PRINCESS KIDAGAKASH
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- Oct 9, 2003
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AMFAMAN, I hope you didn't buy any of the stuff he was smoking+selling. That stuff is definitely ILLEGAL.
TWU negotiations.........what?
- Thread starter Chuck Schalk
- Start date
I certainly hope not. I am trying hard not to prejudge, and to look at this thing on its own merits (or lack thereof). I don't think we should blindly dismiss it because it comes from the company, or blindly accept it because it comes from TWU. I'm sure we'll have lots of fun debating its finer points on this forum.
T
The Goose
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An old Navy saying re: your president's posterior, negative pressure, and bilgewater comes to mind ...
Hopeful
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- Dec 21, 2002
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Hopeful
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Yeah, but your local officer elections aren't next week. <_<
OP
Chuck Schalk
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- Nov 17, 2006
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UAUA), the parent company of United Airlines, soared today after the Chicago-based company announced it had enhanced its liquidity by $1.2 billion. The company also posted second quarter results that were not as dismal as Wall Street had expected
The company will receive a payment of $600 million from JPMorgan Chase & Co. (NYSE: JPM) related to the advance purchase of frequent flier miles.
When I asked if AMR will sell their frequent flier miles back in 2003. I was told they were not worth much by our negotiating committee! I guess 600 million is not much! We were also told by the TWU and the company that there were no other assets to sell.
The company will receive a payment of $600 million from JPMorgan Chase & Co. (NYSE: JPM) related to the advance purchase of frequent flier miles.
When I asked if AMR will sell their frequent flier miles back in 2003. I was told they were not worth much by our negotiating committee! I guess 600 million is not much! We were also told by the TWU and the company that there were no other assets to sell.
And the Union Leadership Thought the first one was crap...what would make the company even think that that would make it to a vote?
You're mixing and matching two different concepts: The sale of the mileage program itself (ala Air Canada and Aeroplan) with an advance sale of miles to the bank that already buys billions of miles each year. United didn't sell MileagePlus - it simply renegotiated its agreement with Chase and Chase agreed to buy billions of miles sooner than it would have originally - in effect, a loan secured by the product Chase already buys: Miles. Delta did the same thing with AMEX a few months before its bankruptcy.
AMR already sells Citi tens of billions of miles each year for nearly a billion dollars. It has sold miles to Citi each year for 20 years. In 2003, AA sold Citi several hundred million dollars worth of miles. Same in 2004. Same in 2005. You get the idea.
In 2003, some wondered why AA didn't sell the AAdvantage program like AC did with Aeroplan. That would not have brought in the kind of money AA needed in 2003, but would have burned a lot of furniture. The concessions from the represented workforce have now delivered AA more than 14 times that $600 million UA borrowed today from Chase thru the advance sale of frequent flyer miles.
Last week, someone asked Arpey and Horton whether AA would sell miles in advance to Citi and they responded that it's an option open to AA but that there were no current plans to do so. AA has plenty of cash on hand plus billions in un-tapped assets against which it could borrow. And if things get grim, it could borrow more money from Citi by selling next years' miles this year.
Problem with selling miles in advance is this: what happens next year when the bank already has that year's miles? When you sell stuff too far in advance, you really miss that revenue in the subsequent period. That's how Lucent and the other Telecoms got in trouble: they pushed huge equipment orders onto their customers to make that year's numbers, but their customers didn't need to buy as much stuff in those subsequent years. All of a sudden, Lucent was trading for $0.50/share and bankruptcy was a possibility.
Something I understood roughly before, but just now totaly got. Thanks for the good post!!!
NewHampshire Black Bears
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- Aug 20, 2002
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frontline,
Just a few words of respectful dissent, to your reference of........"Blindly Dismissing"
1. If an offer was sent to the membership,......STRAIGHT from the company,..IT should be..BLINDLY DISMISSED, because "WE" have a negotiating committee.
2.(Almost the same thing)(Keep in mind that AA and the TWU.."ARE" one in the same) !!!
2.( If our "negotiating committee" ALLOWS a company proposal to be sent DIRECTLY to the membership..............WITHOUT A HINT of it being negotiated,.......................It MUST BE BLINDLY DISMISSED !
JESUS,...what's the Friggin' sense of having a "negotiating committee" ??
THANKFULLY,...........Thats the way I was taught by the AA Old Timers, back here in the North east Quadrant of the USA
TWU informer
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- Nov 4, 2003
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Interseting how we are said to measure against competition using ASM, and CASM, but then when it comes to really comparing in finance we are apples and oranges. I guess it just depends on what is on the agenda, concessions or raises, losses or profits.
OP
Chuck Schalk
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- Nov 17, 2006
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Thanks FWAAA for the education.
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frontline,
Just a few words of respectful dissent, to your reference of........"Blindly Dismissing"
1. If an offer was sent to the membership,......STRAIGHT from the company,..IT should be..BLINDLY DISMISSED, because "WE" have a negotiating committee.
2.(Almost the same thing)(Keep in mind that AA and the TWU.."ARE" one in the same) !!!
2.( If our "negotiating committee" ALLOWS a company proposal to be sent DIRECTLY to the membership..............WITHOUT A HINT of it being negotiated,.......................It MUST BE BLINDLY DISMISSED !
JESUS,...what's the Friggin' sense of having a "negotiating committee" ??
THANKFULLY,...........Thats the way I was taught by the AA Old Timers, back here in the North east Quadrant of the USA
Respectful dissent is the way to go. Too many people on this board demonize other posters instead of discussing the issues.
And now some respectful dissent to your points:
1. Of course the negotiating committee should not be bypassed. Negotiations are their job. Didn't intend to imply otherwise.
2. I disagree that AA and TWU are one and the same. Granted there have been some shenanigans in recent years and I am not eager to see more of those, but we are the only ones who can hold our leaders accountable. And certainly proposals must be negotiated. That means give and take on the issues.
My broader point was that things don't always have to be so adversarial in that sense that there is one winner and one loser. I'll avoid invoking "win-win" but there are cases where co-operation and creative thinking can lead to benefit for both sides. The VBRs are a great example of that.
