While few companies have or should have a year's worth of working capital coverage most of the airlines, not just AA, were announcing a couple weeks in they were essentially broke and needed a fairly immediate infusion of cash from the government. Think of the industries that were also decimated and got squat. Early in my finance careers the standard was that a company should have a minimum of 3 months working capital coverage on hand because of unexpected disaster. Of course back then there were no government handouts.

That's cute to gripe and moan all you want about what you think how American Airlines should have been run for the past 15 years.

But focusing back on the topic at hand: which looks like this: if you work for American Airlines, you have a good chance of having your pay cut and or losing your job altogether. The job market absolutely sucks right now and you could be out of work for a very long time for forced to make ends meet by taking drastic measures which you aren't used to.

Plan accordingly.

Oh, and have a nice day.

Is it just me, seems like AA has too many flights! I think they need less flying this summer and fall. They can't fly out if this, I think they just need to weather thru until demand comes back.

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.

WOW US need a date to the prom bad otherwise they might not be around. AA was no where close 2011 to liquidate in fact the turn around after and the 4+ billon of cash on hand in 2011 they not only did need a date to the prom but they really could have rode out the BK and not filed at all. Arpey was forced out cause he had thought it was a moral obligation to pay pensions they promised and didn't want to goto BK so they found a CEO who would. AA only went to BK to be on par with UA/US/DL so they can dump their pensions as well. Under Arpey AA and without a US as a date to the prom the company would have been in way better shape than what DP has done to AA. In the end every Airline will LAYOFF if they can get creative they can shed now before Oct and save $$$

Every airline including WN will have layoffs unless demand returns very quickly. With no end in sight and no exit strategy to social distancing and mask wearing I don't see demand returning anywhere to what it was. For example CLT went from 9 to 4 banks a day. Yes planes are now full but there's far, far less planes flying.

I feel for anyone that gets a pink slip to day. I'm in technology deployment in what has been a "hot field" and I can tell you the pickins are now slim. All those that thought they had job security because they could work from home and were "professionals" will be in for a rude awakening. Higher unemployment causes more unemployment. It's one big toilet flush. I won't comment additionally on why I think this real sh$$t show has occurred, airline workers are just one group that will be totally hosed.

slcdeltarumd11 wrote:

Is it just me, seems like AA has too many flights! I think they need less flying this summer and fall. They can't fly out if this, I think they just need to weather thru until demand comes back.

AA and WN are taking the risk that by enabling connections and by flying more seats that they will be able to weather the storm better by getting a much larger percentage of the revenue. It is a high risk, very high reward approach.

AA was bloated in management and support staff, it remains to be determined as to whether or not the right departments are cut. Marketing and CEID are two departments that will see cuts but in the long run it'll hurt AA more.

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.

AA was never on a path to liquidation, they reorganized just like everyone else had in 2004 and 2005 after ousting the CEO that refused to do it, they just did it way later than they ought to have in 2011.

US never purchased AA it was a merger that involved no exchange of money, a merger which occurred to try and balance out DL/NW, UA/CO, WN/FL which US was needing. AA was in a position to move out of bankruptcy and continue on just fine on its own with a new reorganized and leaner pocket book (though smaller than everyone else except US), even having re-branded (newAmerican) and moving forward with a new corporate face that included a new flagship aircraft, the 77W, and a strategy to focus on business routes and customers with PTVs on all their new planes and an expansion into the largest corporate markets. US came by and convinced the boards/creditors/unions that AA/US was a good deal that would rival the other mega mergers. Who knows where LAA would be now if they had stayed off on their own... it would have been more interesting to see than the current mess the merged company has become up until COVID changed everything again.


So enough with this "AA was bought by US" crap... Parker himself said US would not survive if it did not merge (another blanket statement, nothing new for him).

alasizon wrote:

slcdeltarumd11 wrote:

Is it just me, seems like AA has too many flights! I think they need less flying this summer and fall. They can't fly out if this, I think they just need to weather thru until demand comes back.

AA and WN are taking the risk that by enabling connections and by flying more seats that they will be able to weather the storm better by getting a much larger percentage of the revenue. It is a high risk, very high reward approach.

AA was bloated in management and support staff, it remains to be determined as to whether or not the right departments are cut. Marketing and CEID are two departments that will see cuts but in the long run it'll hurt AA more.

one airline can afford it, the other one cannot.

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.

Show me the law. I was a longtime IAM Rep at US. Only law is the WARN Act and that’s makes 60 days notice for mass layoffs. Nothing in regards to an early out

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.

AA was not on a path to go chapter 7.

Why can't Dougie do us all a solid and lay himself off?

Boof02671 wrote:

777Mech wrote:

Boof02671 wrote:

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

You'd be wrong.

Show me the law. I was a longtime IAM Rep at US. Only law is the WARN Act and that’s makes 60 days notice for mass layoffs. Nothing in regards to an early out

The Age Discrimination in Employment Act (ADEA) which was amended by the Older Workers Benefit Protection Act (OWBPA) requires it. Passed by Congress in the 90s.

https://www.shrm.org/hr-today/news/hr-m ... rends.aspx
https://www.spigglelaw.com/employment-b ... ent-offer/

alasizon wrote:

Boof02671 wrote:

777Mech wrote:

You'd be wrong.

Show me the law. I was a longtime IAM Rep at US. Only law is the WARN Act and that’s makes 60 days notice for mass layoffs. Nothing in regards to an early out

The Age Discrimination in Employment Act (ADEA) which was amended by the Older Workers Benefit Protection Act (OWBPA) requires it. Passed by Congress in the 90s.

https://www.shrm.org/hr-today/news/hr-m ... rends.aspx
https://www.spigglelaw.com/employment-b ... ent-offer/

First of all it’s not a Severance Agreement, it’s a voluntary separation or resignation. Guess you didn’t see the part doesn’t cover 40 or younger. And AA and all the airlines have just done this and there was no 40 day waiting period. It was two weeks or less. What you posted is about age discrimination

Ghad, this has turned into a typical (off topic) pre-merger AA/JFK HOMER thread - "If AA had not merged with US, this would never have happened". Right, super Horton would likely have visited each AA station with a HUGE Bug spray can and made the Covid-19 Virus evaporate, then used used pre-merger AA's HUGE cash reserves to keep the staff employed at 100%. Give it a rest.

AA747123 wrote:

Remember AA was on track to liquidate in 2011 before he led the US/HP purchase of AA.

Nonsense. AA went into bankruptcy with $4.1B in cash on hand. They were nowhere even remotely close to liquidation.

Every airline is going to layoff on oct 1. It's inevitable. The federal money did help delay it, but it will happen. AA might be in worse shape but they are all hurting

Boof02671 wrote:

alasizon wrote:

Boof02671 wrote:

Show me the law. I was a longtime IAM Rep at US. Only law is the WARN Act and that’s makes 60 days notice for mass layoffs. Nothing in regards to an early out

The Age Discrimination in Employment Act (ADEA) which was amended by the Older Workers Benefit Protection Act (OWBPA) requires it. Passed by Congress in the 90s.

https://www.shrm.org/hr-today/news/hr-m ... rends.aspx
https://www.spigglelaw.com/employment-b ... ent-offer/

First of all it’s not a Severance Agreement, it’s a voluntary separation or resignation. Guess you didn’t see the part doesn’t cover 40 or younger. And AA and all the airlines have just done this and there was no 40 day waiting period. It was two weeks or less. What you posted is about age discrimination

It actually is a serverance agreement, because the employee and airline are agreeing to terms not normally given under normal circumstances. You and the company are agreeing to separate.

I doubt people under 40 qualify for the early retirement anyways.

Boof02671 wrote:

alasizon wrote:

Boof02671 wrote:

Show me the law. I was a longtime IAM Rep at US. Only law is the WARN Act and that’s makes 60 days notice for mass layoffs. Nothing in regards to an early out

The Age Discrimination in Employment Act (ADEA) which was amended by the Older Workers Benefit Protection Act (OWBPA) requires it. Passed by Congress in the 90s.

https://www.shrm.org/hr-today/news/hr-m ... rends.aspx
https://www.spigglelaw.com/employment-b ... ent-offer/

First of all it’s not a Severance Agreement, it’s a voluntary separation or resignation. Guess you didn’t see the part doesn’t cover 40 or younger. And AA and all the airlines have just done this and there was no 40 day waiting period. It was two weeks or less. What you posted is about age discrimination

A voluntary resignation with benefits is a severance agreement and no, I didn't miss the fact it only covers people over the age of 40; that is what the original poster who brought it up stated. Compensation above pre-guaranteed benefits whether it be resignation or retirement is by definition a severance agreement/package.

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.

777Mech wrote:

Boof02671 wrote:

alasizon wrote:

The Age Discrimination in Employment Act (ADEA) which was amended by the Older Workers Benefit Protection Act (OWBPA) requires it. Passed by Congress in the 90s.

https://www.shrm.org/hr-today/news/hr-m ... rends.aspx
https://www.spigglelaw.com/employment-b ... ent-offer/

First of all it’s not a Severance Agreement, it’s a voluntary separation or resignation. Guess you didn’t see the part doesn’t cover 40 or younger. And AA and all the airlines have just done this and there was no 40 day waiting period. It was two weeks or less. What you posted is about age discrimination

It actually is a serverance agreement, because the employee and airline are agreeing to terms not normally given under normal circumstances. You and the company are agreeing to separate.

I doubt people under 40 qualify for the early retirement anyways.

It’s not just an early retirement. You don’t have to be eligible for retirement to take an early out.

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.

I guess airlines need to re-write their contracts and list everyone as "on-call" in order to facilitate resiliency needed to combat any future pandemic. (?)

The thing that sucks the most, is you could have a 25 + year employee hold out and hope they are not involuntarily furloughed, then boom they are. After 25 + years all they have to show is 1 year of D2R travel then nothing. Pretty heartless of Parker and crew

Election is in November. Could there be another aid package to the airlines to prevent furloughs in October?

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.

And you 777Mech would be correct:

https://www.troutman.com/insights/sever ... n-act.html

Older Workers Benefit Protection Act

DDR wrote:

Election is in November. Could there be another aid package to the airlines to prevent furloughs in October?

As others have mentioned in other threads, with unemployment approaching something like 25% airline furloughs likely won't be that salient of an issue even on the heels of the election.

That said, in the hypothetical case of one of the big six major airlines (I'd add HA as well due to its own unique market niche) potentially being in danger of straight up disappearing because of this, I do think some form of aid package is plausible, probably extended to other carriers to prevent accusations of favoritism. Losing service or losing a hub is a lot more painful and longer lasting.

Not that I see that scenario as likely of course. At the very least, at this rate the big six (and the ULCCs are even better off) should have the resources to make it into 2021 without any additional intervention. At the very least, it wouldn't be a salient issue for this November's election.

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.

No one could’ve predicted a pandemic, but it speaks to the management attitude of not preparing for any sort of downturn, and those are guaranteed in this industry. Now they’re in the worst shape of all the legacies.

stlgph wrote:

That's cute to gripe and moan all you want about what you think how American Airlines should have been run for the past 15 years.

But focusing back on the topic at hand: which looks like this: if you work for American Airlines, you have a good chance of having your pay cut and or losing your job altogether. The job market absolutely sucks right now and you could be out of work for a very long time for forced to make ends meet by taking drastic measures which you aren't used to.

Plan accordingly.

Oh, and have a nice day.

This reality is exactly where a lot of posters’ animosity toward Doug Parker comes from.

AA747123 wrote:

The thing that sucks the most, is you could have a 25 + year employee hold out and hope they are not involuntarily furloughed, then boom they are. After 25 + years all they have to show is 1 year of D2R travel then nothing. Pretty heartless of Parker and crew

The 25+ year guy/woman will be among the first to be recalled so long as AA continues operating, at least if we're talking about positions protected by inverse-seniority rules. For management/admin staff, everything is at-will employment, anyway.

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.

I do agree with you regarding AA being very different if they didn't join with US. I do believe the airline would have been better off without a merger. It seems like AA has taken a large step down. I do miss the old AA for sure.

MIflyer12 wrote:

AA747123 wrote:

The thing that sucks the most, is you could have a 25 + year employee hold out and hope they are not involuntarily furloughed, then boom they are. After 25 + years all they have to show is 1 year of D2R travel then nothing. Pretty heartless of Parker and crew

The 25+ year guy/woman will be among the first to be recalled so long as AA continues operating, at least if we're talking about positions protected by inverse-seniority rules. For management/admin staff, everything is at-will employment, anyway.

There is no recall for management. If you are furloughed you are essentially permanently fired. You will never come back.

There is no age limit or requirement in this offer. Age only comes into play if you want to "Retire" with lifetime flight benefits. If you are not old enough to "Retire" you can still get flight benefits for 5 or 10 years depending on the option you choose.
There is no recall is correct but there also is no "you will never come back". We have had people leave the company and come back continuously for the last 30 years and that will likely continue, once they are back in a hiring and growth cycle.

These cuts need to happen at AA as well as their wholly-owned carriers. There are too many layers of management left after the merger. It’s time to trim what needs to be trimmed, restructure the reporting hierarchy, and make AAG efficient as possible. Next step is to get rid of Oasis.

scbriml wrote:

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?

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.

Ah yes, the once-a-century (so far) global pandemic, in the first century where there’s a widespread ability to move millions of people around the world in mere hours. There is quite literally no precedent for this exact scenario; the last disease this far-reaching occurred well before this kind of movement was made, and none of the events you listed come close to this, but think what you want, I guess.
I’m not defending the man - it was one of the dumbest things I’ve personally seen come out of a CEO’s mouth in my lifetime - but to say he should’ve planned for an event orders of magnitude more impactful than all that’ve preceded it in the entire history of the industry is asinine. Humans are reactionary creatures, and slow-moving industries like aviation even more so. Will they plan for it now? If they want to survive, I sure as hell hope they do.

AA747123 wrote:

MIflyer12 wrote:

AA747123 wrote:

The thing that sucks the most, is you could have a 25 + year employee hold out and hope they are not involuntarily furloughed, then boom they are. After 25 + years all they have to show is 1 year of D2R travel then nothing. Pretty heartless of Parker and crew

The 25+ year guy/woman will be among the first to be recalled so long as AA continues operating, at least if we're talking about positions protected by inverse-seniority rules. For management/admin staff, everything is at-will employment, anyway.

There is no recall for management. If you are furloughed you are essentially permanently fired. You will never come back.

Uh, huh, hence this in my earlier post: For management/admin staff, everything is at-will employment, anyway.

Maybe you were in a seniority-protected post too long to understand what 90% of the rest of U.S. private employment is like.

airtran737 wrote:

These cuts need to happen at AA as well as their wholly-owned carriers. There are too many layers of management left after the merger. It’s time to trim what needs to be trimmed, restructure the reporting hierarchy, and make AAG efficient as possible. Next step is to get rid of Oasis.

There were layers of management CREATED after the merger. Positions with 1 or 2 direct reports, people that got there because they're a special breed, lame duct managers that sit in meetings and don't deal with the day to day issues that plague the company, people in lead positions that are batting two levels too high, "special projects" out the wazoo, and the deaf are left to lead the blind. 30% is a good start. I just hope they cut the right people. Seeing as they've never been good at dealing with personnel issues, odds aren't great.

airtran737 wrote:

These cuts need to happen at AA as well as their wholly-owned carriers. There are too many layers of management left after the merger. It’s time to trim what needs to be trimmed, restructure the reporting hierarchy, and make AAG efficient as possible. Next step is to get rid of Oasis.

And Project Kodiak!

Is it remotely possible that about 30% of AA staff opt for voluntarily separation from the company, so that no real or Involuntary lay off come?

Ammad wrote:

Is it remotely possible that about 30% of AA staff opt for voluntarily separation from the company, so that no real or Involuntary lay off come?

Unless there's a ton of people near retirement age probably not. In this economy and in consideration all airlines are looking to downsize where would you go if you're under age 60? Most are probably praying they are part of the 70% that survives.

Have to remember why flights are packed there are still fewer flights and I don't need streams of data to tell me what kind of garbage yields AA (and some others) is getting.

Ammad wrote:

Is it remotely possible that about 30% of AA staff opt for voluntarily separation from the company, so that no real or Involuntary lay off come?

It didn’t happen.

The deadline passed last week and now AA has began to inform employees their post-Sept 30 fate. Just go on LinkedIn and you will see post after post from these people.