Usps Dumps Aa Domestic Mail

[coolflyingfool]

I would hope that the USPS would work with AA rather than make a knee-jerk reaction and pull the mail. I am sure that the other airlines would take the additional revenue, but not at the expense of more people losing their jobs in the industry. Just my thoughts.........

 

[WingNaPrayer]

I don't think this is a knee-jerk reaction. After having leveled 15 million in fines for failure to perform on the contract, it sounds like they've had them on notice for quite some time to either shape up or loose the business.

Guess we'll now get to see what kind of negotiating skills Arpey has.

 

[coolflyingfool]

It is true that the way the gov't penalizes people, it would take a long time to reach $15MM. If the penalties are truly based upon performance, than it probably gets worse the worse the performance gets. So, it must be bad.

 

[whatkindoffreshhell]

Dave Brooks is correct, the 6.4% would roughly equal 10% of AA Cargo Revenue.

The domestic legacy carriers are on a slippery slope here anyway towards the day when all cargo is banned from combi carriers. You can bet the mortgage on this one folks.

National security and vastly improved trucking networks are the reason.

Unfortunate but true. Plan accordingly folks.

 

[mweiss]

National security and vastly improved trucking networks are the reason.

[post="247771"][/post]​

Show me that a truck can get from Los Angeles to New York in less than a day, and I'll believe you when you say that cargo won't be allowed on aircraft anymore.

 

[whatkindoffreshhell]

Show me that a truck can get from Los Angeles to New York in less than a day, and I'll believe you when you say that cargo won't be allowed on aircraft anymore.

[post="247790"][/post]​

Please carefully re-read my post sir. I said 'combi carriers' (and btw the coast-coast cargo will be restricted to cargo-only aircraft with trucks handling everything else).

AA Cargo is one of the best outfits but you will soon lose all belly cargo.

 

[mweiss]

I know what you were saying. I'm just saying that the trucking networks are less of an issue than your post implies.

 

[SVQLBA]

I know what you were saying. I'm just saying that the trucking networks are less of an issue than your post implies.

[post="247795"][/post]​

The issues are

i) truckers can now provide time-definite delivery over 2-5 day periods across the US. Most shippers used to pay air freight premiums just for the certainty of delivery. Now they are getting more sophisticated about sourcing transportation and saving a bundle -- they just need to ship out a couple of days earlier, but the material still gets to its destination (often with better reliability) by truck than by air

ii) all the downsizing at the legacies has greatly reduced the amount of domestic wide-body flying. It's bloody hard to competitively shift airfreight in 737 and A320 bellies. The loss of domestic 767s routes has hit cargo ops at all the majors

iii) security is a biggie -- it's a favorit whipping boys for everyone on the hill trying to prove they're tough on homeland defense. Airline lobbying resources are stretched pretty thin with everything else they're facing.

 

[desertfox]

So what's the latest? Is the mail returning? Are USPS and AA talking?

 

[Oneflyer]

So what's the latest? Is the mail returning? Are USPS and AA talking?

They spoke today, I would suspect a final decision to be made sometime either late this week or early next.

By the way, AA's performance is about the same as the other carriers. Fedex has a much better deal with the USPS, not only is Fedex's mail pre-sorted and containerized, they also get paid about 3 times as much per pound.

 

[LGA Fleet Service]

Fedex has a much better deal with the USPS, not only is Fedex's mail pre-sorted and containerized, they also get paid about 3 times as much per pound.

[post="247961"][/post]​

Because the people at FedEx know their ass would be in a sling in a New York minute if they left 2,500 pounds of mail on double dollies overnight in the rain or they left 3 LD-8's of mail on a loader or left it piled up on a belt loader.

FedEx gets a premium for the mail because they meet and exceed the service standards set by the USPS, the only thing AA mail meets or exceeds is the number of senior men whining about having to do any work at all in the course of an 8 hour day...


I think WnP is right on this one, $15 million in fines is ample warning...they knew this was coming.

I'm laughing my ass off watching these senior heads out there humping bags for the first time in decades....

 

[WingNaPrayer]

Sadly, if AA is unable to convince the USPS that they are worthy of another chance - it's going to cost jobs.

 

[aafsc]

The problem is we are short staffed. AA management wants the flights to depart on-time even if it means leaving the mail off. Add to this the high load factors (meaning a belly full of bags-inbound and outbound) and late inbounds (which means a quick turn) and one can see why mail is not loaded.

 

[mwa]

http://us.rd.yahoo.com/finance/industry/ne...al_rates_2.html

just announced AA is out

 

[eolesen]

Mixed feelings on this one.... It's about $50M in revenue according to what WNP posted. There are probably 300-500 clerks/CC's/agents/CSM's systemwide that work nothing but domestic mail. Assuming $65K per year salary and benefits, at the high end, that's between $20M and $32.5M just for salary and benefits that are directly tied to handling the mail. That doesn't include all the overhead and infrastructure expense, such as scanners, tractors, carts, or the fuel required for both the tractors as well as the incremental weight on the aircraft.

In addition to the expenses, I'm sure there's other money being left on the table because since mail displaces PPS and other revenue freight.

Bottom line -- not a huge profit margin. The scanning requirements by USPS just add expense without any added revenue, so perhaps the time has come for AA to do what Northwest did last year -- stop dealing with the headaches surrounding domestic mail.

The conspiracy theorist in me says that taking mail away from the legacy carriers was the USPS's intent from the day they launched their partnership with Fedex. The scanning standards were set so high that only Fedex and UPS could meet them, since they already used scanning for tracking their packages.

But that's just a theory....