Will AA declare bankruptcy?

[Super FLUF]

A couple of interesting developments.

The LAX base chief is now telling pilots that if AA has to declare bankruptcy, the company will bypass Ch. 11 and go straight into liquidation. This hyperbole being spewed tells me upper management is getting desperate for ANYONE to buy into the BK threat.

The loss of 111 captains has left the company desperately short for October. They are now asking the union for relief and current 777 captains, 767 captains, and 737 captains to defer Sept. and Oct. vacations. The company is already enacting damage control as the Oct. bid sheets show a loss of around 25 777 lines and 25 767 lines. Latest numbers indicate 220 more captains will punch out Oct. 1st. The Nov. bid sheets will look real interesting when this many more leave.

No negotiations this week. Negotiations resume Monday in DCA with executive management at the table.

 

[odie01]

A couple of interesting developments.

The LAX base chief is now telling pilots that if AA has to declare bankruptcy, the company will bypass Ch. 11 and go straight into liquidation. This hyperbole being spewed tells me upper management is getting desperate for ANYONE to buy into the BK threat.

The loss of 111 captains has left the company desperately short for October. They are now asking the union for relief and current 777 captains, 767 captains, and 737 captains to defer Sept. and Oct. vacations. The company is already enacting damage control as the Oct. bid sheets show a loss of around 25 777 lines and 25 767 lines. Latest numbers indicate 220 more captains will punch out Oct. 1st. The Nov. bid sheets will look real interesting when this many more leave.

No negotiations this week. Negotiations resume Monday in DCA with executive management at the table.

Is this a rumor or did the company tell this to your negotiating committee? And why? Seems to me that the bankruptcy threat only accelerates the pilot retirements, and since they are asking for your help by defering vacations, they are cutting their own throat.

 

[Maark767]

A couple of interesting developments.

The LAX base chief is now telling pilots that if AA has to declare bankruptcy, the company will bypass Ch. 11 and go straight into liquidation. This hyperbole being spewed tells me upper management is getting desperate for ANYONE to buy into the BK threat.

The loss of 111 captains has left the company desperately short for October. They are now asking the union for relief and current 777 captains, 767 captains, and 737 captains to defer Sept. and Oct. vacations. The company is already enacting damage control as the Oct. bid sheets show a loss of around 25 777 lines and 25 767 lines. Latest numbers indicate 220 more captains will punch out Oct. 1st. The Nov. bid sheets will look real interesting when this many more leave.

No negotiations this week. Negotiations resume Monday in DCA with executive management at the table.

Right into chapter 7 ???? Never would happen, please! Thats a big fat untrue rumor!

 

[Mr Red]

Right into chapter 7 ???? Never would happen, please! Thats a big fat untrue rumor!

More AA pure B/S !!!

 

[eolesen]

Liquidation? I doubt that a qualified and informed member of management would be making that kind of statement, given the legalities involved...

And no, I don't consider a management pilot to be qualified or informed enough to make that type of statement any more than I'd expect a station manager or MOD at MOC or SOC to be able to.

That's not their job, and from firsthand experience with another carrier who actually declared bankruptcy, the number of people who would actually be "in the know" is probably a dozen or two at most, and most of them would be on the fifth (finance) or sixth (legal) floors, plus perhaps a few guys in purchasing & vendor relations.

The chief pilot in a base? My guess is they'd probably see a "breaking news" alert from CNN or Fox News on their iPhones before the company can roll out a Heads Up or Special Jetwire...

 

[Bob Owens]

1)I have no cubicle.
2)I've never had a cubicle.

Thats right, you have a stall.

 

[Bob Owens]

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.

Why not? After all those are probably the fastest rising costs after fuel that the carriers had.

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.

Well if you rip them down every 30 to 40 years dont tthey really just become 30 or 40 year expenses?

Again in comparing to WN, they do not fly widebodies,

Yes remember that when you cite labor costs. While widebodies dont require more Pilots they do require more mechanics, flight attendants and other ground workers.

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.

No they will let AA do that.

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.

My point, AA wastes money and then expects workers to make sacrifices to make up for it.

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.

They had them, before they blew over a Billion dollars on the new one, and they had more gates back then as well.

 

[Bob Owens]

A couple of interesting developments.

The LAX base chief is now telling pilots that if AA has to declare bankruptcy, the company will bypass Ch. 11 and go straight into liquidation. This hyperbole being spewed tells me upper management is getting desperate for ANYONE to buy into the BK threat.

The loss of 111 captains has left the company desperately short for October. They are now asking the union for relief and current 777 captains, 767 captains, and 737 captains to defer Sept. and Oct. vacations. The company is already enacting damage control as the Oct. bid sheets show a loss of around 25 777 lines and 25 767 lines. Latest numbers indicate 220 more captains will punch out Oct. 1st. The Nov. bid sheets will look real interesting when this many more leave.

No negotiations this week. Negotiations resume Monday in DCA with executive management at the table.

Things must be heating up a bit as the company gets more desperate for a deal with the pilots. I have to wonder if these guys who are bailing are playing into the company's hands though, Lets face it Sept and Oct are always dead travel months. If they would have done this in June or July it would have been something. I saw more empty seats last night, a Friday flying into NYC before the 10th Anniversary of Sept 11, than I've seen in nearly three years of pretty much weekly flying. I actually had a row to myself, unfortunately no GoGO though. Thats Domestic, but International has probably seen a similar fall off. What better excuse to cancell flights and jam the lighter loads onto fewer flights than a pilot shortage?

How long does it take for (I'm assuming) a 767 Captain to train and qualify to slide into a 777 and 757 to 767 etc etc? So all these senior guys bail, but they start dumping the MD-80s a little faster as guys move up, cancell mostly domestic flights which are unregulated, lightly loaded and unprofitable anyway, shrink the carrier a little more, use that as an excuse to close some of the smaller stations and gain a PR point in the contract campaign by annoncing a layoff. Moves that Wall Street has been calling for, making them happy for a change. By shrinking a little they temporarily alleviate the pressure that the shortages of Pilots and Mechanics is causing as well. (They have added over 300 mechanics this year with over one quarter left and a lot of guys waiting for their retro or a package to leave.) The question is does this cause Eagle to bump up against the ASM cap? (Not to worry the International will sign an LOA for a few more A-4s). Then again Eagle has its own problems as they will be hit by an even more severe pilot shortage.

I think the pilots got the company by the balls. They can say all they want about the economy, the "condition" of the company, Bankruptcy or any other thing you can dream up the fact is that they cant do anything without the pilots and even the DFW and MIA pilots are sounding more and more like the NYC pilots. They are fed up. New aircraft are coming, recalls are saying NO thanks and they have to raid the regionals to keep up their own schedules. The number of people looking to become a commerical Airline pilot has dropped by 2/3s. A lot of mechanics who used to moonlight at the Regionals as pilots simply work OT as mechanics because there's a shortage there as well. They make more money working OT as a mechanic than they would flying when you factor in all the time pilots put in but arent paid for. So thats even fewer pilots available. The company only has one thing on the pilots, and maybe I'm wrong, and thats the pension, but what good is a pension when you arent getting the right wage? Lets face it, pilots often die on the job, Its #3 as far as the most dangerous job, right behind Commercial Fishing and Logging, they may never see it.

http://pattyinglishms.hubpages.com/hub/Most_Dangerous_Jobs

 

[DNTULSA]

Gentlemen,

Have you ever noticed that we have several people posting on this board that do not work for AA, but know everything about the company?

They know more about AA than the people who work there. ( either union or company)

How can that be?

 

[WorldTraveler]

Why not? After all those are probably the fastest rising costs after fuel that the carriers had.



Well if you rip them down every 30 to 40 years dont tthey really just become 30 or 40 year expenses?



Yes remember that when you cite labor costs. While widebodies dont require more Pilots they do require more mechanics, flight attendants and other ground workers.



No they will let AA do that.



My point, AA wastes money and then expects workers to make sacrifices to make up for it.




They had them, before they blew over a Billion dollars on the new one, and they had more gates back then as well.

Bob,
terminal costs are relatively small costs... the cost of construction has increased, sure, but it still comes down to that if you want to serve a market, you have to spend the money to do so.
If a terminal is used for 40 years, then a $1B cost comes out to about $25M per year - plus interest.... not exactly a break the bank expense.
It isn't necessary to tear terminals down every 30-40 years - the ATL midfield complex and DFW are both in that "vintage" and both are functional, have received upgrades and renovations, and will continue to.
.

proportionate to the AMSs they can generate, widebodies are not more labor intensive. International widebodies generate far more ASMs and stay in the air far longer than narrowbody aircraft- and thus generate more revenue.
If "the math" didn't work to fly international routes, airlines would not pursue that segment. But the US airlines have increased their bottom lines significantly over the past 10 years by shifting more of their flying to int'l routes.

 

[Bob Owens]

When an airline builds a billion dollar terminal for pony they continue to pay rent because the port does not sell the land.

I agree that two mechanics working a widebody produce more ASMs than one working a narrowbody Remember that when you cite how much more productive you claim WN mechanics are.

 

[WorldTraveler]

Bob,
I have never compared productivity for any AA workgroup including maintenance to any other airline because I don't know the specifics of productivity at that level. I have said that overall, AA has way more people for its size that other airlines - but I do not know where the productivity issues are at AA.
I do know that AA's maintenance costs per ASM are about 25% above the industry average and about 60% higher than WN based on DOT data... and these numbers include all maintenance costs, regardless of whether outsourced or not.
There may be some validity to your point that AA's costs are higher because they do overhaul inhouse compared w/ other airlines - but then that means that AA's mechanics are not doing the job for rates that are competitive with the overall market.

 

[OldGuy@AA]

Bob,
I have never compared productivity for any AA workgroup including maintenance to any other airline because I don't know the specifics of productivity at that level. I have said that overall, AA has way more people for its size that other airlines - but I do not know where the productivity issues are at AA.
I do know that AA's maintenance costs per ASM are about 25% above the industry average and about 60% higher than WN based on DOT data... and these numbers include all maintenance costs, regardless of whether outsourced or not.
There may be some validity to your point that AA's costs are higher because they do overhaul inhouse compared w/ other airlines - but then that means that AA's mechanics are not doing the job for rates that are competitive with the overall market.

That's funny. Whenever AA has peddled heavy maintenance to other carriers and charged them much more per hour then they pay us themselves, there has never been a problem filling up the hangars. Fed Ex and Allegiant were happy to pay for our maintenance. AA ultimately decided they needed the hangar space and ended the contracts. Now explain to me why other airlines who apparently have lower maintenance costs are more than willing to pay AA for heavy work? Could it be that your claim (and AA's complaint of higher labor costs) are based on faulty numbers? If we are so overpaid, then how come Fed Ex and Allegiant were so willing to pay an even higher rate than American pays us? I know that AA charges around $80 per hour for contract maintenance. Our pay (with the few benefits we have left) doesn't come close to half of that. Could it be that the rates in South America and Asia are also that high, or is it that the quality of the work done here is worth the extra money? As far as productivity numbers that AA puts out, a few years ago they claimed that management had increased their productivity by 10 or 15% (don't remember the exact number). Since management produces absolutly nothing, then claiming an increase in productivity is just a falicy. Where I come from if someone lies about one thing they will lie about everything. AA management has been caught in so many lies that it is hard to believe anything they say. We have to take every thing with a grain of salt. Since the same people have been running the airline into the ground since 2003 and supposedly lost billions of dollars (when you include special items, whatever the heck they are) and the BOD has not made a move to replace these people, you have to figure they are doing what the BOD wants them to do. If I was on the BOD of any company and the same thing was happening I would fire them all. You would do it too, but it is not happening. The problem with AA is the management of the company. That is obvious.

 

[Buck]

That's funny. Whenever AA has peddled heavy maintenance to other carriers and charged them much more per hour then they pay us themselves, there has never been a problem filling up the hangars. Fed Ex and Allegiant were happy to pay for our maintenance. AA ultimately decided they needed the hangar space and ended the contracts. Now explain to me why other airlines who apparently have lower maintenance costs are more than willing to pay AA for heavy work? Could it be that your claim (and AA's complaint of higher labor costs) are based on faulty numbers? If we are so overpaid, then how come Fed Ex and Allegiant were so willing to pay an even higher rate than American pays us? I know that AA charges around $80 per hour for contract maintenance. Our pay (with the few benefits we have left) doesn't come close to half of that. Could it be that the rates in South America and Asia are also that high, or is it that the quality of the work done here is worth the extra money? As far as productivity numbers that AA puts out, a few years ago they claimed that management had increased their productivity by 10 or 15% (don't remember the exact number). Since management produces absolutely nothing, then claiming an increase in productivity is just a fallacy. Where I come from if someone lies about one thing they will lie about everything. AA management has been caught in so many lies that it is hard to believe anything they say. We have to take every thing with a grain of salt. Since the same people have been running the airline into the ground since 2003 and supposedly lost billions of dollars (when you include special items, whatever the heck they are) and the BOD has not made a move to replace these people, you have to figure they are doing what the BOD wants them to do. If I was on the BOD of any company and the same thing was happening I would fire them all. You would do it too, but it is not happening. The problem with AA is the management of the company. That is obvious.

Allegiant left because the company quote was to high. I would not know about Fed-X. As for the hourly rate do not forget that it is around $100. Labor and overhead including the facility and engineering etc.

 

[Bob Owens]

Bob,
I have never compared productivity for any AA workgroup including maintenance to any other airline because I don't know the specifics of productivity at that level. I have said that overall, AA has way more people for its size that other airlines - but I do not know where the productivity issues are at AA.
I do know that AA's maintenance costs per ASM are about 25% above the industry average and about 60% higher than WN based on DOT data... and these numbers include all maintenance costs, regardless of whether outsourced or not.
There may be some validity to your point that AA's costs are higher because they do overhaul inhouse compared w/ other airlines - but then that means that AA's mechanics are not doing the job for rates that are competitive with the overall market.

What do you use as a basis for size? ASMs or fleet size? Most from the management side use fleet size, comparing how many mechanics we have per airplane to carriers that only have narrowbodies. They also dont factor in competitors outsourced labor, so they arent fair numbers. AA maint cost per ASM are also inflated because of all the Mods that AA has been doing such as winglets and new interiors etc. AA also chooses to have several fleet types which means more parts, more tooling and more training, figure if you go from one to two types you just doubled those costs, go to three and you triple them etc etc. AA also has fleet types which are less common so they can not rely on pool parts like Southwest which operates the most common fleet around. Pretty much everybody has 737s.