Arpey- How We Do Things Differently

[Hopeful]

http://www.thestreet.com/story/10852291/2/american-airlines-ceo-how-we-do-things-differently.html

 

[TIME FOR CHANGE]

Most airlines have strong corporate cultures, shaped by long, colorful histories and by high proportions of employees entranced by the airline industry. Nowhere is this more so than at American, where the culture has not been diminished -- nor has it been enhanced -- by mergers with roughly equivalent companies.
ARE YOU FN KIDDING ME

 

[eolesen]

Actually a somewhat factual statement. The number of people who earned their wings at AA still far outnumbers the number of ex-OC/QQ/TW folks, especially in upper management. You just don't find that in too many companies anymore.

 

[Frank Szabo]

Actually a somewhat factual statement. The number of people who earned their wings at AA still far outnumbers the number of ex-OC/QQ/TW folks, especially in upper management. You just don't find that in too many companies anymore.

Don't forget - the extent of Arpey's corporate involvement with the dirty deeds of 9/11 was simply being the only person available that had both the authority and 'nads to say "Put 'em Down!". Nobody else was available.

He had been a relative 'insignificant' up to that point and his performance since then is equally as "fantastic". The board simply thanked him for his "fearless" actions of that day two years later when Carty got "caught" implementing a BOD directive - a corporate CEO does not wake up one day and decide to rathole $46MM of corporate buck$ for the benefit of said corporation's elite without the BOD's direction and approval.

Where Hollywood had a movie "The Rise of the Machines", AMR's version was "The Rise of the CPAs".

 

[eolesen]

You're wrong again, Frank. I used to be neighbors with one of Crandall's two secretaries, and about the time Bob retired, she predicted (correctly) that Gerard would eventually be the CEO.

That was six years before Carty-gate. Maybe you had no idea who he was, but he wasn't an unknown by any means to the rest of senior management, the investor community, or the board.

 

[DallasConehead]

Mr Arpey HAD good reason to ride on the moral bandwagon, not anymore. After all, Arpey and Co did avoid BK by getting BK type savings from their employees via concessions. The PENSIONS were indeed saved! All praise Arpey. Arpey and Co lost the moral high ground when they awarded each other huge bonuses while the rest of the employees continue to struggle under the weight of reduced income. The well of goodwill has indeed been sucked dry by Arpey and Co. The moral high ground is now an unethical quagmire. Mr Arpeys days are numbered; he has overseen what was once the greatest airline in the world to a mediocre one at best.

 

[Interested]

Mr Arpey HAD good reason to ride on the moral bandwagon, not anymore. After all, Arpey and Co did avoid BK by getting BK type savings from their employees via concessions. The PENSIONS were indeed saved! All praise Arpey. Arpey and Co lost the moral high ground when they awarded each other huge bonuses while the rest of the employees continue to struggle under the weight of reduced income. The well of goodwill has indeed been sucked dry by Arpey and Co. The moral high ground is now an unethical quagmire. Mr Arpeys days are numbered; he has overseen what was once the greatest airline in the world to a mediocre one at best.

Do you think the start of AA's down fall started with Carty's kinder/friendlier airline?

 

[737823]

Mr Arpey HAD good reason to ride on the moral bandwagon, not anymore. After all, Arpey and Co did avoid BK by getting BK type savings from their employees via concessions. The PENSIONS were indeed saved! All praise Arpey. Arpey and Co lost the moral high ground when they awarded each other huge bonuses while the rest of the employees continue to struggle under the weight of reduced income. The well of goodwill has indeed been sucked dry by Arpey and Co. The moral high ground is now an unethical quagmire. Mr Arpeys days are numbered; he has overseen what was once the greatest airline in the world to a mediocre one at best.

The company has a lot of potential and given its presence in LAX, MIA, NYC they are poised for success if they can get labor costs to come down. I'm not here to cheer Arpey on and I certainly haven't invested a cent of personal savings, retirement, trust in AMR or the airline industry but you have to give them some credit for avoiding BK. The employees have actually faired better without BK-how would he APFA members like a BK imposed contract like UAL or NWA? I don't think their APA brothers and sisters would like their regional jet scope clause tossed out either.

As a passenger I really wonder how the brain trust at Amon Carter have allowed AA's premium products-Flagship Suite, Next Generation Business Class, Flagship lounge, etc. Even UA offers more competitive hard products and I personally prefer the Continental Flat Bed BusinessFirst seat to the Flagship Suite. Face the fact LCCs like Virgin America, Southwest, JetBlue, AirTran are more fungible and have taken their legacy peers on a run this past decade. My loyalty to AA ends after my last mile is redeemed (725,867 to go sadly) and I won't shed a tear the day AA ceases operations or is acquired by another carrier. With that said, I would like to see more comprehensive restructuring and changes. Why can't the company recruit better talent? Why are they unable to serve secondary European markets (let alone primary markets like Amsterdam or Frankfurt year-round from a hub besides DFW)? Why can't AA resolve matters in Tel Aviv and enter that lucrative market? Seoul-Inchenon? Stockholm? Vienna, Austria? The list goes on and on. We'll see how success this joint venture really is, at a minimum I'm looking forward to flying BA 777s on BOS-LHR instead of crAAmped 757s.

Josh

 

[JFK Fleet Service]

Ask the man yourself.

gerard.arpey@aa.com

 

[Bob Owens]

The company has a lot of potential and given its presence in LAX, MIA, NYC they are poised for success if they can get labor costs to come down. I'm not here to cheer Arpey on and I certainly haven't invested a cent of personal savings, retirement, trust in AMR or the airline industry but you have to give them some credit for avoiding BK. The employees have actually faired better without BK-how would he APFA members like a BK imposed contract like UAL or NWA? I don't think their APA brothers and sisters would like their regional jet scope clause tossed out either.


Josh

Which labor costs need to come down Josh?

The unionized labor force has already lost 25% of their pay, the company has slahed 50,000 jobs but somehow their average cost per employee went up $10,000. Management must have gotten a hell of a raise to eat up our concessions and bring the average up $10,000 per employee!!

 

[Hopeful]

Which labor costs need to come down Josh?

The unionized labor force has already lost 25% of their pay, the company has slahed 50,000 jobs but somehow their average cost per employee went up $10,000. Management must have gotten a hell of a raise to eat up our concessions and bring the average up $10,000 per employee!!

Good point, Bob.
But Josh's opinion is consistent with the rampant anti-union sentiment in this country that unions have destroyed this country. They like to say they are pricing themselves out of a job. Too many work rules, wages too high (LMAO on that one.)etc, etc.
But as for airline unions and airline workers in general, we have been decimated since deregulation. That and the assault on unions which began with Reagan firing the controllers, airline unions have been forced to acept concession after concession over the last 30 years or so.
But the pundits are still not happy...They want our pensions and our wages to equal that of third world nations. "PENSION" is a dirty word for them, of course only if a lowly union worker gets one.

And the reason they want us all destroyed is so their stock portfolios may increase.

They usually omit the fact that UPS is unionized and Southwest as well.

 

[DallasConehead]

snip
Why are they unable to serve secondary European markets (let alone primary markets like Amsterdam or Frankfurt year-round from a hub besides DFW)? Why can't AA resolve matters in Tel Aviv and enter that lucrative market? Seoul-Inchenon? Stockholm? Vienna, Austria? The list goes on and on. We'll see how success this joint venture really is, at a minimum I'm looking forward to flying BA 777s on BOS-LHR instead of crAAmped 757s.

Josh

The reason is because AA does not have the equipment to fly all those extra routes you mention. Loose a couple triples to OTS and someone in the system isnt getting to their destination. Arpey and Co took the money he sqeezed out of us and instead of buying widebodys, bought 73s, which we need. But squandared it on winglets and interiors on tired old 76s and 75s; countless terminal and Admiral club upgrades as well. And any other capitol improvement that has come down the pike.

 

[Hopeful]

The reason is because AA does not have the equipment to fly all those extra routes you mention. Loose a couple triples to OTS and someone in the system isnt getting to their destination. Arpey and Co took the money he sqeezed out of us and instead of buying widebodys, bought 73s, which we need. But squandared it on winglets and interiors on tired old 76s and 75s; countless terminal and Admiral club upgrades as well. And any other capitol improvement that has come down the pike.

Good point. As for the 767 winglets, there was an article a week or two ago where AA says the 787 will replace the 767s. Yes, that will be 2013, but I am curious if the cost of doing the 767s is worth the fuel savings until each one is retired.
I truly do not have any statistics on this, it may or may not have been worth it.
Maybe someone has some data.

 

[eolesen]

The winglets will make the 763's more marketable on the secondhand market.

Equipment is part of the reason a lot of the secondary markets Josh pines away for aren't served, but don't overlook the fact they're already served by codeshare partners or aren't going to generate the type of traffic that AA's network can support. UA, CO and DL can make markets work from IAD, EWR, and JFK that will be loss leaders from any other hub. AA could try to be the third (or fourth) carrier at JFK serving the same markets as DL or CO, but again, it's a matter of where you can make money year round.

 

[Hopeful]

The winglets will make the 763's more marketable on the secondhand market.

Equipment is part of the reason a lot of the secondary markets Josh pines away for aren't served, but don't overlook the fact they're already served by codeshare partners or aren't going to generate the type of traffic that AA's network can support. UA, CO and DL can make markets work from IAD, EWR, and JFK that will be loss leaders from any other hub. AA could try to be the third (or fourth) carrier at JFK serving the same markets as DL or CO, but again, it's a matter of where you can make money year round.

Good informative answer. Thanks.
But I have a funny feeling that Josh, and others who feel as he does, blame labor costs for AA's inability to purchase the aircraft we need to compete on those routes. It is always the onus of labor to make the necessary adjustments to help the company "survive." How much, or rather, "little" do these people expect us to work for? They blame every woe of the economy on unions while the people who caused the mess get a pass.

How many markets did AA abandon to free up equipment?
I think once the details of OneWorld are worked out, you will see AA lose the JFK-LHR slots enabling them to free up a couple of 777s.