AA merger options

[Bob Owens]

The big problem AA has with a family of 90-120 seaters is that once you bust 99 seats, you add another AA Flight Attendant. I can assure you that 90% of the AA pilots are not going low ball themselves into a crap pay, 110 seat B-Scale just to subsidize a $45/hour position in the back of the jet and a few 30 year aircraft cleaners at a place like ORD.
There are areas where APA/AA may think outside the box with scheduling that might permit something to happen. A deal letting pilots fly 80 hours in 12 days would be a good start. There are also huge issues at AA has competing with other carriers that employ a good number of people in positions that literally take little to zero education and a 2 weeks or less in training.

Just for reference. The current pay levels are unsustainable in the industry. FAA student pilot starts are in the toliet and the airline career after the military is looked upon as a complete joke except for FDX/UPS/SWA. Colgan Air was just the start.

You were doing so well making your case without trashing anyone else but I guess you couldnt help yourself. I know you aint talking about us (mechanics), you actually have to be 18 to be allowed to sign off maintenance on a plane and the FAA only issued enough certs for less than 3000 mechanics last year, keep in mind thats for the entire Aviation industry, so to do a fair comparasion you would have to compare that to the total number of pilots licenses issued, not just commercial and/or transport. So if pilots starts are in the toilet, mechanic starts are down the drain already.

The biggest secret the airlines have that they dont want to talk about is the shortage of pilots and mechanics. Our hours arent as rigid as yours and most of us are working more hours than ever before. So much that fatigue has become a major concern of the FAA. The airlines wont let them do anything about it though. The company complained to the NMB when I made the statement that if every mechanic in the industry limited his/herself to just 40 hours a week hundreds if not thousands of aircraft would be grounded. They must have thought it was a call for a job action instead of an opinion.

The mechanic recall list has been exhausted and they are mopping up the last of the upgrades as we speak. After that its what they can manage to scrape of off the streets and the pickins are thin. Basically the industry has to raid within itself because new blood simply isnt coming in as fast as its leaving. I think mergers are more about aquiring workers than routes and equipment, Delta just announced its shedding 140 aircraft, that would bring them from number 1 to number three. They are offering a early retirement/buyout to 70% of their employees, anyone with 5 years can get the buyout and anyone with 10 years and years of service plus age equal to 55 can retire. With such low standards you have to wonder where the 30% that arent eligible for either are?

We both have a case, we should get what we can, but it doesnt help our aguement to go after other people whose services, while more easily replaced and therefore more vulnerable, are just as important if we are going to be an airline. Your attacks do not elevate you or your profession, they do the opposite. Confidence, competance and courage are noble traits that we like to find in our pilots, it promotes trust and makes us more comfortable knowing thats the type of person up front, arrogance does the opposite. Capt Sully embodies the first three traits, Capt Jacob Louis Veldhuyzen van Zanten enbodied the later (Tenerife). Who do you think you are more like? How do you think we see you?

 

[FWAAA]

Merger? AA already did merge, thats how we became the biggest carrier, when they bought TWA. Over the years we shed most of what we got with TWA, and are now at number three, behind UAL/CO and DL/NWA but a recent release by Delta says they will be shedding 140 aircraft, that will bring them down to number three, from 744 to 604 aircarft . UAL/CO have 707 but they havent completed the merger process and they will likely shrink as well so without even merging we could easily become the biggest airline again.

AA has 624, not counting Eagle.

Your Delta fleet analysis mistakenly assumed that all 140 to be retired are mainline jets; they aren't.

http://finance.yahoo.com/news/Delta-Air-Lines-Announces-prnews-2151105544.html?x=0&.v=1

Two weeks ago, the 140 was 130 (Delta upped the number to 140) and of the 130, 60 of them were 50 seat CRJs plus all the remaining SAABs plus all the DC9-50s:

•Announced the retirement of 130 of Delta's least efficient aircraft over the next 18 months, including the DC9-50 and Saab turbo-prop fleets, and 60 50-seat regional jets;

At 12/31/10, Delta flew 39 DC9-50s, 26 SAABs and approximately 240 50 seat CRJs. So the 130 included 39 mainline DC9s plus about five other unspecified mainline planes. The new 140 number might be another 10 mainline planes or could include some more 50-seater CRJs.

So DL has announced mainline fleet reductions of about 44 planes over the next 18 months. This year, it is taking delivery of addtional used MD-90s (at least six of them) and might be buying more.

Bottom line: Delta fleet isn't shrinking all that much. AA has announced at least two dozen MD-80s will be retired this year and I expect further AA fleet retirement announcements unless fuel quickly drops back to the $60-$75/bbl level and appears to be staying there.

 

[Bob Owens]

Your Delta fleet analysis mistakenly assumed that all 140 to be retired are mainline jets; they aren't.

http://finance.yahoo.com/news/Delta-Air-Lines-Announces-prnews-2151105544.html?x=0&.v=1

Two weeks ago, the 140 was 130 (Delta upped the number to 140) and of the 130, 60 of them were 50 seat CRJs plus all the remaining SAABs plus all the DC9-50s:



At 12/31/10, Delta flew 39 DC9-50s, 26 SAABs and approximately 240 50 seat CRJs. So the 130 included 39 mainline DC9s plus about five other unspecified mainline planes. The new 140 number might be another 10 mainline planes or could include some more 50-seater CRJs.

So DL has announced mainline fleet reductions of about 44 planes over the next 18 months. This year, it is taking delivery of addtional used MD-90s (at least six of them) and might be buying more.

Bottom line: Delta fleet isn't shrinking all that much. AA has announced at least two dozen MD-80s will be retired this year and I expect further AA fleet retirement announcements unless fuel quickly drops back to the $60-$75/bbl level and appears to be staying there.

We shall see, AA is still taking delivery of new aircraft as well. 39 DC-9s? Yikes!

The McDonnell Douglas DC-9 (initially known as the Douglas DC-9) is a twin-engine, single-aisle jet airliner. It was first manufactured in 1965 with its maiden flight later that year. The DC-9 was designed for frequent, short flights. The final DC-9 was delivered in October 1982.

Delta includes their RJs? So I guess we should include Eagle as well.

 

[Mach85ER]

Bob,

No, I wasn't trashing you or anyone else including the guy on day 3 pushing a broom somewhere. I read 2 pages of why my group should cut it's pay which is already at a minimum at AA. APA's deal to fly the 70 seater at AA was only if it was "cost nuetral. It is my understanding that APFA said they wouldn't fly it for a cutrate (cue the finger in the air) and I don't know what the TWU said about the issue. APA could have said we'd fly it for a CA rate of $100/hour and the FO for $5/hour and it wouldn't have been cost nuetral. you tell me where the problem is.

It is what it is. While I will have zero comment about what other workgroups earn or negotiate (I know we have some knuckleheads sticking their noses into the issue at work), I have little enthusiam for donating more "for the team" like what happened in 2003.

 

[Bob Owens]

Bob,

No, I wasn't trashing you or anyone else including the guy on day 3 pushing a broom somewhere. I read 2 pages of why my group should cut it's pay which is already at a minimum at AA. APA's deal to fly the 70 seater at AA was only if it was "cost nuetral. It is my understanding that APFA said they wouldn't fly it for a cutrate (cue the finger in the air) and I don't know what the TWU said about the issue. APA could have said we'd fly it for a CA rate of $100/hour and the FO for $5/hour and it wouldn't have been cost nuetral. you tell me where the problem is.

It is what it is. While I will have zero comment about what other workgroups earn or negotiate (I know we have some knuckleheads sticking their noses into the issue at work), I have little enthusiam for donating more "for the team" like what happened in 2003.

Glad we had that discussion because Brundage has been lying at our table. With us they want to increase the amount of flying Eagle can do, close stations where we have AA workers and replace them with lower paid Eagle workers, although they dont say it that way. We were told"there would be casualties". We said that we would be ok with increasing Eagle flying as long as our guys did the work and expresed concerns that the pilots would get a deal that would allow the pilots to do the work. Now I see they are looking for a deal that would allow AA pilots to fly Eagles but they denied that, we asked that specifically and they denied it.

Tell me more about how you guys donated for the team? Do you mean workers in other classifications? Because if you do I have to ask who stood to lose more in BK, the pilots with their A and B plan pensions, or other workers whose retirements may have been reduced by the PBGC but not nearly as much as the pilots plans would have? IIRC you guys took a straight pay cut of 25% and got around 9% back once the productivity improvements kicked in a year later then got 1.5% increases like everyone else. We were denied the straight pay cut option, or rather we were given it and when we accepted it they withdrew the offer. Instead we had to take benifit reductions that increased in value over time, that plus the company pulled a slight of hand called a "Roll up adjustment" that gave them two bites of the apple.

So after the 9% snapback in 2004 and the subsequent 1.5% returns by 2008 the base pay for the most senior pilots was down 10%(before inflation) everyone else was down at least 17% not including inflation (21% when you factor in medical benifit cost increases taken out of our checks by the company). The FAA raised the retirement age to 65 which kept a lot of old timers around and this continues to keep your guys on the street. So many pilots saw a much larger pay cut than 10% but you guys arent the only ones that saw that, we had guys bumped down from AMT to OSM.

We took a more than 25% pay cut and got back 7% over the life of the agreement. Despite huge increases in productivity and large headcount reductions we didnt get a 9% snapback like you guys did. We ended up worse off than most of our peers who went through the BK process, I believe you guys are still better off than your peers at those carriers that went through BK, you still have your pensions as well, correct me if I'm wrong.

If we had gone BK the mechanics would probably be better off, despite all their huffing and puffing about OH I think that the operation would still be the same as it is today if they had gone that route because we already had a low cost structure for OH in place since 1995. Sure we may have lost our pension but UAL ended up with a 5% DC. So in the five years since BK the company has given them $16,250 for their pension while over the same period of time AA has put in less than $6000 for mine. We currently earn less than CO, DL and UA(TA). We have the worst benifits and worst work rules. Most of that was gutted in 2003.

So I'd really like to see how you "took one for the team". From what I see you guys are still above most of your peers with the exception of WN, Fed Ex and UPS. All we are asking for is to be put in the standing that you guys are in, above those that went BK and below those that didnt.

I think your union did a pretty good job in 2003, certianly a much better job than our union did. Had the company filed for BK I think you guys had the most to lose simply because you had more but you ended up walking away with just a 10%(before inflation) paycut off the top while we still lost more than double that. Isnt the fact that you guys have so much tied up in the company one of the reasons you guys wanted to buy the company and take it over?

We didnt take what we did to save your pension any more than you guys did what you did 'for the team'. Instead of taking on the company we split up and surrendered in 2003, in the end you guys came out ahead of the rest of us simply because you kept your much richer pensions in place and took the straight pay cut with returns for productivity gains. You had a lot more to lose than we did, my peers who left for the most part found better jobs, over 90% of the recalls for the Northeast told AA "no thanks, I'm not coming back" and we still have high seniority middle aged guys occasionally walking in and quitting because they found something better.

 

[commavia]

Bob,

No, I wasn't trashing you or anyone else including the guy on day 3 pushing a broom somewhere. I read 2 pages of why my group should cut it's pay which is already at a minimum at AA. APA's deal to fly the 70 seater at AA was only if it was "cost nuetral. It is my understanding that APFA said they wouldn't fly it for a cutrate (cue the finger in the air) and I don't know what the TWU said about the issue. APA could have said we'd fly it for a CA rate of $100/hour and the FO for $5/hour and it wouldn't have been cost nuetral. you tell me where the problem is.

It is what it is. While I will have zero comment about what other workgroups earn or negotiate (I know we have some knuckleheads sticking their noses into the issue at work), I have little enthusiam for donating more "for the team" like what happened in 2003.

Who ever suggested you cut your pay?

From me personally, all I suggested is that you dramatically expand the base of mainline pilots at AA - and claw back more flying from Eagle to mainline. Thus, you not only get more flying, expand your dues-paying membership, set an amazing precedident for the rest of the industry, but also take away from management the ability to 'divide and conquer' by setting mainline and Eagle pilots off against each other.

And all of that can be had simply by the APA agreeing to a compensation scale for these planes that is competitive with all the other U.S. carriers flying them. Is that so bad? As I said, the only reason why I was suggesting that the APA agree to a base hourly pay scale for a 90-seater slightly lower than JetBlue, USAirways, Delta Connection, etc. was so that way that lower pay scale can be offset by keeping all those pilots at mainline non-pay (pension and benefits) compensation levels, and thus you would still be cost-competitive with the regional and/or non-union guys flying those planes at other airlines, but not have to create a B-scale with a truly wholly different compensation structure overall.

What is the big deal? You already agree to have MD80 pilots get paid less than 777 pilots, which seems logical. So why not just have the 90-seater pilot get paid less than the MD80 pilot? Is that so controversial?

 

[Hopeful]

Who ever suggested you cut your pay?


What is the big deal? You already agree to have MD80 pilots get paid less than 777 pilots, which seems logical. So why not just have the 90-seater pilot get paid less than the MD80 pilot? Is that so controversial?

Good point!

 

[Hopeful]

Bob,

I read 2 pages of why my group should cut it's pay which is already at a minimum at AA. .

2 PAGES AND YOU'RE GETTING YOUR PANTIES IN A BUNCH?

All I've read for years on this forum is THOUSANDS of posts debating how aircraft maintenance costs are choking this company. And how AA should outsource more...

2 PAGES?

PAALLLLLEEEEAAAAASEEEE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[Frank Szabo]

Had the company really wanted to outsource "it" all, they would have done so by now (with a side agreement protecting the TWU elite, without further ratification, etc. and et al).

For those who aren't keeping up with current events, the company has not done this but has, instead, continued to point out to us how expensive it is to continue in-house work, how high their labor costs (included in their accounting are all peon/management/executive salaries) are, yet won't do squat to back up their assertations.

Some want to strike the company when more damage can be done/costs run up by staying on the property, leaving me to wonder where those individuals' real loyalties lie.

Line maintenance seems to need their own line maintenance union as they are unwilling to embrace the "Majority Rules" concept of the "Democracy" they demand. Protections from the "Tyranny of the Majority" were built into the US Constitution by means of adding a two-reps-per-state body (the Senate) and for both branches to reconcile any law between themselves but I see no movement toward removing this foible of Democracy within the TWU or any other union. Basically, either grow your numbers, change the TWU Constitution to include some well deserved minority protection for the line people, do a line-only withdrawl from the TWU in favor of your own union, or STFU.

Too many people playing too many games.

 

[Rogallo]

or STFU.

:wacko: :wacko:

 

[NYer]

If the Republicans get their way and the limitation for foreign ownership of airlines is modified from it's current 25%, you will see British Airways take over AA, just they did with Iberia. The long term game plan is for all the Oneworld partners to be one large company.

 

[FrequentFlierCA]

I don't think BA has the capital or the will to take over an airline of AA's size and scope. They are still digesting Iberia, and the foreign ownership laws in the US don't look likely to change anytime soon anyway.

I do think AA's best option is to go it alone. A merger with US or AS would be very distracting during a turbulent time in the industry. If AA remains focused on its global strategy and executes it well I can see AA doing better financially in the quarters and years to come.