AA Has ZERO Chance of Avoiding Ch 11

Rhino

Senior
Aug 20, 2002
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To all AA employees:
Your mgmt is far superior to OALs (UAL/US, et al). They've been walking on egg shells trying to get this msg across: WAKE THE HECK UP!
=PORTION DELETED BY MODERATOR=
Do what you need to do now to keep AA from becoming one more domino.
Or not.
 

rampguy

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Aug 21, 2002
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I fail to see how name calling gets you anywhere. You may not agree with them but that doesn't make you intellectually superior. I am one that thinks the employees should help out. NHBB has been posting for a long time now and never ever resorts to ridicule.
 

RV4

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Aug 20, 2002
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[blockquote]
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On 2/5/2003 3:37:22 AM rampguy wrote:

I fail to see how name calling gets you anywhere. You may not agree with them but that doesn't make you intellectually superior. I am one that thinks the employees should help out. NHBB has been posting for a long time now and never ever resorts to ridicule.
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[/blockquote]

That's a damn lie. Be sure to review his responses concerning my post.
 

rampguy

Advanced
Aug 21, 2002
116
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Oh, its not just a lie but a "damn lie". What was I thinking.
Just for clarity, would you repost one?
 

Resman1

Member
Aug 29, 2002
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I don't see how AA can avoid Chapter 11.
The increased debt load since 9/11/01 is what will ultimately be our demise. Even if labor gives AA everything it wants, I still am not certain if it's enough. There is obviously a cost problem, but it's mainly a revenue problem. No one wants to fly unless it's 198.00 roundtrip.
You would be surprised when I quote a high end fare to customers they complain about "how expensive it is to fly and how "unsafe" it is." It's amazing that once you quote 198.00 they are ready to take on Osama themselves. The biggest problem AA and all the majors have is if we woke up tommorow and the Dow Jones was 12,000 and there was 2 percent unemployment, people will still want their fare to be 198.00. You can't charge fares that are necessary, so the only way to go is Chapter 11 to cut not only labor costs but also all of your creditors, supplies etc. The moment we declare war the bankruptcy courts will have an express lane for airlines. "Register one is open for airlines with 80,000 employees or less."
 

KCFlyer

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Aug 20, 2002
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REsman - then if thats the case, I guess all the airlines better line up in aisle "7".

You're right and wrong. Labor cuts alone aren't going to save any airline. And if the economy were to pick up drastically, the consumer would still demand $198 fares if... their only alternative was a $2,000 fare. I'd be willing to bet that if the unrestricted,un-penalty laden fare was $600 to $1,000, people would buy them like hotcakes, and the airlines would make money, and they wouldn't need near the concessions from labor.
 

1AA

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Aug 20, 2002
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CHAPTER 11 is coming real soon with a track record like this with CAARTY at the helm.

(quote)


This is some of what AA has done and where some of the big failures were. I did not add in all the arenas they have spent money on. Nor did I add in the 5 major airports where billions is being spent to remodel to fit AA's needs. AA plans to be around but they just want push the employees back to the 1980's wages when even our raises since then have not kept up with the cost of living. I know AMR is losing money but the employees had no say in these decisions. Mr. Carty has not presented a new model yet has he?

AA management is doing the same devious plotting that they have always done. This is what they have told us in the past.

1983 - B-scale or we will have to downsize the airline. Thanks Don...you did it in Canada before coming to American.

1984 - The beginning of the largest growth AA has ever seen. At our expense.

1987 - Commuter airline to feed AA. Now American Eagle is considered a Major Airline and taking over much of our flying.

1998 - Flow through Agreement for AE. It worked coming to AA but does not work as agreed upon for furloughs.

2001 - TWA agreement. 2002 - Supp CC violations.

2002 - AMR posts 3.5 Bil loss. John you spoke at the MIA meeting last summer and told us that Congress passed the legislation after 9/11 that would allow the Airlines to "recoup" the previous 2 years taxes, but it had to be done by Dec 2002.

How much did TWA cost AA? Did they take the whole purchase as a write-off last year? Will they ever tell us the truth?

2003 - AMR needs 660 Mil from the pilots. 30% pay cut. AA pilots have worked for 30% less than UAL and DAL for 2 years. UAL has taken a 29% cut and some are still paid up to 3% more than AA pilots.

Don Carty failures. He was there for all of these.
-- B-scale
-- Dropping the Air Cal routes
-- The plan to include hotels and car rentals. UAL had already failed at this plan.
-- AA F/A strike. Burned all the fuel we, the pilots, had saved over the last 30 years and what we would save over the next 20 years.
-- Nashville, Raleigh and San Jose hubs dropped.
-- Reno purchase -- planes are gone, routes dropped and Eagle trying to do our flying.
-- Canadian investment failed.
-- Aerolineous Airline investment in Argentina failed.
-- TWA purchase -- DC-9, 717, 767's are gone MD-80, 757 is different than ours. Crandall said it was a "Stupid move"
-- 30% pilot pay advantage for 2 years. Still had the highest losses of any Airline.

Don forgets history.
-- Forgot what happened at UAL with the hotels and car rentals. AA tried to repeat.
-- Forgot what happened with Air Cal. Tried again in the same market with Reno.
-- Forgot what happened at DAL with Pan Am. Tried it with TWA.

There are probably many more I cannot remember. I want start on all the arena investments.

Since Don has taken over AA has not improved any where.
--Employee relations is worst. Now he wants to change the RLA.
--Has an airline that is failing and does not offer a plan to change this.
--He just wants the employees to give up what little we have gained over the last 10 years.

At the Chief Pilots meeting 2 weeks ago they were told the loads for Jan were at about 57%. Five days later Carty tells at the meeting in NY the loads were at about 65%. What are we to believe?

Carty wants 1.8 Bil from the employees. Let him have it. Tell him to do as DAL did with Pan AM. AMR can stop the bleeding by shutting down TWA LLC. It is being run as a separate Airline and it is bleeding us toward Bankruptcy. By closing TWA LLC he will get his 4 Bil+ he is looking for and save a hugh amount of training cost. The employees may have seniority numbers for our list but they are still working for a separate airline that is not profitable to AMR. Let them go with their company...95% did not join our union but we still have to support them and they have two members on the union BOD. If AA needs to keep St. Louis hub open allow him to run it with RJ's with a 700 mile limit for passenger comfort.

Did you remember all of these failures? Now you see why we cannot trust the current leaders. You saw the CEO's at Eastern, Pan Am, TWA and Continetal do what is being done at UAL and US Airways before. UAL will soon be where Eastern and Pan Am are if the CEO does not get a plan together.

(end quote)
 

michael707767

Senior
Aug 21, 2002
332
0
[blockquote]
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On 2/12/2003 8:23:52 AM KCFlyer wrote:

I'd be willing to bet that if the unrestricted,un-penalty laden fare was $600 to $1,000, people would buy them like hotcakes, and the airlines would make money, and they wouldn't need near the concessions from labor.
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[/blockquote]

Exactly!! Airlines got fat feeding at the trough with $2000 fares in the late 90s. Doesn't mean it was right, or was good for them. Ultimately, the public has voted with thier wallets and will not tolerate the extreme difference between a very restricted economy ticket and an unrestricted full fare ticket. Management at the airlines screwed up by not realizing this earlier. Get the ticket prices in line with what you are providing, and people will buy them.
 

TAN 767 300

Member
Aug 24, 2002
23
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Several of you have it correct...we cannot justify to our managment the 2000.00 fares any longer. I have noticed more rational pricing in some markets as I make travel plans for March & April. If you can keep most prices under $1000, closer to 500-600 for most last moment ytrips, then you will find more business travellers returning. Also, I think the moment clear victory is at hand in Iraq, you will see lost of new economic activity at all levels, including travel.
The bottom line is though, you have to have "value Pricing" return to the forefront , and PROMOTE IT!

Good Luck!
 
Without the growth in 1984 thru 1989, how many of us wouldn't be employed today? I wouldn't, and I suspect most of you (except perhaps for NHBB) wouldn't either.

In 1981, AMR had 41,000 employees, 231 aircraft, and revenues of around $4.1B. And that 41,000 employees included Sky Chefs and Sabre...

In 2001, AMR had 120,000 employees, 850 aircraft with AA/TW, another 275 aircraft with Eagle, and revenues of $18.9B.

In 1981, AMR paid out 1.5B in salaries and benefits to 41,000 employees. Average = $39,000

In 2001, AMR paid out 8.3B in salaries and benefits to 120,000 employees. Average = $69,000

Bi[span]t[/span]ch and moan about what you view the failures to be, but the fact still remains that with all of the events you point out above from the past 20 years, there are just as many positives you ignore.

Since 1991, revenues grew almost 500% (not profits, mind you, but people buying our products), the fleet size increased by 389%, and the number of people employed grew by 300%.

Annualized, that's 25% revenue growth, 19% fleet growth, and 15% employment growth.

Growth like that is hardly an indicator of a continual failed management strategy.
 

Mach85ER

Veteran
Jan 13, 2003
1,089
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[blockquote]
----------------
On 2/12/2003 2:06:26 PM eolesen wrote:

In 1981, AMR paid out 1.5B in salaries and benefits to 41,000 employees. Average = $39,000

In 2001, AMR paid out 8.3B in salaries and benefits to 120,000 employees. Average = $69,000

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[/blockquote]

eolesen,

In 1981, AMR paid its employees an average of $39,000

According to the CPI changes, that $39,000
in 1981 had the spending power of about $75,000 in 2001

In 2001, AMR pay averaged $69,000.

I haven't seen that figure in the Jetnews lately.

The AA pilots are down over 20% during the same period in spending dollars. Despite the hysteria, the UAL pilots "obscene" pay gains only brought them up to equal the spending power of their 1981 pay.

http://minneapolisfed.org/research/data/us/calc/
 

KCFlyer

Veteran
Aug 20, 2002
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[blockquote]
----------------
On 2/12/2003 3:11:20 PM Mach85ER wrote:

eolesen,

In 1981, AMR paid its employees an average of $39,000

According to the CPI changes, that $39,000
in 1981 had the spending power of about $75,000 in 2001

In 2001, AMR pay averaged $69,000.

I haven't seen that figure in the Jetnews lately.

The AA pilots are down over 20% during the same period in spending dollars. Despite the hysteria, the UAL pilots "obscene" pay gains only brought them up to equal the spending power of their 1981 pay.

http://minneapolisfed.org/research/data/us/calc/
----------------
[/blockquote]

All well and good, although it doesn't address his statement:

Without the growth in 1984 thru 1989, how many of us wouldn't be employed today? I wouldn't, and I suspect most of you (except perhaps for NHBB) wouldn't either.
 

AAmech

Veteran
Aug 22, 2002
766
1
[blockquote]
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On 2/12/2003 10:32:02 AM 1AA wrote:

TWA purchase -- DC-9, 717, 767's are gone MD-80, 757 is different than ours. Crandall said it was a "Stupid move"
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[/blockquote]
Stop making stuff up to fit your beef with Carty!! Crandall was very impressed with the TWA purchase. Said it was a "Brilliant" move!!
 

Tango-Bravo

Advanced
Aug 29, 2002
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[blockquote]
----------------
On 2/12/2003 8:23:52 AM KCFlyer wrote:

REsman - then if thats the case, I guess all the airlines better line up in aisle "7".


You're right and wrong. Labor cuts alone aren't going to save any airline. And if the economy were to pick up drastically, the consumer would still demand $198 fares if... their only alternative was a $2,000 fare. I'd be willing to bet that if the unrestricted,un-penalty laden fare was $600 to $1,000, people would buy them like hotcakes, and the airlines would make money, and they wouldn't need near the concessions from labor.
----------------
[/blockquote]


To take this truth a step further... If fares had some semblance of consistency and were equitable and predictable, I believe that even the most price conscious leisure pax would be willing to pay substantially more than the loss-leader fares the "full-service" airlines have conditioned them to expect--and hold out for.

KCFlyer's $600-1,000 range for highest unrestricted coach fares is realistic; if it were implemented across the board in all (not just "a select few") markets by the network airlines, and the rock-bottom lowest 14 or 21 day advance purchase, non-refundable coach fares priced consistently in the range of $198.00-398.00 (relative primarily to distance) without all the byzantine restrictions, we would see pax actually willing to pay more and the yield crisis would take care of itself.

Yet another dramatic improvement in yields would be immediately seen IMO if first class was occupied by pax actually paying first class fares rather than freeloader "elites" (not their fault for taking what the airlines offer) upgrading from loss-leader fares. F class fares 20-30% higher than (realistically priced) unrestricted coach fares would keep load factors in F at present levels or higher but at yields generated by the F cabin 500-1,000% greater--assuming that complimentary upgrades from restricted fares were not made available sooner than day of departure.

Again, the keys to making price-shoppers willing to pay more -- also the key to generating adequate yields -- would be equitability (highest coach fare in any given market never more than 2x the lowest fare, plus pax who demand more pay more -- for Business or First Class), predictability (..."if I book 0/7/14/21 days in advance, I can expect to pay about $xxx today, tomorrow, next week or next month") and above all, consistency and simplicity.

If the airlines would stop playing their absurd, self-defeating pricing games with their customers, their customers would ease up in their resolve to beat the airlines at their own games--which IMO would bring yields into line with costs within weeks.