APA votes for NEW Pres and VP

[777 fixer]

Why not? UAL, NWA, USAIR and Delta all went and they are all still around.If AA had gone BK then so would whoever else was left and then the problem would have had to have been addressed by the government. Didnt the railroad industry go through a similar crises over a hundred years ago? Massive overexpansion followed by waves of real bankruptcies(not the farce where BK is used as a means to simply rip off workers and the companies continue in business)and ultimately-consolidation? Whatever ever happened to that? I thought there was only going to be three majors when all was said and done?

I still say we screwed up by accepting the concessions and the only people who really lost anything in all this was the workers. Maybe a few small vendors lost a little but they can make it up by selling toilet seats that cost 50 cents to make for $1000.

Would the pilots force the company to go BK? I doubt it, the government would step in.The pilots should not only go for full restoration of buying power but restitution for lost earnings as well. If the "American People have the right to cheap air transportation then the government should go after the real culprits when it comes to costs-the oil companies.

Bob, could you tell me how many airlines have gone through the BK process and were around fifteen years latter? I'll answer that one for you, Continental and America West. In the case of Continental the only reason they are still around is that they picked the right guy to lead them after their second BK. They were within an inch of declaring BK a third time which probably would have been fatal. If they had picked the wrong guy it would have been lights out.

 

[nbmcg01]

But it seems to me that the unions are out for blood and want Plan-D...and nothing less. 4 years ago the FA's nearly voted down concessions and would rather have gone to BK instead. My guess is they'll want nothing less than what they lost and would be willing to take us into BK.

The pilots electing a MIA pilot is interesting...I belive the home of the of Pilots Defending the Profession group...http://www.apapdp.org/cms/

The flight attendants DID vote down the concession package. The vote was reopened with only yes votes counting. This is the subject of ongoing litigation. There was no nearly about it, it was a sound NO!!!!

 

[aafsc]

Bob, could you tell me how many airlines have gone through the BK process and were around fifteen years latter? I'll answer that one for you, Continental and America West. In the case of Continental the only reason they are still around is that they picked the right guy to lead them after their second BK. They were within an inch of declaring BK a third time which probably would have been fatal. If they had picked the wrong guy it would have been lights out.

The only reason CO is still around today is because they parasitically fed off of EAL's assets.

 

[eolesen]

If anything, CO is still around today because they bought up People Express. The EWR hub is their crown jewel, far surpassing the IAH hub in terms of overall profitability.

Anything EA was still flying out of EWR in 1987 was also being flown by PE with perhaps the exception of SJU, so your argument, while a popular myth for labor, doesn't hold a lot of water under scrutiny.

CO did get A300's as cheap widebody lift, and a few narrowbodies and few gates here and there, but only a few of the asset transfers from EAL actually benefitted CO directly. OnePass is the only one I can think of which still exists today.

Two of the the three largest asset transfers were to outside interests (AA with South America, and Trump with the Shuttle). The third largest transfer was SystemOne, which went to Texas Air directly, and didn't really benefit CO at all because they already had CCS/Shares in place.

 

[777 fixer]

The only reason CO is still around today is because they parasitically fed off of EAL's assets.

I was going to point out that one of Eastern's most valuable assets, the South American routes, were purchased by AA. However it looks like eolesen beat me to the punch.

 

[The Goose]

Ok. I think I'm getting it now. The union mindset is, in BK, AA could have cut non-employee costs deeper than they did outside of BK, while the employees would lose the same amout.

I guess I can accept that non-employee costs would have been cut deeper, but, I completely disagree that employee cost cutting would have been the same. I really believe we employees would have been worse off in BK, except for the execs, who would have increased compensation & benefits, just for sticking around. Not to mention all the lawyers fees.

It appears, however, with the rhetoric that's floating around here that we'll soon find out which way is better. You know what they always say, be careful what you wish for...

Bankruptcy laws have changed considerably - do a bit of research and you'll see it's not the attractive corporate silver bullet it was before October 2005.

Note how many businesses of any type have filed for Chapter 11 protection since then.

 

[aafsc]

If anything, CO is still around today because they bought up People Express. The EWR hub is their crown jewel, far surpassing the IAH hub in terms of overall profitability.

Anything EA was still flying out of EWR in 1987 was also being flown by PE with perhaps the exception of SJU, so your argument, while a popular myth for labor, doesn't hold a lot of water under scrutiny.

CO did get A300's as cheap widebody lift, and a few narrowbodies and few gates here and there, but only a few of the asset transfers from EAL actually benefitted CO directly. OnePass is the only one I can think of which still exists today.

Two of the the three largest asset transfers were to outside interests (AA with South America, and Trump with the Shuttle). The third largest transfer was SystemOne, which went to Texas Air directly, and didn't really benefit CO at all because they already had CCS/Shares in place.

You forget EA had a hub at MCI which had a negative impact on CO's DEN and IAH hubs. CO's service at that time was piss poor and EAL at MCI was taking business from those two CO hubs. EAL also had a very small and limited hub at IAH itself in addition to the "moonlite special".One of the first things Lorenzo did was shut them down in attempt to bolster CO's position. SODA (system one direct access), which was was EAL's "SABRE" was very valuable, some estimated it was worth $500 million IIRC. Texas Air took SODA from EAL for a note of about $100 million payable in the year 2025 IIRC; then they started charging EAL a certain amount per reservation. Texas Air started charging EAL 5 cents per gallon for jet fuel in the form a "management fee". These and other management fees bled EAL dry and benefited Texas Air and CO. EAL was a very asset rich airline. What it lacked was a presence in high dollar business markets like JFK-LAX (like AA and UA) and a management team with the ability to correctly allocate the right aircraft to the right routes (flying empty L-10-11's daily from MIA-NAS wasn't profitable) and to maximize profits with proper scheduling in Latin America (like AA). Instead of flying to all Latin American cities non-stop from MIA (like AA), EAL would do stupid routings such as MIA-PTY-BOG and MIA-LIM-SCL-EZE.

 

[AirwAr]

....
Not to mention all the lawyers fees.
....

From the Associated Press

ATLANTA - Delta Air Lines Inc. racked up at least $168.6 million in bills from lawyers, consultants and advisers during the 19½ months it was in bankruptcy, according to an Associated Press analysis of final fee and expense applications that have been filed.

The total is roughly half what UAL Corp.'s United Airlines spent on lawyers and consultants while in bankruptcy, but the Elk Grove Village, Ill.-based airline was under Chapter 11 protection twice as long as Delta.
...

 

[eolesen]

You forget EA had a hub at MCI which had a negative impact on CO's DEN and IAH hubs. CO's service at that time was piss poor and EAL at MCI was taking business from those two CO hubs. EAL also had a very small and limited hub at IAH itself in addition to the "moonlite special".One of the first things Lorenzo did was shut them down in attempt to bolster CO's position.

Don't know if I agree that it was taking business away from other carriers as much as it was being a drain on EA's finances. MCI was used purely as a connecting hub, and that concept has never worked for any carrier outside of a major metro area. Braniff II, Midwest, Vanguard and EAL all tried to make MCI work as a mini-hub, and failed miserably.

The MCI hub had 61 mainline flights to 27 destinations (ABQ, ATL, BOS, CLE, DCA, DEN, DTW, EWR, IND, LAS, LAX, LGA, MCO, MIA, MKE, OKC, OMA, ONT, ORD, PHL, PHX, SAN, SEA, SFO, SJC, STL, TUL) per day in July 1986, well before Lorenzo stepping in.

Texas Air started charging EAL 5 cents per gallon for jet fuel in the form a "management fee". These and other management fees bled EAL dry and benefited Texas Air and CO.

I'm not disputing the fact that Texas Air bled EAL dry, but it wasn't necessarily reinvested in CO. Had Lorenzo been reinvesting the cash from EAL into CAL, I'd agree with you 100%, but he wasn't. As you said, they had a piss-poor reputation that wasn't fixed until after Texas Air was removed from the picture. Instead, that money was being siphoned off to other Texas Air ventures and to Texas Air shareholders, mainly Lorenzo.

EAL was a very asset rich airline. What it lacked was a presence in high dollar business markets like JFK-LAX (like AA and UA) and a management team with the ability to correctly allocate the right aircraft to the right routes (flying empty L-10-11's daily from MIA-NAS wasn't profitable) and to maximize profits with proper scheduling in Latin America (like AA). Instead of flying to all Latin American cities non-stop from MIA (like AA), EAL would do stupid routings such as MIA-PTY-BOG and MIA-LIM-SCL-EZE.

All very true, and exactly why they were a failing entity before Lorenzo even entered the picture. Most of their LatAm routings were simply a reflection of what Braniff had been doing before EAL bought up the routes in 1982.