No Flight Attendant Buyout Planned

[AdAstraPerAspera]

how does the VP of IFS not know the number of FAs that are planned to be hired in the next year with facility that should roll off of his tongue?

Also, It's not IFS, it's Flight Service. Check your titles for accuracy.

 

[eolesen]

instead of new palace at HQ would require that management tolerate the ancient buildings they currently occupy, but I'm sure they could do it.

Yeah, normally I'd agree with you, but AA's HDQ isn't just old, it's cubed out. It was pretty well maxed out when I was there 10 years ago, to the point AA had been leasing small pockets of space in the surrounding office parks, which just adds its own inefficiencies... you shouldn't have to get in the car twice a day to attend meetings.

 

[bob@las-AA]

Actually, it doesn't really take that long.  If you consider only the difference (ignoring other savings such as reduction in medical costs, etc)  between hourly pay of Top of Scale and new hire flying.  Assume 2000 f/as leaving with a $90 million buyout, and an equal number of new hires. (Hourly rates of pay are approximate.)
 
TOS= $55/hr.  New hire=$20/hr.  Difference=$35/hr.
 
$35/hr X 2000 = $70,000 saved for every hour flown by new hires instead of TOS f/as.  Average hours flown/month/fa (again, approximate) =  75.  Savings/month for flying by new hires instead of TOS = $70,000 x 75 = $5, 250,000.  $90,000,000 buyout /$5,250,000 = 17.14 months to amortize buyout.  And, this takes no account for savings on Purser/Lead f/a pay, etc.
 
But, as you say, management has to see an advantage for them before buyouts are considered.

You're funny!!
 
I think you need to re-sharpen your pencil.
Sorry to be blunt but gotta keep it real.

 

[Roadking5560]

You're funny!!
 
I think you need to re-sharpen your pencil.
Sorry to be blunt but gotta keep it real.

You may need to explain your position/figures on this one since jimntx is a f/a and is little more knowledgeable than say a fsc or in my case an amt.

 

[Kev3188]

Also, It's not IFS, it's Flight Service. Check your titles for accuracy.

*Chuckle

Tough crowd...

 

[IORFA]

*Chuckle
Tough crowd...

IFS at AA means International Flagship Servce.

 

[bob@las-AA]

You may need to explain your position/figures on this one since jimntx is a f/a and is little more knowledgeable than say a fsc or in my case an amt.

Why would AA do this? The last time it happened the cost was absorbed in BK. And just where would this money come from? To think AA would just open its wallet and peal off money of its own is absurd. The cost of labor is fixed to a degree, if AA waits long enough, a person will retire at or just beyond retirement age. The added kicker is that if you make it to retirement age, the likelihood of that person collecting the pension longer than 6-8 years drops at a predictable rate. So the old saying "Its cheaper to keep them" rings true.

 

[Glenn Quagmire]

Don't quit your regular job bob@las.

 

[AANOTOK]

Don't quit your regular job bob@las.

Something tells me many of his crew members and/or work associates wishes he would.

 

[FWAAA]

You're funny!!
 
I think you need to re-sharpen your pencil.
Sorry to be blunt but gotta keep it real.

Uhh, no, you are completely incorrect. Jim nailed it, which isn't surprising given that he has a college education and worked in management at Texaco before he retired from there to become a flight attendant. He's demonstrated, in this thread and others, the capability to analyze issues like the amortization period of an early out incentive.
 

Why would AA do this? The last time it happened the cost was absorbed in BK.

What, exactly, is meant by "absorbed in BK?" Did the bankruptcy fairy provide the cash for the early outs?

No. The cash to pay the early outs came from AA's bank account, just like every other expense, including the hundreds of millions of dollars paid to the bankruptcy lawyers, accountants, investment bankers, consultants and other assorted parasites.
 

And just where would this money come from? To think AA would just open its wallet and peal off money of its own is absurd. The cost of labor is fixed to a degree, if AA waits long enough, a person will retire at or just beyond retirement age.

Here is where you really show your ignorance. The time to top-out for a flight attendant used to be 12 years - I don't remember if it was changed substantially in Ch 11, but I doubt it.

New hire FAs earn, like Jim said, about $20/hr, while TOS is about $55/hr. Very few FAs retire or die or quit or are fired each year. An early out incentive could rid AA of thousands of TOS FAs who would be replaced by very cheap new-hire replacements, and, as Jim correctly analyzed, the break-even point is only about 18 months. The labor savings of those new low-paid new-hires covers the cost of the early out payoffs in less than two years.

With what money would AA pay off the "experienced" FAs? As I posted above, 3,500 FAs could be paid $100k each to quit now for a measly $350 million, a drop in the bucket for a $42 billion dollar annual revenue company with nearly $10 billion in cash and short-term investments (that can be turned into cash within a few days). That $350 million is the amount that Parker has budgeted for the new management HQ palace.
 

The added kicker is that if you make it to retirement age, the likelihood of that person collecting the pension longer than 6-8 years drops at a predictable rate. So the old saying "Its cheaper to keep them" rings true.

The pension doesn't really factor in anymore, since it was frozen in 2012. AA employees will get the same pension when they retire that they would have been entitled to if they had quit in 2012 when it was frozen. In other words, working now isn't increasing your pension benefits. Whether they quit now for an early-out payment or work until they're aged 60, their pension payments will be identical.

It is certainly not "cheaper to keep them." Experienced FAs are very expensive compared to new-hires, and AA could save hundreds of millions of dollars per year if it motivates some more older, experienced FAs to quit. Unions were instrumental in enacting the federal age discrimination laws precisely because unions were smart enough to know that companies would let older workers go so they could hire young, low-paid replacements. How did you manage to get to adulthood and not know that? Did you attend a lousy public school system, perhaps? How have you not learned some of that as a member of the TWU? How do you work around other unionized workers and not learn the basics?

Because of those federal laws, employers can't simply fire the old, so instead, they offer the old a medium to large payoff as an incentive to quit, which obviously prevents the employees from suing AA for age discrimination.

Speaking of old sayings, here's one that could benefit you: "Better to remain silent and be thought a fool than to speak out and remove all doubt." It's attributed to various people like Lincoln and Mark Twain, among others.

Like others said - don't quit your day job.

 

[Glenn Quagmire]

FWAAA, thanks for taking the time to do what I was not willing to waste any effort in doing...hence the "don't quit your regular job" comment.

Sigh.

 

[bob@las-AA]

Uhh, no, you are completely incorrect. Jim nailed it, which isn't surprising given that he has a college education and worked in management at Texaco before he retired from there to become a flight attendant. He's demonstrated, in this thread and others, the capability to analyze issues like the amortization period of an early out incentive. What, exactly, is meant by "absorbed in BK?" Did the bankruptcy fairy provide the cash for the early outs?No. The cash to pay the early outs came from AA's bank account, just like every other expense, including the hundreds of millions of dollars paid to the bankruptcy lawyers, accountants, investment bankers, consultants and other assorted parasites. Here is where you really show your ignorance. The time to top-out for a flight attendant used to be 12 years - I don't remember if it was changed substantially in Ch 11, but I doubt it.New hire FAs earn, like Jim said, about $20/hr, while TOS is about $55/hr. Very few FAs retire or die or quit or are fired each year. An early out incentive could rid AA of thousands of TOS FAs who would be replaced by very cheap new-hire replacements, and, as Jim correctly analyzed, the break-even point is only about 18 months. The labor savings of those new low-paid new-hires covers the cost of the early out payoffs in less than two years.With what money would AA pay off the "experienced" FAs? As I posted above, 3,500 FAs could be paid $100k each to quit now for a measly $350 million, a drop in the bucket for a $42 billion dollar annual revenue company with nearly $10 billion in cash and short-term investments (that can be turned into cash within a few days). That $350 million is the amount that Parker has budgeted for the new management HQ palace. The pension doesn't really factor in anymore, since it was frozen in 2012. AA employees will get the same pension when they retire that they would have been entitled to if they had quit in 2012 when it was frozen. In other words, working now isn't increasing your pension benefits. Whether they quit now for an early-out payment or work until they're aged 60, their pension payments will be identical.It is certainly not "cheaper to keep them." Experienced FAs are very expensive compared to new-hires, and AA could save hundreds of millions of dollars per year if it motivates some more older, experienced FAs to quit. Unions were instrumental in enacting the federal age discrimination laws precisely because unions were smart enough to know that companies would let older workers go so they could hire young, low-paid replacements. How did you manage to get to adulthood and not know that? Did you attend a lousy public school system, perhaps? How have you not learned some of that as a member of the TWU? How do you work around other unionized workers and not learn the basics?Because of those federal laws, employers can't simply fire the old, so instead, they offer the old a medium to large payoff as an incentive to quit, which obviously prevents the employees from suing AA for age discrimination.Speaking of old sayings, here's one that could benefit you: "Better to remain silent and be thought a fool than to speak out and remove all doubt." It's attributed to various people like Lincoln and Mark Twain, among others.Like others said - don't quit your day job.

FA got a contract and raises, and you want more?

 

[Glenn Quagmire]

FA got a contract and raises, and you want more?

Clueless, your table for one is ready.

 

[Albert]

FA got a contract and raises, and you want more?

Bob during the 90s US stored a bunch of planes in the desert they were still paying the leases and because of a clause in their contract still paying the pilots. Yes they were losing a lot of money but less then they would had they operated the flights. In order to stay in business a company will do things like this. Part of LUVs success is that they were always growing, having employees lower on the pay scale. You have no business sense no wonder your electrician business failed that and the fact a few of the houses you rewired were soon reduced to cinders

 

[bob@las-AA]

Uhh, no, you are completely incorrect. Jim nailed it, which isn't surprising given that he has a college education and worked in management at Texaco before he retired from there to become a flight attendant. He's demonstrated, in this thread and others, the capability to analyze issues like the amortization period of an early out incentive.
 

What, exactly, is meant by "absorbed in BK?" Did the bankruptcy fairy provide the cash for the early outs?

No. The cash to pay the early outs came from AA's bank account, just like every other expense, including the hundreds of millions of dollars paid to the bankruptcy lawyers, accountants, investment bankers, consultants and other assorted parasites.
 

Here is where you really show your ignorance. The time to top-out for a flight attendant used to be 12 years - I don't remember if it was changed substantially in Ch 11, but I doubt it.

New hire FAs earn, like Jim said, about $20/hr, while TOS is about $55/hr. Very few FAs retire or die or quit or are fired each year. An early out incentive could rid AA of thousands of TOS FAs who would be replaced by very cheap new-hire replacements, and, as Jim correctly analyzed, the break-even point is only about 18 months. The labor savings of those new low-paid new-hires covers the cost of the early out payoffs in less than two years.

With what money would AA pay off the "experienced" FAs? As I posted above, 3,500 FAs could be paid $100k each to quit now for a measly $350 million, a drop in the bucket for a $42 billion dollar annual revenue company with nearly $10 billion in cash and short-term investments (that can be turned into cash within a few days). That $350 million is the amount that Parker has budgeted for the new management HQ palace.
 

The pension doesn't really factor in anymore, since it was frozen in 2012. AA employees will get the same pension when they retire that they would have been entitled to if they had quit in 2012 when it was frozen. In other words, working now isn't increasing your pension benefits. Whether they quit now for an early-out payment or work until they're aged 60, their pension payments will be identical.

It is certainly not "cheaper to keep them." Experienced FAs are very expensive compared to new-hires, and AA could save hundreds of millions of dollars per year if it motivates some more older, experienced FAs to quit. Unions were instrumental in enacting the federal age discrimination laws precisely because unions were smart enough to know that companies would let older workers go so they could hire young, low-paid replacements. How did you manage to get to adulthood and not know that? Did you attend a lousy public school system, perhaps? How have you not learned some of that as a member of the TWU? How do you work around other unionized workers and not learn the basics?

Because of those federal laws, employers can't simply fire the old, so instead, they offer the old a medium to large payoff as an incentive to quit, which obviously prevents the employees from suing AA for age discrimination.

Speaking of old sayings, here's one that could benefit you: "Better to remain silent and be thought a fool than to speak out and remove all doubt." It's attributed to various people like Lincoln and Mark Twain, among others.

Like others said - don't quit your day job.

 
I use this blog as a therapeutic source of entertainment. For which this is, hollowed fertile ground for the truly disengaged and disjointed. I was soon to realize that this space was for only for those who agree with the indoctrinated consensuses of those within this space. All others were shunned for having their own opinion formed from the facts as they see them, and a different perspective. I will refrain from responding to all of the jargon you portray as fact, and will not dispute the pedigree of the one you call Jim. Because I don't care. But I will say this,
I too know something about finance, 
 
To calculate Effective Interest on 350mil for 17.14 24 months, how much would the payment be and at 3.5% APR.