Congress Weighs Proposed Fix For Pension System

[Buck]

Yup Buck, those F/C folks who you claim can't understand amts and should not represent them DID NOT loose half of their sickpay. Maybe negotiating skills bear no relation to how clever you are with your hands, or how vast a load of responsibility you carry on your shoulders. You know sign log books on the line etc.

[post="280109"][/post]​

I guess you meant FSC, when you type F/C and it is lose not loose. And it is susposed to be a union, not one of your socialist recuitment centers.

 

[Wretched Wrench]

I guess you meant FSC, when you type F/C and it is lose not loose. And it is susposed to be a union, not one of your socialist recuitment centers.

[post="280186"][/post]​

Let he who is without typos cast the first stone.

 

[Bob Owens]

FWAAA,Jul 2 2005, 03:29 PM]
Yes, we know. Owens reminds us all the time. Paycuts suck, but so does having your employer run out of cash. And AA did what it had to do two years ago to keep from running out of cash.

Yea, but now the company claims that they are out of cash when they only have $2 billion on hand. Not all that long ago Crandall was bragging to the pilots that he had a $500 million war chest to beat them if they struck.

If UAL and USAir don't fold, it is likely that your pay will be cut even more, as the domestic overcapacity plaguing the USA isn't gonna just magically disappear. Fares must rise, and they ain't gonna rise until there are fewer domestic legacy hub/spoke seats for sale.

There we go again with the "overcapacity" myth. Load factors are the highest ever but you keep claiming there is overcapacity. Show me any system that transports people on posted schedules that runs as high of a load factor.

The New York Times recently posted an article that stated that AA only needed $6 more per ticket to break even, if all the airlines are running high load factors then what prevented AA from raising their prices? Are you still going to claim that the same person who is paying $25/day to park his car at the airport and $5 for a cup of coffee at the airport would decide to stay home if the fare was $10 more? Would they all go on Jet Blue or a competitor? Where would they sit if those planes are pretty much full already?

By the way MSN now quotes Institutional Ownership of AMR at 99%. If the airlines were really that desperate why would large Institutions own nearly all of it? Why would they increase ownership if the company was headed down the toilet? Would it be safe to say that some of these Institutions may be the same ones that claim that AA must keep $2 billion on hand or they would be broke?

The question is what do these airlines have to gain by making a profit at this time? Those that are losing money are getting their workers to give away everything they ever gained and work for peanuts. In the meantime they continue to operate. NWA showed profits for longer than any of the other legacy carriers and they are the only ones facing the threat of a strike. It seems that losing more pays off more. In the case of AMR they claimed they lost $3.5 billion in 2002, more than anyone else, got the biggest labor concessions of any airline and didnt even have to go BK!

If you were a large Insitution and had large amounts of money in things that benifitted from the business that the airlines generate (I think the ATA puts the figure at $6 to every one spent on a ticket) then it would be worthwhile to keep a money losing entity going. As you pointed out, three years running in BK and USAIR and UAL are still in business with no end in sight. If there really was too much capacity then wouldnt they have pulled the plug on at least one of those carriers? Granted, its not a monolithic structure and some of those Institutions may be competitors but come on, USAIR and UAL have had problems for a long time and no matter how much they cut costs it wont change things because the others will simply follow, or in the case of AA lower the bar even further. In the meantime the fuel gets bought, the rents, landing fees, leases etc get paid, the hotel rooms are filled, business meetings , conventions etc all go on and the money keeps flowing, actually even more is available for other industries thanks to the cheap airfares.

 

[Bob Owens]

Completely ignoring the fact that you still have incoming cash flow from paychecks. AMR has daily incoming cash flow from ticket sales, so future benefit payments will still be made, even if AA doesn't fully fund its DB trusts tomorrow, as you seem to desire.

Interest rates went up again today with the Fed's rate hike, automatically raising the level of AA's DB plan funding. A few more rate hikes, and there won't be an underfunding to discuss anymore.

[post="279900"][/post]​

A lot of maybes and what ifs there.

A few more rate hikes could put the cash flow from ticket sales at risk. That cash will be needed to make future payments, unless of course you feel that the rate hikes would result in returns as high as they were at times in the 90s where the company not only didnt have to contribute but actually could take excess money out of the plan.