Labor Costs

[x-insider]

I still do not understand how AA wants to compare its labor costs to SW!

How can you when AA has 40+ overpaid VP's and SW does not?

Their (SW) Mechanics make more than we do yet their labor costs per ASM are lower. Do you think it is all of the excess AA management??

Lets do some more worthless charts and graphs to show how well management is doing and how the workers are not!! Just finished a class where AA is buying and utilizing more Software to make more charts and graphs WHY???

Why not concentrate on our core business and get rid of the management fluff. Last year they were supposed to get rid of Level 4 Management yet all they did was shuffle them around and make them level 5. Can we say more pay?? More Fluff??

I agree with the other poster lets break out the Management Costs and the other work groups! See where the real Labor Costs are!!!

Why does our Union fail to go to the press to tell the flying Public they pay more to have their cars fixed than they pay to have someone work on their Airplane??? Last time I checked I could pull over if the car failed but not on an airplane.......

Last time I had to have my Car worked on it was $135 per hour. Yet they still want to pay Aircraft mechanics $25 per hour??? Plus Auto Mechanics have weekends and Holidays off plus they work in the Normal daylight hours!!!

Less Management=Higher pay and profits!

 

[The Goose]

I still do not understand how AA wants to compare its labor costs to SW!
How can you when AA has 40+ overpaid VP's and SW does not?
Their (SW) Mechanics make more than we do yet their labor costs per ASM are lower. Do you think it is all of the excess AA management??

Before that can be answered, honest comparisons will have to be put forth, not using selected data but all that's available, but anything not fudging the facts is not according to the playbook of AA's present management nor its pet union. Further, they'll compare themselves to anything they hope we don't understand scratching for any advantage available.

Lets do some more worthless charts and graphs to show how well management is doing and how the workers are not!! Just finished a class where AA is buying and utilizing more Software to make more charts and graphs WHY???

Look a little farther - the software that prints the charts and graphs probably only prints in black and white. On the next page of the order you may find a line ordering crayons.

Why not concentrate on our core business and get rid of the management fluff. Last year they were supposed to get rid of Level 4 Management yet all they did was shuffle them around and make them level 5. Can we say more pay?? More Fluff??
I agree with the other poster lets break out the Management Costs and the other work groups! See where the real Labor Costs are!!!

Get rid of the fluff? Are you sure you want those people to try doing their real jobs? In a way, it's fun to watch them fall all over themselves on a daily basis. Where else can you go and get that level of entertainment? It's almost as good as the Keystone Kops.

Remember - if people costs (not just "labor") are itemized as you and others wish, some shareholders may take offense to being hosed and lied to - that would not be a good thing for the present mismanagement team.

Why does our Union fail to go to the press to tell the flying Public they pay more to have their cars fixed than they pay to have someone work on their Airplane??? Last time I checked I could pull over if the car failed but not on an airplane.......
Last time I had to have my Car worked on it was $135 per hour. Yet they still want to pay Aircraft mechanics $25 per hour??? Plus Auto Mechanics have weekends and Holidays off plus they work in the Normal daylight hours!!!

Having that printed in an informative-type ad would require an OK from Mr. OurPay - Little doesn't want to risk having a lover's quarrel.

Less Management=Higher pay and profits!

That's correct, but for the wrong people.

 

[Mach85ER]

Big factor probably isn't management VP, it's the way it operates it's system.

The biggest thing is the hub system along with the different fleet types that require training (down time) for everybody involved from Pilots, FA's, Mechs and others.
On the pilot side, they are fond of pointing out AA's pilot hours compared to SWA and CO, forgetting of course to include in their charts and graphs that SWA has one A/C type flying domestic, and CO has basically 3 types for pilots with 3 bases.

AA doesn't want to pay their employees for their business decisons on fleet types. They also don't want to pay the associated training costs either. (One big factor in the APA billboards)



The costs add up fast with fleet differences. Ask a VP on a rough idea on costs, and they might just stare at their shoes ( like the one I asked).

 

[FrequentFlierCA]

Big factor probably isn't management VP, it's the way it operates it's system.

The biggest thing is the hub system along with the different fleet types that require training (down time) for everybody involved from Pilots, FA's, Mechs and others.
On the pilot side, they are fond of pointing out AA's pilot hours compared to SWA and CO, forgetting of course to include in their charts and graphs that SWA has one A/C type flying domestic, and CO has basically 3 types for pilots with 3 bases.

AA doesn't want to pay their employees for their business decisons on fleet types. They also don't want to pay the associated training costs either. (One big factor in the APA billboards)

The costs add up fast with fleet differences. Ask a VP on a rough idea on costs, and they might just stare at their shoes ( like the one I asked).

Very good points. Fleet simplification will bring AA's labor costs down. They've already ditched the Fokkers (thank God) and the A300s and S80s are next to go. Having an all-Boeing (real Boeing, that is) short-haul fleet of 737s, 757s and 767s will help tremendously.

 

[Boomer]

As far as what each employee group costs: Every employee at AA can view their Total Value Statement on Jetnet.

Employee numbers link to job codes and hours worked:

1) TVS per employee divided by hours worked equals individual employee cost per hour|: Whether or not vacation time, sick time or any of the various Leave From Duty reasons would apply is the subjective part;

After that is hammered out;

2) TVS per job code, aggregated for all employees covered by each job code or series, divided by system RPMs gives the CASM for each workgroup;

3) CASM per workgroup, aggregated for all Union workgroups, subtracted from System CASM gives cost per ASM of Union Labor, by Union and classification;

4) CASM per workgroup, aggregated for all Non-Union workgroups, subtracted from System CASM gives cost per ASM of all Non-Union workgroups, Non-Union and Management;

Basically, you should be able to use the TVS and demographically characterize the costs and revenues by most of the standard measures along the line of inquiry sought: it would be interesting to see and probably not that much work to retrieve.

 

[eolesen]

TVS is simple to obtain on a pure value basis, boomer, but it's not that simple to allocate costs on an org unit basis. M&E has huge costs and little revenue directly associated with their cost centers.

Then there are the departments you see as worthless but are a neccesary evil in a corporation like AMR. How much of HR do you allocate to each workgroup?? They don't proportionally use the same amount of resource.

How about Tax? Treasury? Investor Relations? Corp Comm? Legal?

Likewise, how do you split up the revenue per employee??

 

[Bob Owens]

TVS is simple to obtain on a pure value basis, boomer, but it's not that simple to allocate costs on an org unit basis. M&E has huge costs and little revenue directly associated with their cost centers.

Then there are the departments you see as worthless but are a neccesary evil in a corporation like AMR. How much of HR do you allocate to each workgroup?? They don't proportionally use the same amount of resource.

How about Tax? Treasury? Investor Relations? Corp Comm? Legal?

Likewise, how do you split up the revenue per employee??

The same way AA does, whichever way supports your claim.

The bottom line is that AMR is claiming that their labor costs are higher even though they are paying much less than some other carriers. Workers are not getting any benifit from being the most costly and the reason AMR pays more in labor costs is because of the way the company is run. Inefficient management policies and practices pretty much sums it up. The eggheads need to realize that sometimes when you cut wages and benifits it costs you more in the end. I would say that the vast majority of workers out there could produce more, but they wont, why should they when the most they would get from it is less OT, maybe another paycut or even a WARN letter? Why should workers reward management for bad behavior?

 

[x-insider]

Bob you are absolutely right!!!

Some of the Employees could and would do more but Why????

You get some new Regional Management weenie that has a better Idea of how to run things.

Take a station that is high in mel clearing and add more ECO's without adding more people! Expect it done and promises of "if you do all this on top of regular work it will keep the Station open and save Jobs"??? Then they turn around and lay people off or close the Station!!!

Some reward!!!!

Been there done that before!!!!!

Pay us like SW and Treat us Like SW you may get more out of us!!!

Management has lost all Business concept of:

HAPPY EMPLOYEES=HAPPY CUSTOMERS=MORE BUSINESS!!!

Look at SW! Need I say More!!!!

 

[UAL_TECH]

Management has been beating all the legacies over the head with the Southwest Business Model.
But when they want to implement it, it comes down to frontline and maintenance employees. Totally ignoring all the other issues that the legacies do not follow in regards to Southwest.

Southwest is great at what they do because they started out that way.
Small infrastructure, no in house maintenance, single domestic fleet, no hubs, no international service, no first or business class, no 45 executive VP’s, SRVP’s.

United had 29 subsidiaries under ‘UAL CORP’ only one of which was United Airlines. They had scavenger subsidiaries dealing directly with United Airlines providing ‘Loyalty Services’, ‘Leasing Services’ and several other ‘services’ that I forget. Most of these ‘subsidiaries’ were showing a profit while United Airlines did not. Collusion? Hard to prove. I would not be surprised if UAL CORP created a fuel hedging subsidiary that is currently showing a hefty profit while United Airlines is taking it in the shorts.

I doubt if ‘AMR CORP’ does anything differently.

Good Luck Guys N'Gals

Take Care,
B) xUAL_TECH

 

[Bob Owens]

If airline workers wait till the airlines are consistanly profitable to ask for a raise they will never get a raise.

If the airlines do actually start making profits airports will simply raise their fees, banks will charge more for the liquidity they provide and suppliers will charge even more. Instead of paying $1000 for a toilet seat they will be paying $5000.

This industry doesnt exist to earn a profit, it exists to make other industries money.

Once workers realize this and structure their unions and contracts to deal with that we wont simply be left with the scraps after everyone else grabs their share of the spoils.

 

[UAL_TECH]

Another great ‘deception’:
1) The executive’s responsibility is to enhance ‘share holder’ value.

What a crock of crap!

It should read:
2) The executive’s responsibility is to enhance the executive’s value.

Everyone please take a look around and see how well this works out. When ‘Executives’’ receive stock in the company it is typically class B preferred with a guaranteed strike price. If the ‘common’ bag holders stock goes down, the preferred has a set price that is typically what the original ‘value’ of the stock was at issue.

Shared sacrifice? The great lie!

B) xUT

 

[eolesen]

Southwest is great at what they do because they started out that way.
Small infrastructure, no in house maintenance, single domestic fleet, no hubs, no international service, no first or business class, no 45 executive VP’s, SRVP’s.

Point of order.... Not including the board of directors, SWA has 40 (count 'em, 40) Vice Presidents, and about about 34,000 employees. AA's got 44 Vice Presidents, and about twice the employees WN does. Simple math would say that WN has more VP's per employee than AA does.

Chairman of the Board, President and Chief Executive Officer
Vice President Marketing, Sales and Distribution
Executive Vice President Strategy and Planning
Vice President Ground Operations
Executive Vice President Corporate Services and Corporate Secretary
Vice President Flight Operations
Executive Vice President and Chief Operating Officer
Vice President Technology and Chief Information Officer
Senior Vice President Culture and Communications
Vice President Schedule Planning
Senior Vice President Customer Services
Vice President Properties
Senior Vice President Administration and Chief People Officer
Vice President Fuel Management
Senior Vice President of Marketing and Revenue Management
Vice President Internal Audit
Senior Vice President Operations
Vice President Financial Planning
Senior Vice President Finance and Chief Financial Officer
Vice President Customer Relations and Rapid Rewards
Vice President Safety and Security
Vice President Public Relations and Community Affairs
Vice President Director Operations
Vice President Labor Relations
Vice President Technology Customer Experience Portfolio
Vice President Purchasing
Vice President Ground Operations
Vice President Maintenance and Engineering
Vice President Inflight Services
Vice President Treasurer
Vice President Provisioning
Vice President Reservations
Vice President Labor and Employee Relations
Vice President Ground Operations
Vice President Technology Aircraft Operations & Enterprise Management Portfolios
Vice President Strategy and Change Leadership
Vice President General Counsel
Vice President Revenue Management and Pricing
Vice President Controller
Vice President and Chief Technology Officer

I'll spare you the list from AMR. There are 44 at AA, plus four at Eagle and one at Beacon (which has since been spun out of AMR).

So, go ahead and point out how inefficient and bloated AMR management is, but remember that when you make comparisons to WN, they've got more VP's per front-line employee than AMR.

Not just opinion, guys. Facts.

If WN's really the model to follow, then AMR needs more management to be like WN.

 

[UAL_TECH]

Point of order.... Not including the board of directors, SWA has 40 (count 'em, 40) Vice Presidents, and about about 34,000 employees. AA's got 44 Vice Presidents, and about twice the employees WN does. Simple math would say that WN has more VP's per employee than AA does.



I'll spare you the list from AMR. There are 44 at AA, plus four at Eagle and one at Beacon (which has since been spun out of AMR).

So, go ahead and point out how inefficient and bloated AMR management is, but remember that when you make comparisons to WN, they've got more VP's per front-line employee than AMR.

Not just opinion, guys. Facts.

If WN's really the model to follow, then AMR needs more management to be like WN.

Thanks E,
Where did you get this list?
PM me with the info.

Can't find it in my usual sources.

Thanks in advance.


B) xUT

 

[eolesen]

Where did you get this list?

For the skeptics in the forum, I'm posting for all to see...

http://phx.corporate-ir.net/phoenix.zhtml?...irol-governance

 

[xmarlin]

For the skeptics in the forum, I'm posting for all to see...

http://phx.corporate-ir.net/phoenix.zhtml?...irol-governance

Nicely done. Of course there will now be a different case made that the information from the internet cannot be independently verified.