WSJ: Delta, TPG Assessing Bids for American Airlines

[Flying low]

If cuts at TUL are major, then you are suggesting the outsouce of the facility as a heavy maintenace unit, maybe to a Light "C" unit. At what point does the company stop doing there own maintenance? Are we to immulate the other bankrupt airlines just because of what they did in bankruptcy.

I am sure that work rules are being "negotiated" for OH, the 1/7th Rule and possibliy OT and Field Trip Rules. Maybe the line could do their own work instead of calling OH all the time to do the work the won't perform.

So if an OH mechanic is at $35/hr and the Line mechanic is at $50/hr than the company gains a instant Field Trip Premium to their favor just by sending the OH mechanic on the trip.

Buck, you have to remember that AA isn't a leader in the industry anymore. Ever since "Uncle Bob" left they have become the followers.

 

[Rogallo]

So if an OH mechanic is at $35/hr

:wacko:

 

[Buck]

:wacko:

easier math, could have been $30, but that would have been a falsehood...

 

[eolesen]

Holly Hegeman at PBB seems convinced we will be broken up. Comments E?

The only topics that Holly and I openly disagree on are anything involving AA and national politics.

She's been a good friend over the years, and lives partially off the subscription revenue. Try to respect the way she earns a living by not posting verbatim stuff that comes from the subscription site.

 

[WorldTraveler]

Buck raised a question based on an idea that someone in the industry has suggested... he quoted nothing.
.
We understand that the whole AA restructuring and all of the questions about AA's future are difficult for some people but not talking about it doesn't solve the problem.
.
As I have said for years, AA's bk would be far more difficult than others because they waited so long - not because their finances have deteriorated to the level of other carriers when they were in BK - but because AA's strategic options and the relative strength of its competitors is compromised compared to the situation for the other four network carriers that emerged from BK in the 2000s.
.
It is still far too early to know whether AA can successfully restructure but make no mistake that AA still generates $20B/yr of good revenue and has very unique strategic advantages that will make it a valuable takeover target as well as a target for competitor incursions that will continue during AA's BK and remain through its emergence should it occur. AA also has key partnerships/alliances that other carriers would love to have - and all of that combines to mean the competitive pressure on AA will be very strong for years -and AMR's bk is only a couple months old.
.
If other carriers are willing to pony up enough cash and take on enough of AA's debt as well as hire enough employees (since the unions are all on the creditor committees) then it is highly possible that AA may be more valuable to other airlines than it will be as a standalone company.
.
Against that intense competitive backdrop, if AA is to emerge as a standalone company, it will have to cut costs deeply to turn the company around and gain the momentum necessary to regain lost market share.
Competitive comparisons on salary are far down the list of considerations in BK... the primary objective is to turn the company around and whatever cuts are necessary to do so will be made. There is little margin for miscalculating what is necessary to turn AA around. If AA is successfully turned around, then pay can be restored upon emergence - but no one should doubt that deep cost cuts will be made early on in BK and unfortunately for employees salary cuts are the fastest and largest way to reduce costs quickly.

 

[wrencher]

Buck raised a question based on an idea that someone in the industry has suggested... he quoted nothing.
.
We understand that the whole AA restructuring and all of the questions about AA's future are difficult for some people but not talking about it doesn't solve the problem.
.
As I have said for years, AA's bk would be far more difficult than others because they waited so long - not because their finances have deteriorated to the level of other carriers when they were in BK - but because AA's strategic options and the relative strength of its competitors is compromised compared to the situation for the other four network carriers that emerged from BK in the 2000s.
.
It is still far too early to know whether AA can successfully restructure but make no mistake that AA still generates $20B/yr of good revenue and has very unique strategic advantages that will make it a valuable takeover target as well as a target for competitor incursions that will continue during AA's BK and remain through its emergence should it occur. AA also has key partnerships/alliances that other carriers would love to have - and all of that combines to mean the competitive pressure on AA will be very strong for years -and AMR's bk is only a couple months old.
.
If other carriers are willing to pony up enough cash and take on enough of AA's debt as well as hire enough employees (since the unions are all on the creditor committees) then it is highly possible that AA may be more valuable to other airlines than it will be as a standalone company.
.
Against that intense competitive backdrop, if AA is to emerge as a standalone company, it will have to cut costs deeply to turn the company around and gain the momentum necessary to regain lost market share.
Competitive comparisons on salary are far down the list of considerations in BK... the primary objective is to turn the company around and whatever cuts are necessary to do so will be made. There is little margin for miscalculating what is necessary to turn AA around. If AA is successfully turned around, then pay can be restored upon emergence - but no one should doubt that deep cost cuts will be made early on in BK and unfortunately for employees salary cuts are the fastest and largest way to reduce costs quickly.

IF YOU SCREW THE EMPLOYEES TOO MUCH THIS BK IS ALL FOR NOTHING. IT WILL BE WORSE THE SECOND TIME AROUND

 

[The Phantom]

IF YOU SCREW THE EMPLOYEES TOO MUCH THIS BK IS ALL FOR NOTHING. IT WILL BE WORSE THE SECOND TIME AROUND

You have got to be kidding. Most of the employees FOR YEARS have been taking this crap and have yet to do anything to stop it. hopefully it will be better after we get rid of some dead weight.
Too bad they won't remove people that can't do their jobs or won't do them.
To many lazy people here that won't stand up and fight when you need them, they just cry and complain. Lets get paid for our actual performance and quality also, not just for being here.

 

[787nightmare]

You have got to be kidding. Most of the employees FOR YEARS have been taking this crap and have yet to do anything to stop it. hopefully it will be better after we get rid of some dead weight.
Too bad they won't remove people that can't do their jobs or won't do them.
To many lazy people here that won't stand up and fight
when you need them, they just cry and complain. Lets get paid for our actual performance and quality also, not just for being here.

Exactly why "productivity and work rule changes" aren't going work around here. The cancer has been in the patient far too long....

My observations in the short time (and Im afraid I'm a short timer in every way)I've been around this place have confirmed what I suspected on the outside.
The issues plaguing this carrier started a loooong time ago and are not going to be dealt with overnight. I saw it at CO.
it's going to take fresh mgt faces and ideas AND ACTIONS. Not mere words or company policy changes. These people have been lied to for SO long....it's going to take a complete management makeover/approach to start the healing process.

This airline needs a replay of Continental ca: 1993 with another Gordon Bethune approach. And if AA doesn't deal with it that way....well, it's merely slapping a band aid on a severed artery.

 

[WorldTraveler]

Exactly why "productivity and work rule changes" aren't going work around here. The cancer has been in the patient far too long....

My observations in the short time (and Im afraid I'm a short timer in every way)I've been around this place have confirmed what I suspected on the outside.
The issues plaguing this carrier started a loooong time ago and are not going to be dealt with overnight. I saw it at CO.
it's going to take fresh mgt faces and ideas AND ACTIONS. Not mere words or company policy changes. These people have been lied to for SO long....it's going to take a complete management makeover/approach to start the healing process.

This airline needs a replay of Continental ca: 1993 with another Gordon Bethune approach. And if AA doesn't deal with it that way....well, it's merely slapping a band aid on a severed artery.

CO also eventually figured out how to mint money through their EWR hub, an airport that no one thought was worth 2 rusty nickels yet CO managed to turn it into the largest hub in the NE.
DL's turnaround was fueled by more than doubling of its international presence, done at very low cost by virtue of moving underutilized assets around, and then a merger that added even more geographic diversity to DL's revenue streams. UA tapped into its historic strength (via Pan Am) in Asia and China and also "married into" CO's high value revenue.
AA's turnaround can only come if they also figure out how to generated huge amounts of additional revenue compared to what they have now. All the cost cuts in the world won't turn an airline around if they can't gain revenue benefits from their restructuring - and BK does nothing to help that. Minds in Ft. Worth have to figure out how to do something the industry hasn't done before.

 

[signals]

I would welcome a Delta merger. Although it would encounter a bumpy ride, perhaps the unions can be revived at Delta at last 🙄

 

[787nightmare]

CO also eventually figured out how to mint money through their EWR hub, an airport that no one thought was worth 2 rusty nickels yet CO managed to turn it into the largest hub in the NE.
DL's turnaround was fueled by more than doubling of its international presence, done at very low cost by virtue of moving underutilized assets around, and then a merger that added even more geographic diversity to DL's revenue streams. UA tapped into its historic strength (via Pan Am) in Asia and China and also "married into" CO's high value revenue.
AA's turnaround can only come if they also figure out how to generated huge amounts of additional revenue compared to what they have now. All the cost cuts in the world won't turn an airline around if they can't gain revenue benefits from their restructuring - and BK does nothing to help that. Minds in Ft. Worth have to figure out how to do something the industry hasn't done before.

Agree WT...but, all the revenue generating manuevers they can come up with ain't gonna do squat for mending employee/managment relationships. Unless.........they decide to start sharing the revenues with the worker bees.
That would gain traction fast in most of the employees eyes.

 

[MCI transplant]

Agree WT...but, all the revenue generating manuevers they can come up with ain't gonna do squat for mending employee/managment relationships. Unless.........they decide to start sharing the revenues with the worker bees.
That would gain traction fast in most of the employees eyes.

<_< ------ And that my friend will never happen! Because, what they'll tell you is------ " they have a fiduciary responsibility to the stock holders, not the employees!"

 

[eolesen]

CO also eventually figured out how to mint money through their EWR hub, an airport that no one thought was worth 2 rusty nickels yet CO managed to turn it into the largest hub in the NE.

CO didn't have the vision to turn EWR into the largest NE hub -- PE did.

Certainly, CO has grown it considerably since 1987, but at the time of the merger, I seem to recall PE running at least 200 flights a day out of EWR between mainline and PBA.

If it wasn't the biggest, the only place bigger at the time might have been AL @ PHL; nobody at JFK, LGA, or BOS approached that size, and UA's IAD hub wasn't quite as built up at the time, either.

 

[BoeingBoy]

the only place bigger at the time might have been AL @ PHL

In the late 80's PHL was little more than a spoke in AL/US's system - certainly not the primary hub it is today. The new PIT terminal was being built and effectively AL/US was a one hub airline.

Jim

 

[wings396]

Don't forget to toss NY Air into that mix in EWR with PE&CO. Fwiw, until they all merged together, PI was the largest carrier in EWR....