Company serves up crap offers to pilots

[Buck]

IT appears that the biggest changes AA wants come from a combination of medical and pension costs.

Then why does the company always say that labor is their biggest expenxse? I realize that the two costs are part of labor. If the pilots at WN are paid well then the difference must be medical and pesion costs?

 

[FWAAA]

Then why does the company always say that labor is their biggest expenxse? I realize that the two costs are part of labor. If the pilots at WN are paid well then the difference must be medical and pesion costs?

While this is necessarily simplistic, WN pilots don't spend any time training to move from one fleet type to another while AA pilots do spend a fair amount of time being paid but not flying so they can move up from one type to the next. The pay-banding proposal recognizes this inefficiency and reduces the number of pay rates to help reduce the time spent training. Just another example of the cost-saving efficiency of having just a single fleet type like WN perfected.

Continental has just three pay rates: small narrowbody, large narrowbody and widebody.

And I think the jury is still out on the AA pension. When the equity markets perform well, that reduces AA's out of pocket cash to the pensions. When the markets tank, of course, AA has to shovel more cash at the pensions. Over the long-term, perhaps DB pensions prove to be more costly. But on an out of pocket cash basis, AA has not suffered all that much over the past decade despite having contributed about $3 billion in cash to the pensions. That's an average of just $300 million per year, far cheaper than the WN Defined Contribution plan.

Medical? Every employee of every company in the USA has heard from their employer "medical costs continue to skyrocket and the only way we can keep the current medical plan is for you to contribute more and more each year toward your medical coverage." I doubt medical is any cheaper at WN or any other airline. Retiree medical, on the other hand . . . many employers don't provide any retiree medical coverage.

 

[Mach85ER]

FWAAA,

You're correct on antoher obvious inefficiency when it comes to AA. Before CAL decide to merge with AA, they had an all-Boeing fleet which simplfies Flight Management Computer and Flight display training as well having only 3 types and 3 crew bases. AA had more types, many more crew bases, yet we get berated about the AA pilot block hours per pilot.

I asked an AA junior VP that once when he compared AA pilot average hours to CAL/BLU/SWA pilots what the difference was due to AA's management decisons to buy airplanes and how much more efficient we would be with CAL's fleet mix. His response? A condescending snort that CAL operates MD80's like AA. Right over his head was the fact that CAL had retired the MD-80's 2 years before.

This was from a VP that was rumored to collect nearly $1,000,000 in PUP bonus money, a plan that was designed to "keep the talent".

 

[FWAAA]

I understand that the proposed pay rates may not be satisfactory, but what does everyone think about AA's proposal that all future RJs larger than 50 seats be flown by mainline pilots? Is it even possible for AA and the pilots to reach agreement on pay rates for 70 seat or 90 seat or 100 seat planes that both sides could live with?

 

[Mach85ER]

FWAAA,

Given that AA offered $139 an hour for the A319 that Spirit pays $164 hour (2 class,124 seats at AA), and Jetblue pays $143 and hour for a EMB-190 Captain on a jet (2 class, 94 seats at AA), I think you pretty much can figure who the problem child is in this situation.

 

[WorldTraveler]

Then why does the company always say that labor is their biggest expenxse? I realize that the two costs are part of labor. If the pilots at WN are paid well then the difference must be medical and pesion costs?

I was simply noting that AA is apparently targeting the benefits side of pilot pay more than the actual wages - until I saw the post about the B scale wage for the 319.
.
Compounded w/ the statement that AA intends to seek unlimited domestic codesharing apparently adding US to fill in on the Shuttle, then it appears that it is indeed AA's failure to manage and protect its network that is what is driving its need to reduce its employee wages to levels that are below its peers, even low fare competitors.
.
AA employees need to decide if they are willing to support the company, but it is apparent that they no longer can hold together the network they have and they intend to cut wages and codeshare with anyone that can make it in markets that AA cannot in an attempt to keep up with their competitors who will be offering much more complete networks and paying their employees better wages.
.
It should be abundantly clear by now that AA cannot operate a business model that provides its employees with a level of compensation and benefits of other airlines.

 

[Jacobin777]

You mean all of those "labor friendy" analysts that are always bitching and moaning about the "overpaid and underworked" union members? What a shocker that they would say that a pay proposal that would leave us 25% LOWER than discount airline Southwest would just completely destroy American Airlines. Maybe an Oscar for best drama queen is in order.

The bottom line is, if AA wants their Christmas list, they are going to have to take it from us in bankruptcy court. We are not going to give it to them. End of story.

I think it is interesting that AA is floating these turds while the TWU is voting to ratify. This could be a strategy to help "motivate" a yes vote.

Well I guess EVERY one is anti-union....go figure.

Come up with a better argument please.

Half (or whatever it is) is better than something of nothing.

I have a suggestion (only a suggestion mind you). How about asking/polling/finding out/whatever employees of the other carriers as to how BK has affected them. A little research might help in determining what course of action should be taken.

Again, its just a suggestion.

And somebody thinks the union is being unrealistic? Are you kidding me? Take a good look at what they offered for Captain pay on the A319, $139 Hour. The LLC Spirit Airlines pays $164 Hour for the same job. What clown would think AA is serious.

It's already been covered on this board. The pilots are willing to phase in productivity issues with retirements that are happening quickly and ramping up in 2 years. Moving the average age downwards will add in benefits of less vacation time and lower medical costs with a younger workforce. UAL/CAL are deep into negotiations right now, their pay is going up as well as DAL in a few years. SWA is a competitor as well as a comparison for pay as well as work rules. AA will probably get a majority of SWA productivity rules phased in over a few years. World wide salaries are also going up for lack of qualified pilots, even with 500 hour First Officers. Pilot costs are going up.

Wake up people. AA is mouthing off to everybody about pilot productivity. Here are a few domestic flying statistics for December:

Average scheduled hours per flying line: 72.47 hours, they can schedule 78 hours
Average days worked per month: 13.88 Days per month. SWA pilots can fly 82-85 hours in the same days worked per month.

AA doesn't max pilot productivity today, they won't do it tomorrow. It's just a B.S. statistic to cover up their own business decisons.

Why aren't pilots scheduled to a max done? (I'm genuinely curious). I haven't seen the union head really discuss this in detail as well (are there any links to it)?

Also, as mentioned, different planes, different pilot pools @ AA versus say Spirit or WN.

While this is necessarily simplistic, WN pilots don't spend any time training to move from one fleet type to another while AA pilots do spend a fair amount of time being paid but not flying so they can move up from one type to the next. The pay-banding proposal recognizes this inefficiency and reduces the number of pay rates to help reduce the time spent training. Just another example of the cost-saving efficiency of having just a single fleet type like WN perfected.

I'm curious just how much "un-productivity" time does this add to. Its not as if there are tens of thousands of pilots shifting ever year.

Continental has just three pay rates: small narrowbody, large narrowbody and widebody.

Maybe this is one system AA can go for.

And I think the jury is still out on the AA pension. When the equity markets perform well, that reduces AA's out of pocket cash to the pensions. When the markets tank, of course, AA has to shovel more cash at the pensions. Over the long-term, perhaps DB pensions prove to be more costly. But on an out of pocket cash basis, AA has not suffered all that much over the past decade despite having contributed about $3 billion in cash to the pensions. That's an average of just $300 million per year, far cheaper than the WN Defined Contribution plan.

Medical? Every employee of every company in the USA has heard from their employer "medical costs continue to skyrocket and the only way we can keep the current medical plan is for you to contribute more and more each year toward your medical coverage." I doubt medical is any cheaper at WN or any other airline. Retiree medical, on the other hand . . . many employers don't provide any retiree medical coverage.

IIRC, AA is still at a pension disadvantage over its peers, especially when UA, DL, NW, etc. "dumped" their pension obligations to the PBGC.

I understand that the proposed pay rates may not be satisfactory, but what does everyone think about AA's proposal that all future RJs larger than 50 seats be flown by mainline pilots? Is it even possible for AA and the pilots to reach agreement on pay rates for 70 seat or 90 seat or 100 seat planes that both sides could live with?

I would love to see pay rates which make 50+ seats, especially 80-100 seat range profitable. That would REALLY help AA in many markets.

FWAAA,

Given that AA offered $139 an hour for the A319 that Spirit pays $164 hour (2 class,124 seats at AA), and Jetblue pays $143 and hour for a EMB-190 Captain on a jet (2 class, 94 seats at AA), I think you pretty much can figure who the problem child is in this situation.

Who is the so-called "problem-child"?

 

[TWU informer]

It appears to me that AA Management has not a clue how to solve the issues within this airline.

Maybe instead of cunsulting firms to assit them is this endeavor, they actually do need a BK Judge to assist them.

And. although this might be more difficult for all involved, at least we wont end up with a scorched earth policy because of ignorance.

Not the way most hoped this would go but obviously no other way with a future attached.

Let's all prepare to rally in front of the lawyers going up the steps this time.
Before the idiots light a fire that cannot be put out.

Or on the other hand, maybe this is really the plan and has been all along but they want the NO VOTE from each group before they file. Offering up AA Pilot pay that is less than the LLC's on similar aircraft is nothing more than either a design for a no vote or incompetence beyond our imagination.

 

[767one]

True, but I do believe they will take more in bankruptcy by either freezing or terminating the pension for current employees. That would be the big difference between agreeing to their demands or being force fed a new contract in bk court!

My guess is that no matter what they agree to in a pre-bankruptcy contract they will still terminate the pension and take what they want from the employees after a bankruptcy filing.

 

[chris perry]

If it's concessions Vote it down,no need in helping the JUDGE!!!!! Personally I'm tired of hearing the BK word get it overwith....

 

[RevThruster]

If it's concessions Vote it down,no need in helping the JUDGE!!!!! Personally I'm tired of hearing the BK word get it overwith....

In no way, should AA employees vote in rates lower than JBLU, and Spirit. Despicable.

 

[WorldTraveler]

It appears to me that AA Management has not a clue how to solve the issues within this airline.

Maybe instead of cunsulting firms to assit them is this endeavor, they actually do need a BK Judge to assist them.

And. although this might be more difficult for all involved, at least we wont end up with a scorched earth policy because of ignorance.

Not the way most hoped this would go but obviously no other way with a future attached.

Let's all prepare to rally in front of the lawyers going up the steps this time.
Before the idiots light a fire that cannot be put out.

Or on the other hand, maybe this is really the plan and has been all along but they want the NO VOTE from each group before they file. Offering up AA Pilot pay that is less than the LLC's on similar aircraft is nothing more than either a design for a no vote or incompetence beyond our imagination.

I will note that I have been saying for multiple years that this day would come... if you don't turn a company around, the situation gets beyond your ability to do so. I have been castigated as trashing everyone but exactly what I said would happen is now happening.
AA can't turn the company around and the best proposal they can come up w/ is to slash scope so that thousands of current employees will be laid off (way beyond what other carriers who went through BK did) and then gut pay and benefits (in some cases as bad as and in some cases worse than what its formerly BK peers) went through.
.
To argue that AA employees will get from a judge what other airlines got is just not accurate... it might be a whole lot worse but it will also be far worse than the CURRENT situation of other airline employees.
.
In this context it can ONLY be expected that AA employees will do exactly what every other group has done - ride out the current situation as long as possible, prepare for the inevitable (with an abundance of history as to what might happen), and then take what is dished out knowing that the profession and the company will sink yet one more notch.. because that is what has happened before.
.
The question still remains, as I have painted it before, whether AA can turn itself around in an industry where no one else is in the same shape at the present time and where they are all attempting to obtain the revenues that AA has developed over the years.
.
All I can say is that the gut-wrenching pit in my stomach gets bigger and bigger as I watch this situation play out one more time in the airline industry.

 

[strikeforce]

I will note that I have been saying for multiple years that this day would come... if you don't turn a company around, the situation gets beyond your ability to do so. I have been castigated as trashing everyone but exactly what I said would happen is now happening.
AA can't turn the company around and the best proposal they can come up w/ is to slash scope so that thousands of current employees will be laid off (way beyond what other carriers who went through BK did) and then gut pay and benefits (in some cases as bad as and in some cases worse than what its formerly BK peers) went through.
.
To argue that AA employees will get from a judge what other airlines got is just not accurate... it might be a whole lot worse but it will also be far worse than the CURRENT situation of other airline employees.
.
In this context it can ONLY be expected that AA employees will do exactly what every other group has done - ride out the current situation as long as possible, prepare for the inevitable (with an abundance of history as to what might happen), and then take what is dished out knowing that the profession and the company will sink yet one more notch.. because that is what has happened before.
.
The question still remains, as I have painted it before, whether AA can turn itself around in an industry where no one else is in the same shape at the present time and where they are all attempting to obtain the revenues that AA has developed over the years.
.
All I can say is that the gut-wrenching pit in my stomach gets bigger and bigger as I watch this situation play out one more time in the airline industry.

The grievances with this company are deep rooted and will not be forgotten or forgiven by simply watching management destroy the pilot profession and then the mechanic profession. I fully understand the grave consequences of BK, but I've prepared myself for the worst possible outcome because I knew 8 years ago AA management was on course to take more come 2008. I blame both labor and management for the condition of American Airlines.....management for reckless business practices and union for NOT representing the membership. I cannot look in the mirror and willingly accept more concessions because the only people I will be screwing are my children. American Airlines management are the most pathetic individuals on this planet because in 2003 they chose to rape their employees instead of doing their JOBS by downsizing the operation and laying off thousands. In 2008, the company chose a path of least resistance by stalling negotiations for 4 years, and further angering those same employees they raped 8 years earlier.....and then people on this forum wonder why the employees are entrenched in our stance against the company. The company chose this route 8 years ago and they will again choose the path of least resistance which will be BK, and that's fine with me........but, don't hold US hostage any longer and GO BANKRUPT ALREADY!!!!!!!!!!

 

[paul1]

It will be interesting, if we do go into bk. will there be any thing left of AA. Its easy to say now, go into bk it will be no worse. Well it can be alot worse.

Usair can pick up the parts they want (routes, not people) just because delta and united surived bk, many others failed eastern, pan am, midway the list goes on. No we are not to big to fail, and thats what the other airlines are looking for so they can increase there market shares.

 

[TWU informer]

I will note that I have been saying for multiple years that this day would come... if you don't turn a company around, the situation gets beyond your ability to do so. I have been castigated as trashing everyone but exactly what I said would happen is now happening.
AA can't turn the company around and the best proposal they can come up w/ is to slash scope so that thousands of current employees will be laid off (way beyond what other carriers who went through BK did) and then gut pay and benefits (in some cases as bad as and in some cases worse than what its formerly BK peers) went through.
.
To argue that AA employees will get from a judge what other airlines got is just not accurate... it might be a whole lot worse but it will also be far worse than the CURRENT situation of other airline employees.
.
In this context it can ONLY be expected that AA employees will do exactly what every other group has done - ride out the current situation as long as possible, prepare for the inevitable (with an abundance of history as to what might happen), and then take what is dished out knowing that the profession and the company will sink yet one more notch.. because that is what has happened before.
.
The question still remains, as I have painted it before, whether AA can turn itself around in an industry where no one else is in the same shape at the present time and where they are all attempting to obtain the revenues that AA has developed over the years.
.
All I can say is that the gut-wrenching pit in my stomach gets bigger and bigger as I watch this situation play out one more time in the airline industry.

I agree with you. But I am claiming the exception that I don't blame the employees as much as I blame inept management, and in particular Carty for not taking the lead and allowing the union's to decide how to manage the place during the 2003 crisis and after that Arpey and his gang of theives and consultants he hired to try an cover his inability to run this airline from day 1

Now the employees will finish it off and you and others will only focus on their faults.

But at this point who rally cares who gets blame or credit.