Another US red flag?

[N288AA]

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.

As a 26 year employee of AA, it started way back then and hasn't stopped.

 

[Bob Owens]

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.

And out of 1000 workers how many had bills like that in that year? Sure there are some that get whacked and there are those that pay the premiums and dont even see a doctor for years. That figure is the average.

 

[Kev3188]

I didn't say that what happens at one carrier doesn't affect other players...

Nobody said you did; I was referring to what Bob posted.

Note further, that the whole notion of pattern bargaining in the airline industry is over.

No it's not. WRT pilot negotiations, there might not be a whole lot of "parity +1," but CBA's at one carrier are often still modeled after what another has.

For ground employees (AMT's, Ramp, CSA, etc.) pattern bargaining is very much alive. The difference is that instead of the traditional moving upward, the race now is to the bottom. NW employees had the misfortune of being last in line after AA's '03 concessions, US' BK CBA's and more. If you look at the original ask, it's easy to tell which item the company got from which carrier.

And you can thank the IAM at USAir for starting the concessions train as you yourself have posted before....

That train started with the TWU-certainly for Fleet service anyway. B-scale, flight thresholds, and reduced rate sick pay (Thanks Mark Rasko!) and more all originated there. That said, who started it isn't the main issue (at least to me, anyway); the bigger question is, who'll turn it around?

 

[Bob Owens]

Nobody said you did; I was referring to what Bob posted.



No it's not. WRT pilot negotiations, there might not be a whole lot of "parity +1," but CBA's at one carrier are often still modeled after what another has.

And thats how the PEB models settlements. (recommendations).

The Airline Industry needs to get to the point where the Rails have been, but it wont happen as long as the airlines have C-11 thats been molded especially for airlines to crush their workers.

That said, who started it isn't the main issue (at least to me, anyway); the bigger question is, who'll turn it around?

Looks like the next opportunity will be the USAIR AFA or possibly the AA APA (if they reject the TA).

 

[signals]

As a 26 year employee of AA, it started way back then and hasn't stopped.

1981 was when Reagan fired the ATC workers. Common myth is that Reagan busted unions. The truth is that corporate America turned the situation to their advantage, and started taking back what the unions had achieved.

 

[WorldTraveler]

thank you for clarifying, Kev, but the evidence is overwhelming that unions have not successfully pattern bargained for increases... even if one carrier's employees look at and desire the contract of another carrier, they are not achieving that as once occurred.

If pattern bargaining in a downward direction is the norm in the industry, then would it be true that labor unions are in fact a lightning rod that mgmt is attracted in delivering cuts?

The carriers that will turn it around are the ones who generate the revenues and who choose not to fight w/ their employees. We have examples among represented (unionized) and non-unionized airline groups... so it would appear that the issue, as I believe it has, has more to do with the philosophy of the airline mgmt team rather than the employee group.

Specific to AA, we'll see how it all pans out but I think the non-strike work action which no one wants to call for what it is might be shown to be the most effective way to get mgmt's attention.

 

[delldude]

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.

They billed you 400k but your stay, surgery and whatever else didn't cost the medical facility 400k.

 

[johnny kat]

delldude,

You make a good point. We all know it doesn't cost the medical facility 400k. But you have to consider they are in business to make money. So, if the facility says it costs 400k, then it costs 400k. Fortunately insurance will take care of all but $6500.00.

The tragedy arrives when one does not have insurance and is billed 400k. Then the only recourse would be to file for personal BK and settle with the facility for just cost. Of course if that is still too much to bear then one will have to file personal chapter 7 BK. The good news is that this process gets rid of the debt, the bad news is it also probably kills the individual who has to lose everything.

Something to think about the next time you are ready to throw in the towel and quit a job that provides medical insurance.

 

[WorldTraveler]

actually, insurance, medicare, and medicaid probably disallowed about 2/3 of that $400K so that the "real cost" is alot closer to $125K which is still a heck of a lot. But the reason why the billed price is so high is because medicare and gov't disallow so much of the charge.

Thus, it is indeed the poor person who has no insurance that gets stuck w/ a bill they can never pay and which no insurance company or gov't agency would have paid anyway.

It doesn't change that health care costs in the US have doubled over the past year and every American is paying more and there is no slowdown in the cost.... and that will most definitely impact business' ability to keep jobs in the US - something to think about as you watch the next jet take off for an overseas overhaul.

 

[delldude]

Thus, it is indeed the poor person who has no insurance that gets stuck w/ a bill they can never pay and which no insurance company or gov't agency would have paid anyway.

And that's why the $400,000 tab.......you and me covering government mandated acceptable fees for entitlement medical care plus Hill/Burton.
And under Obamacare tm its not going to change.

 

[777 / 767 / 757 Love]

Love, please give some specific examples of what would be screwed up? Why would a US/AA merger be any messier than the DL/NW or UA/CO mergers?

Sorry for the late response, was out of the country, but you asked a good question so I wanted to respond: First, its my opinion, because I don't see how I could prove it as fact. But some of the things I think would be screwed up:

• Labor / Seniority / union issues: what a cluster f***k things will be
• Fleet: I have said it in the past on here, look at the two fleets, they would bescatterred over so many types of aircraft leading to HUGE increase in maitenance costs. The HUGE advantage AA was aiming for (new, streamlined fleet all with new interriors and amentities) would be derailed and put them back into what they have now.
• Service and Identity: AA is going for the "high value" customer with a "services oriented airline". DL can claim such services, but frankly, AA is the only domestic carrier with international service that isn't a joke as it relates to the premium passenger. With the new interriros coming for the widebodies, plus the A321 103 seat configuration on NYC/LAX&SFO coming, AA is getting back to being a leader in services rendered.
• Weaknesses Remaining: AA has a big problem brewing in NYC, and merging with US does not fix that issue. They are wanting to expand as quickly as possible in Asia, another issue not fixed by merging with US. From a weakness point of view, the only thing that US merger would imporve and is of high value is a presence in the southeast.

I would rather have higher margins and lower revenues then higher revenues and lower margins. This push to match DL or UL/CO is mis-guided and dangerous. Investors care about ROI, and you could generate 90 billion in total revenues and have a smaller ROI than a company generating 10 billion. At the end of the day, a lean, and focused AA that is aimed at a specific market segment (as is with southwest and B6) could serve them VERY well. I think a merger with US will bring as many problems as benefits and lead to a sluggish, chaotic company that will ultimately sputter and fail. To me merger with B6 makes the most sense, but since that will never happen, going it alone is the next best laternative. Hope the UCC sees it that way.

Cheers,
777 / 767 / 757

 

[jimntx]

delldude,

You make a good point. We all know it doesn't cost the medical facility 400k. But you have to consider they are in business to make money. So, if the facility says it costs 400k, then it costs 400k. Fortunately insurance will take care of all but $6500.00.

That's part of the problem today. If you do a little research you will find that the great majority of medical facilities--hospitals, specifically--are incorporated as non-profit institutions. It's one of the reasons that it is so very puzzling that medical costs have increased many multiples of the cost of living increase over the past 10-20 years.

Though I know part of the problem today is what you might call hospital administrator and physician ego. For instance, in Houston 20 years ago which even then had one of the world's largest medical centers, if you needed a thalium stress test, your doctor had to refer you to Texas Heart Institute for the actual test because they were the only facility in Houston that had the machine. The suckers cost over $1 million each. Within 5 years there were cardiologists in Houston that had one in their office and small general care hospitals in the suburbs that were adding wings just so they could have one on premises. (The suckers are also big. You can't just move a patient bed out of a room and install one. ) You and I are paying through the nose that we don't have to drive across town to get a highly specialized test--even if we are willing to drive the distance. The doctor/hospital don't want to share the profit from that test with anyone across town.

 

[WorldTraveler]

•Fleet: I have said it in the past on here, look at the two fleets, they would bescatterred over so many types of aircraft leading to HUGE increase in maitenance costs. The HUGE advantage AA was aiming for (new, streamlined fleet all with new interriors and amentities) would be derailed and put them back into what they have now.

Except there really is no evidence that network airlines with 500 aircraft fleets cannot be profitable with multiple fleet types. LH and AF have done it in Europe for years. DL and UA have it now. Small fleets of less than 50 narrowbody or 20 widebody aircraft may be problems but there can be lots of commonality between aircraft even if they are not the same family. Ie UA’s 757s have two engine types as do their 777s but the airframe is still the same; DL’s 767s 744s and 330s have similar engines but different airframes. And all of those are large fleets. AA-US would not rise or fall based on fleet, esp. since it would have the exact same situation as DL and UA have.

•Service and Identity: AA is going for the "high value" customer with a "services oriented airline". DL can claim such services, but frankly, AA is the only domestic carrier with international service that isn't a joke as it relates to the premium passenger. With the new interriros coming for the widebodies, plus the A321 103 seat configuration on NYC/LAX&SFO coming, AA is getting back to being a leader inservices rendered.

Except that DL and UA both get higher yield (revenue per mile) than AA does – and yield tends to go down on longer haul routes such as DL/UA offer more of over the Pacific.
Further, DL’s corporate revenues – and its RASM – have grown far more over the past several years than AA’s; AA had a run of about six months where it was beating DL at RASM gain but most recently, AA’s total revenues shrank in order to push RASM up. It isn’t much of an accomplishment to cut total revenues in order to boost RASM.
And let’s keep in mind that UA shot itself in the foot w/ its merger execution and has provided a great opening to AA to gain corporate revenue just when AA most needed it in BK.
BTW, the business travel network just awarded DL the #1 spot with wins in every one of the 10 categories but AA was #2. UA was at the bottom of the list.
AA’s BK has been far smoother because of UA’s problems…. And that should be a powerful signal of what can happen to AA if it engages in a poorly executed merger.

•Weaknesses Remaining: AA has a big problem brewing in NYC, and merging with US does not fix that issue. They are wanting to expand as quickly as possible in Asia, another issue not fixed by merging with US. From a weakness point of view, the only thing that US merger would imporve and is of high value is a presence in the southeast.

true

I would rather have higher margins and lower revenues then higher revenues and lower margins. This push to match DL or UL/CO is mis-guided and dangerous. Investors care about ROI, and you could generate 90 billion in total revenues and have a smaller ROI than a company generating 10 billion. At the end of the day, a lean, and focused AA that is aimed at a specific market segment (as is with southwest and B6) could serve them VERY well. I think a merger with US will bring as many problems as benefits and lead to a sluggish, chaotic company that will ultimately sputter and fail. To me merger with B6 makes the most sense, but since that will never happen, going it alone is the next best laternative. Hope the UCC sees it that way.

Except the airline industry is network based and networks favor size. There is no historical basis for being a niche network airline. Either you grow to be competitive with your peers or you lose business. Part of the reason why AA’s revenue growth has not kept up is because DL and UA gained the mass to offer a much broader network to corporate clients which have long been the backbone of AA’s business.
AA standalone is still probably the lowest risk alternative – but it still remains that US COULD obtain the funding necessary to pay off the creditors and then US assumes the risk, assuming it can sell its plan to its stockholders and banks….

That's part of the problem today. If you do a little research you will find that the great majority of medical facilities--hospitals, specifically--are incorporated as non-profit institutions. It's one of the reasons that it is so very puzzling that medical costs have increased many multiples of the cost of living increase over the past 10-20 years.

Though I know part of the problem today is what you might call hospital administrator and physician ego. For instance, in Houston 20 years ago which even then had one of the world's largest medical centers, if you needed a thalium stress test, your doctor had to refer you to Texas Heart Institute for the actual test because they were the only facility in Houston that had the machine. The suckers cost over $1 million each. Within 5 years there were cardiologists in Houston that had one in their office and small general care hospitals in the suburbs that were adding wings just so they could have one on premises. (The suckers are also big. You can't just move a patient bed out of a room and install one. ) You and I are paying through the nose that we don't have to drive across town to get a highly specialized test--even if we are willing to drive the distance. The doctor/hospital don't want to share the profit from that test with anyone across town.

and of course having every doctor order the test because the machine is available does nothing to contain health care costs... did long-term outcome for cardiac patients really improve that much because the city gained all those new machines? Heck no. The only outcome that improved was the doctors and medical device salesmen.

There are ample reasons why health care cannot be solely free market based.

 

[ChockJockey]

• Labor / Seniority / union issues: what a cluster f***k things will be

If people weren't so quick to become protectionist and adversarial they'd be able to see this an opportunity and not just a several-years extension to the onging quagmire of labor hell that stalks both these airlines. Some people, perhaps too many, seem to thrive on this strife however, so sadly a cluster just might be the default expectation.

 

[WorldTraveler]

can you give us some historical perspective - any would do - that shows that labor situations at two separate companies have been improved after a merger?