Hopeful
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- Dec 21, 2002
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Glading's Delusions
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The Goose
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I was reading that ACORN had to "fold up" in a couple states but was able to legally reopen under a different name.
Google Language Tools may help you get his point.
Hopeful
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Oh, I checked the online translator first....My "FRENCH" reference was aimed at the "submissive" type posters on this forum.
All more the reason which points to his "relationship" with AA.
The figures are from Wikinvest
http://www.wikinvest.com/stock/American_Ai...ta/Gross_Profit
When you open the page , under gross profits, click on 'Full".
Sorry but I didnt see anything about Gross Profits (or loss) on your link, but that doesnt mean that the figures cited from Wikinvest were wrong, it only means it wasn't required information on the 10K. Are you claiming that every metric of relevance to how a company is doing is included on a 10K?
Normally salaries arent included except for the labor needed to directly produce the product. So I would guess that Pilots, flight Attendants, gate agents would be part of the cost of goods sold.
There's going to be just one post...no excuses. The accusations of someone being a company employee, plant, shill, or whatever are to stop now. By the same token, accusations of someone being slavishly pro-union are to stop now.
Whether a member is or is not an employee of American Airlines is no one's business--especially yours. Just because someone does not agree with you is not proof-positive of their employment. Discuss the issues, not each other.
If there are any more such statements, a mandatory 14 days off will be awarded with moderator preview upon return.
"It is generally safe to translate 'biased'...as someone who doesn't agree with me."
Jon Meacham, editor of Newsweek
Whether a member is or is not an employee of American Airlines is no one's business--especially yours. Just because someone does not agree with you is not proof-positive of their employment. Discuss the issues, not each other.
If there are any more such statements, a mandatory 14 days off will be awarded with moderator preview upon return.
"It is generally safe to translate 'biased'...as someone who doesn't agree with me."
Jon Meacham, editor of Newsweek
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- #68
That explains it.
The SEC regs require that the 10-K contain audited financial statements. The public companies and their auditors determine what's in those statements, in accordance with the accounting rules.
Gross Profit (Sales minus Cost of Goods Sold) is a mercantile concept and I haven't yet found an airline or railroad that uses such a system to report its finances. Wonder why not? Because AA and other airlines (and railroads) are transportation businesses selling a service (movement of goods or people), not department stores. Every airline reports its finances in a similar manner. Revenue minus operating expenses equals operating profit (or loss). Last year, AA reported an operating loss. Subtract the interest and other misc expenses and get the net profit (or loss).
Macy's, Bloomingdales and Sears report their numbers consistent with the Gross Profit model. But not airlines.
The $11 billion Gross Profit alleged by the wiki article isn't "wrong," it's a mythical number made up by someone completely unfamiliar with the accounting conventions applicable to the transporation industry.
No, there are many metrics of relevance that aren't included in the 10-K. For airlines, the DoT numbers (Form 41) are great sources of info.
But the concept of "Gross Profit" has no relevance or applicability to an airline. Airlines don't buy goods and resell them; the very concept behind Cost of Goods Sold.
How about the cost of airplanes? Aren't they required to move people?
How about maintenance materials and repairs? Don't the planes require maintenance to get people where they're going?
What about landing fees and terminal rents? Can't move people if you don't pay these fees.
See what I'm getting at? AA's "Cost of Goods Sold" are the operating expenses shown on AA's income statement. Vastly different from a retail store's cost of goods sold.
Sadly, Hackman looked at a wiki article containing fantasy numbers prepared by an anonymous someone. And he's wondering where the fantasy $11 billion of "gross profit" went.
By comparison, AA's financial statements are prepared by AA and audited by E & Y. And they don't contain any Gross Profit, let alone $11 billion worth. Not even WN's or Allegiant's income statements are presented using the retail store model. No airline at all reports their profit or loss like the wiki article.
It's all about looking at source documents and not wiki articles. Especially wiki articles obviously prepared by someone who doesn't know what they're talking about.
Yes, the source documents may be fraudulent. AA may have cooked the books and E & Y may have missed it (or they were paid off to look the other way). But the wiki article relied on AA's audited numbers and re-arranged them in a nonsensical way to manufacture a made-up "gross profit" number.
The number itself isnt important, its the trend that the numbers reveal. AA's revenues far outpaced the costs directly related to producing the service. We all know that operating costs represent the biggest cost for a service indusrty, and usually labor is the biggest component of that cost, after all "A service is the intangible equivalent of a good" (Thanks Wiki). Essentailly a service company sells our labor or the product of our labor, so it stands to reason that labor should be the largest component of operating costs, but it isnt anymore. We know that our wages and what they pay to those who directly produce the service have declined on two fronts, there are at least 35% less of us and we are getting around 20% less in unadjusted dollars. If total labor costs dont reflect those savings its due to the fact that management pay has been increased so much. A few years back they reclassified the supervisors as managers, essentially they do the same thing that supervisors did but at manager pay. In the beginning thay reduced the number but those numbers have since gone back up.
You claim that the gross profits figures are a made up number, then say they arent wrong. My guess is that the person who or program that made them up took real numbers and those real numbers show a real trend thats probably a more accurate picture of whats going on at the core of the business than the net profit figures on the 10K. Like I've said many times before, the 10k is designed to be a tool to protect investors from managements tendancy to present overly optimistic portraits of the company's financial condition, but its not a truly all encompassing picture of the business, its not designed to give workers access to what information trends etc that they could use. While there may be some info that we can use the fact is its not there for that purpose. The gross profits numbers reflect that AAs revenues compared to its core costs are doing very well, better than they have for the last 10 years and better than their competitors. It may be a made up figure that leaves a lot out so you cant compare AA to Macys with it but you can compare AA to SWA, UAL, Jet Blue etc. Its probably a truer comparasion than RPMs, CASMs ,RASMs etc. So while it may not be a figure of relevance as far as GAAP or the SEC that doesnt mean that its not applicable or irrelevant for us, in fact the trends it reveals are useful. For one it shows that AA has a revenue advantage over competitors so we dont need to give them a cost advantage by working for less. Their problem lies elsewhere in their operation of the business.
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In 1999, AMR revenue was $17.73 billion and total wages and salaries were $6.12 bilion, or 34.5% of revenue.
In 2009, AMR revenue was $19.92 billion and total wages and salaries were $6.81 billion, or 34.2% of revenue.
In 1999, fuel cost was $1.7 billion, or 9.6% of revenue.
In 2009, with about 100 fewer mainline planes, fuel cost was $5.55 billion, or 27.9% of revenue. In 2008, fuel was $9.01 billion, or 37.9% of revenue.
Most all other expenses were similar with some variations. Fairly easy to see the problem: Fares too low and fuel too expensive to enable break-even results.
In 2009, AMR revenue was $19.92 billion and total wages and salaries were $6.81 billion, or 34.2% of revenue.
In 1999, fuel cost was $1.7 billion, or 9.6% of revenue.
In 2009, with about 100 fewer mainline planes, fuel cost was $5.55 billion, or 27.9% of revenue. In 2008, fuel was $9.01 billion, or 37.9% of revenue.
Most all other expenses were similar with some variations. Fairly easy to see the problem: Fares too low and fuel too expensive to enable break-even results.
Royal Ambassador
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- Nov 24, 2003
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Glading keeps one thing consistent, keep sacrificing the junior and the former TWA flight attendants.
TheStreet.com
TheStreet.com
That is a fine example of the "expensive" representation afforded to those most junior. I would think the 596ers would be getting very nervous. Instead of a poll tax perhaps the iunion should have looked at the conflict between their C&B and the CBA. Gotta love this...
There is no way that the company is NOT going to get productivity gains in the contract. Its not a matter of if they get the gains , it's how much they will gain. It's going to happen with the TWU and the Pilots. So get ready.... It's not only Glading dealing with this. I would think there will be an early out package associated with this overage. The TWU are getting a package to offset their overage.
BTW... They agreed to unlimited recall rights so former TWA F/As will be recalled at some point.
