AA will be bankrupt soon?

[Bob Owens]

I know you did. No one is denying that. But how do you plan to squeeze blood from the turnip that is AMR Corporation?

AMR was nearly a $24 billion turnip last year. We need to push our way through all the other Lions who are simply grabbing all they can get and do the same.

Of course that's exactly what the AA offered earlier this year. Time to re-think.

You dont sell the farm to buy the seed. AA sought more permanent concessions that would further weaken our bargaining power.

 

[eolesen]

For 75 years the industry hasnt had a sustainably profitable model, why worry about that now?

Maybe in the US it isn't sustainably profitable, but there are plenty of examples overseas where airlines remain profitable, even in bad times.

The one thing I've seen that the cyclically profitable airlines share in common is a high degree of unionization. They're stuck with unionized employees and have little ability to outsource.

Then there's carriers like VS, SQ, CX, JL, and LH. They run great airlines, but rarely have their own ground employees, even in their hubs --- instead, they outsource everything on the ground (call centres, check-in, ramp handling, maintenance, premium lounges, baggage service). That lets them focus on the safety and service aspects of running the airline. I'd be willing to bet that the carriers mentioned operate with a quarter of the permanent staff that it would take for a US airline to operate their network...

Not coincidentally, those airlines get some of the highest marks for quality, and have pretty decent safety records. So, the usual insults over "you get what you pay for with the lowest bidder" and the evils of outsourcing don't quite hold up there.

 

[JimJimmyJim]

Maybe in the US it isn't sustainably profitable, but there are plenty of examples overseas where airlines remain profitable, even in bad times.

The one thing I've seen that the cyclically profitable airlines share in common is a high degree of unionization. They're stuck with unionized employees and have little ability to outsource.

Then there's carriers like VS, SQ, CX, JL, and LH. They run great airlines, but rarely have their own ground employees, even in their hubs --- instead, they outsource everything on the ground (call centres, check-in, ramp handling, maintenance, premium lounges, baggage service). That lets them focus on the safety and service aspects of running the airline. I'd be willing to bet that the carriers mentioned operate with a quarter of the permanent staff that it would take for a US airline to operate their network...

Not coincidentally, those airlines get some of the highest marks for quality, and have pretty decent safety records. So, the usual insults over "you get what you pay for with the lowest bidder" and the evils of outsourcing don't quite hold up there.

Just what I want to fly on, an airline with a decent safety record. I'm not sure how outsourced labor equates to safety. I bet you'll tell me though.

 

[Delta Technician]

Maybe in the US it isn't sustainably profitable, but there are plenty of examples overseas where airlines remain profitable, even in bad times.

The one thing I've seen that the cyclically profitable airlines share in common is a high degree of unionization. They're stuck with unionized employees and have little ability to outsource.

Then there's carriers like VS, SQ, CX, JL, and LH. They run great airlines, but rarely have their own ground employees, even in their hubs --- instead, they outsource everything on the ground (call centres, check-in, ramp handling, maintenance, premium lounges, baggage service). That lets them focus on the safety and service aspects of running the airline. I'd be willing to bet that the carriers mentioned operate with a quarter of the permanent staff that it would take for a US airline to operate their network...

Not coincidentally, those airlines get some of the highest marks for quality, and have pretty decent safety records. So, the usual insults over "you get what you pay for with the lowest bidder" and the evils of outsourcing don't quite hold up there.

You failed to point out that most overseas airlines are government subsidized. How can free enterprise compete with that?

 

[Hackman]

Maybe in the US it isn't sustainably profitable, but there are plenty of examples overseas where airlines remain profitable, even in bad times.

The one thing I've seen that the cyclically profitable airlines share in common is a high degree of unionization. They're stuck with unionized employees and have little ability to outsource.

Then there's carriers like VS, SQ, CX, JL, and LH. They run great airlines, but rarely have their own ground employees, even in their hubs --- instead, they outsource everything on the ground (call centres, check-in, ramp handling, maintenance, premium lounges, baggage service). That lets them focus on the safety and service aspects of running the airline. I'd be willing to bet that the carriers mentioned operate with a quarter of the permanent staff that it would take for a US airline to operate their network...

Not coincidentally, those airlines get some of the highest marks for quality, and have pretty decent safety records. So, the usual insults over "you get what you pay for with the lowest bidder" and the evils of outsourcing don't quite hold up there.

Brilliant!!!!! Outsourcing jobs to China, El Salvador, and Mexico is the answer to all the US airlines problems! If AA could of just outsourced all it's ground and service employees, there would have been no need for the 2003 bankruptcy threats or the billions in concessions that has lasted 6 years. I think you should have been promoted to at least a VP at AA instead of just a manager, you could have turned AA around. I'm sure of it. Outsourcing has worked so well at all the other BANKRUPT carriers in the US. It must have been the unions that caused all the losses and bankruptcies all along. I wonder, what is the excuse for Wall Street and all the arrests of executives and money managers of corporations that have failed in the past few years? Must of been the lack of outsourcing and unions in those monumental failures also. Those damn unions at Enron and Healthsouth did at lot of damage.

I'm wondering if those same foreign carriers you mention have a policy like AA of paying their upper management hundreds of millions in retention bonuses, PUP's, along with other millions in perks for their upper management when they lose billions year after year? In my opinion, if AA could only outsource the jobs of the highly overpaid upper 800 to say maybe.... Sudan. AA would surely could be on the road to recovery and more than likely shed mountains of arrogance and incompetence along the way. I bet a Sudanese CEO would be giddy over a Toyota Corolla and a few new suits from the Mens' Warehouse. Sounds like an excellent business plAAn....

 

[Hopeful]

I guess the woes of the airline industry fall squarely on the unionized employees..
Inept management is never to blame.

 

[eolesen]

You failed to point out that most overseas airlines are government subsidized. How can free enterprise compete with that?

Not a single one of the profitable high service carriers I mentioned are government subsidized. Cathay has always been owned by Swire. Lufthansa was privatized decades ago. Virgin has always been independently owned. SQ is 54% government owned, but they don't receive subsidization.

In fact, in first world and most second world economies, very few of the European and first world Asia/Pac carriers are government owned or subsidized.

Jimmy, why don't you tell me how outsourced maintenance is compromising safety for the non-US carriers. How does using HAECO compromise CX's safety record? Should they as a HKG based carrier be flying their aircraft to TUL?

I'm not a proponent of offshoring. Instead, I could see a case where TUL/AFW/MCI are spun off as a standalone profit center (similar to what AC did). Let you guys negotiate your pay based on the profit/loss of the maintenance operation only, unpolluted by stuff like buying aircraft, renovating lounges, or taking ownership stakes in foreign carriers... If you guys are as efficient and lean as you claim, you have nothing to lose by going onto your own balance sheet. And you'll never have to piss and moan about the lack of third party maintenance. There's not exactly an urge for someone to use a competitor's maintenance, but if you're at arm's length, there's a different attitude which takes place. No longer do you worry about your work being put at a lower priority than the operator's own metal.


Maybe you should question why you believe that carrying an ID card of an airline makes you better than someone carrying an ID card for a quality MRO. And yes, there are quality MRO's out there.

A few of you have the attitude that the only place with safety standards is the US. That's a little ignorant if not xenophobic.

The rest of the world has safety standards, too, and in some cases, they exceed that of the US. The fear over offshoring of US jobs sounds great as a soundbyte, but always seems to ring hollow when asked for actual proof to back it up.

 

[JimJimmyJim]

Not a single one of the profitable high service carriers I mentioned are government subsidized. Cathay has always been owned by Swire. Lufthansa was privatized decades ago. Virgin has always been independently owned. SQ is 54% government owned, but they don't receive subsidization.

In fact, in first world and most second world economies, very few of the European and first world Asia/Pac carriers are government owned or subsidized.

Jimmy, why don't you tell me how outsourced maintenance is compromising safety for the non-US carriers. How does using HAECO compromise CX's safety record? Should they as a HKG based carrier be flying their aircraft to TUL?

I'm not a proponent of offshoring. Instead, I could see a case where TUL/AFW/MCI are spun off as a standalone profit center (similar to what AC did). Let you guys negotiate your pay based on the profit/loss of the maintenance operation only, unpolluted by stuff like buying aircraft, renovating lounges, or taking ownership stakes in foreign carriers... If you guys are as efficient and lean as you claim, you have nothing to lose by going onto your own balance sheet. And you'll never have to piss and moan about the lack of third party maintenance. There's not exactly an urge for someone to use a competitor's maintenance, but if you're at arm's length, there's a different attitude which takes place. No longer do you worry about your work being put at a lower priority than the operator's own metal.


Maybe you should question why you believe that carrying an ID card of an airline makes you better than someone carrying an ID card for a quality MRO. And yes, there are quality MRO's out there.

A few of you have the attitude that the only place with safety standards is the US. That's a little ignorant if not xenophobic.

The rest of the world has safety standards, too, and in some cases, they exceed that of the US. The fear over offshoring of US jobs sounds great as a soundbyte, but always seems to ring hollow when asked for actual proof to back it up.

I've worked for contract maintenance and all they want is a signiture to turn the plane and get it out of there. We won't even get into the lack of oversite in some of the near third world countries that do outsourced maintenance. No drug and alcohol testing for employees. So Eric as much as you want to see all U.S. based AMT's at nine dollars an hour, I don't.

 

[MCI transplant]

<_< ----- Eric, leave MCI out of it. AA has larger line maintenance teams than what's at MCI today!

 

[Vortilon]

Not a single one of the profitable high service carriers I mentioned are government subsidized. Cathay has always been owned by Swire. Lufthansa was privatized decades ago. Virgin has always been independently owned. SQ is 54% government owned, but they don't receive subsidization.

In fact, in first world and most second world economies, very few of the European and first world Asia/Pac carriers are government owned or subsidized.

Jimmy, why don't you tell me how outsourced maintenance is compromising safety for the non-US carriers. How does using HAECO compromise CX's safety record? Should they as a HKG based carrier be flying their aircraft to TUL?

I'm not a proponent of offshoring. Instead, I could see a case where TUL/AFW/MCI are spun off as a standalone profit center (similar to what AC did). Let you guys negotiate your pay based on the profit/loss of the maintenance operation only, unpolluted by stuff like buying aircraft, renovating lounges, or taking ownership stakes in foreign carriers... If you guys are as efficient and lean as you claim, you have nothing to lose by going onto your own balance sheet. And you'll never have to piss and moan about the lack of third party maintenance. There's not exactly an urge for someone to use a competitor's maintenance, but if you're at arm's length, there's a different attitude which takes place. No longer do you worry about your work being put at a lower priority than the operator's own metal.


Maybe you should question why you believe that carrying an ID card of an airline makes you better than someone carrying an ID card for a quality MRO. And yes, there are quality MRO's out there.

A few of you have the attitude that the only place with safety standards is the US. That's a little ignorant if not xenophobic.

The rest of the world has safety standards, too, and in some cases, they exceed that of the US. The fear over offshoring of US jobs sounds great as a soundbyte, but always seems to ring hollow when asked for actual proof to back it up.

Ole,

I doubt there is even one airline AMT that started out his/her career hoping to work at some third party maintenance vendor. Many AMTs paid their dues gaining experience by working in these aircraft maintenance dungeons. The key was that eventually those AMTs would eventually be able to secure a better job at an airline. Given the current state of the airline industry, and how the employees are treated - the cat is out of the bag - working for the airlines is a big gamble on ones future. Many AMT schools nationwide have closed due to the job prospects. People considering a career in A/C Maint soon find out what they can expect, and decide to take their skills elsewhere. I have personally advised sons of friends and relatives to steer clear of the industry.

Xenophobic, now you're starting to sound like a progressive. I have personal experience with HAECO work, and spoke with many others and listened to some of their examples of bad maintenance performed at HAECO. The proof is there, the problem is getting the info out to the public. The people with the resources and power keep a lid on it. They pay some so called expert to say "there is no diferrence in work performed overseas vs here" and soon it becomes gospel. How many whistelblowers do you suppose there might be in some third world country willing to step up and say "no" to performing sub par maintenance, or alerting the proper authorities? Whats in it for them? Many of them do not share the same values as we do here in America on human life - it's just a means for a paycheck. For many, it could be a means for sabbotage and or terrorism. Lets roll the dice......

 

[frontline]

I guess the woes of the airline industry fall squarely on the unionized employees..
Inept management is never to blame.

Inept management is frequently to blame, I just don't share the view many of you hold that AMR's management is inept. I don't always agree with their methods (stock bonuses) but they certainly managed their way out of a bankruptcy filing in 2003 (yes, by getting us to give concessions). They have kept the company going through wars, disease and recession. Inept management is what United has. AA is not a poorly managed company.

 

[Bob Owens]

http://iagblog.blogspot.com/2007/01/chines...aintenance.html

This happens more often than Eoleson would like to admit. Just a few weeks ago the Feds pulled a Portugese plane out of service at JFK for multiple items after someone dropped a dime on them.

I would say that Maintenance out of most of Western Europe is first rate (they also make more than we do and have better benifits and more rigid work rules -I believe they are limited to how many aircraft they can be type certified on), but my guess is poorer the country the worse the maintenance.