Will AA declare bankruptcy?

[FWAAA]

Thanks for the repost and making it more clear. As far as $100 per hour for the AA contracts that is just par for the course. Claiming overhead when they rent the facitlity for next to nothing and even have the City of Tulsa paying the electric bill for them. Crooks.

A lot of the overhead consists of management personnel and support staff - people who are necessarily employed because of overhaul but who don't personally touch the airplanes and whose time is not separately billed.

When I take my car to the local GM shop, I have to help pay a lot of people who don't touch my car and thus are not separately billed, like the service writer (who makes big bucks), the girl who takes my payment (underpaid), the lot jockeys and the shuttle driver.

 

[OldGuy@AA]

A lot of the overhead consists of management personnel and support staff - people who are necessarily employed because of overhaul but who don't personally touch the airplanes and whose time is not separately billed.

When I take my car to the local GM shop, I have to help pay a lot of people who don't touch my car and thus are not separately billed, like the service writer (who makes big bucks), the girl who takes my payment (underpaid), the lot jockeys and the shuttle driver.

Agreed, but I would bet that your local GM shop pays it's own utility bills and had to pay for the land and building that it sits on. This is not the case at American Airlines in Tulsa. AA has very low overhead in Tulsa especially when you consider the size of the operation.

 

[Buck]

Bob or others,
how many AA mechanics are devoted exclusively to overhauls - and what percentage of the total maintenance workforce is this?

Title I = 9554 Mechanics

Title II = 2025 Facility Maintenance

OH apprises roughly 6062.

Then there are Stock Clerks that support OH

 

[eolesen]

No I do not believe I said that. When the time for contract renewal came around, Allegiant took bids for the work and the company was not selected because the company outbid themselves.

My contacts at Allegiant said the same -- AA priced themselves out. He also said that when G4 was starting up, they were ok paying more for AA to do the first overhauls, so that they had a comfort level with airframes. But that was also before fuel spikes, and LAS tanked. This last round of bids they chose to go with someone who had a good reputation at a lower price point.

 

[chris perry]

A lot of the overhead consists of management personnel and support staff - people who are necessarily employed because of overhaul but who don't personally touch the airplanes and whose time is not separately billed.

When I take my car to the local GM shop, I have to help pay a lot of people who don't touch my car and thus are not separately billed, like the service writer (who makes big bucks), the girl who takes my payment (underpaid), the lot jockeys and the shuttle driver.

Yes, but the service department pays the majority of the facilities bill including the plush office of the owner ,manager etc... Its just the way they manage the business.....In our case we paid all the bills ,water electric,building included. Also rental's for everyone and their cousins when faimily or customers flew in...I suspect it's no different here at AA. So if you wonder why the labor rate is so high at the dealership thats why.... I worked as a Rolls Royce mechanic in dallas for many years before AA...greed took over there too, it was sold off later after I went to American in 1991.

 

[chris perry]

The unit of production in the airline industry is available seat miles (ASMs)... every other metric is based on ASMs.... Revenue per ASM, Cost per ASM etc.... and those two can be drilled down to specific levels.
Yes, for specific areas, you can use metrics such as number of mechanics per airplane but that number is not accurate because there are different levels of aircraft utilization between airlines.
You are correct that all of these calculations have some element of error in them based on factors that do include the level of outsourcing... but the maintenance CASM is still the all inclusive number of what it costs to maintain an airline's fleet - and reflects mods, outsourcing, everything to do w/ maintenance.
I know AA has done alot of mods but I doubt very seriously that they have done anywhere close to as much in the way of mods as DL has - first converting 30 or so aircraft from domestic to int'l config, 20 or more interior mods every year, plus winglets. AA's fleet is less complex than DL or US' and yet both of those have lower maintenance costs than AA.
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I ahve said before that I don't know the specifics of why AA's maintenance costs are so much higher than its peers - DL and UA are both large network airlines w/ similar percentages of widebody aircraft doing int'l flying.
As a union leader, I would think you should be able to obtain in some manner some sort of comparative statistics about how productive your peers are for specific tasks that are done by maintenance.
IN the absence of you and the TWU knowing, the company will call the shots and they will do what they think is right, regardless of whether they are or not. IN the absence of information, you are unfortunately at their mercy regarding whatever changes they say they are needed in order for AA to be competitive.
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It is possible that AA needed the space for its own overhauls but given that there are people who say that AA's costs for insourced overhauls are too high and other carriers don't do them inhouse and DL - the largest US airline based MRO focuses on line, engine, and component maintenance more than overhauls (which is part of why they entered into the maintenance partnershp w/ AeroMexico), I doubt if any US airline can cost effectively do inhouse routine overhauls.

The TWA mods and cross over Are probably more mod work than Delta has done total period....Most people dont understand..A TWA 80 is not a AA80. Most parts don't interchange and none prior to integration.We might as well had Airbusses.....Still today these aircraft are very different under the hood. They cause major delays due to part differences today as well....Example APU different ,radio alt's,gyro's,iru systems installed,engine guage cluster and many more...

 

[WorldTraveler]

The TWA mods and cross over Are probably more mod work than Delta has done total period....Most people dont understand..A TWA 80 is not a AA80. Most parts don't interchange and none prior to integration.We might as well had Airbusses.....Still today these aircraft are very different under the hood. They cause major delays due to part differences today as well....Example APU different ,radio alt's,gyro's,iru systems installed,engine guage cluster and many more...

ok... so help me understand. How many TW M80s are flying, what mods are being done on them now (not just when those planes entered the fleet), and why should AA's degree of mods be so much higher than DLs?
DL like NW has long had a willingness to acquire and operate aircraft from various sources - configured differently which means different parts, training, etc.
Without going down a tangeant of the benefits/costs of fleet commonality or not, I'm trying to understand why you or others believe that AA's maintenance costs are much different than other carriers because of mods.
As for interior mods, DL has been far more aggressive in this area than other carriers - although UA with the merger integration may match DL's level of activity... not sure. Winglets? Other carriers are doing them too. I find it hard to believe that AA's total level of mod activity is higher than other carriers but perhaps I'm not seeing .
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based on the information provided by Buck and FWAAA, it would appear that AA has about 12K maintenance personnel.
For comparison - because it is a peer airline with major maintenance capabilities, DL Tech Ops says it has just under 10K employees.
http://deltatechops.com/about-us/view/category/about-delta-techops
DL does not do the majority of its overhauls in-house but has a larger fleet of its own plus does contract work for about 150 other carriers; based on DOT and SEC data, DL obtains insourced revenue equal to about 1/4 of what it spends to maintain its own fleet. DL probably has some support staff in their headcounts as well. Thus, perhaps UP TO 2500 DL maintenance personnel do work for other carriers - but I think that number is probably quite high since they insource the highest revenue types of work. Even if it is only 1000 people, it would seem that DL Tech Ops is alot more efficient by maintaining a larger fleet plus doing insourcing, which most people say AA does very little of these days. OTOH, if AA uses half of its maintenance staff to do overhauls leaving about 6000 to do comparable work that DL does (and again AA and DL heavy maintenance do overlap among those 6000 people and what DL Tech Ops does in house on its own fleet), and DL insources as well, then perhaps DL uses about 7500 people to maintain its fleet on a comparable basis of work that AA also does to 6000 for AA.
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If that is true, it would sound like 6000 for overhead is high if the remaining 6000 support comparable work DL does with perhaps 7500-8000.
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I'm trying to get to the question of whether AA maintenance is cost efficient compared to DL. If we had similar information for UA, we could throw that in - and you could do it for any foreign airline if you know those numbers and can normalize them for the differences in work weeks/hours etc. Not sure that any other US airlines have the technical capabilities that AA, DL, and UA have... not sure what AC has left of in-house maintenance capabilities.
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If AA really has half of its maintenance staff - and alot of facilities - devoted to overhead - almost 8% of the entire company - and other airlines outsource the majority of that work, then it might not be surprising if AA might try to outsource overhaul.
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If a BK filing is on the horizon, then union leadership should be thinking about how they approach that reality.
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This is worth thinking thru and discussing.

 

[Frank Szabo]

... snip
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If AA really has half of its maintenance staff - and alot of facilities - devoted to overhead - almost 8% of the entire company - and other airlines outsource the majority of that work, then it might not be surprising if AA might try to outsource overhaul.
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If a BK filing is on the horizon, then union leadership should be thinking about how they approach that reality.
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This is worth thinking thru and discussing.

Item 1) If Horton gets his way and does away with AA's maintenance, the cost will most assuredly go up greatly and the reliability of scheduling will drop.

Item 2) With the TWU (American's defacto wholly owned subsidiary) deeply in bed with the company, one can believe AMR's pet union has situated themselves as best they can (with the assistance of the company) to weather any storm on the horizon. I assure you the TWU has first thought of its own survival as opposed to that of its membership that pay it dues.

You continually make the assumption this so-called union and its parent, AMRCORP, are acting as they should when, in fact, all evidence points to facts quite opposite.

All that's really worth discussing is how a group of workers can get rid of a so-called "union" that collects dues from its membership for the company's benefit.

 

[Buck]

World Traveler, you asked for a head count doing OH at AA. I gave you the A&P Mechanics, Overhaul Support Mechanics, Aircraft Cleaners and Parts Washers. Then I gave you the OH Facility Mechanic numbers. You should not take it for anymore than it is. Those that support those posted above is a much smaller number. Stop estimating when you ask for numbers or I for one will stop providing you with any information.

 

[WorldTraveler]

World Traveler, you asked for a head count doing OH at AA. I gave you the A&P Mechanics, Overhaul Support Mechanics, Aircraft Cleaners and Parts Washers. Then I gave you the OH Facility Mechanic numbers. You should not take it for anymore than it is. Those that support those posted above is a much smaller number. Stop estimating when you ask for numbers or I for one will stop providing you with any information.

ok, then what is your estimate of how many of AA's maintenance personnel do overhaul maintenance?, which I presume was what you said here:
"OH apprises roughly 6062. "
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The question which has been talked about for months if not years is how efficient or costly AA's inhouse overhauls are vs. the rest of the industry and vs. the rest of what AA does.
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Frank,
your union in bed w/ mgmt theory is possible... but I still haven't heard the rationale behind saying that the company is intentionally trying to self destruct. How does anyone gain in that scenario?
How do you believe the TWU will survive if thousands (not sure if it is 4000, 6000) of jobs are cut as part of a potential plan for AA to spin off overhaul?
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If AA can succeed in reducing headcount by thousands of people as part of outsourcing maintenance, then it is possible they might go that route.
NW obviously gutted its maintenance workforce and had very little left of maintenance capability. problem is that we never really knew where that would end up because they merged w/ DL before any long term implications could be seen.
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And if AA reallly intends to buy 450 planes over 5 years and end up w/ a fleet age closer to Singapore Airlines than any US carrier, do you think they care about maintenance?
And if they don't, where does that leave you and others who want to finish a career at AA?

 

[Buck]

You asked for OH, I gave you OH. If you want to know the total maintenance unionized work force then ask the TWU.

 

[Birdman]

And if AA reallly intends to buy 450 planes over 5 years and end up w/ a fleet age closer to Singapore Airlines than any US carrier, do you think they care about maintenance?
And if they don't, where does that leave you and others who want to finish a career at AA?

There's no doubt that 5-10 years down the road AA will be a much leaner maintenance provider for their own fleet although I think AA would like to expand it's MRO presence, provided it can acquire the skills to bid contracts without subsidizing it's customers. Tulsa continues to modify hangars, at great expense, to meet it's own demands so they obviously don't think they're putting good money after bad. As with predicted "white spaces" in maintenance, Hortons comments are dubious at best.

 

[Frank Szabo]

... snip
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Frank,
your union in bed w/ mgmt theory is possible... but I still haven't heard the rationale behind saying that the company is intentionally trying to self destruct. How does anyone gain in that scenario?
How do you believe the TWU will survive if thousands (not sure if it is 4000, 6000) of jobs are cut as part of a potential plan for AA to spin off overhaul?
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... snip

When I reference the twu surviving, I'm speaking of the International - the ones that don't give a damn about the rank and file.

I'll bet you're even one of those that believes it when "they" say "I'm from the government and I'm here to help you".

Wake up - AA is not Delta. The management at AA has much less in the way of scruples than where you came from. They believe in "management by fear and lies", more so than anywhere else I've worked in my entire life and bribe others to spread the same crap in their support.

You may well have had experience in the industry but you've had no experience with a pack of liars such as this - to the extent that when you're told the truth you refuse to believe it and continue to empty arguments most of your posts are full of. AMR's "management" may not be criminal in their actions but they ARE NOT ethical in any stretch of the word's meaning.

 

[AANOTOK]

It's just a matter of time.

Nice job Beverly of not mentioning Ch.11 as you know you will have to go back and answer
questions as to why you said no back then. We all can read between the lines!!

http://blogs.star-telegram.com/sky_talk/2011/09/american-to-cut-fourth-quarter-capacity-less-flights-on-tues-wed-and-sat.html

 

[Frank Szabo]

Quite honestly, I've lost interest re: whether there's a filing of any kind or not.

I'll not willingly give the lying bastards any more. If the Centrepork darlings just can't get by without having more given back, they'll have to use the process set forth - but that's my attitude.

I'm sure others will have different ideas.