AA headed for bankruptcy?

[Maark767]

Unfortunately people don't understand this. The $1.6 billion wasn't enough. I don't know why people just don't want to accept the fact AA's cost in relation to its peers/competitors is just too much.

What's so difficult to understand??

I think AA should file for BK and have an "exit plan" for current management as well after they exit BK. AA does need some fresh leadership but the current leadership will be needed to guide the company through BK.

I have an idea.... How about we go to YOUR employer and ask that you give up 35% of your pay and benefits.... How does that sound??? And then have you go and ask for a 6 % raise 8 yrs and they say no way and in the meantime upper management has been taking millions in bonuses.....
Try and swallow that??

 

[Jacobin777]

.
A
because as much as you and AA want to proclaim otherwise, AA's labor costs at the per employee level ARE NOT HIGHER... AA employee costs were cut just as much as everyone else and other carriers that are able to make a profit are paying MORE in pension costs including the DB plans still on their books.
.
The simple fact is that AA has not grown the airline in 10 years and thus has a very senior and expensive workforce and the size of the workforce is too large for the size of AA's network.
The notion that individual employee salaries need to be cut is completely false.
AA needs to use its assets more efficiently and either expand the size of the airline or reduce the workforce.
Cutting individual salaries will only alienate the 80% of the people AA needs to get the job done.
And AA has relatively little benefit to be gained from a BK filing except for to reduce labor costs which does not have to be done in BK to begin with.
AA will file when its cash gets too low and it can't refinance anymore.
Until then it will continue to limp along w/ competitors banging away at AA's core revenue.

Labor costs for AA include its current pension scheme. It is part of the over all "employee costs". Filing for BK would help that end (along with leases, etc.). With the current contract AA management is trying to sign with the TWU and with the recent (and upcoming) retirements of its pilots, it will certainly help AA shift costs to a lower scale.

Salary + productivity + pension can definitely change in BK - even with the new laws in place.

AA's situation isn't really unique.

Management at UAL Delta are borderline Madoff ,they used BK as a tool. A money making tool for themselves....at the expense of the American Worker...These laws were not intended to pilfer employee's....No integrity in my book just plain American Greed....
The moral issue Arpey's right .... The scum bag no moral leader's of todays business will have their day with the man upstairs...

That doesn't really sound like a persuasive argument. Do show us how UA and DL management used BK as a tool for themselves.

I have an idea.... How about we go to YOUR employer and ask that you give up 35% of your pay and benefits.... How does that sound??? And then have you go and ask for a 6 % raise 8 yrs and they say no way and in the meantime upper management has been taking millions in bonuses.....
Try and swallow that??

If my pay was above "industry standard" then I really wouldn't have choice to either accept or make changes in my/my family lifestyle. Coincidentally, as having a degree in chemistry, a minor in biology and having a graduate degree in molecular immunology, I was making less than a garbage collector - and this was after 8 years as well. :blink:

Rather than "lashing out" at everyone and complaining about the "system" and how it has "screwed me over", I decided to work harder and pursue my studies even further. Now I'm my own boss and run my own company.

I guess if I want to ask for a 35% pay-cut to myself, I have not choice but to accept it... 😛

 

[Vortilon]

I have an idea.... How about we go to YOUR employer and ask that you give up 35% of your pay and benefits.... How does that sound??? And then have you go and ask for a 6 % raise 8 yrs and they say no way and in the meantime upper management has been taking millions in bonuses.....
Try and swallow that??

Que the crickets......................

 

[Hopeful]

Unfortunately, the $1.62 billion annual concessions extracted from labor, although large and painful, weren't large enough. By time US and UA emerged from Ch 11, their labor costs were significantly lower than AA's. Then DL and NW filed and reduced their costs even below those of UA.

I agree that the losses are from poor management decisions; Exhibit A is the reluctance/refusal/moral objection (whatever it is) that Arpey has to the use of the bankruptcy code to restructure his employer. Every one of his legacy competitors has done it (some more than once). Thinking AA could go it alone without using that same cost-reduction tool was naiive.

So the ONLY fault you find with Arpey & Co is his reluctance to file BK and screw the workers out of pensions and wages and benefits?
I suppose you will cheer the loudest should AA file and screw the employees while Arpey and his asswipe team reward themselves for having made the "oh so difficult decsion to file."

Chapter 11 has become the tool for bad management by blaming labor for all their woes and people like you are frothing at the mouth waiting for that moment when you can say "I TOLD YOU SO, YOU LOWLIFE WORKERS."

 

[Boomer]

Unfortunately, the $1.62 billion annual concessions extracted from labor, although large and painful, weren't large enough. By time US and UA emerged from Ch 11, their labor costs were significantly lower than AA's. Then DL and NW filed and reduced their costs even below those of UA.

I agree that the losses are from poor management decisions; Exhibit A is the reluctance/refusal/moral objection (whatever it is) that Arpey has to the use of the bankruptcy code to restructure his employer. Every one of his legacy competitors has done it (some more than once). Thinking AA could go it alone without using that same cost-reduction tool was naiive.

If the current chowderheads running the compAAny could not estimate what it took, in concessions from the Unions, to make up for their inability to manage the operAAtion: why would any of the Unions now negotiate concessions outside of bankruptcy?

 

[FWAAA]

So the ONLY fault you find with Arpey & Co is his reluctance to file BK and screw the workers out of pensions and wages and benefits?
I suppose you will cheer the loudest should AA file and screw the employees while Arpey and his asswipe team reward themselves for having made the "oh so difficult decsion to file."

Chapter 11 has become the tool for bad management by blaming labor for all their woes and people like you are frothing at the mouth waiting for that moment when you can say "I TOLD YOU SO, YOU LOWLIFE WORKERS."

You're pretty adept at putting words in others' posts. 😀

I've posted repeatedly that AA's line mechanics should not settle for anything less than WN wages and, ideally, perhaps the midpoint between UPS and WN wage scales. Your own union local president posted here that his worthless union's table position isn't even seeking that wage. Perhaps you should ask him why he's not negotiating on your behalf to get you what you deserve.

I list one of Arpey's failures and you conclude that it's "the ONLY fault" that I find with Arpey? Summarizing someone else's beliefs is not your strong suit.

And no, I won't cheer. I'm one of those who commends the difficult moral position staked out by Arpey. His anti-BK stance is ridiculed by the fans of corporate bankruptcy the same way Christians are ridiculed by the godless liberals and communists on the coasts of this great country. He tried to do the right thing.

 

[FWAAA]

If the current chowderheads running the compAAny could not estimate what it took, in concessions from the Unions, to make up for their inability to manage the operAAtion: why would any of the Unions now negotiate concessions outside of bankruptcy?

Yes, Carty, Arpey and the rest of the execs were stupid and incompetent for failing to anticipate in early 2003 just how large the concessions would be at UA. They were similarly worthless when they failed to anticipate in early 2003 just how large the NW and DL concessions would be in 2004-07. Yes, failing to see that far into the future in 2003 is conclusive evidence of their collective failure as managers. 😀

As an example, in late 2004, DL's 7000 pilots agreed to a 33% paycut in hopes of keeping DL out of Ch 11 - those concessions were worth more than one billion dollars per year. Just 18 months later, in Ch 11, the 6000 pilots agreed to another paycut of 14%, worth another $280 million per year. AA's execs were worthless because they didn't see DL pilots taking it in the shorts to that extent.

Seriously, though, no union would now negotiate further concessions outside bankruptcy with the sole exception of the APA, as bankruptcy equals potential distress pension termination, an event that might inflict great pain on pilots but not any other workgroup, as other workgroups do not earn pensions in excess of the PBGC maximums.

 

[Zom JFK]

That doesn't really sound like a persuasive argument. Do show us how UA and DL management used BK as a tool for themselves.

I remember reading that UAL execs split up a half a billion bucks in bonouses among the top execs the first year out of BK. Well what did people think they were going to do with the money they took from the employees?

 

[FWAAA]

I remember reading that UAL execs split up a half a billion bucks in bonouses among the top execs the first year out of BK. Well what did people think they were going to do with the money they took from the employees?

I don't recall that but I do remember the UAL execs proposing that they receive about 15% of the new stock upon exit from BK - that would have been worth about a billion dollars. Even right-wing Republicans said that was unbridled greed. The judge agreed and awarded the execs something like 8% of the new stock. Of course, that was value extracted not only from the employees but also from the other unsecured creditors.

http://www.nytimes.com/2006/01/18/business/worldbusiness/18iht-ual.html

 

[Hopeful]

You're pretty adept at putting words in others' posts. 😀

I've posted repeatedly that AA's line mechanics should not settle for anything less than WN wages and, ideally, perhaps the midpoint between UPS and WN wage scales. Your own union local president posted here that his worthless union's table position isn't even seeking that wage. Perhaps you should ask him why he's not negotiating on your behalf to get you what you deserve.

I list one of Arpey's failures and you conclude that it's "the ONLY fault" that I find with Arpey? Summarizing someone else's beliefs is not your strong suit.

And no, I won't cheer. I'm one of those who commends the difficult moral position staked out by Arpey. His anti-BK stance is ridiculed by the fans of corporate bankruptcy the same way Christians are ridiculed by the godless liberals and communists on the coasts of this great country. He tried to do the right thing.

Sorry pal....Of all your posts, I can not help but allude to the fact that you, as well as other management leaning posters here can never refrain from referring to Arpey's refusal to file BK when discussing management failures...I am entitled to how I perceive your post. That's a main point on these forums. And the times you do mention AA management faults and shortcomings, they are usually precluded or concluded by a complimentary mention of how you understand the pain we have had forced upon us and still endure.
When you can discuss AA management shortcomings and disastrous decisions of the past WITHOUT referring to the NO BK FILING, then I won't put words into your mouth, or post, or whatever.

And as for Arpey's decision NOT to file as being one of great moral and ethics,,,how can you be so certain that he, his team and the bod would rather not file for BK because of AArogance and the threat of some loss of control before a judge?
How can you be so sure?

 

[Bob Owens]

Unfortunately people don't understand this. The $1.6 billion wasn't enough. I don't know why people just don't want to accept the fact AA's cost in relation to its peers/competitors is just too much.

I think AA should file for BK and have an "exit plan" for current management as well after they exit BK. AA does need some fresh leadership but the current leadership will be needed to guide the company through BK.

Hmm, so I guess you figure that since they led us into it they can figure how to get out of it?

If the $1.6 billion wasnt enough then its purely managements fault and they need to be replaced. The fact is as far as mechanics, when all things are factored in, benefits and wages, AA has a significant cost advantage over competitors. To cite "labor costs" is disengenous, since we all know that AA outsources less than competitors. Its unrealistic for AA to expect the same labor costs as a competitor who pays a vendor to do what AA pays and employee to do. We would have to work for free in order to meet those cost which I'm sure AA would love because AA would have a much lower total cost, even if they blew the savings on all the things that AA continues to blow money on. We already work for less than most of AA's competitors and AA has never produced any evidence that total costs are reduced by outsourcing.

AA, since they do most inhouse should have a much lower cost as far as paying for services. The question is do they? UAL cited some huge numbers for paying for maintenance, some posters claimed I made them up but when I offered to produce the documents they fell silent.

 

[FWAAA]

AA since the do most inhouse should have a much lower cost as far as paying for services. The question is do they? UAL cited some huge numbers for paying for maintenance, some posters claimed I made them up but when I offered to produce the documents they fell silent.

Ok, Bob. If you get a chance, I'd love to read the source that says that in one year (was it 2007?) that 17% of UAL's total expenses were solely for outsourced maintenance. You could email it to fwaaa10 at yahoo dot com (displayed that way to try to outsmart the bots that harvest email addresses). Thanks.

 

[Flying low]

Would AA have the nerve to do this?
http://www.bloomberg.com/news/2011-10-29/qantas-grounds-international-domestic-fleets-over-labor-union-disputes.html?cmpid=yhoo

 

[BoeingBoy]

More like 5%, FWAAA. Total maintenance expense was 10% of operating expense.

Jim

 

[MCI transplant]

<_< ------- And remember people, the rules of bankruptcy have changed since the last Airline declared! The outcome my not be as favorable to Management as it used to be! And AA may only use it unless it if has no other options!------ As it should be!!