Well, that sucks (American Airlines)

Derg

New Arizona, Il Duce/Warlord
Staff member
American Airlines to cut 200 pilot jobs
02:50 PM CDT on Tuesday, July 15, 2008
By TERRY MAXON / The Dallas Morning News

American Airlines Inc. said Tuesday it will cut 200 pilot jobs as part of its efforts to reduce expenses in the face of sharply rising fuel costs.

The carrier also proposed to its pilot union, the Allied Pilots Association, some steps to mitigate the number of involuntary furloughs, but did not immediately make public its proposal.

“The company's proposal would provide financial incentives for senior captains ready to voluntarily leave and create advancement opportunities for junior pilots,” an American spokesman said.

“If accepted by the APA, this agreement could significantly minimize the number of pilot furloughs,” the spokesman said. “It would also provide the company with the flexibility to recover from heavy retirement periods and greater ability to manage the short-term operational demands we are facing.

The Fort Worth-based carrier previously announced plans to eliminate 900 flight attendant jobs and hundreds of jobs across the United States at various airports.

It has said it intends to reduce its workforce of 85,500 in line with its planned 8 percent reduction in capacity after Labor Day, or about 6,800 positions.

The company has reached agreement with the Association of Professional Flight Attendants and Transport Workers Union for a variety of steps to let employees leave voluntarily, including incentives for people 50 years or older with enough years of seniority to depart.

American also has programs for people to take leaves of absence or, in the case of flight attendants, to have two part-time attendants share a full-time job.
 

Nick

Well-Known Member
The cheap route

Looks like AMR is putting finances ahead of job preservation if this goes through.

If I were in the bottom 200 there and knew the remaining workforce was going to get increased hours out of it I would probably be a little disappointed, though it will save AA more money instead of reducing the average line value and holding onto people.

There will be pilots there who have been furloughed or on reserve for more than a decade.
 

Derg

New Arizona, Il Duce/Warlord
Staff member
Re: The cheap route

The carrier also proposed to its pilot union, the Allied Pilots Association, some steps to mitigate the number of involuntary furloughs, but did not immediately make public its proposal.

“The company's proposal would provide financial incentives for senior captains ready to voluntarily leave and create advancement opportunities for junior pilots,” an American spokesman said.

“If accepted by the APA, this agreement could significantly minimize the number of pilot furloughs,” the spokesman said. “It would also provide the company with the flexibility to recover from heavy retirement periods and greater ability to manage the short-term operational demands we are facing.
Sounds like AMR management is trying to take home hostages in hopes of some quid pro quo.

Grrrrr...
 

kellwolf

Piece of Trash
I think the flowthrough/back agreement was killed a while back when AMR decided it wanted to divest AE.
 

SlumTodd_Millionaire

Evil Landlord Capitalist
Re: The cheap route

Sounds like AMR management is trying to take home hostages in hopes of some quid pro quo.

Grrrrr...
Seems to be that way. Thankfully, the new APA President, Captain Hill, is extremely militant and unlikely to cave to such pressures. If anything, AMR has just poked a lion in the eye.
 

typhoonpilot

Well-Known Member
Talking to my brother today ( retired AA ) I would guess that AA will enter bankruptcy by the second quarter of next year, if not earlier. They really need to lose all 300 remaining MD-80s and get rid of their inefficient regional jets ( under 50 seats ). That would entail way more than 200 furloughs. I would be worried if I was in the bottom 3000 at AA.

The way I see it AA will be unable to compete with the MD-80s and the small RJs. They need newer, more efficient, narrowbodies and bigger RJs. They do have some 737-800s coming, but not enough and not fast enough. To my knowledge they have no big RJs in the pipeline. That is a huge mistake and will cost them dearly.

The U.S. domestic flying market is going to become one of mostly large RJs with mainline narrowbodies fitting into the larger markets. If one is with a large RJ operator then they should be okay. If one works for a small RJ operator with no orders for the larger RJs they should be very worried. If one is in the bottom third of a major airline seniority list they should be very worried.

People don't want to hear this, but it's best to be prepared for it because it's coming.

Over 6 months ago I predicted on this forum that the Expressjet branded flying would disappear in the near future and nobody wanted to hear that either.

In regards to Eagle flowbacks, I sat next to an Eagle Captain ( roughly 11 years seniority ) on the way to DFW a few weeks ago. He said the flowback deal is finished so it isn't going to happen again. He also said some of the flowbacks declined recall. I can't remember exactly how it works, but I think they then go to where their Eagle seniority will hold, which is right seat of the ERJ. Seemed odd to me, but apparently these guys were betting exactly correct. Even a right seat job on the ERJ is better than no job when they get furloughed from AA again. With roughly 7 years seniority they are pretty senior First Officers and have a chance to upgrade in a few years ( depending how Eagle gets restructured in the bankruptcy that's coming ).


Typhoonpilot
 

SlumTodd_Millionaire

Evil Landlord Capitalist
I think that's a little overly pessimistic, and that's saying a lot, since I'm pretty pessimistic lately. DAL managed to re-negotiate their -88 leases down to $80k/mo. That's barely more than a 50-seat RJ lease. AMR could probably do better if they enter bankruptcy now. I can see them getting rid of maybe a third of their -80s, but not anywhere close to all of them. An -80 is a much better platform for most markets than a 70-seat RJ if you can get the lease costs down.
 

WestIndian425

Well-Known Member
I think that's a little overly pessimistic, and that's saying a lot, since I'm pretty pessimistic lately. DAL managed to re-negotiate their -88 leases down to $80k/mo. That's barely more than a 50-seat RJ lease. AMR could probably do better if they enter bankruptcy now. I can see them getting rid of maybe a third of their -80s, but not anywhere close to all of them. An -80 is a much better platform for most markets than a 70-seat RJ if you can get the lease costs down.
Well there is the E-190 as a possible Mad-Dog replacement (especialy since the NGs are severlely back-logged and the 717 line is shut down), but I don't know if they'd consider that.
 

SlumTodd_Millionaire

Evil Landlord Capitalist
It's cheaper to renegotiate the leases on the Mad Dogs than it is to get a brand new lease on a -190, not to mention the problems in procuring that many EMBs.
 

WestIndian425

Well-Known Member
It's cheaper to renegotiate the leases on the Mad Dogs than it is to get a brand new lease on a -190, not to mention the problems in procuring that many EMBs.
True, but I seriously doubt AA would go the way of NWA and hold on to the Mad dogs that long like the latter did with the Diesels. Everything is about gas and oil prices these days.
 

typhoonpilot

Well-Known Member
I think that's a little overly pessimistic, and that's saying a lot, since I'm pretty pessimistic lately. DAL managed to re-negotiate their -88 leases down to $80k/mo. That's barely more than a 50-seat RJ lease. AMR could probably do better if they enter bankruptcy now. I can see them getting rid of maybe a third of their -80s, but not anywhere close to all of them. An -80 is a much better platform for most markets than a 70-seat RJ if you can get the lease costs down.
It is pessimistic and I really hope that it doesn't happen. I agree that they could negotiate the lease rates lower while waiting to procure more efficient aircraft. That will depend on the leasors of course. The MD-80 is still somewhat marketable in the third world so the leasors can always try for more money elsewhere.

The newer MD-80s came off the line in 1998/99 and were for TWA. Those are still at American as far as I know. The oldest ones were 1980 vintage and are probably gone already. So they probably range between 10 and 20+ years of age wth an average age close to 18 or more. That's getting pretty old with intendant high maintenance costs. They really need to re-equip the fleet sooner rather than later.

The MD-80 burns 1000 lbs. an hour more than a 737. At $4.00/gallon that is a monthly difference of close to $180,000 in direct operating cost based on 300 hours of flying time. So it would be cheaper to lease a 737NG for $250,000 a month than an MD-80 for $80,000/month. Of course I have no idea what the real lease numbers are, but you can see it would need to be pretty significant to make an argument for keeping the -80s.


Typhoonpilot
 

wheelsup

Well-Known Member
AA's original plan was to put off buying new aircraft until the replacement to the 737 was developed. Kinda like driving an old car into the ground (MD80) so you can wait for the newer model year to come out. Although I bet $4/gal gas has impacted their plan as of late.

If I remember correctly, NWA owns pretty much all their DC-9's, does AA own their MD80's? That would allow them to reduce capacity pretty easily.

The problem is, without domestic feed, you've got significantly less international customers.
 
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