- Dec 21, 2002
- 5,998
- 347
Don't spend the whopping 1.5% wage increase all in one place. $.38 an hour, wow! The TWU went all out negotiating this one. Looks like non union personnel are getting the same increase without having the TWU break legs to get it for them.
February 10, 2004
M&E TUL Base Employees,
We have started 2004 on a positive note. Together we are making the progress we hoped for under the Turnaround Plan. In January, we announced a commitment to every member of our AA team to share in our successes through new incentive compensation programs.
First, our Employee Stock Plan, which we introduced last April, has benefited from the substantial increase in our stock value over the past year. After April 17, 2004, you will be able to exercise the first third of your options, without any out-of-pocket cost to you. There will be more information regarding this program as we approach the April time frame.
The second program is our Profit Sharing. Profit Sharing is paid in March for the previous year and is paid as a percentage of an employee's eligible earnings. Before we can share in this program, we must have annual pretax earnings of at least $500 million. Fifteen percent of pretax earnings over $500 million will go into a pool to be paid to union employees, support staff, and management levels 1 through 4. Unfortunately, based on the earnings report for 2003, there will be no payout for any employee group from the Profit Sharing Program.
We have also announced the new Annual Incentive Program (AIP). This is a new incentive that is based on Customer Service and/or our Department of Transportation (DOT) rankings. We firmly believe that when we perform well in two of the areas most important to our customers – customer satisfaction and dependability – our profits will improve and you will share in these profits. If we meet our customer service and/or our Department of Transportation (DOT) ranking goals, awards will be paid to you quarterly. Details of this new program will be forthcoming later this month and accessible to you on the Tulsa Base website.
I’m particularly pleased with the new AIP. I firmly believe our customers want to board an aircraft that is clean and on which every mechanical part is working properly to get them to their destination safely and on time. Producing a quality on-time product from the Tulsa Base will be our contribution for our Customer Service and DOT ranking goals. Customer satisfaction is a critical component that we all participate in. The new AIP stands on its own and is not tied to corporate financial goals.
Finally, in May, there will be increases in paychecks over and above these programs. Our union employees have a negotiated contractual increase of 1.5%. Our support staff and management employees will also have a pay plan of 1.5%. Details on that pay plan are being finalized.
It is important, however, that we face the realities of our business and our industry. According to industry analysts, our airline costs, even with restructuring and cost improvements, are still higher than our leading competition. It is projected that by next year, we will compete with low cost carriers (LCCs) on 100% of our domestic route structure. That is 65 percent of our customer base. This is giving us fewer opportunities to capture the revenue premium that we depend on. Our job at the Tulsa Base is to provide the airline with the best product we can at the lowest possible cost. Simply put, we will have to continue to work together and follow through on the tenets of our Turnaround Plan:
1. Lower Costs to Compete
2. Fly Smart – Give Customers What They Value
3. Pull Together, Win Together
4. Build a Financial Foundation for Our Future.
So how are we going to accomplish this task here at the Base? From time to time you will see reports on our website regarding Maintenance Repair Organizations (MROs) that we have visited. The purpose of these visits is to benchmark the Tulsa Base against our competitors. It is important that we are continuously looking for ways to cut our costs and work smarter. This will keep our work in-house and at a competitive rate. American Airlines has adopted a strategy to keep heavy maintenance within our own company. Other airlines, such as United and Northwest have chosen a different strategy and are sending heavy maintenance work to these MROs. While lower cost carriers (LCCs) are the true competition for the airline, these MROs are the true competition for the heavy maintenance work performed at the Tulsa Base. We will also expand our efforts to find better and more efficient ways to operate through the use of Continuous Improvement (CI) and Internal Maintenance Acquisition Analysis Committee (IMAAC). Many more of you will participate in CI Training and CI Events in the coming year.
The results of CI Events and IMAAC have been one of the driving forces in the decisions to bring work to the Tulsa Base. We are also working closely with American Eagle. On February 16, 2004, Eagle will be here to audit six of our shops to see if we can do repair work for them. I can tell you today that it is looking promising.
As a team, we will continue to be innovative and do our part to help American Airlines return to prosperity. We need to watch how we interact and do business with one another. We need to show our respect and recognition of one another to reinstate our sense of pride. By working together to solve our challenges, we will secure a better working environment and better relationships with each other. All of these concepts will secure our financial future.
To each of you, I thank you for your continued efforts and your vision.
Regards,
Carmine Romano
--------------------
Hammer
February 10, 2004
M&E TUL Base Employees,
We have started 2004 on a positive note. Together we are making the progress we hoped for under the Turnaround Plan. In January, we announced a commitment to every member of our AA team to share in our successes through new incentive compensation programs.
First, our Employee Stock Plan, which we introduced last April, has benefited from the substantial increase in our stock value over the past year. After April 17, 2004, you will be able to exercise the first third of your options, without any out-of-pocket cost to you. There will be more information regarding this program as we approach the April time frame.
The second program is our Profit Sharing. Profit Sharing is paid in March for the previous year and is paid as a percentage of an employee's eligible earnings. Before we can share in this program, we must have annual pretax earnings of at least $500 million. Fifteen percent of pretax earnings over $500 million will go into a pool to be paid to union employees, support staff, and management levels 1 through 4. Unfortunately, based on the earnings report for 2003, there will be no payout for any employee group from the Profit Sharing Program.
We have also announced the new Annual Incentive Program (AIP). This is a new incentive that is based on Customer Service and/or our Department of Transportation (DOT) rankings. We firmly believe that when we perform well in two of the areas most important to our customers – customer satisfaction and dependability – our profits will improve and you will share in these profits. If we meet our customer service and/or our Department of Transportation (DOT) ranking goals, awards will be paid to you quarterly. Details of this new program will be forthcoming later this month and accessible to you on the Tulsa Base website.
I’m particularly pleased with the new AIP. I firmly believe our customers want to board an aircraft that is clean and on which every mechanical part is working properly to get them to their destination safely and on time. Producing a quality on-time product from the Tulsa Base will be our contribution for our Customer Service and DOT ranking goals. Customer satisfaction is a critical component that we all participate in. The new AIP stands on its own and is not tied to corporate financial goals.
Finally, in May, there will be increases in paychecks over and above these programs. Our union employees have a negotiated contractual increase of 1.5%. Our support staff and management employees will also have a pay plan of 1.5%. Details on that pay plan are being finalized.
It is important, however, that we face the realities of our business and our industry. According to industry analysts, our airline costs, even with restructuring and cost improvements, are still higher than our leading competition. It is projected that by next year, we will compete with low cost carriers (LCCs) on 100% of our domestic route structure. That is 65 percent of our customer base. This is giving us fewer opportunities to capture the revenue premium that we depend on. Our job at the Tulsa Base is to provide the airline with the best product we can at the lowest possible cost. Simply put, we will have to continue to work together and follow through on the tenets of our Turnaround Plan:
1. Lower Costs to Compete
2. Fly Smart – Give Customers What They Value
3. Pull Together, Win Together
4. Build a Financial Foundation for Our Future.
So how are we going to accomplish this task here at the Base? From time to time you will see reports on our website regarding Maintenance Repair Organizations (MROs) that we have visited. The purpose of these visits is to benchmark the Tulsa Base against our competitors. It is important that we are continuously looking for ways to cut our costs and work smarter. This will keep our work in-house and at a competitive rate. American Airlines has adopted a strategy to keep heavy maintenance within our own company. Other airlines, such as United and Northwest have chosen a different strategy and are sending heavy maintenance work to these MROs. While lower cost carriers (LCCs) are the true competition for the airline, these MROs are the true competition for the heavy maintenance work performed at the Tulsa Base. We will also expand our efforts to find better and more efficient ways to operate through the use of Continuous Improvement (CI) and Internal Maintenance Acquisition Analysis Committee (IMAAC). Many more of you will participate in CI Training and CI Events in the coming year.
The results of CI Events and IMAAC have been one of the driving forces in the decisions to bring work to the Tulsa Base. We are also working closely with American Eagle. On February 16, 2004, Eagle will be here to audit six of our shops to see if we can do repair work for them. I can tell you today that it is looking promising.
As a team, we will continue to be innovative and do our part to help American Airlines return to prosperity. We need to watch how we interact and do business with one another. We need to show our respect and recognition of one another to reinstate our sense of pride. By working together to solve our challenges, we will secure a better working environment and better relationships with each other. All of these concepts will secure our financial future.
To each of you, I thank you for your continued efforts and your vision.
Regards,
Carmine Romano
--------------------
Hammer
