Are AA Labor wages competitive?

[Buck]

If we are going to operate as Southwest, then there are many changes to be made. Southwest may not do a majority of it's heavy maintenance, but they do not fly international either. Do we cut Aa down until we are exactly like Southwest?

 

[RV4]

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On 1/31/2003 9:17:34 PM flyhigh wrote:

Buck,

I don't see how you can ask about wages and not expect productivity to be a part of it. You should have expected as such. What point could you possibly make if you just compare wages? No relevant one.

Also, Kiowa, maybe you can help on this, but doesn't WN pay pilots based on trips not block hours. A trip being a mileage calculation (i.e. a trip is 540 miles...HOU-LAX is x miles which 3 times the amount of a trip...therefore they get paid three times their rate)?

I also recall hearing that WN pays wheels up to wheels down vs some of the other airlines paying when brakes lock/un-lock.

I would also note that WN's business is done much more simpler, and thus more cost effectively.
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[/blockquote]


Dude,

Are you paid by AA to come on here and produce this rhetoric?

 

[flyhigh]

Buck,

I don't see how you can ask about wages and not expect productivity to be a part of it. You should have expected as such. What point could you possibly make if you just compare wages? No relevant one.

Also, Kiowa, maybe you can help on this, but doesn't WN pay pilots based on trips not block hours. A trip being a mileage calculation (i.e. a trip is 540 miles...HOU-LAX is x miles which 3 times the amount of a trip...therefore they get paid three times their rate)?

I also recall hearing that WN pays wheels up to wheels down vs some of the other airlines paying when brakes lock/un-lock.

I would also note that WN's business is done much more simpler, and thus more cost effectively.

 

[Buck]

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On 1/31/2003 9:17:34 PM flyhigh wrote:

Buck,

I don't see how you can ask about wages and not expect productivity to be a part of it. You should have expected as such. What point could you possibly make if you just compare wages? No relevant one.

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[/blockquote]
Of course productivity is part of the Big Picture. But again I just wanted to know if there any wage differences for each workgroup. As a mechanic it is revelant when Mr. Carty says we need to be like Southwest. Does this mean that a mechanics wages at Southwest should be more than that at AA? What about supply and demand?

 

[Hopeful]

I think AA wants to remain essentially what it is today, but at JetBlue and Southwest's costs. No small task!

 

[Oliver Stone''s Apprentice]

Sorry, Buck, but wages and productivity go hand in hand. They pay about the same on an hourly basis, but on just about any measure you want to use (per-passenger basis, per ASM, per aircraft) to compare productivity, WN find ways to run their airline with far fewer people than we do.

Some of that lower productivity can be explained by AA operating internationally, offering a premium cabin, etc. But that only accounts for a portion of the productivity gap.

 

[GGpillow]

Hourly wage is just a small part of a total benefit package. To even begin a ROUGH comparison one would need to know what WN's mechs get for vacation, sick time, retirement funding, health care, dental, flight privledges, negotiated overtime rates etc. Buck, if WN mechs make say 2.00/hr more then you, but AA is spending 10.00/hr more on you in these associated but very real benefits, then you will have shot your own arguement in the foot.

 

[Buck]

And the Topic of this thread is?

 

[flyhigh]

I guess that's the fundamental flaw for most of us who understand the business. You're trying to say, "well, we're paid the same paycheck amount so we're already at WN levels". Problem is, that is not what Carty is saying. If he hasn't articulated that well, well then he screwed up. However, it should be painfully obvious that wages are PART of the package.

As for me being paid by AA mgmt, well that would be nice as it would mean I work for two companies, but it is not the case. I just understand what the problem is when you ask, "...are we paid the same?" What the rhetoric is I'm not sure though...

 

[KCFlyer]

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On 2/1/2003 11:37:49 AM Buck wrote:

However the mechanics at LUV are being compensated with stock also. This is above and beyond anything AA has ever done.
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[/blockquote]

IT wasn't that long ago that I remember reading "stock doesn't pay the rent". BAck then, it sounded like that even if AA would have offered stock, nobody would have wanted it.

Also, Southwest has a generous 401K match, profit sharing, and a stock purchase plan. They don't have an underfunded pension fund, like AA has. So you have to look waaaay beyond hourly rate to hourly rate to find out what "becoming like Southwest" might entail.

 

[Buck]

I just wanted to know what the competitive labor rates are. I understand the total compensation is different. If we were to look at compensation between the mechanics at AA and LUV, you would see a comparable wage. However the mechanics at LUV are being compensated with stock also. This is above and beyond anything AA has ever done. So when you say work rules are different, remember that it is possible that those who work differently are also compensated differently. Remember I just asked about wages. I understand that there is more to the "Big Picture" brother.

 

[AA80Driver]

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On 2/1/2003 12:17:00 PM KCFlyer wrote:

IT wasn't that long ago that I remember reading "stock doesn't pay the rent". BAck then, it sounded like that even if AA would have offered stock, nobody would have wanted it.

Also, Southwest has a generous 401K match, profit sharing, and a stock purchase plan. They don't have an underfunded pension fund, like AA has. So you have to look waaaay beyond hourly rate to hourly rate to find out what "becoming like Southwest" might entail.
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[/blockquote]

1. AA Pilots received a stock option grant in lieu of retro pay when their last contract was signed (1997).

2. The big difference between SWA and "the others" is that SWA actually contributed to their employees 401K while the others either underfunded their defined benefit plans or didn't contribute at all. The sad thing is, if they had funded appropriately when times were good and adjusted their return assumptions realistically, they wouldn't be looking into the abyss right now.

3. Many of the costs associated with labor are byproducts of the business model. AA could adopt all of SWA's contracts and they would still cost much more due to the nature of their business model.

 

[Buck]

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On 2/1/2003 12:17:00 PM KCFlyer wrote:

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On 2/1/2003 11:37:49 AM Buck wrote:

However the mechanics at LUV are being compensated with stock also. This is above and beyond anything AA has ever done.
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[/blockquote]

IT wasn't that long ago that I remember reading "stock doesn't pay the rent". BAck then, it sounded like that even if AA would have offered stock, nobody would have wanted it.

Also, Southwest has a generous 401K match, profit sharing, and a stock purchase plan. They don't have an underfunded pension fund, like AA has. So you have to look waaaay beyond hourly rate to hourly rate to find out what "becoming like Southwest" might entail.
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[/blockquote]
Why is that?

 

[KCFlyer]

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On 2/1/2003 4:48:55 PM AAmech wrote:

Its not going to be a pretty sight 40yrs from now to see armies of pennieless Seniors rummaging thru garbage cans to survive.
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[/blockquote]

You mean the ones who found their pensions were worthless too?

 

[AAmech]

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On 2/1/2003 12:17:00 PM KCFlyer wrote:

Also, Southwest has a generous 401K match, profit sharing, and a stock purchase plan. They don't have an underfunded pension fund, like AA has. So you have to look waaaay beyond hourly rate to hourly rate to find out what "becoming like Southwest" might entail.
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[/blockquote]

Thats probably the biggest negative about an otherwise great company is the fact that SWA does not have a pension for its employees. As bad as most pension funds have been lately they far outperform the average 401k plan. Speaking as a person who has seen 6+ years of 10% contributions and interest evaporate, I'm very glad I have a pension to look forward to. The 401K scheme is one of the biggest crimes foisted upon American workers. After all, if they were good for employees, companys would not offer them! Its not going to be a pretty sight 40yrs from now to see armies of pennieless Seniors rummaging thru garbage cans to survive.