Forum Post: American Airlines files for bankruptcy ... Shows destructive force of unions
Posted 12 years ago on Nov. 29, 2011, 10:32 p.m. EST by Monkeyboy69
(150)
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AMR management made generous offers to the pilots union and in the end I am glad they filed. Unions were way to greedy, they wanted a signing bonus and ridiculous pay raises every year. In the end their inflexibility will cost them. Their $5.2 billion underfunded pension liability will be rejected and their wages (which were materially higher than the industry average) will be cut. It is their own fault. Another prime example that industries that have high union involvement (airlines, steel, auto) are destined to fail.
The problem is their aircraft flleet is old and fuel costs have made all the airlines struggle. I worked for an airline during the first iraq war, and when fuel costs shot up, it really hurt them. Additionally, they had just bought new airplanes. The mother company of my puddle jumper offshoot chopped off the branches that were struggling. My job did not pay much. Pilots and mechanics made fair wages for their education and expertise. Thought getting paid what you are worth was important... Guess it only applies to those earning over five digits...
Yeah, well. I don't know about you but I don't want some poor minimum wage slob or kid fresh out of flight school flying my airplane and I don't want some poor minimum wage slob or kid fresh out of high school teaching my children.
If you want to attract talented, dedicated people you have to pay.
How much was Captain Sully's expertise worth to the passengers on his plane this day?
You and American Airlines - penny wise, pound foolish.
The pilot flying my plane is worth more to me than the fat CEOs and the greedy shareholders.
People, not profits
Us airways pilots make less than AMR pilots
you would rather pay for the workers food stamps i suppose.. yes.. people who work for low wages get food stamps.
AMR is a private company they have no obligation to pay exorbitant wages. Private corporations are not boondoggles or union workers. In the end end I am glad by filed ... Unions need to learn
as long as you paying for the food stamps doesnt bother you just dont gripe about how much the low wage worker cost you in taxes.
Despite losses, American Airlines CEO's compensation climbs
http://www.star-telegram.com/2011/04/21/3019164/despite-losses-american-airlines.html
This is not a legit bankruptcy. This is the way to cheat there own employees on wages.
AA had 4 Billion in there account a few month ago, and still raising strong revenus during the holidays and the coming holidays.
A missmanagement when refusing planes with lower mileage.
I really would like to investigate if and how the kickbacks on purchasing new equipment where handled.
AMR was and still is hemorraging cash ... Please get your facts straight
Unions are a double edge sword. They start off good but can grow to powerful and stifle a business.
Kind of of topic, I always believed that unions should be started by the workers when needed then dissolved once they accomplish their goals. I support the unions but I'm smart enough to see their flaws as well.
Another idiot bashing his own middle class brothers and sisters while the elites rape his childrens future. How's that Koolaid fool, I hear Becks cherry flavor is the best!
You are entitled to nothing !
Maybe if the CEOs of airlines would stop buying our politicians, unions would not have to exist.
Enough with that garbage ... Unions buy politicians too
yeah, but Unions buy them for people like me, workers. therefore, they are my kinda politician shopper. if and when I decide to be a CEO, I'll embrace their right to shop. that is how the game is played.
That is why I favor management
Pilots do not make too much money. It is ridiculous to blame them.
They make the most in the industry .... Compared to the rest of the industry hey make too much .... Don't forget t factor in the juicy pensions and benefits unions employees like to suck out of their employers
This is nothing new!!! It's been going on for years!!!
http://content.beggarscanbechoosers.com/labels/CEO%20pay.html
OF COURSE!!! Their CEO making 5.2 million plus extras has nothing to do with them screwing those who are doing the work. UPHOLD all who merely perform paper magic and money changing!
You are nothing more than an ignorant instigator and inconsistent objector!!!
http://www.star-telegram.com/2011/04/21/3019164/despite-losses-american-airlines.html
Despite losses, American Airlines CEO's compensation climbs
AMR Corp. Chief Executive Gerard Arpey received $5.2 million in total compensation last year, even though the parent company of American Airlines was the only major U.S. carrier to lose money in 2010.
Arpey's compensation grew 11 percent over 2009, boosted by an increase in stock awards and options that were granted in May.
All that stock he got is worthless now! A lot of that was stock and options which are now WORTHLESS .... Do u understand that?
You'd like to believe that.
Look at AMR stock it is 41 cens ... When bankruptcy settles it will be a zero .... Do u not understand?
No, not only am I completely jaded and cynical beyond belief, I'm likely mildly stupid and am sure they brass won't figure out any way to eat all the flesh off it before it's properly gutted.
Ok thanks
or American, the question is, why now? There hasn't been any catastrophic event, such as 9/11, which precipitated a sharp drop in air travel and a wave of airline bankruptcies in the early 2000s. If labor costs are the culprit, that doesn't explain why American filed this week, as they've been unable to reach a deal with their pilots for the past five years. American is, in fact, flush with cash, with $4bn in reserves. This puts them in a much stronger position than their predecessors heading into bankruptcy – and also explains a great deal of the timing.
Whereas bankruptcies once gave companies a cash buffer, by allowing them to stop payment on unsecured debts, today, most debt is secured – which is to say, collateralised (for airlines, with their planes, facilities and landing rights). This leaves debtors reliant on debtor-in-possession (DIP) lenders for cash. These lenders, typically large investment banks like JP Morgan, get priority over other creditors and can make all sorts of demands on the company. And increasingly, DIP lenders have learned to leverage this position to reshape corporate governance according to their whims: sometimes in preparation to purchase the bankrupt company themselves, sometimes for complete liquidation.
American's large cash reserve leaves it less dependent on DIP financing and thus will have more say over its future. "It's a throwback case," says David Skeel, law professor at University of Pennsylvania, although he predicts American will likely have to seek out loans at some point. Ultimately, it's a question of power. And while this puts American in a better position with its creditors, it ironically puts them in a weaker one with its employees. http://www.guardian.co.uk/commentisfree/cifamerica/2011/nov/30/how-american-airlines-use-bankruptcy-cut-costs
Cut the shit. It was a way to fuck the people that work.
AMR burned cash for years ... They had to secure literally everything they had .... They were leveraged to the eyeballs. Every plane ... Every route, gate, slot ... All were collateral for debt .... I am a research analyst and I cover airlines .... AMR pilots made the most in the industry ... Their labor costs were $800 million more than united or delta .... They offers they made to the greedy u ion was very generous ... But the union wanted more ..... Please get a clue ... AMR burns $300-400m a quarter in cash ... Do some work before u post an ignorant comment... This UK guardian story is garbage .... Read the wall street journal ... Financial times .... Speak to any research analyst (buyside or sellside) on why they filed. Union got greedy and they got what they deserved ... Good ... Screw them
It is a crock of shit is what it is.
What Is?
Actually Airline pilots make 60% less then they did before 9-11 and airlines have been losing money for awhile. What we have is an outdated transportation system. We need high speed rail but the powers that be think the profit margins are to low.
Pan AM, Eastern, Branoff.. all due to unions right... Unions have looked after your safety by making sure everything was done right.
National Airlines are going to regional airlines to get away from all the safety standards.. That why I avoid them regardless of the extra mile you earn.
This is not due to unions, it is due to the government stepping onto the industry slapping high corporate taxes and high fuel taxes and much more. If it was not for the unions, we would be earning wages like those of the Chinese workers in China whom get cheated for the work they do to earn as little as $20 to $50 a month. This amount cannot not buy you much so must stay poor. Most Americans could not even dream of being poor but their tables have been turned on them by the government so now the middle class will be hit with a lower society status declining slowly back to the poor level.
It is a free system ..l u don't like what u are getting paid ... Go work somewhere else
I have a solutions..Lets remove all the safety rules like Wall Street and let them buy all the spare parts in china It's cheaper. Lets make the pilots work 72 hours a week..
Right.. Glad I'm not flying
Why do people assume industries or companies without unions are unregulated and unsafe?
it couldn't be from poor structuring http://www.forbes.com/2009/07/27/airlines-oil-recession-intelligent-investing-jet-blue.html
http://www.slideshare.net/pstaehler/customer-centric-business-model-innovation-in-the-airline
http://www.dynamicwealthreport.com/Archives/Stock-Investing/best-of-dwr-the-stupid-things-businesses-do.htm
Mostly it was because of the deregulation of the airlines.
It just took a while.
Now they will head for a monopoly.
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Just the most recent example of how Unions are way past there usefulness.
Pilots do not make "low wages".
What do pilots make?
depends on the airline.
they would without unions.
the union just screwed American Airlines. It's going chapter 11.
and why is that a problem? there are other airlines. and dont say.. cause thats thousands of jobs.. so what, join the club. plus you want unions to die? then the company dies also. there are other companies.. like there are other jobs. its not a catastrophe
GOOD!!! I'm glad to see them go!!! Any company reporting record losses yet still pays their failing executives millions per year, needs to DIE and PAINFULLY!
The airline industry as whole loses money every year. Individual airlines make money
Wrong. Airlines use this tactic frequently. This has become a normal procedure.
5 years of negotiations and the head of the pilot union threw away his constituents.
This is a BS bankruptcy and you know it.