Management Layoffs Coming at American Airlines

by Gary Leff on June 19, 2018



When American Airlines and US Airways merged four and a half years ago many legacy American Airlines executives departed. Several management level staff that were holdovers from American before the merger left two years ago, presumably eligible for bonuses based on the length of time they had stayed on.

In any merger of this size there are initial promises of cost savings, and personnel is one area where those need to be delivered.

Last fall airline CFO Derek Kerr shared that they planned to “further eliminat[..] post-merger redundancies” and that we’d begin to see those in 2018.

Today American announced to its employees that those are coming at the Director level and above. Now that most (but not all) of the merger integration work is done they’re looking at their management staff count. Doug Parker’s letter to employees says that the airline “has more director and above leaders than we require for the long term.”

Over the next few weeks each ‘director and above’ employee will learn their fate as some face “involuntary exits” and those being let go who have two or more years with the company are offered the chance to leave voluntarily with severance. We can also expect some other management positions to be eliminated as well.

Here’s the letter that was shared with American employees today:




























None of this is surprising. If I were placing a bet I’d expect more legacy American Airlines employees to be let go than US Airways management veterans, however we’ll have to see in the comings weeks what happens.

American Airlines Says 767s Will Go to the East Coast to Retire


by Gary Leff on June 19, 2018

Back in March American Airlines Chairman Doug Parker described the Boeing 767 as a bad customer experience and suggested they needed to retire the aircraft sooner. Indeed shortly after that the airline announced a big order of Boeing 787s.

While offering a less spacious business class than other widebodies, and overall an antiquated interior, in some ways it’s the best plane to fly in coach because the seats are wider — by half an inch compared to Boeing 777s and even up to a full inch compared to American’s Boeing 787s.

Talking about flying widebodies on domestic routes, American Airlines Vice President – Planning Vasu Raja told employees in Chicago last week that they’ll see more of it in winter and less of it in summer. That’s presumably because over the summer they use widebodies more for seasonal routes to Europe.

There will always be some domestic widebody flying in and out of Chicago for utilization purposes, spare aircraft time that’s not enough to send the plane on an another international trip.

We can expect to see more Boeing 767 flying domestically though going forward. He explained,

As the 767 is retired, as it’s going through the process of retiring it, we will bring it increasingly into the East Coast to go die and fly fewer trips into other hubs.

We’ll start to see Boeing 767s flying domestic routes simply because they view the product as being uncompetitive with international flying, certainly in premium cabins. And the aircraft isn’t reliable enough for once a day international routes either.

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About 70 American Airlines flights have been canceled after another “technical issue” Sunday morning, including at least six flying through the Dayton International Airport.

The issue at PSA Airlines, a regional carrier for American Airlines based in Dayton, primarily affected flights arriving and departing from Charlotte, said American Airlines spokesman Ross Feinstein.

American Airlines has dispatched a group of technical workers to PSA’s headquarters in Dayton to resolve the “technical issue,” according to media reports.

Both of PSA’s technical issues on Thursday and Sunday are related to a crew scheduling and tracking system, which the airline uses to assign crews to each aircraft, Katie Cody, a spokeswoman with American Airlines told the Charlotte Observer.

The impacted Dayton flights include those arriving from Charlotte and departing to Charlotte and Philadelphia, according to the airport’s flight tracker.

PSA is operating a reduced schedule to and from Charlotte until noon today, but the issue is not affecting other regional carriers of American Airlines or mainline flights.

These cancellations come a few days after a “technical issue” canceled or delayed 675 American Airline flights Thursday and Friday.

Last week’s problem began in Dayton on Thursday afternoon because of issues with the carrier’s dispatch and crew scheduling system at PSA.
Flights were first halted at 4 p.m. Thursday after problems emerged at the airline’s local operations center in Dayton. The outage affected about 4 percent of American’s global flight operations, primarily shorter routes from its hub in Charlotte, N.C., American Airlines officials said.

“We understand that these cancellations have been frustrating for our customers, and we are doing everything in our power to get things back to normal as quickly as possible,” Feinstein said. “We are re-booking passengers and American’s Customer Relations department will be reaching out to all affected customers.”

Passengers can check their flight status on aa.com or the American Airlines app.

American Explains How They Choose Regional Jets for Routes: “Trial and Error”

by Gary Leff on June 20, 2018


American Airlines just placed an order for Bombardier CRJ900 regional jets. They placed another order for Embraer EMB-175 regional jets. Both types of planes are 76 seat aircraft that will be flown by American’s regional partners.

Even though the carrier says they’re trying to simplify their fleet, operate fewer aircraft types and subfleets, they’re doubling down on flying similar competitor products.

Their regional partners, including wholly owned carriers like Envoy Air and PSA, fly CR7s, Embraer 140s and 145s, and even CRJ-200s. Regional jets with 50 seats and below don’t offer a first class cabin. While most of American’s regional fleet offers internet, most lacks seat power.

American’s Vice President – Planning Vasu Raja explained to employees at Chicago O’Hare last week how they assign regional jets to different routes. And it turns out much of it comes down to ‘trial and error’.

How do we put especially the premium RJs in some markets versus others? … the more bases we stretch a regional operator into the more risk we put on their operation, so we try to consolidate our regional operators into fewer bases which has the necessary byproduct where you only have certain fleet types you can access in a place like Chicago. It’s what Envoy and SkyWest can effectively bring to the table.

… The fifty seaters are single class and the rest of the RJs are increasingly going to dual class, then it’s more of trial and error to be quite honest with you. We put the larger RJs in markets that have stronger aggregate demand. … If you’re seeing a case where there’s value in putting a premium product in some of those markets we make schedules so often we’ll just go try it. We’ll move it there and see how it works out for a defined period of time, and indeed if it’s producing the kind of P&L result we all want then we’ll go and keep it there. So it’s largely trial and error, typically in general the large RJ goes to places where the demand is higher.

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American Airlines flight attendants get some unwelcome news

American Airlines had some difficult news for its 27,000-plus flight attendants this week.

Jill Surdek, vice president of flight service for American Airlines, delivered some difficult news on Tuesday to the 27,000-plus flight attendants who work for the world’s largest airline.

In a internal memo obtained by the Chicago Business Journal, Surdek told flight attendants that reserve numbers are going up at American Airlines (NASDAQ: AAL) in the months to come.

Being on reserve is tough for flight attendants because it means they have to be available on short notice to work flights whenever they get the call from American. Typically, flight attendants are able to plan their schedules for the month in advance, so they know exactly when they will be in the air and for how long. Not so when on reserve.

And Surdek was blunt in her memo: “There’s no getting around it — reserve numbers are going to be higher in July than they were in June. And systemwide, the total number of reserves is up about 1,000 across all bases year over year.”

Surdek also was honest with her team of flight attendants, conceding that “nobody likes being on reserve.” 

Still, she said American had no choice but to keep swelling the ranks of flight attendants on reserve for several reasons, including more flights in the air, contract changes going into effect, and the simple fact that more reserves have been called into action recently, depleting the available flight attendants that AA can activate on short notice.

Surdek said AA analyzed the flying situation the carrier is facing in months ahead and predicted in her memo “high utilization” of reserves this summer. 

The upcoming July 4th holiday poses a particular challenge for AA and its reserve utilization. 

Wrote Surdek: “Traditionally, we see a spike in the number of reserves used during the weekend and in the days immediately preceding and following the July holiday. And with the holiday falling in the middle of the week, this, in essence, creates a fifth weekend.”

Surdek also said May reserves utilization put AA on notice that it might need more reserves to call on in the months ahead.

Wrote Surdek: “In May — which isn’t historically a peak month — we utilized over 80 percent of all reserves on an average day. However, on peak days in May we used nearly 100 percent of our reserves, which means we almost ran out of crews on those days.”

And as Surdek goes on to note in her memo — running out of crews could create serious operational risks. Those risks might include delayed or canceled flights.

AA’s plan to up its reserve ranks comes in the wake of details about Delta Air Line’s (NYSE: DAL) plan to entice more flight attendants to work more hours during the peak summer travel season. The carrier is offering every flight attendant who works 100 hours or more for each of June, July and August a $1,000 “thank you” bonus. 

^v^

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