AA Plans

[bluesideup1]

Re: Get over it

Consistantly over the last 20 years, American has had the best major airline management in this country followed by Delta. You might want to listen to it. [/B][/QUOTE]

Publisher,
I would love to hear what you are basing your opinion on how AMR has had the best major airline management in country. You must mean the supurb relationship that management has with all its employee groups or maybe the high ethical standards to which they adhere to. Maybe it is the constant belief that their own employees are the enemy.
The only reason this company continues to run despite the best efforts management has to make it disapear from the face of the earth is soley because the dedication and pride that each employee can give no matter how badly management trys to take it away.

 

[publisher]

right

bluesideup

I am reminded of a quote from when Crandall was CEO. A pilot was describing him, " He is a real son of a bitch, but, thank God he is our Son of a bitch."

The point was while all management sucked to him, at least he recognized that his guy was the best of the lot. Airline management has to get along with a large number of groups, not just pilots or even employees. Balancing all those groups and interests is what makes it so hard.

As to Southwest, they have become the best for many reasons. If I was trying to give a simple example of one reason it would be this. Flying Tigers, the cargo carrier, tried for a number of years to compete with Fedex in the overnight business. One of the reasons they failed was because they tried to mix overnight envelopes with regular freight. It did not work.

The dealing with regular freight was what took the time and more expense and made them non competitive.

Southwest only has one type of passenger, one type of plane, one set of standards of service, and people who believe they are the best. That is a winning combination today and tomorrow.

 

[alek]

AMR-Expand

Let me give you example of SWA employee relations.

Before 9/11 I talked to 2 pilots at SWA about their contract negotiations. Junior pilot, only 3 years with SWA was complaining about schedule, and pay. He told me he would go for UAL or DAL without looking back. However, senior pilot about 20 years with SWA told me this is the best place in the world and that the junior guys only make problems with the contract negotiations, they don't want to work hard ,,,, etc.

My point is after 9/11 I am sure everybody thinks SWA is the best employee company, they take care of their own people, no furloughs. If that is true, than why not sign Mechanics Contract without delays. Also, what will happen when SWA has 9000 pilots and they request same pay on the A/C as their friends at the other airlines. It will be interesting to see what will happen, with more people you will have also more problems. Junior pilots don't care so much about profit sharing. It is all about cash, and when economy goes back, they will forget that SWA didn't furlough after 9/11. Of course, I wish SWA all the best, they are there to keep Majors in balance, but never one side (SWA) has everything good and everyone else is just a looser.

As far as AMR, I would agree they have a solid Management. However, I think they should change their conservative approach to business. They have airplanes, people, they should attack market to attain greater share of passengers. Why put all TWA pilots in STL. They could create extra domiciles around country, and start same operation like SWA. If you have money you go against competition instead waiting to see what everybody else does. When UAL expanded in 80s/90s, they didn,t wait for the competition they went for the market. I think AMR business strategy was excellent when they were #2 Airline, but now being #1 you either learn very fast to lead or you end up second best again. Also, never understood, why can't they ones for all stop arguing with Unions and show to the rest of the business world being and staying #1 also requires fair relations with your Unions.

All the best Alek

 

[HA25]

Again, I say, Listen to the last AMR conference call to investors (on AMRCORP.com) and you will hear two things that I believe ar facts that have already been stated on this thread.

1. AMR is a very conservative company that understates everything and makes very conservative assumptions (as compared with other airlines).

2. SWA has a MAJOR advantage in that their labor cost (which is by far the largers cost to an airline) is smaller than all other carriers, other than AWA (don't ask my why they can't turn a profit).

With that, we can assume that AMR, which has $3 Billion in the bank and another $6 Billion in aircraft assets will be around for a long time. We can also assume that SWA will over time (maybe 5-6 years) begin to see labor costs grow and then they will really have to begin to compete. As of now, they are only competing with themselves, Jet Blue is too small to matter for now. Plus a 737 can only take you so many places, you still need cross the Pacific, and that costs a lot less to do when you pack the plane with 250+ vs the 140 or so a 737 can handle.

I predict that SWA will continue to grow, but at a much smaller rate. It kinda reminds me of NetJets, for a while everybody said that they will take over all of the Corporate Jet flying in the country because they do it cheaper. well they have not and they never will, they are a nich product and their customer base is very finite.

AMR will be back strong, and all of us with class dates that were cancelled (if we are determined) will get invited back to interview when they begin hiring, I'll bet on it.

 

[rapidD]

Guys

The bottom line is that when the economy is up, the big carriers thrive and are the place to be. When the economy is down, the low fare carriers and freight folks are the place to be. SWA has a great corporate climate and is a wonderful place to work. My buds there, though, were really bitching prior to 9-11 about the inequity of the pay scales. God knows where we're headed next but all of the optimism and pie-in-the-sky attributes of SWA, Jet Blue, et al should be kept in perspective of today's marketplace.

 

[HA25]

well said rapidD, I agree with that statement 100%, and sorry guys for my crappy spelling, I tend to spell bad as it is, then add to it the heat of a debate and I turn into an spelling slob.

 

[publisher]

ggod points

Good points but there will always be another SWA and another Alaska.

The fact is that left to their own devices would revert to pre deregulation type pricing and polcies.

The SWA's of the world always come along to keep them honest in both fairs and employee compensation.

What has not be recognized here is that a systemic change is going on and that it began almost 6 years ago. The percentage of people on an aircraft at discount has risen steadily for many years. Eventually it was going to catch up with the industry. Business travel diminishes and that's the ball game. We will see how long this lasts.

 

[HA25]

Carty and AMR acknowledge that pricing structure change is inevitable, and AMR seems to be proactive in this area, as in the past during hard times, which will help them. But there is one fact that cannot be escaped ......an airline has NEVER made it by shrinking ....growth is a key driver in rising earnings. Don’t think that AMR is gonna defer all aircraft orders for ever. Wait the the 17th of July and listen to the conference call, I’m sure some interesting news will come out.

 

[Jakeair]

SWA does not want market share !

As a SWA Pilot (about one year), I can tell you that SWA does not want to complete with other airlines. SWA does not care about market share like other airlines, it's all about profits.

Take a look at the cost of moving one SWA seat, one mile.
About 7.54 cents (2001)

(UAL about 9.2, U about 8.9 and on and on.)

Now look at the Yield per RPM.
About 8.51 cents (2001)

After Sept. 11 the yields are down. However, so are the costs.

In 2001 the Average Passenger fare is $83.46.

27.3 % of SWA aircraft are leased, the rest are owned.

Long-term Debt 1.3 billion.
Cash 2.27 billion.

As you can see the company is run like a business, not to buy other business (car rental comp. or Hotels). When it makes money, it pays off its liabilites.

I think the interim contract offer will pass. In 2006 with the super Mediation language in the offer, I think the pay will come up that last 15-20 % in 2006 (if you count the stock opts).

SWA will always be a low cost, lower paying(?), grow at 9-10% per year, secure, well run airline. Who's management knows how to stay the course.


Jakeair


PS. You can cross the Pacific in a 737-700 (with the APU runing !!)

 

[HA25]

The key is that SWA is not really in competition with AMR, they are a niche company who does better in tough times. I still maintain that when the pilots and others get paid closer to AMR wages, as they eventually will, that cost of moving a seat will rise, as will the fare.

 

[Draginass]

What DAL, UAL, NWA, and AA managements want to do is gut scope and dumbdown pilot jobs to commuter scale compensation. When they get done with that, they want to open up cabotage and internationalize their companies. That way they can get rid of those overpaid commuter scale guys now flying wide-bodies and get even cheaper labor from South America and eastern Europe.

 

[ex nav]

more AA pilot furloughs?

Ex-TWA pilots could be caught in layoff

By Christopher Carey
Of The Post-Dispatch
Bloomberg News Contributed Information To This Report.


American Airlines could have to furlough more than 100 former TWA Airlines LLC pilots to comply with a seniority-integration agreement it signed before the carriers combined operations.


Fleet reductions since the terror attacks Sept. 11 have left American with an "excess" of ex-TWA captains at its St. Louis hub, said Stephen Tankel, a spokesman at American's headquarters in Fort Worth, Texas.


Under the formula for combining the seniority lists, the number of former TWA captains at the St. Louis hub was capped at a fixed percentage of the number of American captains at the carrier's Chicago and Dallas/Fort Worth hubs.


The strictest interpretation of the agreement between the airline and the Allied Pilots Association would require the airline to park about a dozen jets operating from Lambert Field and to displace at least 103 captains. Such a move could lead to an equivalent number of layoffs at the lower end of the seniority list.


Negotiators for American met Tuesday with negotiators for the Allied Pilots Association -- the union representing all 12,400 pilots in the merged airline -- to discuss alternatives to furloughs.


About 310 former TWA pilots have been idled.


American has outlined three options, Tankel said.


The airline's preferred option would be to amend the maximum number of ex-TWA captains in St. Louis to "more closely reflect the realities of the current environment."


It also would be willing to create a satellite base for the excess pilots at LaGuardia Airport in New York, relocating their flying until retirements, attrition and aircraft conversion eliminate the surplus.


American said its least favored option would be grounding jets and laying off pilots.


The union also offered some options, said Todd Wissing, an American first officer who serves on the union's communications committee. "The things that we've proposed would not result in any displacements," he said.


The seniority-integration plan developed last fall envisioned that the merged airline would be operating about 880 aircraft today. Because of fleet adjustments, the figure stands at 823 aircraft.


Jeff Darnall, a former TWA captain who could be displaced, believes that neither American nor the Allied Pilots Association wants to see more pilots leave the work force.


Whatever imbalance exists between the number of ex-TWA and American captains should work itself out in the next year or so as TWA veterans reach the ends of their careers, Darnall said.


American plans more cuts


American Airlines, a unit of AMR Corp., will eliminate more jobs gradually as it cuts costs to compete with no-frills carriers, the company's chief executive, Donald Carty, told employees Tuesday. "Eliminating duplication, simplifying and otherwise streamlining the business . . . will no doubt mean that, over time, we'll need fewer people," Carty said in a recorded message.


"We don't anticipate wholesale changes to happen tomorrow."


AMR employed 123,732 people March 1.


The airline has no information beyond what was included in Carty's message, a spokesman said.



Reporter Christopher Carey:
E-mail: [email protected]
Phone: 314-340-8291

Published in Business on Wednesday, July 3, 2002.

 

[publisher]

Sell AE

Some anticipate the selling off of Eagle as one thing coming/ It would be no surprize.

It is hard to be all things to all people. As I have said before this does not have much to do with pilot pay as with a changing market.

It used to be that discount had a bad tone. Today both Southwest and Airtran are not looked on as discount carriers but in a positive light.

There is as much chance that major carrier pay will come down than these carriers up. In either case, you cannot directly compare. The big disparity in pay per hour that impacts costs are the larger aircraft of the majors.

 

[HA25]

Spinning of AE would be a God send!

 

[alek]

AE and TWA

I dont't think they will sell Eagle, they desperately need feed, and other commuters are tied with other majors.

I think we might see, if APA agrees, B-scale pay for new airline within AMR, using TWA airplanes/pilots, call some furlough people back, and start point to point operation like SWA. August 1 AA announced 2 daily roundtrips from Kansas City to New York. This might be the beginning of point to point or just try-out. Kansas City is Maintenance base but not the hub for AA, I wonder if other cities will follow.

I hope AMR learned lesson from SWA expansion. SWA didn't expand with 70% market share overnight. Jet Blue is doing same thing in their backyard in New York. I believe 2 days ago they announced 40 extra flights to Florida this fall. If Jet Blue can find passengers then AA should also expand. AA has crew domicile there, and also TWA use to have big domicile in JFK.

I like how everybody blames SWA for their expansion and their market share. That didn't happen overnight, and instead of fighting with unions over last 10 years about pay issues Managers of Big 4/5 should realize what's happening with their Airlines and their own market share.

Alek