AMR Corp files bankruptcy in New York

[pieceofcake]

Well done... What a sorry state.

[119.4]

AMR CorpConfirms earlier reports, AMR and American Airlines file for Chapter 11 reorganization
- AMR Corporation ("the Company"), the parent company of American Airlines, Inc. ("American") and AMR Eagle Holding Corporation ("American Eagle"), announced that in order to achieve a cost and debt structure that is industry competitive and thereby assure its long-term viability and ability to continue delivering a world-class travel experience for its customers, the Company and certain of its U.S.-based subsidiaries (including American and American Eagle), today filed voluntary petitions for Chapter 11 reorganization in the U.S. Bankruptcy Court for the Southern District of New York.
- AMR's Board of Directors determined that a Chapter 11 reorganization is in the best interest of the Company and its stakeholders. Just as with the Company's major airline competitors in recent years, the Chapter 11 process enables American Airlines and American Eagle to continue conducting normal business operations while they restructure their debt, costs and other obligations.
- American Airlines and American Eagle are operating normal flight schedules today, and their reservations, customer service, AAdvantageprogram, Admirals Clubs and all other operations are conducting business as usual. Likewise, throughout the Chapter 11 process, American and American Eagle expect to continue to:

Provide safe and reliable service;
Fly normal schedules;
Honor tickets and reservations, and make exchanges and refunds as usual;
Fully maintain AAdvantage frequent flyer and other customer service programs, and ensure all AAdvantage miles and elites status earned by members remain secure and intact;
Provide Admirals Club access and similar amenities to members and eligible customers;
Remain an integral member of the oneworldalliance, of which American is a founding member, and continue its codeshare partnerships;
Provide employee wages, healthcare coverage, vacation, and other benefits, without interruption; and
Pay suppliers for goods and services received during the reorganization process.

[pieceofcake]

Pilots union must be so proud, another airline blown up by its workforce. (edited to add - posted for no other reason than this was so obviously going to end badly and its a situation mirrored across the industry).

[AlpineSkier]

ability to continue delivering a world-class travel experience for its customers

Amazing. Even when filing for bankruptcy, they can't stop spewing out the corporate crap-talk.

[pieceofcake]

@LC - why did AMR have to file for bankruptcy?

[millerscourt]

If 411A was still with us I have no doubt he would have plenty to say on the subject.

[captjns]

Good luck to the folks at AA who make it work... Pilots, FAs, MX., and ground staff.

To the suits!?!? Shame on all of you!:=

[Left Coaster]

Ok I thought I would let sleeping dogs lie,,,but in your case, I'll bite? Blaming all this on the pilots of AA? Let's hear it...

[HalloweenJack]

blame is being placed at the unions rather than the pilots:

The Texas-based corporation said labour rules forced it to spend $600m (£384m, 450m euros) more than other airlines on staff costs.

taken from the bbc.

[Massey1Bravo]

@pieceofcake So they can legally void all existing employment contracts and force the unions to renegotiate new contracts.

[pieceofcake]

@LC - in the broadest of terms I understand that the company wanted new contracts that altered terms and pilots wanted to get back some of the things they gave up back in earlier restructuring.

If you have a different opinion then speak up. However what seems a dumb trade to me is blowing the company up in the process. In the old days that would be see a little "dog in a manger".

The wider point is why does this keep happening to airlines? It is surely the most distrupted industry of the modern age.

[DocJacko]

I hate to say it, but this step has been overdue for a long time. All other major competitors (United, Continental, US Air) already did this in the early to mid 2000's. AA has been less competitive because of - among other things - old union-dominated labor contracts. While this filing will obviously be painful for AA's employees, it will hopefully bring the company back on track and make it able to stand up to its competitors. I just hope they cut salaries and benefits wisely and not simply across the board.
Better not fly AA today, I bet customer service will slightly lack enthusiasm...

[BobnSpike]

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....


Read more: Despite losses, American Airlines CEO's compensation climbs | News | News from Fort Wort... (http://www.star-telegram.com/2011/04/21/3019164/despite-losses-american-airlines.html#ixzz1f6SRQcwW)

[Huck]

This bears posting


Despite losses, American Airlines CEO's compensation climbs

BY ANDREA AHLES
[email protected]

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.

Last year, AMR posted a $471 million loss while other major carriers reported profits. And with rising fuel costs, the Fort Worth-based company reported a $436 million loss for the first quarter.

On its earnings call this week, Wall Street analysts questioned Arpey and other AMR executives about whether they had any original ideas and criticized their lack of focus on short-term objectives. Shares of AMR (ticker: AMR) hit a 52-week low, closing at $5.49 Thursday.

According to the proxy filing made with the Securities and Exchange Commission late Thursday, Arpey received a salary of $669,646 for 2010, unchanged from the previous year, and no cash bonus. However, most of his compensation came from $3.3 million in stock awards and $1.2 million in option awards, which were $515,000 higher in value than the stock and options given to Arpey in 2009.

He also received $94,660 in other compensation, including $56,440 for security for his family in 2010.

In describing its methods for executive compensation, the board of AMR said that Arpey's compensation "remains significantly below the median of CEOs" of comparable publicly traded companies.

AMR President Tom Horton, who was promoted in 2010 from chief financial officer, also received a substantial pay increase of 45 percent, to $3.1 million, because of stock and options.

The Star-Telegram uses the same formula to determine executive compensation as The Associated Press. Total compensation includes salary, bonuses, nonstock incentives, other benefits and the estimated value of stock and options.

The company also announced that it will hold its annual shareholder meeting May 18 in Los Angeles. This is the second year in a row that AMR has decided to not hold its annual meeting in Fort Worth after conducting the meeting at its headquarters for 15 years.

American Airlines' unions had picketed outside the meeting, protesting "corporate greed" and the stock-based bonuses awarded to AMR managers each year.

On Wednesday, the Association of Professional Flight Attendants picketed at several airports, including Dallas/Fort Worth, handing out leaflets to passengers saying AMR executives had received over $100 million in compensation and bonuses since 2005.
(Emphasis Huck's)

Union representatives were not immediately available for comment late Thursday. American has been in contract negotiations with its three unions for several years as they seek to increase wages. But the carrier's officials say American's labor costs are the highest in the industry.



Read more: Despite losses, American Airlines CEO's compensation climbs | News | News from Fort Wort... (http://www.star-telegram.com/2011/04/21/3019164/despite-losses-american-airlines.html#ixzz1f6TVXTpj)

[Huck]

Stupid pilots. If they wanted to make good money they should have gotten an MBA....

[Cyber Bob]

Guess they shouldn't have made that huge budget ad with Kevin Spacey - that's where a big chunk of the money went I reckon - not!!!

[Large fries]

They are still taking bookings on AA.com without any warning of bankruptcy, is this legal?

[Airbubba]

Stupid pilots. If they wanted to make good money they should have gotten an MBA....

Yep and standby for the customary endless whining from the unions about how much the CEO makes.

They will probably hire some hippies to set up an 'Occupy AA' camp at headquarters for the news cameras.

Not that long ago AA pilots proudly strutted around the terminal like they were Deltoids or something.

It's all part of the OGA (Once Great Airline) drill, many of us have been there and done that...:sad:

[clevlandHD]

AA has one of the oldest fleet of any majors around the world. That is failure of management, not unions. Yet management will get massive bonuses when they re-emerge from chap 11.

Tell your kids to go the MBA way!

[djwebby]

Why wouldn't it be legal; they're not going to be going out of business tomorrow are they.....

[Large fries]

If a UK company goes into administration they have to advise of that at point of sale

[Crashdriver]

I feel bad for the 1400 or whatever pilots they just hired for Eagle. It's a big shame too cause I'm sure this is like the 3rd or 4th furlough they've been through.

And if they actually get those 400+ new planes, I think I'll crap myself!

[xray one]

So AA can now operate at a serious loss in-and-out of LHR, undercutting everyone. How on any level if that fair competition?!

[Crashdriver]

^^
Welcome to the airlines :(

[HalloweenJack]

Clevland HD

would you rather the company go completely `bust` and lose everything? AA have the heaviest larbour contracts in the USA and its crippling the airline - if they cannot restructure, i hope those said same unions can afford to pay the soon to be unemployed pilots and aircrew the wages they apparantly deserve......

[aterpster]

Large fries:

They are still taking bookings on AA.com without any warning of bankruptcy, is this legal?

Anyone who books after the filing has lots of protections. But, whether before or after filing, if payment is made with a credit card (most are) you are fully protected in any case.

[pieceofcake]

@ Halloween exactly.. so why does this keep happening at airlines?

[WHBM]

Few questions. Be grateful for answers.

1. What happens to the stockholders equity ? Is it all lost ? Had they already regarded their investments as gone ?

2. What happens to all the stock and stock options granted to the execs in recent years. Is that all lost for them ? Big loss for them ?

3. What happens to their slots at Heathrow ? This is the UK, outside US bankruptcy laws. If a carrier is bankrupt do the slots go back to the pool ? If not why not ? There will be a different company coming along; who says they just Grandfather the rights ?

ability to continue delivering a world-class travel experience for its customersThat would be those lengthy sectors in the US with no catering provided, I presume. Remind me which "mainstream" world class carriers in other continents would dream of doing this ? And the attitude of the flight attendants, the highest paid and yet the worst attitude flight attendants in the world.

[jetset]

I can't imagine that the pilots contracts are the key issue here.

I suspect it's a catch all.

I would be interested to know what the implications are though.

[pieceofcake]

Chapter 11 like a debt restructure. Stock is currently -80% to 33cents per share. Stock options / holdings all bombed out like wise. slots etc will still be operatiing if they have cash flow - which one suspects they do hence why they called time now.

[The SSK]

WHBM I thought that Heathrow slots could be transferred to the 'corporate successor' of the holder, which is how American (and United) got theirs in the first place.

[STN Ramp Rat]

AMR Corp. filed for protection in New York in a surprise move given it has more than $4 billion in cash

Silly me, I always associated bankrupcy with having no money... obviously thats where I have been going wrong

[clevlandHD]

Halloween,

no, I don't want AA to go bust but I do want to see a sweep at the HQ. Bring people who can actualy run a business, not a bunch of losers who reward themselves for failure.

Note: I am surprised that the CEO did take responsability for the failure and moved on to let new blood bring new life to this airline.

[Non Zero]

here how you solve the pilots shortage in the middle-east and china!

[Hedge36]

Note: I am surprised that the CEO did take responsability for the failure and moved on to let new blood bring new life to this airline.

It's easy to step aside when you've just been handed several million in severance.

[Brockton]

RE: Stupid pilots. If they wanted to make good money they should have gotten an MBA....

Please don't saddle the world with more MBAs. we have enough problems with the lot we have now!:ugh:

[BobnSpike]

Originally Posted by clevlandHD
Note: I am surprised that the CEO did take responsability for the failure and moved on to let new blood bring new life to this airline.Steve Miller Band Take the Money and Run with Lyrics - YouTube

[willl05]

... and should be thrown out.

"American said it has about $4.1 billion in unrestricted cash and short-term investments."

American Airlines parent files for bankruptcy - The Washington Post (http://www.washingtonpost.com/local/american-airlines-parent-files-for-bankruptcy/2011/11/29/gIQAhcXr8N_story.html?hpid=z1)

[Huck]

AA have the heaviest larbour contracts in the USA and its crippling the airline

Step one: tote up the total hourly rate for a 777 crew

Step two: divide amongst the people in the back

Step three: multiply by length of flight.

People pay their pilots $20 or less to fly across the Atlantic. Don't believe the hype. American's problem is a dearth of leadership.

[pieceofcake]

20USD to fly across Atlantic - I don't believe you.

[pieceofcake]

Actually I don't even understand the rational for the maths lesson. Hourly rate/ passengers * length of flight... what has it got to do with the pilot how many people he carries?

[lomapaseo]

Better not fly AA today, I bet customer service will slightly lack enthusiasm...

How can one tell the difference?

[Airbubba]

Actually I don't even understand the rational for the maths lesson. Hourly rate/ passengers * length of flight... what has it got to do with the pilot how many people he carries?

Who knows?:confused:

Huck's airline carries no pax and 777 captains make $48 an hour more, pre-AA bankruptcy, with much better work rules:

Airline Pilot Central - American | Legacy (http://www.airlinepilotcentral.com/airlines/legacy/american.html)

Airline Pilot Central - FedEx | Cargo (http://www.airlinepilotcentral.com/airlines/cargo/fedex.html)

I think it is safe to say all AA 777 captains have at least 15 years of longevity for pay purposes.

[racedo]

Its about time EU law was changed to ban Bankrupt airlines from flying into EU from the US.

US complains all the time of unfair business practices elsewhere but it allows its airlines to walk away from their responsibilities which is not afforded to EU airlines.

[Lyman]

Somewhere, there is a crusty old pilot, flying a ghostly Lockheed TriStar, who is grinning.

[CrashDive]

Lyman - I ROFLOL at that one... lovely! :ok:

[Uncle Fred]

I find it interesting that those, without having read the entire affidavit (which one can do here btw: http://online.wsj.com/public/resources/documents/AMRaffidavit.pdf ) are quick to champion the position that this is "labours fault." I find it interesting that they maintain this position without providing an exact financial butressing of this line of thought. Perhaps, perhaps not. Some facts however, (always in short supply when the teeth are bared in hatred or anger...) would be beneficial so as to pay this argument proper heed.

Speaking of pay. In all the years I have heard this topic discussed, I have NEVER once been witness to one of the proponents of the "union goons are taking the company down" position sketch out just exactly what the compensation package should be. I happen to fly the 777 and have asked many in discussions exactly what they think I should earn. All (other than the stupid "$10 per hour" remark) have demured. I was earnestly seeking an opinion the same way that I seek an opinion of how much I will need to pay the crew to get my driveway resurfaced.

I guess what I am trying to say here is that had one been a member of the prep school debating team (or even watched it in action) one would realize that bringing some rigour to the argument would help.

I cannot speak for Huck in this matter but I am sure he has had the same experience. It really boils down to the point that if one says the pilots are paid too much then how can one say this without knowing exactly much they should be paid according to the financials. Saying the one without knowing the other renders the argument nugatory...

[tsgas]

The US airline deregulation act of 1978 has led to a race to the bottom for all the US air carriers. Not one single carrier has survived without having to go through Chapter 11.
The air fares are about the sane as they were 20 years ago. It's totally insane.

[Huck]

Actually I don't even understand the rational for the maths lesson. Hourly rate/ passengers * length of flight... what has it got to do with the pilot how many people he carries?

An AA twelve-year captain, and a twelve-year F/O, make a combined $344 US an hour.

That's (roughly) a dollar an hour for every seat in the back of the aircraft.

So on an eight hour slog across the atlantic, each passenger is paying less than ten dollars US for the flight crew's salaries. Add another ten for benefits and support, and another ten for the flight attendants. You're still at $30. Total. For the flight.

You could cut their pay to zero and it wouldn't make a dent in the thousand-dollar coach tickets in the back.

Is that any clearer?

[BusyB]

I think Huck (post39) is fairly accurate if he is saying $20 per ticket. Do some work and take total aircrew costs and divide by number of passengers flown and you will see approximately how much a ticket is taken by aircrew salaries.

It will be a very small proportion of costs.:hmm:

[Intruder]

AA pilots are still working under the concessionary pay and work rules they got when they had to negotiate out of the $40 Million court settlement from their sick-out. The ONLY "good thing" they got out of that contract was a continuation of their pension plan. Now it looks like AA will be able to unilaterally terminate that as well.

This bankruptcy was predictable as soon as the AA pilots rejected both options in AA's public "last best offer" a week or 2 ago. Too bad [mis]management decided to take it public instead of negotiating in good faith. It's the norm in the industry (as well as corporate America in general), though... :(

[WHBM]

AMR Corp. filed for protection in New York in a surprise move given it has more than $4 billion in cash
Silly me, I always associated bankrupcy with having no money... obviously thats where I have been going wrong
American are indeed reported as having $4bn in cash, but they also have debts of $29bn listed. If those are due to be repaid tomorrow that would be a very good reason to go for Chapter 11 today.

[bluearrow]

Its about time EU law was changed to ban Bankrupt airlines from flying into EU from the US.

US complains all the time of unfair business practices elsewhere but it allows its airlines to walk away from their responsibilities which is not afforded to EU airlines.

Couldn't agree with you more racedo but alas it won't happen as the EU needs the SLF to come and spend money within it's borders plus the US will normally reciprocate and then it's no good for anyone. Nice idea though.

[Airbubba]

The US airline deregulation act of 1978 has led to a race to the bottom for all the US air carriers. Not one single carrier has survived without having to go through Chapter 11.

What about Southwest? They were certainly around in 1978.

I can remember a United pilot saying 'here come the scabs' years ago as a lowly Southwest crew boarded the hotel bus. Now UAL pilots get 737 type ratings in hopes of an interview at Southwest.

And, since we earlier mentioned pay, a twelve year SWA 737 captain makes $210 an hour, a UAL 777 or 744 captain makes $190 an hour. The United 737 captain makes $137 an hour. Maybe Southwest didn't race to the bottom as fast as United.

[galaxy flyer]

Air bubba

But, SWA has a entirely different business model that allows them to pay more but have lower crew costs. The network lines, like AA, want to offer service everywhere, fly as big s market share as possible. If you want to go from Bismarck, ND to Ft Myers or Shanghai, the network carriers can do it thru hubs and RJ feed. SW says, "we fly to these airports, selected by the fact we can go there 6-8 times a day, and fly you to these cities. If you don't live here, drive to meet us.". They have one type, no hubs, no feed, no international flights, they are a bus. A very good one, I might add. They were created outside of the regulated environment.

Everyone of the legacy airlines still think they are operating as in the old days, from the entrenched bureaucracies, the union rules, the multiple types, the debt, the MBA types. They need to change to a different model, one based on reality, not history.

You might note EK doesn't worry about feed, they might be the SW of international flying.

[grounded27]

The employee's will pay for the new aircraft order, AMR will balance their books. Like the above post's the other legacies made harsh decisions much earlier than AMR did. Time will tell their strength and position in the market.

[golfyankeesierra]

What about pensions? Are they out the door?

[CityofFlight]

I haven't flown a flight with AA I thought was worth the value in years. I'd fly any other airline and pay more before I'd willingly hand over fare to them.

The most recent flight was under the guise of another carrier. Much to my surprise, the boarding pass showed AA. I boarded the flight in October and the aircraft had the worst old dirty, musty smell-- like an old transit bus in a bad part of town, not to mention horribly cramped, uncomfortable seats that were past their expiration dates. And I haven't seen friendly cabin crew in years.

There is the law of supply and demand. Their schedule of flights may have flown full, but they lost the art of customer satisfaction and IMHO, therefore, a bigger picture. The customer will ultimately pay for the value and AA lost it a long time ago.

[PAXboy]

He also received $94,660 in other compensation, including $56,440 for security for his family in 2010
Hhmmm. Most families would consider his basic salary of $669,646 a reasonable amount of 'security' but they speak a different language in the board room.

would you rather the company go completely `bust` and lose everything?Frankly? Yes. If mgmt know they have Ch.11 on call when they want, they will take bigger risks. Also, they know that they are in control of the bankruptcy. That is not fair in any one's language and if we had some genuine bankruptcies - it might focus the attention of some other companies. Like with the banks themselves. Banks have not been allowed to fail and so the failure spreads FAR WIDER.

The US airline deregulation act of 1978 has led to a race to the bottom for all the US air carriers. Not one single carrier has survived without having to go through Chapter 11. The Republican Party must be just SOOO proud of themselves.

[galaxy flyer]

PAXboy

Please re-read history of deregulation of the airlines. It was Ted Kennedy and Jimmy Carter who wrote and passed the deregulation law. Phil Bakes, who killed Eastern, was a staffer of Kennedy's.

[bubbers44]

In about march 2003 all AA employees took a 23% pay cut to avoid bankrupsy. Then they gave all their management people giant bonuses for running the company so efficiently.

Now AA is in BK. Poor management, not employee greed caused this. Now the employees are taking the hit again while Arpy runs off with his golden parachute to his new job day after tomorrow. Too bad pilots can't do the same but we can't. MBA's obviouly pay much much better then ATP's.

Take your kids out of Embry Riddle learning how to fly jets and send them to Harvard for an MBA and make the megabucks.

[PAXboy]

galaxy flyer Thanks. I guess I was confusing the event with the Reagan/ATC event? I also note that it was a Democrat, Clinton, that repealed the Glass-Steagall Act, so they obviously have a talent for it.

[galaxy flyer]

Mind you, I'm not excusing the Republicans, both parties aren't deep in cahoots with business--classic crony capitalism. We need to remove government's powers so business isn't rent-seeking all the time. Right now, the US Ex-Im Bank is subsidizing planes for AI creating havoc on the subcontinent's airline pricing. It's growing at 10% per year and everyone is losing money.

[PAXboy]

So, galaxy flyer, do you mean that this ever faster grabbing for money could lead to a massive financial melt-down one day? And, where once some people made a lot of money, then a lot of people will lose a lot of money?! I do hope that never happens. (removes tongue from cheek) But, Yes, that will be human beings doing what we always do. :sad:

[pilotss2001]

I am surprised at all the comments about what was the single cause of demise of American Airlines. I didn't know so many people here were privy to all this sensitive financial data. Burn the witch eh?

[Me Myself]

The legacy airline model is TOAST !!! And AA is the last in the US to go down the drain......I hope with a not too battered pension scheme.
Next in line ??? European airlines and it will be bloody.
Kids, get yourself a MBA if you don't want to end up shoveling horse manure in Belmont Park between furloughs.

[poina]

Yeah an MBA so there can be more Lehman moments! Europe will soon become very familiar with bankruptcy.

Send your kids to N.D. and get 100,000 to start in the oilfields.

[johnnyramjet]

So if US Airways puts in an offer to buy AA and AA then becomes US Airways, how will the AA pilots look at seniority then? Will it be the TWA model or Air Cal or Reno Air.
Pay attention SWA, it is a cyclical business. What goes around comes around. :=

[galaxy flyer]

It'll be a donnybrook, for sure. I suspect the East guys and the AA guys will team up against the West guys. The East/AA guys are probably pretty close in age distribution. The problem might be in joining APA and USAPA and which name Parker chooses to fly as the flag. AA might be the surviving name.

[Loose rivets]

The wider point is why does this keep happening to airlines? It is surely the most disrupted industry of the modern age.

It's possible airlines could work if there were not so many people holding their hands out for services rendered. Airlines have little choice - not allowed to do their own thing in so many cases. Silly money for this, obscene money for that . . . even before the aircraft moves, the money is being hoooooosed out to the hangers on. Hundreds of small 'services' seem to be soaking up so much of the profit.


I always thought it a shame the crews were kind of weighed down from a professional status. God knows, their responsibility is greater than so many in a so-called top profession. It leaves them as just another potential cost-saving division of the business.


My last flight with AA was something that had to be endured. I'm not fat, but I do not come close to fitting in those implements of torture they call seats in coach. I was literally taking Paracetamol 6 hours into the flight because of the extreme discomfort/pain of being jammed into a seat suitable for a child. Coupled with this, the treatment of passengers has over the years, gone from not too bad, to a level of indifference I can hardly believe.

I dread my bi-annual UK_US commute.

What's more, in the event of an accident getting people out of a crush like that is just fantasy.

The years we spent making things pleasurable for ordinary passengers seems to have been totally forgotten. The Them and Us thinking, with First class, Business class, and that unmentionable lot down the back. is an exercise in humiliation. And that's before you even step on the aircraft.

It's not just the airlines management that's failing, but it's hard to see just what is causing everything to go wrong, though my ticket price breakdown is a clue.

[johnnyramjet]

You might be right GF, what a mess it could be.

[Rollingthunder]

LR - get your travel dept to book you on something else.

Anyone figured our what AMR stands for?

[johnnyramjet]

It simply stands for “American.”

[keitaidenwa]

Kids, get yourself a MBA if you don't want to end up shoveling horse manure in Belmont Park between furloughs.
MBA is no job safety these days, there are plenty finding them self unemployed as banks go titsup or restructure due to financial turmoil. Not to mention that many MBA jobs are being converted to automated computer tasks... Rest finding them self being replaced by "business process outsourcing" in India.

Studying law appears to be the safest ticket to gravy train these days.

There seems to be some confusion around what "Chapter 11 bankruptcy" for AMR means. It is not quite the same as what non-Americans associate with "bankruptcy". Chapter 11 is reorganizing while being protected from creditors. Chapter 7 is analogous to bankruptcy is the rest of world - eg split the assets between creditors and the last employer switches lights off permanently.

[Type1106]

How is this going to affect Willy Walsh's much vaunted ( and much hated by The Bearded One) BA/AA tie up?

I hope it kills it dead - BA has its problems, but I shudder at the thought of buying a BA ticket to JFK and finding the service is operated by AA. No experience of long haul with them, but if their US 2.5 to 3 hr sector service is anything to go by - Lord help us.

[pieceofcake]

An AA twelve-year captain, and a twelve-year F/O, make a combined $344 US an hour.

That's (roughly) a dollar an hour for every seat in the back of the aircraft.

So on an eight hour slog across the atlantic, each passenger is paying less than ten dollars US for the flight crew's salaries. Add another ten for benefits and support, and another ten for the flight attendants. You're still at $30. Total. For the flight.

You could cut their pay to zero and it wouldn't make a dent in the thousand-dollar coach tickets in the back.

Is that any clearer?

So extend that argument and with a combined $344 per hour earnings why take their company to the brink for the sake of a few perks. What kind of world do we live in when that kind of hourly rate for two guys becomes not enough? The very sad thing is the guys who are the pilots co-workers find themselves working at the same destroyed company. Some might call that selfish.

[lomapaseo]

Most of the economic disussions above are Voodoo economics and worthless to support valid opinions. Of course the opinions on either side are expected regardless. :)

[Ancient Observer]

I hope some one is looking after the Pensions.

[bugg smasher]

I hope some one is looking after the Pensions.

Sadly, that will be one of the first things to go. Money there to play with. I don't know if AA funded their own pensions, or if that responsibility had already been cleverly devolved by company lawyers to a third party 'discounter', at cents on the dollar.

Judging from the United/Northwest/USAir et al experience of things, the pilot group is, henceforth, well and truly shafted. Professionals of the highest order, subverted into unskilled temp staff, expendable, pawns for the bean counters to move at will. Food stamps for all.

Meanwhile, Arpey has vacated the premises, in a really expensive car, with an obscenely massive golden parachute. I guess it wasn't really his fault though.

He's only human after all. Or is he?

[flyingchanges]

AA does note have any combination of 12 year CA and FO making close to $344 per hour.

A 20 year FO and a 30 year CA, 777 combo would be close to that.

Remember, the less AA pilots make, the less you make.

[NG ExPat]

According to what I am hearing, one of the major reasons for the BK was to avoid having to pay out lump sum retirement payments on the large group of pilots that were expected to jump ship in December.

Retirees who left in November, and have yet to receive their lump sum distribution, are being told that they will now become creditors, and will have to get in line to collect.

[gkpilot]

You can do anything in the USA until some one complains, company is top heavy , should cut back on aircraft types,adds 2 many different crews,, look at sothwest,, 1 type all737,s

[FlyingConsultant]

Meanwhile, Arpey has vacated the premises, in a really expensive car, with an obscenely massive golden parachute.

Come on, there is enough to talk about, at least get your facts straight. According to AA and an independent research firm, no severance and no exit bonus. And with the stock being worth nothing, whatever he had in equity or options is worthless. He is 53 years old. When he is 55, he can collect pension. Let's see whether that pension is affected by the chapter 11 :E

If they are lying about this, it will show in their filing. They have to report exec pay.

[LD12986]

How is this going to affect Willy Walsh's much vaunted ( and much hated by The Bearded One) BA/AA tie up?

I hope it kills it dead - BA has its problems, but I shudder at the thought of buying a BA ticket to JFK and finding the service is operated by AA. No experience of long haul with them, but if their US 2.5 to 3 hr sector service is anything to go by - Lord help us.


It will carry on in the same way it has now for over a year.

AA announced yesterday its new 777 aircraft will be deployed on LHR routes with fully flat beds in J and other upgraded products.

[caber]

So extend that argument and with a combined $344 per hour earnings why take their company to the brink for the sake of a few perks. What kind of world do we live in when that kind of hourly rate for two guys becomes not enough? The very sad thing is the guys who are the pilots co-workers find themselves working at the same destroyed company. Some might call that selfish. Amazing how quickly people like yourself are willing to jump on the bandwagon of blaming the pilots. While that hourly rate sounds high to you, the number is meaningless unless you know what it translates to in actual yearly earnings. How low should their pay go to be acceptable to you? If the pilots had worked completely for free to ensure that their "selfishness" had not unduly affected their poor suffering coworkers, what kind of profit would the airline be turning?

Pilots are a necessary cost to any airline operation, much like maintenance staff, leasing/buying of aircraft, fuel, parts, etc.... Where has the management leadership been in renewing the fleet? Do you have any idea how much less efficient a massive fleet of MD-80 aircraft is compared to a comparable fleet of B737/A320 series aircraft?

Fleet renewal is an expensive process, however it is a necessary one that can be put off for only so long before the effects of not renewing the fleet cost more than the renewal would have cost in the first place. Passengers take this into account when booking in an attempt to avoid tired old aircraft, fuel providers rub the hands in glee when providing an extra xxx gallons of fuel for an aircraft that others don't need to buy, heavy maintenance providers can fill their schedules for years to come and bill accordingly based on the age of the aircraft.

Sure, go ahead and blame this on the pilots, it's an easy thing to point to and quite popular to rail against the "greed" of people who are so obviously overpaid for what they do. :ugh:

I would respectfully ask that you please put an end to the endless strikes of various natures in Europe however, as obviously those on strike are merely "greedy" with no concept of how their "greed" is costing the poor workers not on strike that their actions affect. After all, you must have determined that they already make enough have you not? :=

[Huck]

It's also worth point out that the 777 crews at AA are probably the upper 10% of the seniority list, and the captains have worked 25 or 30 years to make that kind of money.....

[Lyman]

From a paleo standpoint, the key word is "Legacy". The industry is changed, forever, and opinions are a dime a dozen. The OIL, THE UTILITY, THE BANK, THE AIRLINE.

The tentacles of archaic Capitalism are many and stubborn. We suffer the outcropping of decisions made in 1916 re: OIL, and are servant to the remnants to this day. The Processes that govern big business are hopelessly in play, LABOR, COMPENSATION, ROUTE, HARDWARE, etc.

And the POLITICS. Bankruptcy means Pensions get stolen, Criminals get bags of Gold, and Lawyers send their children to College on the fees collected to "RESTRUCTURE". Which is a poorly understood (evidently) word that means: drop your knickers.

So long as the players on the field, eg. here, are hopelessly ill informed, and ignorant, the formula will continue to work.

Stop electing the same bastards who continue to steal you blind.

[bugg smasher]

Come on, there is enough to talk about, at least get your facts straight.

During his tenure at AA, how much did he collect in yearly bonuses?

[Huck]

From another website....

(NOT written by me, but by an AA pilot)

The management had a chance to solve its current cost problems in 2003. The contract that could have been was squandered when it was revealed that, not only had a rapacious bonus system been set up but management had insulated THEIR retirements from Ch11.

Carty was forced out and the management/labor range war not only continued but intensified.

Prior to the management sweetheart deals being leaked, all the unions were on board with real, effective workrule changes that would have made AA truly competitive with the carriers that had or would soon file Ch11. The AA pilot group is the most radical and intransigent in the business but they were willing to work with management for the good of all. I was in the boardroom at APA when this all happened. When Carty tried to explain why management had a sweetheart deal, you could feel the air go out of the room.

AA's die was cast that day. It just took 8 or so years for the carcass to assume room temperature.

AA's management has been holed up in the bunker, abdicating their role as "leaders". AMR has the employee group they deserve.

TC

[Airbubba]

Here's a puff piece from the New York Times that paints the AA CEO as yet another hapless victim of the bankruptcy:

It seems that every week we hear of a C.E.O. who earned millions from a golden parachute after demonstrating poor business judgment or cutting thousands of jobs with no financial downside for executives. These stories feed the fires of the Occupy movement growing all over the world.

But on Tuesday, we heard something different. American Airlines, once the largest airline in the United States, declared bankruptcy. This is not surprising news for the beleaguered airline industry; what is different is what is emerging from the wreckage. Gerard J. Arpey, American’s chief executive officer and chairman, resigned and stepped away with no severance package and nearly worthless stock holdings. He split with his employer of 30 years out of a belief that bankruptcy was morally wrong, and that he could not, in good conscience, lead an organization that followed this familiar path...

http://www.nytimes.com/2011/12/01/opinion/at-american-airlines-a-departing-ceos-moral-stand.html

[bugg smasher]

I'll answer my own question; during Mr. Arpey's 3-year tenure as AA's CEO, he received a total of $1.92 million in compensation.

Gerard J Arpey, CEO Compensation - Forbes.com (http://www.forbes.com/lists/2006/12/S8LH.html)

[ironbutt57]

Piece of cake.....have a look back a few years when AA posted a 750 million profit for one quarter....the board voted to pay the entire amount as a bonus to their CEO and others as a "well done"...the entire profit for said period....blown out of the water by the pilots?? Think again....

[RobertS975]

So how does have company that declares Bankruptcy in November have the "cojones" to order almost 500 new Boeings and Airbus jets a couple of months ago?

[galaxy flyer]

Iron but

You do know that profit is AFTER all expenses including salarys and bonuses? The lack of simple accounting knowledge is reason enough to keep pilots away from the controls.

Could you post a link that AA paid $750 million to the executives? It would mean they earned 1.5 billion that quarter.

Robert

Boeing and Airbus almost certainly were read into the possibility of a Chapter 11 filing. So were the bankers. AA's bankruptcy was a open secret in business circles--viewed as a certainty.

[ironbutt57]

Yes I am aware of the definition of "net income"....wish I had the link, was several years back, just found it a bit disgusting, but not suprising..and AA'ers here help with more details??

[grounded27]

Come on, there is enough to talk about, at least get your facts straight. According to AA and an independent research firm, no severance and no exit bonus. And with the stock being worth nothing, whatever he had in equity or options is worthless. He is 53 years old. When he is 55, he can collect pension. Let's see whether that pension is affected by the chapter 11

These guys have bullitproof contracts, often use verbiage that trump other financial obligations just as the fianciers do. I guarentee you he is not on the CBA pensions the union workers are on. Not to mention the ambigious compensation execs recieve for say as an example negotiating a large aircraft purchase. Off the books possibly payed through a consultant firm. FACTS, please it would take decades to dig through the paperwork.

[grounded27]

You can do anything in the USA until some one complains, company is top heavy , should cut back on aircraft types,adds 2 many different crews,, look at Southwest,, 1 type all737,s


You can not seriously compare SWA to AMR. They are a legacy tasked with flying domestic and international routes, the recent A320/B737 purchase seemed like an effort to streamline domestic travel (I agree they should have chosen one or the other). But hell now they file chapter 11, they have leverage to renegotiate to pick a single fleet after forcing MFG R's to compete and come out with a better price on their decision.

[grounded27]

Lawyers send their children to College on the fees collected to "RESTRUCTURE". Which is a poorly understood (evidently) word that means: drop your knickers.


LAYMAN

Wached a docc. that exposed UAL for spending 400 million in lawer fees to save 1.2 bil in Labor costs. Seems to most that they could have easily given up the 400m in negociations to gain the 800mil in concessions. BOARDROOM BULLSH&T!

[500N]

Iron Butt

Is this what you are referring to ?

American Airlines' bonus plan has unions up in arms - seattlepi.com (http://www.seattlepi.com/business/article/American-Airlines-bonus-plan-has-unions-up-in-1192226.php)

American Airlines' bonus plan has unions up in arms
Published 10:00 p.m., Monday, January 9, 2006

FORT WORTH, Texas -- Leaders of three unions at American Airlines are questioning stock-based bonuses that executives of the money-losing carrier are due to receive in April.
Last week, the company provided more details about bonuses for about 1,000 executives, from the airline's No. 2 official to midlevel managers. Four officials would get payouts of more than $1 million if parent AMR Corp.'s stock price holds steady or increases before April.
The bonuses, first spelled out in 2003, were increased because AMR's stock price increased more than any other major U.S. carrier through the end of 2005.
The company also estimated last week that stock options granted to all employees in 2003 could be worth more than $500 million when they vest, also in April. Those stock options were granted when workers took pay cuts to help the company avoid bankruptcy.
Still, leaders of unions for American's pilots, flight attendants and mechanics and other workers said the executive bonuses were poorly timed because AMR has lost more than $7 billion since the beginning of 2001.
"Saying that many of our pilots are outraged would be a significant understatement," said Ralph Hunter, president of the Allied Pilots Association in a letter to his members on Monday. "Your entire APA leadership is equally displeased."
Hunter said, "It is absolute insanity to pay out seven-figure bonuses at a time when the company is suffering nine-figure losses, mired in eleven-figure debt, and seeking further help from its employees to survive for the long term."
AMR has lost more than $7 billion since the beginning of 2001, when the airline industry went into a slump that resulted in several carriers filing for bankruptcy protection. AMR has cut costs sharply, largely through layoffs and pay cuts, but analysts still expect the company to lose about $675 million for the year when final 2005 figures are released this month.
In 2005, AMR's shares more than doubled, rising from just over $11 per share to $22.23 by year's end. Monday, AMR shares rose 13 cents to close at $22.79 on the New York Stock Exchange, near their 52-week high of $23.53.
Tommie Hutto-Blake, president of the Association of Professional Flight Attendants, told her members in a message posted Friday that the "very poor timing of management bonuses" wasn't in the best interests of the company or its employees.
Hutto-Blake said her union was protesting the bonuses by pulling out of base briefings with management scheduled for this week. She did, however, commend Chairman and Chief Executive Gerard Arpey for not taking part in the bonus plan.
AMR has disclosed the management bonuses in regulatory filings since 2003, although it hasn't put a dollar figure on the total cost. Executives will be paid in cash based on AMR's stock price in April.
At AMR's current stock price, bonuses would range from about $2,000 to about $1.7 million for Daniel Garton, the airline's executive vice president for marketing.
Three other executives would get about $1.4 million.
Lisa Bailey, a spokeswoman for American, said the unions were preparing to ask the company for more information about the plans.
Last week, Senior Vice President Jeff Brundage said in a letter to managers that also was sent to union leaders that the bonuses rewarded managers for "superior performance."
Brundage said the plan, in which executives depended on bonuses for a high percentage of their compensation, held managers accountable for the company's fate.
The company has not estimated the total cost of all the executive bonuses. A spokeswoman said last week that such information might be disclosed when AMR releases final 2005 financial results.

[Huck]

Brundage said the plan, in which executives depended on bonuses for a high percentage of their compensation, held managers accountable for the company's fate.

I am so sick of this. Companies do good, it's the managers and executives that are responsible.

Companies do bad, it's those unsightly union contracts.....

[Spooky 2]

The blame game doesn't mean a hill of beans from here on out. Place all the blame you want at management, no one that matters is listening. Case closed. What happens now is the BK court will round up what's left and parse it out to the secured and unscercured creditors. Estimates have the secured creditors receiving ony ten cents on the dollar so that should give you a hint where the unsecured creditors stand. Since the employees usually wind up as unsecured creditors in these deals, they will continue to take it in the shorts. Don't know if embracing that last contract offer would have made a difference or not but one thing you can bank on is that nothing now or in the AA pilots future will ever enable them to recover what is about to be lost. For those that complain about the age 65 rule, you can be assured that 95%+ of the pilots from here on out at AA will continue on to that age. Most pilots are simply not able to take a 2 million dollar hit on their retirement and move on as if nothing happened. This is a watershed event in every AA pilots career and a devistaing one at that. Life goes on, but nothing like what might have been had this BK not occured. The sooner one stops pointing the finger and gets moving on with his or her reduced expectations, the better their lives will be. Cross your fingers that AA does not simply vanish from the scene as others that have gone before it have done.

[hunger4justice]

Aside from the fact that the CEOs compensation is rising "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." and the fact that the new aircraft orders are still a go :
"Tom Horton, the chief executive of American Airlines, insisted a £24.7bn order for 460 aircraft from Boeing and Airbus is "rock solid" despite filing for bankruptcy protection"

the fact that they are even allowed to file ch11 with an eye to terminate already agreed upon and earned benefits should be illegal. It is immoral.


That is why I told my child to get their 3000 hrs in and go to the UAE or Cathay, anywhere, that does not have a history of breaking agreements and terminating earned benefits. The best predictor of future performance is past performance, so work for an American Carrier and expect to be screwed.

[Spooky 2]

While CX has not, and hopefully never will contimplate much less declare BK, I think there is plenty of evidence that it can be a hostile place to work...at times.

Better yet suggest to you child that there better ways to enjoy aviation other than sitting in the cockpit of an airliner for 30+ years. Just say'n :} Ditto for UAE.

[GrahamO]

There are significant parallels between the airline and the US car manufacturing sector.

While one can complain about the level of remuneration of a CEO, the basic imbalance between the wage bill of the staff and the price a market will stand is quite clear. There is only one CEO but when tens of thousands of staff are paid a large percentage higher than the market rate, no company can survive.

In the Uk it is illegal to trade while insolvent and in the US a similar scheme exists which can be applied to 'going to go insolvent' if nothing is done.

Sad for the folks involved, but hardly a surprise, and hardly the fault of the management when the unions point blank refuse to accept market rate terms. Even the best CEO in the world, getting paid $1 can do nothing when a union would rather drive the company to bankruptcy than accept a reduction in salary for their members. We passengers don't want to pay more than we have to and that means the staff will have to accept different terms, or get another job.

A bit of contributory negligence on the part of the union leadership IMO.

[Uncle Fred]

There is only one CEO but when tens of thousands of staff are paid a large percentage higher than the market rate, no company can survive.




Full disclosure: I do not, nor ever have, worked for AMR but I would again maintain that the above position is severely weakened by not, either out or commission or ommisision, stating exactly what that market rate is.

Looking at peer competitors in the United States (one would assume we would have to limit the statistical sample to that geographical region for this example) one finds a broadly diverse level of remuneration--American pilots would have to take a pay raise if on Southwest's pay scale and a cut if on that of United or USAirways. Productivity measures would need to be made to see how these pilots contribute to the revenue model vis a vis the competitors.

If I am errant I will certainly admit it, but I keep thinking that one cannot say that any pilot group (or work group for that matter) is unduly (either high or low) paid until one can accurately state what that market rate exactly is. Just saying "it is too much" does not cut it here.

For those who are going to argue so, please (!) help us along with giving us figures with which to work. What should these groups be paid? By giving us this figure, you will give us a benchmark against which to weigh your argument. Again, without them, the argument is nugatory. :ugh:

[Neptunus Rex]

hunger4justice
That is why I told my child to get their 3000 hrs in and go to the UAE or Cathay, anywhere, that does not have a history of breaking agreements and terminating earned benefits. With your monicker, what beautiful irony. Let's have some more!

[caber]

Sad for the folks involved, but hardly a surprise, and hardly the fault of the management when the unions point blank refuse to accept market rate terms. Even the best CEO in the world, getting paid $1 can do nothing when a union would rather drive the company to bankruptcy than accept a reduction in salary for their members. We passengers don't want to pay more than we have to and that means the staff will have to accept different terms, or get another job.Please let us know what the market rate terms are! My company made over 1/2 BILLION dollars last quarter. My CBA is still in negotiations from the emergency concessions we made following the terrorist attacks of 9/11. I can guarantee you, we will be getting a raise and better work rules. This bankruptcy makes it much harder for us to do so, as our company will now cry about being competitive with a company in bankruptcy. So what do we consider market rate terms? Did you take into account that the pilot contract at American already gave them a paycut after 9/11?

In the USA airline labor relations are governed under a lovely set of rules known as the Railway Labor Act (RLA) These rules were imposed on railroads back in 1926 and extended to cover airlines in 1936. They create very strict controls on labor relations. These rules make it very difficult for pilots to negotiate new contracts, and seniority rules make it extremely difficult to just decide to leave a company if the contract isn't what you want it to be. Imagine working 20 years in a business, but being told if you left the company you worked for to move to another the most you would be allowed to make is the entry level secretary wage, though you will retain the responsibilities of your position.

The RLA defines things as major or minor disputes. Anything relating to a current contract is a "minor" dispute. Labor is not allowed to strike for minor disputes. Disputes are only classified "major" when they relate to negotiating new contracts. For pilots to take any kind of action on a major dispute, such as a strike, the national mediation board must be involved. First, we must negotiate for years, as management has no incentive to provide a new contract. Then NMB has sole decision making responsibilities when it comes to determining whether progress is being made. If no progress is being made, we continue negotiating. If some progress is being made, we continue negotiating. If some progress is made, and there are only a few key points we can't agree on, then the NMB either keeps us negotiating, parks us (ceases negotiations) or releases us into a 30 day cooling off period. Only after those 30 days are we given permission to strike, though the President can form an Emergency Board and delay any strike for another 60 days.

Please note that we are now frequently years past the date that our old contract was supposed to end. For this reason, a 4 year CBA here can frequently last 7 - 9 years. The reason we as pilots are so concerned over short term concessions or signing on to a substandard new CBA is because we will most likely be stuck with those terms for a significant number of years. We typically don't have the option of jumping ship to a new company once we've committed significant years to our current company. Basically, we need to look out for ourselves because surely no one else is.

[BadgerGrowler]

American/AMR has just filed papers on rejecting 24 aircraft leases, of which 4 are Fokker F100's, which they haven't flown since 2004.

http://bit.ly/vafhWZ

So they have been paying the lease fee's + desert storage parking fee's :ugh:

[VFD]

If I am errant I will certainly admit it, but I keep thinking that one cannot say that any pilot group (or work group for that matter) is unduly (either high or low) paid until one can accurately state what that market rate exactly is. Just saying "it is too much" does not cut it here
Do not shoot the messenger Fred.
One of the indications on the news today was that AMR was burdened with 31% of their total operating expenses for retirement benefits.
UAL, DAL, NW took bankruptcy for the generally same reason.
This appears to be probably one of the main issues to declare bankruptcy from where I see it.
That is a lot of revenue to be generated above other operators and be profitable in a cost competive market.

The wages in themselves appear to be relatively close to other mainline carriers.
Many of the other carriers seem to be in the 401k camp for retirement but I do not know to what extent what each airline makes additional contributions.

[NG ExPat]

This is the best piece that I have seen written on the subject of the AA Bankruptcy. Done by the Boyd Group International. They really know the airline business and dispell a number of the rumors that are running around.

http://www.aviationplanning.com/Images/AMR%20Bankruptcy%20-%20Time%20For%20Reality.pdf

[SKS777FLYER]

I have some experience with American. When I started there in the beginning of 1979, they operated an all jet (3 pilots), mostly US domestic operation with a small dedicated freighter operation. They had about 280 some aircraft. 30 years and 2 furloughs later, when I retired early (I thought they were going to file Chapter 11 in late 2008) they were operating near 800 or so 2 pilot jets almost all over the globe.
The union was offered several times when Robert Crandall was President and CEO of AMR for the pilots to take over ownership or partial ownership of the company, but each time the pilot union declined the offer. Yet the union continuously broadcast and shouted from the rooftops how evil and inept management was, how the evil managers were trying to destroy the earning power of pilots and oh how the union wished they had a CEO who wanted to run an airline, blah blah blah.
Curiously, over the years, many of the upper level union officers would, upon leaving union service go right over to the Flight Academy and take high level management positions. Amazing when most of the higher level flight ops jobs require approval from corporate headquarters. I still wonder about that.

Anyhow, as has been mentioned in the thread, the plight of recently retired pilots who face the possible loss of one part of their retirement funds. That would be the defined benefit or "A"plan, which is now (NOV29 Chapt11) no longer available as a lump sum, but as an annuity.
Who knows what will happen to the A fund in bankruptcy. The pilot B fund, however is rock solid and safe, still available for lump sum distribution. The company will I believe contribute to the "B" fund during the bankruptcy process. The "B" fund is 11% of pilot pay each year; the A plan, 4%.

Two types of dates have been mentioned. Pilot retirement date and Retirement Benefit Commencement date; and at least for early retirement they are NOT the same.
For example, in my case when I retired early at the end of August 2008, my retirement date was 01SEP2008, but my retirement benefit commencement date 2 months later, 01NOV2008.
In normal retirement (age 60 or 65) I believe the retirement date and the benefit commencement date coincide.
Bottom line, I truly hope the guys who early bailed in October still get their lump sums from the A fund when their benefit commencement date arrived/arrives sometime this month.
I think (but do not know) that any pilot who retired EARLY within the months of October or November and would have a Commencement date of Dec 01 or Jan01 is not going to get a lump sum from the A fund.

[MungoP]

Personally I'll be happy when ALL american airlines are made bankrupt and forbidden the protection of chapter 11.
Without exception (and I travel constantly throughout the US and Internationally), I find them to be badly organized, have poor service, poor reliability, uncomfortable seating and lousy customer relations service. I could list horror stories of lost baggage (3 times this year alone).. overbooking, late flights and missed connections ... life's too short.
Far better that they pack it up and let European airlines take over.

[SKS777FLYER]

No news yet about retiree medical, tho I would think the cost will go up dramatically in the months ahead. I don't know about other U.S. Carriers, but AMR was self-funded for covering employee medical expenses; they just hire medical insurance group management help to administer the program.
As for the stock options from the distant past, I sold my options before the stock split, and before Trump ran the stock up to around $140 as it was thought he was going for a hostile takeover attempt. The pilot union was pleading with Crandall not to sell the airline, and of course he did not. At the peak, Crandall had control of north of $125 MILLION of AMR stock, tho some of it may have been restricted, whatever, the pilots depended on the hated Crandall and the AMR BOD to save the airline from Trump, which they did.
The option grants had I dimly recollect had life of about 10 years so I would think they have long expired anyhow.

[mini]

There are significant parallels between the airline and the US car manufacturing sector.

AMR were competing internationally for sales, US auto makers have long since given up any illusion that they could do similar.

[SKS777FLYER]

I have an old AA stock certificate; when I get some time I will see if I can get it displayed on here. It is actually a pretty cool stock certificate.

[tsgas]

Galaxy Flyer

Phil Bakes was only brought into EAL after Col Boreman was forced to sell out to Texas Air.
Charlie Bryant and ALPA signed Eastern's death warrent.

[tsgas]

Airbubba

SW was not a major airline in 1978. It was a small regional carrier with a tiny fleet and very low costs.

Today it has become a high cost operation that could face Chapter 11 like all the other over bloated super large carriers have .

Remember that a lot of SW past success was from fuel hedges, flying into secondary airports, and having competitors will high costs. All these advantages are now gone. Just check out the stock price (LUV) which is telling in itself.

The "times they are a changing".

[TacomaSailor]

"... US auto makers have long since given up any illusion that they could do similar."

Mini - you may be a pilot but you don't have a clue about international automotive issues

Here is just one example for one US company that shows how incorrect your statement was:

Ford's October sales in its traditional 19 European markets increased by 4.7 per cent to 95,800 vehicles, while market share was 8.1 per cent - up 0.5 percentage points from 2010
Ford market share rose in 15 of its traditional 19 European markets compared with a year ago
October sales in the UK, where Ford is the market leader, climbed by 8 per cent to 23,500 sales, and share was 14.8 per cent, up 0.6 percentage points
Ford's positive momentum in Germany continues, with October sales up 6.8 per cent to 22,700 vehicles, and total vehicle market share at 8.0 per cent up by 0.5 percentage points. Year-to-date, Ford sales in Germany are up 18.1 per cent
Ford's sales across its total 51 European markets in October were 123,300 - an increase of 6,000 or 5.2 per cent higher on October 2010. Year-to-date, however, Ford's sales in these markets are 1,327,300, up 2.9 per cent, or 37,000 vehicles, from a year ago
Russia was Ford's third-largest market by volume in October, with sales totalling 11,400 vehicles, up 28.8 per cent from a year ago. Year-to-date, Ford sales in Russia are up 34.1 per cent
Sales of the new Focus surpassed the 150,000 mark (at 151,700) units after seven months on sale in Europe

[poina]

Have a read: seekingalpha.com under the " investing for income" tab, Bail out this