Will AA declare bankruptcy?

[Birdman]

If management takes any scope gains, it will be done in an 1113c proceeding in bankruptcy court.

Best of luck to everyone.

It was recently said that the pilots that can currently retire would be certified "nuts" if they didn't do it promptly. How much would be lost for those that remained in BK?

 

[737823]

To put things in perspective, "DISCOUNT" airline Southwest pays their pilots about 30% more. So yes, we would need 30% immediately, just to match SWA. As you know, work groups usually try to leapfrog peers at other airlines to keep raising the bar. If we did that, now we are looking at a raise in the 35-40% range. Interesting that if we even got a 50% raise today, we would still be making less than the UAL and DAL pilots were making 11 years ago. (Time for the management shills to chime in and tell everyone that the sole cause of UAL and DAL going into BK was the pilot's contract)

At any rate, the biggest issue now is not pay, it is scope. What good is a pay raise if you are either furloughed or pushed back 10-20 years in career progression and earning potential. Furthermore, if you look at the personal losses from stagnation or sliding backwards in bid status(i.e. pilot stuck as F.O. not upgrading to Captain) the numbers are in the 100's of thousands.

Loosening of scope is extremely bad news for everyone else on property as well. More flying farmed out to other carriers through "code share" means less jobs needed all around. Less pilots, mechanics, flight attendants, ramp workers, CSAs etc.. This is the AA management wet dream - collect revenue for doing nothing. Slap the AA code on other airlines and collect money for them doing the work. All the while not having to tolerate the pesky labor brick scum.

It is obvious from what I have been hearing at the negotiating table that the issue of scope is managements biggest target as well. Their opener asked for MASSIVE outsourcing of flying to JetBlue, Alaska, USAirways, and other sundry regional airlines. Not only would the other larger airlines eat up mainline flying, but management wanted the right to have regionals fly much larger aircraft. In other words, you could kiss a ton of the current S-80 routes good bye.

As of right now, we are trying to recapture much of what we have lost in the past on scope. Obviously, management has other plans. One thing is for sure - we are not going to give an inch, and the APA board has told Ourpay, Horton, and Brundage this to their face. If management takes any scope gains, it will be done in an 1113c proceeding in bankruptcy court.

Best of luck to everyone.

Bring it on. I hope the unemployment line treats you well.

Josh

 

[Hopeful]

Gee, all this talk about SCOPE and Chapter 11.....
And all along I thought AA's biggest disadvantage was doing maintenance in house!

 

[737823]

Gee, all this talk about SCOPE and Chapter 11.....
And all along I thought AA's biggest disadvantage was doing maintenance in house!

I actually think Bobs case that outsourcing overhaul moves costs to other items has some credibility. But the fact is AA's scope is uncompetitive and will be the most restrictive once UCH is under a SOC. It's clear the UAL scope will prevail-it would cause an undue hardship to the company and UAX carriers otherwise.

Josh

 

[strikeforce]

Bring it on. I hope the unemployment line treats you well.

Josh

If management put as much effort into managing the business as they do finding ways to circumvent labor agreements, airlines would make billions!

 

[eolesen]

It's productivity in general. Scope is part of it, but things like max hours, having segregated dom/int bases, not using FAs to clean on short turns, etc. all add up to less output than what other airlines get out of their employees.

A full days pay is great if you get a full days work. For lots of reasons, including AA's methods for scheduling flights, crews, & work on the overhaul base, AA appears to employ more people per (insert your favorite measurement here than) than if they were run like their peers...

WT has pandered to employees by saying labor isn't the issue, and it is only a revenue problem, yet doesn't offer up any specifics on where AA would be able increase RASM other than shrinking the airline, and we all know shrinking to profitability has worked oh, so well for all those other extinct carriers who tried that approach.

 

[WorldTraveler]

At any rate, the biggest issue now is not pay, it is scope. What good is a pay raise if you are either furloughed or pushed back 10-20 years in career progression and earning potential. Furthermore, if you look at the personal losses from stagnation or sliding backwards in bid status(i.e. pilot stuck as F.O. not upgrading to Captain) the numbers are in the 100's of thousands.

---

Loosening of scope is extremely bad news for everyone else on property as well. More flying farmed out to other carriers through "code share" means less jobs needed all around. Less pilots, mechanics, flight attendants, ramp workers, CSAs etc.. This is the AA management wet dream - collect revenue for doing nothing. Slap the AA code on other airlines and collect money for them doing the work. All the while not having to tolerate the pesky labor brick scum.

It is obvious from what I have been hearing at the negotiating table that the issue of scope is managements biggest target as well. Their opener asked for MASSIVE outsourcing of flying to JetBlue, Alaska, USAirways, and other sundry regional airlines. Not only would the other larger airlines eat up mainline flying, but management wanted the right to have regionals fly much larger aircraft. In other words, you could kiss a ton of the current S-80 routes good bye.

As of right now, we are trying to recapture much of what we have lost in the past on scope. Obviously, management has other plans. One thing is for sure - we are not going to give an inch, and the APA board has told Ourpay, Horton, and Brundage this to their face. If management takes any scope gains, it will be done in an 1113c proceeding in bankruptcy court.

Best of luck to everyone.

Super,
yes, you are right, Scope is absolutely the issue to be concerned about ... and not just to protect pilot jobs - or the jobs of other employees.
Scope matters to the company, too, but AA doesn't see it.
In their efforts to outsouce domestic flying, they continue to put the future of the company at risk.
Unlike with international partners, the US government does not allow domestic airlines to share revenue... which means that AS and B6 simply sell their seats to AA but AA cannot cooperate w/ those airlines in route planning, pricing, or in sharing revenue.
As such, those airlines are and will always be competitors to AA - and every other US network carrier.
Pilot groups at NW- later DL - and AA both were convinced that AA and DL would never fly the routes that AS flew so codesharing was a net plus to those companies.... now, however, AA continues to cancel routes in the NE because they can't effectively compete - and then turn around and codeshare on B6.
Not surprisingly, AA's former focus city at BOS is now nothing more than another spoke on the system, JFK and LGA routes continue to fall to other competitors, and B6 and other competititors are taking aim at ORD. AA's desire to outsource domestic flying will leave less and less of AA's key network that will be flown on AA metal competing against more and more other more efficient carriers.
Some can argue that ORD's role as a hub may be changing because of sky high and growing passenger facility costs but the low cost carriers can manage to serve the local market.... and there IS clear historical evidence that once a hub carrier pulls its ratio of service down below a level that is multiples larger than other carriers, those other carriers start to take the local carrier. AA more than any other carrier has lost its local marekt presence as its hubs have declined or been pulled down.
MIA and DFW are not sufficient for AA to remain a viable domestic carrier... and both are still highly subject to incursion by other carriers.
So, yes, fight for scope not only for employee jobs but also for the future of the company - even if mgmt doesn't realize how absolutely critical it is to figure out how to compete - and not flee from its competitors.

E,
I have NOT said AA should shrink the airline... I HAVE SAID they should quit giving up markets to competitors, esp those that will turn around and use the revenue they obtain from AA to turn around and compete w/ AA on even more routes.
And, E, AA IS shrinking its network footprint... they are adding more capacity on the largest routes on AA's network (ie more LAX-ORD/DFW) but pulling back in other markets. Total ASMs may be flat to up but AA's competitive footprint is smaller, esp. against DL and UA that have greatly expanded their networs, including thru mergers.

 

[Hopeful]

Super,
yes, you are right, Scope is absolutely the issue to be concerned about ... and not just to protect pilot jobs - or the jobs of other employees.

Now the options.... the pilot's say NO WAY on SCOPE.....
Company goes bankrupt...How do the pilots truly feel they will do after a judge throws the SCOPE down the toilet?

The point I am making here is that AA's unions don't have the nads to shut the place down....

The unfortunate reality is that AA will get what they want WITH or WITHOUT the unions' help.

I tend to believe the unions will cave in to further concessions.
Little with afterwards orate how he had to save the membership from a judge...And the management will hurt their arms patting themselves on their collective backs boasting how they got a bankruptcy - ruled contract WITHOUT bankruptcy.

They will then reward themselves with millions for having screwed the workers further!

 

[Buck]

Now the options.... the pilot's say NO WAY on SCOPE.....
Company goes bankrupt...How do the pilots truly feel they will do after a judge throws the SCOPE down the toilet?

The point I am making here is that AA's unions don't have the nads to shut the place down....

The unfortunate reality is that AA will get what they want WITH or WITHOUT the unions' help.

I tend to believe the unions will cave in to further concessions.
Little with afterwards orate how he had to save the membership from a judge...And the management will hurt their arms patting themselves on their collective backs boasting how they got a bankruptcy - ruled contract WITHOUT bankruptcy.

They will then reward themselves with millions for having screwed the workers further!

The point I am making here is that AA's unions don't have the nads to shut the place down....

You might have the "nads" to ride out the bankruptcy, but you will not come close to being given the opportunity. The unions will do everything possible to prevent a bankruptcy to keep their meal ticket. It is critical now to fund the election process to get their candidate reelected.

 

[damajagua]

I do not understand why we keep beating this issue over and over.
If it happens it happens. I will deal with it then. It looks like there are
people here obsessing about it. Its interesting that a few analyst
have recently said that they do not see a bankruptcy fling in the
near future. To me that means no bankruptcy for the next year
or so. AA has enough cash on hand for about four to eight quarters
and then I would be concern about a bankruptcy. From a pure
business stand view I think they should file. It seems like
every other airline that has file is doing much better now.
Make no mistake about it if AA file there will be a lot of
changes to our contracts. I tend to believe that it's not so much
our salaries that are the issues; but there is no doubt that
there are bigger companies than AA with less employees.
That obviously tell me that there is a productivity disadvantage
At AA in comparison to the rest of the industry. There is also
no doubt AA has a revenue generating problem comparing it
to it's peer. But all this talk about the B word. Don't worry about it.
I will cross that bridge when I get there.

 

[commavia]

It is obvious from what I have been hearing at the negotiating table that the issue of scope is managements biggest target as well. Their opener asked for MASSIVE outsourcing of flying to JetBlue, Alaska, USAirways, and other sundry regional airlines. Not only would the other larger airlines eat up mainline flying, but management wanted the right to have regionals fly much larger aircraft. In other words, you could kiss a ton of the current S-80 routes good bye.

As of right now, we are trying to recapture much of what we have lost in the past on scope. Obviously, management has other plans. One thing is for sure - we are not going to give an inch, and the APA board has told Ourpay, Horton, and Brundage this to their face. If management takes any scope gains, it will be done in an 1113c proceeding in bankruptcy court.

While I don't disagree with you that SCOPE probably represents the greatest single "threat" to AA pilots at the moment, your definitive statements above beg the obvious (at least to me) question: what about AA's competitors? If AA's legacy competitors - Delta and United - are able to shift more and more of their system capacity to regional operators that have lower-costs than Delta/United mainline (and certainly lower than AA mainline), then how are AA and the APA to respond? (And, of course, this doesn't even take into account the low-cost carriers whose "mainline" pilots make less than AA's.)

The solution I have long advocated is moving all flying - or at least all jet flying over, say, 70 seats - to mainline, APA pilots, but having the APA agree to fly those planes at pay scales more competitive with the market rates for other pilots flying planes that size. If the going rate for a 70-seat or 90-seat jet is X, and with far less benefits than APA pilots enjoy now, why couldn't the APA agree for its pilots to fly those planes at, say, 98% of X, and keep all of their mainline benefits (let's say - making up numbers - 5% additional cost), which would ultimately lead to AA's pilot costs for the jets being only marginally higher than for the competition (103% of market average)? That would seem like a reasonable compromise and winning proposition if it allows AA to remain competitive, but keeps the flying in-house, with mainline APA pilots.

 

[WorldTraveler]

damaj,
what you aren't hearing anywhere else is the size of the revenue problems AA has... because AA can't blame anyone else for those problems.
If scope concessions are made - inside or outside of BK - the revenue problems won't change. Granting scope concessions w/o addressing the revenue problems - which have nothing to do with BK - will only lead to further erosion of AA's revenue.
Those who have noticed the similarity between TW and AA are exactly right... this is the same path that every other network/major airline has faced... labor problems that become revenue production problems and which ultimately lead to a failure of the company.
.
Comm,
what you once again fail to consider is that DL and UA/CO both granted scope concessions but made up for it with increased flying that generated more revenue.
CO's pilots benefitted from a huge increase of lucrative int'l flying, even though they have kept their RJ scope restrictions very tight. The combined UA/CO still has an enormous int'l network - and the scope restrictions - whether the PMCO pilots like it or not - will mirror more what PMUA had than CO's.
DL's pilots indeed have expanded the scope of 70 seat flying but they have benefitted both with a much larger int'l network as a result of domestic 767 redeployment and the conversion of 50 seat flying to mainline flying. There are certainly DL pilots who want more - but no other US network airline is shrinking their RJ flying....
.
As for what AA should do? It still comes down to that AA has to find more mainline flying for its pilots than what they are wanting those pilots to give up. I don't think the APA would be near as worked up about allowing increased large RJ and domestic partner flying if there were assurances that AA would on a block hour equivalent basis replace that flying with something at least as valuable...
but that isn't being proposed and that is likely why the only concessions that AA obtains will be in a forced contract in BK...
and it will also result in continued shrinkage of AA's network... the process of BK is lengthy and other carriers will continue to chip away at AA's network obtaining all they can until AA and AE are in a position to successfully compete.
.
Given that AMR is the only major airline restructuring, the chances for AA/AE to succeed against much hungrier and healthier competitors is minimal.
.
AA's competitors LIKE a wounded and impotent AA... they can continue to feed freely.
AA's knows that whatever they enjoy now will come to an end if they make concessions so there is little incentive for them to change the status quo either.
Given Arpey's aversion to BK, it is probably true that he will hold out as long as possible....
but given that AA's market value continues to decline and the ability to compete after a restructuring diminishes, there is a point at which the board has to say that continuing the status quo may be tantamount to voting for AMR to be liquidated at some point in the future.
The time for AA to take dramatic action to ensure a viable future for the company has long since passed.

 

[Bob Owens]

damaj,
what you aren't hearing anywhere else is the size of the revenue problems AA has... because AA can't blame anyone else for those problems.
If scope concessions are made - inside or outside of BK - the revenue problems won't change. Granting scope concessions w/o addressing the revenue problems - which have nothing to do with BK - will only lead to further erosion of AA's revenue.
Those who have noticed the similarity between TW and AA are exactly right... this is the same path that every other network/major airline has faced... labor problems that become revenue production problems and which ultimately lead to a failure of the company.
.
Comm,
what you once again fail to consider is that DL and UA/CO both granted scope concessions but made up for it with increased flying that generated more revenue.
CO's pilots benefitted from a huge increase of lucrative int'l flying, even though they have kept their RJ scope restrictions very tight. The combined UA/CO still has an enormous int'l network - and the scope restrictions - whether the PMCO pilots like it or not - will mirror more what PMUA had than CO's.
DL's pilots indeed have expanded the scope of 70 seat flying but they have benefitted both with a much larger int'l network as a result of domestic 767 redeployment and the conversion of 50 seat flying to mainline flying. There are certainly DL pilots who want more - but no other US network airline is shrinking their RJ flying....
.
As for what AA should do? It still comes down to that AA has to find more mainline flying for its pilots than what they are wanting those pilots to give up. I don't think the APA would be near as worked up about allowing increased large RJ and domestic partner flying if there were assurances that AA would on a block hour equivalent basis replace that flying with something at least as valuable...
but that isn't being proposed and that is likely why the only concessions that AA obtains will be in a forced contract in BK...
and it will also result in continued shrinkage of AA's network... the process of BK is lengthy and other carriers will continue to chip away at AA's network obtaining all they can until AA and AE are in a position to successfully compete.
.
Given that AMR is the only major airline restructuring, the chances for AA/AE to succeed against much hungrier and healthier competitors is minimal.
.
AA's competitors LIKE a wounded and impotent AA... they can continue to feed freely.
AA's knows that whatever they enjoy now will come to an end if they make concessions so there is little incentive for them to change the status quo either.
Given Arpey's aversion to BK, it is probably true that he will hold out as long as possible....
but given that AA's market value continues to decline and the ability to compete after a restructuring diminishes, there is a point at which the board has to say that continuing the status quo may be tantamount to voting for AMR to be liquidated at some point in the future.
The time for AA to take dramatic action to ensure a viable future for the company has long since passed.

AA doesnt have a revenue problem, they are set to bring in $24 billion this year, they shed 40,000 workers, 200 airplanes and they areset to bring in more revenue than ever before. If they wanted to they could bring in $50 billion and still cry poverty.

 

[TWU informer]

AA doesnt have a revenue problem, they are set to bring in $24 billion this year, they shed 40,000 workers, 200 airplanes and they areset to bring in more revenue than ever before. If they wanted to they could bring in $50 billion and still cry poverty.

Just out of curiousity Bob, in your opinion if what you say is true then why doesn't the TWU Leadership create DVD's containing facts that back up your claims and do a mass distribution amongst the membership instead of making political yard signs, slogans, and fear mongering data? I think I know my answer or opinion on this, but would be much interested to hear your take on it.

Your YouTube video served it's purpose in the given time but why not mass distribution of a DVD to the membership?

In my work area, everyone is just starving for information, and nobody believes a damn thing the Local Leaders say, if you have something to share, then stop bothering with this forum which cannot be reaching more than hundred or two, and create a mass distribution DVD.

 

[Flying low]

AA will wait until it completes the Eagle spin-off and adsorb it's debt. Then and only then will AA file BK.