla, bla bla. Heard all those same BS arguements before. $4500, thats a landing fee at JFK. Do you really expect me to believe that the PONY is just covering their costs there? In one breath you throw out a statement like that, attempting to justify how much they have increased landing fees (because even though AA lands fewer planes they still have to cover the costs) then on another thread it gets pointed out that as the legacy carriers reduced service regionals and upstarts increased service. In other words yes AA is landing fewer planes but other carriers are landing more, so airports arent facing the problem of spreading the cost of operating the airports over fewer flights they are just being greedy. And who owns the Port Authority? The banks, through bonds that are only made available to banks.



Medical, another BS arguement. AA now provides the worst plans in the industry. On average how much in dollars does the average worker consume as far as medical services? $10,000/year? Thats from the single guy who doesnt see a doctor ($0) to a family with somebody with cancer($100,000). If anything thats high. But a lot of that comes from the workers, right off the bat you have what we pay to the company for the coverage (AA is its own insurance company), then you have the deductables, the Co Pays and the Co insurance, so out of that $10k , depending on which plan the member chooses the member pays between $7500 and $9000 of that $10,000, meaning the company only pays between $2500 and $1000 . What we gave up in Holiday pay alone more than covers what it costs the company to provide Medical, even at todays much higher rates.


Tired of the BS about how other costs have gone up so they cant pay us, our costs go up as well. If they can find the money to pay everyone else more then they can find the money to pay us more. If not then let us do like everyone else does when the airline refuses to pay the fair market value for what they provide-withdraw it. For suppliers it means cutting off supplies, for airports it means telling them they cant land here, and if they do they will impound the plane till they pay up, for lessors it means taking their equipment back, and for Unions it means going on strike. The only party that is denied the right to use their property to suit their interests are Unions.
 
Bob, Informer, Kev

Let’s be very clear that I have said several times even on this thread that I am concerned for AA employees because it appears that AA is taking the same labor-mgmt tactic that US took in BK which is to cut wages as deep as possible and keep employees at those levels for as long as possible. That strategy is bad enough at one airline in the industry but it is 10X worse when it becomes the basis for a merger with one of the top 3 carriers in the industry. Regardless of the promises that were made in US’ talks w/ AA labor unions, the economics don’t work to raise AA and US employees to industry standard and better levels and still merge the company….. and it has everything to do with the revenue shortfall that AA and US have relative to the industry and which will not be overcome solely thru a merger.

But let’s look at some of the cost items you mention because it isn’t BS… it is a real part of running the business.

Medical costs - I have had this conversation w/ Kev on the DL forum several times. Health care costs have soared and most employees have no idea how much it really costs for their employee to provide that benefit to them. The rate of employee cost sharing for medical expenses for US employees of large private sector companies is in the range of 25-30% and that percentage is not a secret at any company and is probably included in the labor agreements AA has w/ each of its labor groups. However, union contracts in the airline industry that do not expire mean that companies are locked into health care cost sharing formulae that do not represent current situation – but what health care looked like years ago. The same laws that have kept AA employees from being able to strike have also kept AA locked into contracts for health care costs that have been well-below average. Several AA employees here have posted how much health care costs are going to cost – and what they are saying is not out of line with the industry or with what private sector employees are paying for all parts of their coverage. Kev noted how much his health care costs went up after the IAM contract was superseded by DL’s non-contract policies, yet DL specifically says that their health care plans are based on 26% employee cost sharing. I just analyzed my health care costs for the coverage I am in (not an airline industry policy) and my employee share for the year to date was right at 25% - even though I am so sick of paying out expensive premiums only to have huge deductibles and copays. Health care is expensive and if AA employees are now reeling, the likely reason is not because AA’s coverage is worse than other private sector companies or because AA employees are paying the majority of the total health care bill (I can assure you they are not) but because health care is extraordinarily expensive in the US and it is not getting any cheaper. If you are disappointed w/ what you pay now for the level of service you get, you don’t want to see what health care looks like in the US in two or three costs.

Landing fees? Just like any other user fee in the airline industry, the more you use, the more you pay. If AA has reduced its flying at JFK, then other carriers not pay a disproportionately higher percentage of the total bill of operating the airport. PANYNJ has open financial records; you can see whether you think they are making outrageous profits or not.
If you don’t like $2500 to land a jet at JFK, then you surely won’t like that AA’s terminal costs at JFK and MIA are estimated to be at least $25 per passenger which means the terminal costs for an AA 777-200 are about $6000. And like air traffic control fees, there is no room for negotiating; the PANYNJ will simply repossess the terminals if AA doesn’t want to pay that amount just as an unpaid bill with the FAA will result in being denied services.

Bob, there isn’t a fee or cost at AA that other airlines don’t also pay. Other carriers manage to be profitable and pay their employees more than AA does.

It therefore comes down to two items….

First is revenue…. Labor has long said that generating revenue is not their responsibility – and they are right – to an extent. But if a company doesn’t generate sufficient revenue to pay all the costs everyone else pays and still have enough left to pay employees comparable to the industry, then there should be no expectation of decent pay. Like it or not but revenue does matter to employees and does have a huge bearing on how well they will fare at the bargaining table.

Second, and perhaps the core issue, is that some companies choose to pay their employees wages at or above industry average and thus free themselves from the strife that affects employees in the bottom half of the compensation table. Whether AA is now extracting “interest” for its employees being paid above average compared to the rest of the industry for years when other airline wages were suppressed by BK or whether AA has determined that they will not allow wages to ever rise to a level where they will have to fight to get them back to industry average again, the reality is that AA has taken an aggressive if not punitive approach to employee compensation.
You can talk all you want about withholding services if you don’t get the pay you want but there are a dozen other airlines that are standing in line waiting to take AA’s revenue if AA is unable to provide the services those consumers are paying AA to provide. And the employees of those other airlines are not going to put their jobs and families at risk to fight a battle which does not affect them to anywhere near the same degree it affects AA employees.

The battle is one AA employees are going to have to fight.

And they have to convince the board to get rid of the management team and replace it – either as a standalone or in a merger – with one that will choose to compensate AA’s employees at industry average or better levels.

Other airlines have chosen that philosophy and have developed business plans capable of supporting their compensation goals.
My best wishes to you and AA employees in achieving it… but it won’t come unless you recognize the reality of the costs that face the industry, the fact that other debtors will find other parties to pay the tab if AA doesn’t, and other airlines and their employees will take AA’s revenue and will not stand with AA employees in a fight that doesn’t affect them to anywhere near the same extent as it affects AA.
Those are the harsh realities that you must face and overcome… and I wish you well in figuring out how to achieve what you and AA employees need in light of those realities.
 
Bob, Informer, Kev

Let’s be very clear that I have said several times even on this thread that I am concerned for AA employees because it appears that AA is taking the same labor-mgmt tactic that US took in BK which is to cut wages as deep as possible and keep employees at those levels for as long as possible. That strategy is bad enough at one airline in the industry but it is 10X worse when it becomes the basis for a merger with one of the top 3 carriers in the industry. Regardless of the promises that were made in US’ talks w/ AA labor unions, the economics don’t work to raise AA and US employees to industry standard and better levels and still merge the company….. and it has everything to do with the revenue shortfall that AA and US have relative to the industry and which will not be overcome solely thru a merger.

But let’s look at some of the cost items you mention because it isn’t BS… it is a real part of running the business.

Medical costs - I have had this conversation w/ Kev on the DL forum several times. Health care costs have soared and most employees have no idea how much it really costs for their employee to provide that benefit to them. The rate of employee cost sharing for medical expenses for US employees of large private sector companies is in the range of 25-30% and that percentage is not a secret at any company and is probably included in the labor agreements AA has w/ each of its labor groups. However, union contracts in the airline industry that do not expire mean that companies are locked into health care cost sharing formulae that do not represent current situation – but what health care looked like years ago. The same laws that have kept AA employees from being able to strike have also kept AA locked into contracts for health care costs that have been well-below average. Several AA employees here have posted how much health care costs are going to cost – and what they are saying is not out of line with the industry or with what private sector employees are paying for all parts of their coverage. Kev noted how much his health care costs went up after the IAM contract was superseded by DL’s non-contract policies, yet DL specifically says that their health care plans are based on 26% employee cost sharing. I just analyzed my health care costs for the coverage I am in (not an airline industry policy) and my employee share for the year to date was right at 25% - even though I am so sick of paying out expensive premiums only to have huge deductibles and copays. Health care is expensive and if AA employees are now reeling, the likely reason is not because AA’s coverage is worse than other private sector companies or because AA employees are paying the majority of the total health care bill (I can assure you they are not) but because health care is extraordinarily expensive in the US and it is not getting any cheaper. If you are disappointed w/ what you pay now for the level of service you get, you don’t want to see what health care looks like in the US in two or three costs.

Landing fees? Just like any other user fee in the airline industry, the more you use, the more you pay. If AA has reduced its flying at JFK, then other carriers not pay a disproportionately higher percentage of the total bill of operating the airport. PANYNJ has open financial records; you can see whether you think they are making outrageous profits or not.
If you don’t like $2500 to land a jet at JFK, then you surely won’t like that AA’s terminal costs at JFK and MIA are estimated to be at least $25 per passenger which means the terminal costs for an AA 777-200 are about $6000. And like air traffic control fees, there is no room for negotiating; the PANYNJ will simply repossess the terminals if AA doesn’t want to pay that amount just as an unpaid bill with the FAA will result in being denied services.

Bob, there isn’t a fee or cost at AA that other airlines don’t also pay. Other carriers manage to be profitable and pay their employees more than AA does.

It therefore comes down to two items….

First is revenue…. Labor has long said that generating revenue is not their responsibility – and they are right – to an extent. But if a company doesn’t generate sufficient revenue to pay all the costs everyone else pays and still have enough left to pay employees comparable to the industry, then there should be no expectation of decent pay. Like it or not but revenue does matter to employees and does have a huge bearing on how well they will fare at the bargaining table.

Second, and perhaps the core issue, is that some companies choose to pay their employees wages at or above industry average and thus free themselves from the strife that affects employees in the bottom half of the compensation table. Whether AA is now extracting “interest” for its employees being paid above average compared to the rest of the industry for years when other airline wages were suppressed by BK or whether AA has determined that they will not allow wages to ever rise to a level where they will have to fight to get them back to industry average again, the reality is that AA has taken an aggressive if not punitive approach to employee compensation.
You can talk all you want about withholding services if you don’t get the pay you want but there are a dozen other airlines that are standing in line waiting to take AA’s revenue if AA is unable to provide the services those consumers are paying AA to provide. And the employees of those other airlines are not going to put their jobs and families at risk to fight a battle which does not affect them to anywhere near the same degree it affects AA employees.

The battle is one AA employees are going to have to fight.

And they have to convince the board to get rid of the management team and replace it – either as a standalone or in a merger – with one that will choose to compensate AA’s employees at industry average or better levels.

Other airlines have chosen that philosophy and have developed business plans capable of supporting their compensation goals.
My best wishes to you and AA employees in achieving it… but it won’t come unless you recognize the reality of the costs that face the industry, the fact that other debtors will find other parties to pay the tab if AA doesn’t, and other airlines and their employees will take AA’s revenue and will not stand with AA employees in a fight that doesn’t affect them to anywhere near the same extent as it affects AA.
Those are the harsh realities that you must face and overcome… and I wish you well in figuring out how to achieve what you and AA employees need in light of those realities.

The only reality that we can deal with is being able to charge a fair rate for our labor, if AA can not pay it then let them shut their doors with our help and with AA gone, as you said, others will pick up the routes , equipment and most of the employees. Workers should not be legally obliged to subsidize AA with inferior contracts and discounted labor.
 
I don't fully agree that is the only problem but it is a major one... but if the issue is that AA doesn't want to pay the labor rates you want them to pay, then quit worrying about new terminals or landing fees or anything else other than labor rates.

If revenue doesn't matter and if the issue really comes down to whether AA will pay its employees what they need, then you need to focus your attention solely on what it takes to get labor rates for AA employees where they need to be and quit worrying about everything else.

But also recognize it is not a problem that affects the rest of the world and thus you will not necessarily find the rest of the world really willing to stick its neck on the line....
 
I don't fully agree that is the only problem but it is a major one... but if the issue is that AA doesn't want to pay the labor rates you want them to pay, then quit worrying about new terminals or landing fees or anything else other than labor rates.

If revenue doesn't matter and if the issue really comes down to whether AA will pay its employees what they need, then you need to focus your attention solely on what it takes to get labor rates for AA employees where they need to be and quit worrying about everything else.

But also recognize it is not a problem that affects the rest of the world and thus you will not necessarily find the rest of the world really willing to stick its neck on the line....

First of all C-11 affects all workers, especially airline workers. Delta, United, USAIR and AA all used C-11 to get what they couldnt get at the bargaining table and nothing is stopping them from doing it again. AA admitted that they were not broke, not really in serious financial distress (not in danger of liquidating) and was using BK to get what they want from their unions. One company not long after AA filed and told the court that they only wanted to throw out labor contracts, nothing else. IF AA and USAIR combine they will be the largest carrier in the country, and other carriers, regardless of the truth, will use that as an excuse to demand the same concessions from their workers. Whether they like it or not their necks are on the line.

You keep saying that AA has a "revenue problem", well thats not really saying anything, You need to be more specific. As I cited AA is bringing in around $7 billion more with 40,000 less employees and around 300 less airplanes. In other words they reduced the size of the company by around a third and increased total revenue by 68%. In any other industry that would be a miracle.

Medical, we can go back and forth on that but we have the worst plan in the industry. This is an industry that typically had good medical benefits, lousy dangerous working conditions that placed added stress on people, but giooid health benefits. Now the good health benefits are history. Another thing about this industry is they dont really compensate people for working odd hours like many other industries either. Whereas many industries, such as health care, offer a percentage premium, 10% or more, for working nights this industry has always been very stingy, and such shifts take a toll on ones health. Some of our workers only get 2 cents an hour for working nights. TWO CENTS!!! Thats not even half of one percent! The average is around 60 cents, or less than 2%, still way behind the 10% we see in health care or other essential industries where 24/7 is needed.
 
You continue to believe that other airlines will compensate their workers just because someone else does it when the obvious truth is that other carriers have improved their compensation post BK and even those who weren't in BK don't use the baseline set by former BK carriers as the basis for setting salary scales.

You need to come to grips whether you and certain people on this thread like it or not that AA has chosen a policy of cutting its employees' compensation as deeply as it can even if the financial evidence shows it is not necessary or not.

There will always be carriers who will reduce compensation to the lowest common denominator and much of the reason is because they do not have the certainty that they can raise revenue. If AA was as successful at increasing revenue as some of its peers, then there would be far less reason to worry about cutting costs as much as they have. The simple fact that you and others on here don't want to admit - which is probably why I keep saying it - is that AA has lost significant amounts of market share and revenue to other carriers and that directly relates to how well it can compensate its employees.

I have written ad nauseum about the revenue problem AA has.... and I won't repeat it here other than to highlight that AA has given up even its local market in its former hubs... BNA, RDU, STL, and SJC... and has dropped significantly in market position in NYC while low fare carriers have grown at AA's expense in DFW and ORD. MIA and Latin America continue to remain the only place in AA's network where AA has maintained its market position.

Sorry, Bob, but health care costs a whole lot more than it once did - for everyone. There is no going back to the days of cheap health care... and adding in millions of new participants to the system who can't pay their way is only going to make your costs go up.

Shift differentials..... I agree with you that the airline industry has managed to erase as much as possible.... but the industry is a 24/7 industry... compensation may and will continue to change but the airline industry will always operate 'round the clock. Health care costs, incidentally, continue to rise specifically because there is no mechanism to check the cost of rising pay checks and expensive diagnostic equipment. Your wife's paycheck is now what makes sense but that surely wasn't the case 30 years ago... the world will continue to evolve.

The bottom line remains that you have to address AA's willingness and/or ability to pay its employees what you believe they are worth..... so far, they have the upper hand and their ability to get what they want does not appear to be threatened... you have to figure out how to be smarter than them....
You'll be the hero of all airline industry employees when you can figure out how to beat AA at their own game.
 
You keep saying that AA has a "revenue problem", well thats not really saying anything, You need to be more specific. As I cited AA is bringing in around $7 billion more with 40,000 less employees and around 300 less airplanes. In other words they reduced the size of the company by around a third and increased total revenue by 68%. In any other industry that would be a miracle.

Medical, we can go back and forth on that but we have the worst plan in the industry. This is an industry that typically had good medical benefits, lousy dangerous working conditions that placed added stress on people, but giooid health benefits. Now the good health benefits are history. Another thing about this industry is they dont really compensate people for working odd hours like many other industries either. Whereas many industries, such as health care, offer a percentage premium, 10% or more, for working nights this industry has always been very stingy, and such shifts take a toll on ones health. Some of our workers only get 2 cents an hour for working nights. TWO CENTS!!! Thats not even half of one percent! The average is around 60 cents, or less than 2%, still way behind the 10% we see in health care or other essential industries where 24/7 is needed.

Then why do you stay?! Is it becasue you have deluded yourself into thinking that you are going to change things? Or is it becasue staying is easier?
 
Medical, another BS arguement. AA now provides the worst plans in the industry. On average how much in dollars does the average worker consume as far as medical services? $10,000/year? Thats from the single guy who doesnt see a doctor ($0) to a family with somebody with cancer($100,000). If anything thats high. But a lot of that comes from the workers, right off the bat you have what we pay to the company for the coverage (AA is its own insurance company), then you have the deductables, the Co Pays and the Co insurance, so out of that $10k , depending on which plan the member chooses the member pays between $7500 and $9000 of that $10,000, meaning the company only pays between $2500 and $1000 . What we gave up in Holiday pay alone more than covers what it costs the company to provide Medical, even at todays much higher rates.

You have got to be kidding? When was your or your families last surgery? My last surgery cost over $400,000 for a three night stay in the hospital. My total out of pocket was around $6500.

I am not trying to be insulting, but how in Gods name can you claim to represent employees and NOT KNOW what medical costs are for serious illnesses or injuries? Most of us are older and have had to use our benefits, we KNOW.
 
You have got to be kidding? When was your or your families last surgery? My last surgery cost over $400,000 for a three night stay in the hospital. My total out of pocket was around $6500.

I am not trying to be insulting, but how in Gods name can you claim to represent employees and NOT KNOW what medical costs are for serious illnesses or injuries? Most of us are older and have had to use our benefits, we KNOW.

plus a whole bunch.
The cost of doing business IS the cost of doing business.
Like it or not but airports and fuel suppliers are not going to cut their costs just because one airline doesn't want to pay... and the airline industry is and will remain competitive enough that there will be another one step in and pay the price if one airline doesn't want to pay.

As much as organized labor wants to believe otherwise, the labor market does not work the same way. There are a larger supply of airline workers who want jobs than there are airlines willing to hire them... and part of that is because the airline industry after years of cut throat competition is rationalizing capacity so that fares can be raised.
Further, as much as it sucks that US airlines can use C11 to cut wages, the same process has been used in other countries with the very real result that if pay cuts weren't taken, the companies fold. Have you watched how quickly SAS employee unions all voted in wage concessions and outsourcing?... because if they didn't, SAS would have folded.


+1

...And since DL uses "industry averages" to determine compensation, the cuts you are all suffering now, could very well depress the wages over there come next year...

I didn't say that what happens at one carrier doesn't affect other players... but there have always been carriers that have paid less than others. For the better part of a decade, US has had the lowest labor rates in the industry but it hasn't stopped some carriers from increasing their wage rates.

It also says why it combining AA and US is a bad thing because it will combine two airlines who have the same compensation philosophy of keeping employees at the bottom of the barrel. But what AA and US do collectively or separately won't change the fact that other carriers will continue to increase pay of their employees.

Note further, that the whole notion of pattern bargaining in the airline industry is over. The current route of pilot contracts has shown that one contract does not result in the same contract for successors.

AA is restructuring at a time when other carriers are restoring wage cuts and AA will use the excuse that it restructured last but the reality is that AA employees, like those at US, have had two massive rounds of wage cuts which will keep them below their peers at other airlines for years.

Harsh reality but reality none the less.

The ability of some carriers to pay more than average is tied to their ability to generate revenue - which is not the same across the industry as it once was when fares were the same and pattern bargaining resulted in very similar employee costs. Add in that some carriers have recognized that paying your employees above the bottom half in average compensation is worth it when it comes to delivering service levels that make that carrier the choice for passengers.
 
First of all C-11 affects all workers, especially airline workers. Delta, United, USAIR and AA all used C-11 to get what they couldnt get at the bargaining table and nothing is stopping them from doing it again. AA admitted that they were not broke, not really in serious financial distress (not in danger of liquidating) and was using BK to get what they want from their unions. One company not long after AA filed and told the court that they only wanted to throw out labor contracts, nothing else. IF AA and USAIR combine they will be the largest carrier in the country, and other carriers, regardless of the truth, will use that as an excuse to demand the same concessions from their workers. Whether they like it or not their necks are on the line.

And you can thank the IAM at USAir for starting the concessions train as you yourself have posted before. The IAM has encouraged the Wal-Martization of airline careers through encouraging ready reserve, scope relaxation, cutting benefits, wages, pay and work rules all in the interest of protecting jobs to maintain dues payers. The concessions train has pulled into the station and thanks to the IAM this isn't its last stop.

Josh
 
How many times are you going to lie about US and the IAM?

We were the LAST Union at US to give concessions and we even voted down concessions in bankruptcy case.

ALPA, AFA and TWU gave concessions before the IAM.

1983 the TWU started concessions at AA.

Why do you constantly lie?

Dont let the facts get in your way.
 

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