Show me the money! AA pilots opener ;-)

[junior_man]

American pilots ask for pay increase of 53 percent
Fort Worth Star-Telegam, October 24, 2007
American Airlines' pilots have asked for a hefty boost in pay and benefits, a proposal that analysts said would likely lead to long and arduous contract negotiations at the world's largest airline.
The proposal, presented to the airline Tuesday, requests a one-time raise that would restore pilot salaries to 1992 levels, when adjusted for inflation. If approved by May 2008, that would mean a raise of about 53 percent.
The union also asked for future annual raises of 6 percent and annual cost-of-living increases, and a signing bonus that totals 15 percent of a pilot's earnings between July 21, 2006, when talks began, and the effective date of the new contract.
Labor leaders said the proposal restores purchasing power that pilots have lost since 1992 to pay cuts and inflation. They point out that American's executives have enjoyed a substantial increase in pay in recent years while pilot earnings have fallen.
"Inflation has killed our purchasing power," said Karl Schricker, an American pilot and spokesman for the Allied Pilots Association, which represents the 12,000 pilots at the Fort Worth-based airline. "Senior management, meanwhile, has seen theirs go up over 500 percent."
Airline officials said they were reviewing the proposal. But they stressed that any significant increase in pay would likely hurt the company's competitive position.
"At first glance, it appears the items they've proposed would dramatically increase our pilot costs, which would make us even less competitive," spokeswoman Tami McLallen said. "And some of the things they've asked for are unprecedented."
The contract talks are being closely watched by the industry. American is the first major hub carrier to negotiate a new deal with pilots since the wave of bankruptcies and restructuring after 9-11 that dramatically cut employee wages and benefits. Already struggling with the rapid rise in fuel prices, airlines are worried that steeper labor costs will jeopardize the industry's turnaround.
In 2003, when American was on the brink of bankruptcy, pilots approved concessions that slashed average pay by 23 percent, saving the airline about $660 million annually and allowing it to avoid a Chapter 11 filing. Since then, American has returned to profitability, with six straight profitable quarters.
So far this year, American has earned $573 million in profit. Union leaders argue that the financial turnaround means that it's time for the airline to restore pilots' pay. And they say that their proposal would not significantly boost the airline's costs.
According to the union, the deal would increase the total cost of transporting one seat one mile by about a half-cent. That would be about a 4 percent increase, and would still give the airline lower costs than Continental Airlines, Delta Air Lines and US Airways.
"American has been able to absorb the cost of fuel and still earn millions in profits," Schricker said. "They could certainly absorb this modest increase."
McLallen said it was too early for the airline to provide a detailed analysis of the proposal's impact on costs.
One analyst was skeptical. William Swelbar, a researcher for the International Center for Air Transport at the Massachusetts Institute of Technology, said it would be "pretty hard for [American] to get their arms around this."
He said the proposed 6 percent raises, plus cost-of-living adjustments, are "unheard of" in the industry today.
"It's been an awful long time since we've seen raises like this for anyone," said Swelbar, who has worked in the airline industry for nearly 30 years, both for unions and management.
He predicted that the proposal signaled that pilots are ready to endure long and difficult bargaining over the new contract.
"It's seems to me that this is inviting a very long and arduous negotiation," he said. "And that might be their strategy."
Labor leaders, however, said the proposal is reasonable and are hopeful that talks will be swift.
"We understand the need to be competitive," Schricker said. "This allows us to keep a cost advantage, and we don't see why we can't move quickly on it."
In May, the union submitted a pay proposal that included a 30 percent raise as well as signing bonuses -- a plan that was rejected by the airline. Two months later, union members elected new leaders who promised to take a more aggressive negotiating stance. Talks, which had formally begun more than a year ago, essentially restarted with new pilot negotiators.
Schricker said the new pay plan reflects the desires of pilots, which were documented in a survey this summer.
"They just want to get back what they've lost," he said.
The proposal would also:
Give pilots holiday pay for work on 10 scheduled holidays, including Christmas, Labor Day and Super Bowl Sunday. The current contract doesn't provide holiday pay.
Increase vacation time and change sick time to "personal time" that can be used for any reason, including illness.
Implement an unspecified annual bonus plan for pilots based on the company's performance.
Eliminate a one-year probation period for new hires.
The deal, which would last until Jan. 4, 2011, would also greatly quicken the pace of negotiations for the next contract. It specifies that talks would begin 180 days before the contract opened for changes and that mediation could begin 120 prior to that days if the two sides couldn't reach an agreement.
It would allow the union to strike if a deal isn't reached by the contract's amendable date.
Currently, talks at American and other airlines are conducted under federal laws that allow for significant mediation and "cooling-off" time before unions can strike. That time often extends years beyond the contract's final date.
The pilots' proposal also asks the airline to pay all of the union's direct negotiating costs. Currently those expenses are shouldered by the union.
The pilot plan did not address scheduling or productivity. Airline executives have insisted that productivity gains must accompany any pay increases. Labor leaders said those issues will be addressed in future proposals.
The pilots are just one of three major contracts that American will be negotiating over the next few years. Next month, the airline will begin talks with the union that represents mechanics and other ground workers. And flight attendants will begin their negotiations in March.
Shares of AMR Corp., American's parent (ticker: AMR), closed at $24.65, up $1.34, in trading Tuesday.

[Charliethewonderdog]

Show Me The Money

[sevenstrokeroll]

I sincerely hope that the AA pilots are winners in this.

I still blame them for the "B" scale, maybe they can make things right and get the world of airline pilots back up to the flight levels, instead of skimming by at the treetops (no reference implied to BDL ;-0 )

[Air Ace]

There is no comparison between pay claims by AA pilots and pilots in Australia.

AA pilots took a number of very significant pay cuts over the years to save their airline. AA also furloughed many pilots, some of whom have still not been recalled.

The US IR scene can not be compared to Australia. For starters, Australian workers have far greater protection.

[Charliethewonderdog]

Have you heard of work choices??????

[Going Boeing]

Air Ace, I agree with your post, however, "supply and demand" forces will dictate a significant payrise for Oz pilots.

[Air Ace]

Charliethewonderdog.
Intimately. :E

"....requests a one-time raise that would restore pilot salaries to 1992 levels, when adjusted for inflation."

From memory, the AA pilots took pay cuts in excess of 25% and up to 50% to save their employer airline.

Going Boeing.
Correct - and the laws of supply and demand will eventually establish and stabilise pilot wages in Australia, as it should in a free market economy.

However, one can not compare the US and Australian airline industrial arrangements.

[411A]

Perhaps a better solution might be for American Airlines management to sell off the airline, piece by piece, to other carriers such as Continental or Delta, thereby solving AA's pilots demands altogether.
Nothing like stapling the AA guys to the bottom of someone elses senority list to get their immediate attention...they would forget all about a 53% pay raise...:}

[Monday]

411A, you certainly are an interesting fellow.
Why do all of your posts try to antagonise most thinking people?

[411A]

Oh dear...terribly sorry Monday if you don't like my comments, but I find it truly remarkable that already well paid pilots (AA) would ask for a totally unreasonable 53% pay raise.
Lets face facts here.
AA pilots agreed to lower pay a few years ago to (in most part) protect their company pensions but to now expect 53% more is rather unreasonable...perhaps they would now like to give up their pensions to achieve that 53%...most likely not.:ugh:

[click]

Why would you sell off a profitable airline? Making a profit for six straight quarters is proof that the trend is positive and now is the time to get back your concessions. After all it's the guys up front that saved the day after 9/11 so time to get the just reward. If you think that 53% is outrageous then keep in mind that our last contract here in ex-commie land gave us a 50.5% increase in wages over three years. It's doable. Go for it!:ok:

[TowerDog]

From memory, the AA pilots took pay cuts in excess of 25% and up to 50% to save their employer airline.



Some of us took a 100% pay cut to save the airline from chapter 11:

Furlough.....

[Check Airman]

Oh dear...terribly sorry Monday if you don't like my comments, but I find it truly remarkable that already well paid pilots (AA) would ask for a totally unreasonable 53% pay raise.

Where are the well paid AA pilots? Maybe my vision needs testing again, because I haven't seen any lately.

[Re-Heat]

Hardly the time to ask for such a great rise when the financial firms that pay for their employees to travel are making massive cutbacks on staff and expenses.

To appear credible though, they should have started at the 500% that management achieved for themselves - at least while unrealistic, management would realise that everyone works hard and they must appear to be more equitable.

[Avman]

Check Airman, 411A lives in the past (aah, the good old days) and makes comments based on that era.

I don't for one moment think that AAL pilots expect to get anywhere near 53%. They're just publicising a very valid point.

Coalface workers in many industries have taken pay cut after pay cut only to see senior managers take raise after raise.

[Check Airman]

53% does seem excessive indeed, but in light of the bonuses the paper pushers have been getting lately, is it really that unreasonable?

[Check Airman]

BTW, what's the source of this information? Hope it's credible and we're not wasting out time...

He said the proposed 6 percent raises, plus cost-of-living adjustments, are "unheard of" in the industry today.

Indeed it may be, but then again, there are many many things in aviation today, that were unheard of a few years ago. The indignities at "security" checkpoints, the low wages nowadays...Ten years ago, if someone told me it would be this way now, I'd call them ridiculous.

All the major airlines have changed in pretty significant ways over the years. In all the cases, pilots (and other astff) have increased productivity and reduced income. Now that the companies are turning profit, it's time for us to reap the fruits of the sacrifices we've all made.

[Capot]

Hmmm, if their demand for 53% is justified in today's market, that must mean they are being paid 53% less than they could get elsewhere, otherwise called the market rate.

There's a global pilot shortage.

Time to walk, maybe? Mobility goes with the territory of being an airline pilot, just as it does in some other professions.

Of course the administrative snouts in the trough are an affront while others suffer. Unfortunately it's an affront that's irrelevant to this issue.

[Mick Stability]

I sincerely hope they win. It would be a welcome change to see T&C's on the way up again.

This industry is not short of cash, and it's time the ruthless got a dose of their own medicine. It's pilots who deliver safety and efficiency everyday. We're the ones who make their shoestring operations hold together, and pull them out of the poo when the chips are down.

I might be a lone voice, but I really wish the guys at AA well. I hope that just for once we get some recognition for the ridiculous rosters and the constant fatigue. I'm sick to death of people within our own profession grinning with shadenfreude when yet another great aviation job gets shafted by some private equity shark.

It's high time we drew a line in the sand.

[faheel]

Mick, its never going to happen mate.!
Drawing a line in the sand will not work, except to speed up the demise of AA.
Look, the owners of the airline I work for expects to make 8 percent on their investment, and they do, thats why they are the most profitable airline in the world.
I bet london to a brick that the owners of AA make nowhere near that on their investment and quite frankly they would be better closing up shop, selling the a/c and the real estate and putting the money into a cash management account.
I do sympathise with the guys, but being profitable for a year and a half after years and years of losses does not even begin to cut into the losses already incurred.
They will never ever get back to the good old days, its just not going to happen and as much as people disagree with 411A, he is right, either bite the bullet and except what you are getting now or get out and start again somewhere else.
:uhoh:

[Ignition Override]

As a continuation of some media articles last week about the billion dollars (+) in United Airlines' Frequent Flier cash fund (estimated by one analyst to be worth billions), how much money is kept in American Airlines' Frequent Flier fund, and were these funds detached from AA-as happened at United-and put into a bank 'vehicle' somewhere?

[sevenstrokeroll]

Its not the good old days, but some people really need to review the past.
IF 9-11 hadn't happened, my stock options would have been worth well over a quarter of a million dollars.

A 737 captain would be getting over 200k a year.

retirement would be worth 60 percent of that.

Our health care would be better. We would be flying less and enjoying life more.

9-11 was used by some ''corporate terrorists'' to screw pilots...lose your pension, half pay and more...YOU HAVE TOO or the airline shuts down. BUT WE MUST PAY MANAGEMENT A 30 MILLION BONUS.

I'm with the AA boys on this one. FIGHT and get stuff like "the good old days" back.

And you guys who took jobs with the start ups, flying captain on an A320 for 95k...you are part of the problem and not the solution. Virgin, Skybus and the lot...

To the AA guys...save some bucks for a strike...it won't last too long with BUSYBODYBUSH in the white house.

BUT TAKE OUR profession back.

[20driver]

Faheel - a voice of reality that sadly wil be like the loons cry, a faint call in the wilderness. Sad to say the recent hard times do not seem to have induced the slightest bit of reality into the AA pilots. Rather it seems to be - wait for the screw to turn and then we'll get em.
Looking at what the pilots are asking for roughly equates to the entire annual profit of AA. Pilots want 600 odd mill and then some and airline made 580 odd year to date. This is so typical of the self important pilot "we are the world" mentality. Guys, wake up and figure how you'll do in the morning with no reservation clerks, check in people, baggage handers and the other poor souls who are all just overhead.
You want a long term well paid job you need a company making serious long term cash. 5 quarters out of twenty does not cut it. Look at the pilots making real cash, UPS, FEDEX and Southwest and look at their employers profits over the last 5 year compared to AA. It tells the story.
If you can get it, go for it but your regulated monopoly is gone and you are just going to have to live in todays world. Negotiating ploy or not, asking for that kind of cash is just making you look dumb or stupid, take your pick.
20driver

[junior_man]

In the deregulated environment AA tripled in size and made money paying wages like these.
Oil went from $10 a barrel up to $90 a barrel and the airlines are still making money. Their costs can go up and they can still make money. But, maybe they would have to charge something more for a ticket? The AA pilots will probably not get what they ask for, but I imagine they will get more than if they went in asking to start negotiating from where they are today. More than they would get if they sent faheel or 20driver in to negotiate some new concessions.
BTW AA grew and made money at the old wages. The pilots are asking for what they made in 1992. The managers are making substantially more than they did in 92.
The wages will be going up again. And the line of guys out there who are gladly willing to sell their services for less and less seems to be a bit smaller now. It will not jut be AA asking for more. The only reason wages are where they are right now is the use of the bankruptcy courts. Now it is our turn to get some of that back.
At around $190 an hour for a 737 Captain, Southwest Airlines seems to be making money too.

[20driver]

AA has never made money on a five year average and only grew as a result of being a protected player in a government-rigged system. They could pay plenty because people had no choice and the prices were fixed. Airlines simply passed along what every they paid and the customer swallowed it.
That is all gone and what is really amazing is that the AA pilots don’t get it. The whip sawing of wages in the long run hurts the pilots and the industry. Asking for stupid amounts of money you are not going to get makes you look stupid. Work it out, 3% a year compounded for 10 years is a lot more than 50 per cent one year and handing it back 2 years later.
Forgot what it was, it isn’t that way anymore for pilots and a lot of other people. At one time there was a group of engineers called coal gasification engineers and they earned more than any other group. The world switched to natural gas and bingo, out on their butts.
The only thing that will change this is if enough people stop entering the pilot job market. Fact is being a pilot is a relatively easy job with a low entry level for what the job pays. It has never being easier to train to be a pilot and adjusted for inflation I suspect never cheaper.
The bankruptcy laws have hurt pilots but mostly because of seniority. Construction companies go tits up weekly but do the tradesman take a hit? Hell no, they just sign up with the Big Construction Mark IV when it opens on Monday at the same wages Mark III was paying Friday. Pilots give up that option by tying themselves to the company and its frequently useless management. Hate to say it but the best thing that could happen is for a lot of these companies to go bust and let their gates go to new companies that can run things, make money and pay a market wage.
I wish the AA guys well but they clearly don’t get it. It ain’t what it was and it never will be.
20driver

[faheel]

I should have said accept the reality of what the airline world
has become today.
The problem is ( for all of us I might add) is that the travelling public will no longer tolerate the fares they paid even a few years back.
In those days airfares were high, costs were high, no one heard of LCC.s then (save for Southwest) and there were far fewer airlines. Salaries were higher because costs were passed onto Joe Public.
Fast forward to the present time and we are where we are today.
LCC,s have driven down costs by paying less across the board for everything except for fuel, and as that rises they are going to want to drive costs down in other areas even further.
Its not just the low cost carriers American has to compete against either. On the international front Asian airlines have newer a/c, a better product and much lower costs, just look at travel magazine surveys that all show that foreign airlines pretty much sweep the board in customer satisfaction I don't remember seeing any US airline anywhere near the top 5 or 6 , so where do you think the travelling public are going to put their hard earned bucks when they go overseas?
At the high yield end it is vital for any airline to provide the best product to attract the big money and from what I see by and large the US majors come up short.
So salaries are always going to be under pressure, small pay rises are going to be the order of the day, and sad to say, the good old days are long gone, never to return. If I were just starting out in this industry right now the honest truth is I probably would'nt
And that folks is my take on it :{

[sevenstrokeroll]

People don't get it.

Jet Balu, Skyburst, Virginal and the like are run on the cheap...and it always catches up with you. Remember Valentine's day?

Southwest hedged fuel very well and that is why they are profitable.

OIL is now over 90 bucks a barrel...and you don't think that will get passed on to the consumer?

And with the huge delays in the US system, cheap will not win out.

American pilots will get a good piece of the pie and it will start the ball rolling for all pilots.

Imagine the ad: Virgin pays their captains 95k....we pay twice as much...do you really think you will be better off with a cheap pilot?

[TowerDog]

Asking for stupid amounts of money you are not going to get makes you look stupid.

Sad to say the recent hard times do not seem to have induced the slightest bit of reality into the AA pilots.

This is so typical of the self important pilot "we are the world" mentality.


Negotiating ploy or not, publically asking for that kind of cash is just making you look dunb or stupid, take your pick.


Would you prefer to fight back, or just take it up the arse trying not to look stupid?

Take your pick..:yuk:

What is your problem with AA pilots Mr. 20driver?
Did AA turn you down for a job? :confused:

[junior_man]

Actually AA more than tripled in size since the end of deregulation. AA never even flew international routes prior to deregulation.

Slot? Please do not be so ignorant. Domestic US only 4 airports are slot controlled. Perhaps the international stuff on some routes yes, but the bulk of the AA flying is not slot controlled.

And Southwest makes money paying these kinds of wages.

[StbdD]

Excellent website for the rest of the story:

http://www.apanegotiations.com/

[20driver]

Junior Man - Edited slot to gate - and try getting one at any major North American airport. They are all locked up.

Nothing against AA pilots, one fixes my plane and I ski with a few every year.

I find it sad to see lots of very hard working airline employees getting screwed over. My IR examiner had to go back to work at the FAA after having his USAIR pension stolen. But so have many others in this economy. Piloting a plane is simply not the leveraged position it once was. Nothing to do with the pilots as much as the airline industry. It, like so many others has changed, and it will never be what it was.

The pilot unions have had their heads in the sand for years. They knew the pensions were grossly underfunded but did nothing about it. Asking for 50% increases is more of the same old same old.

I wish the AA pilots good luck, starting with that position they are going to need it.


20driver

[junior_man]

Actually most of the pension underfunding was due to the dramatic fall in the stock market post 9/11 and then the subsequent lowering of interest rates to keep the economy moving. So the value of the assets suddenly became less and the amount needed to be in the account became substantially more due to the low interest rates.

Gates? Most of the LCC and other new entrant carriers seem to have little problems getting them. They have also been awarded slots at slot controlled airport as well.

Maybe piloting a plane is going to be increasing in value, at least if pilots will start to realize that it is at least worth what it was in 1992.

[sevenstrokeroll]

Pension plans were not grossly underfunded...but they were underfunded...indeed I would have settled for 75 percent of my promised pension instead of 25 percent as the PBGC will cover.

Slots were done away with in the domestic US market by act of congress around the year 2000...that is why so many airports are overscheduled and have such huge delays...no corresponding increase in infrastructure...GIVE ME THE CAB any day.

Junior man is quite right...Southwest is now the best paying airline in the US...they make a profit due to fuel hedging.

for all those who say pilots have to be realistic about pay...how come airline management pay and perks has gone up while pilot pay has gone down? Doesn't management have to be realistic...its all about negotiations!

1992 pay, compensated for 15 years of buying power would be just fine.

[411A]

With the possible exceptions of UAL and DAL, managements pay has gone up because they have been able to keep the airline actually going in the face of a recession, high oil prices, and without their efforts, many pilots today, whom are employeed, would have long been out of a job.
Take AA for example.
Dispite massive losses over the last few years, they are now making a small profit.
Perhaps it would have been best for the senior management to have simply sold off the unprifitable routes that AA had, and concentrated on just a few...and promptly tossed out on the street the malcontents who now seemingly want to push AA back into the red, once again.
For AA to remain competative, costs must be contained, and cash stored up for both fleet renewal and future downturns in the economy...to do otherwise is extremely foolish, from a sound business perspective.
Most line pilots today have long forgotten economics 101 (provided they even understood it in the first place) and generally find great difficulty in balancing their own checkbooks, let alone how to tell management about financial matters with the company.
In short, the AA pilots can go pound sand, and I fully expect AA management to tell them likewise.

In fact, I would invite the AA pilots to go promptly on strike, and see their airline go just as promptly belly up...for it would serve them right for being such fools in the first place.
The Sky Gods at AA deserve nothing less.

[taildrag]

Both United and American Airlines have elected more agressive union leaders, in hopes of regaining what they had. I hope for them it works, but I fear the industry has permanently changed.
It's extremely vexing to see management paying themselves outrageous raises and stiffing the workers. They seem impossible to embarass.
The opener, as reported by the press with the usual exaggerated comments, reminds one of the opener from the late, lamented Pan Am a few decades ago. Pilots were ticked at having their cars vandalized at the JFK car park, so demanded the company buy each captain a car for his commute.
"Pan Am Pilots Demand Company Cars!" was the headline in the tabloids.
I hope the American pilots have better luck than the Pan Am folks!
The old saw, "What's a pilot worth? --Whatever he can negotiate!" seems less and less of a joke,nowadays.

[sevenstrokeroll]

It is what you negotiate, not what you deserve.

Regarding company cars...I heard that BA pilots get picked up in a limo from home. Does anyone know if this is true?


AND GUYS, don't let THEM use the 90 bucks/bl oil price stop you...the oil companies don't cut prices.

[411A]

Regarding company cars...I heard that BA pilots get picked up in a limo from home. Does anyone know if this is true?


Dunno about BA, but I've been picked by limo for many years...doesn't everybody?:rolleyes:

No? What a shame...:E

[bubbers44]

AA pilots deserve a significant raise after that 23.5% cut in 03. The big bonuses in stock to the executives have shown they can afford to compensate them for their sacrifices. Arpey needs to fix this before he forces them to shut the place down to get their fair share. Management gave the employees a big slap in the face with the bonuses and they must do something before angry employees retaliate, with every right to.

[Check Airman]

I see it as a fundamental lack of good leadership. I can't say to my employees, "You do the work and I take all the profit." It's neither ethical nor moral. I'm pretty sure the executives saw it coming though. You can't be increasing your own wages and cutting everyone else's and expect folks to sit back and say "ok, fine with me." If that's the way management sees it, they can go and fly all 700+ planes themselves (after getting the appropriate ratings and certificates of course).

[Raas767]

Most of you guys are missing the point.
Pilots in the U.S have hit rock bottom. Since 911 our inflation adjusted wages and work rules are about what they were in the 1980's.
Trust me. We will get our money. You never get what you deserve, you get what you can negotiate! We WILL shut this baby down and we WILL get our raise! It is a mathematical certainty. Just wait and see what 10,000 pissed of pilots can accomplish on the picket line.
It's not a matter of IF but When...This is war!

[Raas767]

Oh. and buy the way. I don't give a flying @!#%^$ what the market will bear! If they can make money at 90 dollar oil they can dam well afford to pay us a decent wage!

[Raas767]

Fellow Pilots,

The article below is an excerpt from “What Were They Thinking? Unconventional Wisdom about Management” by Jeffrey Pfeffer (Harvard Business School Press, 2007) that appeared in Sunday’s Dallas Morning News. Dr. Pfeffer is a professor of organizational behavior at the Stanford Graduate School of Business and a world-renowned management, leadership and human resources scholar. Dr. Pfeffer’s article explains that though unions are often maligned, research shows that they can make companies highly profitable and competitive.

Fraternally,

Captain Lloyd Hill, President



Common Wisdom about Unions Dispelled in Data

If there's one word that never fails to raise the blood pressure of my friends in business, that word is unions. Even presumably progressive thinkers and executives in countries with a strong labor tradition see unions as anachronisms in the modern world.

Like much conventional wisdom, however, the prevailing views about unions are often inaccurate or incomplete.

Wages up, profit up

Consider the effect of unions on wages. Yes, there is evidence that unions raise wages. But higher wages do not automatically translate into lower profits or diminished competitiveness.

How can wages go up without profit going down? First, higher wages attract more skilled employees. Unionized firms, generally offering higher wages and more attractive working conditions, pull in more skilled and educated people. Such employees accomplish more per unit of time they work and thus are more productive.

Second, higher wages decrease turnover. Multiple studies in both unionized and nonunion settings demonstrate the negative relationship between relative wages and quit rates. Turnover is expensive, so curbing turnover produces benefits for the company.

Third, higher wages, just like higher prices for anything, encourage companies to economize on the use of labor. In the case of employees, that means investing in equipment and training, and ensuring that work methods are as efficient as possible so that labor hours don't get wasted. Studies in a number of industries demonstrate that unionized workforces are actually more productive than their nonunion counterparts.

Unions not only affect wages, but they also affect the distribution of earnings. Unions have an egalitarian ethos - necessary to effectively organize for collective action - and generally strive for a more equal wage structure. There is a lot of discussion about the "high road" competitive strategy in which industrialized countries stop trying to compete on the basis of labor costs - a battle they can never win - but instead compete on innovation, productivity and brainpower. In this effort, the evidence suggests that the implementation of high-performance work practices is useful.

Contrary to what many believe, having a unionized workforce is not antithetical to high-commitment or high-performance work practices - things such as investment in training, working in self-managed teams, longer-term time horizons for the employment relationship (read: more job security), information sharing and so forth. Rather, the empirical evidence suggests that unionization is positively associated with the implementation of such practices.

Furthermore, research suggests that many high-commitment work arrangements are relatively fragile. That's because the typical response to economic stress is to abandon strategies that entail investing in people or social capital. Ironically, unionization may lead to higher persistence of high-commitment work arrangements because unions act as a countervailing force to short-term pressures to abandon such arrangements.

It is perhaps in medicine where the positive effects of unionization can be most clearly seen. Studies summarized by a report from the Institute of Medicine show that lowering the nurse-patient ratio - a short-term cost-cutting tactic embraced by many hospital administrators and political figures but vigorously opposed by nurses' unions - is associated with higher rates of infection, pneumonia, cardiac arrest and death.

The authors concluded that it was probably the increased power the unionization provided to nurses as well as the increased level of joint decision-making that led to the better patient care results. That same study found that much of the gain disappears when union-management relations are adversarial.

Success stories

Some of the most successful private-sector organizations are unionized. Southwest Airlines, the only carrier to have been profitable each of the last 34 years, is the most unionized of all U.S. airlines at 82 percent of employees. UPS is unionized. So it is possible to be economically successful and have labor organizations.

Consider Cingular Wireless (now AT&T), which remained neutral while 18,000 employees joined the Communication Workers of America. At the same time, the company achieved the best financial results in its history, and Lew Walker, vice president of human resources, believes there is a connection between the two.

That's because the company got "engaged employees who are focused on customer service and building the Cingular network rather than nursing grudges against management."

[Raas767]

It's time for all of us to stick together. It's AA now. Tomorrow it's UA, NW, DL. Who knows? Maybe even EK!

[777Contrail]

I firmly believe that T&C was taken from pilots over the last decade, but even as far back as 30 years ago.

And pilots let it be taken.

If they want it back, they will have to take it back.

May the force be with AA!!:ok:

[Hotel Mode]

Regarding company cars...I heard that BA pilots get picked up in a limo from home. Does anyone know if this is true?

Er no, utter rubbish.

[jetjackel]

"time to stick together"?? Don't forget to include the veterans who allowed the "B" schale to take place. Stick together.....you guys kill me.

[Raas767]

B scale was a catastrophe for our profession. Fortunately all of the people that engineered it are dead and buried. Only about 700 "A" scalers remain at AA. That's about 9500 guys that had to live through some kind of B scale in the beginning of their careers. Everyone knows the damage it did. Times have changed.

[411A]

Times have changed.

Oh, yes indeed they have, RAAS767, but not for the better, even the guys at AA must realise this..then again perhaps the 'less than bright' at AA never will.

Shut down AA will you?
Welcome to try, but blood out of a turnip is not all that possible, in today's competative airline world.

You will find out...the company will give up more salary..yes, but not anywhere near what the APA malcontents might hope for...lottsa luck, Bubba...ROFL:p:p

[RRAAMJET]

I took a stiff drink and turned the 411-filter off...

and believe it or not, a great deal of what he says is absolutely correct. And I work for AA....

However: what he (and our 'management') have totally failed to take into account this time is that the outrage is not primarily caused by wage rates, but more by the totally unacceptable unethical behaviour of certain individuals high-up in HQ who were warned and should have known better.
As Von Klauswitz preached: the generals [I]never, ever[I]eat before the troops.

Believe me 411, this time at least 50% of the guys I'm flying with intend to burn the place down (and have other careers) if there are not serious changes. It's no idle talk...they are saying that they are going to make a statement for all American workers, if need be, and force Congress to accept some of the 3 recent Democratic bills to control executive compensation in the US. Even if ordered back by Dubya, a lot of the guys are saying 'no way...not this time....this is it, we're at the defining moment'. The economic damage in n. Texas would be unbelievable, I know first hand from an exec. that a VP has said 'if they want to Eastern Airlines it, so be it'.

Then there's the FA's and the ground workers, shortly after...

So be it....

[teedub]

RRAMJET
Nice post....as a former recipient of APA's group power (enjoying that early retirement) I think you are spot on about the war to come but I hope after some blood and battle that cooler heads prevail and some sort of % increase sets the future.
Trust you and your APA members use the same "techniques" to get what we deserve (yes I am still considering coming back).
Lets see what the Dems do....wonder how much AMR is lining Hillary's pockets right now (or is it Rudy's) hmmm!....do you really think its gonna go to the White House before next november...
Hats at home is just the begining!!
Looking fwd to Travelling With American soon
teedub

[bubbers44]

The" so be it" management mentality has failed in the past and will in the future. AA management has been going down hill for quite some time. The yes men chief pilots now are alienated from the pilots in most cases and are not trusted. I have worked under those conditions and know how it changes your way of protecting your future by knowing you are on your own in the aircraft so you have to protect yourself, nobody else will. Efficiency takes second place to covering your 6. Things need to change at AA. A lot of bad things are happening now, mostly from the top.

[Philly Pilot]

This is what the actual APA Pay proposal is:-

"The pay proposal presented by APA to AMR management is based on the concept of pay restoration. The initial pay rate adjustments incorporated in the proposal are
designed to restore the purchasing power pilots had in 1992, adjusted for inflation.

American Airlines pilot pay rates are slightly below the pay rates that were in effect in 1992. In the period 1992 through year-to-date 2007, the pilots of American
Airlines lost more than a third of their purchasing power as the cost of goods and services has increased in the same time frame.

During the same period, the top five “named executive officers” at AMR—those executives whose compensation is required to be reported in regulatory filings— have seen their income increase 469 percent, while the AMR CEO’s has seen an increase of 723 percent. The CEO’s purchasing power is now 560 percent of what it was in 1992.

While professional-level incomes generally increased between 1992 and 2007— defraying the effects of inflation—American Airlines pilot income has remained flat.
Moreover, our current pilot income trails pilot income at key competitors, typically by double-digit margins.

A more rewarding pilot contract is well within the means of the corporation. The company just reported its sixth consecutive profitable quarter in spite of a 277 percent increase in fuel costs since 1999. AMR's cash balance is at a historically high level and the company has paid down nearly $5 billion in debt over the last two years, reducing total debt by 40 percent.

Our initial pilot pay restoration proposal would increase the corporation's cost per available seat mile by less than half a cent, and would allow the company to retain a cost advantage over key competitors like Continental, Delta and USAirways.

AMR management has enjoyed massive increases in compensation and purchasing power over the last 15 years. In contrast, APA proposes a reasonable restoration to
levels of historical purchasing power in our next collective bargaining agreement."

[bubbers44]

Philly Pilot states it like it is. If you take away 23.5 of your wages in 03 and give it back in 08 you still have a lower wage without figuring inflation. The number is smaller so you are still below the 03 pay. I hate to see a strike to settle this but it looks like it is going to happen unless management gets realistic about how unfair the last year has been in compensation of management and employees after the big pay cuts. SHUT THEM DOWN! Maybe that will get their attention for a while.

[CAT II]

No one more than I would like to see them win this issue. They make a very valid point re the state of the industry over the past decade. However, AA might be making a profit but the fact is that fuel prices are something even the traveling public can understand. They see it every day at the pumps and on the news. Hence the airlines have passed on most, all, or in some cases more than, the actual cost to the traveling public in "fuel surcharges" on the airfaires. I doubt very much this same understanding public would swallow a "Pilot Pay Raise" surcharge on airfares; especially after the airline makes thier pay increase public in media. The cost per seat mile is a valid argument and in a perfect world should be sufficient grounds to justify the raise. I imagine the seat mile cost savings gained with the concessions were similar and thus justified to ensure survival. Should works both ways.

We suffer from the misguided stereotyping that all pilots are financially solvent and fly for the love of it. As for the traveling public, they will waste no time is pointing out just where we can find sympathy in the dictionary.

[Philly Pilot]

Cat II
"....the actual cost to the traveling public in "fuel surcharges" on the airfaires. I doubt very much this same understanding public would swallow a "Pilot Pay Raise" surcharge on airfares....."

Unfortunately, there is a 'cost' to the airlines for having 'professionally flown aircraft' just like there is a cost for oil, tires, catering etc.
The 'travelling public' doesn't have a say in management compensation or their pension/bonusses/golden parachutes either. They want everything for nothing. Time to wean them off this.

Just as you (hopefully) won't go to the cheapest heart surgeon, you'll want the best. They may not come cheap, they will want the best pay for their skills. Its time pilots woke up to this and stopped 'paying' for the fun of flying and got down to business.

[CAT II]

Beautifully said, couldn't agree more. Maybe my cynicism is born of a 28 year career flying for several North American carriers in addition to Asian and Middle East carriers just trying to stay one step ahead of the repo man. Let's hope hope this is the beginning...

[ReallyAnnoyed]

Good luck to all you AA guys in the negotiations. It is time to stop the deteroriation of T&Cs.

When you read the ever whinging comments of some of the posters and nay-sayers in this thread, bear in mind that they have not comprehended basic management psychology and are oblivious to the utter rubbish spin spouted from management. These guys think themselves seasoned, but fail to see that they have adopted the views management have been trying to sell as the truth, but these arguments are JUST bollocks used to make workers accept decisions made by management. It is painful to see these guys try to bring down their fellow colleagues and appreciate the benevolent wisdom of managers who DESERVE outrageous renumeration, because without them the company would be in dire straits. Utter rubbish! A manager's job is to try to squeeze all costs as much as he can and will use most means to get there - including psychology and intimidation while lining his own pocket. Do not be fooled by these arguments. It is spin. As for the nay-sayers, jealousy and envy are main constituents of their motivation.

Go for it, guys. YOU deserve it!

[411A]

It would appear that some shareholders are not especially satisfied...

From Airwise
November 30, 2007
FL Group, an Icelandic private equity group, said on Friday that it had cut its stake in American Airlines parent AMR to 1.1 percent from 9.1 percent because management of the carrier had done too little to boost its value.

Couldn't have anything to due with the present salary negotiations....naw, couldn't be:ugh::E

[RRAAMJET]

You're right 411a - it's nothing to do with salary negotiations...

They wanted AAdvantage sold, not Eagle. Only minor run-up in stock price this week due to AE announcement...FL are fed up waiting.

BTW we're not on salary. You should know that.:rolleyes:

[ARINC]

Maybe BA will buy them.....and send them all to work on Project Lauren :E

[KC135777]

AA pilot's wages, right now, are slightly worse than 1992 wages. The 51% increase represents 1992 wages, CPI adjusted (@ 2.68%/year).

In 2003, 23% pay cut turned out to be 35-40%+ paycut, as NB captains & 777 FOs displaced to 767/S80 FOs, etc... vacation & sick days were converted to a ****ty 'hours' system, resulting in much loss too.

Since 1992, top management's compensation packages have skyrocketed 700+%.

B-Scale? AA pilots were NOT the first B-Scale in the US. I believe it was Piedmont, or possibly another carrier.

The CEO, Gerard Ourpay (Arpey), trumpeted "Pull Together-Win Together"....sorry, he failed to "walk the walk", and enriched himself and others to the tune of a 1/4 billion dollars in bonuses over the last 1 1/2 years.

AA pilots are pissed, and want full restoration of purchasing power. Flying 100 hours/month to "make more money" will NOT be the solution.

If they try piecing the company apart, via sales...or manipulate the AE sale next year to the "financial" boys/hedge funds, etc... and turnaround and AE buys AA, or whatever union busting/concessionary pushing tactic they want to try--AA pilots will walk, period.

APA isn't a company union anymore. Our leadership is in place.

411A, "go pound sand"? I don't think so.

KC

[sevenstrokeroll]

time to make the job worthwhile again...and the only way to do that is to say: this is a job...not a love affair.

[Raas767]

A wise man once said: " You don't get what you deserve you get what you can negotiate".
Or, in this case, extract by force.
AA management is going to pull out all the stops on this one with massive disinformation campaigns and divide and conquer strategies etc, etc. The ATA knows that if AA can't win this fight then the union busting bankruptcy orgy at UA, DL and NW was for nothing because as APA goes so will ALPA.
This will definitely go to a strike and the White House will definitely order us back to work regardless who is president. Parking 650 AA airplanes will simply be too disruptive on the economy. There are other ways to fight, however. One way would be targeted chaos. Shut down various pieces of the airline on different days. Painful for AA but not disruptive enough for government intervention.
In any case. We will win this fight. Guaranteed!

[free at last]

It is time that the GREEDY management in this industry, and their Union, Employee busting tactics of the past 20 years get laid to rest. :)

[sevenstrokeroll]

the presidential back to work order is an obvious tool of management...and I hope that APA is smart enough to have a bright attorney to challenge this...why?

do you remember how american provided a brand new 737 NG in retro livery to haul president elect bush to IAD ?

hmmm

time to challenge the status quo...what would THEY do if no one came back to work? would president bush have as much luck with APA as he did with illegal aliens?

also, have APA declare bankruptcy seconds after a strike is called...no more wages, no more dues!

[PantLoad]

I remember saying (and everybody thought I was crazy) that the top execs' pay (and total compensation packages) should be made public. If it's a public corporation, this information is available to a shareholder (or should be, legally).

Then, pay the employees a percentage of the top guy's total compensation package. For example, (where I used to work), for several years in a row, the top guy...it was 'estimated'... was averaging $35M per year in total compensation. So, as a NB captain with 25 years service...pay me one percent of that...yes, just one percent.

Forget sick leave, vacation, pension...forget everything...just pay me the cash...1% of what the top guy makes. If I'm sick and can't fly, too bad, I don't get paid. No vacation pay, etc. Just pay me my 1% of his pay for the hours I'm supposed to fly.

I've always found it amazing how a company is 'going bankrupt' and the employees give, give, give to bail it out. All the while, the execs are not only getting pay raises, but bonuses as well, as reward for convincing the unions to give, give, give.

What happened with pensions in the U.S. is nothing short of criminal. But, it occurred, the execs profited by it, and that's the end of it. Now, the taxpayers are sending checks to these guys, since PBGC is in such bad shape. This, I feel, is wrong, too. But, once one or two companies figured out how to work the system (i.e. pay off politicians), everyone (many companies) stuck their hands in the cookie jar (bankrupted the company, raided pension funds, etc.) and left the taxpayers holding the empty bag.


PantLoad