AMR tumbles more than 10% after pilot contract proposal

 
Old Nov 15, 2011, 9:53 am
  #1  
FlyerTalk Evangelist
Original Poster
 
Join Date: Sep 2003
Location: MileagePlus Premier Gold
Posts: 11,522
Cool AMR tumbles more than 10% after pilot contract proposal

From Bloomberg - snippet below. As of 11:52am ET on 11/15/2011, AMR is down more than 10% to $1.92, more than 75% off in the 52-week period.

Pilots want a 10% signing bonus and 7% pay raises for three consecutive years. Wow.


Not good.

http://www.bloomberg.com/news/2011-1...tml?cmpid=yhoo

American Airlines parent AMR Corp. (AMR) tumbled the most in six weeks in New York trading after trying to end a five-year stalemate with a contract proposal that offers pilots smaller pay increases than they had sought.

“The time has come to close this chapter and move forward,” American said yesterday on its labor website, urging the Allied Pilots Association to permit members to vote on the plan. The union’s board began a three-day meeting today.

Compensation and the scope of flying that rivals might do for Fort Worth, Texas-based American are the biggest unsettled issues in bargaining that began in 2006. American is seeking to cut labor costs and made the proposal as AMR directors prepared to gather tomorrow for their last scheduled session of 2011.

“Management is trying to put on a lot of pressure” to resolve the stalled talks, said Robert W. Mann, president of consultant R.W. Mann & Co. in Port Washington, New York. “If the gulf is wide, it’s not going to move. It will just go back for further discussion. It looks like the company is pretty frustrated right now.”
UnitedSkies is offline  
Old Nov 15, 2011, 9:57 am
  #2  
Suspended
 
Join Date: May 2010
Posts: 2,621
Wow, Indeed

Originally Posted by UnitedSkies
From Bloomberg - snippet below. As of 11:52am ET on 11/15/2011, AMR is down more than 10% to $1.92, more than 75% off in the 52-week period.

Pilots want a 10% signing bonus and 7% pay raises for three consecutive years. Wow.


Not good.

http://www.bloomberg.com/news/2011-1...tml?cmpid=yhoo

American Airlines parent AMR Corp. (AMR) tumbled the most in six weeks in New York trading after trying to end a five-year stalemate with a contract proposal that offers pilots smaller pay increases than they had sought.

The time has come to close this chapter and move forward, American said yesterday on its labor website, urging the Allied Pilots Association to permit members to vote on the plan. The unions board began a three-day meeting today.

Compensation and the scope of flying that rivals might do for Fort Worth, Texas-based American are the biggest unsettled issues in bargaining that began in 2006. American is seeking to cut labor costs and made the proposal as AMR directors prepared to gather tomorrow for their last scheduled session of 2011.

Management is trying to put on a lot of pressure to resolve the stalled talks, said Robert W. Mann, president of consultant R.W. Mann & Co. in Port Washington, New York. If the gulf is wide, its not going to move. It will just go back for further discussion. It looks like the company is pretty frustrated right now.
Assume they have been doing some really serious drinking of late.
DaddyRabbit is offline  
Old Nov 15, 2011, 10:07 am
  #3  
 
Join Date: Jun 2000
Location: DFW, 3.5 MM, AA EXP, LIFETIME PLATINUM, MARRIOTT LIFETIME PLATINUM, STARWOOD AMBASSADOR 223 NIGHTS, AND LIFETIME GOLD, HILTON DIAMOND, NATIONAL EXECUTIVE ELITE
Posts: 5,847
All I can say is Wow.

I wish I could get a 10% signing bonus and 7% raise for the next 3 years.
freeupgrade is offline  
Old Nov 15, 2011, 10:12 am
  #4  
FlyerTalk Evangelist
 
Join Date: Oct 2003
Location: Washington, DC
Posts: 11,242
Originally Posted by freeupgrade
All I can say is Wow.

I wish I could get a 10% signing bonus and 7% raise for the next 3 years.
Do you fly 777s? I hear there's big demand for 777 pilots.
Japhydog is offline  
Old Nov 15, 2011, 10:12 am
  #5  
Suspended
 
Join Date: Sep 2006
Programs: AAdvantage PP
Posts: 13,913
Originally Posted by freeupgrade
All I can say is Wow.

I wish I could get a 10% signing bonus and 7% raise for the next 3 years.
I could not have said it better. They really are living in la la land.
MiamiAirport Formerly NY George is offline  
Old Nov 15, 2011, 10:16 am
  #6  
 
Join Date: Nov 2011
Location: Bay Area
Programs: WN A-List, AA good-riddance, Safeway Club Card Extraordinaire
Posts: 3,851
Originally Posted by Japhydog
Do you fly 777s? I hear there's big demand for 777 pilots.
Originally Posted by newyorkgeorge
I could not have said it better. They really are living in la la land.
Supply and demand. If there's indeed a 777 pilot shortage, then these salaries and benefits make perfect sense.
Science Goy is offline  
Old Nov 15, 2011, 10:17 am
  #7  
 
Join Date: Jun 2005
Location: AUS
Programs: AA Exec Platinum/MM, DL Gold/MM, Hilton Diamond, Accor Platinum, Hertz Presidents Circle
Posts: 6,939
Originally Posted by freeupgrade
All I can say is Wow.

I wish I could get a 10% signing bonus and 7% raise for the next 3 years.
I agree but I think part of it is meant to recoup some concessions made in prior years. The problem is every other airline imposed far more draconian concessions on their employees during bankruptcy, leaving AA at a huge disadvantage.
Stripe is offline  
Old Nov 15, 2011, 10:20 am
  #8  
FlyerTalk Evangelist
 
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Originally Posted by Science Goy
Supply and demand. If there's indeed a 777 pilot shortage, then these salaries and benefits make perfect sense.
There is no shortage of pilots. There's a temporary shortage of pilots qualified on the 777 at AA because of a very large number of retirements over the past several months that exceeds AA's ability to immediately train and replace. But rest assured that it is temporary and will be solved prior to next summer's busy flying season. There's no shortage of pilots wanting to move up to AA's 777s at current pay rates - there just isn't enough training capacity to immediately train hundreds of pilots.

Retirements over the past three months have run at about 10 times the typical rate.
FWAAA is offline  
Old Nov 15, 2011, 10:26 am
  #9  
FlyerTalk Evangelist
Original Poster
 
Join Date: Sep 2003
Location: MileagePlus Premier Gold
Posts: 11,522
There is still a very big gap between what the pilot's union wants and what management is proposing.

Under one of American’s proposed pay plans, pilots would get a 4 percent average raise on the date the contract is signed, followed by a 3 percent boost after 15 months, and increases of 2 percent after 30 months and again after 45 months.

The second option offers a 5 percent average increase at signing, followed by a 4 percent jump after 12 months, a 2 percent increase after 24 months and 3 percent after 36 months.
UnitedSkies is offline  
Old Nov 15, 2011, 10:53 am
  #10  
 
Join Date: Jan 2008
Location: San Luis Obispo, CA
Programs: Military Space-A, UA Plat, AS MVP Gold 75K, Hyatt Globalist, Marriott Plat, IHG Plat, HHonors Gold
Posts: 1,246
Originally Posted by FWAAA
Retirements over the past three months have run at about 10 times the typical rate.
Not to impugn the pilots, but is this the "rats from a sinking ship" phenomenon?
slocouple is offline  
Old Nov 15, 2011, 11:00 am
  #11  
FlyerTalk Evangelist
 
Join Date: May 2001
Location: LAX; AA EXP, MM; HH Gold
Posts: 31,789
Originally Posted by slocouple
Not to impugn the pilots, but is this the "rats from a sinking ship" phenomenon?
Partly. It's primarily because of a quirk in the pilot's pension that permits them the benefit of hindsight when they retire, by giving them a 60-90 day look-back at the asset values (different published sources reference 60 or 90 days). It's happened in prior years when the markets fall substantially - huge market declines generally cause a big uptick in early pilot retirements. The additional fear that AA might file for Ch 11 (and terminate the pilot pension) probably enhanced the number of early retirements over the past several months.

So when the stock market tanks, they can pretend they retired 60-90 days prior to their actual retirement and lock in the historic stock values. So on October 1, they could decide to retire but take the August 1 values (which were substantially higher). When the market is very volatile, this can mean tens or hundreds of thousands of additional dollars per pilot. It's a fantastic benefit that insulates the pilots somewhat from market volatility as their retirement date approaches.

It would be great to be able to sell equities today with the option of selling them for the prices those equities were worth 60-90 days ago, no?
FWAAA is offline  
Old Nov 15, 2011, 11:06 am
  #12  
 
Join Date: Jun 2009
Location: LAX
Posts: 6,769
Originally Posted by Japhydog
Do you fly 777s? I hear there's big demand for 777 pilots.
Yeah, but you still wouldn't get the bonus and raise.
FlyMeToTheLooneyBin is offline  
Old Nov 15, 2011, 11:23 am
  #13  
 
Join Date: Nov 2011
Location: Bay Area
Programs: WN A-List, AA good-riddance, Safeway Club Card Extraordinaire
Posts: 3,851
Originally Posted by FWAAA
It would be great to be able to sell equities today with the option of selling them for the prices those equities were worth 60-90 days ago, no?
On the flip side, it'd be pretty awful to be counting on your retirement portfolio at age 65, only to have it lose half its value a few months beforehand. I'm very glad there are still some jobs out there that insulate their employees from these pitfalls.
Science Goy is offline  
Old Nov 15, 2011, 11:40 am
  #14  
 
Join Date: Apr 2006
Location: SJC/SFO & ORD
Programs: LT Gold/BA Executive Club/AS MP/Marriott
Posts: 1,646
Other international carriers such as EK, QR, etc. are hiring pilots. While its probably not the 100% of choice, they can retire, get their pensions and still work for another carrier (if that other carrier doesn't have a mandatory age-requirement for retiring). While its not post-retirement, I do know of one person who's brother was on the right side of an AA B777 for a number of years and "bailed ship" to QR to pilot their B777's.
Jacobin777 is offline  
Old Nov 15, 2011, 11:47 am
  #15  
FlyerTalk Evangelist
 
Join Date: Sep 2002
Location: Chicagoland, IL, USA
Programs: WN CP, Hilton Diamond
Posts: 14,164
Originally Posted by Science Goy
On the flip side, it'd be pretty awful to be counting on your retirement portfolio at age 65, only to have it lose half its value a few months beforehand.
Stock options.

I am more and more glad I did not do a Stardump in an effort to get to Lifetime Gold.
toomanybooks is offline  

Thread Tools
Search this Thread

Contact Us - Manage Preferences - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service -

This site is owned, operated, and maintained by MH Sub I, LLC dba Internet Brands. Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Designated trademarks are the property of their respective owners.