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One Little Mistake Sparks Fury And Mistrust at American Air
Wall Street Journal ^ | April 23, 2003 | Scott McCartney

Posted on 04/23/2003 8:09:23 AM PDT by Mister Magoo

Edited on 04/22/2004 11:48:45 PM PDT by Jim Robinson. [history]

Amid all the turmoil over the failure of AMR Corp.'s American Airlines to disclose executive benefits, even as it asked its employees to take huge pay cuts, one little mistake stands out.

One short statement is creating enormous fallout for both Donald J. Carty, AMR's chief executive, and the leaders of American's three unions. The result could be that American, which has struggled so hard to cut its costs, could end up filing for bankruptcy protection anyway, changing the direction of the airline industry.


(Excerpt) Read more at online.wsj.com ...


TOPICS: Business/Economy; Front Page News; News/Current Events
KEYWORDS: aa; airlines; carty; unions

1 posted on 04/23/2003 8:09:24 AM PDT by Mister Magoo
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To: Mister Magoo
On Monday, Mr. Carty said American remains on the precipice of bankruptcy. Under a bankruptcy-court reorganization, perhaps 10,000 more American workers would lose their jobs. That's a huge price to pay for a small mistake.

Out-of-work flight attendants may gain some small solace if Carty is asked to step down, but it won't put food on the table.

It's like the crook, barricaded in his house, who says "The cops lied to me, so I'll cut my own throat."

2 posted on 04/23/2003 8:14:54 AM PDT by sinkspur
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To: Mister Magoo; sinkspur
The airline industry model is, as has been shown on a previous thread, shot forever.

It had nothing to do with the recession or terrorism, Cut routes.but the dawning realization in the travel respite that umpteen zillion useless business trips do nothing about increasing the profitability of a company. If they intend to survive, they are going to have to do the following:

1. Kill off the free miles and charge cash for each ticket - that way, they calculate their profits on real money as opposed to monopoly money.

2. Cut routes dramatically - tickets should be hard to find about 2 weeks out from just about any flight, and every flight should be full.

3. Eliminate food and beverage service on all flights. This eliminates a huge expense, lots of people, and a security risk all in one swoop. Airports have finally gotten their food courts working as they should, and its better than the crap served on flights. It wouldn't bother me to carry a bag of Wendy's.

4. Smaller, faster, regional flights are becoming more and more prevalent, and that is a positive.

5. Courtesy, efficiency and truthful statements to the flying public should be the number 1 priority.

3 posted on 04/23/2003 8:36:12 AM PDT by Chancellor Palpatine
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To: Mister Magoo
For all you "Union Bashers" out there..Maybe now you see that it is a really a two way street and not just all "Union Greed!"
4 posted on 04/23/2003 8:38:10 AM PDT by Don Corleone
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To: Mister Magoo; sinkspur
Oh, I forgot -

6. Luggage should be paid for by weight. When I travel, I don't bring much luggage - however, I inevitably see the "steamer trunk" travellers, who I'm apparently subsidizing. Inasmuch as every pund affects fuel consumption, there would be greater profit to weighing baggage and charging by the pound.

5 posted on 04/23/2003 8:38:26 AM PDT by Chancellor Palpatine
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To: sinkspur
Out-of-work flight attendants may gain some small solace if Carty is asked to step down, but it won't put food on the table.

I certainly do not consider myself pro-union but I understand the anger and reluctance on the part of the mechaics, attendants etc to approve the wage concessions. I guess the concept of "shared sacrifice" has a different meaning to Mr. Carty.

Granted, the rank and file worker may send American into bankruptcy and oblivion and their jobs along with it. However,as an AMR employee, how could you trust that Mr Carty will do all he can to keep AMR going when he concedes that "that he had given less-than-accurate information to his own spokesman?".

Did you trust that Clinton was deeply concerned you and would do everything in his power for the welfare of our country? Why trust this Clintonian character, Mr. Carty?

6 posted on 04/23/2003 8:44:53 AM PDT by eeman
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To: Mister Magoo
It would seem that the senior ranks of US business
combine greed with monumental and unwarrented ego.
American Air Lines deserves to die.
7 posted on 04/23/2003 8:51:40 AM PDT by Hans
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To: Chancellor Palpatine
1. Kill off the free miles and charge cash for each ticket - that way, they calculate their profits on real money as opposed to monopoly money.

Frequent flyer programs will be the last thing to go; airlines know consumers have lots of these on the books and will fly the same airline to accumulate more for that "dream vacation." Besides, ever tried to use one of those big certificates? You've got to book a year in advance to get a seat.

I'm not sure what you mean by "charge cash." Airlines don't book revenue until flights are actually taken, no matter when the ticket was purchased. Revenue actually reflects passenger loads rather than "spring sales" or some such promotion.

Luggage should be paid for by weight. When I travel, I don't bring much luggage - however, I inevitably see the "steamer trunk" travellers, who I'm apparently subsidizing. Inasmuch as every pund affects fuel consumption, there would be greater profit to weighing baggage and charging by the pound.

Airlines are already moving in that direction, by limiting bags and charging for oversized bags. I know a guy (rather wealthy) who FedExs his bags to his vacation destinations because he doesn't trust the airlines.

8 posted on 04/23/2003 8:53:17 AM PDT by sinkspur
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To: Don Corleone
For all you "Union Bashers" out there..Maybe now you see that it is a really a two way street and not just all "Union Greed!"

Unions still suck.

What sense does it make to, in a fit of pique, vote yourself out of a job?

Some of these dopey AA employees are actually talking about bringing Bob Crandall back!

Talk about somebody who DESPISES unions!!

9 posted on 04/23/2003 8:56:51 AM PDT by sinkspur
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To: sinkspur
You have a point on those certificate miles. Hell, if you even can get on a flight, I suspect that they're only easy to use (for those on Delta, at least) on those high demand flights from Raleigh NC to Topeka. Every other use is dark. I'm trying to get to St. Lucia on one, but the closest I can get is Puerto Rico.
10 posted on 04/23/2003 8:57:07 AM PDT by Chancellor Palpatine
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To: Don Corleone
For all you "Union Bashers" out there..Maybe now you see that it is a really a two way street and not just all "Union Greed!"

I agree it's a two way street .. but I still don't trust the Union Leaders

11 posted on 04/23/2003 9:01:18 AM PDT by Mo1 (I'm a monthly Donor .. You can be one too!)
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To: Chancellor Palpatine
Actually, all of those steps are unnecessary. As has been evidenced by recent financial status statements, all an airline has to do to be successful is one simple step:

Follow Southwest Airlines' example. -Jay

12 posted on 04/23/2003 9:26:47 AM PDT by Jay D. Dyson (Terrorists of the world, RISE UP! [So I may more easily gun you down.])
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To: sinkspur
I agree, but what a slap in the face to the people who agreed to a cut in THEIR pay in order to keep American "afloat" only to learn the bigwigs were going to rake in the bucks. And I can't believe the stupidity of the management. Maybe with people like this running the company it is no wonder they have financial problems.
13 posted on 04/23/2003 9:48:39 AM PDT by ImpotentRage
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To: sinkspur
" I know a guy (rather wealthy) who FedExs his bags to his vacation destinations because he doesn't trust the airlines."

Bruce Williams (radio entreperneurial advice host) has been advising people to do this for years.

14 posted on 04/23/2003 10:05:36 AM PDT by Irene Adler
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To: Chancellor Palpatine
Flying is a major aggravation, and I'll do whatever I can to keep from flying again.
15 posted on 04/23/2003 12:08:28 PM PDT by cruiserman
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To: Mister Magoo
Linda Daschle's employer.

What do you expect?
16 posted on 04/23/2003 12:38:27 PM PDT by mabelkitty
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