» And they have company, too: San Bernardino, population 202,000, is not a small city. Nor is Stockton, population 291,000, which announced its intention to declare bankruptcy last month. Both fell on hard times after a boom-and-bust period. The much-smaller Mammoth Lakes also filed for bankruptcy protection recently, but unlike the recession-related reasons for the other two cities, their reason was lawsuit-related. (That city owes $43 million in a breach-of-contract lawsuit to a developer, which is far more than their yearly operating budget.) Anyone want to take bets on which California city falls prey to bankruptcy protection next, if any? (Edit: Spelling)
» Quick thought on the matter: Anyone see shades of AT&T and Verizon in this whole mess, in that (like AA) both companies sold unlimited service for something — in this case, mobile data access — only to change their minds after they decided it was costing too much, in the process treating their customers like jerks? The lesson: Unlimited has limits, apparently.
basicallyenhanced asks: As a son of an AA employee who went through the fear of mass layoffs during the post 9/11 airline bankruptcy days (He made it thankfully). Do you guys think AA'll be laying off any employees as per renegotiations with the unions? Or do you think it'll be purely restructuring.
» SFB says: To put it simply, layoffs are probably on the menu. From this CNNMoney article on the matter: “American pilots fly fewer hours than their counterparts at other carriers, and receive similar pay and benefits for less work time. And because the maximum number of hours an American pilot can work in a month equals the minimum at Southwest, American is required to hire more people to work in the cockpit for the same amount of flying.” Even though American pays less than most of the other airlines, the union-enforced disparity of hours is hitting the airline hard, costing them roughly $200 million each year. Benefits are also very costly for the airline. Ultimately, if the forthcoming labor talks go AA’s way, expect layoffs. Even if they don’t, expect service cuts that could lead to labor cuts anyway. — Ernie @ SFB