AMR Corp files bankruptcy in New York
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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.
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.
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legal
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
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Meanwhile, Arpey has vacated the premises, in a really expensive car, with an obscenely massive golden parachute.
If they are lying about this, it will show in their filing. They have to report exec pay.
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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.
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.
AA announced yesterday its new 777 aircraft will be deployed on LHR routes with fully flat beds in J and other upgraded products.
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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.
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.
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?
Trash du Blanc
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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.....
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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.
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.
quidquid excusatio prandium pro
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Come on, there is enough to talk about, at least get your facts straight.
Trash du Blanc
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From another website....
(NOT written by me, but by an AA pilot)
(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
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
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Here's a puff piece from the New York Times that paints the AA CEO as yet another hapless victim of the bankruptcy:
http://www.nytimes.com/2011/12/01/op...ral-stand.html
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...
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...
quidquid excusatio prandium pro
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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
Gerard J Arpey, CEO Compensation - Forbes.com
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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....
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.
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.
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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??
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FC
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
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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 Southwest,, 1 type all737,s
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Lawyers send their children to College on the fees collected to "RESTRUCTURE". Which is a poorly understood (evidently) word that means: drop your knickers.
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!
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Iron Butt
Is this what you are referring to ?
American Airlines' bonus plan has unions up in arms - seattlepi.com
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.
Is this what you are referring to ?
American Airlines' bonus plan has unions up in arms - seattlepi.com
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.
Trash du Blanc
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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.
Companies do bad, it's those unsightly union contracts.....