Originally Posted by
FlyyGuyy
Yeah, hard to believe that anyone thought the b was a good idea.
They won't admit it but the folks hired under the B scale were extremely lucky. They saw fast upgrades and tons of growth. Prior to the B scale AA wasn't anything more than a regional type carrier. I'm not sure they even had int'l flights. Crandall ordered the large S80 fleet and the rest is history.
Instead, Crandall proposed building what amounted to a new, low-cost airline inside American, but without the dirty terminals and planes, surly employees and scheduling problems that plagued his cut-rate competitors. Crandall's method, though not entirely novel, was widely hailed as the ''two-tier'' wage system. Existing employees, the so-called A track, received a higher wage than the newcomers on the B track. ''We went to the unions and said, 'If you will agree with us to let us hire new people at market rates, we will double the size of the airline, and everyone will move up fast.'
* ''
Crandall, touring the company to make his case in person, promised his employees that they would not lose their current wages and benefits, and he went even further: he promised them lifetime employment and a profit-sharing agreement. By a narrow margin, the unions agreed. Over the next six years, labor costs fell to 34 percent of operating expenses. Crandall had bought himself nearly a decade of labor peace.
It's a fact of life - practically every airline has seen a similar trajectory. In a way, the regionals were also a form of a b-scale which also saw massive growth.
In the mid 80's, US Air was *the* place to be. Best contract, best pay, lots of growth, straight to the right seat. Delta was a po-dunk airline in the south that had folks rotting away for years in the FE seat.
Fast forward 15 years later and US Air, now US Airways, was half its previous size and being gutted on all sides by SWA and United. United was *the* place to be in the late 90s. Then 9/11 and the fuel price issue.
SWA had low pay and was fairly small pre-9/11. Fast forward a few years, and they were *the* place to be. Lots of growth, aggressively taking US Airways market share, wildly profitable due to the fuel hedges.
The only thing going for AA was the retirements - additional investment that was put into the carrier was making us less competitive and more costly vice lowering our costs. It's a death by a thousand cuts. I was hopeful that the merger would shake out some of that mentality but it doesn't seem like it did.
Spirit on the other hand - as they grow - their CASM decreases. They get more competitive and profitable as they spread out their costs.
Crandall was focused on unit costs and had a goal of making AA the world's "cost effective" (read: inexpensive) carrier. Here is a two min log video of him telling a story about that....pretty funny.
https://youtu.be/6XXtqX01PzU
That mentality still permeates some of the long time employees here...I notice it every now and then by their (small) behavioral cues.
Meanwhile, we had a fashion show, ice cream bar, and disco ball at our uniform unveiling. So much waste here.