e-Vents

[ Friday ]

 

Flying Empty

Flown anywhere lately? If you've been to the airport at any time during the past two years, you have probably noticed fewer people walking through the terminals and concourses, and the planes have not always departed with a full complement of passengers. Personally, I only fly when I have to, not when I want to. A number of factors have helped influence my decision.

This week, American Airlines was in the news, attempting to gain $1.62 billion in wage concessions from its unions in order to avoid bankruptcy proceedings. And just as the last union voted to approve the measure, a SEC filing disclosed that company executives had been given bonus guarantees effectively doubling their base salaries. Don Carty, AMR CEO, scrambled to issue an apology to the unions, and scaled back the bonus plan for his executive team. A matter that was not discussed was that of the deferred compensation plan. Late last year, in anticipation of a bankruptcy filing, AMR execs axed their deferred compensation plan, as it would have exposure to creditors in any filing. The execs took a big tax hit by accepting the compensation during 2002, but they still got their money.

AMR Execs Apparently Cannot Read...

Delta Airlines announced last month that their executives would also cut back on their compensation, albeit only after a disclosure similar to AMR's. CEO Leo Mullin and his crew had been awarded large salary increases, while applying to the Federal government for post-9/11 relief. Mullin claims that he will take a cut of $9.1 million this year. Don't look for him to be spotted at the discount bread store anytime soon.

During the year 2000, Oracle Chairman and CEO Larry Ellison announced that he would forego his salary and bonuses. In return, he accepted stock options and incentive bonuses which ultimately resulted in a windfall of $ 706 million in January 2001. Not content with that sum, he also leased his aircraft to the company for $942,000.

So, it seems that AMR execs missed some of the recent headlines and 'scandals'...even those within its own industry.

As for Delta, this Atlanta-based company deserves little sympathy. Like other major carriers, Delta pays its top pilots over $200K per year...and there are quite a few on the payroll. Its flight attendants are the best paid in the industry, and its employees have traditionally been provided with the best benefits. But times have changed, and pilots have been furloughed. Employees have taken on a larger share of their insurance co-payments as company profits have disappeared. And Mullin and his group still attempted to pull one over on the hired help.

So, the next time I need to travel to a destination within a 500-mile radius, I will once again gas up the car. Afterall, by the time I drive to the airport, park the car, check in and clear security, I have already invested a couple of hours. Add to that the actual (not scheduled) flight time, the post flight requisites, and I usually arrive only a couple of hours ahead of what it would take me to drive it. While the time savings sometimes weighs in, the cost and hassle factor don't even come close.

So, Messrs. Carty and Mullin, put that in your pitot tubes and smoke it.



MM [20:49]