SEC FILING

[chris perry]

If these contracts are ratified by union membership, the Company’s estimate of the third quarter 2010 mainline unit cost impact of the currently negotiated tentative agreements is an incremental 0.15 cents. The Company anticipates implementing productivity improvements consistent with the agreements that will help to offset the ongoing cost of salary increases.


Actual wording from SEC filing.We are breaking the bank at .15 cents what a joke TWU!!!

 

[chris perry]

Revenues
The Company’s revenues increased approximately $785 million, or 16.0 percent, to $5.7 billion in the second quarter of 2010 from the same period last year. American’s passenger revenues increased by 16.4 percent, or $602 million, on approximately a one-half percent decrease in capacity (available seat mile) (ASM). American’s passenger load factor increased by approximately 2.0 points to 83.9 percent, while passenger yield increased by 14.0 percent to 13.28 cents. This resulted in an increase in passenger revenue per available seat mile (RASM) of 16.8 percent to 11.14 cents. Following is additional information regarding American’s domestic and international RASM and capacity:

more sec

 

[FWAAA]

That works out to $57.6 million additional expense in the third quarter based on about 38.4 billion mainline ASMs. Breaking the bank? Hardly.

 

[WorldTraveler]

It is also important to know that based on the last two quarters of financial results, AA has maintained a 15% cost disadvantage to CO and DL and an 8% cost disadvantage to UA.
AA's cost disadvantage is even more pronounced relative to low fare carriers such as AS and B6 which have significant overlap with AA. (even though AS is a codeshare partner, AS and AA are legally still competitors because US domestic carriers cannot cooperate on revenue or cost generation as AA can now do with BA etc).

While AA mgmt is counting on an increase in costs by UA and CO as part of their merger, there is no large scale cost increase on the horizon by DL.

Keep in mind that the quote you are providing is based on the tentative agreements which have been reached. There is no tentative agreement with some of the most costly labor groups. AMR mgmt knows that the pattern they set for agreements with one group will be carried through to other groups. The 0.15 cent cost increase could easily become 3-4 times that amount or more when it is spread to all labor groups... and it comes on top of AA's labor costs which are already the highest in the US industry.

If 0.15 cents per ASM was all that AA could expect to see labor costs increase, they would have signed the contracts a long time ago.

 

[Duke787]

It is also important to know that based on the last two quarters of financial results, AA has maintained a 15% cost disadvantage to CO and DL and an 8% cost disadvantage to UA.
AA's cost disadvantage is even more pronounced relative to low fare carriers such as AS and B6 which have significant overlap with AA. (even though AS is a codeshare partner, AS and AA are legally still competitors because US domestic carriers cannot cooperate on revenue or cost generation as AA can now do with BA etc).

While AA mgmt is counting on an increase in costs by UA and CO as part of their merger, there is no large scale cost increase on the horizon by DL.

Keep in mind that the quote you are providing is based on the tentative agreements which have been reached. There is no tentative agreement with some of the most costly labor groups. AMR mgmt knows that the pattern they set for agreements with one group will be carried through to other groups. The 0.15 cent cost increase could easily become 3-4 times that amount or more when it is spread to all labor groups... and it comes on top of AA's labor costs which are already the highest in the US industry.

If 0.15 cents per ASM was all that AA could expect to see labor costs increase, they would have signed the contracts a long time ago.

Someone who know's what they're talking about, not the ususal vote NO, because we want our 2003 contract back rhetoric. We all want that 2003 contract, but what is the market calling for us to make, and how much can AA afford to pay, those are the real questions.

 

[chris perry]

It is also important to know that based on the last two quarters of financial results, AA has maintained a 15% cost disadvantage to CO and DL and an 8% cost disadvantage to UA.
AA's cost disadvantage is even more pronounced relative to low fare carriers such as AS and B6 which have significant overlap with AA. (even though AS is a codeshare partner, AS and AA are legally still competitors because US domestic carriers cannot cooperate on revenue or cost generation as AA can now do with BA etc).

While AA mgmt is counting on an increase in costs by UA and CO as part of their merger, there is no large scale cost increase on the horizon by DL.

Keep in mind that the quote you are providing is based on the tentative agreements which have been reached. There is no tentative agreement with some of the most costly labor groups. AMR mgmt knows that the pattern they set for agreements with one group will be carried through to other groups. The 0.15 cent cost increase could easily become 3-4 times that amount or more when it is spread to all labor groups... and it comes on top of AA's labor costs which are already the highest in the US industry.

If 0.15 cents per ASM was all that AA could expect to see labor costs increase, they would have signed the contracts a long time ago.

During 1995 contract managers sat around saying they couldnt afford to even a 1% or so raise
as soon as the ink dried on the contract mabe even before.They awarded themselves healthy raises
so I wouldnt take much stock in what management says.....As for the cost advantage at UA and CO you bet costs are going up.....management has built this culture of mistrust one letter of agreement at a time with the Twu neither can be trusted period...This vote is just another example.....