Aa Vs "lowcost"

[Decision 2004]

Think Again

While American Airlines had continually placed the blame on labor
for their comparatively higher costs, most of the difference in
costs today compared to Southwest Airlines actually comes from non- labor expenses.

According to each company's first quarter SEC filing, American
Airlines mainline had a cost per available seat mile (casm) of 9.49
cents, while Southwest's casm stood at 7.82 cents. American only
had a 1.67 cents cost premium over Southwest. But labor costs only
accounted for .37 cents of that cost premium. On the other hand,
1.30 cents or 77.8% of that premium actually came from non-labor
costs.

In fact, American's labor force could be compensated less than their
Southwest counterparts, and American Airlines mainline would still
have costs per available seat mile at least 16.4% higher than
Southwest.

That's because American's labor costs per available seat mile are
only 11.6% higher than Southwest's, while American's non-labor costs
per available seat mile are 28.1% higher than Southwest's.

What's more, at Southwest, labor's wages, salaries and benefits
account for 41% of their total operating expenses. At American
Airlines mainline, labor accounts for only 33.6% of total operating
expenses.

In the end, American's hub and spoke network with multiple aircraft
types, management decisions and strategy have significantly more to
do with its higher costs than labor. Though labor may continue to
take the fall, blaming labor simply doesn't fit the facts.

Labor Costs as a % of Total Operating Expenses
Southwest: 41.0%
AA mainline: 33.6%


Breakdown of AA mainline 1.67 Cost Premium Over Southwest
(CASM: SW 7.82, AA 9.49; Difference of 1.67)

Non-Labor: 1.30 77.8%
Labor: .37 22.2%

SW AA Difference
Labor Casm 3.20 3.57 11.6%
Other Casm 4.62 5.92 28.1%
CASM 7.82 9.49


CASM Comparison if AA Labor Takes 11% Cut in Wages & Benefits (resulting in AA labor compensated less than SW labor)

AA mainline: 9.10 (after hypothetical pay cut)
Southwest: 7.82
Cost Premium: 16.4%

Sources:
Southwest Airlines SEC Form10Q 3/31/2004
American Airlines SEC Form10Q 3/31/2004

Steven Baumert

 

[TIME FOR CHANGE]

If this is true then why did we give up so much. Why didnt the company /union look else where to save money? I will tell you why...
Because the company knew that the twu would sign off on this concessionary contract.
They blame labor every time and every time the inept twu bends over and accepts the BOHICA
Great job twu you guys are the best at lowering the standard of living for every individual in the ATD. You must GO . Vote the choice that is the only right choice. Vote AMFA and get rid of the union that has done absolutely nothing for you except lower your pay and benefits. They didnt save jobs they laid off 3000 mechanics. They lie so that it doesnt sound as bad as it really is. They lie so much you start to believe what they say. Its called brainwashing. Say something enough times and people believe it. This is what the twu does.

 

[NewHampshire Black Bears]

If this is true then why did we give up so much. Why didnt the company /union look else where to save money? I will tell you why...
Because the company knew that the twu would sign off on this concessionary contract.
They blame labor every time and every time the inept twu bends over and accepts the BOHICA
Great job twu you guys are the best at lowering the standard of living for every individual in the ATD. You must GO . Vote the choice that is the only right choice. Vote AMFA and get rid of the union that has done absolutely nothing for you except lower your pay and benefits. They didnt save jobs they laid off 3000 mechanics. They lie so that it doesnt sound as bad as it really is. They lie so much you start to believe what they say. Its called brainwashing. Say something enough times and people believe it. This is what the twu does.

"GREAT POST's"(Dave+time for a change)

VERY INFORMATIVE !!!!!!!!!!!!!!

I can't wait for the FIRST non AMFA supporter, EMPLOYEE or Non EMPLOYEE, to respond !!!!!!!!!!!!!!!!!!!!

NH/BB's

 

[flyguy767]

When the company is in bed with the union, it's always easier to convience your "partner" to see things the way you want them to. I've never seen anyone that is making the decisions on our behalf take a pay-cut, or a reduction in benefits. If this were the case, they may not rush to judgement in giving everything away that we have fought for over the years. TWU never even argued when AA presented the contract revision that was forced down our throats. It was take it or leave it. Leave it and you are on the street.

 

[j7915]

Think Again

While American Airlines had continually placed the blame on labor
for their comparatively higher costs, most of the difference in
costs today compared to Southwest Airlines actually comes from non- labor expenses.

According to each company's first quarter SEC filing, American
Airlines mainline had a cost per available seat mile (casm) of 9.49
cents, while Southwest's casm stood at 7.82 cents. American only
had a 1.67 cents cost premium over Southwest. But labor costs only
accounted for .37 cents of that cost premium. On the other hand,
1.30 cents or 77.8% of that premium actually came from non-labor
costs.

In fact, American's labor force could be compensated less than their
Southwest counterparts, and American Airlines mainline would still
have costs per available seat mile at least 16.4% higher than
Southwest.

That's because American's labor costs per available seat mile are
only 11.6% higher than Southwest's, while American's non-labor costs
per available seat mile are 28.1% higher than Southwest's.

What's more, at Southwest, labor's wages, salaries and benefits
account for 41% of their total operating expenses. At American
Airlines mainline, labor accounts for only 33.6% of total operating
expenses.

In the end, American's hub and spoke network with multiple aircraft
types, management decisions and strategy have significantly more to
do with its higher costs than labor. Though labor may continue to
take the fall, blaming labor simply doesn't fit the facts.

Labor Costs as a % of Total Operating Expenses
Southwest: 41.0%
AA mainline: 33.6%


Breakdown of AA mainline 1.67 Cost Premium Over Southwest
(CASM: SW 7.82, AA 9.49; Difference of 1.67)

Non-Labor: 1.30 77.8%
Labor: .37 22.2%

SW AA Difference
Labor Casm 3.20 3.57 11.6%
Other Casm 4.62 5.92 28.1%
CASM 7.82 9.49


CASM Comparison if AA Labor Takes 11% Cut in Wages & Benefits (resulting in AA labor compensated less than SW labor)

AA mainline: 9.10 (after hypothetical pay cut)
Southwest: 7.82
Cost Premium: 16.4%

Sources:
Southwest Airlines SEC Form10Q 3/31/2004
American Airlines SEC Form10Q 3/31/2004

Steven Baumert

Hey cool shades, I don't see where you factored in the wages of the "virtual SWA overhaul" amts. What is their payscale?

A 737 should cost the same for all airlines, so maybe the AA labor cost is too high? Or is SWA paying peanuts?

 

[scorpion]

Wage Base Rates add your shift differential, license/skill pay, longevity

Classification 8/16/2001 8/16/2002 8/16/2003 8/16/2004

Lead Insp. $ 30.80 $ 33.60 $ 34.72 $ 35.84

Inspection & Lead Mechanics $ 29.15 $ 31.80 $ 32.86 $ 33.92

Mechanics

1st 6 Months $ 17.72 $ 18.30 $ 18.62 $ 18.94

2nd 6 Months $ 18.61 $ 19.21 $ 19.55 $ 19.89

2nd Year $ 19.65 $ 20.29 $ 20.64 $ 21.00

3rd Year $ 20.84 $ 21.52 $ 21.89 $ 22.28

4th Year $ 22.16 $ 22.88 $ 23.28 $ 23.69

5th Year $ 23.64 $ 24.41 $ 24.84 $ 25.27

Thereafter $ 27.50 $ 30.00 $ 31.00 $ 32.00

Add $4.00 for license. .56 for second shift. .10 per year longetivity up to 10 years then .15 per year next two years.

So right now a mechanic with 12 years service on day shift will make $36.30 per hour. 8/16/2004 he will make $37.30per hour.

 

[Buck]

Hey cool shades, I don't see where you factored in the wages of the "virtual SWA overhaul" amts. What is their payscale?

A 737 should cost the same for all airlines, so maybe the AA labor cost is too high? Or is SWA paying peanuts?

And you never factor in the perpetual SRP/OSM and all of the concessionary contracts since 1983....

 

[Drip E. Kwill]

And you never factor in the perpetual SRP/OSM and all of the concessionary contracts since 1983....

And Buck..please tell what you received for the OSM/RSM program. Was it not the non-furlough clause? Was this voted on by the members? Was it voted over 50% of the members? Were any of these members AMFA supporters? And Buck, the contract of '83 was presented as a "NO VOTE" contract by the TWU, it passed by over 80% of you all...shuddup man.

What is it with you guys? You vote for everything you have received but you lay blame with the incumbant union, gee go wonder.

Also Ken, Mr. Little has satisfied your ego by responding and answering in full your questions/remarks. What does that leave you? Asking what my real name is? You lack knowledge.

DO NOT RESPOND WITH THE NORMAL "WE'LL GET A REVOTE"! BS. That , and you sir, are lame.

 

[Decision 2004]

And Buck..please tell what you received for the OSM/RSM program. Was it not the non-furlough clause? Was this voted on by the members? Was it voted over 50% of the members? Were any of these members AMFA supporters? And Buck, the contract of '83 was presented as a "NO VOTE" contract by the TWU, it passed by over 80% of you all...shuddup man.

The 1995 Labor Agreement pased by 77 votes, and there were illegal activities regarding the ratification procedure. There were two sets of ratification ballot sent out from AFW Local 567 within three days of each other.

You know nothing about the TWU, and the IAM concessions for jobs program at TWA led you to be bought out by another carrier in Bankruptcy Court and you lost your seniority.

What exactly is it in your history or your background that qualifies you to lead those at AA?

 

[Decision 2004]

And Buck..please tell what you received for the OSM/RSM program.

Here is what we got with the SRP/OSM Program...

...Tulsa Mechanics, AA Dispute Hires

By Melanie Busch

Section: BUSINESS
Edition: FINAL HOME EDITION
Page: E1
Estimated Printed Pages: 2

Index Terms:
AVIATION

Article Text:

The hiring of lesser skilled maintenance personnel at American Airlines' maintenance and engineering base in Tulsa has prompted the Transport Workers Union to file a contract grievance with the Fort Worth-based carrier.

The union disagrees with the company's hiring of shop repair personnel instead of licensed mechanics in some of the base's 35 shops where workers repair American's fleet at Tulsa International Airport.

Though the union agreed to "reclassification" in some shops during contract negotiations last year, it did not agree to the hiring of the lesser skilled workers in some of the shops where they are now being hired, said Marion Finley, president of the TWU Local 514, which represents about 5,400 American mechanics in Tulsa.

"It's just an interpretation problem," he said.

An outside arbitrator, William Eaton, will hold a hearing Sept. 10-11. His decision is final and binding.

American has been hiring repair personnel, some holding mechanic's licenses, in jobs that are easier to learn, that are not as closely supervised and that are repetitive, American spokesman John Hotard said.

"They've reached a point where American thinks these new hires could be used in shops where the TWU believes you should still use (licensed) mechanics in those positions," he said. "The issue is not ... who do we hire to fill that job, but how many jobs fall under the category of a shop repair person or a (licensed) mechanic."

Line mechanics now start at $13.40 an hour, while repair personnel start at $9 an hour.

Finley downplayed the dispute, saying the union has filed several grievances with American since the contract was approved in November. However, the current grievance is the first to directly impact Tulsa maintenance workers, he said.

Under the current contract, amendable in the year 2000, American reclassified some TWU positions, separating lesser skilled positions from highly skilled positions. The airline is allowed to pay less for the positions requiring less skill.

The old contract grouped a wide range of jobs into a job classification with one pay scale, whereas the new one created lower pay classifications for lower skill tasks.

Hotard said the reclassification was "the thrust of the new contract. We could hire certain jobs out where you wouldn't have to have your (airplane mechanic's) license."

The company has hired fewer than 100 shop repair personnel with whom the union disagrees with, Finley said. The union accepts another 600 repair personnel hired since November, he said.

The union decided to file the grievance because it believes American will hire many more repair personnel.

"It takes away jobs from mechanics," Finley said. "But there haven't been any mechanics laid off because of this."

Though the contract gives American the right to hire some shop repair personnel, it also guarantees current TWU members the same job and pay scale they now have.

American has contracts with three labor groups, including pilots and flight attendants.

Last fall, American announced it would hire 1,050 workers, mostly mechanics, at the Tulsa base through 1997, and recall another 529 furloughed mechanics.

Copyright 1996 Tulsa World. World Publishing Co.

Record Number: TUL582498

October 17, 1996

 

[Buck]

And Buck..please tell what you received for the OSM/RSM program. Was it not the non-furlough clause? Was this voted on by the members? Was it voted over 50% of the members? Were any of these members AMFA supporters? And Buck, the contract of '83 was presented as a "NO VOTE" contract by the TWU, it passed by over 80% of you all...shuddup man.

What did I receive from the SRP/OSM program? I received an eviction notice from the engine shop I was working in. No I did not have the ability to vote on that eviction?



As for the shuddup man, are you really so ignorant?

 

[Ken MacTiernan]

And Buck..please tell what you received for the OSM/RSM program. Was it not the non-furlough clause? Was this voted on by the members? Was it voted over 50% of the members? Were any of these members AMFA supporters? And Buck, the contract of '83 was presented as a "NO VOTE" contract by the TWU, it passed by over 80% of you all...shuddup man.

What is it with you guys? You vote for everything you have received but you lay blame with the incumbant union, gee go wonder.

Also Ken, Mr. Little has satisfied your ego by responding and answering in full your questions/remarks. What does that leave you? Asking what my real name is? You lack knowledge.

DO NOT RESPOND WITH THE NORMAL "WE'LL GET A REVOTE"! BS. That , and you sir, are lame.

little replied to my questions. He did not answer them. little is a liar. He told me that the NWA AMT's fight during their negotiations with NWA & a PEB were not our fight. WRONG!

little still believes that AMFA allowed UAL to farm out 100% of their overhaul. And he thinks it was AMFA that allowed two overhaul facilities to close at UAL. WRONG!

At least little signs his name to his responses. What's your excuse?

Post your lies and half truths. There will be an election and the twu will lose.

THE twu SMELLS FEAR... AND IT IS THEIR OWN!

Oh, where's our FULL REVOTE? Why should this question be "lame"? It was told by your elected leader jim little so it must be a true statement.

 

[Decision 2004]

Jim Little said that a complete re-vote was the only way to have a legitimate ratification.

So, where does the leave us?

 

[Bob Owens]

What exactly constitutes "Low Cost"?

If SWA is paying their mechanics $35/hr and AA is only paying $30 who has the lower costs?

Seems to me that SWA should be complaining about AAs low costs. The fact that AAs ASM costs are higher while their labor costs per hour for maint is much much lower seems to be a reflection on management.

 

[Dallas Air Mach]

little replied to my questions. He did not answer them. little is a liar. He told me that the NWA AMT's fight during their negotiations with NWA & a PEB were not our fight. WRONG


Ken, and AMFA, You want to involve all unions to fight together, but yet you want to discriminate against your fellow brothers and sisters within your own airline?
Why is that you and AMFA want all airline mechanics (workers) including plant maintenace but will not fight for lower classifications, stores and fleet service? I see this as discrimination, I know your going to disagree, but Fleet and stores are a part of the AIRLINE INDUSTRY,
I prefer a union that saves jobs, helps all classes, all work groups, instead of a ORGANIZATION who picks and chooses who they will represent, WHAT HA AMFA done for anyone outside of their representation? How has AMFA or what Has AMFA to legislate any assistance to any AIRLINE employee? Politically? How many jobs has AMFA saved anywhere when a base was closing or threatened to close? How many times has local, state or federal government came to assist and prevent layoffs or base closing?
AMFA is not a union, AMFA is only concerned about themselves,
AMFA chooses to discriminate against stores and fleet, goes to show, whats down the line? whos next to be discriminated by AMFA?