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WSJ: Delta, TPG Assessing Bids for American Airlines
- Thread starter Veritas
- Start date
enough already
Veteran
- Jan 8, 2003
- 659
- 249
No way! We must hope for the worst...
Bob Owens posted last year that quite a few AA mechanics were sticking around until the checks for retro were issued but would leave after they got those retro checks.
Retro is probably not in the cards now, but it's possible that some of the mechanics will leave as soon as they realize that they can earn more money fixing something other than airplanes (maybe anything other than airplanes).
I gotta believe that AA is hiring mechanics in the hopes that it can cover the daily line maintenance needs if large numbers of mechanics quit during the bankruptcy (perhaps because the wages AA offers are not as rich as many mechanics would like).
- Aug 20, 2002
- 7,319
- 1,555
If some of the line gets what they want and OH goes away with there only protection is to RED CIRCLE the line, then there would be in need of hiring new mechanics. If company is cutting some flight schedules even before bankruptcy, the need for more mechanics is really puzzling. You also have to remmeber that one of the cost advantage in maintenance is the OSM. Are we going to see a licensed Aircraft Support Mechanic appear out of bankruptcy?
What makes you think mechanics are going to quit, rather get laid off?
eolesen
Veteran
- Jul 23, 2003
- 15,945
- 9,372
Great, but I don't think pay is the issue. My guess remains that pay remains largely untouched for the rank & file. AA will get their 25-30% primarily thru gutting scope & other workrules.
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #126
there are alot of people at AA that think there will be no cuts to base salaries but all of the cuts will come from benefits... however, it would require benefit cost cuts of 50% or more not to cut base salaries but achieve a 25% cut in total compensation - virtually impossible to do without eliminating entire classes of benefits. Given that AA has a nearly $2B shortfall in profitability compared to its network peers DL and UA, they will cut costs where they have to in order to turn the business around. It would be nice to think they could get the cost cuts they want without touching base pay but it is highly unlikely they can make the numbers work and it would be unprecedented in a BK restructuring not to touch base pay.
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I'm sure alot of DL FAs didn't like seeing any PA FAs move into their ranks but the DL FAs somehow missed the fact that DL added about a dozen daily international flights on one day in 1991... the new flights provided a great deal of opportunities for original DL FAs that never would have existed had the asset acquisition not taken place.
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Yes DL and US and everyone else are doing all they can to make sure that AA doesn't emerge as a stronger viable competitor... that is what competition is all about. The notion many had here that AA would go in for a little tub bath and emerge unscathed was more than a tad separated from reality.... all the more so given that demand continues to shrink as fuel prices are expected to continue to increase and every other airline is looking for a way to keep growing their business... given that the US market is essentially mature, you grow your business by taking share from other carriers.
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I'm sure alot of DL FAs didn't like seeing any PA FAs move into their ranks but the DL FAs somehow missed the fact that DL added about a dozen daily international flights on one day in 1991... the new flights provided a great deal of opportunities for original DL FAs that never would have existed had the asset acquisition not taken place.
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Yes DL and US and everyone else are doing all they can to make sure that AA doesn't emerge as a stronger viable competitor... that is what competition is all about. The notion many had here that AA would go in for a little tub bath and emerge unscathed was more than a tad separated from reality.... all the more so given that demand continues to shrink as fuel prices are expected to continue to increase and every other airline is looking for a way to keep growing their business... given that the US market is essentially mature, you grow your business by taking share from other carriers.
chris perry
Veteran
- Sep 17, 2008
- 544
- 118
The fact remains that mechanic's at AA have less benefit's overall with the exception of Pension....Pretty much the only thing left is two days off in a week. Unless we work a day for free...I'm pretty sure this will turn out like Eastern if pay is raped..no one will be on board...I don't see rank and file putting up with more bonuses and less pay for the troops. It would be a complete disaster to cut 25% the whole thing will implode.That would be a 50-60% pay-cut since 911.They may as well start looking for parking lots for Aircraft now...
D
Deleted member 14439
Guest
Agreed.
I've long assumed that AA's licensed mechanics will not suffer much in the way of payrate cuts, as it's obvious that AA's rate is already near the bottom of the industry and about 33% below the industry-leaders. In maintenance, I see the savings coming from headcount reduction, especially in Tulsa.
For pilots and FAs, however, there's more room to cut payrates, as AA's pilots have been at or near the top of the industry (except for WN) despite the concessions. Only recently did DL's post-bankruptcy raises cause some DL pilots to surpass AA's pilot payrates, and DL has a long history of buying labor peace among its pilots with unsustainable payrates. Plus, if AA shrinks in Ch 11 (as is widely expected), it will have a greater surplus of pilots and FAs, and cuts to top payrates will eventually cause some of the senior crew to leave. Perhaps Horton won't cut payrates but will try to get all the savings from productivity improvements - we'll soon find out.
Pilots at US East have been willing to fly narrowbodies for $125/hr (captains) for many years and that payrate is far below the jetBlue rate. The US East narrowbody first officer rates are also far below the jetBlue first officer payrates. Cutting pilot payrates would be painful, but pilots at other airlines have flown for much less than AA's rates for much of the last decade.
For pilots and FAs, however, there's more room to cut payrates, as AA's pilots have been at or near the top of the industry (except for WN) despite the concessions. Only recently did DL's post-bankruptcy raises cause some DL pilots to surpass AA's pilot payrates, and DL has a long history of buying labor peace among its pilots with unsustainable payrates. Plus, if AA shrinks in Ch 11 (as is widely expected), it will have a greater surplus of pilots and FAs, and cuts to top payrates will eventually cause some of the senior crew to leave. Perhaps Horton won't cut payrates but will try to get all the savings from productivity improvements - we'll soon find out.
Pilots at US East have been willing to fly narrowbodies for $125/hr (captains) for many years and that payrate is far below the jetBlue rate. The US East narrowbody first officer rates are also far below the jetBlue first officer payrates. Cutting pilot payrates would be painful, but pilots at other airlines have flown for much less than AA's rates for much of the last decade.
NYCDelta
Senior
If that's the case, then this cycle will never end. BK, lower costs. Another BK, lower costs. I wish all the airlines could just find equilibrium, pay a fair wage, charge fares that people can afford, and deliver a decent product, i.e. on-time flights with your bags arriving with you and in one piece. People who insist on paying low fares and expecting chateaubriand are delusional.
BoeingBoy
Veteran
- Nov 9, 2003
- 16,512
- 5,865
- Banned
- #131
Personally I don't see big cuts in pay rate either - even for pilots AA's top rate is between DL and UA top rates for equivalent equipment. I do see productivity improvements and benefit cuts since those are the areas with big differences between AA and it's two primary legacy peers.
Jim
Jim
Disagree FWAAA.
US East pilot rates occurred when the company was days away from total liquidation. They have also been locked in due to the seniority fight with the West and the B.S. of the RLA. As I've posted before, the pilot job market today is far different than just a few years ago. There is a pilot job fair for Asian carriers in MIA at the end of FEB. Expect a large attendance from AA pilots if Horton gets cute and tries the USair payrate act. 737/Airbus and 777 rates worldwide are busting $200K a year and rising. these same companies are finding pilots walking to another job with equal or better pay when they're treated badly. These jobs used to pay crap and with equal work conditions. That game is changing and Horton could lose 300 777 Captains in one month if he plays it badly.
It won't go over well when the LCC Spirit up the street pays a A319 $164/hour and Horton offers $120/hour for a 737-800 with the same FAR work rules and little retirement. Now if it was a liquidation scenario within days, and every other employee group matched the outsource/contracting/work rules and pay of the Spirit employees, then maybe some might stay to fight another day. $115k/year vs $200K a year? You tell me what guys will do.
I've also mentioned pilot work rule improvements before. AMR had APA onboard before and the future retirements would have covered the changes. That plus the retirement cost is the difference between AA-DAL/UAL. Basic hourly AA pilot rates are not that far off the other main carriers on a CASM basis (arilinefinacials.com)
Other AA employee groups are far more exposed to realigning workrules and labor costs than the AA pilots.
- Aug 20, 2002
- 7,319
- 1,555
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.
Super FLUF
Senior
- Jun 10, 2011
- 313
- 206
Holly Hegeman at PBB seems convinced we will be broken up. Comments E?
duh
