justApilot
Dawn Patroller
- Joined
- Jan 27, 2002
- Posts
- 346
Monday Hot Flash - April 28, 2003 --The Boyd Group
Update On American's Fiasco
Your Call Is Important To Us. Or, At Least It Used To Be: Two weeks ago, Don Carty was viewed as the Man With The Plan, a guy with a strong view of the future and one who could rally the troops. He was the Glorious Leader, saying the right things and leading his airline to the Economic Victory.
So much for that..
Now we find out that he's the Baghdad Bob of the airline set. In that regard, here's a hoot. When you dial Carty's AA employee hotline (1-800 222-2789), instead of the inspiring words of a confident CEO, a short and terse recording answers: "American Airlines has no comment."
Coincidentally, they have no Carty, either.
Who Wants To Be A Millionaire? Become A Former AA Executive & Find Out
After the revelation of bonuses and protected pensions for executives, then-chairman Don Carty claimed that it was all necessary to retain top talent. He may have been right - especially when you see what American paid some executives just to walk out the door.
One executive who departed in September got the following, according to American's 10-K:
Severance of just over a cool million - $1,040,000 - two times the guy's salary, paid in a lump sum, along with pay for his accrued vacation days in 2002 and 2003. Compare and contrast - some line mechanics could see their paychecks shrink by 25%. Some pilots will see 30% to 50% cuts in income. And with the reductions in force, a lot of other employees will get out of AA, too, just like this executive. Only difference is that when executives leave, they get big bucks. When the rank-and-file get laid-off, they get bupkus.
He gets a pension protected from any bankruptcy filing. How comforting, especially when employees were being told that their benefits must be slashed to save the airline.
Eligibility for more pay under American's "2002 Incentive Compensation Plan." Whatever that is.
A "consulting" contract, paying the guy another $278,300 over the next 12 months, for services relating to "Advertising and Brand Awareness" - which could easily translate into "stay home." Of course, he could bill for any expenses he incurs in the process of "consulting" to American. Sure.
This difficult consulting work could, of course, be stressful for the former VP, and could therefore have a detrimental effect on Brand Awareness programs. He must be in top form, mentally and physically. So, American agreed to pay for the use of "his clubs" - and we ain't talking about a set of Ping irons. No, we be talking 'bout fully-paid memberships for a full year to three institutions - The Sports Club, LaCima Club, and Las Vegas Southshore. Close as we can tell, the first one is a health club, the second a members-only business club in Dallas, and the third seems to be a posh golf resort in Nevada. American's flight attendants, with their paychecks whacked by concessions, will be concerned about making ends meet. Meanwhile, AA's paying this guy's dues so he can meet his buddies at the health club.
Free travel on American for he and his wife. Not just with an A2 positive space pass. No, no. We're talking real positive space travel. See, he also got a UATP credit card on which he could just book the travel full-fare, with the bill paid by American. In short, he could bump paying passengers because, well, he would be a paying passenger, except American would be paying for it. Of course, the IRS would consider the value of such transportation as taxable income. But not to worry, AA will send a check at the end of the year to reimburse him for the amount of those taxes. But, unlike this ex-exec-turned-consultant, some AA employees won't have the bother of income taxes. See, when you get laid-off, the income stops.
American is paying for a car for the guy during this rough year of consulting on Brand Awareness. One can bet that it isn't a Ford Focus. To facilitate his important consulting duties, he's been granted parking privileges at DFW headquarters "consistent with those provided elected Officers of the Company." Parking in the rank-and-file employee lot can result in door dings, you know. Or maybe sugar in the tank. (Again, compare and contrast - at Continental, "executive parking privileges" are open to all management staff - they pay for it themselves.)
Parking seems to be a big thing with this ex-VP. In case a Brand Awareness emergency arises while he's on the links at the Southshore, he can rush back to DFW Headquarters without worrying about a parking spot at LAS. That's because American is paying for a parking permit for him at McCarran International Airport. The agreement seems to indicate this is permanent.
American is requiring that the former VP return his company cell phone. But not for another year.
Good health is important to dreaming up Brand Awareness programs. So AA's paying for a year and a half of full medical insurance for he and his wife.
A honorary lifetime membership to the Admiral's Club. While he's traveling free on American's dime, he can relax in a private, quiet setting between flights. Thinking about Brand Awareness does not allow distractions.
By the way, at the time this VP was ushered out the door with all this cash, prizes, and lovely parting gifts, American Airlines was losing around $10 million a day. Every day.
Two weeks ago, it appeared that American had the leadership to move it into the future. By cutting deals like this, it's pretty clear that behind the scenes, AA's senior management was more concerned with moving themselves into the future. And, don't forget, the AA Board of Directors, as well as the newly-appointed CEO, were in on the deal. Add that to the fact that the SEC filing that revealed this stuff was delayed by management until just after unions agreed to concessions, and something suddenly smells rotten in CenterPort.
American has great employees, and eventually trust can be restored in their leaders. But it may take years. This new CEO had better start by renouncing the Don Carty program of which he was an active participant.
In any case, it's pretty obvious that the last thing AA needs is another consultant to expand its image. The revelations of the last two weeks have made American Airlines awash in Brand Awareness.
Update On American's Fiasco
Your Call Is Important To Us. Or, At Least It Used To Be: Two weeks ago, Don Carty was viewed as the Man With The Plan, a guy with a strong view of the future and one who could rally the troops. He was the Glorious Leader, saying the right things and leading his airline to the Economic Victory.
So much for that..
Now we find out that he's the Baghdad Bob of the airline set. In that regard, here's a hoot. When you dial Carty's AA employee hotline (1-800 222-2789), instead of the inspiring words of a confident CEO, a short and terse recording answers: "American Airlines has no comment."
Coincidentally, they have no Carty, either.
Who Wants To Be A Millionaire? Become A Former AA Executive & Find Out
After the revelation of bonuses and protected pensions for executives, then-chairman Don Carty claimed that it was all necessary to retain top talent. He may have been right - especially when you see what American paid some executives just to walk out the door.
One executive who departed in September got the following, according to American's 10-K:
Severance of just over a cool million - $1,040,000 - two times the guy's salary, paid in a lump sum, along with pay for his accrued vacation days in 2002 and 2003. Compare and contrast - some line mechanics could see their paychecks shrink by 25%. Some pilots will see 30% to 50% cuts in income. And with the reductions in force, a lot of other employees will get out of AA, too, just like this executive. Only difference is that when executives leave, they get big bucks. When the rank-and-file get laid-off, they get bupkus.
He gets a pension protected from any bankruptcy filing. How comforting, especially when employees were being told that their benefits must be slashed to save the airline.
Eligibility for more pay under American's "2002 Incentive Compensation Plan." Whatever that is.
A "consulting" contract, paying the guy another $278,300 over the next 12 months, for services relating to "Advertising and Brand Awareness" - which could easily translate into "stay home." Of course, he could bill for any expenses he incurs in the process of "consulting" to American. Sure.
This difficult consulting work could, of course, be stressful for the former VP, and could therefore have a detrimental effect on Brand Awareness programs. He must be in top form, mentally and physically. So, American agreed to pay for the use of "his clubs" - and we ain't talking about a set of Ping irons. No, we be talking 'bout fully-paid memberships for a full year to three institutions - The Sports Club, LaCima Club, and Las Vegas Southshore. Close as we can tell, the first one is a health club, the second a members-only business club in Dallas, and the third seems to be a posh golf resort in Nevada. American's flight attendants, with their paychecks whacked by concessions, will be concerned about making ends meet. Meanwhile, AA's paying this guy's dues so he can meet his buddies at the health club.
Free travel on American for he and his wife. Not just with an A2 positive space pass. No, no. We're talking real positive space travel. See, he also got a UATP credit card on which he could just book the travel full-fare, with the bill paid by American. In short, he could bump paying passengers because, well, he would be a paying passenger, except American would be paying for it. Of course, the IRS would consider the value of such transportation as taxable income. But not to worry, AA will send a check at the end of the year to reimburse him for the amount of those taxes. But, unlike this ex-exec-turned-consultant, some AA employees won't have the bother of income taxes. See, when you get laid-off, the income stops.
American is paying for a car for the guy during this rough year of consulting on Brand Awareness. One can bet that it isn't a Ford Focus. To facilitate his important consulting duties, he's been granted parking privileges at DFW headquarters "consistent with those provided elected Officers of the Company." Parking in the rank-and-file employee lot can result in door dings, you know. Or maybe sugar in the tank. (Again, compare and contrast - at Continental, "executive parking privileges" are open to all management staff - they pay for it themselves.)
Parking seems to be a big thing with this ex-VP. In case a Brand Awareness emergency arises while he's on the links at the Southshore, he can rush back to DFW Headquarters without worrying about a parking spot at LAS. That's because American is paying for a parking permit for him at McCarran International Airport. The agreement seems to indicate this is permanent.
American is requiring that the former VP return his company cell phone. But not for another year.
Good health is important to dreaming up Brand Awareness programs. So AA's paying for a year and a half of full medical insurance for he and his wife.
A honorary lifetime membership to the Admiral's Club. While he's traveling free on American's dime, he can relax in a private, quiet setting between flights. Thinking about Brand Awareness does not allow distractions.
By the way, at the time this VP was ushered out the door with all this cash, prizes, and lovely parting gifts, American Airlines was losing around $10 million a day. Every day.
Two weeks ago, it appeared that American had the leadership to move it into the future. By cutting deals like this, it's pretty clear that behind the scenes, AA's senior management was more concerned with moving themselves into the future. And, don't forget, the AA Board of Directors, as well as the newly-appointed CEO, were in on the deal. Add that to the fact that the SEC filing that revealed this stuff was delayed by management until just after unions agreed to concessions, and something suddenly smells rotten in CenterPort.
American has great employees, and eventually trust can be restored in their leaders. But it may take years. This new CEO had better start by renouncing the Don Carty program of which he was an active participant.
In any case, it's pretty obvious that the last thing AA needs is another consultant to expand its image. The revelations of the last two weeks have made American Airlines awash in Brand Awareness.
