AMR reports 4th quarter loss

[ArtTang]

Thank goodness AMR executives will receive their bonuses for yet another profitable quarter

Art Tang
IMA

AMR Corporation Reports a Fourth Quarter Loss of $604 Million, As
Compared to a $387 Million Loss in 2004
Wednesday January 18, 8:51 am ET
High Fuel Prices and Competitors With Lower Costs Continued to Impact
American's Financial Performance
Despite These Headwinds, AMR's Fourth Quarter Results, Excluding
Special Items, Improved Year Over Year


FORT WORTH, Texas, Jan. 18 /PRNewswire-FirstCall/ -- AMR Corporation
(NYSE: AMR - News), parent company of American Airlines, Inc., today
reported a net loss of $604 million in the fourth quarter of 2005, or
$3.49 per share, as compared to a net loss of $387 million, or $2.40
per share, in the fourth quarter of 2004. The loss for the fourth
quarter of 2005 includes a net $191 million negative impact of
special items, including $155 million for aircraft charges, $73
million for facility charges and a $37 million gain related to debt
restructuring. Without these special items, AMR would have recorded a
net loss of $413 million, or $2.39 per share, in 2005. The net loss
in the fourth quarter of 2004 was $473 million, or $2.94 per share,
excluding an $86 million net gain due to special items.
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For the year 2005, AMR posted a $93 million operating loss and a net
loss of $861 million, as compared to 2004's full-year operating loss
of $144 million and net loss of $761 million. Special items resulted
in a net charge of $180 million in 2005 and a net gain of $135
million in 2004. Excluding these special items, the Company's net
loss would have been $681 million in 2005, with operating earnings of
$100 million, and $896 million in 2004, with an operating loss of
$133 million.

"Our fourth quarter results close the book on another very difficult
year," said AMR Chairman and CEO Gerard Arpey. "But while we are
dissatisfied with our financial results, we did make progress in a
number of important areas during the year, including our first annual
operating profit, excluding special items, since the year 2000. As a
result, we have -- unlike many of our competitors -- continued to
meet our various financial obligations, including funding our defined
benefit pension programs. And, by working together with our people
and our unions, we have continued to improve the efficiency and
productivity of every part of the company. Our collaborative approach
enabled us to retain control of our destiny in 2005, despite a
challenging revenue environment and higher fuel prices driving a $1.7
billion increase in fuel costs, compared to what we would have paid
at 2004 prices."

During the fourth quarter, the Company paid $433 million more for
fuel than it would have paid at 2004 prices and, on a year over year
basis, American's mainline cost per available seat mile was up by
12.9 percent. Excluding fuel and special items, mainline unit costs
increased 2.8 percent versus the fourth quarter of 2004. For the full
year, mainline unit costs increased 7.9 percent; however, excluding
fuel and special items, these unit costs decreased 2.0 percent.

Arpey congratulated the airline's employees for lowering unit costs,
excluding fuel and special items, for the fourth year in a row in
2005. He also pointed out that good customer service, capacity
restraint, new products, and numerous fleet and schedule changes
enabled American to outperform the industry in generating passenger
revenue. Included in the numerous fleet and schedule changes was the
year-end decision to permanently ground 27 MD80 aircraft, 24 of which
had previously been in temporary storage. The remaining three
aircraft were grounded as of Dec. 31, 2005.

For the quarter, American's passenger revenue per available seat mile
was up 13.8 percent year over year. American's load factor -- or
percentage of seats filled -- for the fourth quarter was 77.9
percent, up 3.6 points over the fourth quarter of 2004, while yield,
representing average fares, was up 8.5 percent.

"As our revenue performance indicates, we have been doing a good job
of giving customers what they value, and leveraging our global
network, strong brand and well-earned reputation for customer
service," Arpey said. "We expect these American strengths to continue
serving us well in 2006 and beyond, but the fact is we need to do
more -- on both the cost and revenue sides of the ledger -- to return
our company to sustained profitability."

Arpey noted that the Performance Leadership Initiative (PLI) -- a
collaborative effort launched in 2005 -- has the potential to
generate substantial improvements, and close gaps between the
company's performance, and what would be considered best in
class. "PLI is the natural next step in the Turnaround Plan we
launched several years ago," Arpey said. "Every work group in the
company has participated in identifying the areas where more
improvement is needed."

Arpey said one important by-product of the company's collaborative
approach has been its ability to meet all of its pension obligations.
During the fourth quarter, AMR contributed $22 million to its various
defined benefit plans, bringing the 2005 total pension contribution
to $310 million.

AMR ended the year with $4.3 billion in cash and short-term
investments, including a restricted balance of $510 million.

Statements in this release contain various forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which represent the Company's expectations or beliefs
concerning future events. When used in this release, the
words "expects," "plans," "anticipates," "indicates," "believes," "for
ecast," "guidance," "outlook" and similar expressions are intended to
identify forward-looking statements. Forward- looking statements
include, without limitation, the Company's expectations concerning
operations and financial conditions, including changes in capacity,
revenues and costs, future financing plans and needs, overall
economic conditions, plans and objectives for future operations, and
the impact on the Company of its results of operations in recent
years and the sufficiency of its financial resources to absorb that
impact. Other forward-looking statements include statements which do
not relate solely to historical facts, such as, without limitation,
statements which discuss the possible future effects of current known
trends or uncertainties or which indicate that the future effects of
known trends or uncertainties cannot be predicted, guaranteed or
assured. All forward-looking statements in this release are based
upon information available to the Company on the date of this
release. The Company undertakes no obligation to publicly update or
revise any forward- looking statement, whether as a result of new
information, future events, or otherwise.

Forward-looking statements are subject to a number of factors that
could cause the Company's actual results to differ materially from
the Company's expectations. The following factors, in addition to
other possible factors not listed, could cause the Company's actual
results to differ materially from those expressed in forward-looking
statements: changes in economic, business and financial conditions;
the Company's substantial indebtedness; continued high fuel prices
and the availability of fuel; further increases in the price of fuel;
the impact of events in Iraq; conflicts in the Middle East or
elsewhere; the highly competitive business environment faced by the
Company, characterized by increasing pricing transparency and
competition from low cost carriers and financially distressed
carriers; historically low fare levels and fare simplification
initiatives (both of which could result in a further deterioration of
the revenue environment); the ability of the Company to reduce its
costs further without adversely affecting operational performance and
service levels; uncertainties with respect to the Company's
international operations; changes in the Company's business strategy;
changes in the price of the Company's stock; actions by U.S. or
foreign government agencies; the possible occurrence of additional
terrorist attacks; another outbreak of a disease (such as SARS or
Avian Flu) that affects travel behavior; uncertainties with respect
to the Company's relationships with unionized and other employee work
groups; the inability of the Company to satisfy existing financial or
other covenants in certain of its credit agreements; the availability
and terms of future financing; the ability of the Company to reach
acceptable agreements with third parties; and increased insurance
costs and potential reductions of available insurance coverage.
Additional information concerning these and other factors is
contained in the Company's Securities and Exchange Commission
filings, including but not limited to the Company's 2004 Form 10-K.


Detailed financial information follows:



AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)

Three Months Ended December
31, Percent
2005
2004 Change
Revenues
Passenger - American Airlines $4,080
$3,610 13.0
- Regional Affiliates 566
463 22.2
Cargo 162
173 (6.4)
Other revenues 360
295 22.0
Total operating revenues 5,168
4,541 13.8

Expenses
Wages, salaries and benefits 1,776
1,680 5.7
Aircraft fuel 1,585
1,188 33.4
Other rentals and landing fees 306
286 7.0
Depreciation and amortization 296
329 (10.0)
Commissions, booking fees and
credit card expense 264
244 8.2
Maintenance, materials and repairs 228
230 (0.9)
Aircraft rentals 148
151 (2.0)
Food service 119
137 (13.1)
Other operating expenses 830
651 27.5
Total operating expenses 5,552
4,896 13.4

Operating Loss (384)
(355) 8.2

Other Income (Expense)
Interest income 45
19 *
Interest expense (260)
(223) 16.6
Interest capitalized 6
20 (70.0)
Miscellaneous - net (11)
152 *
(220)
(32) *

Loss Before Income Taxes (604)
(387) 56.1
Income tax --- ---
*
Net Loss $(604)
$(387) 56.1

Basic and Diluted Loss Per Share $(3.49) $(2.40)

Number of Shares Used in Computation
Basic and Diluted 173 161

* Greater than 100%



AMR CORPORATION
OPERATING STATISTICS
(Unaudited)

Three Months Ended
December 31,
Percent
2005 2004
Change

American Airlines, Inc.
Mainline Jet Operations
Revenue passenger miles (millions) 33,226 31,893
4.2
Available seat miles (millions) 42,627 42,906
(0.7)
Cargo ton miles (millions) 573 586
(2.2)
Passenger load factor 77.9% 74.3%
3.6 pts.
Passenger revenue yield per
passenger mile (cents) 12.28 11.32
8.5
Passenger revenue per available
seat mile (cents) 9.57 8.41
13.8
Cargo revenue yield per ton mile
(cents) 28.35 29.56
(4.1)
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (A) 11.57 10.25
12.9
Fuel consumption (gallons,
in millions) 706 738
(4.3)
Fuel price per gallon (cents) 202.1 147.4
37.1

Regional Affiliates
Revenue passenger miles (millions) 2,359 1,928
22.4
Available seat miles (millions) 3,262 2,877
13.4
Passenger load factor 72.3% 67.0%
5.3 pts.

AMR Corporation
Average Equivalent Number of Employees
American Airlines 74,000 77,500
Other 13,200 13,200
Total 87,200 90,700

(A) Excludes $655 million and $561 million of expense incurred
related
to Regional Affiliates in 2005 and 2004, respectively.



AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

American Airlines, Inc.
Mainline Jet Operations Three Months Ended
December 31,
(in millions, except as noted) 2005 2004

Total operating expenses $5,588 $4,957
Less: Operating expenses incurred
related to Regional Affiliates 655 561
Operating expenses excluding expenses
incurred related to Regional Affiliates $4,933 $4,396
American mainline jet operations
available seat miles 42,627 42,906

Operating expenses per available seat mile,
excluding Regional Affiliates (cents) 11.57 10.25

Impact of special items (cents) (0.44)
(0.14)
Fuel cost per available seat mile (cents) (3.35)
(2.54)
Operating expenses per available seat mile,
excluding impact of special items and
the cost of fuel (cents) 7.78 7.57

Percent change 2.8%



AMR Corporation
Impact of Fuel Price Variance

Average fuel price per gallon (cents)
Three months ended December 31, 2005 203.3
Three months ended December 31, 2004 147.7
Change in price (cents) 55.6
2005 consumption (gallons, in millions) x 779.4
Impact of fuel price variance
(in millions) $433.3

Note: The Company believes that operating expenses per available
seat
mile, excluding special items and the cost of fuel, as well as
the impact
of fuel price increases, assist investors in understanding the
impact of
fuel prices on the Company's operations, without regard to
special items.



AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

AMR Corporation
Impact of Special Items
(in millions, except per share amounts)
Three Months Ended
December 31, 2005
Amount EPS

Net loss $(604) $(3.49)
Less: Impact of special items 191 1.10
Net loss excluding special items $(413) $(2.39)



AMR Corporation
Impact of Special Items
(in millions, except per share amounts)
Three Months Ended
December 31, 2004
Amount EPS

Net loss $(387) $(2.40)
Add: Impact of special items (86) (0.54)
Net loss excluding special items $(473) $(2.94)

Note: The Company believes the loss excluding special items
assists
investors in understanding the impact of the special items on the
Company's financial results.



AMR CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
(Unaudited)

Twelve Months Ended December
31, Percent
2005
2004 Change
Revenues
Passenger - American Airlines $16,614
$15,021 10.6
- Regional Affiliates 2,148
1,876 14.5
Cargo 622
625 (0.5)
Other revenues 1,328
1,123 18.3
Total operating revenues 20,712
18,645 11.1

Expenses
Wages, salaries and benefits 6,755
6,719 0.5
Aircraft fuel 5,615
3,969 41.5
Other rentals and landing fees 1,262
1,187 6.3
Depreciation and amortization 1,164
1,292 (9.9)
Commissions, booking fees and
credit card expense 1,113
1,107 0.5
Maintenance, materials and repairs 989
971 1.9
Aircraft rentals 591
609 (3.0)
Food service 507
558 (9.1)
Other operating expenses 2,809
2,377 18.2
Total operating expenses 20,805
18,789 10.7

Operating Loss (93)
(144) (35.4)

Other Income (Expense)
Interest income 149
66 *
Interest expense (957)
(871) 9.9
Interest capitalized 65
80 (18.8)
Miscellaneous - net (25)
108 *
(768)
(617) 24.5

Loss Before Income Taxes (861)
(761) 13.1
Income tax --- ---
*
Net Loss $(861)
$(761) 13.1

Basic and Diluted Loss Per Share $(5.21) $(4.74)

Number of Shares Used in Computation
Basic and Diluted 165 161

* Greater than 100%



AMR CORPORATION
OPERATING STATISTICS
(Unaudited)

Twelve Months Ended
December 31,
Percent
2005 2004
Change

American Airlines, Inc.
Mainline Jet Operations
Revenue passenger miles
(millions) 138,374 130,164
6.3
Available seat miles (millions) 176,112 174,015
1.2
Cargo ton miles (millions) 2,209 2,203
0.3
Passenger load factor 78.6% 74.8%
3.8 pts.
Passenger revenue yield per
passenger mile (cents) 12.01 11.54
4.1
Passenger revenue per available
seat mile (cents) 9.43 8.63
9.3
Cargo revenue yield per ton mile
(cents) 28.21 28.36
(0.5)
Operating expenses per available
seat mile, excluding Regional
Affiliates (cents) (A) 10.50 9.73
7.9
Fuel consumption (gallons,
in millions) 2,948 3,014
(2.2)
Fuel price per gallon (cents) 172.3 121.2
42.2

Regional Affiliates
Revenue passenger miles (millions) 8,946 7,283
22.8
Available seat miles (millions) 12,714 10,835
17.3
Passenger load factor 70.4% 67.2%
3.2 pts.

(A) Excludes $2.5 billion and $2.1 billion of expense incurred
related
to Regional Affiliates in 2005 and 2004, respectively.



AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

American Airlines, Inc.
Mainline Jet Operations Twelve Months Ended
December 30,
(in millions, except as noted) 2005 2004

Total operating expenses $21,008
$19,029
Less: Operating expenses incurred
related to Regional Affiliates 2,515
2,104
Operating expenses excluding expenses
incurred related to Regional Affiliates $18,493
$16,925
American mainline jet operations
available seat miles 176,112
174,015
Operating expenses per available seat mile,
excluding expenses incurred related to
Regional Affiliates (cents) 10.50
9.73

Impact of special items (cents) (0.11)
(0.01)
Fuel cost per available seat mile (cents) (2.91)
(2.09)
Operating expenses per available seat mile,
excluding impact of special items and
the cost of fuel (cents) 7.48
7.63

Percent change (2.0%)



AMR Corporation
Impact of Fuel Price Variance

Average fuel price per gallon (cents)
Twelve months ended December 31, 2005 173.5
Twelve months ended December 31, 2004 121.6
Change in price (cents) 51.9
2005 consumption (gallons, in millions) x 3,237.0
Impact of fuel price variance
(in millions) $1,680.0

Note: The Company believes that operating expenses per available
seat
mile, excluding special items and the cost of fuel, as well as
the
impact of fuel price increases, assist investors in
understanding the
impact of fuel prices on the Company's operations, without
regard to
special items.



AMR CORPORATION
NON-GAAP AND OTHER RECONCILIATIONS
(Unaudited)

AMR Corporation
Impact of Special Items
(in millions, except per share amounts)
Twelve Months Ended
December 31, 2005
Amount EPS

Net loss $(861) $(5.21)
Less: Impact of special items 180 1.09
Net loss excluding special items $(681) $(4.12)



AMR Corporation
Impact of Special Items
(in millions, except per share amounts)
Twelve Months Ended
December 31, 2004
Amount EPS

Net loss $(761) $(4.74)
Add: Impact of special items (135) (0.84)
Net loss excluding special items $(896) $(5.58)



AMR Corporation
Impact of Special Items on Operating Earnings
(in millions, except per share amounts)
Twelve Months Ended
December 31
2005 2004

Operating income (loss) $(93) $(144)
Less: Impact of special items (A) 193 11
Operating income (loss) excluding
special items $100 $(133)

(A) Certain special items in 2005 and 2004 did not impact
operating
earnings.

Note: The Company believes the operating income/(loss) and net
loss
excluding special items assists investors in understanding the
impact of
the special items on the Company's financial results.

Current AMR Corp. news releases can be accessed on the
Internet.
The address is: http://www.aa.com




----------------------------------------------------------------------
----------
Source: AMR Corporation

 

[Hopeful]

Arpey says "we need to do more!"
Yea more executive payouts to keep the "key" people on board with AMR.




AP
AMR Corp.'s 4Q Losses Deepen on Fuel Costs
Wednesday January 18, 9:43 am ET
American Airlines Parent AMR Fourth-Quarter Losses Deepen Due to Fuel Costs, Competition


FORT WORTH, Texas (AP) -- American Airlines parent AMR Corp. on Wednesday said its fourth-quarter loss widened as the nation's biggest airline company wrestled with high fuel costs and competition with low-cost rivals.
ADVERTISEMENT


Chairman and Chief Executive Gerard Arpey said the company is "dissatisfied with our financial results."

"We need to do more -- on both the cost and revenue sides of the ledger -- to return our company to sustained profitability," he said.

Losses totaled $604 million, or $3.49 per share, for the three months ended Dec. 31 versus $387 million, or $2.40 per share, in the prior-year period. The latest period includes $191 million in special items, including $155 million in aircraft charges, $73 million in facility charges and a $37 million gain related to debt restructuring.

Without the special items, AMR would have posted a loss of $413 million, or $2.39 per share, in the latest quarter.

AMR revenue rose 14 percent to $5.17 billion from $4.54 billion a year ago.

Analysts polled by Thomson Financial expected the company to report a loss of $2.50 per share on $5.24 billion in revenue. Their estimates typically exclude one-time items.

Its shares fell 22 cents to $18.64 in early trading on the New York Stock Exchange.

The high cost of energy weighed on the company's bottom line, as AMR paid $433 million more for jet fuel than it would have had prices held steady with the prior year.

For the full year, losses widened to $861 million, or $5.21 per share, from $761 million, or $4.74 per share, in 2004. Annual revenue rose 11 percent to $20.71 billion from $18.65 billion in 2004.

AMR ended the year with $4.3 billion in cash and short-term investments, including a restricted balance of $510 million.

 

[eolesen]

Pithy comments about bonuses aside for a moment, this is not bad news.

Excluding special accounting charges, AMR had a $100M operating profit for 2005, versus a $133M operating loss for 2004. That means AMR was operating in the black for the entire year, even with the higher fuel prices.

Cash has increased by almost $400M to $4.3B, and that's after meeting all of the pension funding obligations. That puts AMR in the position to actually consider buying NWA's Pacific routes if they suddenly came on the market (remember the Eastern South America purchase in 1989, and how well that has worked out). It also means that AMR can weather another spike in fuel prices better than anyone else aside perhaps from WN.

Last, revenue per ASM is up over 9%, and yields are up over 4%, despite the fact that fuel rose as much as it did during the year. Ticket prices have climbed, and AMR has been able to hold onto more of it than they have since the Tech Bubble burst in 2000.

 

[Hopeful]

Let's not forget the $22 billion in debt!

 

[eolesen]

Let's not forget the $22 billion in debt!

This is my biggest concern as well. Gary Chase (Lehman) just sent out his preliminary analysis of the release, and included this comment:

Cash balances remain strong at $4.3bn (of which $500mm restricted), but American's liquidity position is less in question given current industry circumstances. If cash generation in 2006 is consistent with our expectations, we expect the company to begin paying down its towering debt load.

The earnings call is going to be this afternoon (webcast link off of AA.Com under Investor Relations), so hopefully Gary or one of the other analysts will ask where the debt load stands today. There's a $37M gain attributed to debt restructuring, so it's possible that some of that $22B was already paid off during 4Q05.

 

[Connected1]

There's a $37M gain attributed to debt restructuring, so it's possible that some of that $22B was already paid off during 4Q05.

I believe the $37M was a deferred gain from a debt restructuring that occurred in 2003.

 

[WingNaPrayer]

I'm hoping I'm not the only one to pick up on this subtle hint:

UPDATE: AMR Corp.'s Loss Widened By Fuel, Charges

NEW YORK (Dow Jones) -- American Airlines' parent AMR Corp. said Wednesday full seats and continued cost cuts weren't enough to lift it out of the red last quarter, with soaring fuel prices and low-cost fares preventing the nation's No. 1 airline from breaking a string of losses.

The scourge of the airline industry remains jet fuel. AMR said it paid $1.59 billion for fuel in the fourth quarter -- $433 million more than it paid a year ago.

Overall, AMR spent $1.7 billion more for fuel in 2005 than in 2004.

To combat fuel costs, the company is working to become more efficient. The effort includes cutting labor expenses, examining how it burns jet fuel and getting more revenue out of its planes.

Fort Worth, Texas-based AMR(AMR)posted a fourth-quarter loss of $604 million, or $3.49 a share, wider than the $387 million, or $2.40 a share, a year earlier.

The latest results include $155 million in aircraft charges, $73 million in facility charges, a $37 million gain related to debt restructuring. Excluding one-time items, the loss was $413 million, or $2.39. American grounded some of its least efficient planes at the end of last year.

The average estimate of analysts polled by Thomson First Call was a loss of $ 2.55 a share.

Labor expenses in the quarter rose 5.7% to $1.78 billion.

Revenue rose 14% to $5.17 billion from $4.54 billion. Some $566 million in revenue came from regional operations.

The results were at the high end of the company's estimates, according to Citigroup analysts in a research note.

The airline said its cost per available seat mile rose 12.9% in the fourth quarter, a period in which it permanently grounded 27 MD80 aircraft, 24 of which had been in temporary storage.

American's quarterly passenger revenue per available seat mile rose 13.8%, while its load factor -- the percentage of seats filled -- rose 3.6 points to 77.9%. The fourth-quarter yield, representing average fares, increased 8.5%.

For the year, AMR's net loss widened to $861 million from $761 million in 2004.

Despite the financial headwinds, AMR has avoided bankruptcy, unlike rivals Northwest Airlines(NWACQ)and Delta Air Lines(DALRQ), which filed last September.

On Wednesday, AMR shares joined a broad airline sector rebound. The stock, which is down 15% this year following last year's run-up, gained 2.8% to $19.39. END
*****
There aren't a lot of ways to cut labor expenses other than . . I loathe to say the "C" word.

 

[FWAAA]

I believe the $37M was a deferred gain from a debt restructuring that occurred in 2003.

It's related to the sale of the F100s and their debt. From the Dec 22 Eagle Eye:

Data is as reported and includes an expected $37 million gain in December related to the 2003 retirement of certain Fokker 100 debt, as disclosed in footnote 3 of the Form 10-Q for the quarterly period ended September 30, 2005. 2005 amounts include a $55 million special fuel tax credit received in 1Q05 and a net charge of $58 million in 3Q05, reflecting a contract termination and the reversal of an insurance reserve following a favorable legal decision. In addition, the Company expects to recognize some additional special items in the fourth quarter related to restructuring and other initiatives designed to generate additional revenues and reduce costs. The amount and scope of these special items are not known at the present time.

http://www.shareholder.com/aa/EdgarDetail....05-84&SID=05-00

From my recollection, this gain was contingent on AA avoiding Ch 11 during the relevant period.

 

[Connected1]

I'm hoping I'm not the only one to pick up on this subtle hint:

A company cannot give guidance on concessions that it hasn't already achieved. This has to refer to productivity gains already underway in places like Flight and M&E.

 

[eolesen]

Aw, don't shoot down WNP so quickly with facts -- he's missed around here. Really.

 

[TWU informer]

Yawn.

IF fuel pricing was at 2003 levels this company would have record profits, and I mean RECORD profits.

Yeah, thats it, lets go buy NWA Pacific Routes expand the fleet and bring on another crisis.

 

[FWAAA]

Yawn.

IF fuel pricing was at 2003 levels this company would have record profits, and I mean RECORD profits.

Yeah, thats it, lets go buy NWA Pacific Routes expand the fleet and bring on another crisis.

With the one ORD-PVG flight (beginning in April) projected to bring in something north of $200 million per year (see http://www.usaviation.com/forums/index.php...topic=18952&hl= ), buying the 29 weekly China frequencies held by NW (and perhaps its Japan 5th freedom rights as well) would probably be the best possible outcome for AA - and for you, too, since you'd get to help maintain more long-haul airplanes at TUL, given the relative absence of mechanics at NW.

Such a move would allow AA to close MEM and severely downsize MSP and DTW, reducing a lot of the domestic overcapacity while picking up billions in revenue to Japan and China.

Yes, if fuel were cheap again, AA would be rolling in money. But we live in the real world, not I'd like a pony world, so let's see AA plan for high fuel prices going forward, not wish for Santa to somehow bring back $0.50/gallon JetA, 'cause that may never happen.

 

[TWU informer]

With the one ORD-PVG flight (beginning in April) projected to bring in something north of $200 million per year (see http://www.usaviation.com/forums/index.php...topic=18952&hl= ), buying the 29 weekly China frequencies held by NW (and perhaps its Japan 5th freedom rights as well) would probably be the best possible outcome for AA - and for you, too, since you'd get to help maintain more long-haul airplanes at TUL, given the relative absence of mechanics at NW.

Such a move would allow AA to close MEM and severely downsize MSP and DTW, reducing a lot of the domestic overcapacity while picking up billions in revenue to Japan and China.

Yes, if fuel were cheap again, AA would be rolling in money. But we live in the real world, not I'd like a pony world, so let's see AA plan for high fuel prices going forward, not wish for Santa to somehow bring back $0.50/gallon JetA, 'cause that may never happen.

I dont disagree with your financial pro-management post. But get this, if the employees are not given back what was taken away to "survive", and instead the fortunes are invested as you state, there will be labor/management war. And I mean beyond conflict anything ever seen at AA before.

I work for a paycheck, not to subsidize management bonuses and growth.

We gave up the $1.8 for survival, not enhancement.

AA cannot go from death spiral to growth spiral without first giving back to the employees first. Such a move will bring destruction, reduction of any trust built, and a battle that will be impossible for Arpey to overcome!

But hey, I am just a disgruntled union member, involved in an insurgent movement to replace the most docile union in aviation history. What could I possibly know about labor/management relations?

 

[Bob Owens]

This has to refer to productivity gains already underway in places like Flight and M&E.

Yea, like thats gonna happen.

I suppose it depends on how you want to measure productivity.

Gordon Bethune said it in his book "From Worst to First", that if you piss off your mechanics, which AA and the TWU have, that you can make them work but you still are not going to get what you want.

All the threats, all the propaganda in the world is not going to change the attitude where people only do what they must instead of what they can.

If the company becomes more agressive and demanding the mechanics will simply dive deeper into the maintenence manuals, written by the company in a way so that no matter what goes wrong blame can be put on the mechanic,where even the simplest of tasks have scores of references and subreferences and subreferences to the subreferences, all of which the mechanic could be held responsible for should anything go wrong. Why do we need to install gear pins when changing a fuel pump? Because thats what the maintenance manual says. Why does it say that? Possibly because in a heavy check a landing gear swing may be required along with changing the fuel pumps and the mechanic could be killed if he got in the way of the gear. What does it have to do with line operations? Not much, but the manual does not distinguish between line operations and overhaul. Every task, even checking the oil requires that the aircraft be grounded, and not only grounded but that a resistance check be accomplished to insure that the potential betwen the aircraft and the ground is less than 1 ohm. To date, in 25 years in the industry the only time I've seen grounding cables connected to the aircraft at the gate is during fueling, and the cables are a part of the truck, so when they leave, so does the cable. At any time a mechanic would be within his rights to demand that a cable be provided to ground the aircraft before working on it.

Mechanics, often to their own demise, are very individualistic, the company/TWU strategy of propadganda saturation whereby they are trying to make it seem like "everyone else is on board with pull together-win together" will not work with mechanics. They dont care what everyone else may or may not be doing, all they know is that come payday their check is short, on the few holidays that the company recognizes they are forced to work for half pay, they lost a week of vacation, if they work nights they get the lowest night differential going in just about any industry (even Target pays their stock clerks more), no more double time, no paid lunch, no easy hour, if they go above and beyond and get hurt in the process the company doesnt want anything to do with them after 10 days, if they get sick the company will dock them eight hours pay, the company even took the clothes off their back simply because they could. Thats what the mechanics remember and care about.

I've overheard it said many times, "They pretend to pay me and I pretend to work".

 

[Connected1]

Yea, like thats gonna happen.

It already has happened...past tense. It will continue.