The spending cannot continue.
American says labour-contract rules force it to spend at least $600million more than other airlines. It has also struggled with rising jet fuel costs.
American lost $162million in the third quarter and has lost money in 14 of the last 16 quarters.
The company listed assets of about $24.7 billion, liabilities of $29.55 billion and $4.1billion in cash at a court in New York.
via American Airlines parent firm files for bankruptcy protection. It’s getting pricey to fly these days. There is a charge for this and that and more. I understand. At this rate of spending, I’m going to be found working at a computer station when I’m 1000 years old.
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November 29, 2011 at 2:54 pm
Too bad so many will be hurt by this. But, rest assured, the union boses will coninue feathering their nests.
November 29, 2011 at 6:41 pm
It’s the pilot’s union that is really dug in. I think it hurt AA quite a bit to not have restructured after 9/11. Every other airline did file Chapter 11 which helped them restructure and work with the unions (within reason). It’s too bad that AA had to go this way.
November 29, 2011 at 6:41 pm
It’s the pilot’s union that is really dug in. I think it hurt AA quite a bit to not have restructured after 9/11. Every other airline did file Chapter 11 which helped them restructure and work with the unions (within reason). It’s too bad that AA had to go this way.
November 29, 2011 at 7:51 pm
People agreed to work for American Airlines at the salaries that they did in part because of the pensions. Practically every business in America used to have pension plans, and they paid them out too.
What they didn’t used to have is a bunch of whoring stockholders intent on making the most profit without ever plowing any of the profits back into the company to keep to competitive: because when these companies were taxed reasonably that’s what they did with their profits to minimize taxation: they put it back in the business. With the drop in tax rates over the last 3 decades, they chose to give themselves fat bonuses and pay out enormous amounts to stockholders instead.
Now they whine about pensions and try to blame the little people. Well, AA and all the rest of them can just bite me. It isn’t the pensions that sunk them. They got the labor at the rates that they did by giving the workers pensions in the long run and lower earnings in the short run. Then they want to complain about the deal when they have to pay what they owe.
Instead of restructuring and declaring bankruptcy they should have all raised their airfare rates. If many people including business travelers could no longer have afforded to fly, well too bad. they’d have figured something else out. Airline travel increases in number every year. These airlines were never in any danger of going under from lack of customers. They went under because they insist on having too big of a bottom line for the management.
November 30, 2011 at 7:10 am
Stockholders should be reimbursed, they took the gamble. When I was working for the government in the 70s, I already knew that I would never see the funds that I had set into my retirement. Every year I saw another person retire, I saw them taking less. As long as someone is working for someone else, they will always have someone’s hand in the till. I’m not thrilled about huge payouts to CEOs, but I have never seen anything different. It’s their job to perform by cutting, slicing and dicing. It’s their reward. Our debt is so disturbing at this point in time that I don’t see any difference between government and private sectors anymore. It is all a risk. You make a pact with an employer, it’s a risk that you take. I have always thought that.
November 30, 2011 at 8:15 am
No. When an employer signs a contract with an employee and says the employee will get $x put into a pension, it’s an obligation. For the full amount. It’s one thing when the employees truly have bargaining rights and agree to less–in nonunionized sectors of work, they have no recourse against the theft of their entitlements–, but even that is a moral hazard to allow.
“Our debt is so disturbing,,,” Our debt?? What U meanz, Our Debt? It is THEIR DEBT. As you noted: the stockholders are the ones getting the rewards from risk taking, so too are they obligated to take the penalties. That is what capitalism IS.
You “don’t see any difference between government and private sectors anymore”. Nor do I. What you describe so accurately is correctly called fascism. It has been in some cases the precursor historically to a right wing totalitarian state, I might add. it doesn’t have an upside, and it doesn’t transition to other forms of government without a war, whether civil or external..
November 30, 2011 at 6:35 pm
I don’t see the scenario changing Nom. It has played out many times in history. The money and power only change hands. It is a lesson that is repeated.
November 30, 2011 at 11:21 am
Remember CEO’s, CFO’s, Presidents and all other Vice-Presidents and top management are nothing but HIRED HELP!
They’re just like the cleaning maids………………….
except they are in positions to LOOT the Corporations – legally!
November 30, 2011 at 6:59 pm
They sure don’t act like they are the hired help, do they?
November 29, 2011 at 8:51 pm
OT: Police state is official. Welcome to Obananistan, Home of Sheeple, land of the Slaves.
http://www.huffingtonpost.com/mobileweb/2011/11/29/senate-votes-to-let-military-detain-americans-indefinitely_n_1119473.html
November 30, 2011 at 11:22 am
Why those Democrats (in the Democrat controlled Senate) want to do that?
OH YEAH!!!!
D for Democrat,
D for Dictatorship!
Snark snark
November 30, 2011 at 12:08 pm
Well I don’t disagree on your assessment of the dems, but if you think the repubs are any different, I own this gigantic obelisk right on the Mall and I’d be willing to sell it to you for cheap.
December 1, 2011 at 7:04 pm
No you don’t Nom!
I own it, but I’ll sell it to you at wholesale!
lol
December 2, 2011 at 11:48 am
No, really I do. It was securitized along with that greek-looking building with the guy sitting in a chair and the long pool in front, and I am the one with the papers; you just think you own it.
November 29, 2011 at 9:01 pm
Well the pilots won’t get much of a pension now. Trust me the pension fund will be tossed under the bus first thing. The bond and stock holders are in line ahead of the pension fund, just ask any of the former Eastern airline employees!! Oh but I’m sure the muckity mucks all have golden parachutes that are iron clad. Nom you are correct about pension, investments and stockholders.
I knew a pilot that worked for damn near 40 years for Eastern, when they went bankrupt, so did he. The pension he counted on disappeared before his eyes. In the end all the employees were able to apply to some kind of government pension trust fund thing…..but what they got was literally pennies on the dollar of what their pension should have been.
November 30, 2011 at 6:57 am
Somebody, the pennies on the dollar is usually what everyone sees in the end no matter what the promises are. I can’t see how pensions can be funded at the rate that they are without adjustments for fluctuations in the economy. It can’t go on forever. That goes for our social security and medicare funds as well. The government has already raided those funds to suit their wants.
November 30, 2011 at 11:24 am
Of course consider, what pension would they get if the company goes out of existence by the ultimate bankruptcy?
Methinks most employees of dead businesses get ZERO.
Anyone have any links to studies about that?
November 30, 2011 at 12:08 pm
And why should they be allowed bankruptcy when they actually do have assets with which to pay their debts?
November 30, 2011 at 10:19 am
Jmo, Here’s the thing:
Scenario 1
Let’s say Person B borrows $2,000 from Person A for the purpose of re-roofing his home. He has half the $4000 needed but cannot afford the total. He agrees to pay back the money in $200/mth amounts for a total sum of $2,100, adding in a final $100 interest payment at the end. So if he pays it all back it’s a reasonably good deal for them both. Let’s further assume they are neighbors, so they have some reason to want to keep good relations.
After 6 months of months of paying back the money on schedule, Person B has his work hours reduced and cannot make payments at all, though he does not need to borrow more money. The remaining 5 of 11 months go by; still no more payments. Person A is getting aggravated, but she knows Person B has not had his hours restored. She can: wait for Person B’s situation to improve and trust Person B will resume making payments; decide to write off the remaining debt because they are neighbors; or she can take Person B to court and hope doing so results in getting more of her money back. These are all reasonable actions.
The overall scenario can be described as: Person B who is less affluent than Person A, owes Person A money.
What we have in the airlines industry is the exact freaking opposite.
Scenario 2:
In this case, Airline C ”borrows” money from Persons D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, α, β, γ, δ, ε, ζ, η, θ, ι, κ, λ, μ, ν, ξ, ο, π, ρ, ς, σ, τ, υ, φ, χ, ψ, ω, А, Б, В, Г, Д, Е, Ж, З, И, Й, К, Л, М, Н, О, П, Р, С, Т, У, Ф, Х, Ц, Ч, Ш, Щ, Ъ, Ы, Ь, Э, Ю, Я, א, ב, ג, ד, ה, ו, ז, ח, ט, י, ך, כ, ל, ם, מ, ן, נ, ס, ע, ף, פ, ץ, צ, ק, ר, ש, ת, װ, ױ, ײ, , , …D¹ºººº, E¹ºººº… Only unlike Person B, Airline C could have chosen to fulfill Airline C’s obligations to Persons D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, α, β, γ, δ, ε, ζ, η, θ, ι, κ, λ, μ, ν, ξ, ο, π, ρ, ς, σ, τ, υ, φ, χ, ψ, ω, А, Б, В, Г, Д, Е, Ж, З, И, Й, К, Л, М, Н, О, П, Р, С, Т, У, Ф, Х, Ц, Ч, Ш, Щ, Ъ, Ы, Ь, Э, Ю, Я, א, ב, ג, ד, ה, ו, ז, ח, ט, י, ך, כ, ל, ם, מ, ן, נ, ס, ע, ף, פ, ץ, צ, ק, ר, ש, ת, װ, ױ, ײ, , , … D¹ºººº, E¹ºººº handily but decided not to.
Additionally, while Person A has some reason to believe that if Person B’s situation improves she may get her remaining money, that is patently not the case for the involuntary lenders Persons D, E, … μ, ν, ξ, ο, π, ρ… D¹ºººº, E¹ºººº etc. They f#ckall aren’t Airline C’s neighbors because Airline C lives in a multimillion home-value gated community whose security would arrest Persons D, E, … if they trespassed there.
Also, because involuntary lenders Persons D, E, … μ, ν, ξ, ο, π, ρ… D¹ºººº, E¹ºººº etc were never consulted as to having their funds “borrowed” there is a very high probability that many of them could not afford this “loan” and they cannot afford to simply write it off as a voluntary lender might be able to do.
That leaves court. But BY AMAZING FREAKING COINCIDENCE it gets harder every day to bring a class action lawsuit
see, Walmart, women being fucked over for YEARSand easier everyday for F#CKING PLUTOCRATS to bring mass action against what ought to be perceived as individualssee http://thesibylspeaks.wordpress.com/2011/08/08/were-pretty-darned-fcked-open-thread/#comment-5446This overall scenario can be described as: Person C who is filthy rich owes Persons D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, α, β, γ, δ, ε, ζ, η, θ, ι, κ, λ, μ, ν, ξ, ο, π, ρ, ς, σ, τ, υ, φ, χ, ψ, ω, А, Б, В, Г, Д, Е, Ж, З, И, Й, К, Л, М, Н, О, П, Р, С, Т, У, Ф, Х, Ц, Ч, Ш, Щ, Ъ, Ы, Ь, Э, Ю, Я, א, ב, ג, ד, ה, ו, ז, ח, ט, י, ך, כ, ל, ם, מ, ן, נ, ס, ע, ף, פ, ץ, צ, ק, ר, ש, ת, װ, ױ, ײ, , , …D¹ºººº, E¹ºººº… a whole lot of f#cking money.
Scenario 1, which occurs between relatively near equals, is not comparable to Scenario 2, in which there is an extreme disparity of power.
November 30, 2011 at 6:58 pm
Nom, I don’t understand why anyone who is rich is filthy? If you inherit tons of bucks, does that qualify? What if you win the lotto? Where do you draw the line? I don’t have a problem with stockholders making money. Disparity of power? When you state disparity of power because of money, are you advocating class warfare? I don’t believe that you are for the record.
In your scenario, there are many things that aren’t spoken of. Does this person have a mortgage that was subprime where they never really could afford that house that requires those repairs? (I remember reading about a bus driver purchasing a 1/2 million dollar home and couldn’t make the payments in CA). It doesn’t take a rocket scientist to understand that perhaps that person is living far beyond their means. I think that there are far too many variables to state that the rich are constantly making money hand over foot at the expense of others. I think that they insulate themselves very well because they can.
As for the rest of us, I think that many of us make very poor choices. I read about a family that had booked a flight to Belize. They had to cancel because one of the people has stage 4 cancer. Now, they want the airline to give them their money back. Although I understand that the woman will probably never be able to see this country, I can’t understand why the family would feel entitled to a refund? They should have purchased the insurance (minimal nominal fee which would have refunded them every penny for such situation). Many times, but not always I find that poor planning on one’s part rarely merits an emergent response. Yet, the I want it now and can’t wait attitude is pervasive amongst many in this country. I actually see far too many people that throw money away for the bright, shiny objects that they covet, but refuse to pay for the necessities of life. Whether it is denial or not, I believe that they have refused to acknowledge their circumstances. Look at the medical field, everyone wants the best that medicine has to offer, but who really wants to know what the technology and behind the scenes cost info is? As much as I would like to have empathy for those who are suffering in the moment, I find it more difficult each day. I see a lot of abuse on the part of many who are unwilling to live within their means. I don’t want a Lamborghini, but I’ll tell you that I hear a lot of kids telling me that is what they want. Rarely is what they need ever mentioned. I am a curmudgeon.
November 30, 2011 at 9:33 pm
This does not occur in a non-rigged economy.
”When you state disparity of power because of money, are you advocating class warfare? I don’t believe that you are for the record.”
Could you please clarify what you mean by class warfare?
December 1, 2011 at 7:27 am
Haves vs have nots.
I was raised to believe that you came into this world with nothing but the free air to breathe. Everything else was a lesson that somehow was not previously learned. Yeah, I do believe in karma. I never truly cared for the latest, greatest, most, etc., so it boggles my mind that so many are angry at others for having what they have. I’ve paid my way by myself throughout my life, rough times and not such rough times. I have never taken a penny from another. I have worked multiple jobs at time sacrificing what many believe is an entitlement. Simple pleasures are far more important to me. (I think that is the price you pay for working as an artist). There are always many reasons for income inequality.
December 1, 2011 at 11:36 am
If you were talking about 50 years ago for white men, I’d agree. If you were talking about 30 years back for a majority of American citizens, I’d agree more than not. But today, no. The opportunities are not there. There are millions of people who have no jobs because there are no jobs: for every opening at Target there are 50 people in line, maybe 500 people. These superrich are not are not hard workers, most of them have never worked at all unless you count financial gambling with other peoples’ money and the economy of their purported nation as “work” (I call it treason); they are not job makers they are job killers. That makes them people killers. And yes, I’m for making them pay.
The idea that American citizens should be content with an economy based upon McDonalds and cruise missiles is disgraceful.
If these elites are so fucking great, then where are the fucking jobs? If there is so much opportunity for people to move ahead why is everyone moving backward except for the top 1 percent?
Don’t tell me I am not moving ahead because I am lazy and won’t do hard work. I will do any kind of work for which I am able. But there is no work. When my particular job became automated a good 12-15 years back, over 70% of the people with my job lost their job. Those jobs never came back. It’s a career that doesn’t exist now. I’m one of the few who had the opportunity and also managed to learn the new technology (it is much more difficult than the unautomated version of essentially the same job) and keep a job. Who knows what those people who didn’t have that opportunity or couldn’t learn had to do. It isn’t like it was a high paying job in the first place where one could necessarily afford to go back to school and learn something else. Probably most of them ended up doing cashiering and the like. And it’s not like it worked out so great for me either, I haven’t had a raise or even a cost of living adjustment in over 10 years. And money sure doesn’t spend like it used to: it’s not like inflation has stood still or anything! And now, my present job is disappearing too: because there’s no work. I haven’t managed to get 40 hours a week in over 3 years. I used to be able to pick up extra money raking leaves, mowing lawns, caring for other peoples’ pets; my man would repair peoples’ machines: no one can afford this now.
I have also never taken a handout and I don’t want a handout now. But damned if I’ll bend over for some rich fucker and take it up the ass without complaint. The trillions of dollars of debt owed by this nation do not come from ordinary people, about 5% comes from these insane wars and about 95% comes from the banksterists, who also make money off the wars.
WE JUST LEARNED THAT THERE WAS A SECRET BANKSTERIST BAILOUT FOR 8 TRILLION HIDDEN DURING TARP, AND JUST LAST WEEK WE GOT STUCK WITH $75 TRILLION UNINSURABLE MONOPOLY MONEY DEBT BEING FORCIBLY BACKED BY THE FDIC! $75 TRILLION! IN JUST ONE DAY! YOU AND I JUST GOT INDEBTED TO PAY BACK THESE POS’ GAMBLING DEBTS TO THE TUNE OF $75 TRILLION IN JUST ONE SINGLE DAY! YOU DO REALIZE THAT WHAT THEY WILL GET FOR THEIR WEATHER DERIVATIVES MARKET IS ALL THE COMMON LANDS LIKE NATIONAL PARKS, AND ALL THE NATIONAL HIGHWAYS, WATERWAYS, EVERYTHING YOU AND ME AND OUR ANCESTORS BUILT OVER GENERATIONS?
HOW MANY MORE $75 TRILLION DAYS ARE WE GOING TO GET FROM THESE PARASITES? HUH???? HOW MANY MORE DAYS OF BEING ON THE HOOK FOR $75 TRILLION ARE YOU WILLING TO SWALLOW? YOU COULD TAKE EVERY CAREER WELFARIST FOR 5 CENTURIES AND IT WOULDN’T ADD UP TO EVEN ONE $75 TRILLION DOLLAR DAY!
I’M NOT ANGRY THAT THE SUPERRICH HAVE WHAT THEY HAVE, I’M ANGRY THEY TOOK WHAT EVERYONE ELSE HAD TO GET IT. I’M ANGRY THEY’RE DESTROYING THE ENTIRE PLANET TO GET IT. THERE’S A DIFFERENCE.
December 1, 2011 at 12:26 pm
I understand what you are saying, but I don’t feel the same way. I believe that they have what they have because they are here to learn as well. I know it must sound very odd, but they also have choices.
December 1, 2011 at 12:33 pm
I have taken the three jobs working for pennies or free at times. I get by like many others. I have never turned down any work. I took the odd jobs, no benefits, no retirement, and even now…there is no guarantee that there will be work for me. I’ve lived this way all of my life in exchange for doing what I loved. That was the payoff. You don’t have to yell.
December 1, 2011 at 12:39 pm
I understand your frustration. My greatest hope is that out of this frustration will emerge something very different for all of us. Perhaps we won’t be aided as we have been in the past? No matter how difficult everything is right now Nom, something good will yield. I don’t know what it is. I do know that historically a lot of change occurs when the blowhole blows.
December 1, 2011 at 3:10 pm
What they’re here to learn is exactly what I’d like to teach them.