APAPDP Update
PDP Special Update: Our Current Status
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DFW Captain Thomas Westbrook has written an outstanding article on the current state of our company and our union. The article was originally posted on APA's Challenge and Response bulletin board.
With Captain Westbrook's permission, we have forwarded his article in its entirety. We urge you to take the time to read it carefully.
The release of the 2nd quarter numbers and the subsequent decision of the AMR Board to reward senior management with lucrative payouts under their Performance Plan have led to some interesting discussion. In my opinion, too much of this discussion has detoured into the same endless re-hashing of the decisions of 2 years ago. I would respectfully submit that whether we should have voted one way or the other, whether AMR would have or should have declared bankruptcy, whether the purchase of TWA was a good idea or the cause of all our current troubles, along with the parallel discussions of which union leader is to blame for where we find ourselves are all counter-productive to meeting the challenges we currently face.
Two years ago, we decided (for better or worse, whether correctly or incorrectly) to invest a large sum of money (I don't want to debate the details of how much we have invested) in the form of pay rate reductions and work rule changes. We also decided to devote a large amount of union volunteer time and focus on working with AMR to streamline operations and improve the profitability of the corporation. This effort was described by Mr. Arpey as "Pull Together-Win Together". Now that two years have passed, it is time to assess what management has done with our "investment" and decide where we as a Union need to go from here.
As some are fond of pointing out, any objective examination requires a look at the numbers. A fellow pilot suggested a list of measurements, which I have borrowed for use here, and I have added a few of my own. My numbers are all archived directly from the AMR quarterly and annual reports, APA status 15 manning and fleet numbers, and Eagle fleet numbers from the AMR web site. To keep things a little more simple, I will only look at how we compare today (2nd quarter 2005) with where we were when we signed the contract (1st quarter 2003).
American Airlines:
* AA Available Seat-Miles have grown a modest 11.779 percent (from 40.274 billion to 45.018 billion).
* This was done while the AA fleet shrank from 812 airplanes to 714 (12.069 percent decrease), down from its peak of 905 in 2nd qtr 2001.
* AA Revenue Passenger miles have increased 28.583 percent (from 27.838 to 35.795 billion).
* Load factor has risen from 69.1 percent to 79.5 percent, an increase of more than 10 percentage points.
* AA quarterly passenger revenue has risen 25.633 percent (from 3.394 to 4.264 billion).
* Total AMR quarterly revenue has risen 28.859 percent (from 4.12 to 5.309 billion).
* The number of AA employees has fallen from 92,200 to 75,100 (an 18.547% decrease).
* AA revenue per ASM has risen 11.957 percent (from 9.42 cents per ASM to 10.547).
* Total AMR revenue per ASM has risen 12.914 percent (from 9.749 to 11.008 cents).
American Eagle/Regional Affiliates:
* Eagle ASMs have grown 61.6 percent (from 1.987 to 3.211 billion) - Eagle ASMs have grown 82.755 percent from 1st qtr 2002 (3 year growth 82.755 percent, 2 year growth 61.6 percent).
* The Eagle fleet has risen from 286 to 343 (including the American Connection fleet) - a 19.93 percent increase.
* Eagle RPMs have increase 98.884 percent while Eagle Passenger Revenue has increased 72.086 percent. It should be noted that Eagle revenue reporting has changed and is still artificially set according to "industry standard proration agreements".
* Eagle load factor has risen from 58.6 percent to 72.2 percent, a 13.6 point improvement.
* Eagle employee count has risen from 11,800 to 13,400, a 13.559 percent increase.
Productivity results:
* The number of AA pilots has fallen from 12,410 to 9,610 - a 22.562 percent decrease and down 29 percent from a peak of 13,550 in 3rd qtr 2001.
* AA ASMs per aircraft have risen 27.122 percent.
* AA ASMs per pilot have risen 44.348 percent.
* AA revenue per pilot has risen 62.238 percent.
* AMR wage/benefit expense per ASM has fallen 29.585 percent from 5.271 to 3.712 cents per ASM.
* Fuel cost per ASM has increased 65.67 percent from 1.81 to 2.999 cents per ASM.
* This in spite of an 8.198 percent increase in our ASMs per gallon of fuel burned (from 55.55 to 60.104).
* AA revenue per aircraft has grown 42.877 percent (from 4.180 to 5.972) while Eagle revenue per aircraft has grown 43.489 percent (from 1.140 to 1.636). Eagle revenue per aircraft is 27.387 percent of AA's revenue per airplane.
* The percentage of Total ASMs being flown by Eagle has risen from 4.702 to 6.658 (a 41.6 percent increase).
* AA generates 63.05 million ASMs per airplane per quarter, Eagle produces 9.362 (14.848 percent of AA efficiency).
AMR financial position:
* At the end of the 1st quarter 2003 AMR reported its cash and short term investments as 1.272 billion plus restricted cash of 550 million - for a total of 1.822 billion.
* At the end of the 2nd quarter 2005 AMR reported cash and short term investments of 3.4 billion plus restricted cash of 492 million - for a total of 3.891 billion. This is an increase of over 2 billion dollars in 2 years.
* Including the present value of operating leases (which is the method AMR insisted on using in 2002) Total AMR debt at the end of 2002 was 21.305 billion (13.17 billion in debt plus 8.135 billion in present value of operating leases).