Counterparties: The misery of flying
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On some level, complaints about modern air travel are absurd. Think about that famous Louis CK bit: “You’re flying! It’s amazing!…You’re sitting in a chair, in the sky!”Â But Gary Shteyngart’s awesomely scathing rant about American Airlines relays an experience bad enough to go beyondÂ Tyler BrÃ»lÃ©’sÂ the walk-to-my-gate-was-too-long-and-I-had-to-interact-with-plebes shtick:
You, American Airlines, should no longer be flying across the Atlantic. You do not have the know-how. You do not have the equipment. And your employees have clearly lost interest in the endeavor. Like the country whose name graces the hulls of your flying ships, you are exhausted and shorn of purpose. You need to stop … Flight 121 from Paris to New York began on a clear autumn afternoon. It ended over 30 hours later.
Shteyngart’s experience is unfortunately an extreme example of a larger pattern. Since mid-September, half of all American Airlines’ flights have been delayed, while competitors’ on-time rates are 90%. The underlying reason for that abysmal record, Matthew Yglesias writes, is how the airline’s parent company has treated its labor force since filing for bankruptcy last year. One of the company’s aims (along with cutting its debt load) was to cut labor costs: It pays around $600 million more a year in employee salaries and has $200 million a year more in pension costs than its competitors. It also does spectacularly silly things like own a $30 million London townhouse. And looking back at the company’s 2010 financial statement, labor costs, while relatively high, are not rising that quickly.
Last month, a judge allowed the company to shred its contract with pilots. At that point, Yglesias writes, American lost the “active cooperation of skilled pilots who are capable of judging when it does and doesn’t make sense to request new parts and who conduct themselves in the spirit of wanting the airline to succeed” (translation: American pilots may be intentionally delaying flights). Ground crew and flight attendants agreed to new, more “flexible” contracts. Shortly thereafter, the company notified 11,000Â workers they were at risk of being laid off. Owners of $450 million in bonds of American’s parent company aren’t happy either — they’re suing, claiming that the company’s planes, used as collateral for the bonds, are falling in value and no longer sufficiently secure the debt.
American Airlines is not alone in facing the ire of prominent writers. TechCrunch’s Michael Arrington has savaged Delta in the past for poor service. The fact is that when you have a miserable experience on US airlines, that’s probably because the employees are being treated miserably themselves.Â – Ben Walsh
On to today’s links:
Billionaires “feel that they have become the new, vilified underclass” -Â Chrystia Freeland
“The sense of victimization is one part narcissism, one part greed, and one part tactical” -Â Felix
“One of the more ridiculous concepts that’s ever been invented in accounting” may be rolled back soon -Â WSJ
Big win for the bank lobby: Judge kills Dodd-Frank derivatives position limits -Â Bloomberg