Read the link for more info:
http://www.usatoday.com/story/travel/flights/2013/06/19/american-airlines-us-airways-merger/2439297/
http://www.usatoday.com/story/travel/flights/2013/06/19/american-airlines-us-airways-merger/2439297/
GAO throws up Red Flags over AA/US Merger
- Thread starter gizmo_sc
- Start date
All this is is politico-speak for... " Let's bring back airfare regulations ", because we haven't screwed the airline workers enough the first round...
WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,721
Exactly... With deregulation...The airline trade has been McDonaldized..
Glenn Quagmire
Veteran
- Apr 30, 2012
- 4,825
- 4,428
xUT
Veteran
Sad but true.
If you get the boot in aviation, best to look for something else.
True but airfares declined more under the regulated era than they did during the deregulated era. Under the CAB with the introduction of WideBody aircraft and more efficient hi-bypass engines air travel became affordable. The problem was the Consumer and the workers were seeing most of the benefits. Deregulation allowed airlines to post higher profits (and higher losses due to favorable accounting practices) than ever before. The higher losses, most of which are false losses, losses that human persons can not claim ("Goodwill" etc) were used to leverage concessions from the workers which were quickly diverted to other corporations (oil companies, Airports, Vendors, Banks etc).
Last year AA brought in $25 billion ($416,666 per worker, an increase of approximately $200,000 per worker compared to 2003)yet, despite the fact that they shed 40,000 employees, slashed the wages and benefits of those who remained by at least 25% and 300 airplanes still operated in Bankruptcy.
In bankruptcy they not only kept the largest order for new aircraft in history in place but ordered more.
Something isn't right with the system some people send their sons out to die for.
Not even close to reality, but I'm going to focus on the rest of your post for now.
Not even close. Your numbers are off by a country mile.
Yes, last year AMR had revenue of $24.855 billion and 77,750 employees, for revenue per employee of $320,000. In 2003, AMR had revenue of $17.440 billion and had 96,400 employees, for revenue per employee of $181,000. AMR had 18,650 fewer employees in 2012 compared to 2003 (not 40,000 fewer, as you posted). As an aside, the 2003 fuel bill per employee was $28,750, which by 2012 had risen to $112,000 per employee.
Shed 300 planes? Nope. At 12/31/03, AMR flew 770 mainline planes and 271 regional planes for a total fleet of 1,041. At 12/31/12, AMR flew 614 mainline planes and 254 regionals for a total fleet of 868, or 173 fewer planes.
How did AMR carry more passengers and bring in more revenue with fewer planes and fewer people? Easy. Mainline load factor in 2003 was 72.8% while in 2012, mainline load factor was 10 points higher at 82.8%.
Comparisons between now and prior years are interesting, but 2003 was a low point - revenues had still not recovered and the airline was grossly overstaffed for the amount of revenue. More relevant comparisons would be between the year 2000 (prior to the terrorist attacks and resulting multi-year revenue disaster that followed).
Yes, AA's business plan was (and still is) to spend more on new planes and far less on fuel and maintenance. AA's Ch 11 filing didn't change that. AA's bankruptcy was never about "being broke" (which is why most individuals file Ch 13 or 7), AA's Ch 11 filing was all about cramming more efficient contracts down the throats of the pilots and flight attendants, and as I predicted, that's exactly what the AA board of directors got when they finally over-ruled "I don't believe in bankruptcy" Arpey and ordered Horton to get the job done.
Having rejected the modest (meager) raises offered to you in 2010 (as you viewed the price of those raises as too costly), AA's mechanics went into the bankruptcy at lower hourly pay rates than AA had been willing to pay. And with the crappiest union on the planet, AA's mechanics ended up with very meager hourly raises.
Perhaps the unions haven't given enough money and support to the stupid ass Democrats? Maybe you need to dig deeper.
Yes, we've heard it before. The government is corrupt. The courts are corrupt. The greedy bastard corporate executives are corrupt. It's everybody's fault except for the poor AA mechanics. The mechanics at UPS and WN have figured out how to get higher hourly pay with the assistance (or in spite of) various union representation. The mechanics at FedEx figured out how to get higher hourly pay without sharing their pay with non-working union stooges.
And yet it's "the system's" fault that you and your colleagues at AA toil for the lowest hourly pay and most spartan benefits among the major airlines? Sorry, I'm not buying it. It may be time for some introspection.
You get what you negotiate and for many years, the AA mechanics have pretended to negotiate thru their crappy "union," the TWU. Let's face it - you guys just weren't up to the task. Fixing airplanes? nobody's better. Successfully negotiating for your pay and benefits? You guys are the absolute worst in the industry at that function. "Incompetence" doesn't quite convey just how much you guys collectively suck at figuring out how to get paid.
If enough write in "AMFA" on the IBT ballots, perhaps that will shake things up enough to change things. I have my doubts.
Think again. The CAB came into effect in 1938. Really the industry was regulated prior to that and if you want to go back even further thats fine by me.
Think about it, how much would a round trip ticket cost to go from NY to LAX in 1938 compared to say 1970? For most Americans it would cost around half their annual wage, by 1970 it would be down to a few weeks. Flying went from something only the rich could enjoy in 1938 to something most could afford by 1978. If we look at average fares in 1978 and compare them to Average fares pplus fees that were included in the price when the industry was regulted there was a much bigger drop in the first 40, the first 30, than there has been the last 30.
Last year the airline collected around $1billion in fees, that has to be factored in as a cost of air travel.
Air travel costs went down more under regulation than they did under deregulation despite what you claim, otherwise you would have posted data proving your point.
The main factor that drove costs down was technologocal improvements which made Air Travel less expensive to deliver. Passengers and workers reaped most of the rewards but the government could not have that so they deregulated the industry. So now the fare may say one thing when you hear the ad but when you try and buy your ticket it says something else-more, then add on fees for checked bags, meals, even blankets. God help you if you need to go somewhere on short notice, then you really pay through the nose, even though the guy sitting next to you paid half. You have to go by the average paid per passenger not the lowest advertised price where only a few are sold at that price.
At its peak AA had around 120,000 employees. I cited 2003 in reference to how much reveneue per employee had increased not to its peak employment.
Even using your numbers revenue per employee increased by $140,000 per employee and outsourcing decreased during that time and compensation also declined, more than making up for the increased fuel costs. The fact is the point I was making , that other corporations, such as Banks, vendors, oil companies etc all took much bigger bites out of the airlines. For them these are the best of times, most walked out of BK unscathed with the exception of those who had already reaped a ten year free ride collecting payments for Aircraft AA didnt fly or facilities AA didnt use. They increased their share of the revenues at our expense, especially the oil companies. None of them were told that they would have to continue to provide their product at wages determined by the company and the judge, only the Unions were told that.
At its peak AA had over 900 planes. They have shed 300 since their peak.
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What a load of crap. Pure spin. SWA has less airplanes and as far as the consumer is concerened far less available ASMs yet they are number three?
As ASMs become scarcer the price is likely to go up, not down. Consolidation will lead to higher prices , less service and fewer choices. All one needs to do is look at what airlines are already doing to passengers with limited choice, jam packed airplanes with no leg room, no meals, no blankets, fees to even carry on bags, huge fees to change flights and even a fee to get a printed ticket! Does anyone think that having over 70% of the available ASMs in the country controlled by just three carriers is going to make things better for travellers, or workers?
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