Things AA "can" afford
- Thread starter Bob Owens
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It is perfectly acceptable to criticize Soros' currency speculation, political actions and positions and the organizations he supports and finances.
It is anti-Semitic to falsely accuse him of collaborating with the Nazis.
That wasn't the DNC, that was Abe Foxman president of the Anti-Defamation League.
No. Those are your words, not mine. It's okay to provide objective criticism about Israeli policy or US policy towards Israel. If you want to hear criticism about Israeli government policy, talk to Israelis.
Josh
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Not sure what this has to do with "Things AA can afford" Josh. Could you at least troll about the topic at hand!
MCI transplant
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<_< ------- I understand that AA is still on the hook for lease payments on the MCI hangers, to the City of Kansas City, for approx. the next 16 years at what? ( a million$ a year) and have only sub-let it out for the next two years. ------ Oh well! 🙄
What happened to FWAAA???
Having given him ample opporunity to respond I'll try, based on past experience compose a response for him.
Ok Bob. A $22 billion pie is bigger than a $17 billion pie, does that make you feel good? Well I'm still a Rich lawyer living in Southern California with a lot of time on my hands and you are still an underpaid Aircraft Mechanic. If you want to know where the $1.6 billion went find it yourself because I'm not going to do the research to prove myself wrong.
Where did the $1.6 billion go? We know where it came from , us. I really am not that concerned as to where it went, I just want it back, and I'm willing to either get it back or make sure that nobody else gets it or the rest of the $22 billion that we help generate.
Would have been easier for you to write "I know you are but what am I?".
In other words "I havent the balls" and you are right, thats the difference between you and I.
eolesen
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Maybe its because Bobonomics are too silly to try and debunk.
"In other words" makes all the difference between having a judge agree with you or getting cited for contempt of court.
Unlike you, I actually place value on the credibility of what I say regarding issues, Bob. You have no problem going out on a limb and looking like an ass. Bobonomics is a great example. But that's your choice.
No, I don't find it necessary to take every issue I have with my employer, and post about it on a public bulletin board to prove my manliness.
And if you actually understood the various lines of business my employer is in, and you actually read what I say about it, maybe you'd realize that I do question them.
The difference is I do it in a subtle enough way to prove the point without crossing the line of what could be seen as inflammatory or discoverable.
😀 😀
Well played, Bob. That got a laugh.
Actually, I owe you an apology. My delay in responding to your repeated demands for answers was just a little experiment I was conducting.
You see, I'm just a prison inmate here at Folsom and yet you, on the outside, President of a union local, unable to convince your employer that you're worth more pay, are hanging on my every word, as if my words will help you achieve what you've failed to achieve thus far. 😀
No, that's not it. Seriously, when it became apparent that you want an exact accounting of the numbers, I decided to wait for the 10-Ks to be filed, particularly the American Airlines, Inc 10-K (as opposed to the AMR 10-K) so that we could see the mainline numbers. They were filed last week and I've been busy with my other union-busting responsibilities. It is on my to-do list.
Besides, as E has pointed out, arguing with Bobonomics is a tough assignment and can be tiring.
Well I guess that makes one person who considers you credible.
"Bobonomics", now comes the name calling. Whats next? Dont know whether you are on the playground or tuned to Fox, then again, whats the difference?
Never asked for exact numbers, round numbers will do fine. You are claiming that we should simply accept what the company wants to pay us as many of the other parties simply jack up their prices. That despite huge increases in revenue and huge decreases in labor costs that the company cant pay us what we want. I've maintained that the more we give up the more everyone else can charge, even your numbers showed this to be true. All those other parties are stakeholders as well, if we withdraw our services and the company fails to find replacements, which currently seems to be what would be the case, because of the difficulty with simply finding enough replacements to make up for attrition, they lose as well. If you, or the company think I'm wrong then you and they should be championing for release by the NMB but the company has done the opposite.
Crandall and Branson both talked about how the industry is a consistant money loser (on paper anyway) yet Institutions still buy the stock. Why is that? E-do you care to explain? Prior to the 2003 bailout AMR was somewhere around 97% Institutionally owned. Somehow the loans get paid off as banks fall over themselves lending consistant money losers, even ones that filed for Bankruptcy, cash.
I say its because its all a big scam. Its all legal, but its still a scam carried out against working Americans by Corporate America and the government they own. Go ahead with your accusations of seeing Black helicopters, I dont mind, as E said, I'm willing to go out on a limb because sometimes thats what you have to do to see the truth.
E claims that his company was hurt by the bailout and bankruptcies , really ? How so?
Lets say I own XYZ Toilet Seat manufacturer, and I sell AMR a Toilet seat that I make for $10 for $1000 dollars. I sell AMR 100 seats. It cost me $1000 to supply those seats to AMR, well due to the reorganization they only paid me for half of them, I have to eat the other half as a loss. Ok so they paid me for 50, so they paid me $50,000. So I made $49,000, but they stiffed me for 50 and even though it only cost me $500 to produce those seats that I wasnt paid for, on my books carry the full value of the seats, $50,000 as a negative. So while I made $49,000 I also have a loss on paper of $50,000. So on the books my company shows a net loss of $1000. I tell my employees what a tough years its been, no raises this year but maybe with a few concessions and more productivity we will do better next year. But in reality my company still made $49,000. I can take that money and give myself a nice bonus (after all the company cant afford to lose me at such a critical juncture), get a chauffeur, have the company use it towards a company sponsored golf tournament or a skybox in Dallas Stadium to "entertain clients"(of course I have to be there to entertain them, especially if its the Superbowl), sponsor the New York Pops at Carnaghie Hall(with complimentary seats of course) or even reinvest it into the company. Since corporations can carry the full value of the loss and not the actual cost of the loss it can be advantageous to get stiffed. Especially if later on you can use that loss as an excuse to charge even more. Apparently many of the airlines providers, except labor of course, are doing just that.
According to your own numbers, the monies AMR paid to banks went up despite the fact that AMR paid off a lot of debt. Banks get to lend out at least $10 for every $1 they actually have (I believe those rules were relaxed under Bush to allow even higher amounts). So while they are paying you .5% interest on your dollar they collect 50 times that on a loan that your $1 allows them to lend. If you did that you would go to jail, but its how banks make so much money.
What it comes down to is its not simple arithmatic, its a complicated legalized shell game. I'm sure that if you look long enough, isolate and set aside, then you will find the figures you desire to support your position, even if they have no relevance. "If you cant dazzle them with the facts then baffle them with the bullshit." Hope all is well and dont drop the soap.
eolesen
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Well, you miss one fundamental there, Bob. In most cases, the company has the right to replace suppliers. They can't typically replace unions or employees. Just about every supplier except airports can be replaced when a contract comes to an end. Don't want to pay $1000 for a toilet seat? Put it out for bid -- there is always someone who will be lowest bidder.
Even with airports, airlines have some ability to fight back. They can threaten to pull back at a given airport when costs spiral out of control, or they can do what AA and UA are doing and take the operator to court. Despite what you claim about landing fees being a blank check, the only place that is the case is in NYC, where the airports are a government monopoly. Put Christie in charge of EWR, give Bloomberg LGA, and leave JFK to the Cuomo, and you'd see competition between JFK, LGA and EWR, and maybe JFK wouldn't be the most expensive airport in AA's system.
Unlike unions, suppliers don't usually meddle in the affairs of the companies they serve.
Maybe institutions buy the stock because they need guaranteed losses for tax purposes...
Never claimed my company was hurt by bailouts. But bankruptcies? Absolutely. We had Aloha, ATA and Mexicana as customers. They shut down, and we lose money because when you sell IT to a company, the cost of delivery is usually amortized over the life of the contract. When the customer goes away one year into a three year contract, so goes the ability to recoup those expenses. I forget just how much the cost is to acquire a new customer than it is to sell added products and services to existing customers, but that is also an impact. Fewer customers means more competition between suppliers, so prices get driven down accordingly as well.
And that's just three companies who went out of business. Other customers went thru bankruptcy and renegotiated for lower continuing rates, even though the money to deliver product was already spent years back. So not only is it lowering cashflow, it's also discounting the ROI.
Another part of our company sells products to travel agencies. With bankruptcies and things like the loss of commissions, do you think the number of travel agencies has gone up or down, Bob?
I'll give you a hint. It's down. And probably continuing to shrink thru a combination of consolidation and moves like what AA is doing to drive people to AA.Com instead of using Expedia or Orbitz.
Those are just two examples. There are others, but I won't bore you anymore with facts.
$10, eh? Maybe that's the raw cost of materials and maybe the direct labor associated with it, but there's no way the cost is just $10 for aircraft parts. You have all of the costs related to certifying the product with the FAA. Yes, I believe even the toilet seat is certified on the same basis that upholstery or a galley cart. You have to file engineering diagrams, do burn testing, and all of that costs money which then in turn gets spread out across your production run. And then there's things like QA, rent, insurance, health insurance for employees, etc...
If your production run is a couple million units, I'd believe that you could absorb all of that overhead with a price point of $10. But AA only has <700 aircraft. Assuming 2 toilet seats per year per aircraft, that's only 1400 toilet seats in a year, or about 7000 for all of the US airlines combined. I'd be willing to bet Home Depot sells more toilet seats in week than all of the world's aircraft suppliers do in five years. That means the ability to recoup that cost just gets higher and higher on a per-unit basis...
I know your $10 was just a straw man, Bob, but since Bobonomics usually omits things you don't think about, you might want to consider the fact that a company doesn't just charge a lot because they want to. Usually, it's because they have to cover their costs while also being competitive with other suppliers.
And I'm sure if you continually ignore stuff you don't know about, you'll always find examples which can support whatever argument you want to make that day, Bob.
"He with the most supporting data usually wins"
Ok, so in other words the airlines costs arent fixed? I can hear the Airlines saying "E-shut the F up".
Cant wait to see the A380 land at LGA! Probably get it stopped somewhere in Woodside.
Then we should do our best to make the offset as big as possible for them!
You are leaving out the fact that you write off what you charged, not what it cost. That was the point of my example. So your company got to write off a contract that goes several years into the future without providing any service and the cost was already paid out. They can use that to "discount the ROI" (from other contracts where they made money) on their balance sheet. They certainly made out better than employees whose revenue was cut, expenses increased and were not given the opportunity to lower their tax burden with those losses.
A fancy way of saying "We dont make as much profit".
Silly me, I thought they charge what the market will bear with the intention to maximize profits. Wouldnt being competative drive down costs, not bring them up like you imply?
Maybe in your eyes, but most of us would rather believe that "the truth will prevail".
Frank Szabo
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