What Happens if AMR wants to abrogate our contract

[tom barry]

Why would Eagle disappear when they announced new aircraft on the way? It might be that some of the aircraft AMR ordered, will be used on select markets.....

OK Buck, you've Sold me on that.
One thing is Absolute, EAGLE pay rates for a lot of AA things will be here to stay, even if the A/E paint job disappears !

 

[frontline]

Looks like AA is going full steam ahead with this now. IF our unions dont' get their act together and work out a deal for us AA will go to the judge and say, Look we tried but just couldn't make it happen.

At that point I think the judge tears up our contract.

We have little to no leverage here. It's time to play Let's Make a Deal!!

 

[WorldTraveler]

Except that DL, UA, AA, US have costs that WN doesn't have and mainline to mainline doesn't reflect the total cost of operation for the network carriers. I can say I'm saving every dime I take in (disregarding all spending). While it's a true statement, it gives a distorted picture. It costs US, UA, AA, DL $X to operate their system and the system produces Y ASM's. So $X/Y = CASM. Now I could say that the US 330's cost $X to operate/year and they produce Y ASM's per year so $X/Y = US' CASM*** and be absolutely correct as long as somewhere those *** say that it's for the A330 operation only, but it doesn't really mean anything. I prefer giving an accurate picture rather than making any specific carrier look better than another.

Jim

which is why the bottom line RASM or CASM number matters... you can argue with how the pieces are constructed but you can't argue with the bottom line... or you begin to sound like those who argue that AA is really rolling in dough and should pass it out along with cups of water in the Texas sun.
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Saying the data is flawed because the answers aren't what you want to hear is pretty easy to spot.
Find a data set you do believe is an accurate comparison and then compare based on that....
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You of course could also just focus on stuff like profit.. the way EVERY company is compared.

 

[Frank Szabo]

Southwest's routes feeding AA's international routes, that would be brilliant. AMR could sell off their domestic market to Southwest and a whole new model would be born.

... and the ego-clash of upper management re: how to deal with employees may even be comical to watch.

 

[BoeingBoy]

which is why the bottom line RASM or CASM number matters...

Geez, is there an echo in here. That's what I said to start with - omitting a bunch of stuff distorts the picture. But you wanted to use mainline only and then exclude stuff from even that to make DL's CASM number look as low as possible.

Jim

 

[eolesen]

... and the ego-clash of upper management re: how to deal with employees may even be comical to watch.

No, I'm not so sure about that, Frank. Assuming that TPG were backing the deal, they'd have a pretty strong hand in who the successor management is going to be, and there won't be any ego clashes left to deal with. Unlike DL/NW and UA/CO, there won't be any pretense of a merger of equals to contend with.

Won't name names, but if there were a merger backed by TPG with a stronger brand name carrier, I'd expect a fair number of those who were in Arpey's inner circle prior to the filing to be gone once the restructuring is completed. Right now, some know where all the bodies are buried and are pretty valuable -- once the restructuring is done, they won't be necessary anymore. Others may just simply wind up as sacrificial lambs.

If there's a marriage with a weaker carrier, who knows what would happen. And I don't see TPG risking their money on an also-ran.

 

[WorldTraveler]

We could use any number of metrics.... but you were the one who argued that US' CASM number wasn't really fare because they didn't bother to exclude insourcing (maybe because no one really pays US to insource?) and you also thought that US preferred to skew their CASM because of their higher percentage of RJ flying.....

So, let's just compare the consolidated CASM (ex-nothing - throw it all in there) and we'll see that DL's was 14.12 for the year 2011 and US' was 14.68.....
ok so we could let you argue that the stage length adjustment might account for some difference, but don't you think it should all wash out in the final profit numbers, Jim?
On the same basis that ANY TWO companies would be compared, for 2011,
US reported an operating profit margin of 3.2% and a net profit margin of 0.5% - that's 1/2 of one percent, Jim
WN was 4.4 and 1.1, respectively AND
DL was 5.6 and 2.4.

So you can argue all you want about why including this metric or not matters or not but at the end of the day, US came up in a pretty wretched position in terms of costs.... far below DL and UA (which I didn't report but which had comparable stats to DL), AS and B6, and even WN which is tripping over some serious merger bumps.
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And yet it is US that is trying to tell us why they should be allowed to not only touch but take home some of the crown jewels in the industry - and why anyone with half an ounce of common sense can see that US just doesn't stack up, no matter what metric you use.
And worse yet, US can't really come up w/ a good reason on why they are underperforming so badly - so they just make up stuff like they have some of the most profitable hubs and they are generating profits on par with their peers - when anyone with two eyes connected to a semi-educated brain can see those claims are nowhere true.
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I'm sure we'll continue to have nitwits in the press and a few gullible people here think US can actually save someone else, but how about you just admit that US can't possibly compare to any other non-BK airline in the industry.

Eric is absolutely right in that most of the US leadership wouldn't be given the time of day for a meeting if BA and TPG were to dump billions into AA.... they've got more than enough to worry about protecting their investment in AA... they sure don't have time to take on US and its decades long inability to produce industry acceptable financials.

 

[Buck]

... and the ego-clash of upper management re: how to deal with employees may even be comical to watch.

How to deal with the mechanic and related, when Goliath (TWU) clashes with David (AMFA) ?

 

[swamt]

An AA-WN linkup isn't too far fetched. The domestic network by itself might not have any unique value, but WN's customer base does. And it's no secret that WN is looking beyond the US...

Put WN into AAdvantage and oneworld, and both DL & UA might have to redefine what it means to be in a new world of hurt.



Wrong.

They can operate from DFW the moment they stop serving DAL, and a gate limited DAL may not be too hard to part with if they could walk in the door at DFW with 80% of the market.

Once the W/A goes away SWA can in fact operate out of DFW. However, SWA would have to release a gate at DAL for every gate operated out at DFW. But SWA would not have to shut down DAL just to start operations at DFW.

 

[BoeingBoy]

So, let's just compare the consolidated CASM (ex-nothing - throw it all in there) and we'll see that DL's was 14.12 for the year 2011 and US' was 14.68.....

Finally...

You seem to be under the mistaken impression that I'm defending US or claiming it's CASM is uber low. That's not the case at all. I was just pointing out the amount of manipulation that airlines go to to present a pleasant, but less than complete picture.

I like the idea that if a seat is marketed as a US (or DL/AA/UA/WN/B6/etc) seat then it should be included in the CASM calculation. And that the cost of providing every one of those seats should be part of the calculation too. As far as I'm concerned, omitting 16-18% of ASM's because "well...they're not really US seats" or the cost of fuel (why should our number be worse because we paid more for fuel???) is sleight of hand. Every big airline has operating expenses that aren't directly related to moving seats from A to B, but does that mean that that money doesn't go out the door? What's wrong with taking 100% of operating cost and dividing it by 100% of the ASM's for sale by the brand? To use your old signature line, what's wrong with "the whole truth?"

For the record, tying US and AA together is the 2nd worst thing that can happen to AA as far as I'm concerned. Well, maybe 3rd worst - I guess it's theoretically possible that AA could liquidate but I think that the odds of that are between "won't happen" and "definitely won't happen."

Jim

PS - WN's 2011 CASM was 12.41 cents.
PS#2 - US does do contract work for other carriers - every bigger carrier does. Not on the scale of DL or AA, but they do it.