Once again, do yourself a favor: don't make comments about things you have no clue about. I fully appreciate the sacrifices that AA employees have had to endure in the last decade - more than you could possibly know. I don't need anyone - least of all you - to tell me about AA's average annual wages versus competitors. I can go look at the same numbers as you, and I have.
As I have already made clear (but you - not surprisingly - have chosen to ignore), my comments were always - clearly, from the outset - about "unit costs," which in the airline industry means cost per ASM. They were not about wages singularly. That was the basis for my comment that AMR's unit costs, in both the labor and maintenance categories, are above industry average and many of their peers.
That is a fact that especially for you, who loves to continually extol us with your wisdom and "depth of intelligence" about why AMR is such a trainwreck and post-bankruptcy Delta is flawless and infallible, should not find any reason to dispute.
You know, Com, there are times when I could sit down and have a beer with you and think we could probably pass hours together and enjoy it.
Then there are times when you get on your high horse and I want to do nothing but knock you off of it so fast your head doesnt even have time to spin.
If you are so familiar about what AA employees went through, then you dont know with anywhere near as much clarity what anyone else went through and have no business commenting about it.
If on the other hand, you dont take it QUITE so personally and admit that maybe some things are numbers which you and everyone else can see, then there is indeed a basis for you to compare AA employees to others (you dont seem to have a problem doing it when YOU provide the numbers) and so can anyone else do it the other way around too.
The bottom line is that you want to hold onto this moral superiority thing about bankruptcy but seem unable to comprehend that AA employees dont have the advantage you would like them to have because then it would blow your whole moral superiority argument.
BK despite what you want to believe is a dollars and sense financial decision. Companies that used it didnt do it because they wanted to sin. They did it because it was legal and because it was what was necessary to turn their companies around.
The sooner you can get through your head the idea that BK is not an argument about moral superiority but about money and finances, the sooner you can gain the respect that you otherwise merit.
It would also help your argument if you could demonstrate that AA and its employees are indeed in a superior financial position but the simple fact is that AA employees ARE NOT the highest compensated network airline employees any longer. There are ample facts to prove that.
On an hourly rate, AA's employees may be paid less, but I'm not sure that is the case on a total compensation basis (wages plus the company's portion of healthcare and funding a retirement plan).
It's hard to guess what the pension obligations really are on a per employee basis per year, since it is a crapshoot as to how many years a retiree will be drawing their pension or using healthcare. You can average, but people are living longer, which affects both.
WN knows exactly how much obligation they have at retirement: zero. They only fund the 401K while the employee is on payroll, and have no retiree healthcare....
Actually, it is not at all difficult to calculate total employee costs. It is reported to the DOT along with other data, even though employee salary data is reported on a fairly delayed basis.
Every publicly traded airline has financial statements on a quarterly basis that break out employee costs. There is not consistency between how mainline and regional carrier employees are reported but there is enough other information to be able to calculate fairly accurately the average compensation (including benefits) for each employee group. Airlines like AMR and DAL which have owned regional carriers create some challenges in picking out what is mainline but there is still enough outside data to be able to calculate mainline employee costs.
Further, productivity is very easy to calculate from current data and it explains fairly accurately the difference between AA and other carriers in terms of labor costs.
That is why I am far from the only person who has noted that AAs labor cost DISADVANTAGE is driven by productivity and when you see the effects of productivity, there mathematically isnt room to also have the increased total compensation that you want to believe exist.
You and others would do well to remember that other carriers DO HAVE retirement benefit costs, even if it doesnt come in the form of defined benefit contributions. IN fact, in many cases, defined CONTRIBUTION costs MORE THAN defined benefit plans… but the company loses the uncertainty and long term liabilities with defined benefit plans.
Further, DL DID NOT terminate most of its pension plans. Of the combined DL/NW pension plans, only the DL pilot plan was terminated. DL continues to have obligations to fund all of the PMNW plans and all PMDL plans except for the pilot plan.
I would strongly bet that if you combined DLs defined contribution pension costs per employee today and combine it with DLs pension obligations from its defined benefit plans, the amount PER EMPLOYEE (the equal basis for comparing two different sized companies) is actually greater for DL. The difference is that DL and NW obtained permission to stretch out the repayments for its defined benefits plans while AA and CO which also requested the same treatment was denied. There isnt such a great moral superiority argument about what AA is contributing to its pension plans if AA (and CO asked for the same plan that DL and NW asked for) but just happen to be denied, now is there.
UA and US may have terminated their pension plans which mean they no longer have responsibility for those plans but DL did not terminate everything.
Dealing with the facts as they exist for both of you will go along ways toward allowing you to contribute something to the conversation.
You both have a lot of knowledge and information you do contribute. If you stick to the facts and let them fall where they may even if it makes AA or DL or anyone else look bad then your information will be taken seriously.
I'm not trying to burn anybody's buns here. There are many dynamics to "maintenance costs" as Bob has pointed out many times. How each airline calculates and reports costs, i.e. outside contract work revenue/manpower needs, maintenance programs/procedures, etc., from what I'm hearing varies from airline to airline. You can't compare apples to oranges if that is truly the case. I believe a detailed breakdown of how expenses are reported would be the only way to put this debate to rest. Those have not been produced. I also know that AA's a/o mechanics fix everything without regard to cost, adhering to very strict manual tolerances which I believe is a higher standard than MRO's adhere to.
Come on, Birdman. Do you really think that every other carrier cuts corners to the point of sarcrificing safety while AA spends whatever it wants to on maintenance? That is just not even realistic to consider.
Again, your moral superiority about AAs inhouse maintenance belies the fact that other carriers obviously do a very good job at maintenance and are able to do it while operating on a budget.
If carriers who performed contract maintenance did such a bad job of maintaining their own planes, dont you think that would be apparent to others?
Im not sure how much in-sourcing UA does but DL is the largest airline MRO in the Americas and has received a number of awards for the quality of the work it does, in addition to the work that other carriers pay DL to do.
You might find supporters for your cause if you, like Bob Owens, could accept that other carriers actually can manage to do a decent job at what they do even if they do use a different business model.
The fact that every other carrier is able to outsource at least some of their maintenance makes AA, not everyone else, the exception. It also places the burden on AA and its employees to justify that the increased costs for in-house maintenance are worth it. Given that everyone else in the industry manages to operate safe airlines and stay out of trouble with the FAA better than AA you might want to reconsider the whole notion that spending more for maintenance makes AA better.
And nor am I trying to incite anything or offend anyone.
And, in both areas - cost and ASMs - both management and the unions deserve credit for the monumental amount they have achieved, and have responsibility for the work they still need to do. Costs can and should be attacked in areas like distribution, better management of fuel, and targeted capital investment in cost reduction, and productivity (as in ASMs) can and should be improved through more flying with 90-seaters at competitive rates, more long-haul flying at competitive rates, and improved utilization of AA's existing widebody fleet. Just a few ideas that I think would have a huge impact on the cost per ASM number - for all employees, and indeed, even in non-labor cost categories - and make AA far more competitive immediately.
Now were trying to sound like a diplomat.
The reality is that AAs costs outside of labor ARE competitive with the rest of the industry. AA has always done a good job of cost control. And a big reason why they are holding onto that wad of cash they have is because they need it to hold onto the fuel hedges and without those hedges, AAs costs fuel costs could skyrocket.
AA could do a lot of things to improve its network and reduce costs as you note, but many of those things require a fairly substantial rework of its core business model and you cant do that stuff when you are operating at a significant cost advantage.
That is why AA mgmt is focusing on replacing high operating cost MD80s with 738s, even if the result is an even greater leveraged balance sheet (planes generally can be resold fairly easily so there is little risk of default). And the use of the 773 which is a low CASM long haul aircraft (have we determined if the APA will fly it beyond the MTOW of the 772ER?)
Yes, there are a lot of things that AA can do to turn itself around. It does require some out of the box thinking as well as a return to some of the basics. But the same mindset must exist w/ labor as well. We wouldnt be having this discussion if both parties were tired of 8 years of the status quo.
