Pilots And Outsourcing

[Hopeful]

Had a brief cockpit conversation with a first officer yesterday. In so many words, this pilot said he and fellow pilots support the outsourcing of more American Airlines maintenance so the pilot group could argue for more wages since the company's expenses would be drastically reduced.

I told him that was selfish and basically that logic sucked. So he came back and said ALL employees could argue for higher wages.

I left the cockpit in amazement.





Nice guy, that pilot!

 

[Dizel8]

And I am sure you could find other employees, who think pilots are overpaid switch monkeys. You know wat they say about opinions, so this persons clouded visison, does not mean that is the feeling of the entire pilot group.

 

[Hopeful]

I didn't say that. This ONE pilot stated his feelings.
In these times of concessions and layoffs affecting ALL employees, ONE work group should not sacrifice for ANOTHER!

And this pilot IS an A**HOLE for his opinion!

 

[HGIEFOswitch]

Outsourcing would make the company more profitable. The quicker the AA pilots are replaced with Eagle and Connection carriers the better. Lets hope the regionals get the 100 seaters.

 

[ZMAN777]

What is more likely, and unfortunately I think this will happen within the next 12 months unless fuel really takes a dive (unlikely), is that AMR will approach APA with the "need" to increase their productivity vis a vis more hours/month which will equal more pilots on furlough.

We're seeing U and UAL narrow-body pilots approaching up to 95 hours/month. DAL pilot's new contract will have them flexing upwards of 85+ hours month. As much as I hate to see it happen (my wife is a pilot at AA), I think it's inevitable.

Just my thoughts. I think AMR has been dancing around this for some time thinking they may not need it if fuel would just come down a bit more and if they could get some pricing power in the marketplace. Neither of which seem to be forthcoming. It's possible APA will be asked for something like a letter of agreement (LOA) wherein the whole contract will not have to be renegotiated. In exchange, AMR will have to pony up some items APA surely has on its list of things from the contract that need addressing. Rest assured that the pilots won't be the only group asked for such productivity increases.

Here's wishing all the best to my friends at AMR.

Cheers,
Z B)

 

[Skyyggoddess]

Outsourcing lowers quality in any area where it is employed. Outsourcing is a very dangerous trend. I suppose it will take a couple of decades of tragedies and poor quality before it becomes a reality that you pay for what you get.

 

[operaations]

Outsourcing lowers quality in any area where it is employed. Outsourcing is a very dangerous trend. I suppose it will take a couple of decades of tragedies and poor quality before it becomes a reality that you pay for what you get.

[post="227844"][/post]​

I agree with sky thing...outsourcing is not the answer. I do not now what the answer is but i hope it happens real fast

 

[HGIEFOswitch]

Quality may be lowered but that's OK. Airlines provide a commodity product to the masses. This is best served as cheap as possible. Watch AA squirm if the antequated Wright Amendement is lifted. Wealthy individuals and many companies have already found the path of class in travel. Fractional Business Jets. This means of travel is more addictive than crack.

 

[aafsc]

Quality may be lowered but that's OK. Airlines provide a commodity product to the masses. This is best served as cheap as possible. Watch AA squirm if the antequated Wright Amendement is lifted. Wealthy individuals and many companies have already found the path of class in travel. Fractional Business Jets. This means of travel is more addictive than crack.

[post="227853"][/post]​

And coming soon is Crandall and Burr's "POGO". This is an on-demand air taxi service using very light jets (Adamair-700). It has been said that the price for this service will be about the cost of a current first class ticket. These small jets can use just about any general aviation airport because these jets need only about a 3000 ft. runway. I think that the business traveler will be willing to pay to use this service because of convienience in terms being able to select the closest general aviation airport at departure and arrival points and the fact that they can schedule at their demand. Additionally, they won't have to travel on crowded roads to get to the main airport, fight for an airport parking spot,avoid the long lines at the ticket counters and TSA, and avoid sitting on the taxiway waiting for takeoff for an hour or two on bad weather days.. This will save them a lot of travel time which they can spend with their families or doing more work. Also they really won't have to worry about security, losing their bags (it is brought on board with them), and crying infants.
This, along with fractional business jets, will deplete the "higher yielding tickets" even more. I agree with HGIEFOswitch that the traditional airlines will be for the "masses" at lower ticket prices.

 

[Bagbelt]

Outsourcing costs big money. Hire an outside maintenance outfit and see what they charge. We deal with one that pays it's guys a couple of dollars less an hour but charges us enough to cover the payroll twice over.

 

[Winglet]

Like someone said . . . . management's next goal is to outsource MD-80 and smaller flying (domestic minus transcon) to the serfs at Eagle. JetBlew's Needleman, and their feckless pilot group's response, have set the precedent for shameful compensation with the 70-90 seat aircraft.

 

[markkus757]

I also agree with the air-taxi concept for the future. As for the rest of the non-believers, when there is a 25% reduction in manpower AND capacity, your airlines will start to make money again. Fuel is not going to go down. Your only hope is to hold on until WN's fuel hedge runs out in about 19 months. Stick to a niche and you can survive. Try to be everything and die trying....................

 

[FWAAA]

Your only hope is to hold on until WN's fuel hedge runs out in about 19 months.

[post="227931"][/post]​

:huh:

What are you talking about?

From WN's 3Q 10-Q:

The Company utilizes financial derivative instruments for both short-term and long-term time frames. In addition to the significant hedging positions the
Company had in place for the first nine months of 2004, the Company also has
significant future hedging positions. The Company currently has a mixture of
purchased call options, collar structures, and fixed price swap agreements in
place to hedge over 80 percent of its remaining 2004 total anticipated jet
fuel requirements that effectively cap crude oil-equivalent prices under $24
per barrel. The Company is also over 80 percent hedged for 2005 with prices
capped at approximately $25 per barrel, 60 percent hedged for 2006 at
approximately $31 per barrel, and over 40 percent hedged for 2007 at
approximately $30 per barrel.

http://phx.corporate-ir.net/phoenix.zhtml?...CZhdHRhY2g9b24=

Given the progression of WN's hedging position as disclosed in its previous filings, it is very likely that at the end of the fourth quarter (in just over 2 weeks), WN will have hedged 80% or more of 2006 and very likely 60% or more of 2007 requirements. Perhaps even some of 2008 requirements.

Don't fool yourself into thinking that WN's hedges will run out in 19 months or whenever and that suddenly it will be as vulnerable as everyone else to higher fuel costs. Each quarter this year, WN has disclosed that its hedges extend farther and farther out.

For evidence, see WN's quarterly filings for all of 2003 and 2004.

Another popular myth is that any future hedges will be at higher and higher prices. Some people even assume that future hedges will be at today's spot prices. Wrong.

Agreements (gambles) with WN about fuel for 2007 are not at today's high prices - witness the 2007 hedges at $30/bbl. Those positions were acquired in the third quarter of this year, when oil was very high. But nobody expects oil to be as high in 2007, so WN's effective price is about $30.

Oil futures for 2007 are about $30, so I expect WN to keep hedging at about that price. Maybe even slightly lower. We'll know for sure in January when it releases its 2004 earnings. B)

 

[777 fixer]

One has to asume that Hopeful is telling the truth and not just trying to stir things up. With that said I would not be suprised at all that some pilots feel this way. After all if they think that outsourcing will mean higher wages for them then why would should care how it affects other people. When it comes right down to it a lot of pilots do not have a clue as to what it takes to keep those aircraft in tip top shape.

If someone actually thinks that outsourcing maintenance will improve revenue one only has to look at UAL and US Air to see the flawed logic in that.

 

[Ken MacTiernan]

I agree with sky thing...outsourcing is not the answer. I do not now what the answer is but i hope it happens real fast

[post="227848"][/post]​

The answer is partly management and labors response. Management needs to have people who know how and WANT to run an airline. Labor also needs to stand tall and fight for what was negotiated.

USAir & UAL want more and more concessions. Look where they are. NWA told their AMTs a few times that NWA NEEDS to open the contract because they were losing money. The AMTs simply said, "Show us the books." Well, NWA didn't show them the books. But they kept asking. My point is that concessions do not work. A solid bussiness model does.

One airline says they need to pay their management brass bonus on top of bonus to "retain" the good ones. If they don't another airline will hire them. What a joke!

And as for outsourcing, the twu lead the way and other airlines followed. UAL closed TWO overhaul facilities and they still want to outsource more in maintenance. Does the public know that UAL & NWA both send a/c overseas to Singapore and China for major overhauls? No they don't. Will they know or even care? Probably when one of these overseas a/c doesn't quite make it from point A to point B someday. I pray that NEVER happens but the airlines are playing the odds. But till then it is "cost effective"!