Employees&Productivity

[chris perry]

I was just browsing,found some intresting data,note the numbers.It's intresting to see foot notes for shaded area's for AA
It shows data is incorrect or suspect. Just happens to be labor......http://web.mit.edu/airlinedata/www/Employees&Productivity.html

 

[chris perry]

oops here's the ink http://web.mit.edu/airlinedata/www/Employees&Productivity.html

 

[jimntx]

I was just browsing,found some intresting data,note the numbers.It's intresting to see foot notes for shaded area's for AA
It shows data is incorrect or suspect. Just happens to be labor (snip)

I'm shocked! Shocked, I tell you. Round up the usual suspects.

 

[WorldTraveler]

note how similar DL and UA's stats are and where there are deviations from AA's data.. that should give you an indication of where AA will need to go to stay in "their league".
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Also note that AA's maintenance outsourcing is ranked at 24% while AA and DL are both around 40%... not exactly an "AA doesn't outsource and they outsource everything" situation.
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these numbers also don't factor in revenue which is skewed toward network carriers and their longer haul, higher value operations.

 

[chris perry]

The problem with the data is check the item for total employee's {maint & related} in 2002.That just happened to be the AMFA drive,the data is incorrect.....management lied...check the total m&e the next few years...They didn't layoff 6000 people come on....
They used those numbers to defeat the Amfa card drive.... So they obviously lied,they had dead people on that list... I saw it myself.
I have no reason to believe the numbers now ... They lied then..... are the numbers now correct ?doubtful.....

 

[BoeingBoy]

they had dead people on that list... I saw it myself.

You need a better union. Since either side can challenge anyone on the list submitted to the NMB, the union letting known deceased workers stay on the list is a big failure.

There is one exception - the list is frozen at a point prior to the voting - I think it's a few weeks. That's to prevent changes due to hiring, firing, resignations, deaths, which happen pretty constantly with a big company, from delaying the vote forever. It is entirely possible that people could pass away during that period and and they would remain on the list.

Jim

 

[BoeingBoy]

Don't be too impressed by the name of MIT and think that they're some kind of experts. That's not a slam of MIT. It's just that they and everyone else who doesn't work for management uses the same raw data - that required to be submitted to the BTS and SEC filings, all submitted by the carriers.

Jim

 

[Bob Owens]

Don't be too impressed by the name of MIT and think that they're some kind of experts. That's not a slam of MIT. It's just that they and everyone else who doesn't work for management uses the same raw data - that required to be submitted to the BTS and SEC filings, all submitted by the carriers.

Jim

We agree;

William S. Swelbar is a Research Engineer in MIT’s International Center for Air Transportation, where he is affiliated with the Global Airline Industry Program and Airline Industry Consortium. Prior to accepting his research position at MIT, Bill was President and Managing Partner of Eclat Consulting, Inc., a firm he founded. He also serves as a member of the Board of Directors of Hawaiian (Airlines) Holdings, Inc.

The guy is a shill for the carriers, a clone of "Aircon as far as I'm concerned.

MIT probably got a huge kickback from the airline Industry to give this guy an office and use the MIT name for credibility.

The "Global Airline Industry Program" and "Airline Industry Consortium" are one and the same with MIT.
Eclat is the company that came up with our concessions and the scam where the company got two bites of the apple by using the pay cut to reduce the value of the other concessions, they called it a "Roll up adjustment", more like a roll over. When the committee said that they would go for the straight 25% paycut the lapdogs on the committee accused those on the Committee who favored the straight pay cut approach of trying to sabotage the deal, in fact in order to maximize the concessions it was neccessary to split the concessions between benefits and pay, so they could get two bites of the apple and use the pay cut to diminish the value of the concessions and get even more concessions to reach the goal. We were told that the objective was $320 million in savings but thanks to the Roll up adjustment scam they got much more than that. Somewhere along the way they switched it to we have to sacrifice "a value" of $320 million a year.

 

[chris perry]

That figures thanks for the info...Just as I said, there is no integrity in these negotiations... just smoke..mirrors.

 

[BoeingBoy]

The guy is a shill for the carriers, a clone of "Aircon as far as I'm concerned.

MIT probably got a huge kickback from the airline Industry to give this guy an office and use the MIT name for credibility.

To convince me, you'd have to show that he manipulates the BTS data to favor the airlines in general or specific carriers - I'm not a big believer in conspiracy theories. Personally, I don't buy it - Herbst's data at Airline Financials pretty much shows the same conclusions and he's a former airline pilot. His firm has been used by airline unions. All told, there are about a dozen outfits that use the BTS data for analysis, although some of those specialize in different parts of the data. For example, Boyd specializes in routes, revenue, and traffic. Some are also fee only - if you want to use their products you pay for it. But all do nothing that you can't do. They take all the raw data and integrate it into easier to understand metrics. For you to do it you'd have to get the employee cost figures from one database (which might be for only a month, so it'd take 12 of them to look at a year), aircraft days from another, block time from another, passenger numbers from another, etc, etc, etc. But if you want to work with large databases to get the data (some over a million separate records) and do the analysis yourself, have at it. I've played with some of it and understand why most of the firms sell their product instead of giving it away.

Any tinkering with the data is in the submission by the airlines. They have guidelines to follow and what data is to be reported is specified. But MIT, Airline Financials, and others augment the BTS data with data from SEC filings, which must pass muster with an auditing firm and manipulation carries more penalties compared to fiddling with the BTS submission.

Jim

 

[Bob Owens]

To convince me, you'd have to show that he manipulates the BTS data to favor the airlines in general or specific carriers - I'm not a big believer in conspiracy theories. Personally, I don't buy it - Herbst's data at Airline Financials pretty much shows the same conclusions and he's a former airline pilot. His firm has been used by airline unions. All told, there are about a dozen outfits that use the BTS data for analysis, although some of those specialize in different parts of the data. For example, Boyd specializes in routes, revenue, and traffic. Some are also fee only - if you want to use their products you pay for it. But all do nothing that you can't do. They take all the raw data and integrate it into easier to understand metrics. For you to do it you'd have to get the employee cost figures from one database (which might be for only a month, so it'd take 12 of them to look at a year), aircraft days from another, block time from another, passenger numbers from another, etc, etc, etc. But if you want to work with large databases to get the data (some over a million separate records) and do the analysis yourself, have at it. I've played with some of it and understand why most of the firms sell their product instead of giving it away.

Any tinkering with the data is in the submission by the airlines. They have guidelines to follow and what data is to be reported is specified. But MIT, Airline Financials, and others augment the BTS data with data from SEC filings, which must pass muster with an auditing firm and manipulation carries more penalties compared to fiddling with the BTS submission.

Jim

Before becoming a research engineer in MIT's International Center for Air Transportation, William S. Swelbar spent nearly 30 years in the airline industry as a consultant with a focus on airline labor cost restructuring, regulatory issues, and communication strategy and support.

http://web.mit.edu/newsoffice/2009/3qswelbar-0616.html

ie Union Buster

Your peers at AA dont have much use for him either;
http://alliedpilots.org/Public/Publications/Flightline/FLSpring08_Web_Public.pdf

Read his blog for a while and you will see what I mean. Sure he can copy and paste numbers and they are what they are but I dont have as much faiith in the SEC reports as you do. You have to remember what the purpose of the reports are, to protect investors from otherwise hidden liabilities that could leave them overpaying for worthless stock. Its OK to be overly pessimistic on those reports, they just cant be unjustly optimistic. What people fail to realize is that the government is not going to force management to reveal their business strategy, and full discolsure of the numbers would do that, not even to the shareholders.

 

[FWAAA]

Read his blog for a while and you will see what I mean. Sure he can copy and paste numbers and they are what they are but I dont have as much faiith in the SEC reports as you do. You have to remember what the purpose of the reports are, to protect investors from otherwise hidden liabilities that could leave them overpaying for worthless stock. Its OK to be overly pessimistic on those reports, they just cant be unjustly optimistic. What people fail to realize is that the government is not going to force management to reveal their business strategy, and full discolsure of the numbers would do that, not even to the shareholders.

Ok, so you don't trust the numbers that corporations file with the SEC, despite potential prison terms for the executives under Sarb-Ox.

As an aside, the purposes of disclosure under the Securities Act of 1934 is not just to protect investors from paying too much for worthless stock - it also exists to protect investors from companies that would paint too pessimistic a picture (by filing fraudulent numbers), causing those investors to lose money. The anti-fraud provisions of the '34 Act prohibit falsifying the numbers, period. But you don't trust them. Ok.

What about all the other numbers filed with the BTS? Are they fraudulent, also? I don't know what potential penalties await airlines that falsify data filed with the BTS, but I'm going to assume that there are some, and further, without any evidence that AA is falsifying its submissions, that the AA data is accurate. Of course, as Swelbar points out, occasionally the data don't make any sense on their face, and it seems fair for him to point out those instances.

I've done the same thing when you're posted numbers that are nonsensical on their face, like your repeated assertion that UAL's outsourced maintenance consumed something like 17% of their total expenses a few years ago. A cursory review of UAL's 10-Ks reveals the impossibility of the number you have asserted. I don't believe that you're intentionally lying about it - only that you're not remembering it correctly or that whomever told you the number was mistaken.

You spend an enormous amount of effort here arguing that AA's labor costs are not higher at AA than they are at its primary competitors. Why you continue to do so puzzles me. It's almost like arguing about the principles of flight ("lift and drag and thrust don't matter") or whether the earth is basically round. No matter how you slice it, AA's labor costs per ASM is higher than most other airlines. The APFA's outside economist admitted on his YOU-TUBE series that AA's FA cost per ASM was the highest in the industry. He then tried to say it was solely because of AA's extensive 3-class service driving up the costs (without explaining how UAL, with more 3-class service, maintains cheaper FA costs per ASM).

Shady lawyers who don't like the facts they've been given or aren't happy that the law isn't on their side argue that the witnesses are all lying or the law doesn't make any sense or the judges are crooked. The numbers don't always support your position (we're the lowest paid - woe is us) so what do you do? Claim that every source of data about your employer's labor costs is false and fraudulent and indict the character of anyone commenting on that data. I've heard that song before.

 

[IORFA]

You didn't get it before, so probably not this time either. AA chooses to have "extra" f/a's on the plane for their service standards. AA has more f/c seats and less over all seats than UA. Thus AA's costs for the f/a's is higher. Their choice. If they want less f/a's on the plane, simple. Take out f/c and add more b/c and many more y/c seats. They get paid the bonuses, let them manage the company. It's time they manage and stop blaming labor.

 

[Bob Owens]

Ok, so you don't trust the numbers that corporations file with the SEC, despite potential prison terms for the executives under Sarb-Ox.

The fact is that the information is limited and does not tell the whole story. Its not inteneded to provide labor the information they can use in negotiations, thats not the purpose of the report.

Now lets go after the rest of the strawmen in your post. The fact that you are resorting to such tactics indicates to me that you feel you are losing the arguement.

What about all the other numbers filed with the BTS? Are they fraudulent, also? I don't know what potential penalties await airlines that falsify data filed with the BTS, but I'm going to assume that there are some, and further, without any evidence that AA is falsifying its submissions, that the AA data is accurate. Of course, as Swelbar points out, occasionally the data don't make any sense on their face, and it seems fair for him to point out those instances.

"Falsifying" and "fruadulent" are strong words and I dont see where I used them, however information can be factual but presented in a way thats misleading. Also the limited scope of the information and the lack of details leaves a lot of room for manipulation from a labor standpoint as far as information we can use in negotiiations, as you admit in your praise of Swellbar, the information is not always reliable and is subject to interpretation as to what it really means as far as prospects for the company. Anyone who keeps track of spending knows that one of the biggest challeneges is how do you categorize expenses, sometimes an expense can fit into multiple categories and different companies may sort them differently.

I've done the same thing when you're posted numbers that are nonsensical on their face, like your repeated assertion that UAL's outsourced maintenance consumed something like 17% of their total expenses a few years ago. A cursory review of UAL's 10-Ks reveals the impossibility of the number you have asserted. I don't believe that you're intentionally lying about it - only that you're not remembering it correctly or that whomever told you the number was mistaken.

And as I told you then, the information was presented in a slide show to the mechanics at UAL by UAL, I have a copy and offered to send it to you if you provided me an E-mail address to send it to. Its too large to post here. You never responded to the offer and yet you keep claiming that my "assertions" as to what UAL claimed are false because of what you read on their 10Ks. I'm not verifying whether the information is accurate or not, only thats what UAL has claimed but why would they say its higher than it is?

You spend an enormous amount of effort here arguing that AA's labor costs are not higher at AA than they are at its primary competitors. Why you continue to do so puzzles me. It's almost like arguing about the principles of flight ("lift and drag and thrust don't matter") or whether the earth is basically round. No matter how you slice it, AA's labor costs per ASM is higher than most other airlines.

I believe I've agued that the way AA defines and presents labor costs is misleading because they dont pay us more per hour than most of their competitors. For 90% of the population when they hear that a company has the highest labor costs they assume that corresponds to the wages paid compared to competitors.I've also argued that its unrealistic for an airline that does most of their OH in house to not expect to pay more for labor than one that outsources. I have not said that when AA itemizes labor costs that AAs isnt higher, isnt higher in totaliity or by ASMs, I've said that our hourly wage and benefit costs are not the highest in the industry and that the statement that AA has the highest labor costs is misleading.

The numbers don't always support your position (we're the lowest paid - woe is us) so what do you do? Claim that every source of data about your employer's labor costs is false and fraudulent and indict the character of anyone commenting on that data. I've heard that song before.

Once again, back up your claim where I said the information is "false and fraudulent". I've said we cant rely on it for what we need to know in negotiations. That the information can be misleading, and is often intentionally presented in a way thats misleading, perfect example, what you just did, citing that AA's labor costs are the highest, but what metrics are being used to support that statement? For us the only metrics that apply is what do they pay us per hour. Why? Because thats the basis by which we sell our labor. We dont sell our labor based upon ASMs so the figure has no relevance and it shouldn't. We dont determine how many seats they put on a plane, what equipement they buy , what routes they serve or even how many mechanics per ASM they hire. Are Eagle ASMs included?* That could skew the numbers as well because those planes on average generate less ASMs per worker. So what we end up with are two factual statements that appear to contradict each other, one that says that AA has the highest labor costs(per ASM) and one that says that many of AAs competitors pay more for labor (per hour). You, and management choose to cite a figure that for us is misleading and irrelevant. AA could lower their "labor costs" simply by adding more seats to each aircraft, getting different aircraft, flying different routes or spinning off Eagle, we have no control over any of that.

Getting back to Productivity. AA has basically kept the same structure they always had so when AA looks to measure productivity as far as revenue per employee they are pretty much the only legacy carrier where this figure can be considered accurate. Comparing current Revenue per employee to past revenue per employee shows how much of an improvement AA has actually realized, however competitors can not use this metric because due to outsourcing labor is hidden in other costs such as cost paid to vendors for services that used to be done in house. When a company outsources it does not elimiante the cost of labor, it simply transfers it to another category, there may or may not be overall savings.


* Lets look at Pilot ASMS to illustrate how worthless the ASM figure is as far as productivity.

Lets say we have an Eagle pilot who flies two 1000 mile legs in a 50 seat RJ and we have an AA pilot who flies one 3000 mile leg in a 270 seat 767.

The RJ pilot will generate 100,000 ASMs over the two legs and call it a day having been on duty at least 7 hours.

The AA pilot will generate 810,000 ASMs over around the same amount of time. So is the AA pilot over eight times more productive than the Eagle Pilot? The Eagle pilots did twice as many takeoffs and landings. If we go for the smallest Eagle and compare it to the Largest AA plane the numbers are spread even further. With AMR owning hundreds of Eagle Aircraft its easy to see how these figures would dramatically lower the amount of ASMs generated per worker compared to an airline that does not operate any of these small aircraft.

 

[WorldTraveler]

To add, it is only because airlines are still treated like utilities that there is the level of data exchanged.
As Jim notes, it is up to each individual "side" to decide how to extract that data and use it for their benefit. Subscriptions to these data sources are relatively low priced in contrast to the value that could be brought to bear in debating AA's position in labor negotiations, if labor will take the time to learn to use the data. Or you can hire a consultant who has access to the data.

Absent labor having data, AA (or any other company/analyst) can make whatever conclusion they want.
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It is absolutely true that the data is indeed valid when compared with what is known; if nothing else, labor leaders at AA or any other airline have enough data that they should be able to "sniff check" some of the conclusions - including the numbers of personnel, flight schedules, etc.
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Arguing that the data is flawed and the company is manipulating it while providing nothing to counter it is a recipe for allowing the company to control the conversation.