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airlinepeanuts
Topic Author
Posts: 41
Joined: Fri Mar 13, 2015 4:16 pm

AA staff layoffs coming

Thu May 28, 2020 10:53 am

American is asking 30% of all management and support staff to take voluntary leaves or face being furloughed involuntarily.

https://viewfromthewing.com/american-ai ... ort-staff/
 
chonetsao
Posts: 646
Joined: Sun Nov 06, 2005 3:55 pm

Re: AA staff layoffs coming

Thu May 28, 2020 11:14 am

Will Doug Parker sign up to this?
 
tphuang
Posts: 5190
Joined: Tue Mar 14, 2017 2:04 pm

Re: AA staff layoffs coming

Thu May 28, 2020 11:48 am

They need to cut more than 30% if they want to avoid filing chapter 11. If UA is burning 2/3 what AA is burning and they are cutting 30%, AA needs to be cutting 40% to get its burn rate down.
 
JohanTally
Posts: 151
Joined: Tue Jun 18, 2019 3:44 am

Re: AA staff layoffs coming

Thu May 28, 2020 11:59 am

tphuang wrote:
They need to cut more than 30% if they want to avoid filing chapter 11. If UA is burning 2/3 what AA is burning and they are cutting 30%, AA needs to be cutting 40% to get its burn rate down.


They plan on working with other work groups next month. Also 40k employees have already taken some form of leave/early out or reduction in hours.

https://www.cnbc.com/2020/05/28/america ... staff.html
 
LCDFlight
Posts: 553
Joined: Wed Jan 01, 2020 9:22 pm

Re: AA staff layoffs coming

Thu May 28, 2020 12:05 pm

It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.

I suspect management is doing this. "Here is door number 1. It is a fully-developed Chapter 11 plan. Here is door number 2. You will be making specific concessions, which are less bad than it will be for your workgroup if we file chapter 11. We are confident you will agree door number 2 is better for everyone, but especially for you. Your prompt signature is now required."
 
MIflyer12
Posts: 8031
Joined: Mon Feb 18, 2013 11:58 pm

Re: AA staff layoffs coming

Thu May 28, 2020 12:20 pm

LCDFlight wrote:
Your prompt signature is now required."


Under U.S. law, people have to be given time to consider a separation agreement. People over 40 years of age also get seven days to revoke a signature. None of this qualifies as prompt.

CARES Act employment protections expire 30 September. WARN Act notices come at least 60 days before mass layoffs. Watch for a tsunami to start 2 August.
 
CRJ5000
Posts: 145
Joined: Thu Jan 17, 2019 3:06 pm

Re: AA staff layoffs coming

Thu May 28, 2020 12:23 pm

They have also offered one of the more attractive early retirement packages in the industry to pilots and a lot of those eligible are taking it.
50 hours credited a month which isn't that far off from the 73 that they have now. Full 16% 401K contribution, full health benefits, full travel benefits.
Only pilots aged 62-64 are eligible, but its a very lucrative offer for many of them.
The worry with the early out programs is that they can usually be gutted in bankruptcy, which is obviously a big concern, specifically with the pilots.
 
phlswaflyer
Posts: 90
Joined: Sat Oct 19, 2013 9:02 pm

Re: AA staff layoffs coming

Thu May 28, 2020 12:50 pm

chonetsao wrote:
Will Doug Parker sign up to this?


NO such luck. He and Isom are all about themselves and their W2.
 
ShinyAndChrome
Posts: 280
Joined: Fri Aug 28, 2015 1:53 am

Re: AA staff layoffs coming

Thu May 28, 2020 1:01 pm

Is there a reason why they'd state the severance as '3-6 months at 1/3 pay' instead of just '1-2 months pay'?
 
United1
Posts: 4164
Joined: Wed Oct 08, 2003 9:21 am

Re: AA staff layoffs coming

Thu May 28, 2020 1:01 pm

LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
MIflyer12
Posts: 8031
Joined: Mon Feb 18, 2013 11:58 pm

Re: AA staff layoffs coming

Thu May 28, 2020 1:43 pm

ShinyAndChrome wrote:
Is there a reason why they'd state the severance as '3-6 months at 1/3 pay' instead of just '1-2 months pay'?


It may be how they plan to pay it out (minimizing cash burn), rather that leaving people to assume they'll get a lump-sum of 1-2 months pay shortly after separation.
 
Antarius
Posts: 2401
Joined: Thu Apr 13, 2017 1:27 pm

Re: AA staff layoffs coming

Thu May 28, 2020 1:50 pm

MIflyer12 wrote:
ShinyAndChrome wrote:
Is there a reason why they'd state the severance as '3-6 months at 1/3 pay' instead of just '1-2 months pay'?


It may be how they plan to pay it out (minimizing cash burn), rather that leaving people to assume they'll get a lump-sum of 1-2 months pay shortly after separation.


This. It is paid out over 3 to 6 months. The total is 1-2, but it is not handed out in that timeframe
2020: SFO DFW IAH HOU CLT MEX BIS MIA GUA ORD DTW LGA BOS LHR DUB BFS BHD STN OAK PHL ISP JFK SJC DEN SJU LAS TXL GDL
 
Boof02671
Posts: 2096
Joined: Sun Jul 10, 2016 12:15 am

Re: AA staff layoffs coming

Thu May 28, 2020 2:01 pm

MIflyer12 wrote:
LCDFlight wrote:
Your prompt signature is now required."


Under U.S. law, people have to be given time to consider a separation agreement. People over 40 years of age also get seven days to revoke a signature. None of this qualifies as prompt.

CARES Act employment protections expire 30 September. WARN Act notices come at least 60 days before mass layoffs. Watch for a tsunami to start 2 August.

There is no law giving a time period to consider an early out.
 
panam330
Posts: 2161
Joined: Sun Mar 14, 2004 11:58 am

Re: AA staff layoffs coming

Thu May 28, 2020 2:02 pm

United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

That’s a tired chord to keep playing. It was extremely foolish to say anything like that, we know it, and he knows it. Nobody in any industry predicted this kind of business scenario. Excepting covid, he very well could’ve been correct - even an airline as (relatively) poorly run as AA has been the last few years has made money. This is the business environment they all lobbied for, and it’s the one they received.

Also, it’s spelled “lose”.
 
Boof02671
Posts: 2096
Joined: Sun Jul 10, 2016 12:15 am

Re: AA staff layoffs coming

Thu May 28, 2020 2:05 pm

United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

No one could have predicted a Global Pandemic.
 
UpNAWAy
Posts: 681
Joined: Thu Aug 11, 2016 12:42 pm

Re: AA staff layoffs coming

Thu May 28, 2020 2:07 pm

MIflyer12 wrote:
ShinyAndChrome wrote:
Is there a reason why they'd state the severance as '3-6 months at 1/3 pay' instead of just '1-2 months pay'?


It may be how they plan to pay it out (minimizing cash burn), rather that leaving people to assume they'll get a lump-sum of 1-2 months pay shortly after separation.



Its is to keep you on payroll, for Insurance and 401K purposes, as apposed to handing you a check on the day out the door.
 
Byrdluvs747
Posts: 2540
Joined: Thu Jul 15, 2004 5:25 am

Re: AA staff layoffs coming

Thu May 28, 2020 2:35 pm

Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

The truth is the airlines had poor business continuity plans for a worst case scenerio.
Last edited by Byrdluvs747 on Thu May 28, 2020 2:54 pm, edited 1 time in total.
The 747: The hands who designed it were guided by god.
 
joeblow10
Posts: 415
Joined: Mon Jun 04, 2018 11:58 pm

Re: AA staff layoffs coming

Thu May 28, 2020 2:39 pm

Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


Definitely an interesting thought. DL for example always claims to do scenario planning for “any eventuality” - you would think a pandemic would be one of them.

All things considered, COVID isn’t even as severe as you could get for a pandemic either, with a IFR or less than 1%. Imagine if SARS-1 or Ebola had gone global.
 
United1
Posts: 4164
Joined: Wed Oct 08, 2003 9:21 am

Re: AA staff layoffs coming

Thu May 28, 2020 2:55 pm

Boof02671 wrote:
United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

No one could have predicted a Global Pandemic.


The pandemic is unprecedented, and I don't fault AA for that, but you would have thought AA would have learned by now not to make blanket statements that might come back to haunt them. After 9/11 most carriers used that case as their stress test for their finances but even under those scenarios they would have projected to lose money. It is the height of arrogance (or AArrogance in this case) to believe you are invincible or that something can never happen.

Unfortunately AA leadership under the C level and their employees are going to end up paying a heavy price. Best of luck to everyone in the aviation industry.
Last edited by United1 on Thu May 28, 2020 3:01 pm, edited 1 time in total.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
AirnerdTX
Posts: 11
Joined: Wed Mar 13, 2019 12:27 pm

Re: AA staff layoffs coming

Thu May 28, 2020 2:56 pm

Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?

Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired. For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.
 
United1
Posts: 4164
Joined: Wed Oct 08, 2003 9:21 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:05 pm

AirnerdTX wrote:
Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?

Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired. For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.


I don't know about AA but UA during a recent presentation said they would be bolstering their cash position once all of this is over. UA had been using a 9/11+ scenario as worst case impact on their finances...that proved to be not enough...so you will probably see companies sitting on a lot more cash in the future.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
737max8
Posts: 614
Joined: Thu Dec 10, 2015 4:13 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:05 pm

Boof02671 wrote:
United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

No one could have predicted a Global Pandemic.


That's exactly why don't say it...
The thoughts and opinions expressed in my comments do not represent that of any airline or affiliate.
Flown on: 717 733 734 735 736 737 738 739 7M8 744 744ER 752 753 762 763 772 773ER 788 789 A220 A319/20/21 A332 A333 A339 A343 A346 A359 A388
 
FlyingElvii
Posts: 876
Joined: Wed Dec 27, 2017 10:53 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:07 pm

MIflyer12 wrote:
LCDFlight wrote:
Your prompt signature is now required."


Under U.S. law, people have to be given time to consider a separation agreement. People over 40 years of age also get seven days to revoke a signature. None of this qualifies as prompt.

CARES Act employment protections expire 30 September. WARN Act notices come at least 60 days before mass layoffs. Watch for a tsunami to start 2 August.

Interesting zoom meeting this morning. Starting Contingency planning in case Operations service providers file bankruptcies. Alternative sourcing ready to go, that kind of thing. It could only take one or two service providers shutting down to put pressure on Ops in some places.

Everything from ground transportation to cleaners. Something that many folks have not considered, I’m sure.
 
onwFan
Posts: 435
Joined: Wed Feb 03, 2016 4:02 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:10 pm

737max8 wrote:
Boof02671 wrote:
United1 wrote:

I would put about as much faith in that statement from Doug as I would "we will never loose money again."

No one could have predicted a Global Pandemic.


That's exactly why don't say it...

I presume that’s also exactly why it is not justifiable that DL made a ‘brilliant’ move investing billions into a loss-making carrier like LA?
 
777Mech
Posts: 958
Joined: Sun Sep 11, 2016 10:54 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:13 pm

Boof02671 wrote:
MIflyer12 wrote:
LCDFlight wrote:
Your prompt signature is now required."


Under U.S. law, people have to be given time to consider a separation agreement. People over 40 years of age also get seven days to revoke a signature. None of this qualifies as prompt.

CARES Act employment protections expire 30 September. WARN Act notices come at least 60 days before mass layoffs. Watch for a tsunami to start 2 August.

There is no law giving a time period to consider an early out.


You'd be wrong.
 
ShinyAndChrome
Posts: 280
Joined: Fri Aug 28, 2015 1:53 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:14 pm

joeblow10 wrote:
Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


Definitely an interesting thought. DL for example always claims to do scenario planning for “any eventuality” - you would think a pandemic would be one of them.

All things considered, COVID isn’t even as severe as you could get for a pandemic either, with a IFR or less than 1%. Imagine if SARS-1 or Ebola had gone global.


The thing about SARS or Ebola though is that they would've burned out quickly compared to Covid, even if there was worldwide community spread. They're much more deadly for the people who get it, yes, but SARS has a much shorter incubation period and Ebola is a lot less transmissable. Both also don't feature the crazy amount of asymptomatic spread you see right now.

I actually just talked over this hypothetical yesterday with a family member. If this was something like SARS, there would be a lot more deaths upfront, but you'd only need a lockdown of a couple months at most to clamp down on local spread and you'd never see it spreading to almost every county in the US. At the end, the damage both economically and in terms of lives lost would probably be less overall.
 
FlyingElvii
Posts: 876
Joined: Wed Dec 27, 2017 10:53 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:15 pm

joeblow10 wrote:
Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


Definitely an interesting thought. DL for example always claims to do scenario planning for “any eventuality” - you would think a pandemic would be one of them.

All things considered, COVID isn’t even as severe as you could get for a pandemic either, with a IFR or less than 1%. Imagine if SARS-1 or Ebola had gone global.

In today’s pre-Covid world, worst case scenario planning is/was frowned upon. It was go-go-go until you can’t. Why waste money planning for something that may never happen? Don’t be a negative Nancy.
(Lol... Funny thing is, that is exactly what they pay me to do!)

Example:
That is why we no longer have Civil Defense in America, just “Emergency Management”. Civil Defense implies that something COULD happen, and that has been politically incorrect WrongThink since the late 70’s.
 
ShinyAndChrome
Posts: 280
Joined: Fri Aug 28, 2015 1:53 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:17 pm

onwFan wrote:
737max8 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


That's exactly why don't say it...

I presume that’s also exactly why it is not justifiable that DL made a ‘brilliant’ move investing billions into a loss-making carrier like LA?


And here I thought we'd make it to the second page before someone tried turning it into a DL thing again.
 
AA747123
Posts: 287
Joined: Wed Dec 14, 2016 5:15 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:19 pm

chonetsao wrote:
Will Doug Parker sign up to this?



Not at all, Parker is very smart and has done a great job. Remember AA was on track to liquidate in 2011 before he led the US/HP purchase of AA.
 
umichman
Posts: 141
Joined: Sun Apr 07, 2019 2:42 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:21 pm

777Mech wrote:
Boof02671 wrote:
MIflyer12 wrote:

Under U.S. law, people have to be given time to consider a separation agreement. People over 40 years of age also get seven days to revoke a signature. None of this qualifies as prompt.

CARES Act employment protections expire 30 September. WARN Act notices come at least 60 days before mass layoffs. Watch for a tsunami to start 2 August.

There is no law giving a time period to consider an early out.


You'd be wrong.


You all are arguing over an entirely made up "quote" from an a'netter. What exactly is the point? There's no evidence that AA has stated this (or anything similar) to it's employees.
 
CaptainObvious1
Posts: 50
Joined: Sat Apr 11, 2020 11:22 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:21 pm

United1 wrote:
Boof02671 wrote:
United1 wrote:

I would put about as much faith in that statement from Doug as I would "we will never loose money again."

No one could have predicted a Global Pandemic.


The pandemic is unprecedented, and I don't fault AA for that, but you would have thought AA would have learned by now not to make blanket statements that might come back to haunt them. After 9/11 most carriers used that case as their stress test for their finances but even under those scenarios they would have projected to lose money. It is the height of arrogance (or AArrogance in this case) to believe you are invincible or that something can never happen.


The height of arrogance is how Oscar Munoz defended employees and never took ownership of the Dr. Dao incident until he lost his promotion to Chairman.

American issued refunds when asked and that hurt their cash flow immediately, United did not and played with the rules until the DOT gave them warnings. It shows in the May report from the DOT.
 
FlyingElvii
Posts: 876
Joined: Wed Dec 27, 2017 10:53 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:26 pm

United1 wrote:
AirnerdTX wrote:
Byrdluvs747 wrote:

Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?

Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired. For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.


I don't know about AA but UA during a recent presentation said they would be bolstering their cash position once all of this is over. UA had been using a 9/11+ scenario as worst case impact on their finances...that proved to be not enough...so you will probably see companies sitting on a lot more cash in the future.

Large cash balances for continuity of operations is fine, but too large of a pot attracts the corporate raiders looking for cash to loot.
And grandma stock holders complaining on Bloomberg about dividend checks not getting larger because they are just sitting on all of that money.
Two-edged sword.
 
User avatar
DL747400
Posts: 956
Joined: Mon Sep 01, 2008 4:04 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:26 pm

panam330 wrote:
United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

That’s a tired chord to keep playing. It was extremely foolish to say anything like that, we know it, and he knows it. Nobody in any industry predicted this kind of business scenario. Excepting covid, he very well could’ve been correct - even an airline as (relatively) poorly run as AA has been the last few years has made money. This is the business environment they all lobbied for, and it’s the one they received.

Also, it’s spelled “lose”.


You may consider it to be a "tired chord" because you don't like it or don't want to hear it, but it is accurate and factually true that DP did make that statement and it is now part of recorded history. It also continues to affect DP's credibility to this day, so it remains very relevant.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
onwFan
Posts: 435
Joined: Wed Feb 03, 2016 4:02 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:28 pm

ShinyAndChrome wrote:
onwFan wrote:
737max8 wrote:

That's exactly why don't say it...

I presume that’s also exactly why it is not justifiable that DL made a ‘brilliant’ move investing billions into a loss-making carrier like LA?


And here I thought we'd make it to the second page before someone tried turning it into a DL thing again.

Irrelevant statements fetch irrelevant responses.
 
Byrdluvs747
Posts: 2540
Joined: Thu Jul 15, 2004 5:25 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:39 pm

AirnerdTX wrote:
So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?


Yes, they should have been more prepared, especially when its your industry that has been predicted as the primary method by which a virus will spread internationally. SARS should have been a wakeup call, but the industry ignored it.

Your thinking has been proven obsolete by this pandemic just like opinions in the banking industry were proven obsolete after the 2008 financial crisis. After this pandemic, I'm sure it will become the norm to see airlines sitting on larger amounts of cash and/or very liquid instruments.

I can see S&P, Fitch, and Moodys changing how they rate airlines based on their high vulnerability to black swan events and their financial ability to survive them.

AirnerdTX wrote:
Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired.


Then the board can be fired when the company files for chapter 7.

AirnerdTX wrote:
For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.


The point you're missing is that it did come true, and I bet AA, UA, and DL wished they still had the tens of billions they wasted on stock buybacks sitting in their bank accounts. The current model of Boom-Bust-Bailout is losing favor with the taxpaying public, and airlines should expect future bailouts to become more rare, and with more strings attached.
The 747: The hands who designed it were guided by god.
 
JAMBOJET
Posts: 287
Joined: Tue Dec 11, 2018 6:23 pm

Re: AA staff layoffs coming

Thu May 28, 2020 3:47 pm

DL747400 wrote:
panam330 wrote:
United1 wrote:

I would put about as much faith in that statement from Doug as I would "we will never loose money again."

That’s a tired chord to keep playing. It was extremely foolish to say anything like that, we know it, and he knows it. Nobody in any industry predicted this kind of business scenario. Excepting covid, he very well could’ve been correct - even an airline as (relatively) poorly run as AA has been the last few years has made money. This is the business environment they all lobbied for, and it’s the one they received.

Also, it’s spelled “lose”.


You may consider it to be a "tired chord" because you don't like it or don't want to hear it, but it is accurate and factually true that DP did make that statement and it is now part of recorded history. It also continues to affect DP's credibility to this day, so it remains very relevant.

I agree that it wasn't a smart thing to say, but if we're going to keep recreating the quote over and over, we should, at least, quote it correctly: "I don't think we're ever going to lose money again".
It wasn't nearly declarative and definitive as everyone on this website loves to misquote. At the time or before Feb 2020, who on earth was thinking a pandemic would wipe out months of air travel?
No one.
If anyone was, Delta wouldn't have spent $2B+ on LA and certainly wouldn't have given KE even more money in February. United wouldn't have gone all in for international business travel with high-J 767 or come up with a very low-seat CRJ-550, etc.

Based on what he seemed to know at the time from past historical dips he wasn't wrong, even during AA's recent bad years, until this pandemic began.

https://www.cnbc.com/2017/09/28/america ... again.html
Last edited by JAMBOJET on Thu May 28, 2020 3:49 pm, edited 1 time in total.
 
United1
Posts: 4164
Joined: Wed Oct 08, 2003 9:21 am

Re: AA staff layoffs coming

Thu May 28, 2020 3:48 pm

CaptainObvious1 wrote:
United1 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


The pandemic is unprecedented, and I don't fault AA for that, but you would have thought AA would have learned by now not to make blanket statements that might come back to haunt them. After 9/11 most carriers used that case as their stress test for their finances but even under those scenarios they would have projected to lose money. It is the height of arrogance (or AArrogance in this case) to believe you are invincible or that something can never happen.


The height of arrogance is how Oscar Munoz defended employees and never took ownership of the Dr. Dao incident until he lost his promotion to Chairman.

American issued refunds when asked and that hurt their cash flow immediately, United did not and played with the rules until the DOT gave them warnings. It shows in the May report from the DOT.


So your answer to AAs issues are simply to try and shift the blame, change the topic to a competitor and stick your head in the sand? I'm hopefully you don't represent AA employee views in any way...otherwise AA is doomed.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
ShinyAndChrome
Posts: 280
Joined: Fri Aug 28, 2015 1:53 am

Re: AA staff layoffs coming

Thu May 28, 2020 4:09 pm

Byrdluvs747 wrote:
AirnerdTX wrote:
So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?


Yes, they should have been more prepared, especially when its your industry that has been predicted as the primary method by which a virus will spread internationally. SARS should have been a wakeup call, but the industry ignored it.

Your thinking has been proven obsolete by this pandemic just like opinions in the banking industry were proven obsolete after the 2008 financial crisis. After this pandemic, I'm sure it will become the norm to see airlines sitting on larger amounts of cash and/or very liquid instruments.

I can see S&P, Fitch, and Moodys changing how they rate airlines based on their high vulnerability to black swan events and their financial ability to survive them.

AirnerdTX wrote:
Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired.


Then the board can be fired when the company files for chapter 7.

AirnerdTX wrote:
For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.


The point you're missing is that it did come true, and I bet AA, UA, and DL wished they still had the tens of billions they wasted on stock buybacks sitting in their bank accounts. The current model of Boom-Bust-Bailout is losing favor with the taxpaying public, and airlines should expect future bailouts to become more rare, and with more strings attached.


You do realize that if that money wasn't spent on buy-backs most of it would've just gone into dividends, right? Compensating your shareholders is a cost of doing business just like any other. No shareholder comp = no investors = good luck raising the money to tread water, let alone keep up with your competitors' investments.

Leaving aside how our tax code literally disincentivizes companies from sitting on hoards of cash (as I've reiterated several times), how would you go about this if you were an airline CEO in 2015 or 2016, trying to keep tens of billions under the mattress in case the floor fell out in 2020? How would you keep your job amidst the inevitable shareholder coup? Note that you'd need to explain this way, way in the past: Until we invent a time machine, hindsight is less than worthless.

onwFan wrote:
ShinyAndChrome wrote:
onwFan wrote:
I presume that’s also exactly why it is not justifiable that DL made a ‘brilliant’ move investing billions into a loss-making carrier like LA?


And here I thought we'd make it to the second page before someone tried turning it into a DL thing again.

Irrelevant statements fetch irrelevant responses.


Whatever. My bad for expecting any different.
Last edited by ShinyAndChrome on Thu May 28, 2020 4:14 pm, edited 2 times in total.
 
as739x
Posts: 5219
Joined: Tue Apr 15, 2003 7:23 am

Re: AA staff layoffs coming

Thu May 28, 2020 4:13 pm

AirnerdTX wrote:
Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?

Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired. For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.


Maybe not. But also should not be running the airline at 30 billion in debt either!
"Some pilots avoid storm cells and some play connect the dots!"
 
User avatar
scbriml
Posts: 19103
Joined: Wed Jul 02, 2003 10:37 pm

Re: AA staff layoffs coming

Thu May 28, 2020 4:19 pm

panam330 wrote:
That’s a tired chord to keep playing. It was extremely foolish to say anything like that, we know it, and he knows it. Nobody in any industry predicted this kind of business scenario. Excepting covid, he very well could’ve been correct


So he's right. Well, apart from the time he's very, very wrong? :rotfl:

Frankly, it was a dumb thing to say and nobody should be surprised he'll be constantly reminded of it. Maybe he should have used his inside voice instead of the one people can hear? Having seen the results of 9/11, SARS, MERS & GFC all in recent memory, claiming nobody could possibly have foreseen this is a bit of a stretch.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
NorthTexAAs
Posts: 10
Joined: Thu Jun 29, 2017 10:26 pm

Re: AA staff layoffs coming

Thu May 28, 2020 4:27 pm

AA747123 wrote:
chonetsao wrote:
Will Doug Parker sign up to this?



Not at all, Parker is very smart and has done a great job. Remember AA was on track to liquidate in 2011 before he led the US/HP purchase of AA.


American started its CH11 restructuring in Nov 2011, and would have emerged with or without a merger. The AA/US merger wasn't announced until Feb 2013.
 
NYCAAer
Posts: 786
Joined: Thu Jul 29, 2004 10:22 pm

Re: AA staff layoffs coming

Thu May 28, 2020 4:31 pm

AA747123 wrote:
chonetsao wrote:
Will Doug Parker sign up to this?



Not at all, Parker is very smart and has done a great job. Remember AA was on track to liquidate in 2011 before he led the US/HP purchase of AA.


Declining revenue, lost market share, degeneration of hard products, 6 1/2 years to settle a mechanics contract. Great job?

AA was not about to liquidate in 2011. Other merger partners were considered. Horton and Co. should have been allowed to run the combined airline.
 
United1
Posts: 4164
Joined: Wed Oct 08, 2003 9:21 am

Re: AA staff layoffs coming

Thu May 28, 2020 4:33 pm

panam330 wrote:
United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

That’s a tired chord to keep playing. It was extremely foolish to say anything like that, we know it, and he knows it. Nobody in any industry predicted this kind of business scenario. Excepting covid, he very well could’ve been correct - even an airline as (relatively) poorly run as AA has been the last few years has made money. This is the business environment they all lobbied for, and it’s the one they received.

Also, it’s spelled “lose”.


Apologies for putting in an extra "O" either way you seemed to get my drift.

My point is they keep making statements like that and that is troubling...almost like they just don't learn. You can make the case Covid was unprecedented, because it was, but there was always going to be another downturn. The market is cyclical and none of the mergers did anything to change that pattern.

My hope is that Dougs arrogance doesn't cost 130,000 people their jobs.
I know the voices in my head aren't real but sometimes their ideas are just awesome!!!
 
AWACSooner
Posts: 2539
Joined: Tue Jan 22, 2008 12:35 am

Re: AA staff layoffs coming

Thu May 28, 2020 4:34 pm

Boof02671 wrote:
United1 wrote:
LCDFlight wrote:
It's a realistic looking memo. Meanwhile, management has been making commitments that it will not file Chapter 11.


I would put about as much faith in that statement from Doug as I would "we will never loose money again."

No one could have predicted a Global Pandemic.

It was still an incredibly stupid thing to say.
 
LNCS0930
Posts: 105
Joined: Sun Mar 01, 2020 9:17 pm

Re: AA staff layoffs coming

Thu May 28, 2020 4:38 pm

Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

The truth is the airlines had poor business continuity plans for a worst case scenerio.


They predicted a mutation of bird flu. Not some random virus like this. Because the expectation that bird flu might eventually mutate to go human to human there was a baseline vaccine ready. So if it happened we would have a vaccine in 90 days
 
Miamiairport
Posts: 665
Joined: Tue Apr 10, 2018 8:14 pm

Re: AA staff layoffs coming

Thu May 28, 2020 4:45 pm

NorthTexAAs wrote:
AA747123 wrote:
chonetsao wrote:
Will Doug Parker sign up to this?



Not at all, Parker is very smart and has done a great job. Remember AA was on track to liquidate in 2011 before he led the US/HP purchase of AA.


American started its CH11 restructuring in Nov 2011, and would have emerged with or without a merger. The AA/US merger wasn't announced until Feb 2013.


The plan at the time from an AA standpoint was that AA would emerge as an independent entity then consider a merger with USAir (rumors of B6) with AA management taking over the combined entity. Then Parker got the unions on his side, Wall Street on his side and the rest was history.

Would have an AA led entity performed any better? Or resisted the urge to become more like Spirit? We will never know.
 
NYCAAer
Posts: 786
Joined: Thu Jul 29, 2004 10:22 pm

Re: AA staff layoffs coming

Thu May 28, 2020 4:59 pm

Miamiairport wrote:
NorthTexAAs wrote:
AA747123 wrote:


Not at all, Parker is very smart and has done a great job. Remember AA was on track to liquidate in 2011 before he led the US/HP purchase of AA.


American started its CH11 restructuring in Nov 2011, and would have emerged with or without a merger. The AA/US merger wasn't announced until Feb 2013.


The plan at the time from an AA standpoint was that AA would emerge as an independent entity then consider a merger with USAir (rumors of B6) with AA management taking over the combined entity. Then Parker got the unions on his side, Wall Street on his side and the rest was history.

Would have an AA led entity performed any better? Or resisted the urge to become more like Spirit? We will never know.


During the short tenure of Horton, there were the new aircraft orders. The plan was to concentrate on five cornerstone hubs- DFW, ORD, MIA, LAX and JFK. No downsizing JFK for the lousy PHL hub we have from the merger. Then came “the International Premium Experience,” an improved inflight meal service with new china, glassware, flatware and linens, and all flight attendants were required to attend a class to learn about the improvements. The cabins of the 77W and A321T were designed and chosen by his team. And then the plan was to equip every aircraft in the fleet with personal video screens à la Delta and JetBlue. There was a man named Virasb Vahidi who was behind all the improvements, and despite what the unions might say, at least in the flight attendant group, morale was improving drastically. It was exciting being able to offer those products to our customers.

I think AA would be very different if it was run by real American.
 
Brickell305
Posts: 1019
Joined: Sat Jun 24, 2017 2:07 pm

Re: AA staff layoffs coming

Thu May 28, 2020 5:17 pm

NYCAAer wrote:
Miamiairport wrote:
NorthTexAAs wrote:

American started its CH11 restructuring in Nov 2011, and would have emerged with or without a merger. The AA/US merger wasn't announced until Feb 2013.


The plan at the time from an AA standpoint was that AA would emerge as an independent entity then consider a merger with USAir (rumors of B6) with AA management taking over the combined entity. Then Parker got the unions on his side, Wall Street on his side and the rest was history.

Would have an AA led entity performed any better? Or resisted the urge to become more like Spirit? We will never know.


During the short tenure of Horton, there were the new aircraft orders. The plan was to concentrate on five cornerstone hubs- DFW, ORD, MIA, LAX and JFK. No downsizing JFK for the lousy PHL hub we have from the merger. Then came “the International Premium Experience,” an improved inflight meal service with new china, glassware, flatware and linens, and all flight attendants were required to attend a class to learn about the improvements. The cabins of the 77W and A321T were designed and chosen by his team. And then the plan was to equip every aircraft in the fleet with personal video screens à la Delta and JetBlue. There was a man named Virasb Vahidi who was behind all the improvements, and despite what the unions might say, at least in the flight attendant group, morale was improving drastically. It was exciting being able to offer those products to our customers.

I think AA would be very different if it was run by real American.

Exactly, it was obvious in the brief period that Horton took over that the intention was to remain a premium airline and compete from the five hubs at the time. The degradation of product began in full swing once US management took control. As to whether the standalone AA would have survived or not, that's anyone's guess but at least from a customer perspective, it's clear that pre-merger management and post-merger management viewed things very differently.
 
LCDFlight
Posts: 553
Joined: Wed Jan 01, 2020 9:22 pm

Re: AA staff layoffs coming

Thu May 28, 2020 5:39 pm

United1 wrote:
panam330 wrote:
United1 wrote:

I would put about as much faith in that statement from Doug as I would "we will never loose money again."

That’s a tired chord to keep playing. It was extremely foolish to say anything like that, we know it, and he knows it. Nobody in any industry predicted this kind of business scenario. Excepting covid, he very well could’ve been correct - even an airline as (relatively) poorly run as AA has been the last few years has made money. This is the business environment they all lobbied for, and it’s the one they received.

Also, it’s spelled “lose”.


Apologies for putting in an extra "O" either way you seemed to get my drift.

My point is they keep making statements like that and that is troubling...almost like they just don't learn. You can make the case Covid was unprecedented, because it was, but there was always going to be another downturn. The market is cyclical and none of the mergers did anything to change that pattern.

My hope is that Dougs arrogance doesn't cost 130,000 people their jobs.


The loony tunes part of the bankruptcy statement was that Doug's whole thesis to join AA as CEO was that he wasn't like Arpey, who claimed he was not considering Ch 11 and dithered about that. Now Doug has made a similar quote from what I gather, in addition to the doozy "AA will never lose money." He certainly built AA's balance sheet and commitments on the assumption it would never lose money.

These things never change and in 20 years it will still be the same.
 
hohd
Posts: 921
Joined: Sat May 17, 2008 1:03 am

Re: AA staff layoffs coming

Thu May 28, 2020 5:43 pm

AirnerdTX wrote:
Byrdluvs747 wrote:
Boof02671 wrote:
No one could have predicted a Global Pandemic.


Complete nonsense!!! I really wish people would stop saying that. Virologists, epidemiologists, biologists, and various research institutions have been predicting this for the past two decades at least.

Thr truth is the airlines had poor business continuity plans for a worst case scenerio.


So for 20+ years some people have been saying a pandemic is coming, so airlines should have been better prepared? Which means they should have sat on 10's of Billions in cash for the last 20+ years for when the "predicted" pandemic hit?

Nonsense. Any corporation sitting on that kind of cash and not putting it to work would have their board and directors fired. For AA you would be talking about needing 12 months of operating cash, so $20+ Billions of dollars. Just sitting there waiting for a pandemic, that took over 20 years of chicken-little'ing to finally come true.


The airline industry has experienced several downturns in travel, some of them severe, so they have to plan for it. For AA, if they generated cash, they should have paid down that debt, not to do stock buybacks which if the stock goes down, are wasted dollars. Debt reduction is more prudent as it saves company interest payments and prepare better for any sudden travel disruptions. Right now AA is coming close to bankruptcy, while they may not do it, but they cannot borrow as they don't have any cash or can borrow at high interest rates.

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