Who wants a merger with US?

[Kellerguy]

Either way people need to realize what realistic prices are for airline travel. We have multi million dollar aircraft that are beiing purchased, mtc and fuel costs, along with airport rent, and labor of corse. If I could indeed buy a new car for 5k, the UAW guys would have to be working for about $7 an hour.

Realistic is what they are willing to pay for their tickets. What a carriers internal costs are--they could care less, they're just buying transportation to get where they need to go. Even business travel is looking for the best buck to get you there. Unfortunately airline deregulation has opened this can of worms. What is disgraceful is the dual standards used by regulatory agencies for judging maintenance. This is something I'm surprised the unions have not adequately lobbied to change so there is a level playing field.

 

[Bob Owens]

This is not what you want to hear, or I want to see happen, but the historical record of shows M&R and fleet are the groups that get slammed hardest with reductions, due to outsourcing.

Really? When NWA and Delta merged how many mechanics were let go? How about UAL and CO? How about WN and Airtran? The answer to all three is the same- None. If AA lets go of mechanics they are simply supplying competitors with what is becoming a scarce resource-Mechanics.

Of all the workgroups at AA only one has exhausted their recall lists -Maintenance. When they started hiring off the streets they were very dissapointed with the results.

 

[Bob Owens]

Realistic is what they are willing to pay for their tickets. What a carriers internal costs are--they could care less, they're just buying transportation to get where they need to go. Even business travel is looking for the best buck to get you there. Unfortunately airline deregulation has opened this can of worms. What is disgraceful is the dual standards used by regulatory agencies for judging maintenance. This is something I'm surprised the unions have not adequately lobbied to change so there is a level playing field.

And each time they raise prices what happens? People keep flying!!

 

[BoeingBoy]

Really? When NWA and Delta merged how many mechanics were let go? How about UAL and CO? How about WN and Airtran? The answer to all three is the same- None.

Because in two of those cases - DL/NW and UA/CO - the cuts were made in bankruptcy when outsourcing increased dramatically. Also, those were combinations of largely complimentary route networks, so not a lot of extra capacity was left after bankruptcy that was cut during the mergers - hence little loss of employees outside back office and headquarters functions. WN/FL is as different as WN is from the legacies. WN is growing, just through acquisition rather than internally. So again no loss of employees outside back office and headquarters functions.

Parker's preference, as repeatedly stated by Parker himself, is to merge with a carrier in bankruptcy so that duplicate or unnecessary equipment, facilities, planes, and jobs can be cut as needed. That's the pattern of the US/HP merger, even though the route networks were complimentary - US heavy in the east with some non-stops to the west and HP heavy in the west with some non-stops to the east. There's no indication that a US/AA merger would be any different - merely a question of who will get hit with the furloughs. I wouldn't be surprised at all to see AA management reduce the number of employees by the 13,000 or so then Parker just say "Well, it wasn't what I wanted but I was powerless to stop it without a merger agreement with AA management. But I promise there'll be no more furloughs now that I'm in charge..."

Jim

 

[Dilligas]

Really? When NWA and Delta merged how many mechanics were let go? How about UAL and CO? How about WN and Airtran? The answer to all three is the same- None. If AA lets go of mechanics they are simply supplying competitors with what is becoming a scarce resource-Mechanics.

Of all the workgroups at AA only one has exhausted their recall lists -Maintenance. When they started hiring off the streets they were very dissapointed with the results.

You're confusing two totally different issues. We were discussing the hit that M&R takes in BK proceedings, not a merger. I was speculating that after the hits were taken by TWU, the TWU number would not be over the magic 65% and a representational election would be triggered if there were a merger.

Aren't you a TWU officer? If you are unaware of the implications to M&R employees during BK over the past decade I am shocked.

If you are telling your people that M&R isn't going to be slammed by this BK, you are misleading them. There will most definitely be major M&R cuts before any merger or exit from BK.


NWA had already gotten rid of thousands before BK and then merger when they broke the amfa strike with scabs and outsourced before the BK process

Delta - non union, free to outsource all they wish with no restraints.

UAL - outsourced thousands of mechanic jobs during their BK

SW - most profitable airline with highest paid mechanics, already outsourcing, not in BK
Airtran not in BK

Bob, I don't want to see any AA employees lose their jobs. Not one.

But to think AA will keep your shops and not make huge cuts in M&R is delusional. They don't care about the quality of work. They want to reduce headcount, and they will. You may juggle the numbers any way you wish in trying to negotiate jobs but the company will not budge, ask anyone that has been through BK. Meeting the "ask" dollar wise is a smokescreen used by the company. They simply want bodies out the door and off the payroll.

 

[Dilligas]

Bob, (or anyone else in the know)

Has Doug made a written promise to TWU of no layoffs and raises upon exiting BK as he did the FA's and Pilots?

Can you refer me to where I can read any info on the terms TWU accepted from US? It seems APFA and APA have been posting some of the information, but I have not been able to locate the TWU info.

 

[wings396]

Realistic is what they are willing to pay for their tickets. What a carriers internal costs are--they could care less, they're just buying transportation to get where they need to go. Even business travel is looking for the best buck to get you there. Unfortunately airline deregulation has opened this can of worms. What is disgraceful is the dual standards used by regulatory agencies for judging maintenance. This is something I'm surprised the unions have not adequately lobbied to change so there is a level playing field.

That's true. There have been several attempts by some airlines to raise fares, but if everyone is not on the same page it fails. As stated by another poster here, even with increased fares people are still flying. Southwest has been going along with raising fares for a little while now, and that has enabled everyone else to do the same. I hate paying $4 for gas, but I'm still doing it in order to take trips etc.... Sure I shop around for the lowest price, but if everyone is selling it for the same price I'm going to buy it anyway.

 

[BoeingBoy]

but I have not been able to locate the TWU info.

It seems to be a closely guarded secret...but even the Pied Piper Parker has effectively admitted that there will be 6,000-7.000 jobs lost and they won't all be back office or headquarters jobs. So someone is going to feel the pain.

Jim

 

[WorldTraveler]

A few thoughts since I started this poll on April 8th. There was a clear majority of AA folks, I think upwards of 75% did not want a merger with US or would prefer to merge with another carrier. Now a sllim majority would like a majority would like a US/AA hookup.

It is of no surprise after Parker's meetings with the AA unions, that he has come in to save the day. I find myself more in agreement with those I go to battle with on the East who share the same skepticism of Parker. Hours after secretly meeting with potential employees of a merger, he is evasive to the actual employees of his un-merged US Airways. It goes well beyond the premise that he could not tell us anything at the Phoenix town hall because of the pending merger announcement. It is more like the same pattern we have all seen before. It's Doug Parker a disarming and likeable person in public but no different than a Horton or Crandall.

A merger is going to result in a reduction in capacity. It's a fact. People in Pittsburgh, Las Vegas and Boston know this all too well. How can he promise job security to one group of employees without compromising the job security of another? He can't. He preached US Airways was fine as a stand-alone while going to the bar to pick up another airline. He may look attractive at the bar but you may wake up the next morning to a nightmare we have lived since 2005.

We are still an unmerged airline with our own problems. I'd rather be represented by APA than USAPA. For that reason, I would be for the merger. On the other hand, I would like to see the courts resolve our seniority dispute. Either way, there will be problems and disputes that arise. The question is, is it a two way or a three way?

Finally, I think airline forums should have an AA/US Airways discussion area. SW/Airtran has a forum. Now that a potential merger is in the works, I think it would be a good idea for those who want to participate outside the AA or US forums.

Well said… and you highlight exactly what I have been saying… Parker’s promises to AA employees are too good to be true… someone is going to pay the price because AA/US can’t operate with 25K more employees than DL or UA = and all 3 will be comparably sized.
And it is absolutely certain that excess capacity will be leaving the combined airline – that is precisely why US has a revenue disadvantage to AA, DL, and UA because it has more capacity in its system to support premium revenues… but like AA, US has no choice but to keep the capacity in or else shrink further relative to its peers.
If a merger actually occurs, then yes a merged forum is appropriate – but until then it is all speculation and you can participate in whatever forum you want to discuss the issue….

Because in two of those cases - DL/NW and UA/CO - the cuts were made in bankruptcy when outsourcing increased dramatically. Also, those were combinations of largely complimentary route networks, so not a lot of extra capacity was left after bankruptcy that was cut during the mergers - hence little loss of employees outside back office and headquarters functions. WN/FL is as different as WN is from the legacies. WN is growing, just through acquisition rather than internally. So again no loss of employees outside back office and headquarters functions.

Parker's preference, as repeatedly stated by Parker himself, is to merge with a carrier in bankruptcy so that duplicate or unnecessary equipment, facilities, planes, and jobs can be cut as needed. That's the pattern of the US/HP merger, even though the route networks were complimentary - US heavy in the east with some non-stops to the west and HP heavy in the west with some non-stops to the east. There's no indication that a US/AA merger would be any different - merely a question of who will get hit with the furloughs. I wouldn't be surprised at all to see AA management reduce the number of employees by the 13,000 or so then Parker just say "Well, it wasn't what I wanted but I was powerless to stop it without a merger agreement with AA management. But I promise there'll be no more furloughs now that I'm in charge..."

Jim

Also well said.. but it is precisely that AA can restructure to work as a standalone airline that it is unlikely it NEEDS to merge. An airline in BK has the ability to rightsize its costs…. US does not…. So Parker wants AA to make the cuts for the combined group in BK… but since he is trying to win over AA labor, he is promising reduced cuts for them – and then someone else will have to pay the price. Wanna guess where those cuts will come?
There is no such thing as free lunch.

NWA had already gotten rid of thousands before BK and then merger when they broke the amfa strike with scabs and outsourced before the BK process

Delta - non union, free to outsource all they wish with no restraints.

UAL - outsourced thousands of mechanic jobs during their BK

SW - most profitable airline with highest paid mechanics, already outsourcing, not in BK
Airtran not in BK

Bob, I don't want to see any AA employees lose their jobs. Not one.

But to think AA will keep your shops and not make huge cuts in M&R is delusional. They don't care about the quality of work. They want to reduce headcount, and they will. You may juggle the numbers any way you wish in trying to negotiate jobs but the company will not budge, ask anyone that has been through BK. Meeting the "ask" dollar wise is a smokescreen used by the company. They simply want bodies out the door and off the payroll.

And yet DL not only outsources less maintenance than any other US airline besides AA but it also insources more maintenance than any airline in the Americas and is said to be the 3rd largest MRO in the world.
Perhaps the real bottom line is that DL has used its non-union status to create efficiencies in its operations that allow it to do more of its own work in-house than many airlines but operate its maintenance operations efficiently enough that it can win business from other airlines, esp. with high value engine and component repairs.
That is the model that I hope AA reaches with its maintenance operation – use its enormous maintenance capabilities to do as much work inhouse as possible and then also insource to help create efficiencies which bring down its own internal costs.

wings,
fare increases are working because airlines are pulling capacity out of the system, including WN which has stopped growing and is actually pulling capacity out... when multiple airlines at the same time are reducing capacity, fare increases can work - because increased fares will result in reduced demand based on the same external economic environment.

 

[Kellerguy]

And yet DL not only outsources less maintenance than any other US airline besides AA but it also insources more maintenance than any airline in the Americas and is said to be the 3rd largest MRO in the world.
Perhaps the real bottom line is that DL has used its non-union status to create efficiencies in its operations that allow it to do more of its own work in-house than many airlines but operate its maintenance operations efficiently enough that it can win business from other airlines, esp. with high value engine and component repairs.
That is the model that I hope AA reaches with its maintenance operation – use its enormous maintenance capabilities to do as much work inhouse as possible and then also insource to help create efficiencies which bring down its own internal costs.

Could happen, but to be a serious MRO they'd have to be separated or at least a separate company w/in AMR with their own contract, their own profit sharing incentive plan, etc. The stigma attached to being an airline MRO is one of perceived favoritism and distrust by competitors who might otherwise use the service. Otherwise, one airline dislikes the idea of another profiting on their maintenance.

What airlines is Delta doing overhaul for?

 

[UPNAWAY]

<_< ------ Son, you are showing your ignorance. "Would you like the gov't to tell airlines they must charge x amount"? That's exactly what I'm saying! Know the history of your profession.- Once there are only three major carriers in this country, and capacity is reduced, what do you think will happen to prices? What do you think you will pay if you want to fly from Flagstaff, AZ, to Bose ID? Of course we could just open up everything to foreign carriers!------ Fly from Flagstaff, to Bose, on China Air, for only $29.98 each way!!! Yea! Why not? That's the way to go!!!! 😉

Wow, all over the place and not even making sense in this post. You want the government to set fares high enough that airlines can make a steady profit and pay employees a good wage, but you are against airlines merging that will give them the ability to set higher fares and pay employees better ostensibly because it will cost the customer more to fly?

 

[EastCheats]

If a merger actually occurs, then yes a merged forum is appropriate – but until then it is all speculation and you can participate in whatever forum you want to discuss the issue….

I appreciate your kudos of my observations. My suggestion was for a third forum so AA can discuss issues here and those who want to talk merger have a place to go. I understand what some people have been saying here and I think it would be a good idea.

 

[BoeingBoy]

Traditionally this site has not done that - the separate forums for each airline are retained until after a merger actually happens. US/HP, DL/NW, UA/CO were all handled that way and I wouldn't expect an exception to be made in this case. Nothing unique is happening although it seems unique to those involved...

Jim

 

[WorldTraveler]

Kellerguy,
DL Tech Ops says they have 150 airline and aviation customers.

They have press releases showing contracts with a number of small and medium sized and foreign carriers.
http://www.deltatechops.com/news/news-releases/

.

The AA and US forums here have long been the most active... it is not surprising that anything involving both airlines creates even more activity - and it is bound to make the owners of this board happy. 🙂

 

[wings396]

Dupe.