Note the smiley face. What I posted is commonly referred to as a joke--an (evidently unsuccessful) attempt at humor.
American Airlines is set to resume contract negotiations with pilots
- Thread starter Hatu
- Start date
Note the smiley face. What I posted is commonly referred to as a joke--an (evidently unsuccessful) attempt at humor.
eolesen
Veteran
- Jul 23, 2003
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Simple. Network contribution... AA's scope clause, particularly the 70-90 seaters, has cut AA out of a fairly interesting segment of the market.
The current scope clause pretty much allows AA to serve the smallest of the small cities with Eagle, and the largest of the medium size cities with mainline, but not much in between. There's a lot of flying to places in-between which could be lucrative for a 70-90 seater with a premium cabin (places where the F100 could have made sense had it not been a crappy aircraft design). Putting a premium cabin on a 50 seater is suicidal from a cost perspective, but not so bad on the CR7 and CR9 or the E75 and E95.
I'm typically buying business class. When I search for flights using my off-the-shelf corporate booking tool, AA won't come up as an option if it's a routing where ERJ's operate one leg of the trip. But UA and DL do, because they can put 70-90 seaters into those hinterland markets at will, and offer a premium cabin. Since most corporate booking tools will look to book an entire journey in business class first before they look at splitting booking classes, it wouldn't surprise me in the least bit if they're now capturing more of the long haul traffic from the hinterland cities. They didn't add the premium cabins just to allow upgrades...
If you consider all the places which don't have mainline AA anymore, but now have 70-90 seaters operated for UA, US, or DL, that's a lot of revenue being left off the table.
One of the few things I'll agree with WT on is that AA has become increasingly insignificant when you get outside the top 30 markets or so. UA, US and DL have taken their place, and they're winning more and more corporate business as a result. Corporate business is what used to give AA a revenue premium over the other guys. Not so much anymore. If anything, AA's possibly at a revenue deficit because the 50 seaters are tough to break even on.
So... how is that good for AA employees? If you want AA to remain a network carrier, you need to allow them to serve the network with the right aircraft. Having a decent network serving a larger cross-section of markets is where your future job security comes from, not a paragraph in a CBA.
Now, I'm sure AA could do just fine being a domestic point to point carrier like Southwest, providing feed to oneworld at the gateways. Doing so would really allow AA's costs to come down, but it won't do much for career progression...
Well first off, at least from my perspective, I disagree with the premise of your question. I don't think the company needs to outsource more flying in order to loosen SCOPE and be more competitive.
AA does need small jets with less than 100 seats in order to remain competitive with other carriers - particularly Delta and United - who have fully used the flexibility afforded by their post-bankruptcy SCOPE relaxations. However, I don't believe those small jets need to be flown by non-AA pilots. There is absolutely no reason the company and the union shouldn't be able to strike a deal to keep all of that flying at mainline AA, with mainline APA cockpit crews.
The issue really is cost. The 70- and 90-seaters flown at other airlines in the U.S. are pretty much all flown by either regional or non-union low-fare carriers, and at substantially lower cost than mainline AA cockpit costs. I believe that the APA should agree to a lower pay scale for flying 70- and 90-seat jets with a lower $/hour rate that is closer (say, within 1-3%) to the rates of the regional or non-union low-fare pilots flying comparable jets at other U.S. carriers. This wouldn't be a B-scale, mind you, since these mainline crews would be able to keep all of their same mainline benefits, work rules, etc. - thus the overall compensation for these crews would still be higher than what other 70-/90-seater pilots are making elsewhere. In return, the company should agree that all 70- to 90-seat flying in the future goes to these mainline crews, and never again to a regional, and guarantee that no pilots will be involuntarily lose their jobs or pay because of this. The company should definitely be able to agree to this: with all the movement occurring today and about to occur in the next few years on the mainline seniority list, and with flow-throughs up from Eagle and from new-hires sure to come, there need not be many if any mainline pilots who see their compensation decrease: new hires coming in would start on these smaller, lower-paying jets (just as with the F-100s 20 years ago), and flow-throughs coming up from Eagle would still happily see a bump in their pay versus what they're making now at Eagle.
Everybody wins here. The company gets access to the small jets it needs to remain competitive with Delta/United and access traffic flows that today cannot be profitably served with 140-seat MD80s. The pilots get access to a ton of new flying, without a decrement in pay to many if any existing pilots' livelihoods, and also of course get a more stable, financially secure employer. And the union really wins - they not only deprive the company of much of their ability to set mainline versus regional pilots/unions off against each other, but they also set an incredible and monumental precedent for the U.S. airline industry - where for the first time mainline cockpit crews control all flying all the way down to 70 seats. Sure sounds like "defending the profession" to me.
Win, win, win.
I continue to believe and hope that the company and the APA can reach some form of a "grand bargain" regarding small jet aircraft - this is in the interests of the company, the pilots, and the pilots union.
One fly in your ointment...American Eagle. AMR has a contract with the newly established separate company that guarantees that AE gets the regional flying for some number of years. And, since AMR took on every penny of AE's debt in the spinoff, they have a vested interested in AE flying and making a profit.
WorldTraveler
Corn Field
- Dec 5, 2003
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While your idea of insouring RJ flying is laudable, Comm, the reality is that the pilot unions decided 20 years ago that they did not want to have regional carrier flying mixed with mainline flying... they thought then that it was "safer" to keep regional flying on very different pay scales and at different companies.
With minimal exceptions, that is the way the US airline industry works.
The AE agreement which Jim references is based on that reality.
Mainline pilots are now concerned about the continued growth of RJs in the industry and many aren't so sure the decision to force RJs into a separate pay group that is completely separate from mainline pilots was such a good idea.
Meanwhile, mainline pilots now are even more determined that they do not want RJ pay scales at mainline airlines because it only provides an opportunity for airline mgmt to bring mainline pay scales down instead of pulling regional pay scales up.
Unless AA can figure out how to add new large RJs flown by AA pilots at rates the APA can agree to, the idea won't fly.
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Given that even B6 is backpedaling on the value of a mainline 100 seater says that the idea of flying any large RJs at mainline airlines might not work longterm anyway.
With minimal exceptions, that is the way the US airline industry works.
The AE agreement which Jim references is based on that reality.
Mainline pilots are now concerned about the continued growth of RJs in the industry and many aren't so sure the decision to force RJs into a separate pay group that is completely separate from mainline pilots was such a good idea.
Meanwhile, mainline pilots now are even more determined that they do not want RJ pay scales at mainline airlines because it only provides an opportunity for airline mgmt to bring mainline pay scales down instead of pulling regional pay scales up.
Unless AA can figure out how to add new large RJs flown by AA pilots at rates the APA can agree to, the idea won't fly.
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Given that even B6 is backpedaling on the value of a mainline 100 seater says that the idea of flying any large RJs at mainline airlines might not work longterm anyway.
Ah, but that's just the beauty of it: the capacity purchase agreement (CPA) that AA signed with Eagle already has built-in off-ramps for various amounts of capacity at points over the next several years. Thus, the shift of more flying away from 50- or 70-seat jets flown by Eagle to 70- and 90-seat jets flown by mainline AA/APA could be stepped down gradually as AA pulls capacity away from Eagle, and Eagle steadily loses more and more crews - many to mainline anyway - in coming years.
Most of the 37-50-seat RJs are likely going to be parked anyway once their debt is paid off, as those jets are getting up in cycles and not worth doing another MBV on. So what I'm suggesting is: park the 37-50-seaters, and in many cases replace them with 70-/90-seat jets flown by APA crews. (AA would probably keep around some smallish number of RJs for a few select markets, plus also probably order new turboprops for Eagle.)
As I see it, from so many angles - spinning off Eagle, the structure of the Eagle CPA now in place, mainline pilot retirements, Eagle-to-mainline flow-through, new mainline jets soon-to-arrive, etc. - the stars are aligning near-perfectly for this type of a "grand bargain" to occur.
Not sure if it was around 1997 or 2000, but APA offered to fly the CRJ-900 at or slightly below Comair rates at the time.
AA said No. The pilots are not the problem.
The pilot compensation part of the Scope clause isn't the problem. Even the wage scales of the non-union smaller jet companies are unsustainable. The pilot job market is already demonstrating that the salaries paid aren't worth it as a career or the expense outlay needed. AA is only getting 1 in 10 pilots to answer a recall offer.
By the way "WorldT" Jetblue pays their EMB-190 Captains $143/hour.
AA said No. The pilots are not the problem.
The pilot compensation part of the Scope clause isn't the problem. Even the wage scales of the non-union smaller jet companies are unsustainable. The pilot job market is already demonstrating that the salaries paid aren't worth it as a career or the expense outlay needed. AA is only getting 1 in 10 pilots to answer a recall offer.
By the way "WorldT" Jetblue pays their EMB-190 Captains $143/hour.
Well, again, the world changes. What didn't make sense in 1997 or 2000 may make sense in 2012.
I'm not saying that anybody is the "problem" here. What I'm saying is that this could be a viable solution for everyone.
Just my $0.02.
That's a separate issue.
The prevailing market price for pilot labor - like any other good or service - is driven by supply and demand. If there really is a worldwide shortage of qualified pilots upon us, then pay scales will inevitably have to rise.
Nonetheless, that wouldn't theoretically change the fundamentals of what I'm saying here since - in such a scenario - I think it's reasonable to suspect that AA's pay scales would then rise roughly in line with the market. That's the natural course of pattern bargaining that airline labor unions seem to love so much.
But, in the interim, at today's pay rates, AA could be adding new small jets, making their network more competitive, and adding new dues-paying APA members to the payroll. That can occur regardless of where overall market pilot pay scales go in a few years from now.
eolesen
Veteran
- Jul 23, 2003
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Not how I read it. They get some guarantees on what they currently have, but I don't see where AA can't also fly 90's or (scope permitting) be able to use Republic or Skywest for the 70-90 seat flying.
WorldTraveler
Corn Field
- Dec 5, 2003
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since much of the 50 seat capacity in the industry comes off contract in the next few years, AA better have an off ramp for AA.
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I'd like to hear more on why AA rejected APA's offer to fly the 900s at the time.
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As for pilot rates, B6 pays 90% of the 320 rates for 190 captains.... a plane that carries 2/3 of the revenue has pilots that are paid 90% of the 320.
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In contrast, CO, DL, and UA which all have rates for aircraft smaller than 150 seats pay the same or almost the same as the 150 seater. DL's rate for the DC9 and M80 is almost identical.
Pilot labor leaders today have been unwilling to accept pay significantly lower than their "base aircraft."
Perhaps APA could agree to and succeed at convincing AA to insource 70-76 seat aircraft flying for $110/hr but that is about what the market is paying for a topped out captain.
It isn't hard to see why airlines outsource small jet flying if they can't get the rate down proportionate to the revenue the aircraft carries but can w/ regional carriers. The relationship between what DL pays for 76 seat flying on a regional carrier and what they have to pay a 319 pilot is a lot more direct than what DL has to pay on an M90/738 (similar capacity) vs those smaller mainline aircraft.
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I'd like to hear more on why AA rejected APA's offer to fly the 900s at the time.
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As for pilot rates, B6 pays 90% of the 320 rates for 190 captains.... a plane that carries 2/3 of the revenue has pilots that are paid 90% of the 320.
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In contrast, CO, DL, and UA which all have rates for aircraft smaller than 150 seats pay the same or almost the same as the 150 seater. DL's rate for the DC9 and M80 is almost identical.
Pilot labor leaders today have been unwilling to accept pay significantly lower than their "base aircraft."
Perhaps APA could agree to and succeed at convincing AA to insource 70-76 seat aircraft flying for $110/hr but that is about what the market is paying for a topped out captain.
It isn't hard to see why airlines outsource small jet flying if they can't get the rate down proportionate to the revenue the aircraft carries but can w/ regional carriers. The relationship between what DL pays for 76 seat flying on a regional carrier and what they have to pay a 319 pilot is a lot more direct than what DL has to pay on an M90/738 (similar capacity) vs those smaller mainline aircraft.
eolesen
Veteran
- Jul 23, 2003
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Getting lower book rates for the pilots only addresses part of the problem. You're still paying full book for ramp, flight service, dispatch, maintenance, etc.
Essentially, you're getting a 70-90 seat airplane loaded with almost the same staffing costs of the F100...
Essentially, you're getting a 70-90 seat airplane loaded with almost the same staffing costs of the F100...
For start they could try putting seasoned, knowledgeable leadership in place. Robert Crandall would shake the very foundation of centerpork with each step he takes. Leadership equals success, period.
APA was offered the 70 seater as long as it was cost neutral. The TWU and the APFA said: No way. That was the end of the 70 seater coming to AA.
From the Dallas moring news.. (while you're all tripping over yer'selves trying to get APA to give away jobs)
http://www.dallasnews.com/business/airline-industry/20111001-filling-a-hole-in-the-sky.ece
The real Dodo bird here is the use of AA's mechanics for overhaul. As much as I loathe the idea of a foreign shop for heavy checks, well, if you can't beat 'em, join 'em!
From the Dallas moring news.. (while you're all tripping over yer'selves trying to get APA to give away jobs)
http://www.dallasnews.com/business/airline-industry/20111001-filling-a-hole-in-the-sky.ece
The real Dodo bird here is the use of AA's mechanics for overhaul. As much as I loathe the idea of a foreign shop for heavy checks, well, if you can't beat 'em, join 'em!
