US Airways First Company to Step Forward

[signals]

They are the people the unions protect and couldnt survive in the real world...thats why!

And you think you live in the real world behind your picket fence? Gimme a break h34r:

 

[signals]

I find it sad that quite a few people have quit and gone to other airlines, some of whom had more than ten years here. Some people believe in taking care of their internal and external customers. Others believe in the fountain of Kool Aid.

If an Eastie drinks the Kool Ade are they a Westbot?

 

[john john]

What would I have you do? Well we would have to go back six years and start working to negotiate a contract in good faith that utilized mathematics rather than emotion. Since you can't do that now, I suggest you start by looking at the company's operating income every year since the merger and determine what the maximum amount the company can afford to pay given the financial data. On that note, it looks to me like the company has averaged $190M in operating income over the past five years. That's the total pie you have to work with. Do you agree with that?

Now logic and a solid understanding of business finance should tell you that the Company cannot allocate 100% of that operating profit to salaries, wages and benefits because there are other fleet and infrastructure projects required to keep the company in business and competitive within the industry. The company is also highly leveraged (in debt up to its eyeballs, but still far better than the US Government) and some of those operating profits are needed to pay down on the principle on the debt for the survivability of the company. For simplicity sake, let's assume that 50% might be available for wages and benefits (probably high, but easy math). Okay, so that means that the Company has $95M to spread out to all of the labor groups that want higher pay. However, we need to drop that value by about 40% to cover all of the federal, state and related payroll tax burden which cannot be mathematically included in the wage offer to labor, so that takes us down to $57M in wage increases that Management could reasonably offer to employees.

Of course not all employees make the same amount of salary and wages today, so a weighted average would be more appropriate than a simple average and the AFA ought to know what the FA's percentages are relative to pilots, fleet service, MX, customer service and the rest. However, even if we just do the simple $57M divided by 32,000 employees, we come to a figure of $1,781 per employee per year. Divide that again by 12 and we come to $148/mo for each employee as an average available increase. This is mathematically the maximum the company can reasonably offer without risking bankruptcy.

Now I have no idea what financial information Management has passed along to the mediator, but my guess is that, while significantly more thorough and accurate than my rough estimations, the end result is probably about the same. The Company has 32,000 employees and an average of $190M in operating income over a fiver year period. Of course Management has already offered the pilots $120m in annual improvement so that knocks the $190M down to $70M, not including payroll taxes and overhead. Now they have also offered the FAs $40M in improvements so now that leaves $30M to cover roughly the other half of the employees who are not flight crews. Of course both the pilots and FAs want more and must take from an already disproportionately small pool shared by the other 15,000 employees. At that point it starts to look ridiculous to ask for more when the pie has already been shrunk 85% by by two labor groups.

Fair is not an objective measure, but it sounds to me like with the pilot and FA offers made by Management, they have gone above and beyond what the mathematics I just presented will support. If the offers are unfair, it is is unfair to the shareholders, not the employees (by way of lower profits, shareholder value, and far greater risk to solvency). Management has clearly offered more than they could afford to give in order to get the deals done. If the mediators for the FAs and pilots have a calculator and have taken a business finance course, then I wouldn't hold out much hope for significantly higher wages offers or for being released to self-help CHAOS scenarios. The mediator is not going to stick his neck out and have the company file for bankruptcy because employees can't use a calculator and he was just feeling generous with someone else's money. Furthermore, release to self-help is not going to be granted if one side is making unreasonable and unattainable demands (that would be the FAs and pilots). If the AFA had competent negotiators and leadership to figure this out, you would have been told the truth and could have had better paycheck back in 2006. That doesn't mean you would be happy, but at least you would have something rather than nothing with little hope of getting more.

You just validated the reason way a labor group should be unionize so not to be left with scraps

 

[VAflyGal]

I have no say or influence on anyone but I would personally entertain the idea you suggest. Can you provide more financial information on what the AFA has proposed and how it would benefit the FAs willing to retire and the Company? Like I said it sounds reasonable to me so unless I know more I can't speculate as to why Management wouldn't consider it, other than cash flow concerns, of course.

I'll ask sometime. The JNC is up to their eyeballs in negotiations trying to get this thing hammered out, and I'm not so sure the whole buy out proposal, if one exists, would be something they would be willing to share as it may or may not be part of negotiations or some other confidential document. Sometimes we are left in the dark but it seems like a win/win to me - just do simple math - replace a 40K a year f/a with a 17K a year f/a and give them health insurance for 2-3 years - and group health insurance premiums are based on the average age of the group so we would also, in theory, bring the average age down, thus lowering the premiums for both the company and the employee portions. No one is getting rich but it sure as hell improves morale, gets people who are miserable out of here, brings new faces to the group, and allows some of the people who have been on the bottom of the seniority list for 10-15 years some upward movement. Lord knows we are stagnant and it would make perfect sense to me, but I am not an accountant...

 

[CallawayGolf]

I'll ask sometime. The JNC is up to their eyeballs in negotiations trying to get this thing hammered out, and I'm not so sure the whole buy out proposal, if one exists, would be something they would be willing to share as it may or may not be part of negotiations or some other confidential document. Sometimes we are left in the dark but it seems like a win/win to me - just do simple math - replace a 40K a year f/a with a 17K a year f/a and give them health insurance for 2-3 years - and group health insurance premiums are based on the average age of the group so we would also, in theory, bring the average age down, thus lowering the premiums for both the company and the employee portions. No one is getting rich but it sure as hell improves morale, gets people who are miserable out of here, brings new faces to the group, and allows some of the people who have been on the bottom of the seniority list for 10-15 years some upward movement. Lord knows we are stagnant and it would make perfect sense to me, but I am not an accountant...

Seems logical on the surface, but there are likely quite a few other factors to consider. The first consideration would be setting a precedence that the company may not be able to maintain going forward with the FAs or with the other work groups where the mathematics are not nearly so favorable. Despite that I would certainly give it due consideration, but since I have zero ability to affect the decision all I can do is agree someone should be crunching the numbers on this.

 

[CallawayGolf]

Seriously? With the above quote alone, I can definitely say that you are smoking company pot instead of just drinking their KoolAid. It is moot to continue to try to discuss anything with you, as you seem to be a little high. I refuse to smoke, and I am definitely not going to try other stuff to get where you are.

You are out of your mind. I am sorry to put it in those words.

End of discussion

Additional note: "Told ya'll... If you do what this Callaway guy says to do, and would have settled for a $15 a flight hour starting salary that tops out at $30 (the way AWA management would want it), $250 a month health insurance + $100 copay, and a 65 hour guarantee, but a clause that you must fly 130 minimum (otherwise you'll get in trouble), 10 vacation days after 10 years, (oh yeahh and adding some other company mathematics into this), then you ya'll would've had a contract 6 years ago. Of course, you MUST be willing to be in par with the wages that they are paying at, for instance, TACA airlines down in Central America which equals about $5 us dollars a flight hour. In terms of seeing it from that perspective, sure there is nobody else to blame, other than the workforce at US Airways for not wanting to be the "LEADERS" (if you wanna spin it like that) in low wages. After all, flight attendants could make a decent wage if they just would pitch harder for the US Airways Credit Card. As a matter of fact, at least 50% of F/As $1500 monthly income should be coming from this source."

I don't drink and have never used illegal substances of any kind. I do like math and logic problems though. What I know is this: non-executive compensation is paid from operating sources of income. So, the total pool of money available for wages increases or other employee benefits is defined by the operating income of a company. If that company reports $190M in average operating profits over five years, then that's the number both Management and labor have to work with, like it or not. If there are multiple labor groups vying for the finite pool of operating income, then it might be the best strategy to get there first before another group takes a bigger portion than what others consider fair. Regardless, asking for more than what the company has historically produced in operating income is a futile effort that will not achieve results, even with the assistance of a mediator. Complain all you want, the BOD is not going to borrow from stockholder equity (if there was any) to pay for operating expenses in trying to achieve a labor agreement.

I remember back in 2005, even before the merger, seeing a bumper sticker that took shots at AWA management for pursuing the merger and how the FA's were going to demand a new and better contract. I don't remember exactly how it was phrased, but the message was quite clear even then - the FAs were seeking substantial contract improvements and they expected their demands to be met. Now, six years later nothing has changed and I suspect that bumper sticker has long since faded. The rhetoric hasn't changed one bit, but the pay stubs and W2s show no such improvements. Like I said, if the FAs really wanted to have an incremental contract improvement to see them through for the past six years, they would have come to an agreement by now. The fact that they don't speaks volumes about the AFA's level of rationality and competence.