Merger between AA/SWA

[Man of the People]

With all the comparisons AA uses comparing themselves to SWA on every aspect, except of course pay for its AMTs, why not just merge the two? It seems to make sense. However, this would require AA to trim all the bogus managerial positions it has. All this "fat-catting" in management over the years would be exposed by the merger. The way I see it, AA will spend as much money possible to see how they can still keep their over-paid management jobs, yet push to get the employees to be more productive. I wish TWA would've purchased AA. Then you would've really seen AA'rs bellyache over seniority issues.

 

[AMFAMAN]

MIght as well...

Considering the concessions and productivity increases are now in exchange for the fuel increases and not the low revenue and 9/11 effect. Fact is AA would of made close to $2 billion last year even with the so-called low revenue passengers and 9/11 effect if fuel remained at 2003 prices. AA would have made a small profit had oil stayed the same and no concessions were given. When you add in the fact and it is fact, that close to $30 of a barrel of oil is built in fear-factor by Dubya and his gang of oil buddies, you really have to start questioning why we gave so much in the first place. This doesn't appear to be an employee wage problem, more like a government problem.

Average Percent of
Gallons Cost Per AMR’s
Consumed Total Cost Gallon Operating
Year (in millions) (in millions) (in cents) Expenses
2003 3,161 $ 2,772 87.7 15.2
2004 3,264 $ 3,969 121.6 21.1
2005 3,237 $5,615 173.5 27.0

 

[Connected1]

over-paid management jobs

*giggle*

 

[Bob Owens]

With all the comparisons AA uses comparing themselves to SWA on every aspect, except of course pay for its AMTs, why not just merge the two? It seems to make sense. However, this would require AA to trim all the bogus managerial positions it has. All this "fat-catting" in management over the years would be exposed by the merger. The way I see it, AA will spend as much money possible to see how they can still keep their over-paid management jobs, yet push to get the employees to be more productive. I wish TWA would've purchased AA. Then you would've really seen AA'rs bellyache over seniority issues.

Now why would you want to ruin a perfectly good company that pays its employees well like SWA?

 

[Man of the People]

Now why would you want to ruin a perfectly good company that pays its employees well like SWA?

You're right Bob. When I think about it, I have to concur. How suilly of me to think the AA'ers would be brought up in pay. In all likelihood, the SWA people would be dragged down.

 

[Flight]

With all the comparisons AA uses comparing themselves to SWA on every aspect, except of course pay for its AMTs, why not just merge the two? It seems to make sense. However, this would require AA to trim all the bogus managerial positions it has. All this "fat-catting" in management over the years would be exposed by the merger. The way I see it, AA will spend as much money possible to see how they can still keep their over-paid management jobs, yet push to get the employees to be more productive. I wish TWA would've purchased AA. Then you would've really seen AA'rs bellyache over seniority issues.

http://www.atwonline.com/magazine/article....?articleID=1545

Just Compensation

By J.A. Donoghue
Air Transport World, March 2006

Judging one's worth on the job market is never an easy task, but rarely has that process been more in the spotlight than today. This is an emotional issue at every level, yet all are asked to set emotion aside and focus on larger concerns. Ultimately emotions cannot be ignored, for unless the outcome of these compensation calculations is carefully proportioned and falls within an acceptable range as viewed from below, the seeds of disaster will be planted. Labor/management distrust and even hatred have accompanied some airlines' extinction and may have played a key role in their demise.

The most visible airline employees are its managers, fewest in number and highest paid. Their pay and the criteria for calculating their bonuses say a lot about a company and its culture.

Let's establish a benchmark. To the annoyance of many, let's look at the corporate officer pay of Southwest Airlines, the most continually successful carrier in the US. For the year ending July 15, 2006, CEO Gary Kelly will get $411,714 and President Colleen C. Barrett $368,752. Bonuses for a few top officers in recent years have ranged between $184,000 and $316,000, most on the lower side of that range.

Some stock warrants, not many, are granted each year at a value close to the current stock selling price. Given LUV's fairly stable share price, the warrants will not be worth much for quite awhile. Southwest's corporate directors and officers combined own around 8.6 million shares, 1.1% of the total outstanding. Take away co-founder and Chairman Herb Kelleher's 5.5 million shares and your percentage gets tiny. Except for Kelleher, no officer has accumulated stock options valued at more than $2 million, and beyond Barrett, Kelly and departed CEO and Vice Chairman James F. Parker, the highest option value is less than $600,000.

In setting bonuses, the Compensation Committee says it "considered the performance of each individual, his or her level of responsibility within the Company, the Company's profitability, the longevity in office of each officer, and each officer's performance as a team member." Interestingly, Southwest's stock price does not enter into this calculation. Bringing in profits and being a good team member do.

On the other hand, we have American Airlines, a well-managed legacy carrier with a good labor/management relationship despite the episode in April 2003 when AMR Chairman and CEO Don Carty decided to seek employment elsewhere after a generous management bonus plan was revealed immediately after a desperation labor giveback was negotiated. Yet now we see that with the notable exception of Chairman and CEO Gerard Arpey who did not participate in the program the management team of a company that lost $861 million last year is set to pull in cash bonuses totaling around $80 million due to real good stock price performance, especially in relation to five competitors,
three of which were in bankruptcy.

That says it all. The most successful airline values profits and teamwork. A money-losing airline is afflicted by the now-rampant disease that values stock price over all else. It doesn't matter that the bonus would be spread over 1,000 managers. What matters are the measures that are valued in corporate goal-setting and how the full package appears to the employees.

Valuable corporate officers must be paid at levels that keep them from wandering off. Management churn is a very bad thing, and one real measure of a person's fair compensation is what others would offer. But the total compensation package must be constructed with an emotion-damping balance in mind, and that has not been done in many cases such as United Airlines managers seeking 15% of the company's new stock. It was three years of hard work, but in a company where most employees have lost much of their retirement savings, 15% generated a certain stink.

Pilots are a group that comes in for a lot of attention and criticism for high pay and carefully constructed work rules. United pilots, after shoving through an employee stock ownership plan, strong-armed their way to a ruinous pay contract that was copied at Delta and helped bring both carriers down. Now, their stock value wiped out, employees at United, along with labor groups across the legacy landscape, are forced to redefine what they consider "fair" compensation.

With so much pain being suffered by the rank-and-file, it is important that top management's pay be structured with sensitivity to that pain and, importantly, with regard to measures that will sustain the company, not simply please short-term shareholders.

 

[Wretched Wrench]

http://www.atwonline.com/magazine/article....?articleID=1545

Just Compensation

By J.A. Donoghue
Air Transport World, March 2006

The management team of a company that lost $861 million last year is set to pull in cash bonuses totaling around $80 million

Pay for Performance, huh?

.

 

[WingNaPrayer]

On the other hand, we have American Airlines, a well-managed legacy carrier with a good labor/management relationship

Huh??

If this author believes AA is a well-managed airline they must have been watching a monkey screw a football when they made that assumption!

 

[Wretched Wrench]

Huh??

If this author believes AA is a well-managed airline they must have been watching a monkey screw a football when they made that assumption!

It is easier to believe AA is a well-managed airline than to believe AA has good labor relations.

 

[eolesen]

Honestly, AA does have good labor relations when compared to USAirways, United, Northwest, and Delta. It's certainly a far cry from where things were ten years ago.

 

[Bob Owens]

Honestly, AA does have good labor relations when compared to USAirways, United, Northwest, and Delta. It's certainly a far cry from where things were ten years ago.

Well I guess it depends on how you define "labor relations".

If you mean that things are well between appointed officials from the TWU, a company union, and AMR then yes, relations are good, but when you consider that over 9000 mechanics tried to dump the TWU and the majority of the 20,000 or so other workers who are stuck in the TWU would dump them if they had somewhere to go then things as not as rosy as they would have you believe. From what I see we are one incident away from a major wildcat.


How has the PAID attendance been at the PLI meetings? Ive heard a few say that they might go just to sit out rush hour and collect an extra $60. I doubt that despite the huge investment by the company that there will be any converts.