American Airlines Bankruptcy - Your Perspective (Dallas, Arp: health insurance, hotels, movies)

[galore]

I understand that there are costs beyond the pilot's salary.

My point is that a miniscule part of the airfare would pay a very high salary for one pilot. Therefore pilot salaries, even if very high, can't explain AA's struggles. High pilot salaries are always cited as a major reason why AA can't make money.

It appears to me that even if pilots were slaves working for free and AA would subtract their savings from the fare, my coach roundtrip ticket would cost $1280 instead of $1300. LOL!!!!

[galore]

Maybe the solution to the union problem is to add a $9.95 union fee to the airfare (on top of the advertised low, low fare, of course). That should cover the evil union extra cost.

[SimpleLife2]

@justme02,
I'm curious if you're just repeating what you've read in the papers or heard from your friends -- or if you have some first-hand information. Which pilot rules, specifically, for example, are antiquated and unproductive? Are you able to give specifics?

[Johnhw2]

Originally Posted by galore

I understand that there are costs beyond the pilot's salary.

My point is that a miniscule part of the airfare would pay a very high salary for one pilot. Therefore pilot salaries, even if very high, can't explain AA's struggles. High pilot salaries are always cited as a major reason why AA can't make money.

It appears to me that even if pilots were slaves working for free and AA would subtract their savings from the fare, my coach roundtrip ticket would cost $1280 instead of $1300. LOL!!!!

This type thinking is why our government deficits are huge and out of control. The way to be profitable is offer valued products/services at an affordable price. There is no single silver bullet on cost but each penny adds up. To ignore any out of line cost as not making a difference is why we are strugging as a country. Successful long lived companies watch the pennies not just the dollars

[BigT3x]

Originally Posted by SimpleLife2

@justme02,
I'm curious if you're just repeating what you've read in the papers or heard from your friends -- or if you have some first-hand information. Which pilot rules, specifically, for example, are antiquated and unproductive? Are you able to give specifics?

AA has to essentially ask permission from the pilots before starting long routes. This is why DFW-China didn't happen.

AA pilots also prevent Eagle from operating planes over a certain size. This is common, but the AA pilots agreement is more restrictive than most.

[skids929]

Originally Posted by padcrasher

The USA is unique in the Western Word with this ideology that smears unions. Southwest airlines is the most unionized airline in the country and it's very successful. The most unionized nations in the World have a highest standard of living, surpassing the USA, which has a low unionization rate. I've got to hand it to right wing propagandists, they've managed to convince the ever shrinking middle class that unions are evil, and benevolent corporations and diminished government is the answer. This is like watching a 30 year slow motion car wreck. Americans lack the intellect to even understand the most simple issues pertaining the their own family's well being. Vote to hurt unions, and workers rights, and continue to watch this country go down the drain.

Yes yes! Government should be larger and Unions are the answer to our labor problems. Excellent point. Bravo!


I don't even know where to begin with this statement, other than saying tell that to General Motors, or the Public Education system in America. Unions=lower productivity and lower quality-especially large Unions. But hey, why not drive American labor clear into the ground, between Unions and financial markets controlled by Politicians we're already part way there now. What the heck, let's at least finish the job!

Unions as an economic concept are another shortsighted vision by those who are alive today, not thinking about whats best for AMERICA (not themselves) tomorrow. I would suggest you take a lesson in basic Economics before you unabashedly support a labor concept that has only proven to increase market wages above natural levels, increase racial disparity (yes minorities are disproportionately represented by Unions), and decrease the labor supply. By all means do stand behind what you like, but only after you have a basic understanding of how markets function efficiently.

[Cowboys fan in Houston]

Originally Posted by SimpleLife2

@justme02,
I'm curious if you're just repeating what you've read in the papers or heard from your friends -- or if you have some first-hand information. Which pilot rules, specifically, for example, are antiquated and unproductive? Are you able to give specifics?

Im an airline consultant by trade, so yes I do have some first hand knowledge of this because it is part of my job. I dont work for a specific airline, but for clients who hire me to deal with any specific airline.

As to the rules which are antiquated:

1) The scope regarding flight stage length. In this day and age Boeing and Airbus are creating aircraft with ranges weve never seen before. We are also seeing routes being flown that could have never been imagined (Atlanta-Johannesburg and Sydney-Dallas are good examples). These are being flown profitably and opening up new opprotunities to the airlines who fly them. However, the APA has a rule in place (that has been there for a very long time) that any flight over 12 hours requires approval. In recent years, it has been used as a poly to throw a wrench into managements plans to open up new long haul routes (see the Dallas-Beijing example). When the rule was put into place, these types of routes were not yet popular and profitable. Now American has ordered the Boeing 77W which can be used to fly to new destinations that are long haul. With this rule in place, AA will never be able to be truly innovative as to its route planning.

2) The rule regarding a ban on RJ's larger than 70 seats. I can somewhat understand that it might be in the pilots best interest to oppose this as the pay scale will be lower than it would on a mainline aircraft. However, all of their competitors currently opperate them. They have an excellent fuel economy and range (CASM and RASM potential). This is the logical gap between the smallest mainline aircraft (a 319 or MD80) vs. the 70 CRJ or ERJ and would be an excellent solution to hubs with the need for an aircraft that size. Chicago is an excellent example. Also flights from Miami to midsized American cities that are currently opperated on an ERJ-145 would be excellent cannidates (Miami-Pittsburgh/Charlotte/Memphis for example).

3) The pensions. I well and truly believe this is the largest part of what this BK is about. This is where the cost disadvantage comes in. There is not another one of the legacies that did not dump or freeze them in Chapter 11. Think of it this way, you have an entire workforce for whom you are paying pensions and none of your competitors (the legacies) do. Thats a huge cost disadvantage by itself. The best option (in my opinion) is not to dump them, but to freeze them. The problem they are currently running into is if the pilots demand a lump sum payment which would be very hard for the airline to pay.

I hope that clarifies what Im talking about.

[galore]

Originally Posted by Johnhw2

This type thinking is why our government deficits are huge and out of control. The way to be profitable is offer valued products/services at an affordable price. There is no single silver bullet on cost but each penny adds up. To ignore any out of line cost as not making a difference is why we are strugging as a country. Successful long lived companies watch the pennies not just the dollars

Please. Noone here can address my point that it's puzzling that a really small percentage of airfare, smaller than a baggage fee, would cover the oh so horribly uncompetitive labor disadvantage AA may have.

Suddenly it's all so incredibly complicated and even part of the USA's debt problem. I call BS. AA's problems are ****ty product and rude attendents that make flying a terrible experience.

It's not about inflated salaries when other costs like fuel, taxes, airport fees, airplane leases, debt payment make up the VAST share of an airfare. Other airlines have those costs, too, but I'd rather fly LH to Frankfurt and avoid those bitchy AA attendants.

[BigT3x]

Originally Posted by galore

Please. Noone here can address my point that it's puzzling that a really small percentage of airfare, smaller than a baggage fee, would cover the oh so horribly uncompetitive labor disadvantage AA may have.

Suddenly it's all so incredibly complicated and even part of the USA's debt problem. I call BS. AA's problems are ****ty product and rude attendents that make flying a terrible experience.

How big do you think the margins on flying are? (Hint: They're really small)

Your assertion that labor is a small part of the equation is just plain wrong. When you're only making a few hundred dollars overall profit on many flights, those costs can drag you into the red.

Also, for the record, AA just placed a huge order for new aircraft that should address the problems you seem to have with their product. As for the FAs, this one is incredibly subjective. My last two AA flights had FAs that seemed happy and made conversation with the passengers. I know there are some old hags out there, though.

[skids929]

Originally Posted by justme02

However, the APA has a rule in place (that has been there for a very long time) that any flight over 12 hours requires approval.

Case in point to my last post above..The APA is basically a Union, and here a poster provides an excellent example of a stupid rule they have in place that leads to inefficiency.

Also note what this poster stated about the burden of pensions. Another Union creation and coincidentally exactly what drove GM into the depths of despair.

Let them flop, no company is should ever be made exempt from failure.