EXECUTIVE BONUSES MAKE ME SICK!

[AMFAMAN]

But the Delta employees lost a LOT more than we did.

So that is your way of justifying bonuses for management. Is that the offical stance of the "no comment" twu?

 

[aafsc]

So that is your way of justifying bonuses for management. Is that the offical stance of the "no comment" twu?

I am against the stock bonuses, even though it perfectly aligns with the agency theory of executive compensation. In my opinion, these stock (or cash) awards could have been put into an escrow account for the executives and could have been withdrawn only when the employees were made whole (concessions restored). This way, they would have been motivated to restore concessions as soon as practicable. Even though I am against these stock awards, the performance of AA management has been far superior to those at other carriers. AA management (under Arpey) for the most part, has made many good decisions such as: depeaking, winglets, fleet and route rationalization and revenue expansion just to name a few. Compare this to the UA management team who received 2 to 3 times more than AA senior management and all they did was totally rape the employees and repaint some A-320s. Just imagine how much more bitter you and the others would be if you were all AMTs at UAL (or any of the other legacies for that matter). I'm perplexed as to why the other airline forums are not filled with their AMTs complaining louder than the AMTs do here. After all, their compensation is substantially lower; that's if they even have a job.

Would you work for DL AMT compensation at AA(lower pay rate, more expensive benefits, frozen pension, expensive retirement medical, outsourced heavy overhaul, all small line stations farmed out)if AA management agreed to give back their stock bonuses?

 

[Hopeful]

I am against the stock bonuses, even though it perfectly aligns with the agency theory of executive compensation. In my opinion, these stock (or cash) awards could have been put into an escrow account for the executives and could have been withdrawn only when the employees were made whole (concessions restored). This way, they would have been motivated to restore concessions as soon as practicable. Even though I am against these stock awards, the performance of AA management has been far superior to those at other carriers. AA management (under Arpey) for the most part, has made many good decisions such as: depeaking, winglets, fleet and route rationalization and revenue expansion just to name a few. Compare this to the UA management team who received 2 to 3 times more than AA senior management and all they did was totally rape the employees and repaint some A-320s. Just imagine how much more bitter you and the others would be if you were all AMTs at UAL (or any of the other legacies for that matter). I'm perplexed as to why the other airline forums are not filled with their AMTs complaining louder than the AMTs do here. After all, their compensation is substantially lower; that's if they even have a job.

Would you work for DL AMT compensation at AA(lower pay rate, more expensive benefits, frozen pension, expensive retirement medical, outsourced heavy overhaul, all small line stations farmed out)if AA management agreed to give back their stock bonuses?

Let's go back in time since you love this management so much:

Who spent hundreds of millions of dollars building two hubs, RDU and BNA, essentially right next to each other in terms of region. Only to close them down a few years later.
How about More Room Throughout Coach which seats were taking out to only be reinstalled sooner rather than later?
How about AA purchasing TWA just so we could be the Biggest Airline? What we got is more employee animosity than ever before.
What about Carty and the top executive SERPS which GUARANTEED their payouts EVEN IN THE EVEN OF BANKRUPTCY!!


The funny thing is, even after just these several blunders,
AA executives still got their lavish compensation and bonuses as they do today.

You say that AA management has performed so well?

THEY TOOK BILLION$$$$$$$$$$$ FROM THEIR EMPLOYEES!

 

[MCI transplant]

<_< -----You know they say Plagiarism is the highest form of flattery a company can receive! Well, the "More room in coach" program was a direct copy of TWA's "Comfort Class"!---- Just as a side note, TWA's managers found out it didn't work either!!!---

 

[Hopeful]

<_< -----You know they say Plagiarism is the highest form of flattery a company can receive! Well, the "More room in coach" program was a direct copy of TWA's "Comfort Class"!---- Just as a side note, TWA's managers found out it didn't work either!!!---

But the AA execs continue to get rewarded as if they invented the wheel!

 

[eolesen]

Ignorance of the facts is bliss, Hopeful...

Who spent hundreds of millions of dollars building two hubs, RDU and BNA, essentially right next to each other in terms of region. Only to close them down a few years later.

You're right -- AA should have kept one or both of those hubs open, and ceded MIA to some other carrier who was willing to fill the void left by Eastern....

Given the profitability of the South America operation, closing down RDU and BNA as mainline hubs was not a bad strategic decision. I'm sure that had AA passed it up, you'd be complaining about how stupid management was for letting someone else get their hands on MIA and points south (much like people still blame AA for not buying up Pan Am's Pacific routes in the 80's).

Opening them in second tier locations was questionable, but even there, you've still got a huge FF base in both regions, and both cities still support a lot of nonstop service that doesn't exist in other second tier cities.

But hundreds of millions? Please.... I worked pretty closely with Corp Real Estate back in the early 90's when we were shutting down both hubs and the dozen or so spokes like SAV, EUG, FAR, FSD, etc.

There's no way AA spent hundreds of millions at RDU and BNA. In case you didn't know, airlines don't typically pay for airport terminal construction projects -- the port does since they own the property. Airlines pay that back over time in terms of higher rent, but since both leaseholds were released within a few years of the respective hub downsizing, the actual cost of abandonment was probably less than what AA paid for glycol during the past couple months.

How about More Room Throughout Coach which seats were taking out to only be reinstalled sooner rather than later?

MRTC was designed for business travelers, and it's pretty well known that AA saw a higher percentage of last minute purchases as a result. Too bad the non-recession of late 2000/early 2001 occurred, and business travel dropped off a cliff.

With LF's in the high 80's, putting the seats back on was probably a good move as far as employees go. Otherwise, AA would have had LF's in the 90's, making life even worse than it already is for nonrevs and commuters.

How about AA purchasing TWA just so we could be the Biggest Airline? What we got is more employee animosity than ever before.

Great soundbyte, but AA was already the biggest airline and had been for a while. The price was right, and it eliminated a competitor which was trashing yields in both midwest connect markets and out of JFK. Had 9/11 not occurred, the animosity wouldn't be anywhere near what it is today because none of the massive furloughs would have occurred.

What about Carty and the top executive SERPS which GUARANTEED their payouts EVEN IN THE EVEN OF BANKRUPTCY!!

You mean the SERP that had existed for twenty years prior, but hadn't had a dime of funding placed into it? Sheer ignorance on your part perhaps, but the SERP wasn't a payout plan -- it was guaranteeing that AA was able to fulfill the retirement obligations to people like Bob Crandal or Bob Baker's widow. Are you saying that your retirement is worth protecting, but theirs wasn't?

The funny thing is, even after just these several blunders,
AA executives still got their lavish compensation and bonuses as they do today.

More misinformation. After those "blunders", the execs actually involved didn't get a dime in bonuses, since there were no bonuses paid out to management between 2000 and 2006. Plus, you had an entirely different senior management team responsible for most of the decisions you're bitching about, mainly Crandall (RDU/BNA), Don Carty (RDU/BNA/MRTC/SERP) and Mike Gunn (RDU/BNA/MRTC).

 

[FWAAA]

How about More Room Throughout Coach which seats were taking out to only be reinstalled sooner rather than later?

So which was the mistake?

Was it spending the $70 million that the seat removal cost (mostly in overtime pay at Tulsa)?

Or was it the premature abandonment of MRTC and the slow reinstallation of seats from 2003-04?

I agree that one of those decisions was a huge blunder, but logic dictates that both can't be huge mistakes.

AA's mainline yield was higher than UA's mainline yield during the entire MRTC era (1999-2003). Of course AA's yield was higher in 2004-06 as well, even without most of MRTC (it still exists in a few scattered places on most airplanes).

 

[Wretched Wrench]

Eric, you make some good points, but sometimes you go too far. This does not serve you well.

For example,

(SERP) was guaranteeing that AA was able to fulfill the retirement obligations to people like Bob Crandall or Bob Baker's widow.

The most onerous (or odiferous) part of SERP was that it was sub rosa and was not only in addition to the regular retirement, but was bankruptcy-proof.

Are you saying that your retirement is worth protecting, but theirs wasn't?"

Again, you go too far. It invites on to turn that around and ask "Are you saying that the SERP is worth protecting from bankruptcy and our retirement is not?" Neither iteration does much more than inflame emotions and get in the way of intelligent discussion.

I also believe my widow is as important and needs as much protection as Bob Baker's widow.

Please give me credit for not working Ken Lay's widow into this.

 

[ch53D]

I’m in support of MRTC. Every time we re-pitch the seats its job security. My first job with AA was making all the Hawaii DC10-30’s into cattle cars. Just as we finished the last one, Mrs. Crandall flew to Hawaii and didn’t like it. We turned around and put all of them back to old configuration. We made a lot of money in o/t on that brain fart decision.

 

[eolesen]

Wrench, I'm of the opinion that -all- earned retirement benefits should be protected in bankruptcy, regardless of pay-grade.

 

[Boomer]

Ignorance of the facts is bliss, Hopeful...
You're right -- AA should have kept one or both of those hubs open, and ceded MIA to some other carrier who was willing to fill the void left by Eastern....

Given the profitability of the South America operation, closing down RDU and BNA as mainline hubs was not a bad strategic decision. I'm sure that had AA passed it up, you'd be complaining about how stupid management was for letting someone else get their hands on MIA and points south (much like people still blame AA for not buying up Pan Am's Pacific routes in the 80's).

Opening them in second tier locations was questionable, but even there, you've still got a huge FF base in both regions, and both cities still support a lot of nonstop service that doesn't exist in other second tier cities.

But hundreds of millions? Please.... I worked pretty closely with Corp Real Estate back in the early 90's when we were shutting down both hubs and the dozen or so spokes like SAV, EUG, FAR, FSD, etc.

There's no way AA spent hundreds of millions at RDU and BNA. In case you didn't know, airlines don't typically pay for airport terminal construction projects -- the port does since they own the property. Airlines pay that back over time in terms of higher rent, but since both leaseholds were released within a few years of the respective hub downsizing, the actual cost of abandonment was probably less than what AA paid for glycol during the past couple months...

------------------------------
Many people believe that RDU and BNA actually created the opportunity AA seized at MIA by creating a tipping point EAL did not see until far too late. Once the reason behind RDU and BNA evaporated, they became expendable. That is not an error, that was a long range look followed by planning and execution which yielded a large bonus for AA and the majority of the employees.

 

[FWAAA]

Wrench, I'm of the opinion that -all- earned retirement benefits should be protected in bankruptcy, regardless of pay-grade.

Me, too. If I were king, US and then UA would have been liquidated and the proceeds contributed to the pension plans instead of allowing them to discharge those obligations.

Not only would that have preserved the pension promises, particularly to the pilots - those affected most - the resulting decrease in capacity (and corresponding increase in unit revenue) might have helped obviate the need for NW and DL to follow along into bankruptcy where they could screw their pilots as well.

 

[TWU informer]

Me, too. If I were king, US and then UA would have been liquidated and the proceeds contributed to the pension plans instead of allowing them to discharge those obligations.

Not only would that have preserved the pension promises, particularly to the pilots - those affected most - the resulting decrease in capacity (and corresponding increase in unit revenue) might have helped obviate the need for NW and DL to follow along into bankruptcy where they could screw their pilots as well.

You surely don't mean allow the Capitalist Society to sort things out?

It is far better to subsidize the industry using Taxpayer funds and keep losing companies aloft for cheaper airfares for the rich and famous.

 

[777 fixer]

You really hate those first class Flagship Suites, don't you? It's too bad you don't understand what drives the big revenue in NYC. You understand fixing airplanes - of that I'm certain. The problem is that you don't understand that the Flagship Suites are one reason why AA's yields didn't fall as much as at UA or DL or CO in the wake of September 11. AA doesn't buy them and BA and VS capture all the high-yielding customers, leaving AA with the garbage fare vacationers.

Probably should have never bought those 777s either. Much too expensive for Budget-Minded Bob Ownes. Should have kept the 707s and DC-10s. Expensive airplanes are for others.

People forget that on international routes we are not competing with domestic LCC's. We are competing with carriers like Virgin Atlantic, Air France, Lufthansa, ANA etc. Even though airlines like BA and soon JAL are One World partners we are competing with them as well. Good thing we don't have to compete directly with Singapore. The first class seats on their 777-300ER have 24 inch screens.

As far as fleet replacement is concerned if your competitors are flying newer equipment there comes a point where you will have no choice but to replace your fleet of DC-10's, 707's, L1011's or classic 747's.



http://www.airliners.net/open.file?id=1179...7&tbl=CABIN

http://www.airliners.net/open.file?id=1059...6&tbl=CABIN


http://www.airliners.net/open.file?id=0972...9&tbl=CABIN


http://www.lufthansa.com/online/portal/lh/...;nodeid=1771444


http://www.airliners.net/open.file?id=1168...4&tbl=CABIN

 

[eolesen]

You surely don't mean allow the Capitalist Society to sort things out?

Absofrickenlutely, starting with bankruptcy reform. The changes enacted in 2005 didn't go far enough in my opinion.

For example, Ch. 7 is only permitted for individuals once within a six year period. That same restriction doesn't seem to apply for corporations. At the very least, subsequent insolvencies for corporations should result in an involuntary liquidation and not re-restructuring like USAirways and TWA did.