American Airlines' Future in Doubt - Carty Seeks Pay Cuts

[Airbubba]

Despite Federal Help, Carty Says American's Future In Doubt


By AviationNow.com Staff

24-Sep-2001 3:38 PM U.S. EDT

American Airlines' future remains in doubt despite last week's federal aid package aimed at helping U.S. airlines out, says CEO Don Carty, and the airline is seeking voluntary salary reductions from employees to help see it through until passenger demand returns.


"The aid package that passed into law with President Bush's signature will help us get through the next several months," Carty said Monday in a message distributed to all American employees. "The bad news is that we still have tremendously difficult challenges ahead of us."


American, like most carriers, announced huge layoffs and schedule reductions following the Sept. 11 terrorist attacks, in which two American jets were hijacked and crashed, killing everyone on board. But the reluctance of passengers to return to the skies is putting the carrier's future in doubt, Carty said.


"Despite the fact that we reduced our schedule by 20%, our load factors are still very, very low," he said. "And the absence of customers means that, even with some help from the government, the survival of our company and our industry is still in jeopardy."


Carty said he would not take any compensation -- including salary -- for the rest of 2001 to help American cut costs.


"I realize this step by itself will have relatively little impact on our company's overall financial health, but my hope is that it will underscore the depth of my commitment to this great airline, and my willingness as its leader to share in the sacrifices necessary to get us back on our feet," he said.


Carty asked other employees to take voluntary pay cuts. For every dollar surrendered, he pledged, American will put 20 cents into a fund aimed at helping the families of American employees who died in the Sept. 11 attacks and addressing "unique hardship cases that arise as a result of the job reductions."


http://www.aviationnow.com/avnow/news/channel_comm.jsp?view=story&id=news/fcart0924.xml

[BUSDRVR]

14 days after the tragic events every Manager wants you to take a pay cut that wuill take you the next 14 years to recover! Where are the Load Factor guarantees that you get the money back when the loads return?
It is admirable that 20 cents of the dollar will go to Employee familes but they need to put in some guarantees that when things improve, which they will, they wealth is spread!

[The Guvnor]

You can be running with high load factors but if it's all low yield traffic, you're still losing money.

Best way is to do a profit share for staff using the same figures used for calculating management bonuses. That way, it's a win-win situation all round - the company does well, then so does everyone else.

[The Guvnerd]

One more thing. Don't say that I didn't warn you! Infestations of nasty bugs, swarms of locusts, a blight on the corn crop and a poxy general malaise on the aviation industry. All has come to pass just as I said it would. :(

Look at it this way. Pretend that a giant asteroid is on a collision course with the Earth. No defense is possible because the avaricious shortsighted pilots have sucked all monies from worldwide defense budgets and deposited them into their fat overflowing wallets. As a result of this unionised sponsored blackmail the inevitable collision occurs. First a fiery maelstrom engulfs the planet followed by massive flooding as the ice caps melt, then comes the nuclear winter bringing a perpetual freezing twilight. :eek: :eek:

Pretty serious stuff eh? Well, let me tell you that the above Armageddon scenario is NOTHING compared to what this industry now faces. A crisis brought on by years of acquiescence to excessive pay demands from a pampered and over privileged group of self-elected, self-serving golden elite who seek to subordinate the dictatorial rights of management and the financial gains of long suffering shareholders to their own selfish agenda. :mad:

Events of the last two weeks have forced me to retreat to the bolthole of my inner sanctum ( hold the applause). After much pontification, analysis and guesswork I have reached a conclusion ( ditto, as per the last parenthesis). I can honestly not recommend to armchair Walters or delusional airline management wannabes to commence startup airline operations in the present economic climate. I have sadly had to push my own plans of achieving global air superiority back a year or three and can seriously see no prospect of profit until about 3:30 on a Tuesday afternoon sometime in the 2nd quarter of '04. :eek:

Have to sign off. I have an important business lunch scheduled and window seats in McDonalds, unlike flight crew, are usually in short supply.
:D :D :D

[ 25 September 2001: Message edited by: The Guvnerd ]

[Notso Fantastic]

Loved it! Beats that ridiculous finger wagging and lecturing us all from that 'twit of the century' who has the nerve to call himself 'Guvnor' (of what- a pretend airline?)

[The Guvnor]

Amazingly, I find myself in agreement with Captain Tw*t from Hampshire, Notso Fantastic. I too found that rather amusing but don't you think that you are making light of the possible predicament of thousands of people at AA who may well lose their jobs as a result of the current predicament our industry is in? All very well doing a post like this, but I think it would be rather more appropriate over in JetBlast where it can join the offering of The Puprne Dyslexic Poet.

Meanwhile, if you'd like an example of union fiddling whilst the airline industry crashes to the ground, try this, from ATW Online:

Sabena's unions hold out for more as industry crumbles
Dateline: Tuesday September 25, 2001

Sabena has asked the Belgian minister of labor and employment to appoint a social negotiator after management and trade unions failed Sunday to reach an agreement on
the 2001-05 business plan.

Unions are pleading for a larger "social envelope" to compensate for possible additional job cuts above the foreseen 1,400, but Chairman Fred Chaffart replied dryly that there "is simply no extra money available." He added that he was very surprised by the lack of urgency that still marked the union representatives. "When I see how quickly other airlines can come to a social accord, I must conclude the people here seem to believe the situation is not that grave."

Meanwhile, worries continue to grow within Sabena and the government about the rapidly deteriorating financial situation of Swissair Group and the possibility that the group would file for bankruptcy protection, which would jeopardize Sabena's planned recapitalization. Next month the Belgian government and Swissair Group are due to pay a first installment of a eur430 million recap.

[Devils Advocate]

Hey Guvnerd, I think in the above when you wrote 'retreat to the bolthole of my inner sanctum' that what you should have written was 'inner sphinctum' !

[dallas dude]

Now, IF we had a management team we trusted further than we could throw them I'd gladly make any sacrifice with the understanding that when better times return, we'd get our fair share.

As any one that's familiar with AA clearly knows, that's pie in the sky.

We'll be expected to "give" then pay twice to get back what we're owed.

As bean counting airline CEO's constantly prove, they know the price of everything and the value of NOTHING!

I treat everyone with the respect and integrity I like to receive. Sadly, the first thing these CEO's learn at business school is that the price of integrity is too great a balance sheet liabilty.

I'm not holding my breath waiting for our bosses' egos to receive a concsience injection.

Maybe one day they'll figure out the best lead by example, not by screwing everyone they can.

Rant over.

[I. M. Esperto]

AA announced today a 20% cutback in flying hours, and furloughs/firings to match.

The TWA Terminals @ JFK will be closed in Oct., and all PAX will use the AA terminal.