More F/A furloughs

[mci flyer]

One thing that I've wondered about...how many ex-TWA flyers have migrated to AA? How much lower would AA's revenue stream have been if the acquisition had not captured a significant number of TWA flyers (assuming a TWA collapse)?

Personally, I would have moved to Delta if AA hadn't offered such a nice transition for my miles...

 

[FibberMcGee]

As a person who has worked at STL for a long time, I agree the facility needs some much needed cosmetic changes and upgrades but you know there are a lot of decent very hard working people in STL. Some there originally and a lot formerly with TWA. In my wildest dreams and lowest days I would NEVER wish people out of a job. I really do not understand some of you people, I really don't. I work harder now than I ever have and am grateful I have a job as we all should be in this industry at the present time. I feel bad for all those that have been furloughed and I sincerely hope that we are close to the bottom of the cuts. I realize most of the comments come from your own insecurities. I'm doing my best every day to make American Airlines a good place to work and to make it profitable. I don't call in sick, I don't delay flights. I have a family, I have bills, I have a mortgage just like you probably. Are you doing the same? The mean spiritedness of your posts are really uncalled for. We are living in a very precarious time. We are all in this together whether you like it or not. Blaming TWA for all of AA's woes is ridiculous and you know it. When EA went under or when PA went under I didn't think Hey, great news for the other airlines. I thought about those people that had worked long long years only to have it yanked away in the end. You can yell and scream and bit..and moan about TWA but when you do that keep in mind that you are speaking about real live human beings and their livelihoods not just a company you don't like. We weren't consulted on this acqisition and have no more control of what's happening than you do. It is sad to see ANY person lose their job, no matter who it is. To all the people being furloughed soon and to those already on furlough, I hope you will all be back soon and that the cuts have finally reached the bottom.

 

[nyc6035]

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On 1/31/2003 9:46:44 PM mci flyer wrote:

One thing that I've wondered about...how many ex-TWA flyers have migrated to AA? How much lower would AA's revenue stream have been if the acquisition had not captured a significant number of TWA flyers (assuming a TWA collapse)?

Personally, I would have moved to Delta if AA hadn't offered such a nice transition for my miles...
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A good question. I would think that without question very few of TWA's frequent flyers (as opposed to folks just in the Aviatiors Program) would have choosen AA as their new carrier. I too have migrated to AA because I was welcomed more of less with open arms to the AAdvantage program. That said, given the benefit structure of the AA program (read miles needed per award and most importantly upgrades) I don't think AA's program would have seemed at all attractive. During TWA's last 2 years I flew at least 350K miles. In that entire time I failed to receive an upgrade on one SFO-STL segment. And keep in mind all of those upgrades were complimentary. With AA I would have had to pay for the majority of those upgrades. I would have spent approximately $17,500 to upgrade on flights covering that mileage distance. No way I would have moved to AA. I believe I would have looked hard at NW, CO and DL...without having fully vetted the options, I think I would have wound up over at NW.

 

[RV4]

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On 1/31/2003 8:49:39 PM nyc6035 wrote:

You folks really need to wake up and smell the coffee...the TWA acquisition isn't the problem...AMR and the core AA airline is the problem.

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This analysis differs greatly from your views!!!!

Wall Street Journal - If Nothing Changes, American May Be on United's Flight Path

THE MIDDLE SEAT
By SCOTT MCCARTNEY

What's the difference between United Airlines and American Airlines?

At this rate, about one year.

United and parent UAL Corp. filed for Chapter 11 bankruptcy-court protection in December. And unless the airline manages to slash its debt and renegotiate with its labor union, AMR Corp. and its only unit, American Airlines, will be in about the same boat next winter.

American, the world's largest airline, has about $2 billion in unrestricted cash. And even though the stock market is treating it like dead meat, with its share price trading near $3, AMR isn't in immediate danger of filing for bankruptcy protection.

But UBS Warburg's witty analyst Sam Buttrick, to whom I must credit the "one year" one-liner, estimates that AMR likely will end this year with only about $1.4 billion in unrestricted cash. For a company the size of AMR, in an industry as shaky as the airline business, that's not much. Once AMR gets close to $1 billion in cash, it won't have much left for getting through the slow first quarter, not to mention funding a bankruptcy reorganization. United, a smaller company, filed for Chapter 11 protection with $800 million in unrestricted cash, and it has been criticized for waiting too long to reorganize.

"2003 is a make-or-break year for AMR," Mr. Buttrick says.

Other analysts agree with the winter scenario. AMR has borrowed heavily to pay its bills through this fiscal crisis -- buying itself a year's more time, in essence, than United had. But there's little left to borrow against -- most planes AMR owns now are heavily mortgaged. A staggering 96% of American's capital has debt against it. Last year, the company averaged net losses of nearly $10 million a day. This year, it's still burning through about $5 million in cash each day in the first quarter. AMR will get a $550 million tax refund in the first quarter, which should help, but some big bills lie ahead, too.

"AMR's balance sheet has deteriorated the most [among major airlines] and the current cash-burn rate cannot be sustained much beyond 2003," says Glenn Engel of Goldman Sachs & Co. "Unless AMR gets wage relief or an economic recovery gathers steam, AMR could face a liquidity crunch in the winter of 2003-2004."

Bankruptcy lawyers note that there is no real criteria that companies have to meet in order to file for Chapter 11 protection, and most big companies end up timing their filings on strategic issues. If AMR reaches the point where it decides it isn't going to get relief either from labor or the economy, and it is simply on a path to spend all its remaining cash, it probably will file. A reorganization at arch-rival United that substantially lowers its costs also could pressure American toward bankruptcy.

The winter timetable is based on the best guesses right now. A lot can change over the next 11 or 12 months. A war could deliver a double-whammy to airlines with even-higher oil prices and even-lower international travel. In fact, the Association of European Airlines itself has postponed a February conference because of the prospect of war.

While war, especially if it is prolonged, would likely speed up AMR's possible bankruptcy-court landing, economic improvement in the U.S. would certainly slow it down. So, too, would relief from its labor unions.

Last year, AMR paid nearly half of its revenue -- 48.5% to be exact -- in wages, salaries and benefits. AMR says it has revamped operations and cut costs wherever it can to save $2 billion in annual costs, but it still needs another $2 billion in savings, and the only place left to turn is its unions. Savings of about $2 billion would be about 25% of AMR's payroll expense.

"Now is the time for shared sacrifices," Chairman and Chief Executive Donald Carty said in a letter last week to the president of American's pilots union.

Analysts say American actually has done a better job than other carriers on the non-labor cost-cutting front. Even though American's unit labor costs -- wages spread over available seat miles -- went up 6% in the fourth quarter, total unit costs came down 2.6%, even with higher fuel prices. But American isn't performing as well as competitors on revenue -- unit revenue fell 7.2% in the fourth quarter. Delta Air Lines, by comparison, kept its unit revenue the same as a year earlier.

American says it is a victim of circumstance on revenue: It was more dependent on business travelers, and since the travel recession has sapped business-travel revenue, American has suffered disproportionately. American also argues that in regions where it is strong, like Latin America and Europe, the travel downturn has been worse than in other regions like the Pacific, where some of its competitors are strong.

What's more, American says the growth of low-fare carriers is hurting it more than ever. In the fourth quarter, it competed with low-fare carriers on 82% of its domestic routes, up from 75% a year earlier. American is surrendering on some fronts, conceding New York-Oakland to JetBlue Airways, for example.

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But there are other problems, too. In hindsight, American's $742 million purchase of the assets of Trans World Airlines, plus the assumption of $3 billion in leases, has been a drag on the company at a difficult time. TWA stayed afloat for a long time with extremely low ticket prices, and to a certain extent, American has inherited TWA's pricing problems. American has shrunk the TWA operation and eliminated the lowest of the low-fare tickets, but part of the carrier's revenue problem does seem to stem from TWA.

"American wouldn't be in this mess today if it hadn't bought TWA," says Mr. Buttrick. "It would still be in a mess, just not as big a mess." TWA has exacerbated American's cash losses by more than $1 billion, he says.

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In addition, you have to question -- and my knees are telling me not to say this -- American's "More Room in Coach" strategy. For "More Room" to work, American had to get a revenue premium from each seat since it had fewer seats on a plane to sell. Costs stay about the same, so to cover that, ticket prices had to go up. But there is no revenue premium. American says "More Room" has helped it win key corporate accounts, and it's paying off because customers appreciate it. Not enough to pay extra for it, at least in the current climate.

"It is safe to say that American's gamble has not, as of yet, produced the intended results," says Michael Stepp, an analyst at consultants Morten Beyer & Agnew Inc.

Many airline decisions over the past several years failed to produce the intended results. But it will be the decisions made over the next several months that will determine, for American and others, whether problems get fixed outside bankruptcy, or inside.

 

[L1011Ret]

The lack of humanity towards fellow human beings in some of the posts on this Board is appalling. And some of these people work in a service oriented profession?

 

[MiAAmi]

Does anyone have any leads on F/A position openings? Any help for our fellow furloughs would be greatly appreciated.

 

[pilotbob3]

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On 2/1/2003 7:06:22 AM L1011Ret wrote:

The lack of humanity towards fellow human beings in some of the posts on this Board is appalling. And some of these people work in a service oriented profession?
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and it really does reflect in the nAAtive "service" they give

 

[MrMarky]

FibberMcGee and L1011 ret--

Thanks for your comments and for putting things in perspective.

NYC6035---

I agree with you completely. If AA would adopt TWA's FF policies tomorrow, they'd run away with what's left of the frequent business travelers.

My last flight in first on AA was DFW-OAK. A four hour flight and the meal service consisted of a bag of pretzels. Of course the F/A's did have first class quality crew meals for themselves on the same flight! How impressive. On TWA, even a red-eye of that length would have served a nice snack in first, such as a sandwich or something.

Can someone explain to me again how this AA first class service differs from Southwest? BTW, Southwest's peanuts are better than AA's pretzels.

 

[bicaal]

And now I think that it is time for all AA employees to do what they say that the TWA employees should have done during the uncertain times. Everyone must now leave AA and go to Southwest or AirTran, immediately! After all, they are the profitable companies with a future. Hurry, Hurry.......
(Think about this the next time you throw stones)

AirTran's market value zooms past American's

By RUSSELL GRANTHAM
The Atlanta Journal-Constitution


Topsy-turvy times in the airline industry produced another milestone this week: Discount carrier AirTran Airways has a higher value on Wall Street than American Airlines, the world's largest airline.

AirTran, which has 5,000 workers compared with 122,000 at American, rose 25 percent in market value this week, to about $461 million on Friday.

Tuesday, AirTran reported a profit for its third consecutive quarter and for the year, and Chairman Joe Leonard said he expected continued growth. The discount carrier has its hub in Atlanta.

AirTran shares closed at $6.51 Friday, up 51 cents to near a 52-week high.

American's market capitalization, or aggregate stock value, has dropped to $437 million. Parent AMR Corp. posted a $3.5 billion loss for 2002 on Jan. 22.

AMR Chairman Don Carty said such losses were "unsustainable," fueling speculation the airline may seek Chapter 11 bankruptcy protection if it can't stem the losses this year.

Shares of Fort Worth, Texas-based AMR hit a 52-week low Friday, falling 2 cents to $2.80.

Also on Friday, No. 2 United Airlines, operating under bankruptcy protection, said its fourth-quarter loss widened to $1.47 billion, from a year-earlier loss of $308 million.

United cited restructuring expenses, including payments for employee severance, bankruptcy lawyers and consultants.

The Chicago-based airline is scaling back flights another 6 percent this year to match a 20 percent industrywide drop in travel demand since 2000.

AirTran isn't the first low-cost carrier that Wall Street has decided is worth more than larger traditional airlines.

Southwest's aggregate stock value is about $10 billion, and JetBlue Airways' is almost $1.8 billion, well above those of larger U.S. carriers, including Atlanta-based Delta Air Lines.

Delta had a stock market value of about $1.1 billion Friday after its shares fell 12 percent this week, to $9.14. Delta disclosed details this week of a low-fare subsidiary it plans to call "Song."

 

[WingNaPrayer]

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On 2/1/2003 1:43:05 PM MiAAmi wrote:

Does anyone have any leads on F/A position openings? Any help for our fellow furloughs would be greatly appreciated.
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Yup: Southwest is hiring F/As
Pay:

1st 6 Months - $14.67/Trip*
2nd 6 Months - $14.90/Trip*
2nd Year - $17.34/Trip*
*one trip = 243 miles

All pay rates are contingent upon current contracts.

Southwest is also hiring agents, rampers and cabin at various locations.

Pilot positions are also open at various locations. No listings on the pay scales though.

**********

JetBlue is hiring full time pilots for JFK and FLL.
The current pay system for First Officers is as follows:

$50.96 /hr with a minimum guarantee of 70 hours per month.
$76.44 / hr for all hours flown in excess of 70 hours in that month.
Estimated annual pay based on 81 hours (projected average) per month would be $52,896.48 (plus per diem of $1.80 / hr)
Training pay is based on $2500./month (lodging is provided at company cost during initial training)

Upgrade to Captain is estimated to be between 12 and 18 months

Apply on line here: http://www.jetblue.com/workhere/wh2_pilota...lot&strrid=3717

JetBlue is hiring F/As for JFK and FLL

Apply on line here: http://www.jetblue.com/workhere/Internet/j...rew&strrid=3025

PAY:
Based at JFK or FLL. $20 per hour based on 70 hours worked per month. $30 per hour based on 70 + hours worked per month.

As a matter of fact, JetBlue has a lot of positions open, many of them ground and administrative at their JBLuHQ in New York

 

[MiAAmi]

I love how everyone compares what TWA did prior to 9/11 to what AA does post 9/11. TWA was a failed company prior to 9/11 AA may be a failed company post 9/11 thats the only thing they have in common.

 

[Cart Pusher]

AA was a failed company before 9/11 too. They had a model, based on business travelers subsidizing their low leisure fares, that was losing steam fast. Business travelers were already cutting back and traveling smarter before 9/11 ever hit. It's convenient to blame everything on 9/11 but current load factors are not a whole lot lower than they were pre 9/11, it's simply a question of the yields, which would have fallen to these levels eventually regardless of 9/11. It was happening, airlines were already beginning to lose money. Even though the writing was on the wall AA was still pursuing the same failed business model that they always had. Their inability to change with the times is what is causing their downfall.

 

[MiAAmi]

Since you are so wise about the airline business then why did TWA fail? And correct me if I'm wrong but are you not a former TWA'er? If you saw all this coming why did you join on?

 

[L1011Ret]

From the APFA site, "APFA was formally notified by American Airlines earlier today that an overage of 750 Flight Attendants will exist at our STL base by the spring of this year." In fact, this is a fabrication. There is no 750 overage at the STL base. In fact, AA recently revealed that there is a shortage at the STL base. The fact is that there is an overage of 750 F/A's at AA bases other than STL. Such "spin" by APFA misrepresents the true state of affairs. "Spin" is simply use of language to disguise motivations.

 

[Cart Pusher]

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On 2/1/2003 6:30:02 PM MiAAmi wrote:

Since you are so wise about the airline business then why did TWA fail? And correct me if I'm wrong but are you not a former TWA'er? If you saw all this coming why did you join on?
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TWA ultimately failed because of years and years of poor business decisions. One of those decisions, the KARABU agreement with Carl Icahn, was what finally drove TWA to their current state. If the KARABU agreement were not in place, TWA would have been on the road to recovery towards the end of their life. Who know's whether TWA would have survived post 9/11. It's all a matter of personal opinion at this point. My opinion is that they would have weathered the storm and come out on the other side a survivor. They had recently inked an agreement with America West that could have proved to be very lucrative for both carriers. As we see, America West is making progress in becoming a strong player in the new environment that we are all trying to live in. Had TWA fostered a close working relationship with their counterparts at America West, they might be in the same position. It's all speculation though. What we do know is that the major carriers were losing ground prior to 9/11 because of the changing business climate. Business travel was falling off in record numbers and the airlines were beginning to worry as they watched their bread and butter walk away. Low fare carriers were prospering and growing as the business travelers were defecting to save money as their companies cut expenses. 9/11 simply accelerated things. Things might not be as dire as they are currently, but this next wave of airline evolution was inevitable.

As for me, I don't work for TWA or AA - I never have. I work for another airline. I am simply a bystander that feels lucky to be working at all. I will say this, as I have before, the former TWA F/A's got the shaft big time, and they continue to get shafted. If not for these folks, there would most definetely be some original AA folks that would be at the unemployment office.