MrMan

http://business.time.com/2012/02/06/...ne-in-america/

I'll get the popcorn

corporateslave

These kind of quotes sound cute, but don't really say anything.
American is at a slight disadvantage against DL and UA primarily because of consolidation in the industry and the competitive advantage that afforded (not to mention the benefits the other carriers attained after their own Chapter 11), and even this certainly doesn't automatically mean AA is an inferior airline. Some people will argue there are differences in soft product/service (different pax prefer different aspects of each carrier's services) but there isn't really enough of a legitimate difference in hard product among the legacy carriers to justify an argument that AA is decades behind.

The article complains and complains about how horrible management is, but doesn't offer any solutions. Unfortunately, these kinds of layoffs are one necessary step AA has to take to stream line itself. Part of good management means being able to make tough decisions. Layoffs are never easy, but they are sometimes necessary. If AA wants to be competitive, this is a first step.

I do agree that AA should focus on improving soft product overall (making an appealing overall product like VX should always be a priority) but in general this article doesn't really explain why AA is "the worst-managed airline."

Panamajon513

A million ways to alienate your loyal customer base? Cut the Million Mile program while you reorganize under bankruptcy protection to let them know how much they mean to you. Well done, American.

Science Goy

An equally valid argument would be that AA has greatly enhanced the value of its MM program for its "top-of-the-top" tier elites.

panjabi

While I disagree with many decisions of the management, that article is breathtaking in its stupidity. Outside of dumb things like calling BA "British Airlines", the article ignores the cost structure disadvantages that AMR has.

In addition, the fullsome praise of VX centers around their comfy seating, fully ignoring the heavy losses VX has been making of late

The article also rages against AMR for trying to outsource its mechanics while ignoring that Delta and United have precisely done that

Also, it manages to get a few left wing potshots in.

AMR management certainly has been stupid in some/many ways. However, they were also the ones that did the "right thing" by continuing to fund pensions 9 years longer than their competitors did. Had they declared BK back in 2003 (oh how I wish they had), they would have been one of the most profitable airlines today

GOLDEN RULE: No good deed ever goes unpunished.

BearX220

How much revenue loss do you think that will mean? My guess is, damn little.

FWAAA

Well, an editor of Time Magazine said it, so it must be true.

As panjabi noted, the article plays fast and loose with the facts.

FLLUAFlyer

Very poorly written article that only chooses to quote and report on facts that play to the title.

Why doesn't the author report on the fact the the Pilot's union decided to not show up to the negotiations table just as AA thought they had a contract agreement.

Labor is always going to be an issue at every airline. How do you expect a company to be united towards a goal, if there are several different groups of employees each looking out for themselves?!?

Copy Virgin America?!?! They currently only have 38 planes and serve 12 destinations! The author also might want to mention that the CEO came from AA Management.

corporateslave

All good points! ^

MiamiAirport Formerly NY George

Day to day operations I don't think so. In respect to a strategic long term vision yes there could be some argument. However, labor costs/issues were preventing AA from possibly achieving such goals. AA tried for years to resolve its labor issues outside of Chapter 11 until that no longer looked feasible.

869

Come on. AA's "top-of-the-top" elites are those who racked up miles by using AA credit cards for business expenses? For a new customer who signs up, LT Platinum is now earned only after 20 consecutive years of EXP assuming you hit 100K on the dot each time. This move definitely enhanced value for anyone who has achieved LT status but it certainly made trying to get there look like a much less attractive proposition.

Science Goy

I don't know. We're talking about shafting a minuscule percentage of AA customers for the benefit of an infinitesimal percentage. I assume AA did the math and figured it was advantageous to their bottom line, otherwise they wouldn't have made this move. But then I'm an empiricist.

Plato90s

I never thought Million Miler was much of an objective for most travelers given that whole 20-years-as-EXP criteria.

This is mainly about AA stopping the dilution of its Gold/Platinum ranks with credit-card spenders who get to the MM level a lot faster than people who actually travel.



And yes - the linked article by Time is just silly in how they talk out both sides of their mouths, basically arguing that AA hasn't screwed its unions the way other domestic airlines did and thus it's bad management. Way to go - Time magazine. Encourage management to screw their workers!

SFO777

Is this rag still being published?

jordyn

This is actually one of the biggest failings of AA's management, I think. From an admittedly somewhat naive perspective, it seems that they have had about the worst labor relations in the industry. Even accepting that some of the Unions' demands were unreasonable, AA management seemed really incapable of building any sort of working relationship with them which made the BK filing slow-motion inevitable and cost them a lot of opportunities to improve the brand in the meantime.