It may be necessary to reach a 17% EBITAR but is it necessary for the company to survive, compete or even thrive? I think NOT. Your post proves that.
AA has not publicly released its EBITDAR target (it's been redacted in everything I've seen). Are you disclosing the actual (confidential) EBITDAR target or is this a number you backed into thru some revelation of the profit sharing that you claim a company lawyer disclosed?
Do you know what UAL's EBITDAR was in 2011? 15.9%. How about DAL? 14.6%
Even assuming that your oft-repeated claim of 17% is accurate, that's not an outlandish target to shoot for given the competition's actual results from 2011.
None of the other airlines that went into BK went in with over $4 billion in cash and the lowest labor rates in the industry.
You and other employees say this over and over and over, as if the amount of cash in the bank has anything to do with the airline's ability to raise your pay. The bolded portion of your sentence above is misleading. AA has the highest labor costs of any network legacy airline, despite the very low hourly pay rates for the mechanics. AA's pilot and FA block hour costs are the highest in the industry until their contracts are abrogated. Fleet is similarly too expensive, and they've already agreed to changes.
If the Judge abrogates what is he basically saying? So if United decides they want a 25% EBITAR then they too can file C-11, then an 1114e (until the Unions submit in the 1113 process) and have the court impose whatever UAL says is necessary for them to reach that 25% EBITAR? Was that the intent of C-11? If so then working people need to throw the whole Bankruptcy Code out like has been done at least twice before, or at least C-11.
I don't know the answer to your questions, but I do know that your contract is likely to be abrogated in just over a week regardless of the answers. What UAL may or may not do in the future - that has very little to do with the here and now at AA.
Why do you suppose that AA did not file an 1114e? Could it be that they would have had a hard time proving their case? Could it be that if they had forced the court to rule that the court may have tipped them off that they risk destabilizing the whole system?
I don't know. I mistakenly assumed on November 29 (and I probably posted it somewhere) that AA would likely seek large hourly payrate cuts from the pilots and FAs, along with some reductions from all other workgroups. On that, I was wrong, as AA is not seeking large hourly payrate cuts from either the pilots or the FAs - instead demanding more productivity. From what I can see, AA is seeking large hourly paycuts from the agents and, of course, from the AMTs that are downgraded to OSMs.
Why didn't AA seek 1114 relief? I think the answer is that 1114 is usually used for hourly payrate cuts, and since AA is attempting to cut pay via productivity and other workrule changes (that reduce headcount), there wasn't the immediate fire like there was at US and UA that caused those airlines to seek 1114 changes right away. The $4 billion in cash gave AA some breathing room to work thru the 1113 process without seeking 1114 interim relief.
The fact is we are at the bottom of the industry. The current language and the concessions already agreed to allows AA to cut their labor costs far in excess of their "Ask". They simply want more, they dont need it, cant prove they do, they simply want to make more profits than the rest of the industry combined and they are trying to use BK to do it. Their excuses are flimsy. They same they need to show an EBITAR of 17% because "Thats what the analysts would like to see". That these long term concessions to attract capital, but they leave out the fact that they were awarded financing with all their contracts in mediation with all the groups having asked for a release.
Yes, your (TWU M&R) hourly payrates are at the bottom. Problem is, AA's total maintenance costs are the highest per ASM, according to AA on the DoT filings. If I were management, spending hundreds of millions on bankruptcy lawyers and other parasites, I would probably seek the biggest cuts I could, because of the fear of not doing it right the first time - recall that USAir filed a second time not too long after its first botched Ch 11 case. If you think that filing Ch 11 is sign of failure, it's nothing compared to the failure of having to do it a second time in two years because you didn't fix the problems in the first Ch 11 filing.
If AA's employees had any competent negotiators or negotiating skills, they wouldn't get worked up over the size of the potential profits AA wants to make after Ch 11 - they would simply make sure they negotiated iron-clad, bullet-proof, generous "me-too" clauses that would enable everyone to share in those profits before management got a turn at the trough.
I've said it before, We keep our tools on wheels for a reason. Mechanics would be better off to see AA liquidate than accept the terms they are trying to jam down our throats.
What are you waiting for? You and the other 10,000 M&R employees have had more than six months notice that AA would seek massive concessions. Yes, you've posted repeatedly that abrogation may cause massive walkouts, and some pilots and FAs have made similar claims. My guess is that some will stay home and some will turn in de-facto resignations (the employees may call it a wildcat strike) but in all likelihood, most will continue to show up for work, just like they did at every other airline that was in bankruptcy.
You're right, on time performance means nothing, ,,as long as there isnt much excess capacity out there and people are left with few options.
For the last several weeks, AA has been picking up some business from disenchanted UAL customers. And so far in the first five months of this year, Horton & Co. have been more successful at jacking up fares (the higher unit revenue I've been talking about) than either UA or US. Only DL has kept pace with AA in PRASM increases, and AA even overtook DL in May due to Southwest targetting ATL and imposing some fare discipline on DL.
