Why Not Restore and More?

[FWAAA]

Bob,

I have no dog in this fight. But you have to look at profits, not revenue. You can have all the revenue (money comming in)you want, but if you don't have profits (money going in-money going out) its pretty moot.

Nonsense. 😀

As usual, he picks and chooses which numbers to accept. Apparently, he trusts the company's revenue numbers and employment figures when it suits his purposes. Contrast that to this recent post of Bob's:

Who says a loss has to be made up? A "loss" is not based in cash. Write downs, write offs, depreciation and scores of other legal accounting gimmicks allow corporations that are revenue positive to show losses.

http://www.usaviation.com/forums/index.php...st&p=650237

He's made similar sounding posts dozens of times over the past six years.

Why should it matter that AMR's fuel bill has soaked up most of the increased revenues? 😀 Revenue is up and wages are down and in Simplisticville, that's justification enough to ignore the rest of the financials.

Year.............Fuel cost (in millions of $$, net of hedging gains/losses)

2003.............2,772
2007.............6,670
2008.............7,195 (Jan 1 - Sep 30)

Note that the 2008 fuel bill is for the first nine months only - we can probably add another 1,500 to 2,000 for the fourth quarter.

I'd like to see the maintenance personnel recover much of their concessions. But threads like this (and the OP's premise) demonstrate, in part, why the company has had such an easy time exerting dominance over the TWU for so long.

 

[frontline]

I agree that revenue is barely relevant. Profits are what matter. And that's why I still think that everyone's payouts/bonuses/whatever should be tied to that. I don't mind the execs getting a cut, as long as we're all getting a cut.

As for why not restore and more, labor costs are still on the high side. Thank god oil is way down, and if it stays down that might give AA some room to maneuver and give us a better offer than the last one. At end of the day though, AA is still competing with the "new LCCs" like JetBlue and Virgin America. Their labor costs are substantially less than the legacies.

 

[Bob Owens]

Nonsense. 😀

As usual, he picks and chooses which numbers to accept. Apparently, he trusts the company's revenue numbers and employment figures when it suits his purposes. Contrast that to this recent post of Bob's:

I trust those numbers from the 10K because they are probably the most reliable numbers there.

I'd like to see the maintenance personnel recover much of their concessions. But threads like this (and the OP's premise) demonstrate, in part, why the company has had such an easy time exerting dominance over the TWU for so long.

Nonsense FWAAA and you know it.

Its funny how the management types claim that revenue means nothing when it suits them. Admittedly revenue doesnt tell us everything, but in this case it tells us what we need to know. They choose to ignore the fact that productivity is based upon revenue, not profits because profits are easily manipulated , especially in the downward direction, thus not a reliable standard.The fact is that AA brought in nearly $7billion more,with 24100 less employees, nearly all of it from operations and not the sale of assetts etc. Thats a staggering increase in productivity and increased productivity usually means increased compensation for those more productive workers. At least that was always the promise of our Capitalist system.

The fact is that despite what FWAAA claims he would like for us the less we get for our labor the more he will likely make off of it . IIRC he has admitted that he has made money off AA stock and obviously hopes to do it again. An increase in revenue of $7 billion with 24100 less employees is good news for a company even if much,but not all, of it was consumed by a volitile commodity that has since gone down dramatically. Oil is now down almost 2/3s from its high.

 

[Bob Owens]

Last year at this time oil was $86.92 a barrel. On friday Bloomberg listed oil as low as $51 a barrel , around $36 a barrel cheaper.

What was that figure the company gave when oil was going up? "For every penny oil goes up it costs AA ?millions a year more".

 

[FWAAA]

I trust those numbers from the 10K because they are probably the most reliable numbers there.

Nonsense FWAAA and you know it.

Its funny how the management types claim that revenue means nothing when it suits them. Admittedly revenue doesnt tell us everything, but in this case it tells us what we need to know. They choose to ignore the fact that productivity is based upon revenue, not profits because profits are easily manipulated , especially in the downward direction, thus not a reliable standard.The fact is that AA brought in nearly $7billion more,with 24100 less employees, nearly all of it from operations and not the sale of assetts etc. Thats a staggering increase in productivity and increased productivity usually means increased compensation for those more productive workers. At least that was always the promise of our Capitalist system.

Actually, it doesn't evidence an increase in productivity - it represents a return to the pre-September 11, 2001 productivity. From 9/2001 thru 5/2003, AA employees were very unproductive, based on revenue per employee, because of the huge dropoff in yield that accompanied the terrorist attacks. What looks like a huge increase in productivity for 2008 only looks large when measured against artificially low numbers for that year and a half of dismal numbers.

The fact is that despite what FWAAA claims he would like for us the less we get for our labor the more he will likely make off of it . IIRC he has admitted that he has made money off AA stock and obviously hopes to do it again. An increase in revenue of $7 billion with 24100 less employees is good news for a company even if much,but not all, of it was consumed by a volitile commodity that has since gone down dramatically. Oil is now down almost 2/3s from its high.

So you call me a liar with absolutely no evidence or proof of your claim. Nice one, Bob. I'm the only poster here (other than eolesen, who matched my offer) who has pledged money to help you free yourself from the retards who negotiate on your behalf. But instead, you and your co-workers hold but one failed card drive to try to free yourself from the worthless union - a union of unskilled NYC bus and subway drivers. You're professional aircraft mechanics yet your union is made up of bus and subway drivers, WN flight attendants and agents, and your fellow bag smashers at AA. I see only one group of skilled labor there - and that's the professional mechanics at AA.

As for the AMR stock, Bob, that was 2003-2007 as the stock rose from $1.25/sh to $41. Those days are long gone and unlikely to return. Doesn't matter how much or how little the AA employees get in their negotiations, I won't be in a position to profit (or lose money) from your pay.

In 2003, it was obvious that Arpey would not file Ch 11 unless the concessions failed. It was also pretty clear that the concessions would be imposed, by hook or by crook. Making a killing on AMR from early 2003 to early 2007 was the easiset gamble ever.

As I've posted before, it's a shame the employees who suffered the concessions weren't willing to tag along. The $120k of concessions (your number, posted often the past 5.5 years) could have been recovered simply by buying 3,500 shares @ $5.00 each (market price the day of the concessions - same as the option price) and holding until January 2007, less than four years later. Had you guys bought prior to the date of the concessions, you could have made a lot more money, as AMR traded between $1.25 and $3.00 for most of January thru April of 2003. And that ignores the options you were given in the "sorry 'bout the deception" attempt at making nice.

What was that figure the company gave when oil was going up? "For every penny oil goes up it costs AA ?millions a year more".

Dunno, but AMR will use about 2,800 million gallons this year, so each penny of price movement in jetA price means $28 million for AMR over the full year. A dollar equals $2.8 billion of extra expense or profit, as the case may be.

 

[Bob Owens]

Actually, it doesn't evidence an increase in productivity - it represents a return to the pre-September 11, 2001 productivity. From 9/2001 thru 5/2003, AA employees were very unproductive, based on revenue per employee, because of the huge dropoff in yield that accompanied the terrorist attacks. What looks like a huge increase in productivity for 2008 only looks large when measured against artificially low numbers for that year and a half of dismal numbers.

You are contradicting yourself there. Was productivity better in 2008 than it was in 2003 or not?If productivity was lower in 2003 than it was prior to 9/11/01 and it has since returned to the higher level then it went up.

I think that that statement is flawed in its entirety since our headcout is back to where it was in the late 1990s but our revenue is much much higher than it ever was.

But instead, you and your co-workers hold but one failed card drive to try to free yourself from the worthless union

There have been several card drives, only one filing for a vote.

As for the AMR stock, Bob, that was 2003-2007 as the stock rose from $1.25/sh to $41. Those days are long gone and unlikely to return. Doesn't matter how much or how little the AA employees get in their negotiations, I won't be in a position to profit (or lose money) from your pay.

In 2003, it was obvious that Arpey would not file Ch 11 unless the concessions failed. It was also pretty clear that the concessions would be imposed, by hook or by crook. Making a killing on AMR from early 2003 to early 2007 was the easiset gamble ever.

So you admit you did profit from our demise.

As I've posted before, it's a shame the employees who suffered the concessions weren't willing to tag along. The $120k of concessions (your number, posted often the past 5.5 years) could have been recovered simply by buying 3,500 shares @ $5.00 each (market price the day of the concessions - same as the option price) and holding until January 2007, less than four years later. Had you guys bought prior to the date of the concessions, you could have made a lot more money, as AMR traded between $1.25 and $3.00 for most of January thru April of 2003. And that ignores the options you were given in the "sorry 'bout the deception" attempt at making nice.

And what makes you think your average airline worker has $17500 laying around? I bought what I could and sold it to pay back the money I borrowed to buy it. Sure I more than doubled my money but I still lost a lot more through concessions than I made with the stock. Besides thats a BS line anyway, how would you like it if someone told you that you should take a paycut but if you buy a bunch of stock you might be able to recover some of it? Why not just tell people "instead of asking for a raise just buy lottery tickets"? Its the same thing. What we should be getting for our labor has nothing t do with the stock.

 

[WeAAsles]

Nonsense. 😀

As usual, he picks and chooses which numbers to accept. Apparently, he trusts the company's revenue numbers and employment figures when it suits his purposes. Contrast that to this recent post of Bob's:



http://www.usaviation.com/forums/index.php...st&p=650237

He's made similar sounding posts dozens of times over the past six years.

Why should it matter that AMR's fuel bill has soaked up most of the increased revenues? 😀 Revenue is up and wages are down and in Simplisticville, that's justification enough to ignore the rest of the financials.

Year.............Fuel cost (in millions of $$, net of hedging gains/losses)

2003.............2,772
2007.............6,670
2008.............7,195 (Jan 1 - Sep 30)

Note that the 2008 fuel bill is for the first nine months only - we can probably add another 1,500 to 2,000 for the fourth quarter.

I'd like to see the maintenance personnel recover much of their concessions. But threads like this (and the OP's premise) demonstrate, in part, why the company has had such an easy time exerting dominance over the TWU for so long.

Now lets see. I wonder what AMR's future fuel bills going to be now that oil is almost at $50 a barrel? What smart or dumb fuel hedges are they going to make in regards to future spikes. Will the morons sell there hedges to Southwest again?

FWAA we're in a very different environment today with a much larger stick to fight the Co. with (OBAMA) Bye Bye Bushy. Capacity has been cut and the plans are to reduce it even further to continue to keep revenue high even with a stalling economy.

Management has reaped the rewards for the last 5 years. They can offer us anything they want now but if we reject it and it's the first fight to go before a new labor friendly arbitration panel how do you think it's going to turn out? :unsure:

 

[eolesen]

Not so fast, Weasly.

Stick around for a week or three to see how the Dems treat the UAW before you start making bold assumptions about what an Obama administration will be willing to do with an airline strike.

 

[ibtproud]

Not to talk apples and oranges but CAL just offered its ramp as of Jan 09. a 2.5% raise a 1/hr dollar raise as regional pay to 10 coastal cities, a 401k match that goes along with their pension. Also highlights are longevity pay as well more to come but isnt that a bit more AAs ramp was willing to settle for?

Will the TWU ever help other unions get ahead, or is it dwarfed by company men and a lap dog INTL. Cal amts go into talks Dec 10th! We need to restore this profession or leave it ! So whats it going to be?

 

[WeAAsles]

Not so fast, Weasly.

Stick around for a week or three to see how the Dems treat the UAW before you start making bold assumptions about what an Obama administration will be willing to do with an airline strike.

You're going to compare an average pay of $76 to what we make? You really are one loony bugger buddy.

 

[bravozulu@afw]

Hey! Does anyone remember in 2003 a little loan from Citi Bank for $7 to $10 BBillion? One of the conditions of that loan was "No increasing/enriching the labor contracts for EIGHT YEARS"!

I vaugely hearing this lapsus linguae escape from the lips of a Finance Wizaard at HDQ!!!!

Does this mean NO CONTRACTS until 2011??? Are we (TWU APA & APFA) just trying to move a rubber tree plant, with just 3 ANTS!!!

 

[FWAAA]

Hey! Does anyone remember in 2003 a little loan from Citi Bank for $7 to $10 BBillion? One of the conditions of that loan was "No increasing/enriching the labor contracts for EIGHT YEARS"!

Nope. No such loan exists.

I vaugely hearing this lapsus linguae escape from the lips of a Finance Wizaard at HDQ!!!!

Does this mean NO CONTRACTS until 2011??? Are we (TWU APA & APFA) just trying to move a rubber tree plant, with just 3 ANTS!!!

Nope. Your vague recollection is not quite accurate. AA's lenders agreed to help out as long as AA got 6 year (later reduced to five year) contracts.

 

[Hopeful]

Nope. No such loan exists.



Nope. Your vague recollection is not quite accurate. AA's lenders agreed to help out as long as AA got 6 year (later reduced to five year) contracts.

LATER REDUCED TO 5 YEARS??????????

IT WAS A SIX YEAR CONTRACT 1995-2001..... 6 1/2% OVER 6 SIX YEARS......

 

[FWAAA]

So you admit you did profit from our demise.

No, I profitted because others were willing to sell their stock for just over a dollar a share and I took that gamble. I've never denied that.

It recovered in large part because AA managed to impose more than $8 billion of concessions on the represented workgroups over five years.

And what makes you think your average airline worker has $17500 laying around? I bought what I could and sold it to pay back the money I borrowed to buy it. Sure I more than doubled my money but I still lost a lot more through concessions than I made with the stock. Besides thats a BS line anyway, how would you like it if someone told you that you should take a paycut but if you buy a bunch of stock you might be able to recover some of it? Why not just tell people "instead of asking for a raise just buy lottery tickets"? Its the same thing. What we should be getting for our labor has nothing t do with the stock.

Where to begin?

I can understand a recent high school, trade tech school or college grad not having $20k to rub together. But you've been at AA for more than 20 years, right? You don't have to save very much each year to build a sizable cash balance. Don't the finance experts recommend keeping a savings account with a few months worth of expenses? How the hell would you endure a long strike if you don't have any savings?

On top of that, you and the other AMTs are anything but the "average airline worker." Prior to the concessions, base pay was more than $70k plus the several thousands of 2.5 holiday pay you keep talking about plus whatever overtime you grabbed. Be very surprising if the average AA AMT W-2 showed much less than $90k. Substantially more than many people earn. Only the pilots and management made more than that. FAs, agents, fleet service, etc. all earned substantially less.

And even for those living beyond their means without any cash in the bank - all they'd have to do is sell one or two of their typical toys (dually, bass boat, RV, etc) and they'd have $20k plus.

I agree that no one should have to gamble, particularly with their employer's stock, to make a decent living. But as I've posted before, you all decided to "invest" the $120k or so of concessions in your job - evidenced by the fact that you kept working for AA and didn't pursue any of the oft-repeated better opportunities out there. Against that investment in your job, throwing an extra $20k into the pot would have been a good idea. Sort of like laying odds on the craps table. All the $120k got you was a no-bankruptcy employer. Another $20k would have meant $140k in profit by January, 2007, more than recovering the concessions.

And you shouldn't have had to do it. But your worthless bus drivers' union wasn't going to negotiate a proper profit-sharing or win-together agreement with management, so you were on your own. And I don't expect management to do it for you, since that's your union's job. A gain of 8 times your money in less than four years will probably never happen again. Especially given that so many executives have no qualms filing Ch 11, except, so far, Gerard Arpey. Among airline execs, he's sorta one of a kind in that respect.

Back to the topic: Looks like revenue is going to take a dive, as today's news reveals that paid biz and first travel was way off in September compared to 2007:

According to the International Air Transport Association, business- and first-class ticket buyers fell 8% in September from a year ago, far deeper than the decline of 1.5% seen during August. The sharpest decline occurred in the Middle East with a 14% slump, while business travel of the North Atlantic slipped 2%.

Premium-priced fares are airlines' red meat, often making up for below-cost sales to leisure and economy-class travelers. Fewer business travelers means carriers will have to fight harder for them, raising the potential for fare cuts and slower revenue growth.

http://www.marketwatch.com/news/story/busi...mp;siteid=yhoof

Link to full story about paid J and F dropping:

http://www.marketwatch.com/News/Story/airl...6DF9F713C441%7D

So even though oil is still dropping today (down to $54/bbl), airline stock prices are crashing even faster.

LATER REDUCED TO 5 YEARS??????????

IT WAS A SIX YEAR CONTRACT 1995-2001..... 6 1/2% OVER 6 SIX YEARS......

Calm down and re-read bravozulu@afw's post again. Looks like he's talking about the 2003 concession contract. Which was six years and then reduced to five years.

See how he mentions 2003 and mentions eight years and mentions 2011? Doesn't sound like a 1995 contract.

 

[FrugalFlyerv2.0]

FWAA we're in a very different environment today with a much larger stick to fight the Co. with (OBAMA) Bye Bye Bushy.

To paraphrase a certain "Reverend": don't count your chikinz ..... til they've come home .... to roost!