AMR plans no wage cuts.

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Aug 20, 2002
[P]DALLAS, Nov 6 (Reuters) - Taking a bite out of food costs was one of several money-saving proposals AMR Corp. ([A href=]AMR[/A]) presented to analysts on Wednesday, but wage concessions from employees were not an item the parent of American Airlines, the world''s largest carrier, placed on the table.[/P]
[P]AMR said earlier this week it needs to cut operating costs by up to $4 billion, up from the $3 billion figure that had often been cited by top management, in order to compete with budget carriers as cost-conscious consumers increasingly search out the cheapest fares.[/P]
[P]Among the items top executives presented at a meeting with airline analysts were ways to save fuel, squeeze savings through more efficient ticket distribution systems, and shift capacity to more profitable routes.[/P]
[P]But wage cuts with unionized employees, which have sought by other major carriers such as United Airlines, were not a way AMR believes will help them through harrowing financial times.[/P]
[P]We need to restructure. We need to rethink how we do our labor relations, what our contracts look like, what our business looks like, and you don''t do that unless your employees are with you, said Jeff Brundage, the company''s vice president of employee relations.[/P]
[P]You can''t do that by fiat, he said.[/P]
[P]AMR is in talks with its pilots union over a new contract. A federal mediator has been called in to help the negotiations, which have plodded along for over a year.[/P]
[P]American pilots contend that they are paid about 20 percent less than their counterparts at carriers such as United, the No. 2 U.S. carrier.[/P]
[P]AMR executives said one of the greatest challenges American faces is keeping a base of highly profitable business travelers through preferred services and extensive networks, while at the same time slashing costs so it can compete with low-cost carriers, such as Southwest Airlines.[/P]
[P]Don Carty, AMR''s chairman and chief executive officer, has said the airline has already identified $2 billion in structural cost cuts and AMR is halfway to its goal of being able to compete in an environment where price is king.[/P]
[P]Among proposals American announced to analysts were plans to shift capacity away from areas in Latin America where air traffic has declined due to downturns in local economies, and increase capacity to better-performing regions, such as the Caribbean and Mexican resort destinations.[/P]
[P]There will be more automation at the airport, and the airline has already cut back on some services that do not weigh heavily on the minds of bargain-hunting consumers, such as in-flight meals.[/P]
[P]Separately, AMR said it will spin off regional carrier Executive Airlines in a move that could bring the struggling carrier about $700 million. The company said in a statement, it has signed a letter of intent to sell Executive Air, which operates under the name American Eagle, to Puerto Rican hotelier Joaquin Bolivar.[/P]
[P]Last month, AMR reported a third-quarter net loss of $924 million, after special items, as the lingering downturn stemming from the Sept. 11 attacks and anemic revenue in the industry walloped its bottom line. Despite the massive cost-cutting campaign, AMR said its fourth-quarter loss was likely to exceed the third-quarter loss.[/P]
[P]American has cut its payroll and capacity as well as retired airplanes as it tries to save money.[/P]
[P]Last week, it brought its new system, designed to reduce rush-hour peaks of flights to a more even flow throughout the day, to its home field of Dallas/Fort Worth International Airport. AMR is hoping the system will be a major part of a plan announced in August aimed at saving it over $1 billion a year through the more efficient allocation of its resources. [/P]
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Like I said before,THEY EAT THEIR YOUNG
You just wait and see how many upper management positions
are cut when the chainsaw starts up...
Wont be very many at the top suffering I bet...
So they wil just lay off a few thousand extra instead of asking for pay cuts...BIG DEAL..AMR ENRON AND BUSH
what dreams are made of...
On 11/6/2002 5:05:06 PM Sean wrote:
.... but wage concessions from employees were not an item the parent of American Airlines, the world's largest carrier, placed on the table.[/P]
There was also a time when AMR said that they would never even consider selling Executive.....but....
Mabey, (just) Mabey, this could be considered turning(the proverbial) corner !!!!!!!!!!!!

(Carty says NO wage cuts, and the stock shoots up to + $7.)

I've been saying here for quite a while, that (IMHO) the only way to fix AA was to go back to the drawing board !

Similiar to what Crandall did, in the early 80's(although this time around, it's much more severe), AA needed to put itself on the slim fast plan, IMMEDIATELY !!!

1. Shrink the airline !

2. DO NOT cut wages,(AA is going to need to retain
as many happy campers as possible) !

3. Unload parts of Eagle, if need be.(We survived the
unthinkable, WE SOLD SABRE, and lived to tell about it)

4. Does this mean Lay Offs ? (right now) YES !!! Every
one of us,(union) ,in this business knows DAMN
well that OCCUPATIONAL seniority RULES !!!!

5. The faster we make some really difficult choices, is the
faster we can(and will) get EVERYONE back to work !!!
(while NOT cutting hourly wages) !!!!!!!!!!!!!

This is very similiar to what Uncle Bobby did in the early 80's, and we ALL know what happened after he did !
We kicked some major league ass !!!!!!!!!!

I give Don Carty a lot of credit for taking this approach. I just hope he's being TOTALLY sincere.

Only one problem NHBB, Uncle Bobby didn't have nearly as many lowfare carriers around back in the 80's. And many of the lowfare carriers that did exist back then were very unstable and easy to knock off.

Today is a whole new ball game. Your suggestion of shrinking the airline could prove disastrous....just ask your pals at TWA and US how well shrinking works. Every time AA cuts back, the lowfares just add capacity which effectively gives more and more power to the low fare carriers and insures that yields stay down. Shrinking into profitability is not the answer.
[P]I hope that the readers of this thread don't really believe any of this crap. AA will seek wage cuts. I promise you that this will come to pass. It's just a matter of time.[/P]
That has to be the most absurd thing I have ever heard. <PORTION DELETED BY MODERATOR>
I can't stand Carty either, he talks out of both sides of his mouth far too often for my taste.

MHG is right, it's just a matter of time. Never try to compare what Carty does, has done, or will do with what BC did, the two are as different as sand and water.

Needless to say, if BC was still at the helm, I highly doubt that they would have bought TWA's assets. AA is going to be pissed that they did if UA goes up on the block and they don't have the money to buy them up too - and Continental's promise of a UA buyout will come true and make AA's corporate life a living hell.
[P]<PORTION DELETED BY MODERATOR> He hates Carty,[BR][BR]probably hated Crandall. Then why do you still stick around. QUIT[/P]
[BLOCKQUOTE][BR]----------------[BR]On 11/7/2002 12:08:04 PM WingNaPrayer wrote:
[P]AA is going to be pissed that they did if UA goes up on the block and they don't have the money to buy them up too - [/P]----------------[/BLOCKQUOTE]
[P]Hi Wingie---[/P]
[P]There is absolutely NO WAY that AA could ever buyout UA even if they were swimming in money. The anti-trust issues would be insurmountable, even for a Republican administration. Look what they had to do just to get little 'ol TWA. They had to quickly run TWA out of money and create a failed company defense to get past regulators and make the deal look like a job and community saver rather than an anti-competitive acquisition.[/P]
Why should AA cut wages? It's easier for them to cut jobs, and they seem to be doing a pretty good job at it. I mean lets not inconvience anybody with taking a few bucks from ones pay check when we can just get rid of employees. I mean isn't it easier to layoff employees in order for those to keep those heafty paychecks. Isn't that the American way! ( No pun intended ).
“Carty: Airline wages too highâ€￾

Only $2 Billion more.

Come on people. What do you say? We could probably hit the additional $2 billion in savings in our sleep. United’s pilots by themselves are giving more than this.,,SB1...2273071,00.html

If the percentages in the above article are correct, the breakdown per work group would be :

Pilots: 35% = 700,000,000.00
FAs: 16% = 320,000,000.00
Mechanics: 16% = 320,000,000.00
Management & Support Staff: 10% = 200,000,000.00
Others: 23% = 460,000,000.00

I’ll bet a lot of the savings mentioned above can be achieved by work rule changes. For those groups, such as management, that don’t really have work rules that they can play with, well, they’ll just have to take plain old paycuts.

I for one would be more than willing to take a permanent paycut to maintain the current level of employment, and who knows, maybe even encourage a little growth. If nothing else, hopefully, we would be able to extend the bridge of survival until the economy turns around.
[BLOCKQUOTE][BR]----------------[BR]On 11/8/2002 12:42:36 AM AirwAr wrote:
[P]I for one would be more than willing to take a permanent paycut to maintain the current level of employment, and who knows, maybe even encourage a little growth. If nothing else, hopefully, we would be able to extend the bridge of survival until the economy turns around.[BR][/P]----------------[/BLOCKQUOTE]
[P]Don't worry. You won't have to wait too long.[/P]
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