View Full Version : American Airlines to cut 7,000 jobs

3rd Jul 2008, 11:16
American Airlines, the US airline which is close to seeking a merger with British Airways, has told staff thta it will cut 7,000 jobs by the end of the year, as it grounds aircraft in a bid to mitigate the impact of soaring fuel prices.
American said in a regulatory filing that it expected to record a second-quarter charge of up to $1.3 billion to account for the job reductions. It also plans to write down the value of the MD-80 and Embraer 135 regional jets that it is retiring as it eliminates flights, according to a report in The New York Times.

American Airlines to cut 7,000 jobs - Times Online (http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4260034.ece)

BA to seek clearance for AA and Iberia merger

British Airways is said to be close to seeking clearance from competition authorities for a three-way operational merger with American Airlines (AA) and Iberia.

The deal would allow the companies to combine nearly all aspects of their operations, including sales, purchasing and marketing, leading to lower costs and greater economies of scale. Legal sources in the United States said that a submission to the US Department of Transport was expected as soon as next week.

BA to seek clearance for AA and Iberia merger - Times Online (http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4258600.ece)

3rd Jul 2008, 11:48
Ouch. Just got to hope none of them have the right to work here in the EU! Could make it even worse over here now.

Now really isn't the time to be spending 80,000 on flight training :-(

3rd Jul 2008, 11:56
Not a merger in the usual sense, but a marketing cooperation agreement, etc.
However, the 7000 jobs will go, and many older types of aircraft will be retired from the AA fleet.

As I own some AA stock, I have also written to the company suggesting that they cut costs further by outsourcing CC such as BA is proposing.

The AA pilots have already had their salary sliced down to what it should be, so no problem there, however their (the pilots) proposed salary increase of 53% should, of course, be rejected out of hand by the company...and most likely will.

The present fuel price shock is an excellent opportunity for all airlines to trim the fat from their business, including retiring older aircraft from their fleets....which is occuring on an accelerated scale, now.

As for BA, this is an excellent opportunity to get a larger marketing foothold in the American market.

3rd Jul 2008, 14:26
My question is..why do so many US based airlines have so many old, crappy and fuel sucking aircraft in thier fleets..they never seem to update, but seem lost in the 70/80s....or am I wrong?

3rd Jul 2008, 15:27
With some exceptions...yes you are wrong.

3rd Jul 2008, 15:31
Dirt cheap fuel and nil environmental policy has not required them (companies) to update their fleets. To be fair the americans have been using twins across the pond for decades long before the EC released its value.

3rd Jul 2008, 17:04
Short answer? Deregulation Act of 1978.

Real answer? Actually it is more of a case of retaining older aircraft to maintain competitive market share.

Until fuel prices went north of $100/barrel it was more economical to operate paid-for MD80's than purchase expensive 737-800's (FAA wire bundle debacles not-withstanding).

Now with fuel so dear, DC9 numbers in the US are dropping like a Beech Bonanza full of Doctors. At American we operate 325 MD80's with 45 slated for early retirement. Northwest has 92 even older DC9's that will see the scrap heap soon. United announced retirement of their entire 737-300/400 fleet last week (94 aircraft) and will consequently furlough 950 flight crew.

Myself, I am facing my second furlough from American in five years. When my former airline was "acquired", my seniority date was "adjusted" by 12 years and post 9/11 I went from a MD80 command position to the street in a year and one half.

Here we go again!!

Dave :sad:

3rd Jul 2008, 20:59
Additionally, it may be easy to update a fleet of 100-200 aircraft; a fleet of over 700 airplanes however, is much more difficult to 're-new'.

3rd Jul 2008, 21:12
With all due respect 411a, any airline that outsources its cabin crew is on to an immediate loser. The cabin crew are the saving grace of almost any carrier - quite often the only company employees the pax will come across. I work for BA and trust me, the outsourcing plan is causing a huge back lash already and no firm plans have yet been shared. It will almost certainly fail - well with BA at least. I understand AA are losing $3.3m a day, so I guess they need to be a lot more draconian in their approach, but NOT with their crew. :ouch:

3rd Jul 2008, 21:20
Have you seen AA's cabin crew? Many "Angry grandmothers". I'm sure BA can teach them a thing or two about inflight service.

3rd Jul 2008, 21:47
ForwardGalley is sadly mistaken.
New young (pretty) faces are what count in todays competative CC world, and neither BA nor AA have the edge in this department. One need only look at SQ, MAS, CX etc, to see the difference.

The only thing one can say about the more senior AA and BA CC is....they are expendable, and should be shown the exit door at the first available opportunity.

These older/higher paid CC are not that hard to miss, and cabin service will NOT suffer one little bit, when eager twenty-somethings are hired/trained in their place.

Out with the old, in with the new.

And no, this does not apply to pilots, as these folks don't sling the hash/drinks to the punters.

CC, dime a dozen, and should be paid accordingly....which ain't much.

3rd Jul 2008, 21:56
Good to see that 411a is still spouting tosh like an old broken record. Or is that an old broken (bitter & twisted?) L1011 flight deck person. See so many of those Tristars everywhere these days don't we?

Tired old views designed to have a pop at an entire worldwide industry in turmoil. Still 411a is probably revelling in his retirement whilst feebly attempting to stay in touch.

Best advice old chap, stick to a forum where someone might give a flying **** about your rather strange views. A management one might be a good place to start.

3rd Jul 2008, 23:00
As I own some AA stock, I have also written to the company suggesting that they cut costs further by outsourcing CC such as BA is proposing.

411A: I am am sure they are actioning your every proposal. Indeed I am sure they monitor your every post on PPRuNe just in case they miss any words of your wisdom.

Just amazing.

4th Jul 2008, 01:00
What kind of idiot buys airline stock, much less US airline stock? We obviously should listen carefully to 411A. Could you do my investing please?:rolleyes:

4th Jul 2008, 01:03
Sadly 411 is correct.

You see, the job is no longer what we want it to be. Flying first rate planes, getting our work done in about 10 days...lots of days off, fun over nights with beautiful flight attendants.

It is now, working at least 20 days. Older planes with outsourced mx. Older flight attendants (some are still good looking). Crummy hotels. Half the pay we wanted and the pax hate us. Pensions zapped.

And the glory of the wild blue has been tarnished too.

To dodah dave in wisconsin...I am sorry that AA screwed over TWA pilots. Believe me, I've seen stuff like that happen. You are a real airline pilot! Those who speak of how stuff like that never happens, don't know a trim knob from a Toga switch.

SO, the airlines that **** their crews over will survive. And someday, the pilots will be able to get their stuff together and make something decent again.

4th Jul 2008, 02:09
One need only look at SQ, MAS, CX etc, to see the difference

Yeah it kind of helps when at least one of those airlines work under labour laws which would not exist in any 'real' democracy.

Imagine if a Western airline fired a flight attendant because she fell pregnant.

As for the job cuts I'd be interested to see how much the executives make in bonuses out of this too. I know there are a few issues along those lines at United with pilot furlough.

4th Jul 2008, 03:25
What kind of idiot buys airline stock, much less US airline stock?

Google Bernard Baruch, Glacier1900, and you might learn something.

AA is in a rather strong cash position, and with its recent proposed marketing agreement with BA, should do quite well.
Sir Richard will not be pleased, however.

4th Jul 2008, 03:40
Once again 411a has hit it on the head. This time re stewardess. He is in good company. None other than the bearded one has repeatedly told his CC staff that they are cheap to replace and it is a "glam" job for a young thing to do for a few years and move on. And he is not going to pay his CC BA wages.

You might not like it but it is true. Have you ever seen AA advertise an "AA girl" on a billboard?


4th Jul 2008, 05:13
Remember when air transport was a luxury? Reserved for the privileged jet set? Prosperous passengers flying around the world in First Class being attended to by nubile Stewardesses.

Where are they now?

Those lucrative customers are instead flying point to point in fractional business jets having former airline Captains hand carry their bags.

Yes, deregulation has triumphed by turning airline travel into yet another public commodity. Why put up with the frustration of queuing for yet another TSA probe (don't forget your plastic bags and remember to remove your shoes!), sorting oneself through a US hub airport, then missing your connection because of ATC delays and possibly losing your $15 bag?

Today, high yield passengers are not swayed by comely young flight attendants serving chateaubriand. Eliminating the hassles and discomfort of flying with the masses is what appeals to the jet set nowadays. Airlines can't supply that and yields suffer because of it.

How does Southwest do so well? They don't suffer under the misconception that they provide a luxury product, they know air travel is a commodity and they provide a competitive and consistent product.

The rest of us are still figuring that part out.


4th Jul 2008, 05:25
Bernard Mannes Baruch heh? Died in 1965? Before deregulation? Huh, thank you.
Hey, I just got a couple hot stock tips for you: Microsoft and something called "the internet." I think it will be huge. I would give you more hot tips but I outsourced my guy. Now he shows up late, lips me off and sh**s on the carpet.

4th Jul 2008, 08:44
quote from 411a
"AA is in a rather strong cash position"

Would that be the same AA that is losing $3.3m a day?

4th Jul 2008, 19:45
How does AA compare to the other US carriers? I understood United and Continental to be in much worse shape, are they also losing millions of $ per day?

If they are all in this position then there will be lots of bankrupt carriers soon, will the US Government allow this to happen?

5th Jul 2008, 01:29
A little research on your part, Dezso, and you might find the answer.
I doesn't make any difference what happens today, it's what a company has in reserve that makes a difference.

5th Jul 2008, 01:49
Dezso - UAL is in much worse shape than AA.

5th Jul 2008, 04:46

Dear Valued Employee,

The Flight Department is in trouble.

It's business model doesn't work with the current price of fuel and the existing level of capacity in the marketplace.
We need to make changes in response.

While there have been several successful fare increases, those
increases haven't been sufficient to cover the rising cost of fuel.
As fares increase, fewer customers will fly.
As fewer customers fly, we will need to reduce our capacity to match the reduced demand. As we reduce our capacity,
we will need fewer employees to operate the airline.

Although these changes will be painful, we must adapt to the reality of today's market to successfully navigate these difficult times.

Therefore, a program to phase out the more senior pilots by
the end of the current fiscal year, via retirement, will be placed into effect immediately. ;

Under this plan, senior pilots will be asked to take early
retirement, thus permitting the retention of the new-hires who represent our future. This program will be known as
SLAP (Sever Late-Aged Pilots). Pilots who are SLAPPED will be given the opportunity to look for jobs outside the company. SLAPPED Pilots can request a review of their employment records
before actual retirement takes place. This review phase of the program is called SCREW. (Survey of Capabilities of Retired Early Workers). All pilots who have been SLAPPED and SCREWED may file an appeal with upper management. This appeal is called SHAFT (Study by Higher Authority Following Termination).
Under the terms of the new policy, a pilot may be SLAPPED
once, SCREWED twice, but may be SHAFTED as many times as the company deems appropriate.

If a pilot follows the above procedure, he/she will be entitled to HERPES (Half Earnings for Retired Personnel's Early Severance) or
CLAP (Combined Lump sum Assistance Payment).
As HERPES and CLAP are considered benefit plans, any pilot who has received HERPES or CLAP will no longer be SLAPPED or SCREWED by the company.

Management wishes to assure the younger pilots who remain on
board that the company will continue its policy of training pilots through our Special High Intensity Training (SH1T). We take pride in the amount of SH1T our pilots receive. We have given our pilots more SH1T than any company in this area and we are very proud of our record. If any pilot feels they do not receive enough SH1T on the job, see your Chief Pilot. Your Chief Pilot is specially trained to make sure you receive all the SH1T you can handle.

And, once again, we sincerely appreciate all your years of service with us.

5th Jul 2008, 05:13
Sorry,no disrespect,but 411 is correct.Very few FA's do the job the way it was envisioned way back when(1950's transatlantic boom-the full deal,service with a smile).The Singapore girl is a shining exception.WASPS make lousy flt attendants anyways.If I had to run an airline in the troubles ahead Id want all my cabin crew from SE Asia,my engineers ex-Lufthansa and my pilots ex-Qantas(no crashes:cool:).

5th Jul 2008, 06:42
Always thought that "valued employee" was "our most valued asset". We used to greet each other every morning thus. "G'morning valuable asset" ... :}

No joke either. Was part of TQM (Total Quality Management aka Time to Quit Moaning)

Spent millions on that...

5th Jul 2008, 11:38

Big oil is in the driver's seat until the "doubleya duo" (oil ceo's) run into white house term limits. Greenland is hotter and, if you ask me, this whole oil price scam is sanctioned from the elite since they don't want their waterfront property to go under...... but that's not likely to avoid anything as some climatologists point out that there's a thirty year heatsink delay.....

I read the aviation carbon footprint is something like three percent of the total worldwide level. So Aeromachines are not appreciably damaging the enviroment: cars are.

Airlines should become tax exempt imho, or else it's going to start raining aluminum the way things are going. You can't keep pushing crews and skimping on maintenance and expect no impact....

Aviation, Trucking, Banking.... degregulation is another word for slow death of the core structure of business. Sounds great at first to get rid of all those pesky 1929 bank rules until off-book loan skeletons start buring the whole economy alive.

Sounds great at first to get rid of all that nasty airline regulation-era red tape until you find yourself doing 80mph to your airline's bank so you can cash your puny rubber paycheck before all the other employees figure out the place is going under!

Don't ask how I know. :uhoh:

6th Jul 2008, 20:29
Alot of the problems in the U.S. Airlines stem from all the Chapter 11 B.S. that transpired during the past 20 years.
If the weaker carriers had gone under, like they should of , then the remaining carriers could of raised fares and had the money to purchase some new equipment.

6th Jul 2008, 20:42
411 ..AMR has lost 90% in a little over 12 months, 50% in a little over 2 weeks . Its a good buy at about 2$ IMHO.


6th Jul 2008, 22:48
Its a good buy at about 2$ IMHO.

I would agree, thirtysomething, and funds are set aside for just that purpose.

Time to buy is when there is blood in the streets.

7th Jul 2008, 20:46
It's a good bet that AA will be in BK in the winter sometime, so if you want to lose money in airline stock, buy AA.

With regards to the health of the other carriers, the difference is between sick, sicker, and deathwatch. I'd put AA in the "sicker" category and UAL in "deathwatch."

My guess is that the US Congress will sell out (imagine that?) to foreigners and allow majority ownership in US airlines. In any case, there will likely be a deal between BA and AA in a BK that would allow them to have the labor courts eviscerate what's left of employee contracts prior to a buyout deal.

And 411a is right for a change (and agrees with Bob Crandall, former CEO of AA) . . . . that service aboard US carriers is unacceptable. Management has most to do with that, but there is a very high percentage of flight attendants who are way past their prime in both appearance and attitude.