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US Airways Strikes Merger Deal With AA Unions Part 2  
User currently offlineSA7700 From South Africa, joined Dec 2003, 3431 posts, RR: 26
Posted (2 years 3 months 4 days 8 hours ago) and read 10613 times:
AIRLINERS.NET CREW
HEAD MODERATOR

This is a continuation thread from part 1 which can be found here: US Airways Strikes Merger Deal With AA Unions Part 1

Please feel free to contribute to the thread and further your discussion on the topic.


Rgds

SA7700


When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
48 replies: All unread, showing first 25:
 
User currently offlineripcordd From United States of America, joined Apr 2000, 1149 posts, RR: 1
Reply 1, posted (2 years 3 months 4 days 7 hours ago) and read 10545 times:

If some hear suggest that after merger with AA DP will file for BK to get the costs back in line you have to be crazy employees would revolt going thru BK again after a merger it would be insane to think what the morale would be you talk about a rollercoster thats it. Employees have been down for a long time BK brought them down even further DP's argements with 3 unions I have never see the employees more optimistic looking toward the future with DP in charge. Hortons plan for the company is not what ever front line employee has fought for he would be able not flying anyone just using a code share. DP is the opposite and that is what has the employees looking toward a future that they havent since Crandall left. Horton and is senior staff are pissed because they want to come out of BK a stand alone so they can set themselves up with their golden parchautes in case someone buys them out. I doubt US bumps paid first class passengers so its senior staff & spouses can go on vacation in F. At a time when AA needs every bit of revunue this act is just shows that they are selfish and dont care about the long term AA

User currently offlinerj777 From United States of America, joined Dec 2000, 1785 posts, RR: 2
Reply 2, posted (2 years 3 months 4 days 6 hours ago) and read 10436 times:

Did TWA ever emerge from CH 11 before they were bought by AA?

User currently offlinealuminumtubing From United States of America, joined exactly 6 years ago today! , 363 posts, RR: 12
Reply 3, posted (2 years 3 months 4 days 6 hours ago) and read 10396 times:

TWA entered chapter 11 as part of the acquisition deal.

User currently offlineRevelation From United States of America, joined Feb 2005, 12336 posts, RR: 25
Reply 4, posted (2 years 3 months 4 days 6 hours ago) and read 10385 times:

I think Parker has stolen a day's march on AA management.

Maybe I'm naive and optimistic but it seems by having agreements with the three unions in hand, he's done something that AA management hasn't been able to do after years of trying. Along with this comes at least a temporary boost in morale and a sense of momentum that has been lacking for a very long time now. I think the USAPA will be buried under the weight of numbers and that silliness will come to an end as well. Others have said that Parker is offering no more than AA is offering but that's the point, they're willing to take it from Parker but not from current AA management.

For those who say that the union happiness will be short lived under Parker, ask yourselves how happy the unions will be should Parker's plan not come to fruition? I'd say that it would cause another solid decade of unhappiness.

It is a real sad sign of the times that union-management relations have gotten to the point where the union would dislike the current management so much that they'd publicly make an agreement with a different management team, but the reality is that the company will live or die based on how well its employees perform, and it's easier to replace a relatively few managers rather than tens of thousands of employees.

It's ironic how we're having discussions about how disposable FAs are when the ones actually being disposed are CEOs. Arpey's left the building, and who knows how long Horton will be around.

As for contract-based FAs. well, not only do you have US labor laws on sexism and ageism to comply with, but also you'd have to get past the current bargaining agent for the current workers, i.e. the unions, and that's not going to happen.

Besides, given what I see of the average US yoot, I doubt the same formula that works in Asia would work in the US. They're just as capable of standing in the aisles bitching about their pay as are their parent's generation.



Inspiration, move me brightly!
User currently offlinePI4EVER From United States of America, joined May 2009, 641 posts, RR: 2
Reply 5, posted (2 years 3 months 4 days 5 hours ago) and read 10247 times:
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My signature line says it all. "Watch what you want. You may get it."
I can certainly relate to the feeling of most AA employees right now. Been there twice. It is an emotional, and distressing time. For AA people, it has been a long time coming, and possibly is more painful now because many AA people felt they weren't affected when this happened at other airlines and other airline people.
Don't forget US has visited bankruptcy twice. Thousands of employees in crew, airport, reservations and corporate were let go. US alone closed 8 rez centers, the DM Service Center, Consumer Affairs, airport operations staff, flight crews and corporate staff since 2003. Anyone remember the outsourcing of rez to Guatemala, Mexico and the Phillipines? Forget that all retiree benefits were canceled and the default to the PBGC on all pensions? Thousands of employees, and veteran retired employees had little choice or voice in the final outcomes.
Interesting that US can now commit that won't happen at AA when those decisions were made from a strictly financial perspective. Can anyone really expect AA and US to combine.....called what you will and airplanes painted in whatever scheme.....and not expect further reorganization, negotiation and "right-sizing" to maximize revenue and financial success? It may look good on paper, but it has to work.
I can appreciate AA people wanting something good to happen at their airline, and finally in their view to them as employees. I extend Best Wishes and hope your future is bright. It will however, be a painful transition and mark my words.....things change rapidly over time and commitments made now do not always hold up. Remember. There is a still a business to run, and management will make decisions in the interest of the corporation and its mission to insure financial stability and success. Red ink on the money is the same color as employees blood, and they both can be lost.



watch what you want. you may get it.
User currently offlinerj777 From United States of America, joined Dec 2000, 1785 posts, RR: 2
Reply 6, posted (2 years 3 months 4 days 5 hours ago) and read 10206 times:

Quoting aluminumtubing (Reply 3):
TWA entered chapter 11 as part of the acquisition deal.

So US could still buy AA while AA is still in bankruptcy, right?


User currently offlineripcordd From United States of America, joined Apr 2000, 1149 posts, RR: 1
Reply 7, posted (2 years 3 months 4 days 4 hours ago) and read 10123 times:

PI4ever all the employees want is airline to lead and be proud of I know the employees will take less to see that vision cause there is a future in it. Horton is doom and gloom, more bonus, golden parchutes, outsourcing as much as they can and stick to OW hub flying, letting AS B6 fly as much domestic as they can for them its not bright. I think everyone knows that pensions are frozen jobs will be outsourced more flying but under DP this is all done for the benifit of the airline not the 45 top ex;s which it will be done if Horton is left in charge. I think US can buy AA in BK if they get 5 of 9 BK board memebers to sign off on it and the judge to approve it I dont know for sure.

User currently offlineAAIL86 From Finland, joined Feb 2011, 408 posts, RR: 3
Reply 8, posted (2 years 3 months 4 days 4 hours ago) and read 10111 times:

Quoting JFKPurser (Reply 235):
IAnd in the future, please don't assume that all of my answers will by default be defined by the traveling public or management. And frankly you exaggerate the rudeness of FAs overall, as 95% of the members do here. Please be honest.

Well, I should have prefaced that by saying its not a majority of F/As - you are correct when you say that. It's certainly a minority that needs to be smaller (I spent 8 years with American, so I do know what I'm talking about). Now I just fly AA 50,000 miles a year (mostly out of loyalty to friends and former colleagues , as I can obviously fly who I want). When one experiences all those different sides of the business - that gives one a different perspective then every other platinum who just wants his/her miles protected. Best of luck to you going forward.

Quoting Revelation (Reply 4):
Maybe I'm naive and optimistic but it seems by having agreements with the three unions in hand, he's done something that AA management hasn't been able to do after years of trying.

Very, very true. The honeymoon will end, though, I can promise you that. What they all make of it will be interesting to watch.

Quoting Revelation (Reply 4):
It's ironic how we're having discussions about how disposable FAs are when the ones actually being disposed are CEOs. Arpey's left the building, and who knows how long Horton will be around.

Those guys will be fine- look at Carty - he's over at VX - adding routes to compete with AA as we speak.

[Edited 2012-04-22 08:50:07]

[Edited 2012-04-22 08:50:36]


Next
User currently offlineflyguy89 From United States of America, joined Feb 2009, 1899 posts, RR: 9
Reply 9, posted (2 years 3 months 4 days 4 hours ago) and read 10036 times:

Quoting ripcordd (Reply 7):
Horton is doom and gloom, more bonus, golden parchutes, outsourcing as much as they can and stick to OW hub flying, letting AS B6 fly as much domestic as they can for them its not bright.

Stop making things up, it undermines your argument. AA has not released it's reorganization plan, so there is no way that you could know what is in it or what it entails.


User currently offlineDesertAir From Mexico, joined Jan 2006, 1457 posts, RR: 0
Reply 10, posted (2 years 3 months 4 days 4 hours ago) and read 10021 times:

I fly frequently in and out of SMF, Sacramento International Airport.
US has a number of frequencies to PHX and a daily flight to PHL. AA has a number of frequencies to DFW and Eagle flights to LAX. In a merged AA into US, I can see US ticket and ground personal handling the AA flights. Maybe, an increase of a couple of positions. It seems like this would be the situation in many shared US/AA cities. I can see AA positions taking a beating.


User currently offlineHPRamper From United States of America, joined May 2005, 4036 posts, RR: 8
Reply 11, posted (2 years 3 months 4 days 3 hours ago) and read 9841 times:

Quoting DesertAir (Reply 10):
I fly frequently in and out of SMF, Sacramento International Airport.
US has a number of frequencies to PHX and a daily flight to PHL. AA has a number of frequencies to DFW and Eagle flights to LAX. In a merged AA into US, I can see US ticket and ground personal handling the AA flights. Maybe, an increase of a couple of positions. It seems like this would be the situation in many shared US/AA cities. I can see AA positions taking a beating.

In some stations, it will bring ops back in house as AA has outsourced (or is planning to) in many places.


User currently offlinePu From Sweden, joined Dec 2011, 695 posts, RR: 13
Reply 12, posted (2 years 3 months 3 days 23 hours ago) and read 9495 times:

From a business perspective, AA has not been a consistently well managed concern since 1999. September 11th? WN gets to hedge their fuel? Other legacies declare bankruptcy? LHR opened up to competitors? Unions? Wright Ammendment ending? Challenges to most every airline to be sure, but AA handled them all badly.

..and Horton's plan, insofar as I have read, is little more than a continued sad devotion to the failed religion that got them here, especially his confrontational and dictatorial attitude towards workers.

It's clear Horton was aiming for an eventual buyout/merger of AA or some large part of its assets, no doubt with an iron clad golden parachute built into his post bankruptcy employment contract. I am certain Citibank or some other money centers were backstage promising some sweet financing to Horton to either go shopping himself or finance a post-bx merger under his helm, once he destroyed the unions. How emotionally satisfying it must be to have the tables turned on his smug and cynical approach to the bankruptcy process generally and his own workforce in particular.

...but it's not over yet, and all stakeholders including the unions should expect some things they don't like if Parker prevails in the battle for AA. For instance, AA's loss-making devotion to premium services and chasing the (we are told) valuable high yielding customers may devolve into Parker's minimalist approach to luxuries. Head count trimming will certainly come, sooner or later...and other painful things.

Anyway, best of luck to AA. A different looking AA is better than Horton's vision of a shell airline doing little more than managing a FF program and selling tickets on outsourced flying, a vision obviously meant for future m&a activity....



Pu


User currently offlinemilemaster From United States of America, joined Mar 2001, 1063 posts, RR: 2
Reply 13, posted (2 years 3 months 3 days 22 hours ago) and read 9188 times:

Tomorrow I am expecting the judge to throw out the union contracts. This will make for some interesting threads this week for sure.

User currently offlineRising From United States of America, joined May 2010, 269 posts, RR: 1
Reply 14, posted (2 years 3 months 3 days 21 hours ago) and read 8948 times:

Quoting Pu (Reply 12):
A different looking AA is better than Horton's vision of a shell airline doing little more than managing a FF program and selling tickets on outsourced flying, a vision obviously meant for future m&a activity

It's funny, when Southwest outsources its maintenance and United and Delta rely heavily on regional flying it's called smart business but when AMR moves to align its structure in a similar fashion, they are branded as insane.

AMR operates a fleet of over 600 mainline airplanes, and a fleet of 281 regional airplanes. To put that in perspective, United and Continental operated mainline fleets of around 350 airplanes each pre-merger. Think about that for a minute. AMR operates a mainline fleet almost double the size of their old competitors and only slightly less than the now merged UAL enterprise. With Eagle, it's almost 900 airplanes. That's what is truly insane. And you wonder why their plan calls for more outsourcing and code-sharing?

Even if AMR cut their mainline fleet in half, which is not even in the cards, they would still only be slightly smaller than US AIrways today.

I actually would like to see a US Airways/American merger. But to say that if they don't, AMR is going to just sell tickets and dump the fleet is overheated rhetoric.



If it doesn't make sense, it's because it's not true.
User currently offlineNutsaboutplanes From United States of America, joined Jul 2010, 496 posts, RR: 8
Reply 15, posted (2 years 3 months 3 days 20 hours ago) and read 8732 times:

Its been fun reading through all of this over the last several days because there are so many different opinions and clearly a great deal of passion. I think there are two different ways to look at this on A.net and it depends on your position....either current airline employee or a passenger that is not employed in the industry who is an aviation enthusiast.

If you are an enthusiast or passenger, you are worried about paint schemes, frequent flier program benefits, competitive pricing, loss of air service in your community and the fact that a merger means the disappearance of yet another airline from the skies.

If you are an employee of any major airline in the US, I would think that most would be excited (as I am) about this as it rounds out the transformation of the airline industry that started with the US/HP merger years ago. The final merger of two legacy carriers will further stabilize the marketplace and bring long-term stability to the remaining carriers and by default, to their employees. This means better overall capacity and price control which is key with high fuel prices and for the first time in a very long time, the potential for airlines to generate a reasonable rate of return for their investors. Employees from UA, DL, AS, B6 and others should be rooting for this......yes it means a much stronger AA but more importantly, it means one less competitor.

I don't believe for a second that there wont be outsourcing or job cuts, there has to be and that is a fact. There will be station outsourcing on the ramp at field stations and I would look for a similar strategy to the current US strategy in that regard but as mentioned, AA is already doing this on their own.

For the customer, we often hear people complain about poor service and the horror that comes with a flight on a US carrier.....well, that in large part is a product of what has been a super competitive marketplace and now that the industry is well into a serious transformation, I would expect to see service improve over time across the board at all major air carriers. This will however come at a price as airlines will likely be able to charge what it actually costs to move a customer from point A to point B most of the time while profiting enough to cover the massive expenditures that come with running a major airline.

This will be a good thing if it happens but it wont be without its frustrations and issues just as we have seen with all other recent mergers. This situation obviously has its differences as the "hostile" element was not present in other recent merger situations so I do expect more drama than in previous mergers.

As mentioned above, lets wait for a flurry of posts after tomorrows BK hearings as the results could be very interesting....



American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
User currently offlinecommavia From United States of America, joined Apr 2005, 11414 posts, RR: 62
Reply 16, posted (2 years 3 months 3 days 20 hours ago) and read 8570 times:

Quoting Nutsaboutplanes (Reply 15):
it rounds out the transformation of the airline industry that started with the US/HP merger years ago.

The transformation that - I agree - an AA-USAirways merger would largely conclude began far, far before the USAirways-America West merger.

I would argue that a more accurate moment to pinpoint the beginning of this 'transformation' was 1982, when Braniff went out of business. That was the first major airline to exit the marketplace - whether through failure or merger - in the era of deregulation. That began the slow, gradual, but ultimately inevitable process of reducing the number of major carriers in the U.S. There have been some new additions since deregulation, but far more eliminations as the industry has struggled and striven, ceaselessly, to actually make money and return value to shareholders.

If AA and USAirways merge - which I personally think is going to happen one way or another whether now or a few years from now after AMR exits bankruptcy - that will bring us, for the first time in 35 years, to some semblance of natural equilibrium in the U.S. domestic air travel marketplace: four huge national airlines (AA, Delta, United and Southwest), perhaps a couple of smaller, primarily more regionalized carriers (perhaps JetBlue in the east, Alaska in the west), and then a handful of smaller 'niche' carriers (Virgin, Spirit, Allegiant, perhaps Frontier).

Quoting Nutsaboutplanes (Reply 15):
The final merger of two legacy carriers will further stabilize the marketplace and bring long-term stability to the remaining carriers and by default, to their employees.

Hopefully.

Quoting Nutsaboutplanes (Reply 15):
This means better overall capacity and price control which is key with high fuel prices and for the first time in a very long time, the potential for airlines to generate a reasonable rate of return for their investors.

Hopefully.

Quoting Nutsaboutplanes (Reply 15):
Employees from UA, DL, AS, B6 and others should be rooting for this......yes it means a much stronger AA but more importantly, it means one less competitor.

  


User currently offlineNutsaboutplanes From United States of America, joined Jul 2010, 496 posts, RR: 8
Reply 17, posted (2 years 3 months 3 days 19 hours ago) and read 8446 times:

Quoting commavia (Reply 16):
The transformation that - I agree - an AA-USAirways merger would largely conclude began far, far before the USAirways-America West merger.

quote=commavia,reply=16]I would argue that a more accurate moment to pinpoint the beginning of this 'transformation' was 1982, when Braniff went out of business.[/quote]

This made me smile.....I was born at the tail end of 1980  

From my perspective, I have ridden the roller coaster in the airline Industry since 1999 when I began a job as a flight attendant with NW after high school....I was furloughed twice over a 5 year period and worked for HP as a ramp agent during the first furlough. After the second furlough and Chapter 11 at NW, I joined AS as a CSA and worked my way up through the ranks only to have my position eliminated as part of AS's cost cutting initiatives in 2010. I am currently with another major air carrier and I wont say if the AA/ US tie up would impact me but lets just say I am ready for another roller coaster ride.

At the end of the day, I have been doing this for 12 years now and I hope that the merger of AA and US will bring at least several years of stability to the industry in the US......I know I am ready for some job security and the ability to truly plan for a future (I am sure many others on here feel the same).



American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13511 posts, RR: 62
Reply 18, posted (2 years 3 months 3 days 15 hours ago) and read 7279 times:
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Quoting ripcordd (Reply 7):
letting AS B6 fly as much domestic as they can for them its not bright

What domestic flying of AA's would AS possibly pick up? They've got their hands full already, particularly AS. I see very limited opportunity for AA cutbacks to equal new AS/B6 flying that AA would then codeshare on. More likely that the future looks much like it does with the AS/AA codeshare, where there's mutual feed over their own at-will flying.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently onlineFlighty From United States of America, joined Apr 2007, 8401 posts, RR: 3
Reply 19, posted (2 years 3 months 3 days 14 hours ago) and read 7060 times:

Quoting Revelation (Reply 4):
and it's easier to replace a relatively few managers rather than tens of thousands of employees.

Very true.

Quoting Nutsaboutplanes (Reply 15):
I would think that most would be excited (as I am) about this as it rounds out the transformation of the airline industry that started with the US/HP merger years ago.

Yes. I think this is the correct perspective. Nicely put.


User currently offlineRevelation From United States of America, joined Feb 2005, 12336 posts, RR: 25
Reply 20, posted (2 years 3 months 3 days 7 hours ago) and read 6094 times:

Quoting commavia (Reply 16):
Quoting Nutsaboutplanes (Reply 15):
This means better overall capacity and price control which is key with high fuel prices and for the first time in a very long time, the potential for airlines to generate a reasonable rate of return for their investors.

Hopefully.

It will be interesting to see. The capacity controls and route optimizations made possible by consolidation indeed combine with higher fuel costs to produce "sticker shock". The airlines may find they've priced themselves out of the budgets of more and more casual travelers and may find themselves fighting more and more over fewer and fewer premium flyers. I hope things find a workable balance.



Inspiration, move me brightly!
User currently offlineCoronado From United States of America, joined Jun 1999, 1168 posts, RR: 2
Reply 21, posted (2 years 3 months 3 days 6 hours ago) and read 5996 times:
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Quoting Revelation (Reply 20):
The capacity controls and route optimizations made possible by consolidation indeed combine with higher fuel costs to produce "sticker shock". The airlines may find they've priced themselves out of the budgets of more and more casual travelers and may find themselves fighting more and more over fewer and fewer premium flyers. I hope things find a workable balance.

the alternative is for airlines to do what they have traditionally done which has been to fly too many passengers at a loss, for the objective at gaining market share, regardless of the end result of loss after loss, year after year, or at the very best earning such a low profit margin that they cannot properly afford the capital to reinvest, to turn over their fleets, etc.

I think if we analyze CASM's of the major airlines of the world (excluding fuel), on an inflation adjusted basis, they have never been more efficient. The US network carriers led by Delta and United Continental in particular have CASM's in the low US7 cents. They are certainly doing their share to try and hold on to as many casual travelers as possible, even if it means flying in a crowded aircraft with a 31 inch pitch!

Fuel is another issue. Discretionary travel certainly suffers in a higher fuel environment just as many people drive their cars shorter distances for vacations or simply have a 'staycation, ' or take a bus or train to work when fuel is relatively expensive.



The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
User currently offlineckfred From United States of America, joined Apr 2001, 5171 posts, RR: 1
Reply 22, posted (2 years 3 months 3 days 5 hours ago) and read 5902 times:

SPREE34 made a comment that Bob Crandall was a straight shooter, while Don Carty and Gerard Arpey were less than fully honest with the labor groups at AA.

One thing to keep in mind is that Carty and Arpey worked their way up the corporate ladder at AA in the culture that Crandall created.

By the same token, Doug Parker's first job in the industry was at AA, during the Crandall era.

I've heard some AA pilots say that there is a need for a change in the culture at AMR HQ, and that will only come about with a new CEO who has never worked for AA, as well as senior executives from outside of AA (or executives from within the company who would adapt to a non-Crandall culture).

My assumption has been that when AMR exits Chapter 11, the company would issue stock to many of its creditors (particularly lenders and lessors). The new owners would then create a new board of directors who would find a new management team to replace Horton and his team.

What remains to be seen is how the Eagle unions view a potential merger with US. I don't think Eagle will be a part of AMR 5 years from now, but a US merger might lead to less desirable fate for Eagle than AA coming out of Chapter 11 on its own.

I disagree with SPREE34's belief that most AA flying will be done by other carriers. AA has 460 narrowbodies on order, in addition to the order for 738s that started deliveries in 2009. There are 465 options for Airbus and Boeing narrowbodies.

Then, there are the 777 orders (both -200 and -300) and the 787 order that will be confirmed upon signing of a contract with APA (50 firm and 50 options).

Does that sound like an airline that is going to let a lot of other airlines do its flying?

The idea of letting BA, IB, and JL do a lot of international flying, and codesharing with the likes of B6 and AS was meant to generate revenue to get AA back onto its feet. Obviously, the plan didn't work. But, I don't think that is management's plan for the long term.


User currently offlineRevelation From United States of America, joined Feb 2005, 12336 posts, RR: 25
Reply 23, posted (2 years 3 months 3 days 5 hours ago) and read 5861 times:

Quoting Coronado (Reply 21):
the alternative is for airlines to do what they have traditionally done which has been to fly too many passengers at a loss, for the objective at gaining market share, regardless of the end result of loss after loss, year after year, or at the very best earning such a low profit margin that they cannot properly afford the capital to reinvest, to turn over their fleets, etc.

I don't think this is an alternative these days. The cost of fuel will bleed out even the biggest bankroll.

Quoting Coronado (Reply 21):
I think if we analyze CASM's of the major airlines of the world (excluding fuel), on an inflation adjusted basis, they have never been more efficient. The US network carriers led by Delta and United Continental in particular have CASM's in the low US7 cents. They are certainly doing their share to try and hold on to as many casual travelers as possible, even if it means flying in a crowded aircraft with a 31 inch pitch!

Indeed. It shows one of the few variables is employee salaries and benefits, and they are the ones being squeezed the hardest.

Quoting Coronado (Reply 21):
Fuel is another issue. Discretionary travel certainly suffers in a higher fuel environment just as many people drive their cars shorter distances for vacations or simply have a 'staycation, ' or take a bus or train to work when fuel is relatively expensive.

The real question is will there really ever be a lower fuel environment again?



Inspiration, move me brightly!
User currently offlineHPRamper From United States of America, joined May 2005, 4036 posts, RR: 8
Reply 24, posted (2 years 3 months 3 days 5 hours ago) and read 5814 times:

Quoting Revelation (Reply 23):
The real question is will there really ever be a lower fuel environment again?

Depends on regulation and if it ever changes. Short supply isn't the problem - all that oil they are pumping out of North Dakota is being shipped to China.


User currently offlinemoo From Falkland Islands, joined May 2007, 3868 posts, RR: 5
Reply 25, posted (2 years 3 months 3 days 5 hours ago) and read 5931 times:

Whats the legal situation surrounding companies and bodies talking to third parties? Can AA legally talk to another workers body to replace the current employee body if they aren't getting on with the current body?

User currently offlinemayor From United States of America, joined Mar 2008, 10348 posts, RR: 14
Reply 26, posted (2 years 3 months 3 days 4 hours ago) and read 5854 times:

"Is this unprecedented? Making deals with the unions independent from management?"



This question was asked by the OP in Part #1. I remember Doug Parker going directly to DL's creditors during their BK after management had turned down his takeover offer. Much the same strategy, I think.



"A committee is a group of the unprepared, appointed by the unwilling, to do the unnecessary"----Fred Allen
User currently offlineSPREE34 From United States of America, joined Jun 2004, 2240 posts, RR: 9
Reply 27, posted (2 years 3 months 3 days 4 hours ago) and read 5942 times:

Quoting ckfred (Reply 22):
I disagree with SPREE34's belief that most AA flying will be done by other carriers. AA has 460 narrowbodies on order, in addition to the order for 738s that started deliveries in 2009. There are 465 options for Airbus and Boeing narrowbodies.

Good point.

There are questions about how the 319's will be flown, and by whom. Eagle? American "Lite"? American, with APA agreeing a lower pay scale?

I wonder if those orders/slots at Airbus and Boeing have a dollar value should AA wish to sell them?



I don't understand everything I don't know about this.
User currently offlineRevelation From United States of America, joined Feb 2005, 12336 posts, RR: 25
Reply 28, posted (2 years 3 months 3 days 3 hours ago) and read 5882 times:

Quoting SPREE34 (Reply 27):
There are questions about how the 319's will be flown, and by whom. Eagle? American "Lite"? American, with APA agreeing a lower pay scale?

It all depends on if AA gets its wish and is allowed to impose its contractual desires on its unions.

The hearings are happening this week, so stay tuned into the AA Bankruptcy thread!

Quoting SPREE34 (Reply 27):
I wonder if those orders/slots at Airbus and Boeing have a dollar value should AA wish to sell them?

No, the vendors have gotten much smarter about such things.

Right now, FR's MOL is fuming because Boeing is insisting on new purchases having contractual obligations for FR to operate them for a certain period of time.

This is to avoid Boeing having to compete against FR in the event that FR decides to immediately resell aircraft purchased from Boeing.

I doubt slots ever were resellable. The only way to cash in on them was to purchase the aircraft and immediately resell it, and now at least Boeing contractually forbids this.



Inspiration, move me brightly!
User currently offlinedelta2ual From United States of America, joined Dec 2007, 614 posts, RR: 1
Reply 29, posted (2 years 3 months 3 days 3 hours ago) and read 5900 times:

Two great quotes from another, closed thread:

Incitatus: "A merged AA/US would have similar total revenue to Delta and United and 30 thousand more employees. Logically, to be cost-competitive, the companies if merged today would have to shed those 30 thousand jobs.
Nothing of what has been announced so far adds up."

IndustryInsider: "As I joking said in another thread, US will offer the moon to the AA unions and the US unions to help push through a deal. Once AA/US merge and now cost are even higher, US will return to the bankruptcy courts and throw out all the contracts citing that the labor costs are just way too high post merger. An "easy" way to fix the current US union issues, right?"

I agree with both of these assessments. Even with duplicate jobs cut (CEO & other managers) I can't see how these promises by Mr. Parker can be upheld and have the airline be competitive. According to one report that I saw on TV, total revenue of a combined AA/US would be around $37 Billion. UA/CO is around $37 Billion and DL is around $35 Billion. Of course, revenue and profit are two different things.

I think the telling thing about one of these agreements (APFA) is the stipulation that if an agreement isn't completed within 60 days of single-carrier status, the parties will go to binding arbitration. This may be the "out" that Doug Parker needs. He can promise all these things, get the merger, then go to an arbitrator and say that fuel is too high or they didn't factor in XYZ, etc. If the arbitrator is pro-corporation, the F/A's can kiss all these promises goodbye. I'm not saying this is what will definitely happen, but the fact that it is a possibility would make me nervous. I've spoken to 2 of my AA F/A friends, one with 20+ years, and the other with 15 years, and they've both come to the same conclusion. I just wonder if the rank and file employees get a say on these agreements. Will there be a vote?



From the world's largest airline-to the world's largest airline. Delta2ual
User currently offlineripcordd From United States of America, joined Apr 2000, 1149 posts, RR: 1
Reply 30, posted (2 years 3 months 3 days 3 hours ago) and read 5684 times:

Quoting Flighty (Reply 19):

AS they would let them do all the flying out of LAX that eagle does now. B6 they would code share on routes out of BOS and JFK....Eagle or another commuter they want to raise the limit they can do from what it is now which would mean more eagle flying and less AA flying.. They are all ready and have been cutting back from flying int to non-ow hubs. This will only continue.


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2240 posts, RR: 9
Reply 31, posted (2 years 3 months 2 days 22 hours ago) and read 5292 times:

Quoting Revelation (Reply 28):
No, the vendors have gotten much smarter about such things.

It's about time. It skews things too much.



I don't understand everything I don't know about this.
User currently offlineAAplat4life From United States of America, joined Jun 2011, 180 posts, RR: 0
Reply 32, posted (2 years 3 months 2 days 21 hours ago) and read 5191 times:

Quoting milemaster (Reply 13):
Tomorrow I am expecting the judge to throw out the union contracts. This will make for some interesting threads this week for sure

From what I read, this could not happen until June. Management has two weeks to or so to put on its case, the parties have to go back and bargain and then the unions get to put on their case, all of which happens before the judge can make his ruling.

I give Parker some credit for putting forth this preemptive strike. Whether it works in the long run remains to be seen. At some point, enough of the creditors will put their support behind management or US whether implicitly or explicity, and then we'll see what happens. Getting the unions to support US was an important first step, but it is just one of many. I am still not convinced that AA management has a good stand-alone turnaround plan in place and, therefore, think US will prevail ultimately.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7497 posts, RR: 24
Reply 33, posted (2 years 3 months 2 days 21 hours ago) and read 5210 times:

Looks like the creditors sided with AA according to this article:

http://www.msnbc.msn.com/id/47148995...s/local_news-dallas_fort_worth_tx/



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlinecatiii From United States of America, joined Mar 2008, 3029 posts, RR: 4
Reply 34, posted (2 years 3 months 2 days 21 hours ago) and read 5150 times:

Quoting LAXdude1023 (Reply 33):
Looks like the creditors sided with AA according to this article:

http://www.msnbc.msn.com/id/47148995...h_tx/

On the issue of voiding the contracts though, and not on the question of US's actions.

Quoting AAplat4life (Reply 32):
I give Parker some credit for putting forth this preemptive strike.

Totally agree. Whereas with Delta it had a rallying and unifying effect, with AA it throws management off kilter and drives a further wedge between management and labor. It's really a win-win no matter how it turns out.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7497 posts, RR: 24
Reply 35, posted (2 years 3 months 2 days 21 hours ago) and read 5135 times:

Quoting catiii (Reply 34):
On the issue of voiding the contracts though, and not on the question of US's actions

It does tell on something. The creditors think its better to tear up the contracts rather than build a bridge to what US has proposed.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineLDVAviation From United States of America, joined Dec 2008, 1048 posts, RR: 5
Reply 36, posted (2 years 3 months 2 days 20 hours ago) and read 5035 times:

Quoting catiii (Reply 34):
On the issue of voiding the contracts though, and not on the question of US's actions.

It is in the best interest of the secured and most of the unsecured creditors to finance AA's emergence on the backs of the employees. If AA can impose all or most of its terms on the employees, it means more for the secured creditors and the non-labor, unsecured creditors.

In a legal brief filed with the court in advance of today's 1113 section hearings, AA's lawyers indicated that AA will not get (or seek) relief from most of its secured debt. I am guessing that this will be the case for two reasons: (1) AA does not want to lose the use of the equipment, slots, and facilities used as collateral for that debt. And (2) it is a calculated move to gain the support of the secured creditors.

Taken together, the legal brief and the claim in this article, it seems that AA's strategy to remain independent will hinge on abrogating the union contracts and using the cash created by that move to make the secured creditors whole. IT is just business...


User currently offlineincitatus From Brazil, joined Feb 2005, 4000 posts, RR: 13
Reply 37, posted (2 years 3 months 2 days 17 hours ago) and read 4819 times:

Quoting AAplat4life (Reply 32):
I am still not convinced that AA management has a good stand-alone turnaround plan in place and, therefore, think US will prevail ultimately.

The reason why the unions like the US deal is very different from why analysts like the US deal. With the US deal ultimately the merged company will have to shed 30,000 of the jobs that exist today and there will be further capacity "rationalization". The unions would be dodging a bullet now to be hit by a cannon ball later. Ain't going to happen.


User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 38, posted (2 years 3 months 2 days 16 hours ago) and read 4756 times:

Quoting aluminumtubing (Reply 3):
TWA entered chapter 11 as part of the acquisition deal.

TWA liquidated. Chapter 7.

Quoting rj777 (Reply 6):
So US could still buy AA while AA is still in bankruptcy, right?

Yes they very well could.

NS


User currently onlineFlighty From United States of America, joined Apr 2007, 8401 posts, RR: 3
Reply 39, posted (2 years 3 months 2 days 15 hours ago) and read 4699 times:

Quoting incitatus (Reply 37):
With the US deal ultimately the merged company will have to shed 30,000 of the jobs that exist today and there will be further capacity "rationalization".

The more senior rank+file would be pretty safe due to seniority. So, they might be receptive to the higher wages / lower headcount proposal.


User currently offlinegigneil From United States of America, joined Nov 2002, 16347 posts, RR: 85
Reply 40, posted (2 years 3 months 2 days 15 hours ago) and read 4699 times:

Quoting LAXdude1023 (Reply 35):
The creditors think its better to tear up the contracts rather than build a bridge to what US has proposed.

I bet they do both.

They void the contracts, and defer to US's (arguably much) better management.

NS


User currently offlineSPREE34 From United States of America, joined Jun 2004, 2240 posts, RR: 9
Reply 41, posted (2 years 3 months 2 days 15 hours ago) and read 4669 times:

Quoting gigneil (Reply 38):
TWA liquidated. Chapter 7.
http://www.deb.uscourts.gov/Opinions/2001/Twa_eeoc.pdf



I don't understand everything I don't know about this.
User currently offlineRevelation From United States of America, joined Feb 2005, 12336 posts, RR: 25
Reply 42, posted (2 years 3 months 2 days 10 hours ago) and read 4530 times:

Quoting LAXdude1023 (Reply 35):
It does tell on something. The creditors think its better to tear up the contracts rather than build a bridge to what US has proposed.

Or they want to tear up the contracts and merge with US as well. Parker can tell the unions he was willing to pay 'delta + 3%' but the nasty creditors/courts took that off the table.

Quoting LDVAviation (Reply 36):
Taken together, the legal brief and the claim in this article, it seems that AA's strategy to remain independent will hinge on abrogating the union contracts and using the cash created by that move to make the secured creditors whole. IT is just business...

Indeed. Any future managers of AA would prefer the contracts get dumped, and that includes Parker. The only reason why he is being generous to the unions is that he needs them to support the US takeover. Note his generosity is about the same as that which was on the table before the bankruptcy so its not like he's offering them the sun, the moon and the stars.



Inspiration, move me brightly!
User currently offlinechepos From Puerto Rico, joined Dec 2000, 6203 posts, RR: 11
Reply 43, posted (2 years 3 months 2 days 10 hours ago) and read 4522 times:

This could get very ugly over at AA, workng along a demoralized workforce sucks "been there done that". From everything I have read this seems to be going the way Horton wants it to go so the best of luck to all the great people over at AA.Going trhoguh a restructuring process is very difficult and painful and this is just the beginning.

Regards,

Chepos



Fly the Flag!!!!
User currently offlineLDVAviation From United States of America, joined Dec 2008, 1048 posts, RR: 5
Reply 44, posted (2 years 3 months 2 days 4 hours ago) and read 4212 times:

Quoting Revelation (Reply 42):
Or they want to tear up the contracts and merge with US as well. Parker can tell the unions he was willing to pay 'delta + 3%' but the nasty creditors/courts took that off the table.

If the creditors/courts take that off the table, they more or less will have tabled Parker's plans for a takeover. So, yeah, the fact that 6 of the 9 unsecured creditors, plus of course all the secured creditors, wanted to proceed with the 1113 section hearings indicates that there is enough support for Horton's plan for an independent AA.

Quoting chepos (Reply 43):
This could get very ugly over at AA, workng along a demoralized workforce sucks "been there done that".

It was supposed to get very ugly over at United. While in bankruptcy protection, United sought concessions from its employees not once, but twice. Almost as soon as it emerged from bankruptcy, United was thriving again, with better management of its operations and better premium products. If American stresses the same improvements, which it seems it is, it will thrive regardless of the morale of its employees.


User currently offlinelasairlinerenth From United States of America, joined Apr 2012, 59 posts, RR: 0
Reply 45, posted (2 years 3 months 1 day 15 hours ago) and read 3724 times:
Support Airliners.net - become a First Class Member!

Hi Everyone:

http://www.huffingtonpost.com/peter-...us-airways-american_b_1447467.html

IMHO, in this blog post, Greenberg doesn't really say anything that hasn't already been said here on Airliners.net about the potential US/AA marriage (pun intended), but I thought folks might be interested in what the mainstream media has to say.

Greenberg seems most concerned about people who are members of either US's or AA's mileage programs. I have been a member of AAdvantage for the better part of the last ten years. That membership got me from Las Vegas to Prague and London and back last summer; and I have built up about 60,000 AAdvantage miles since then. There is also a good chance I will double that amount of AAdvantage miles by January 2013. Should I be worried as Greenberg says?

Regards,
Tony


User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2349 posts, RR: 1
Reply 46, posted (2 years 3 months 1 day 9 hours ago) and read 3563 times:



Quote:

IAG's two airlines, BA and Spain's Iberia, have deep partnerships with American, through their Oneworld airline alliance. Mr. Walsh, IAG's chief executive, has endorsed AMR's reorganization effort. But IAG is preparing itself for a range of outcomes from the process, Mr. Walsh said.

"We intend to be passive but ready to act if and when something happens," Mr. Walsh said in an interview on the sidelines of an aviation conference.

The 747: The hands who designed it were guided by god.
User currently offlineLDVAviation From United States of America, joined Dec 2008, 1048 posts, RR: 5
Reply 47, posted (2 years 3 months 1 day 3 hours ago) and read 3278 times:

Contrary to information in the first part of this thread, Boeing is not backing the unions or USAirways' plan.

See link: http://www.thestreet.com/story/11508...-backs-amr-plan-to-reorganize.html


User currently offlineckfred From United States of America, joined Apr 2001, 5171 posts, RR: 1
Reply 48, posted (2 years 3 months 1 day 3 hours ago) and read 3246 times:

Quoting SPREE34 (Reply 27):

Good point.

There are questions about how the 319's will be flown, and by whom. Eagle? American "Lite"? American, with APA agreeing a lower pay scale?

I wonder if those orders/slots at Airbus and Boeing have a dollar value should AA wish to sell them?

Back in the mid 90s, the APA suggested an AA Lite, back when CO had a Lite operation, Delta was flying an Express operation to Florida, and United had the west coast Shuttle. Management said no, because it would devalue the AA brand.

Considering that CO got rid of Lite, Delta had little success with Express and Song, and United's Shuttle and Ted didn't do as well as hoped, I don't see AA trying that.

I also can't see the A319s being flown by Eagle. The A319 is meant to replace some of the MD-80 fleet, as well as routes where the Canadair 700 is currently too small. The more likely possibiity is that any Embrear 170s or 190s, and any Canadairs larger than the CRJ 700s would be flown by Eagle.

By the same token, I know some AA pilots who were saying before November that APA leadership should offer to reduce the low end of the pay scale in order to have the Embrear 170/190 or the Canadair C-Series assigned to mainline. They weren't interested in a B-scale, but they did see that it was more expensive to have mainline pilots fly larger Embrears and Canadairs, and that the difference in labor cost should be open to negotiation.


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