Pensions!

[FWAAA]

How many RJ's are currently on order?

How many of them were on order at the time of the AA "dire" financial times?

[post="176042"][/post]​

There are fewer RJs on order now than in early 2003 because none have been ordered yet many have been delivered. At 12/31/02, orders for RJs totaled 22 ERJs and 10 CRJ-700s for 2003 plus 74 ERJs and 7 CRJ-700s for 2004-2006. From page 35 of the 2002 AMR 10-K:

As of December 31, 2002, the Company had commitments to acquire the following aircraft: two Boeing 777-200 ERs, nine Boeing 767-300ERs, 22 Embraer regional jets and 10 Bombardier CRJ-700s in 2003; an aggregate of 74 Embraer regional jets and seven Bombardier CRJ-700s in 2004 through 2006; and an aggregate of 47 Boeing 737-800s and nine Boeing 777-200ERs in 2006 through 2010. Future payments for all aircraft, including the estimated amounts for price escalation, will approximate $1.0 billion in 2003, $753 million in 2004, $694 million in 2005 and an aggregate of approximately $2.6 billion in 2006 through 2010. These commitments and cash flows reflect agreements the Company entered into with Boeing in November 2002 to defer 34 of its 2003 through 2005 deliveries to 2007 and beyond. In addition to these deferrals, Boeing Capital Corporation has agreed to provide backstop financing for all Boeing aircraft deliveries in 2003. In return, American has agreed to grant Boeing a security interest in certain advance payments previously made and in certain rights under the aircraft purchase agreement between American and Boeing. In addition, the Company has pre-arranged financing or backstop financing for all of its 2003 Embraer and Bombardier aircraft deliveries and a portion of its post 2003 deliveries. As a result, substantially all of the aircraft spending in 2003 is supported by committed financing.

http://www.shareholder.com/aa/EdgarDetail....13301&SID=03-00

This next quote shows how the order book declined during 2003, as many of the RJs were delivered during 2003. From page 25 of the 2003 AMR 10-K:

As of December 31, 2003, the Company had commitments to acquire: 36 Embraer regional jets and six Bombardier CRJ-700s in 2004; an aggregate of 38 Embraer regional jets in 2005 and 2006; and an aggregate of 47 Boeing 737-800s and nine Boeing 777-200ERs in 2006 through 2010. The Company has pre-arranged financing or backstop financing for all of its aircraft deliveries through June 2005 (42 aircraft in 2004 and 20 aircraft in 2005).

http://www.shareholder.com/aa/EdgarDetail....-2668&SID=04-00

AMR has placed no orders for RJs in the past 3 years. At 8/21/01, Eagle was on the hook for 235 Embraer RJs (including delivered planes plus orders) plus 42 options. The initial order of CRJs (finalized 2/12/98 but announced in Paris in June 1997) was for 25 plus 25 options, and none of those options has been exercised. All 25 have now been delivered.

AMR has ordered no RJs since prior to September 11, 2001. And the RJ deliveries have been largely seller-financed. So no, AA has not simply slashed your wages so it can buy more RJs.

A question for everyone who thinks that AMR "hid" $1.5 billion from you so it could claim poverty: If they were going to hide $1.5 billion, why didn't they simply hide more?

AA management must be brilliant if they can successfully hide $1.5 billion from the pilots and FAs as well as the mechanics and ground personnel. Yet you keep calling management "stupid."

Would you people believe it if managment told you that the sun was going to rise in the east? Or that each day consists of 24 hours?

 

[Decision 2004]

AA management must be brilliant if they can successfully hide $1.5 billion from the pilots and FAs as well as the mechanics and ground personnel. Yet you keep calling management "stupid."

[post="176187"][/post]​

Who called management "stupid"? You are putting words in our mouths now!

AA Management successfully hid the "SERP" bonuses from ALL THREE UNIONS. And to top that, pressed for ratification within days of the 10K disclosure.

Why shouldn't one conclude that there was even more hid but never found? One glaring fact is that fuel has consumed ALL of the labor groups concessions given, yet AA is NOT on the BK steps? Explain that one with your knot-logic!

You have the right to trust, believe, and follow AA management everywhere they lead you, and I have the right to question and distrust them the same. The difference is, there is proof they lied and cannot be trusted, while you just bury your own head in the sand and ignore that proof!

I have worked for AA for over twenty years and have plenty of stories of broken trust with lower management. And now to top that, we have some stories of upper management lies and distortions to boot.

Want to see the ultimate in distortion? Just look real close into Carmine Romano's current media blitz about "continuous improvement" at the Tulsa Maintenance Base. And then come and talk with some non-suckass members about what the TRUTH is in Tulsa. Romano is nothing more than a smoke blowing con-artist extorting cash and kickbacks from the Tulsa Tax Payers in addition to the employees of overhaul and line maintenance. But hey, maybe that is what AA pays the man to accomplish. The question is, where is the union that we pay to protect our interest?


Tell us all the reasons we should now trust management and ignore the factual past and present?

 

[Mark Inman]

Will fix for food if you think AE's statements of poverty are true please explain how. AA pays for there equiptment, landing, fees,insurances, and fuel on a pass through bases plus builds in a profet margen. AE pays for employees and that's it. How do you think they could loose money? They have increased ASM's on eagle by 46% in the last 2 years in violation of our contract language. AA did all this at a time when they said we were selling fuel hedging to conserve cash. Three months earler AA reported to the sec they had 2.8 billion dollars in reserve cash. This is at the time they were thretening to file bankruptcy. They reported having 1.4 billion in reserve cash by the time they were standing on the court house steps. Where do you think the money for the capacity purches came from? Do a little research man.

 

[will fix for food]

Will fix for food if you think AE's statements of poverty are true please explain how. AA pays for there equiptment, landing, fees,insurances, and fuel on a pass through bases plus builds in a profet margen. AE pays for employees and that's it.

[post="176315"][/post]​

Here we go again.......could you provide proof of that please? Dave made the same supposition a year ago and I asked him to prove it. I am still waiting. Everything I have ever seen and experienced runs contrary to what you just said. But I am willing to listen to your argument. So show me.

 

[will fix for food]

Will fix for food if you think AE's statements of poverty are true please explain how.

[post="176315"][/post]​

I don't. I don't know where you got that from. Read a little closer next time.

 

[will fix for food]

They have increased ASM's on eagle by 46% in the last 2 years in violation of our contract language. AA did all this at a time when they said we were selling fuel hedging to conserve cash. Three months earler AA reported to the sec they had 2.8 billion dollars in reserve cash. This is at the time they were thretening to file bankruptcy. They reported having 1.4 billion in reserve cash by the time they were standing on the court house steps. Where do you think the money for the capacity purches came from? Do a little research man.

[post="176315"][/post]​

OK. I'm not quite sure I understood all that as it is not very clearly written. However, I am guessing that you are trying to say that 2.8 billion dollars turned into 1.4 billion dollars because American spent 1.5 billion dollars on the capacity purchase agreement. (Or purches as you put it).

OK, this isn't very difficult. Go look at the 10K revenues section. There is a 1.5 billion "credit" from the regional affiliates. Now go look at the expenses section. There is a 1.5 billion "debit" to the regional affiliates. It was a wash. I don't know where the 1.4 billion in reserve cash went, but the capacity purchase payment was matched by the revenues. The net affect was nearly zero.

I did my research, I suggest you try doing some.

 

[FWAAA]

Three months earler AA reported to the sec they had 2.8 billion dollars in reserve cash. This is at the time they were thretening to file bankruptcy. They reported having 1.4 billion in reserve cash by the time they were standing on the court house steps. Where do you think the money for the capacity purches came from? Do a little research man.

[post="176315"][/post]​

As of September 30, 2002, AMR reported having $2.8 billion of cash.

As of March 30, 2003 (six months later), AMR reported having $1.27 billion of unrestricted cash plus $550 million of restricted cash (total of $1.82 billion). Where did all the cash (nearly $1.0 billion) go? Operating losses (like employees' paychecks).

As of June 30, 2003, AMR reported $1.827 billion of unrestricted cash plus $550 million of restricted cash (total of $2.377 billion). Cash increased because of the sale of AA's share of Worldspan for $180 million cash plus the immediate wage savings due to the concessions.

In July 2003, AMR borrowed $255 million in ETCs, and continued borrowing for the remainder of 2003.

Lenders had cut off AMR's ability to borrow in early 2003; hence the demand for concessions.

Had AMR's unrestricted cash balance fallen below $1.0 billion, AMR would have been in default of most of its debt. Bankruptcy would have been inevitable had that happened.

The $1.5 billion capacity purchase deduction appears in the 2003 AA 10-K, but is nowhere to be found in the AMR 10-K.

Any of you geniuses have any guesses as to why?

Because most of the money was paid by AA to Eagle, which are all owned by the same entity - AMR. Only the portion paid to Republic and Trans States (the AX carriers) is a true payment outside the family. And that was only about $160 million.

By the way, the $1.5 billion was paid in 2003, not 2002, so most of the money had not been paid when you voted on your concessions.

Sorry to baffle the easily-baffled with the facts; it's a dirty job, but somebody's gotta do it. B)

 

[FWAAA]

Who called management "stupid"? You are putting words in our mouths now!

Why shouldn't one conclude that there was even more hid but never found? One glaring fact is that fuel has consumed ALL of the labor groups concessions given, yet AA is NOT on the BK steps? Explain that one with your knot-logic!

[post="176225"][/post]​

Dave, I answered (refuted) your assertions about the fuel v. concessions amounts in post #7 of your thread entitled "Fuzzy Math" which certainly was an appropriate thread title, given your weakness in basic mathematics:

/index.php...c=12422&hl=fuel

Check it out and let me know if you have taken any remedial math classes to make up for your math deficiencies. Hope you studied hard and got a good grade.

I'm not puting any words in anyone's mouth: Nearly every post by AA employees that mentions management asserts failure and stupid decisions one after another.

How is it possible that the only area in which management excels is in screwing the organized employees?

Hiding money? Are you guys serious?

Do you guys see aliens on your way home? I've driven thru Tulsa a lot, but I've never spotted any UFOs.

 

[Decision 2004]

Dave, I answered (refuted) your assertions about the fuel v. concessions amounts in post #7 of your thread entitled "Fuzzy Math" which certainly was an appropriate thread title, given your weakness in basic mathematics:

/index.php...c=12422&hl=fuel

Check it out and let me know if you have taken any remedial math classes to make up for your math deficiencies. Hope you studied hard and got a good grade.

I'm not puting any words in anyone's mouth: Nearly every post by AA employees that mentions management asserts failure and stupid decisions one after another.

How is it possible that the only area in which management excels is in screwing the organized employees?

Hiding money? Are you guys serious?

Do you guys see aliens on your way home? I've driven thru Tulsa a lot, but I've never spotted any UFOs.

[post="176352"][/post]​

I noticed you call me "Dave", do I know you?

SO are you the LIAR or is AA Management the liar?

Take a look at todays "JETNET" sign in.....

"OVER $1 BILLION MORE THIS YEAR THAN LAST!"

Ok so fuel has NOT consumed the entire concession package, but if not, then how much profit was AA planning to make? You do get the point dont you? "We have to have $1.8 billion in concessions or go Bankrupt", and then fuel consumes the concessions, and still no filing. Either the concessions were excessive, or someone had a fuel price crystal ball, or AMR would have posted a $1 Billion profit the first year after concessions were given.

No FWAAA, I have not taken any remedial math classes, maybe I just mistakenly believed what AA Management was telling me once again. And if I was a CPA, I wouldn't be working for AA in Tulsa, OKlahoma.

Thanks for clarification that AA Management must NOT ONLY be telling lies about fuel cost, but they are also now begging us to contact our congresssional representatives over the issue. How many Corporate Government handouts can one company gain from George W?

But instead, we should believe you, the internet bulletin board math wizard? Uh, OK!

DIRECT FROM JETNET AND COMPANY UNION WEBSITE...

Fueling the Fire: How You Can Help

The soaring price of oil has become a national crisis. As difficult as it has been for consumers at the gas pump, the impact on aviation has been nothing less than devastating.

Last year at this time, oil cost about $31 a barrel. One week ago, the price was over $49 per barrel. At American and American Eagle the jump in prices will cost us over $1 billion more this year than last.

Put another way, every penny increase per gallon in jet fuel costs the company $33 million annually.

Today, fuel accounts for nearly 20 percent of our operating costs - making it the largest cost item after wages and benefits.

The impact on our industry is just as significant. The price of a barrel of oil has risen over $15 in the past year. Industry-wide, a $1 increase in the price of crude oil adds $425 million to annual operating expenses.

At current employment costs, that translates to 5,500 airline workers. If oil averages $43 for the remainder of the year, the airline industry could lose $6 billion this fiscal year.

According to the Air Transport Association, if fuel costs were at last year's levels, the industry would probably break even - at 2002 prices, it would be making a profit.

While this cost challenge is daunting, the men and women of American and American Eagle are stepping up to the challenge, discovering innovative new ways to reduce the amount of fuel we burn without sacrificing safety or quality service.

These fuel-saving initiatives should save American around $40-50 million this year. Unfortunately, our fuel conservation efforts are not enough. In the second quarter of this year, we basically broke even.

If fuel costs had been at 2002 levels, we would have made approximately $250 million.

Congress is aware of the crisis and some members are beginning to look for ways to ameliorate our dependence on foreign oil. For instance, some Republicans and Democrats have asked the President to stop pumping oil into the Strategic Petroleum Reserve as a way to reduce demand.

We urgently ask for your help. Please write today to your representatives in Washington. We've made it easy for you to do.

American Airlines employees can visit http://www.capitolconnect.com/americanairlines and American Eagle employees should access http://www.capitolconnect.com/americaneagle.

Complete the mailing registration form and in moments you will be sending an important message to your senators and representative, asking for their immediate attention in the form of oversight hearings that will help dampen rampant speculation in the oil market.

Your Senator and Congressional representative is automatically selected based on the address and Zip code that you provide when registering.

TELL US FWAAA the MATH WIZARD, was AMR planning a $1 Billion Dollar Profit if Fuel had NOT risen?

Now go crawl back under your bosses desk and tell him that you have done well attempting to cover the hidden cash flow scheme.

 

[Rusty]

Remember that there was also a 1.5 Billion credit in the revenues column. The net loss from the new FPD system was 31 million and was, I'm guessing, because of Connection. Connection and Eagle are lumped together in the 10K.

[post="175993"][/post]​

I agree there is also 1.5 billion increase in revenue and I tried to say that ("At the end of 2003 the capacity purchase agreement is realized back into cash and now, here we are!!!") but perhaps not well enough. If I were to set aside a dollar to buy a cup of coffee in my cash account but that never happened then at the end of the year I would just realize that back in cash. Expense-Revenue Please reread what I said.

Are you waiting for the international to file one? Why don't you do it yourself?

I don't claim to know exactly what happened ("It appears to me that the company") but, as I get a better grip on it, I may do just that! I will take a look at the pilots award and figure out why they won their case. Again, my point was and perhaps you can explain it to me. Why didn't the twu inverstigate and file a class greivance like the pilots???


The capacity purchase was made in 2003, within weeks of and prior to the "We are out of cash and standing at the courthouse door" statement and no that is not word for word of what was said but, it was the heart of the advocation.

 

[Bob Owens]

Hiding money? Are you guys serious?

[post="176352"][/post]​

Sure, why not? Are you saying that greed does not affect business men? Look at the trouble that all those other businessmen got in by making up numbers? Why do you think they did that? Because they were greedy. Even though they had plenty of money, more than anyone could reasonbly need, they wanted more. Well in our example, the same motive exists even if the method is the exact opposite.

In the case of Enron and others the greedy were trying to convince shareholders that the company was worth much more than it was, because they were defrauding the buyers of the company. In our case I believe they were trying to convince us that the company was in worse shape than it actually was.

Fortunately for shareholders there are laws against painting an unrealisticly optimistic picture of the company, unfortunately for employees the SEC looks kindly at a company that reveals potential liabilities.

Unfortunately for us the unions allowed the losses revealed in the 10k, a report designed to protect the interests of the shareholder not the employee, as the basis for concessions, clearly a bad move for the unions and its members.

A perfect example of this is the $988 million in goodwill. Here the company claims a loss, but was cash actually lost or was it more like an assumed value, a volitile value at that which over a reletively short period of time could more than rebound. When the company writes this off, it may be what the SEC considers a fair conservative valuation. Maybe they figured that AA or its assetts were worth (just for the sake of a nymber)$10 billion if someone were to buy it, however now, because of the current market its only worth $9 billion, so AA lost a billion. But did it? No, if someone had bought AA for $10 billion, then turned around and sold it for $9 billion then we can fairly say that the guy actually lost a billion. However if he bought it for $10 billion and then the market value was estimated to only be $9 billion nothing would stop him from going to his employees and saying that he already lost a billion on this company and that he needed concessions, certainly not the SEC.

As I recall, as part of the "Doom and Gloom" campain Bobby Gless was running around quoting some debt figure for the company, $20 billion or something like that. Clearly these figures were meant to intimidate the employees.

So they have $20 billion in debt? What does that mean? "Oh $20 billion is a big number". Yea so, how did that number come about? How does that debt figure compare to what it was back in 1999 when the company was doing great or at other downturns in the industry? How does that number compare to the companys revenue and how difficult is servicing that debt? If the company generates $20 billion in revenue every year then how does its debt to revenue comparasion compare to the average worker? Most people that get a mortgage borrow much more than one years "revenue". Thats not even counting other debt they may be carrying on things like student, car and personal loans. So if the average worker is carrying a debt that is two or three times his yearly revenues but is surviving then why should we be so shocked that a corporation, which gets tax benifits to carrying debt, something that we lost for everything except a mortgage (which in reality is being eroded by the standard deduction) has a debt that is equal to around one year of revenue?

Lets not forget the circumstances around ratification. The ratification had to be done before the 10 K was released. The FAs delayed that, the revelation of the executive perks drew all the headlines and really killed any chance of a more sensational story coming out of that report.

I'll admit I'm not a trained eye when it comes to such reports but things like the $988 million in "goodwill", "prepaid leases" , AAdvantage miles liabilities, etc, while they might be legal and "appropriately disclosed" for the shareholder may not be figures that someone who has an agreement in place and is being told to radically alter that agreement for a long time into the future should use. Clearly those things are completely out of our control and our concessions in no way related to those things.

The fact is that because of the 7000 page tax code, most of which is geared to corporations, companys can have an easy time making things look worse than they actually are. In our case, where the company was embarking on a strategy to lower costs and they needed a way of convincing the workers that drastic concessions were indeed neccissary, a conservative 10K filing and revealing the figures of legal tax writeoffs were perfect for the job. These tactics suported the theatrics of the threats of bankruptcy, all considered fair in the art of negotiations, allowed the company, and its lapdog union leaders to convince the workers of the largest, strongest, most valueable airline in the world to give away 25% of their earnings to the company.

There is however one bright spot. Since the employees recieved stock, it can be said that they were given something for their concessions. However it comes at a price of $300/ per share or 60 times the market price even though they claim that they are "giving" us those shares, less their $5.

Perhaps this was done to stymie any future lawsuits where employees, after they rid themselves of their incompetant union leaders, sue the company for defrauding them. Now the company can claim that it was the unions that defrauded the workers because the company just did what has always been acceptable during negotiations, they bluffed and manipulated in order to get the best deal for the company. They revealed factual data, whether it was estimated or hypothetical, no different than the methods used by various government officials in trying to convince millions of Americans that they should reject the Social Security system. The union did not analize or dispute the data, is that managements fault? The employees recieved stock, they gave concessions in exchange for a stake in the company, this satisfies the concept of an exchange of value. Its not managements fault that the unions convinced their members to accept an unfavorable deal.

Hide money? Legally? Why not? Are there any laws on the books that forbid a company from misleading employees during contract negotiations?

 

[Mark Inman]

FWAAA are you trying to say AA added 46% capacity to AE out of AA revenue and it did not cost AA a dime or that this was not in violation of our contract? That really is stupid of you to suggest. Where do you think the 46% more seats came from. You can’t just throw more seats on an RJ like you can a 757. We bought the airplanes. AA now owns those planes even if AE's ASM's are reduced latter. If you read any reports from industry analyst you will see that the move is a very risky one. That's why we have scope language limiting it.

 

[will fix for food]

FWAAA are you trying to say AA added 46% capacity to AE out of AA revenue and it did not cost AA a dime.........

How do you know it was out of AA revenue and not out of Eagle revenue? According to Eagle's president Eagle pays for it's own planes. Don't get me wrong, I know he is fully capable of lying for his own purposes, but is he this time?

or that this was not in violation of our contract? That really is stupid of you to suggest. Where do you think the 46% more seats came from. You can’t just throw more seats on an RJ like you can a 757.

Uh-oh. ASM's are "available seat - miles". One way to increase ASM's is to increase number of seats. The other way is to fly those seats farther. The jump in ASM's followed closely the APA's relaxation of the SCOPE average stage length limitations. If I remember correctly Eagle's average stage length went from 200 something miles to 300 something miles. That would give you a 33% raise in ASM's without adding any seats at all. In fact Eagle's active fleet has really grown remarkably little as the older planes are being retired and/or sold at the same time as new ones are brought in.


We bought the airplanes.


Actually Eagle bought the airplanes.


AA now owns those planes even if AE's ASM's are reduced latter.


Actually AMR Eagle Holdings owns the airplanes.

If you read any reports from industry analyst you will see that the move is a very risky one. That's why we have scope language limiting it.

[post="176395"][/post]​

 

[will fix for food]

Thanks for the info....after reading it, I wish I never saw it.


Yep, a stellar negotiations job wasn't it?


BTW...Do you guys get a pension or 401K, if yes on the pension, do you know the formular?

No pension. We have a 401k that matches 50% of the first 6% up to 10 years of service and then 50% of the first 8% after that.

[post="176005"][/post]​

 

[will fix for food]

I agree there is also 1.5 billion increase in revenue and I tried to say that ("At the end of 2003 the capacity purchase agreement is realized back into cash and now, here we are!!!") but perhaps not well enough. If I were to set aside a dollar to buy a cup of coffee in my cash account but that never happened then at the end of the year I would just realize that back in cash. Expense-Revenue Please reread what I said.
I don't claim to know exactly what happened ("It appears to me that the company") but, as I get a better grip on it, I may do just that! I will take a look at the pilots award and figure out why they won their case. Again, my point was and perhaps you can explain it to me. Why didn't the twu inverstigate and file a class greivance like the pilots???
The capacity purchase was made in 2003, within weeks of and prior to the "We are out of cash and standing at the courthouse door" statement and no that is not word for word of what was said but, it was the heart of the advocation.

[post="176365"][/post]​

Maybe I didn't read some of your post closely enough. Sorry about that. After a while it all starts to sound the same and I start skimming.

I don't know why it hasn't been grieved. Laziness maybe. Trying to wade through those stats would be a formidable job and I don't think the company is going to help anybody do it by volunteering the info. I actually think you guys should worry less about stopping it and worry more about trying to get a piece of the action. I heard a rumor that MCI was going to bid on EASI's overhaul work. EASI being non-union and having resisted the TWU's attempts at organizing I am sure the TWU would love for it to happen. They could simultaneously "save TWU jobs" and increase the dues base. What a coup for them.