UPS Agreement

[Ken MacTiernan]

Bob is absolutely correct. If the company feels that we will not resist, withold labor, or chaos when we will be legally able to, then they will not take you as a serious entity or a threat and offer what they think is appropiate. Right now the company is not afraid of the TWU as a whole. Is your president talking the talking and walking the walk or sitting back watching the world go by? Get back to me on that one!

"Right now the company is not afraid of the TWU as a whole."

Especially the international.

 

[Bob Owens]

Actually, UPS pilots do earn at least 50% more than AA's pilots. Every UPS captain currently gets $252/hr and the blended average hourly rate of AA captains is about $170/hr. Same differential with FOs.

Fuel, landing fees - no, AA and UPS pay the same.

Actually they dont. Even using your figures thats less than 50%. 50% more would be $256/hr. Also aircraft size is a component of pilot pay and the average UPS size is much larger than the average AA size. UPS has mostly widebodies while AA has mostly narrow bodies. AA has no 747s.

Just the max Hourly pay component is $171/hr at AA, then you add in all the other "components" and it comes out to considerably more. They also get 3 cents for each mile, figure at 500 mph thats another $15/hr, plus 3 cents per thousand pounds of aircraft flown per hour, with the new 777 thats 660,000lbs, thats another $19,80 and if they fly at night they get $5/hr. So that puts a top paid AA pilot at around $211/hr or around 20% less than UPS. So, they have a good arguement that they are underpaid, just not as underpaid as us. I think a pilot that flies a plane full of live human beings should get more than a plane full of cargo.

If you want to go by "blended average hourly wage then you have to figure that AA mechanics get $27/hr once the rest of the Title Group is included. That would bring UPS in at around 90% higher than AA, over 90% when you factor in Health Benifits, Holidays, sick time and vacation.

WE MAY HAVE TO RETHINK OUR TABLE POSITION!!!

 

[FWAAA]

Actually they dont. Even using your figures thats less than 50%. 50% more would be $256/hr. Also aircraft size is a component of pilot pay and the average UPS size is much larger than the average AA size. UPS has mostly widebodies while AA has mostly narrow bodies. AA has no 747s.

I apologize, Bob, for not showing my work. UPS pilots have a monthly gurarantee of 81 hours, while AA pilots have a monthly guarantee of 64 hours (73 if on reserve). That difference puts UPS pilots at more than 50% higher pay than AA pilots. I also apologize for my poor wording. UPS pilots make at least 50% more than the average AA pilot. Of course, AA's 777 captains make substantially more than AA's MD-80 captains, but UPS makes no distinctions based on aircraft size. All UPS captains make the same, no matter the equipment.

Just the max Hourly pay component is $171/hr at AA, then you add in all the other "components" and it comes out to considerably more. They also get 3 cents for each mile, figure at 500 mph thats another $15/hr, plus 3 cents per thousand pounds of aircraft flown per hour, with the new 777 thats 660,000lbs, thats another $19,80 and if they fly at night they get $5/hr. So that puts a top paid AA pilot at around $211/hr or around 20% less than UPS. So, they have a good arguement that they are underpaid, just not as underpaid as us. I think a pilot that flies a plane full of live human beings should get more than a plane full of cargo.

Again, I apologize. My number of $170 is calculated from the Pay Guides of Supplement A, which already include all of the speed and weight components.

As an aside, the "new 777" is not the 660k model, it's the 765k 777-300ER model. It turns out that AA does not have an agreement with the APA to fly the two planes scheduled to be delivered late next year.

If you want to go by "blended average hourly wage then you have to figure that AA mechanics get $27/hr once the rest of the Title Group is included. That would bring UPS in at around 90% higher than AA, over 90% when you factor in Health Benifits, Holidays, sick time and vacation.

Fair enough.

WE MAY HAVE TO RETHINK OUR TABLE POSITION!!!

Agreed. You earlier posted that you weren't seeking UPS wages. If you were my union leader, I'd have to ask you (in all seriousness) "Why not?" Why would you not seek industry-leading pay?

 

[Bob Owens]

I apologize, Bob, for not showing my work. UPS pilots have a monthly gurarantee of 81 hours, while AA pilots have a monthly guarantee of 64 hours (73 if on reserve). That difference puts UPS pilots at more than 50% higher pay than AA pilots. I also apologize for my poor wording. UPS pilots make at least 50% more than the average AA pilot. Of course, AA's 777 captains make substantially more than AA's MD-80 captains, but UPS makes no distinctions based on aircraft size. All UPS captains make the same, no matter the equipment.



Again, I apologize. My number of $170 is calculated from the Pay Guides of Supplement A, which already include all of the speed and weight components.

As an aside, the "new 777" is not the 660k model, it's the 765k 777-300ER model. It turns out that AA does not have an agreement with the APA to fly the two planes scheduled to be delivered late next year.



Fair enough.



Agreed. You earlier posted that you weren't seeking UPS wages. If you were my union leader, I'd have to ask you (in all seriousness) "Why not?" Why would you not seek industry-leading pay?

Section 3 A 6 States; Suppliment A contains day hourly Pay Guides. The Pay Guides do not include International override and are only guides. Actual pay rates are calculated in accordance with the provisions of the Agreement. I took my info directly from Section 3. I also was conservative on the speed charts.
777=550mph
767=565mph
757=565mph
737=540mph

777-200 weight component is 650 =19.50
777-300 weight component is 662=19.86


Glad to see you add more to the arguement that our pilots are underpaid, and so much for them being the least productive since they are only guaranteed 64 hours or 73 hours, I suspect on average they both fly considerably more than their minimums that so I'll stick with the hourly rate. What are their maximums? We are guaranteed 40 per week and in 25 years I've never been paid monies for hours not worked under that minimum.

Agreed. You earlier posted that you weren't seeking UPS wages. If you were my union leader, I'd have to ask you (in all seriousness) "Why not?" Why would you not seek industry-leading pay?

If it were just up to me I would, but its not my decision. As President of one of 21 Locals I'm really more of a section chairman with a budget. The company has been very successful at lowering the expecations of the membership. THe APA has done a far better job at not only maintaining their standing in the industry but their expectations as well. It could have a lot to do with the fact that many of the top dogs in the union are only an election away from returning to the stick, whereas with us the top dogs really dont have to face that.

At this point the membership would probably accept SWA pay rates, or around $5/hr less than UPS just to get it done. After so many years at near poverty wages that would be seen as a big improvement. The "Retro" will bring us substantial relief.

 

[787nightmare]

Doesnt UPS vendor out their Heavy? I know Dee Howard, now Singapore Technologies does their work.

Correct. UP does no heavy maintenance at all. None. Just B checks.

There's a reason UP, FX and WN have smiliar, attractive payscales. They're ALL very profitable, healthy carriers. Think about it.
I've said it once, I'll say it again. A unions success at negotiating a great contract is in direct proportion to the health of it's balance sheet and success of it's business model.
It's really very simple to me. As the financial results indicate, it's clear...American is still struggling financially, trying to renew it's fleet as quick as possible and they simply can't afford to pay all it's labor unions what they want.

I do agree the strike threat should be made clear to AA. But it's labor groups have got to be reasonable with the company at this time.
I feel like 40/hr plus some 2001 contract give backs should be attainable. But the company is going to have to get some productivity gains/work rules and changes to base maint agreed upon. And some people probably aren't going to be too happy about it.

One other thing...don't forget the new hires. 😛
I figure you guys will be put between a rock and hard place and will take the offer if it's close. I'd probably do the same I guess...tough deal.

 

[lineguy43]

Correct. UP does no heavy maintenance at all. None. Just B checks.

There's a reason UP, FX and WN have smiliar, attractive payscales. They're ALL very profitable, healthy carriers. Think about it.
I've said it once, I'll say it again. A unions success at negotiating a great contract is in direct proportion to the health of it's balance sheet and success of it's business model.
It's really very simple to me. As the financial results indicate, it's clear...American is still struggling financially, trying to renew it's fleet as quick as possible and they simply can't afford to pay all it's labor unions what they want.

I do agree the strike threat should be made clear to AA. But it's labor groups have got to be reasonable with the company at this time.
I feel like 40/hr plus some 2001 contract give backs should be attainable. But the company is going to have to get some productivity gains/work rules and changes to base maint agreed upon. And some people probably aren't going to be too happy about it.

One other thing...don't forget the new hires. 😛
I figure you guys will be put between a rock and hard place and will take the offer if it's close. I'd probably do the same I guess...tough deal.

Couldn't have said it better 787..............................

 

[Bob Owens]

Correct. UP does no heavy maintenance at all. None. Just B checks.


It's really very simple to me. As the financial results indicate, it's clear...American is still struggling financially, trying to renew it's fleet as quick as possible and they simply can't afford to pay all it's labor unions what they want.

UPS and Fed Ex are very profitable carriers but UPS's fleet average is only a year newer than AA, 13 vs 14, if AA's is even that at this point with all the new 737s AA picked up and all the MD-80s they parked. Hell UPS was still flying DC-8s a few years ago. I'll bet before they parked them their average age was substantially higher than AAs. Fed Exs average age is over 23 years. Southwests average is 15 years. Dont see them telling their workers to give up pay and benifits so they can buy new planes.

Normally the larger the fleet the older the average age.

UPS has 215 planes, Fed Ex has 383, Southwest has 551, AA has over 600.

With $22 billion in revenue a year coming in and labor costs at its lowest ever as a percentage of costs if AA is struggling financially its self induced.

The average age for a car in this country is 9,2 years(2007), the average age in my household is 17 years. If I went out and bought a new car then told the electric company that they have to charge me less because I had to get a new car I dont think they would be too responsive to that request.

The average Age for the US Airline fleet is 8.9 years and dropping. If you take the three most profitable carriers their average age is 17 years, nearly double the age for the entire industry which on the whole is said to be "struggling" yet aircraft manufacturers cant keep up with the orders for new planes..

Maybe the reason why some carriers are struggling and others arent is because they want to fly around with the newest fleet instead of making money with what they have. Great for Boeing and Airbus (and the banks that provide the financing) but not for Airline workers who are told they must work for less so the carrier can buy new planes when the old ones still have many years of useful service life in them. Like I told a member of management the other day, "I'll work Dc-3s if AA figures they can make money with them, just pay me". If the most profitable carriers are flying the oldest fleets then new airplanes arent the key to financial success. In fact after looking at UPS, FedEx and SWA, well paid workers with old equipment seems to be the formula for consistant profits.

 

[Deleted member 14439]

Seriously? Reasonable? Now thats just laughable, the company has not been "reasonable" in 3 years of negotiations. No the gloves are coming off. This has moved past ridiculous and is into absurd territory. I`ll be reasonable when the company is.

 

[strikeforce]

Correct. UP does no heavy maintenance at all. None. Just B checks.

There's a reason UP, FX and WN have smiliar, attractive payscales. They're ALL very profitable, healthy carriers. Think about it.
I've said it once, I'll say it again. A unions success at negotiating a great contract is in direct proportion to the health of it's balance sheet and success of it's business model.
It's really very simple to me. As the financial results indicate, it's clear...American is still struggling financially, trying to renew it's fleet as quick as possible and they simply can't afford to pay all it's labor unions what they want.

I do agree the strike threat should be made clear to AA. But it's labor groups have got to be reasonable with the company at this time.
I feel like 40/hr plus some 2001 contract give backs should be attainable. But the company is going to have to get some productivity gains/work rules and changes to base maint agreed upon. And some people probably aren't going to be too happy about it.

One other thing...don't forget the new hires. 😛
I figure you guys will be put between a rock and hard place and will take the offer if it's close. I'd probably do the same I guess...tough deal.

So, let me understand this....because AA decides to mis-manage it's business..... I'm not entitled to increases in wages and benefits. Is this what you mean? Are you blaming the union for the company's poor financial results? I don't ever recall the company implementing a union business plan. Let's face it....the company has had a poor business model in place for many years. They have a poor working relationship with all of it's employees, including their own management staff. They treat their customers like crap.....by nickeling and diming them death....and providing terrible service. There's no accountability of it's employee whatsoever. Absolutely no professionalism from both union and management. To sum it all up....no one cares anymore.
At UPS, FedEx, and WN they keep their people happy. Period. Their employees are happy to go to work. When your happy about doing your job.....it reflects in the working relationship with management. I'm sure employees at UPS, FedEx and WN act like professionals and present themselves as professionals. Therefore, management pays them like professionals.

 

[Ken MacTiernan]

So, let me understand this....because AA decides to mis-manage it's business..... I'm not entitled to increases in wages and benefits. Is this what you mean? Are you blaming the union for the company's poor financial results? I don't ever recall the company implementing a union business plan. Let's face it....the company has had a poor business model in place for many years. They have a poor working relationship with all of it's employees, including their own management staff. They treat their customers like crap.....by nickeling and diming them death....and providing terrible service. There's no accountability of it's employee whatsoever. Absolutely no professionalism from both union and management. To sum it all up....no one cares anymore.
At UPS, FedEx, and WN they keep their people happy. Period. Their employees are happy to go to work. When your happy about doing your job.....it reflects in the working relationship with management. I'm sure employees at UPS, FedEx and WN act like professionals and present themselves as professionals. Therefore, management pays them like professionals.

You are correct Sir!

 

[eolesen]

UPS and Fed Ex are very profitable carriers but UPS's fleet average is only a year newer than AA, 13 vs 14, if AA's is even that at this point with all the new 737s AA picked up and all the MD-80s they parked. Hell UPS was still flying DC-8s a few years ago. I'll bet before they parked them their average age was substantially higher than AAs. Fed Exs average age is over 23 years. Southwests average is 15 years. Dont see them telling their workers to give up pay and benifits so they can buy new planes.

Normally the larger the fleet the older the average age.

UPS has 215 planes, Fed Ex has 383, Southwest has 551, AA has over 600.

With $22 billion in revenue a year coming in and labor costs at its lowest ever as a percentage of costs if AA is struggling financially its self induced.

The average age for a car in this country is 9,2 years(2007), the average age in my household is 17 years. If I went out and bought a new car then told the electric company that they have to charge me less because I had to get a new car I dont think they would be too responsive to that request.

The average Age for the US Airline fleet is 8.9 years and dropping. If you take the three most profitable carriers their average age is 17 years, nearly double the age for the entire industry which on the whole is said to be "struggling" yet aircraft manufacturers cant keep up with the orders for new planes..

Maybe the reason why some carriers are struggling and others arent is because they want to fly around with the newest fleet instead of making money with what they have. Great for Boeing and Airbus (and the banks that provide the financing) but not for Airline workers who are told they must work for less so the carrier can buy new planes when the old ones still have many years of useful service life in them. Like I told a member of management the other day, "I'll work Dc-3s if AA figures they can make money with them, just pay me". If the most profitable carriers are flying the oldest fleets then new airplanes arent the key to financial success. In fact after looking at UPS, FedEx and SWA, well paid workers with old equipment seems to be the formula for consistant profits.

Something critical missing from your analysis, Bob: utilization. UPS and FDX have extremely low cycles -- maybe two to four on average, which is half if not less than the number of cycles a passenger carrier's aircraft see. Low cycles also means less wear & tear, and ultimately, lower maintenance expense.

Something else missing: boxes don't use the lav or have eyes & noses. They don't care if they're in a ratty aircraft that still smells like last night's salmon shipment. Unfortunate for you, customers, even those who paid more to park at the airport than they did for their ticket, do tend to care about the condition of what they sit on and in for a couple hours.

And your "if I go out and buy a new car & tell the electric company to charge less..." argument? I don't see any airline telling other suppliers that they need to charge less. But you could tell your son that he won't be paid to cut the grass...

 

[Frank Szabo]

So, let me understand this....because AA decides to mis-manage it's business..... I'm not entitled to increases in wages and benefits. Is this what you mean? Are you blaming the union for the company's poor financial results? I don't ever recall the company implementing a union business plan. Let's face it....the company has had a poor business model in place for many years. They have a poor working relationship with all of it's employees, including their own management staff. They treat their customers like crap.....by nickeling and diming them death....and providing terrible service. There's no accountability of it's employee whatsoever. Absolutely no professionalism from both union and management. To sum it all up....no one cares anymore.
At UPS, FedEx, and WN they keep their people happy. Period. Their employees are happy to go to work. When your happy about doing your job.....it reflects in the working relationship with management. I'm sure employees at UPS, FedEx and WN act like professionals and present themselves as professionals. Therefore, management pays them like professionals.

There are no costs nor income items to deduct for "happy employees" per GAAP or any other standard of accounting, therefore, there's no financial benefit to AMR for doing so. The effect of a happy and engaged workforce cannot be quantified, on paper and tax forms - this asset can't be added to income or written off as a justifiable expense therefore, it doesn't exist.

Welcome to the world of the accountant, boys and girls. The SOBs use so much starch in their laundry using a crowbar is the only way available to them to mount their skivvies.

 

[787nightmare]

So, let me understand this....because AA decides to mis-manage it's business..... I'm not entitled to increases in wages and benefits. Is this what you mean? Are you blaming the union for the company's poor financial results? I don't ever recall the company implementing a union business plan. Let's face it....the company has had a poor business model in place for many years. They have a poor working relationship with all of it's employees, including their own management staff. They treat their customers like crap.....by nickeling and diming them death....and providing terrible service. There's no accountability of it's employee whatsoever. Absolutely no professionalism from both union and management. To sum it all up....no one cares anymore.
At UPS, FedEx, and WN they keep their people happy. Period. Their employees are happy to go to work. When your happy about doing your job.....it reflects in the working relationship with management. I'm sure employees at UPS, FedEx and WN act like professionals and present themselves as professionals. Therefore, management pays them like professionals.

Strike...don't get me wrong here. I'm not implying at all the union is responsible for anything(esp good representation), btw, nor do I work for AA(trying to get back in though). If AA is being mismanaged(and by many accounts that has occured), then some of the blame lays squarely on the shoulder of executive management.
What I AM saying is...ALL of the LCC(mainly WN) are pretty much handing the legacy carriers there asses in the industry now. If not for the International routes, they'd really have a hell of a time making any money.
Either UP or FedEx(pick one)makes more money in one widebody load than an airline makes all day(net). And WN has a business model so streamlined, it's almost untouchable now. It's called CASM(costs per available seat mile)and this is where the legacys suck vs LCC. The business model of the legacys is inferior to the LCC.
The fleet at FX is rather old(as Bob pointed out), & it kind of surprised me when I was there. Some of there 727s and DC10 were trash. But FX feels like that's what line maint is for.
And all of UP DC8s had CFM 56s on them, and according to a friend there, UP loved them, freighthauling machines. Guess they were too thirsty and hangar queens...??

I have no dog in this race(yet), and I'm a very pro-union guy. But when a company is not doing well financially(regardless of who's guilty), I wouldn't count on an industry leading contract. I know you guys are sick and tired of giving back to the company. I would be too. But at this juncture, I'm thinking a 3 yr deal(max!) with a 42/hr(or so) top out plus 2001 perks returned, and I'd feel pretty good about that if I was with you guys now. No?

I'd be more worried about who's going to cross the line when/if you guys strike, if you want to know the truth...esp in TULE.

 

[toroshark]

Strike...don't get me wrong here. I'm not implying at all the union is responsible for anything(esp good representation), btw, nor do I work for AA(trying to get back in though). If AA is being mismanaged(and by many accounts that has occured), then some of the blame lays squarely on the shoulder of executive management.
What I AM saying is...ALL of the LCC(mainly WN) are pretty much handing the legacy carriers there asses in the industry now. If not for the International routes, they'd really have a hell of a time making any money.
Either UP or FedEx(pick one)makes more money in one widebody load than an airline makes all day(net). And WN has a business model so streamlined, it's almost untouchable now. It's called CASM(costs per available seat mile)and this is where the legacys suck vs LCC. The business model of the legacys is inferior to the LCC.
The fleet at FX is rather old(as Bob pointed out), & it kind of surprised me when I was there. Some of there 727s and DC10 were trash. But FX feels like that's what line maint is for.
And all of UP DC8s had CFM 56s on them, and according to a friend there, UP loved them, freighthauling machines. Guess they were too thirsty and hangar queens...??

I have no dog in this race(yet), and I'm a very pro-union guy. But when a company is not doing well financially(regardless of who's guilty), I wouldn't count on an industry leading contract. I know you guys are sick and tired of giving back to the company. I would be too. But at this juncture, I'm thinking a 3 yr deal(max!) with a 42/hr(or so) top out plus 2001 perks returned, and I'd feel pretty good about that if I was with you guys now. No?

I'd be more worried about who's going to cross the line when/if you guys strike, if you want to know the truth...esp in TULE.

Do you seriously think that AA would offer that without taking it back in some other form? The last T/A took more from us then gave! AA is quite content with the plodding progression of the negotiations, as they have no intentions of full retro or any other than (laugh) a zero cost contract. Serious negotiations from AA will not rear it's beautiful head until (if ever) we are released to a 30 day cooling off period.

 

[Bob Owens]

Something critical missing from your analysis, Bob: utilization. UPS and FDX have extremely low cycles -- maybe two to four on average, which is half if not less than the number of cycles a passenger carrier's aircraft see. Low cycles also means less wear & tear, and ultimately, lower maintenance expense.

Are you saying that we generate more cycles on average per aircraft per year than SWA? Guess you missed that.

Something else missing: boxes don't use the lav or have eyes & noses. They don't care if they're in a ratty aircraft that still smells like last night's salmon shipment. Unfortunate for you, customers, even those who paid more to park at the airport than they did for their ticket, do tend to care about the condition of what they sit on and in for a couple hours.

And I suppose you can smel those lavs while you are sitting at your computer looking for the lowest price? Isnt that what you've been saying for years, that AA has no pricing power, people just look for the lowest price on the Internet?

And your "if I go out and buy a new car & tell the electric company to charge less..." argument? I don't see any airline telling other suppliers that they need to charge less. .

Workers supply labor, therefore we are suppliers.