Will AA declare bankruptcy?

[OldGuy@AA]

That's total B.S. Management have to be accountable to shareholders, bondholders and the Securities Exchange Commission.

Evidently they don't. This company has continued to lose money and demand concessions from their employees while giving bonuses and raises to management. Also their answer to everything is "Lower capacity". Even I know that in order for and airline to make money they have to fly. The BOD has looked on and done nothing. There is a saying that goes "You can't fire the team so you fire the coach." Well, the coach is still here and he is still losing. And yes, there have been numerous lies. Is charging customers for pillows and blankets your idea of "Taking care of our customers."? Is "Shared sacrifice" taking bonuses and raises and paying for them by raping and pillaging the union contracts? How many managers had to refinance or lose their house? Many union members did. How about BOD member David Boren quoted in the Tulsa World saying "We on the board of directors will never forget what the employees have done to save this company." After almost 4 years of negotiations on a contract I would say this is also a lie. The plan was to destroy the unions and to show losses so as to justify not giving anything back. The revenue numbers are huge and yet no profit. I will admit I know little about accounting practices but I sure wonder every quarter when the term "Special items" is used to erase any profit. The new catch phrase should be "Where's the money Arpey?"

 

[Bob Owens]

I know you're conditioned from birth to believe that NYC is the center of the universe, but it isn't....

Remember that when you start talking about how management has to please Wall Street. I believe that when people talk about Wall Street they are referring to the one in lower Manhattan.

Oh, and WN has been engaged in getting new facilities at their largest airports... or more appropriately, has made it clear that they expect them to be upgraded by the airports they serve. Either way, WN pays for it thru higher rent and landing fees.

Well thats a change, but are we talking about billion dollar deals? Usually what happens is AA builds it up, then bails when WN shows up, like ISP.

My house was built in 1930, I could probably make the arguement that I should tear it down and build a new one thats more efficient but if I told everyone else who I have to pay that they ahd to accept less for thier services so I could pay for building my new house I dont think I would get much buy in. Like I said for the last eight years you guys have argued that customers go by price alone, well they cant see the terminal when they are surfing the net and I dont think they chose one airline over another based on a building that they plan to spend less than an hour of their journey in.

 

[Bob Owens]

Airlines don't build new facilities these days because they want shiny new buildings. They build new terminals because what they had doesn't work anymore and doesn't allow them to continue to grow their business where it needs to grow.

In JFK they spent over a billion and ended up with fewer gates than they had before.

 

[Bob Owens]

Unfortunately, AA's nice new T-8 doesn't make AA's labor cost disadvantage go away. Every 18 months, AA's labor cost disadvantage costs it the equivalent of a new JFK T-8.

What labor cost disadvantage? The one that AA says it has but refuses to produce any evidence to back up? This is the same team that told us that by 2012 they would have so many white spaces in the dock plan that they would have to shed 1200 heads if they didnt have cheap enough labor to attract 3P work, well they've been increaseing head count and there arent any white spaces to fill with 3P work

Despite operating from two dilapidated terminals at JFK, AA made record profits in the late 1990s prior to announcing its new Terminal 8 in early 1999. AA was distributing about $300 million a year on average in profit sharing to the employees. Spending one year's profit to build the new JFK T-8 didn't seem like such a bad decision in early 1999 - but with the benefit of hindsight, perhaps AA could have economized a bit.

And we were paid much more in real terms and had more gates.

I think DL's management is brilliant - don't know or care what you think of them.

Then why did you respond?

But according to your reasoning, they must be pretty stupid to spend $1.2 billion to replace their third world toilet of a terminal. Why spend that money when the customers will show up anyway?

Exactly, people will remember how they were treated by the employees more than how new the terminal is. Grand Central Terminal. has been around a lot longer but we dont see any moves towrds tearing in down and putting up yet another white steel and glass Cathedral.

I've been in some pretty nice WN terminals in CHI, BWI and PHX. WN's new half billion dollar, 20-gate terminal at DAL should be impressive.

Perhaps, but we dont see WN crying poverty to their employees as they build their status symbol.

 

[WorldTraveler]

In JFK they spent over a billion and ended up with fewer gates than they had before.

Bob,
anyone who has read this forum knows I have been particularly critical of AA in NYC....
but there are factors that should be considered....
AA and DL were both talking about new terminals at JFK before 9/11... the Port Authority had said even then it wanted to replace all of the original terminals.
AA managed to get a deal done before 9/11 while DL did not.
Obviously post 9/11, AA decided it didn't make sense to build out what they had originally planned back in the late 90s when aviation was doing very well and US airlines were posting record profits - across the board.
AA's decision to downsize its terminal project left what was going to be built disproportionately expensive.... it has also pushed AA's passenger service costs at JFK well above average for US airline projects which in turn makes it much harder for AA to compete in low cost carrier and short haul markets from JFK. Those terminal costs do make more sense for a long-haul domestic or int'l gateway but ultimately AA needs more people to use the terminal it has built and potentially if they do expand it the overall costs will go back down.
.
AA's overall costs have hurt its ability to compete in the NYC market and it is absolutely fair to say that DL used its cost savings from BK to focus the vast majority of its expansion efforts on the NYC market where it has doubled its size in 5 years - and when the slot deal is implemented (assuming final approval), DL's advantage over AA will grow further.
.
Neither of those circumstances that have helped DL are not things that AA could have replicated Evegiven the terminal commitments had already been made. Even if AA had filed for BK, airport facility costs are rarely reduced - at least for the passenger terminal.
AA's JFK terminal was built based on how the industry looked pre 9/11 and the industry looks very different now, as does AA's position in the industry.
Terminals are 30-40 year investments, though, so AA is well-positioned at JFK from a facility standpoint for a number of years to come.
.
Further, DL's facility costs at JFK will reflect 10 additional years of inflation compared to what AA spent and DL's commitment at JFK is far from what will be needed to finish the project.
.
Again in comparing to WN, they do not fly widebodies, do not have int'l flights that require more complex terminals, and will likely never build their own facility in NYC where the cost of construction is much higher than it is in other parts of the country.
Just for comparison, NW built its entire new DTW terminal complex (about 150 gates, half of which are mainline capable and half are RJ capable) not too many years ago for about the same amount of money on an inflation adjusted basis - and perhaps less - than what AA has spent at JFK or what DL will spend for 1/4 of that many gates.
But NYC is the largest market in the country and the largest int'l market; if AA or any other carrier wants to compete in that market, they must have the facilities.

 

[strikeforce]

ONE[/b] case of management fraud at AA where someone from management was tried and convicted. C'mon, I dare you! Your comments about "lies" are nothing more than opinion.

management didn't work out a deal with the unions, the deal was shoved down our throats. It was more like "you either give us the savings or we will take it in BK". That's not how deals are made. The AMT's were under contract til 2004. AA unilaterally decided to break our contract. That's certainly a sore spot for me, and it still brings heartache and anger over how management did it.

As far as "holding their end of the bargain", show me where management "shared" in the sacrifice?? Show me where management took it in the shorts for 8 years??? Show me where management has made AA an efficient and highly profitable company???? I mean, I'm still working under the 2003 deal....and the company is still losing hundreds of millions per qtr. So, in theory, nothing has changed since 2003, except my pay, right??? Look, WE were sold a rotten bill of goods in 2003, and it was done under duress, deceit and lies. Now, whether this was a conspiracy between union and company, or just company with the unions' blessing, but the employees of this company were screwed, and it was done unfairly, and with malice. This is the reason for the hatred and anger towards management. The trust between employee and employer is broken.

Tried and convicted for fraud.....I don't have to prove fraud. Carty's quick departure after the union's found out about the SERP proves guilt. Carty tried to pull a fast one and got caught. Period. What else can I say???

 

[Jacobin777]

Evidently they don't. This company has continued to lose money and demand concessions from their employees while giving bonuses and raises to management. Also their answer to everything is "Lower capacity". Even I know that in order for and airline to make money they have to fly. The BOD has looked on and done nothing. There is a saying that goes "You can't fire the team so you fire the coach." Well, the coach is still here and he is still losing. And yes, there have been numerous lies. Is charging customers for pillows and blankets your idea of "Taking care of our customers."? Is "Shared sacrifice" taking bonuses and raises and paying for them by raping and pillaging the union contracts? How many managers had to refinance or lose their house? Many union members did. How about BOD member David Boren quoted in the Tulsa World saying "We on the board of directors will never forget what the employees have done to save this company." After almost 4 years of negotiations on a contract I would say this is also a lie. The plan was to destroy the unions and to show losses so as to justify not giving anything back. The revenue numbers are huge and yet no profit. I will admit I know little about accounting practices but I sure wonder every quarter when the term "Special items" is used to erase any profit. The new catch phrase should be "Where's the money Arpey?"

Now you seem to be saying that management have been lying to their their accountants (or are colluding with them) and are lying to the S.E.C., etc. Your version of "lying" is nothing more than opinion. Purposefully "destroying" a company and screwing shareholders, bondholders, employees is simply garbage and ludicrous - not to mention highly illegal. You're fooling yourself if you think otherwise.

The argument of "AA management screwed the employees over and handed themselves generous bonuses while running the company to the ground" is getting stale/old/trite and is misguided at best and total b.s. at worst.

What Mr. Boren said was correct in proper context. It still doesn't mean management is "screwing" employees.

management didn't work out a deal with the unions, the deal was shoved down our throats. It was more like "you either give us the savings or we will take it in BK". That's not how deals are made. The AMT's were under contract til 2004. AA unilaterally decided to break our contract. That's certainly a sore spot for me, and it still brings heartache and anger over how management did it.

As far as "holding their end of the bargain", show me where management "shared" in the sacrifice?? Show me where management took it in the shorts for 8 years??? Show me where management has made AA an efficient and highly profitable company???? I mean, I'm still working under the 2003 deal....and the company is still losing hundreds of millions per qtr. So, in theory, nothing has changed since 2003, except my pay, right??? Look, WE were sold a rotten bill of goods in 2003, and it was done under duress, deceit and lies. Now, whether this was a conspiracy between union and company, or just company with the unions' blessing, but the employees of this company were screwed, and it was done unfairly, and with malice. This is the reason for the hatred and anger towards management. The trust between employee and employer is broken.

Tried and convicted for fraud.....I don't have to prove fraud. Carty's quick departure after the union's found out about the SERP proves guilt. Carty tried to pull a fast one and got caught. Period. What else can I say???

1)If you make an accusition of fraud, then prove it, otherwise you are full of hot air..
2)We're not even remotely discussing Carty. How about discussing the current situation , ie.-with the current management.
3)Nothing was shoved down anyone's throat - reality is reality. You can put any spin on it. AA needed to cut costs, and VERY fast.
4)Your comment of "under duress, deceit and lies" means management intentionally deceived you..if that is true then why hasn't even ONE union official/group filed a suit or have reported it to the proper authorities?
5)If your own union head/leaders are screwing you then (or a in collusion with management) then that says something about your unions as well. That being said, I highly doubt there is any form of collusion going on.
6)Why do you believe its only you people who are getting "screwed". Tens of millions of people have gotten fired the past few years. At least you have a job.

I don't know what reality some people live in, but its certainly not on this planet.

 

[toroshark]

The reality is that Arpey was one of the lead negotiators for concessions in 2003. He was one who also benefited from the SERP and other such nonsense yet Carty fell on the sword and AA promoted someone who was way more involved in the BS to begin with. Anyone who did not recognize at that point shared sacrifice was a scam at that point is not very sharp. AA has and will continue to lie, cheat , and steal from the employees till the end of it's tenure as a operational airline.

 

[strikeforce]

Now you seem to be saying that management have been lying to their their accountants (or are colluding with them) and are lying to the S.E.C., etc. Your version of "lying" is nothing more than opinion. Purposefully "destroying" a company and screwing shareholders, bondholders, employees is simply garbage and ludicrous - not to mention highly illegal. You're fooling yourself if you think otherwise.

The argument of "AA management screwed the employees over and handed themselves generous bonuses while running the company to the ground" is getting stale/old/trite and is misguided at best and total b.s. at worst.

What Mr. Boren said was correct in proper context. It still doesn't mean management is "screwing" employees.




1)If you make an accusition of fraud, then prove it, otherwise you are full of hot air..
2)We're not even remotely discussing Carty. How about discussing the current situation , ie.-with the current management.
3)Nothing was shoved down anyone's throat - reality is reality. You can put any spin on it. AA needed to cut costs, and VERY fast.
4)Your comment of "under duress, deceit and lies" means management intentionally deceived you..if that is true then why hasn't even ONE union official/group filed a suit or have reported it to the proper authorities?
5)If your own union head/leaders are screwing you then (or a in collusion with management) then that says something about your unions as well. That being said, I highly doubt there is any form of collusion going on.
6)Why do you believe its only you people who are getting "screwed". Tens of millions of people have gotten fired the past few years. At least you have a job.

I don't know what reality some people live in, but its certainly not on this planet.

It doesn't matter to me what you remotely believe happened in 2003. As an employee for 21 years I don't trust management and frankly speaking, I don't trust the union leadership either.

Reality is AMR and it's CEO at the time, withheld SERP information from the membership.....that's factual based on a letter from Jim Little to the membership dated April 17, 2003. Now, whether the union and management colluded to intentionally withhold this information is irrelevant, but it would of had enormous ramifications on the vote outcome if the membership had known that management was protecting 45 senior executives while we got raped.

Look, I don't know what planet you live on, but the reality is...workers throughout this country are under attack by corporate america. If corporate america finds it morally and ethically acceptable to breaking union contracts and raping it's own employees, so be it, but then don't expect those same employees to have a positive attitude, good morale and jump thru hoops to take good care of it's customers. It's not going to happen!

As an AMT, I hold enormous responsibilities to the flying public by doing my job professionally and to the letter. While AA can hurt me financially, it can never take away my A&P.....and that my friend is the only thing that will allow me to get another job when AA goes under like TWA, Pan AM, Eastern, Braniff, and numerous other airlines. It's not a question of if, but when AA goes under. But, One thing is for SURE.....I will not financially harm my family by voluntarily providing this company with more concessions. So, let's stop beating around the bush and let's go see the judge! Game On!

 

[DNTULSA]

Hey Jacobin,

Where is your cubicle located?

If you badmouth labor enough, will it save your job when the layoff comes?

 

[imwithstupid]

Hey Jacobin,

Where is your cubicle located?

If you badmouth labor enough, will it save your job when the layoff comes?

50% within 2 years or when the B happens.

 

[olderguyAMT]

Now you seem to be saying that management have been lying to their their accountants (or are colluding with them) and are lying to the S.E.C., etc. Your version of "lying" is nothing more than opinion. Purposefully "destroying" a company and screwing shareholders, bondholders, employees is simply garbage and ludicrous - not to mention highly illegal. You're fooling yourself if you think otherwise.
The argument of "AA management screwed the employees over and handed themselves generous bonuses while running the company to the ground" is getting stale/old/trite and is misguided at best and total b.s. at worst.
What Mr. Boren said was correct in proper context. It still doesn't mean management is "screwing" employees.
1)If you make an accusition of fraud, then prove it, otherwise you are full of hot air..
2)We're not even remotely discussing Carty. How about discussing the current situation , ie.-with the current management.
3)Nothing was shoved down anyone's throat - reality is reality. You can put any spin on it. AA needed to cut costs, and VERY fast.
4)Your comment of "under duress, deceit and lies" means management intentionally deceived you..if that is true then why hasn't even ONE union official/group filed a suit or have reported it to the proper authorities?
5)If your own union head/leaders are screwing you then (or a in collusion with management) then that says something about your unions as well. That being said, I highly doubt there is any form of collusion going on.
6)Why do you believe its only you people who are getting "screwed". Tens of millions of people have gotten fired the past few years. At least you have a job. I don't know what reality some people live in, but its certainly not on this planet.

Even with Sarbanes-Oxley Act of 2002 made the CEO accountable to the facts presented in SEC filings along with an accounting oversight funcion from the BOD. The CFO has many options in accounting methods and they are all legal. Loopholes still exist and relevent facts that would benefit unions are still not being reported. Is there detail explaining all the special items? NO. because they don't have to explain it all. Do your DD and you will be suprised at the differnet legal accounting tactics used by public companies today! All this speculation is the result of top mgmt blowing smoke and side-stepping questions asked because the truthful answers would benefit the unions in contract negotiations.

 

[Jacobin777]

It doesn't matter to me what you remotely believe happened in 2003. As an employee for 21 years I don't trust management and frankly speaking, I don't trust the union leadership either.

Reality is AMR and it's CEO at the time, withheld SERP information from the membership.....that's factual based on a letter from Jim Little to the membership dated April 17, 2003. Now, whether the union and management colluded to intentionally withhold this information is irrelevant, but it would of had enormous ramifications on the vote outcome if the membership had known that management was protecting 45 senior executives while we got raped.

Look, I don't know what planet you live on, but the reality is...workers throughout this country are under attack by corporate america. If corporate america finds it morally and ethically acceptable to breaking union contracts and raping it's own employees, so be it, but then don't expect those same employees to have a positive attitude, good morale and jump thru hoops to take good care of it's customers. It's not going to happen!

As an AMT, I hold enormous responsibilities to the flying public by doing my job professionally and to the letter. While AA can hurt me financially, it can never take away my A&P.....and that my friend is the only thing that will allow me to get another job when AA goes under like TWA, Pan AM, Eastern, Braniff, and numerous other airlines. It's not a question of if, but when AA goes under. But, One thing is for SURE.....I will not financially harm my family by voluntarily providing this company with more concessions. So, let's stop beating around the bush and let's go see the judge! Game On!

I don't think what AA does as a corporation should affect the way you do your job anyway, regardless of what you think AA is doing. There is a basic code of ethics and responsibility. Fortunately it seems you believe in that as well (we finally agree on something!).

If Carthy was a complete fraud, he would have been 1)fined 2)jailed 3)prevented from running another company -yet he's running AA's competitor Virgin America (bit ironic). Unethical and fraud are two different situations. What Carthy did (and what most management IMHO do is unethical).

The reality is that union employees are going way of the "dodo-bird" per se (or should we say black and white tv's.-once important but now obsolete).

"American union membership in the private sector has in recent years fallen under 9% — levels not seen since 1932. Unions allege that employer-incited opposition has contributed to this decline in membership."

http://en.wikipedia.org/wiki/Labor_unions_in_the_United_States

You can put any spin on it, but the bottom line is AA's costs are well above its peers. Its really that simple. I understand everything is not a "numbers game", but at some point, numbers do matter.

Again, I'm not the biggest fan of AA management either, but when practically every single analyst states that AA's cost structure is just too high compared to its peers, well there is definitely merit to it.

Hey Jacobin,

Where is your cubicle located?

If you badmouth labor enough, will it save your job when the layoff comes?

1)I have no cubicle.
2)I've never had a cubicle.
3)I'm my own boss so I can fire and rehire myself at my own whim... 😀 😛

 

[Frank Szabo]

deleted

 

[Hopeful]

.

Again, I'm not the biggest fan of AA management either, but when practically every single analyst states that AA's cost structure is just too high compared to its peers, well there is definitely merit to it.

Oh you mean the same analysts who were pumping all the big banks prior to the mortgage mess?