Tag Archives: American Airlines

American Airlines Presentation From Monday

For those of you with inquiring minds, you can access the presentation that American Airlines made to the negotiators for the Allied Pilots Association by clicking here.

Meanwhile, as far as the APA is concerned, they told members yesterday,

“NEGOTIATING UPDATE: After a nearly seven-week break, formal negotiating sessions with AMR resumed this afternoon. According to the National Mediation Board mediator-directed agenda, AMR’s negotiators were slated to offer specific counters to APA’s responses to portions of management’s latest scheduling proposal. To our disappointment, management had no scheduling proposals or responses to discuss. In fact, they were not prepared to conduct bargaining on any area of the contract.

In a subsequent caucus with the NMB mediators, APA discussed the current status of negotiations. Bargaining was suspended and another day was lost because AMR was not prepared to negotiate, did not adhere to the agenda, and was not held accountable by the NMB. They continue to ignore the NMB’s direction and agenda, are non-responsive to APA proposals, and refuse to discuss major issues such as compensation, stagnation and furlough protections.”

As one of our longtime AMR/APA watchers observed this morning, “APA’s version has nothing about walking out or the Powerpoint slide show. That said I think both sides are getting their ducks in a row for the new sheriff coming to town in January.”

American Airlines and The Allied Pilots Union: Ugly, Ugly

Trebor Banstetter over at the Ft. Worth Star-Telegram reports today that things got a little heated at a meeting yesterday between the negotiators for American Airlines and pilot union representatives.

AA blasts union, pilots walk out

Officials with American Airlines gave a presentation to federal mediators Zachary Jones and Mike Tosi yesterday that criticized the pilots union for its approach to contract negotiations. The presentation accused the union of refusing to negotiate, pushing for an impasse (which would allow the union to strike), and ignoring the economic realities of the airline industry. It’s strong stuff, and far more aggressive than most of the airline’s public comments about the talks with pilots, which have made little progress after more than two years. Shortly after beginning the presentation, union negotiators “opted to leave the session,” according to the airline.

Don’t you just love the holidays? The season brings out the warmth and the joy in everyone, wouldn’t you agree?

Earnings Start: American and Delta Air Lines Report Losses

Both American Airlines and Delta Air Lines kicked off the earnings season this quarter by announcing third quarter earnings today.

The results?

Not especially heartening — yet, as analyst Jamie Baker with JP Morgan wrote this morning — third quarter results are going to be somewhat of a major aberration. Or as he said, “3Q jet fuel averaged over $1.00/gallon higher than today’s spot, the industry hadn’t undertaken unprecedented capacity cuts, and demand had yet to reflect the most recent global malaise. As such, we broadly consider 3Q industry results to be irrelevant, offering little to no insight as to the industry’s 2009 profit potential.”

Delta Air Lines reported a loss of $50 million, opposed to a profit of $220 million last year, while American Airlines reported a loss of $360 million. This compared to a profit of $175 million last year.

Yes, the airline DID lose that much.

Headline numbers are touting the fact the airline posted net income of $45 million, but that number includes a huge one-time gain and other items. That one-time $432 million gain came from the sale of American Beacon Advisors.

American Plays Catch-Up Big Time With Boeing 787 Order

In addition to announcing earnings today, American Airlines announced that it has entered into a purchase agreement with Boeing, under which American intends to acquire an initial 42 Boeing 787-9 aircraft scheduled for delivery beginning in 2012 and ending in 2018, with the right to purchase up to 58 additional 787 aircraft that may be scheduled for delivery beginning in 2015 and ending in 2020.

Food For Thought: Airlines and Pensions

I had an errant thought yesterday as I watched the Dow fall and not get back up again.

And that thought concerned pensions. And the airlines that still have pension plans for their employees.

Remember that the last time the airline industry had to deal with the “pension issue” was following the market meltdown that followed the “internet bubble” that burst in 2000.

(If you note a bit of sarcasm in that description…good.)

Going into 2001 and 2002, airlines were suddenly looking at pension plans that required more and more in cash infusions — because the value of the underlying securities in the pension funds had declined so precipitously.

Rewind the clock. Start it over again.

We are now looking at exactly the same situation. With equities in a free-fall — all pension funds are gasping for air.

Tuesday, Congress’ top budget analyst estimated that Americans’ retirement plans have lost as much as $2 trillion in the past 15 months. And you can add more to that total, because you can bet his number crunching did not take into consideration the free fall in the market during the last two weeks.

Public and private pension funds and employees’ private retirement savings accounts – like 401(k)’s – have lost some 20% overall since mid-2007, said Peter Orszag, the head of the Congressional Budget Office.

So just a little red flag for the radar screen.

Airlines such as American Airlines and Continental Airlines that have worked hard to keep their employee pension plans in place are going to face tough times ahead — as pension plan funding requirements balloon.

Then again, an airline like United, which was successful in blowing up its employee pension plans as part of their bankruptcy proceedings, won’t have to worry.

Something just doesn’t seem right about all this, does it?

Wall Street Sends Politicians a Message: We Run This Hood

In case you’ve been occupied with feeding the cat, doing Sudoku, or eating a late lunch, the world financial markets are one big mess today.

So much for the power of politicians in Washington to snap their fingers and hope that the rest of the world simply agrees to sit back and let Treasury Secretary Hank Paulson do his “magic.” A couple of problems with that $700 billion gift from the U.S. taxpayers that Congress okayed last week. One, it’s going to take weeks before any of that buy-back of crappy debt even begins. Two, credit markets are frozen NOW. Third, now world markets are starting to unravel.

Which brings us to the big news if you are an airline investor, or someone who simply owns shares of your own airline that you work for.

Not only are world financial markets one big mess today — but airlines stocks are getting hit very hard.

You’d think that with the price of oil now down below $90 today that investors would be snapping up airline shares right and left.

After all — think of the potentially lethal profit cocktail we have going on — sharply lower fuel costs on their way, coupled with sharply reduced capacity. It would seem like the perfect recipe for higher airline stock prices.

Unfortunately that is not how the market is thinking today. Then again, the market is not thinking very clearly about much of anything. This is definitely one of those days when fear rules.

As for the airline sector, the biggest decliners as of this posting include: United, which is down 18% at 6.68, Continental Airlines, down 20% to 12.15, Republic Holdings down 16% to 7.86, AMR, parent of American Airlines, down 18% to 7.65, and US Airways, down 14% to 5.58.

September 11, 2008

Seven years ago today we all awoke to the horrific events of September 11 as they began to unfold — events that began and ended with the destruction of four aircraft, the death of hundreds of innocent passengers, and many innocent airline crew members.

While the world takes a moment today to commemorate the events that happened that day in a much larger sense — particularly the thousands of people who died in New York City — we here at PlaneBusiness, as we have since that awful day, focus on our departed airline family members. Those crew members who just went to work on what was a beautiful day in the Northeast that day — but never came home.

We will never forget them.

This is our corner of the world. And as I see it, the courage and bravery of these crewmembers deserve our heartfelt acknowledgment. And remembrance.

American Airlines Flight 11, Boston to Los Angeles, crashed into the World Trade Center.

CREW: John Ogonowski, Dracut, Mass., Captain; Thomas McGuinness, Portsmouth, N.H., First Officer; Barbara Arestegui, flight attendant; Jeffrey Collman, flight attendant; Sara Low, flight attendant; Karen Martin, flight attendant; Kathleen Nicosia, flight attendant; Betty Ong, flight attendant; Jean Roger, flight attendant; Dianne Snyder, flight attendant; Madeline Sweeney, flight attendant.

United Airlines Flight 175, Boston to Los Angeles, crashed into the World Trade Center.

CREW: Victor J. Saracini, Lower Makefield Township, Pa., Captain; Michael Horrocks, First Officer; Amy Jarret, flight attendant; Al Marchand, flight attendant; Amy King, flight attendant; Kathryn Laborie, flight attendant; Michael Tarrou, flight attendant; Alicia Titus, flight attendant.

American Airlines Flight 77, Washington to Los Angeles, crashed into the Pentagon.

CREW: Charles Burlingame, Captain; David Charlebois, First Officer; Michele Heidenberger, flight attendant; Jennifer Lewis, flight attendant; Kenneth Lewis, flight attendant; and Renee May, flight attendant.

United Airlines Flight 93, Newark, N.J., to San Francisco, crashed in Shanksville, Pa.

CREW: Jason Dahl, Colorado, Captain; Leroy Homer, Marlton, N.J., First Officer; Sandy Bradshaw, flight attendant; CeeCee Lyles, flight attendant; Lorraine Bay, flight attendant; Wanda Green, flight attendant; Deborah Welsh, flight attendant.

May they all be at peace in a much better place.

My Own “United Airlines Bankruptcy” Old News Experience

Every week as I sit down and begin to gather my mental notes for the next issue of PlaneBusiness Banter, I begin a process of routine news searches — looking for articles dealing with some aspect of the industry.

Sometimes I do this looking for more information on a story that most people already know something about. But oftentimes the payoff comes when a story that I was not aware of pops up on the computer screen.

And so it was last week when I came upon a story that talked about how American Airlines had been forced to cancel hundreds of flights flown by MD-80s as the FAA issued new inspections be done on the aircraft.

The headline on the story, “FAA Crackdown Could Lead to More Delays.”

I hadn’t heard a word about this.

No one had sent me a note about it.

I looked at the date on the top of the story. September 3, 2008.

The article began:

“FAA Crackdown Could Lead to More Delays

Posted on: Wednesday, 3 September 2008, 21:00 CDT

By Michael Sean Comerford Daily Herald Business Writer

mcomerford@dailyherald.com

Three airline fleet related actions in three weeks by the Federal Aviation Administration may indicate more inspection- related flight delays ahead, airline analysts said Wednesday.

The latest U.S. airline to ground its own planes Wednesday was American Airlines, the world’s largest carrier.

The airline canceled 300 flights to re-inspect wiring in Boeing Co. MD-80s after federal regulators raised questions during a maintenance audit.

Southwest Airlines and United Airlines have also recently been subject to FAA actions.

American Airline’s cancellations represented about 13 percent of its Wednesday flights. American Airlines is checking whether a sleeve covering a bundle of wires was installed according to a FAA directive, spokesman Tim Wagner said.

About 80 flights were canceled at the carrier’s Dallas-Fort Worth hub, and about 68 more at O’Hare International Airport. The rest were scattered across the U.S.

Most passengers had been booked on other flights, according to spokesman Tim Wagner, but some may have been delayed until this morning.

As of Wednesday evening, no further flight delays at O’Hare had been announced for today, Wagner said.

I then re-read the article one more time — this time looking to see if I could determine if, in fact, this story had been written in April — not last week — when American was forced to cancel thousands of flights because of an FAA crackdown.

And sure enough, with that second reading it was clear that the story that while the story had been tagged as current, it was, in fact, six months old.

How does this happen?

I’m not sure how it happened in the case of the United Airlines bankruptcy news story that went public Monday that was 6 years old.

Nor am I sure how it happened that this particular story about “FAA Crackdown causing more delays” was posted with a current date and then picked up by the usual news aggregators — when it was, in fact, 6 months old.

But what I do know is that every once in a while, when I post a new post to Movable Type, which is the blog software program that powers this blog — the software will, for some unexplained reason — arbitrarily pull a post from 2006 and post it, along with the right one — with both dated with the current date.

Actually, It happened yesterday. When it happens I have to go in, unpublish the older post, and then republish it — using my best guess as to its original date.

So while I, along with a lot of other people, wait for more details concerning the alleged “reposting” of the six-year old bankruptcy news story — I’m here to vouch that yes, content management systems can be flaky. It can happen. And it does.

Now whether this was an intentional posting is another matter. And I’m sure we’ll find out if it was or not in the coming weeks as the SEC tracks down who posted what and when — and why.