Gloom and Doom at the Conference

[JAFA]

Horton was also quoted on MarketWatch.com in connection with the announcement of a further reduction in domestic capacity of 14% in 2009.

Now, maybe a 14% reduction in domestic capacity doesn't affect you, and if you are management, I'm sure it doesn't.

I have heard the same rumors coming down the pipetine and yes it will affect me and my group. Don't think for a minute these reductions just skip management. There probably is a layer several levels above me world that isn't directly tied to the size of the operation, but for the frontline operational management teams (think below level 8) we are directly tied to the operation size. I frankly probably only survived this round because another manager in my department took (begged) for a 5 year leave. So now my department lost 2 in round 1, 1 in round 2, and after New Years we'll see what happens.

 

[Bob Owens]

I have heard the same rumors coming down the pipetine and yes it will affect me and my group. Don't think for a minute these reductions just skip management. There probably is a layer several levels above me world that isn't directly tied to the size of the operation, but for the frontline operational management teams (think below level 8) we are directly tied to the operation size. I frankly probably only survived this round because another manager in my department took (begged) for a 5 year leave. So now my department lost 2 in round 1, 1 in round 2, and after New Years we'll see what happens.

Thats what they said about Labor Day, what happened was nobody was laid off and the VBR offer was revoked from line maint. The company said they couldnt afford to lose anyone. You would think the company would have jumped at the opportunity to get rid of top paid mechanics with max sick time and max vacation to get in a bunch of kids off the street at half pay with no sick bank or vacation time, if there was any.


I think within the next three years the airlines will be desperate for people, especially pilots and mechanics. The Vietnam era vets are retiring at an escalating rate and there hasnt been a steady supply of mechanics or pilots in years. The last figure I got for A&Ps was 330,000 liscences held by people between the ages of 18 and 65, and that was around fifteen years ago. My guess is that number has decreased significantly since that would have included some Korean War vets and Vietnam vets. The actual number working today is around 135,000, and most that have liscences but are not using them have left the industry for good. Maybe thats why despite all the talk of reductions and layoffs we see the company rehiring the last of the furloughs and revoking the VBR offer instead. I know of at least five guys who plan on retiring within the next year, thats guys who have said they plan on retiring, from what I've seen in the past many say nothing until after they submitted their papers, many others are hoping for a package. My guess is the average age of a mechanic is around 50 years old if not more. I dont see anyone who is in their early 20s.

 

[The Goose]

Actually morale was discussed, as it was last year. Arpey pointed out and reminded us all that everyone wants more money, unions, each of us, that everyone when negotiating is going to want more and that his is natural and should notbe looked down upon. He reminded us all that when people make sacrifices in bad times it is only natual that they will want to get something back. Frankly I think he "get's it" a lot more than most of us (lower level managers and contract alike) like to give hi credit for. We may have problems with how this ship is steered, and of course the PUP payments make him an easy target, but I do have a lot of faith in him. Frankly more than I do in some of the layers between him and me.

There is no way Arpey understands anything about those lower on the food chain than him. He's made it quite plain by his actions and lack thereof, depending on the situation, exactly what he thinks of the workers that have made his wealth possible.

What he says in these management "love fests" is not compatable with the actions of the twits employed by the company he says he runs. He and his minions are lying bastards. Please don't insult us by saying "he cares".

As you say, morale was "discussed" - how long did it take for the laughter to subside?

We mechanics, as a group, can and will put up with quite a bit, but most of us are getting rather intolerant of the outright lies and the lies by omission, both by the company and its pet and purchased so-called union.

 

[FrequentFlierCA]

Tough choices ARE looming for everyone, not just management.

Our whole business hangs on whether or not people have enough money to travel. That's the deciding factor.

That's an excellent point, and one that I think is missed in many of the discussions about AA's general health. It's great that oil is down significantly (let's hope it stays there) and that AA has reduced capacity to the point of full planes. But full planes don't mean high RASM. Most of the articles I've been seeing recently state that demand for premium travel - where the real money is made - is down sharply. A lot will depend on how long and deep this recession is.

 

[Hopeful]

That's an excellent point, and one that I think is missed in many of the discussions about AA's general health. It's great that oil is down significantly (let's hope it stays there) and that AA has reduced capacity to the point of full planes. But full planes don't mean high RASM. Most of the articles I've been seeing recently state that demand for premium travel - where the real money is made - is down sharply. A lot will depend on how long and deep this recession is.

But, of course, executive PUPs are recession proof.

 

[CubsFanJohn]

How would have Crandall shrunk it? I don't recall the comments, I wasn't into the industry at the time.

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Hopeful,

Perhaps AA(via the economy etc.) has reached "the" point that Crandall predicted Years ago, where HE would have "shrunk" the domestic side.

Contract negotiations aside, we ALL know that if "uncle" Bobby did the shrinking, that we'd be Less suspicious, as opposed to Arpey !

While I'm sure that "NYC" combined(EWR/LGA/JFK) will see a reduction in domestic, from a JFK standpoint, I'd like to know what the numbers look like(or will look like) specifically for JFK.

I haven't become a management cheerleader in my increasing ol' age,...far from it. I guess what I'm trying to say is, (again..contract negotiations aside), that AA very well could be at that juncture that the GREAT ONE..predicted 15 years ago !

Be well my FRIEND

 

[FWAAA]

But, of course, executive PUPs are recession proof.

Correct, since the PSPs (PUPs were 2006 only and were replaced by the PSPs) are a reward from the shareholders to the greedy execs that are paid out when AA stock outperforms its peers. You can't stand them, but the PSPs are a great way to reward the execs when the stockholders do well. Would you prefer that the greedy execs get bonuses when the stock performs poorly relative to its peers?

Posted from the luxurious JFK Flagship Lounge, awaiting my flight to NRT in F.

 

[Thomas Paine]

Posted from the luxurious JFK Flagship Lounge, awaiting my flight to NRT in F.

Get comfortable, you may be waiting longer than expected.

 

[Hopeful]

Correct, since the PSPs (PUPs were 2006 only and were replaced by the PSPs) are a reward from the shareholders to the greedy execs that are paid out when AA stock outperforms its peers. You can't stand them, but the PSPs are a great way to reward the execs when the stockholders do well. Would you prefer that the greedy execs get bonuses when the stock performs poorly relative to its peers?

Posted from the luxurious JFK Flagship Lounge, awaiting my flight to NRT in F.

Enjoy the lounge, maybe we can keep you at JFK past departure time.

Hopefully, Obama and the democrats get what they want and address outrageous and greedy executive compensation and make them pay via tax increases.

As for me in the diminishing middle class, we are screwed regardless.

 

[FWAAA]

Enjoy the lounge, maybe we can keep you at JFK past departure time.

Hopefully, Obama and the democrats get what they want and address outrageous and greedy executive compensation and make them pay via tax increases.

Flight pushed back five minutes early and arrived at NRT about 20 minutes ahead of published arrival time.

Today, on my one flight, AA was the On time Machine.

I don't remember who said it, but someone famous (and rich) once said they'd like to be the taxpayer who pays the most tax (since that should equate to the largest income).

Posted from the Luxurious JAL First Class Lounge in T-2.

 

[Hopeful]

Flight pushed back five minutes early and arrived at NRT about 20 minutes ahead of published arrival time.

Today, on my one flight, AA was the On time Machine.

I don't remember who said it, but someone famous (and rich) once said they'd like to be the taxpayer who pays the most tax (since that should equate to the largest income).

Posted from the Luxurious JAL First Class Lounge in T-2.

FWAAA, I could care less that you think you are some kind of big shot flying first class. True big shots wouldn't be wasting their oh so valuable time posting replies to a forum with us peons bragging how important you think you are.

By the way how much did your first class trip cost your company?

 

[jimntx]

Correct, since the PSPs (PUPs were 2006 only and were replaced by the PSPs) are a reward from the shareholders to the greedy execs that are paid out when AA stock outperforms its peers. You can't stand them, but the PSPs are a great way to reward the execs when the stockholders do well. Would you prefer that the greedy execs get bonuses when the stock performs poorly relative to its peers?

Ah, but therein lies the fallacy in your argument...performing well relative to peers does NOT necessarily benefit the stockholders, only the executives. If the stock is in the toilet, even if it is floating higher in the bowl than the other airline stocks, it is still in the toilet. This is like saying the hot dog with mustard, onions and grape jelly tasted less horrible than the tuna-turnip casserole; so, that proves that a hot dog with grape jelly on it is good.

Perhaps you would like to explain how the stock selling at $10.43/shr this morning compared to over $40/shr less than 2 years ago benefits the stockholders? And, how much was the total dividends received by the stockholders this year? How, did the total value of the dividends and the accrued value of the stock stack up against the total value of the executive bonusses?

And, no I would not prefer that "the greedy execs get bonuses when the stock performs poorly relative to its peers?" I would prefer that the execs get bonusses when the stock and the company perform well. There is a telling difference between the two. You don't get a gold star for failing the spelling test just because your failing grade was higher than everyone else's failing grade.

The idea of awarding bonusses relative to the performance of other industry stocks is as phony as a 3-dollar bill. Ford announced a $3 billion loss for the 3rd quarter. Should the executives at GM get bonusses if GM only lost $2 billion?

Correction: GM just announced a $4.2 billion loss and that they are running out of cash. I guess the bonusses go to the Ford executives by FWAAA and AMR's BOD reckoning.

 

[FrugalFlyerv2.0]

Hopefully, Obama and the democrats get what they want and address outrageous and greedy executive compensation and make them pay via tax increases.

Don't you worry, after they tax the he11 out of those outrageous and greedy executives & those annoying "rich people", the outrageous and greedy airline workers compensation is next on their hit list. And luckily for you, dues you pay to your great union will not be affected so that it can continue doing the good work on behalf of the proletariat.

 

[Hopeful]

Don't you worry, after they tax the he11 out of those outrageous and greedy executives & those annoying "rich people", the outrageous and greedy airline workers compensation is next on their hit list. And luckily for you, dues you pay to your great union will not be affected so that it can continue doing the good work on behalf of the proletariat.

OOOhhhhh, I'm shaking in my boots. Who do you think you are kidding with this comment?

Workers have been getting raped since the early 80's, year after year. And thanks to AA and it's lapdog union, the concessions have gone where no concession package has gone before.

So if you think I am worried about the government screwing me any worse than AA and the TWU did, think again. The only difference this time around is that the greedy fat cats up top will get theirs for a change.

 

[eolesen]

Considering that tax rates are going to jump up to where they were in the Reagan years (which was actually a cut from where they were in the Carter years), you're a fool if you really believe all the campaign promise rhetoric.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.

The fifth would pay $1.

The sixth would pay $3.

The seventh would pay $7.

The eighth would pay $12.

The ninth would pay $18.

The tenth man (the richest) would pay $59.

So, that's what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. 'Since you are all such good customers,' he said, 'I'm going to reduce the cost of your daily beers by $20. Drinks for the ten now cost just $80.'

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'

They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so: The fifth man, like the first four, now paid nothing (100% savings).

The sixth now paid $2 instead of $3 (33%savings).

The seventh now pay $5 instead of $7 (28%savings).

The eighth now paid $9 instead of $12 (25% savings).

The ninth now paid $14 instead of $18 (22% savings).

The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before and the first four continued to drink for free, but once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man, "but he got $10!" "Yeah, that's right,"exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got TEN times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!" The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something very important....they didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D. Professor of Economics University of Georgia