We need cheap fares to compete....

[formeraa]

Was there ever a period (more than a decade) where overall real prices(adjusted for inflation) for air travel went up?

From what Ive read prices have been declining since the industry started. As planes got bigger and more effecient those efficiencies were passed on to the consumer, this occured prior to deregulation.

Deregultaion simply opened the door for the industry to attack its workers. Workers were vulnerable because they all based their careers around a single corporation and they failed to solidify the structure of labor within the industry. We have nearly as many unions as there are airlines and the unions are in a race to the bottom.

During the regulated era, fares were adjusted annually to reflect the "average" increase in airline costs (i.e. primarily labor and fuel costs). In that era, management's goal was to keep their labor cost increases at or below the industry average. Whether or not this kept up with inflation, iI don't really know. I suppose it depended on the labor unions' negotiating skills!

 

[aamechntx]

Missed this the first time around. You should be paid what the market will bear. In the era of low cost carriers that number has dropped significantly. Look no further than the pay scales of JetBlue for your future.

Hey FrequentFlier,
This is just a chart showing hourly compensation, mind you. These same comparable airlines also compensate their various work groups with increased vacation, sick time and real holiday pay.
When you consider those other comps were still behind another 10K - 20K compared to airlines like JetBlue.

 

[eolesen]

"Gee Dad, I promise to feed the dog every day if you buy me one"

Never mind the vet bills, chewed up furniture, the cost of a dog sitter or kennel when you go out of town, etc...

"Dad, I'll pay for the gas if you buy me that 12 year old Toyota that Mr Owens is selling"

No mention of the insurance, or the licence plates, new tires, or the brake rotor which is only about six hard stops away from being out of tolerance for resurfacing...


If we can figure all that out as adults when the kids come asking for these things, why is it so friggin' hard for y'all to figure out there are some things you can't decouple, like benefits when comparing paychecks.

That added $10-20K you bemoan is being paid *for* you in other forms.

Ever compare the street value of the health plan you get to what the guys at Jetblue or Airtran get?

And yes, there's a cost for the scope clause which holds AA from contracting out work to the same degree WN, B6 and FL do.

Then there's the intangibles -- ever try non-revving to Europe on Jetblue, Airtran or Southwest?... How 'bout all those D3 passes for spur of the moment travel by family or friends? The 20% discount on published fares?

None of that's in you paychecks, but it's still part of your compensation.

 

[aamechntx]

Hey Eric,
First, have you tried to nonrev anywhere lately? I don't have the time to explain how hard it is to travel anywhere let alone Europe. Those flight benefits you like to praise are not what they used to be. Insurance? I'm not the expert on differences of coverage that you seem to be. Maybe you can enlighten all of us on the differences in coverage and out of pocket expenses for various employees and their prospective work groups in the industry. American has resolved to do their own maintenance. Is it possible that they really like to have their maintenance kept in house?
With universal coverage being pushed so ardently we might even see that program extended to puppy owners. Taking out the second largest cost of dog ownership.

 

[eolesen]

Nonrevving on the weekends or to Europe in the summer has always sucked. But it's rarely a problem to get to LAS or NYC for the weekend. And you actually have the option of going to that impromptu family event at the last minute without having to drop down $300 apiece for a family of four... I don't miss being stuck at the airport for hours at a time hoping a seat opens up, but I live in a city with a lot of commuters and a fair sized AA operation, and there's almost always a half dozen or more D2's onboard (it's not too hard to pick them out in the lounge...). There's also no shortage of commuters (even easier to pick out of a crowd).

Sure, AA is resolved to doing their own maintenance for the same reasons they've agreed not to outsource flying 90 seat e-Jets, or to have flight attendants based in NRT or LHR. But I'm sure they'd like flexibility to be able to make those decisions based on an actual business case, and not have those types of decisions be based entirely on the job protection clauses in a CBA.


Pension plus healthcare benefits is said to run between 15 and 20% of salary. I've seen health insurance run between $6000 and $12000 for a married couple plus dependents, depending on a lot of factors like dental or prescription coverage, copays vs. high deductibles. The current value of health coverage for federal employees is $4,200 for an individual and $13,000 for a married couple plus dependents.

Dispute it, argue it, deny it, but those are the averages I've seen in looking at when doing budgets as an analyst, when doing headcount justifications as a manager, when doing business cases as a consultant, and when looking at jobs as an prospective employee.

Oh, and go read some of the fine print on Obamacare. The difference between the value of the private healthcare provided by your employer and the federal rate is about to become taxed as income...

 

[aamechntx]

Okay, insurance and pension amount to approximately 15-20%. Don't the other airlines offer medical and dental insurance to their employees too? Is AA's employee insurance cost more than Delta, United and Southwest? I'm not sure that any employer has a cost advantage when it comes to insurance rates, you gave me averages based on government statistics. Other airlines do not have a pension for most of the workers, but they do offer matching 401Ks. I have to wonder what the difference is between pension cost and 401K employer contributions.
Why is that when the gov't spends 100s of billions of dollars in what most of us would agree is wasteful conservatives barely raise an eyebrow anymore? Hillary promised 900 million to rebuild the Gaza strip. We just bought GM and Chrysler and put billions into the banking sector. I am not saying that Obama's plan is great, but when half of all bankruptcies are attributed to out of control healthcare cost, would you agree that something is wrong? Most of those filing for protection were supposedly covered by insurance. The way most of us witnessed the way republicans handled the problem was to wait and let the market correct itself. That's great if you have the same coverage that congressmen and senators have.

 

[Bob Owens]

Okay, insurance and pension amount to approximately 15-20%. Don't the other airlines offer medical and dental insurance to their employees too? Is AA's employee insurance cost more than Delta, United and Southwest? I'm not sure that any employer has a cost advantage when it comes to insurance rates, you gave me averages based on government statistics. Other airlines do not have a pension for most of the workers, but they do offer matching 401Ks. I have to wonder what the difference is between pension cost and 401K employer contributions.
Why is that when the gov't spends 100s of billions of dollars in what most of us would agree is wasteful conservatives barely raise an eyebrow anymore? Hillary promised 900 million to rebuild the Gaza strip. We just bought GM and Chrysler and put billions into the banking sector. I am not saying that Obama's plan is great, but when half of all bankruptcies are attributed to out of control healthcare cost, would you agree that something is wrong? Most of those filing for protection were supposedly covered by insurance. The way most of us witnessed the way republicans handled the problem was to wait and let the market correct itself. That's great if you have the same coverage that congressmen and senators have.

Lets not forget that our Health care costs are driven up so AA can save money on wages. The company offers the same thing we get to part timers-it gets them Part Time workers so they save on wages and the increased cost of providing the coverage to these workers and their families is passed on to us.

 

[TIME FOR CHANGE]

"Gee Dad, I promise to feed the dog every day if you buy me one"

Never mind the vet bills, chewed up furniture, the cost of a dog sitter or kennel when you go out of town, etc...

"Dad, I'll pay for the gas if you buy me that 12 year old Toyota that Mr Owens is selling"

No mention of the insurance, or the licence plates, new tires, or the brake rotor which is only about six hard stops away from being out of tolerance for resurfacing...


If we can figure all that out as adults when the kids come asking for these things, why is it so friggin' hard for y'all to figure out there are some things you can't decouple, like benefits when comparing paychecks.

That added $10-20K you bemoan is being paid *for* you in other forms.

Ever compare the street value of the health plan you get to what the guys at Jetblue or Airtran get?

And yes, there's a cost for the scope clause which holds AA from contracting out work to the same degree WN, B6 and FL do.

Then there's the intangibles -- ever try non-revving to Europe on Jetblue, Airtran or Southwest?... How 'bout all those D3 passes for spur of the moment travel by family or friends? The 20% discount on published fares?

None of that's in you paychecks, but it's still part of your compensation.

OK so cancel the D3 pass travel and give me my money back.

You say our health plan is superior to other carriers do you have any numbers to back that up because our plan is nothing to brag about.

AA keeps maintenence in house because it is cheaper in the long run. If it wasnt cheaper they would have farmed it out long ago. Or maybe they are keeping it in house because they want to loose money

Ever try nonreving to NY its allmost impossible especially in the summer time.

 

[eolesen]

Estimate of pension rates last time I paid attention to one came out to about 8-11% of salary per active employee. Less in a good stock market, higher in a poor stock market, and unfortunately, that's when companies are less likely to have the cash to be pouring in to keep minimum funding levels.

Average 401K match is 3-5%. Do your own math on the savings there...

There are differences in the plans offered by different employers. Jetblue might be large enough to be offering a self-funded plan, but just how much each employee pays towards it is the unknown. They might have free healthcare with crappy coverage, or decent coverage with employees paying a portion. AA has employees paying a portion for excellent coverage. If you want to see a real revolt from employees, start messing with health care coverage...

 

[nbmcg01]

Estimate of pension rates last time I paid attention to one came out to about 8-11% of salary per active employee. Less in a good stock market, higher in a poor stock market, and unfortunately, that's when companies are less likely to have the cash to be pouring in to keep minimum funding levels.

Average 401K match is 3-5%. Do your own math on the savings there...

There are differences in the plans offered by different employers. Jetblue might be large enough to be offering a self-funded plan, but just how much each employee pays towards it is the unknown. They might have free healthcare with crappy coverage, or decent coverage with employees paying a portion. AA has employees paying a portion for excellent coverage. If you want to see a real revolt from employees, start messing with health care coverage...

Excellent coverage? I have had to keep my plan at work because AA's scares the you know what out of me. Another retiree I work with spent 3 days trying to get out of LGA on a D1. Great bennies..If anyone is thinking of retiring for the passes or medical, think again.

 

[JimJimmyJim]

Prior to going into Aircraft Maintenance I was an auto mechanic. I don't ever remember being asked to go backwards in salary. I got my raises and if the dealer or garage didn't make money they never came back and asked me for money. In fact I can't remember any other job that wanted money back, or benefits for that matter. The bottom line is this. AA hired us. In doing this hiring they threw out there how much we would make, what benifits they offered, vacation, sick days, etc. We gave alot back, in 03. If you voted yes or no it doesn't matter at this point, we as a group gave it back. The Execs have gotten there 's over the years, since 03, and now it's time for us to get some of ours back. No other industry I know of asked its employees for money and benefit cuts to try to turn a profit. The flights are full, raise the price and charge for the product. Available seats are not there. Charge the people who want the convienance of flying. PERIOD

 

[Bob Owens]

Estimate of pension rates last time I paid attention to one came out to about 8-11% of salary per active employee. Less in a good stock market, higher in a poor stock market, and unfortunately, that's when companies are less likely to have the cash to be pouring in to keep minimum funding levels.

Are you adding in Social Security to that figure? Back in the 90s I recall AA not only not having to contribute anything but they took out excess earnings that the plan generated. If they had left that money in there then they wouldnt have to pay as much now.

Lets also not forget that those rates include management and the pilots who have substantaily higher pensions.

Average 401K match is 3-5%. Do your own math on the savings there...

And your average worker works days, is off Holidays and weekends as well. If you demand more you should offer more.

There are differences in the plans offered by different employers. Jetblue might be large enough to be offering a self-funded plan, but just how much each employee pays towards it is the unknown. They might have free healthcare with crappy coverage, or decent coverage with employees paying a portion. AA has employees paying a portion for excellent coverage. If you want to see a real revolt from employees, start messing with health care coverage...

Like I said AA uses the medical plan to save money. If they didnt offer the medical then they wouldnt get the part timers to take the job and show up on the holidays and weekends. They then take the increased costs of providing those benifits and make the full timers help bear the burden. For full timers its a lose-lose proposition, part timers weaken their bargaining position and they cost them money in higher health care premiums.

 

[eolesen]

The 8-11% is what goes into the qualifying plans, Bob. The variances in salary are a lot more normalized there based on the PBGC cap of $65K per year. Anything contributed to the supplemental plans for pilots or management/salaried is above in addition to that 8-11%.

Bottom line here, you've got a total compensation package that's probably 20-30% higher than what you see in your paycheck. As long as you focus just on the gap, and ignore what the gap entails, you'll continue to be pissed off. If it were me, I'd be looking at enriching the benefits package -- that's where you're more likely to get some restitution. If it means negotiating away bennies for the part timers, go for it.

I don't disagree at all with you on the part-time/full-time argument, Bob. There used to be some justification for the PT's in stations out west where due to the directional banks at ORD and DFW, you'd see the last eastbound departures around 1400 in the afternoon, but no westbound arrivals until 1800 or later. That's been evened out a lot in the past five years. In the hubs, the locals wanted more weekends off for the senior guys, and you wound up with weekend warriors... That's going to be a little more troublesome to get rid of unless you give a lot more guys T/W & W/Q as days off.

 

[Bob Owens]

The 8-11% is what goes into the qualifying plans, Bob. The variances in salary are a lot more normalized there based on the PBGC cap of $65K per year. Anything contributed to the supplemental plans for pilots or management/salaried is above in addition to that 8-11%.

Where can I find information that supports those claims?

Bottom line here, you've got a total compensation package that's probably 20-30% higher than what you see in your paycheck. As long as you focus just on the gap, and ignore what the gap entails, you'll continue to be pissed off. If it were me, I'd be looking at enriching the benefits package -- that's where you're more likely to get some restitution. If it means negotiating away bennies for the part timers, go for it.

AA actually provides workers with a "Total Value Statement" It includes the Pension and SSI as well as Medical benifits paid and anything else they can say has a value. The figures there come out to around 2% for the pension. They include their payment to SSI as part of pay, this is the only place where its included as part of pay, if their contribution to the pension was 8-11% of our salaries they most defineatly would have that listed as part of the Total Value. If AA put $6500 towards my pension I doubt they would only list my pension benifit value at $1200.

 

[eolesen]

Bob, if you're so involved with the negotiations process, why don't you ask for it? You're the one who wants proof, not me.