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AMR Bankruptcy Court Thread Part 3  
User currently offlineSA7700 From South Africa, joined Dec 2003, 3431 posts, RR: 26
Posted (1 year 11 months 3 days 20 hours ago) and read 20590 times:
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This is a continuation thread of part 2 which can be found here: AMR Bankruptcy Court Thread Part 2


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Regards,

SA7700


When you are doing stuff that nobody has done before, there is no manual – Kevin McCloud (Grand Designs)
215 replies: All unread, showing first 25:
 
User currently offlinecommavia From United States of America, joined Apr 2005, 11409 posts, RR: 62
Reply 1, posted (1 year 11 months 3 days 20 hours ago) and read 20577 times:

Parker continues to sweeten the pilots deal to buy them off ...

http://www.thestreet.com/story/11673442/1/exclusive-us-airways-pilots-mull-merger-contract-with-10000-bonuses.html?puc=yahoo&cm_ven=YAHOO


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 2, posted (1 year 11 months 3 days 20 hours ago) and read 20528 times:

Quoted from norcal (Thread Part 2): "If there was the possibility of a strike (or if AMR management cared at all about employee relations) they would have offered the new Delta contract as a TA. That would have gotten them competitive with the industry and would have gotten at least 51%, if not an overwhelming 90%+ yes vote, and the company wouldn't be in this situation."

AMR is operating under the supervision of bankruptcy court. How does that relate to Delta's situation at all? If AA pilots want the Delta contract, they should do their part to make AA profitable in the long term before asking for Delta's contract. As is, AA's pilots will NOT be taking a pay cut, when every other pilot group, including Delta's, took a pay cut in bankruptcy.

As to the terms that will be imposed by the court, I quote SJUSXM from Thread 2: "The imposed contract has been vetted by the judge and deemed fair to the process of making AA a viable company. The pilots were offered a contract that went beyond that. The pilots rejected it. Now they have to live with the consequences. Of the 111 pages of Judge Lane's decision on the 1113 motion, only 3 had items where he agreed with the APA's position. He must have said 'the Court rejects the APA postion' 40 times."

As to the threat of the pilot's walking, been there and done that. Given the history, I could see a federal judge issuing contempt charges against union leadership and a fine that bankrupts APA.

[Edited 2012-08-23 11:55:14]

User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 3, posted (1 year 11 months 3 days 20 hours ago) and read 20485 times:

Quoting commavia (Reply 1):
Parker continues to sweeten the pilots deal to buy them off ...

http://www.thestreet.com/story/11673...YAHOO

What next $10,000 and 100,000 frequent flyer miles to every AA EXP who supports the merger? LOL.

The merger would have happened aleady if there were any real money behind it. Where's the private equity firm or bank with the billions to underwrite all the IOU's Parker has been writing? Watching from the sidelines and having a good laugh at his expense?

With the no furlough clause, fences, minimum block hours stipulation, signing bonus, and pay raises, Parker has already promised much to much for any one with real money to back his takeover of AA. Parker is such an amateur and the pilots look even more foolish for dealing with him.



[Edited 2012-08-23 12:21:49]

User currently offlineckfred From United States of America, joined Apr 2001, 5167 posts, RR: 1
Reply 4, posted (1 year 11 months 3 days 20 hours ago) and read 20469 times:

Quoting LDVAviation (Reply 2):
As to the threat of the pilot's walking, been there and done that. Given the history, I could see a federal judge issuing contempt charges against union leadership and a fine that bankrupts APA.

First, the APA got in serious trouble over the sick out to protest the QQ merger. APA not only had to pay AA, but it had to deal with lawsuits filed by passengers who couldn't get from A to B.

Second, UA's F/A union threatened CHAOS while dealing with its contract in bankruptcy. Despite picketing at major airports, press releases outline possible strike efforts, and a web site, the F/As never walked off the job for even one flight. My guess is that leadership and legal counsel understood the potential downside, ala APA, and that ALPA was just lucky that management never took the pilots to court over the sick out during the summer of 2000.

Even though one could see the APA becoming more militant in the wake of the T/A being rejected, one has to think that the union leadership understands that a strike could have very serious and permanent consequences.


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 5, posted (1 year 11 months 3 days 19 hours ago) and read 20352 times:

Quoting LDVAviation (Reply 2):
If AA pilots want the Delta contract, they should do their part to make AA profitable in the long term before asking for Delta's contract. As is, AA's pilots will NOT be taking a pay cut, when every other pilot group, including Delta's, took a pay cut in bankruptcy.

Both the term sheet and the TA represented pay cuts. If you don't know that then you don't understand how contracts work.

If AMR wanted to make their company profitable and buy labor peace they would have gone with Delta contract. Instead they have elected to go for the jugular, well I hope they like the results. I'm sure the passengers won't


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 6, posted (1 year 11 months 3 days 15 hours ago) and read 20070 times:

Quoting norcal (Reply 5):
Both the term sheet and the TA represented pay cuts. If you don't know that then you don't understand how contracts work.

If AMR wanted to make their company profitable and buy labor peace they would have gone with Delta contract. Instead they have elected to go for the jugular, well I hope they like the results. I'm sure the passengers won't

Why should AMR have gone with Delta's contract? AMR is not in the same financial position as Delta. Delta is not in bankruptcy; AA is. Did you just overlook this crucial distinction?

When Delta was in bankruptcy, they cut pay rates AND changed the work rules for their pilot's group.

AA has not proposed any cut to pay rates. And, while I very well understand that work rule changes at AA will mean more work for the same pay, do you recognize that when Delta emerged from bankruptcy work rule changes there meant more work for LESS pay?

If APA wants Delta's contract, they will have to wait until AA is consistently profitable. That is what Delta's pilot did and only NOW are they catching up to AA's hourly work rates.


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 7, posted (1 year 11 months 3 days ago) and read 19670 times:

Quoting LDVAviation (Reply 6):
Why should AMR have gone with Delta's contract? AMR is not in the same financial position as Delta. Delta is not in bankruptcy; AA is. Did you just overlook this crucial distinction?

Absolutely not, APA needed to take cuts. I'm arguing that AMR doesn't need to impose close to regional airline work rules in order to turn the company around. Frank Lorenzo did the exact same thing with Continental and the company nearly had a third bankruptcy. Slashing employee wages to the bone doesn't = profitability. There has to be a certain realistic investment made in your people to demonstrate that you actually care somewhat about them. That can pay huge dividends in the end. Southwest is a perfect example of this, they are industry leading pay and the most heavily unionized company in the industry. Conventional A-net wisdom is that they should be hemorrhaging money, but they aren't. They are profitable and have been consistently profitable for 40 years and that isn't because of fuel hedges. It's the result of solid management and a fantastic employee/management relationship that leads to industry leading productivity.

Another example is Skywest and ASA/ExpressJet. Both have industry leading contracts and yet both are in solid financial shape. It was Mesa with the lowest paid employees that went bankrupt. Employee concessions won't fix poor management.

Now does AMR need to pay employees industry leading rates? NO! I've never argued that and I've agreed that there needs to be changes to make the company more efficient. I however do not agree that AMR employees need to be the lowest paid in the industry, especially when they are an industry leader in revenue generation. AMR's "tear the jugular out" approach reeks of greed and vengeance. That is not the way to get labor peace and move the company forward. As much as AMR loathes its employees, the company actually needs them and needs them to do a great job to make the company successful. Threats aren't the correct path to success.

An industry standard contract comparable to United and Delta along with all the other structural changes that have occurred in bankruptcy will make the company profitable. I've been shown a company memo by an AA pilot that was written by Horton where he brags about how AMR is leading the industry in revenue performance. How on the one hand do you say that, but then try and force the worst contracts in the industry on your employees and expect them to come along for the ride? Especially after you continually award yourself bonus after bonus despite all the pre-bankruptcy losses?

It's no wonder the employee groups are in open revolt against Horton and there hasn't been any "keep AA, my AA," campaigns. They are begging for a disaster of a merger with US Airways because they have so little confidence and most importantly trust in management. Horton isn't building a foundation for long term success for AA with his actions. This is looking more like a repeat of Lorenzo's Continental....I guess they better hope for another Gordon Bethune to come along and clean up the mess Horton is making.

Quoting LDVAviation (Reply 6):
That is what Delta's pilot did and only NOW are they catching up to AA's hourly work rates.

Incorrect, Delta, American, United, etc. have always had very comparable pay rates, even after the bankruptcy's of everyone else (AA pilots gave back a lot in their voluntary 2003 concessionary contract). Delta is actually going ahead of the pack now. The fact you harp so much on pay rates shows a clear lack of how contracts work. The work rules are a far more important than pay rates and AA pilots will be working more for less pay. A lot of them will flat out be out of work.

AA management set up their proposal in such a way that it makes for great PR bytes, "No pay rate cuts," however there is so many other forms of pay cuts and job losses that are happening; work rules, scheduling changes, B-scale A319, code share, scope clause changes, that will end up costing AA pilots a lot on their W2s if not sending them straight to the street.

All the while the senior executives are going to get hundreds of millions in equity in the company for a "job well done." Even though all they've done is screw creditors and employees. This is no better then the AIG bonuses after tax payer bail outs, only in this case it's the employees bailing out poor management.


User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 8, posted (1 year 11 months 2 days 23 hours ago) and read 19536 times:

The pilots were offered a 13.5% stake. That's expected to be over $800 million worth of an emerged AMR. But they rejected it. So dont complain about anyone else's stake.

and Horton has to tout the massive revenue improvements if he wants to keep AA away from US. Parker's entire reasoning behind why AA can't work as a standalone (if AA is too small to compete standalone how has US done it successfully? I dont buy that logic) is that their revenue would lag DL and UA. AA has shown this is not the case on a PRASM basis.



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User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 9, posted (1 year 11 months 2 days 22 hours ago) and read 19525 times:

Quoting norcal (Reply 7):
An industry standard contract comparable to United and Delta along with all the other structural changes that have occurred in bankruptcy will make the company profitable. I've been shown a company memo by an AA pilot that was written by Horton where he brags about how AMR is leading the industry in revenue performance. How on the one hand do you say that, but then try and force the worst contracts in the industry on your employees and expect them to come along for the ride? Especially after you continually award yourself bonus after bonus despite all the pre-bankruptcy losses?

You keep glossing over this crucial fact. AMR is in bankruptcy. It has to pay back its creditors for claims on the estate. It has to increase its return on capital in order to attract new investment, to make good on the equity it uses to satisfy claims on the estate, to pay off the debt it will still have after bankruptcy, and to finance the new planes, interiors, and systems that are crucial to its transformation. That money has to come from somewhere. They can't give it all to the employees and expect to start borrowing again. Prior to bankruptcy, the airline was not keeping up with its competitors because too much of its cash was going to labor costs and debt servicing. Bankruptcy will balance that out.

That is why AMR cannot afford to offer an industry standard contract. It is simply not in the same financial position as Delta or United, regardless of its marginally better revenue performance over the last two quarters.

As to the bonuses, that's just propaganda. All the union groups signed off on the management bonus program when they agreed to their own concessionary contracts. The union groups were offered the same bonuses, but opted instead for more of their salary and benefits. On the other hand, management took a steeper cut in pay and benefits in return for bonuses (stock options). What is unfair about that? As it was, the salary and benefits of the union groups did more to drain AA's cash than the stock options. By the way, those stock options are worthless now, but up to this day AA pilots with their industry leading contract continue to drain AA's cash reserves.

Quoting norcal (Reply 7):
Incorrect, Delta, American, United, etc. have always had very comparable pay rates, even after the bankruptcy's of everyone else (AA pilots gave back a lot in their voluntary 2003 concessionary contract). Delta is actually going ahead of the pack now. The fact you harp so much on pay rates shows a clear lack of how contracts work. The work rules are a far more important than pay rates and AA pilots will be working more for less pay. A lot of them will flat out be out of work.

In the past, I have posted the link to the MIT Airline Data Project. According to them, AA's pilots are the highest paid and the least productive of the four legacy airlines. If you had taken the time to read the transcripts of the 1113 hearings, you would have learned that a consultant to the pilot's union admitted as much in court. BTW, we are not just talking pay rates here, but also benefits and work rules. Till this day, AA's pilots have an active pension plan whereas the others have had theirs either frozen or terminated. Till this day, AA pilots have more of their jobs because they have been insulated from the economic reality of more liberal scope clauses that the other airlines have used to balance capacity to demand.

As to what is comparable, I will repeat this again. When Delta was in bankruptcy, its pilots did not obtain a contract that was at all comparable to AA's. They did not get AA's pay rates, AA's pension, or AA's work rules. They took a pay cut, they had their pension frozen, and they gave up a lot in scope. So what makes AA's pilots so special? Why should they not have to make the sacrifices that Delta pilots had to make?

Truth is, AA's pilots have been living high on the hog for almost a decade while AMR languished and the rest of their industry peers made the necessary financial sacrifices to make United and Delta consistently profitable. Whatever the case, AA pilots have had their day in court. And the judge has in effect concluded that the pilots did not give up nearly enough in their token concessionary contract of 2003.



[Edited 2012-08-24 09:27:29]

User currently onlinepar13del From Bahamas, joined Dec 2005, 7042 posts, RR: 8
Reply 10, posted (1 year 11 months 2 days 22 hours ago) and read 19475 times:

Quoting norcal (Reply 7):
As much as AMR loathes its employees,

If that is an accurate situation I would have to say it's the same on both sides, so AA needs to look at Chpt.7 and get this out of the way.


User currently offlinecommavia From United States of America, joined Apr 2005, 11409 posts, RR: 62
Reply 11, posted (1 year 11 months 2 days 22 hours ago) and read 19458 times:

Quoting LDVAviation (Reply 9):
As to the bonuses, that's just propaganda. All the union groups signed off on the management bonus program when they agreed to their own concessionary contracts. The union groups were offered the same bonuses, but opted instead for more of their salary and benefits.

Generally true - with one correction. The unions did not "opt out" of stock options. They got the same stock options the executives did - just not as many of them, and theirs were automatic, not based on any performance metric. But, if they cashed out at the right time, some employees stood to (and did) make tens of thousands off their stock options. The pilots, of course, got more than any other work group.

Quoting LDVAviation (Reply 9):
BTW, we are not just talking pay rates here, but also benefits and work rules. Till this day, AA's pilots have an active pension plan whereas the others have had theirs either frozen or terminated. Till this day, AA pilots have more of their jobs because they have been insulated from the economic reality of more liberal scope clauses that the other airlines have used to balance capacity to demand.

Yep. And that last one is really one of the biggest keys often lost in the debate. One big part of AA's problem is that, regardless of the pay scales, they just have so many more people. AA has not been able to spend nearly the last decade shifting nearly as much of their mainline domestic network to non-owned regional operators like Delta, United and USAirways has. As such, while AA mainline unions often want to benchmark against the pay, benefits and productivity of other mainline unions today, that misses that increasingly AA mainline union employees are actually competing against the employees of SkyWest, ExpressJet, Mesa, etc. in more and more markets where AA mainline is competing against Delta Connection, United Express, etc. Or, as another example, AA mechanics often repeat that they are the lowest-paid and worst-compensated among airline mechanics at Delta, United, USAirways, etc., which, while perhaps true in isolation, ignores the fact that those airlines in many cases have thousands upon thousands fewer AMTs today because they overhauls to third parties and/or foreign countries. So rather than benchmarking AA mainline AMT compensation vs Delta mainline AMT compensation, as an example, perhaps the apt comparison is AA mainline AMT compensation vs weighted average of Delta mainline AMT compensation plus HAECO, Aeromexico, Aeroman, or whoever else.

Quoting LDVAviation (Reply 9):
As to what is comparable, I will repeat this again. When Delta was in bankruptcy, its pilots did not obtain a contract that was at all comparable to AA's. They did not get AA's pay rates, AA's pension, or AA's work rules. They took a pay cut, they had their pension frozen, and they gave up a lot in scope. So what makes AA's pilots so special? Why should they not have to make the sacrifices that Delta pilots had to make?

Well, the AA unions now feel that they, once again, shouldn't have to endure the economic reality that has hit their counterparts at other airlines because they can essentially skip the bankruptcy concessions (and by extension several years of bankruptcy contract allowing their employer to "catch up") step and go right to the richer-contract-arising-from-merger step. They claim a "new AA" would be bigger, stronger, and more competitive, and thus be able to pay them more right off the bat. They may be right. We'll see.

Quoting LDVAviation (Reply 9):
Truth is, AA's pilots have been living high on the hog for almost a decade while AMR languished and the rest of their industry peers made the necessary financial sacrifices to make United and Delta consistently profitable.

I don't know if I'd say AA's pilots or any other employees have been living "high on the hog" but it is true that - as even some of the most vocal and militant anti-Horton unionists will admit - AA's employees did benefit enormously over the last 8 years from the fact that AA's 2003 concessions were not via bankruptcy. Thousands of AA employees benefited from higher wages, better work rules, an actively-contributed-to defined benefit pension, and far more restrictive scope/outsourcing provisions than their peers at other airlines. Economic reality did ultimately win - as it always does - but many, many people did benefit in the mean time.

Now, the counter (Laura Glading) argument is that AA employees would now benefit more from working for a stronger, more stable, competitive and financially viable airline. True. But, the corollary to that is that had AA cut deeper in 2003, much of the alleged "failure" of the Arpey era would not have happened, as the company would have had lower, competitive costs and been far stronger, and that would thus have benefited the employees who survived the greater layoffs, outsourcing and cuts that would have come. Interesting thought experiment - I'm sure there are probably plenty of people at AA who fall on both sides of that argument - thinking AA should have just gotten it over with and cut deeper in 2003, and those who are glad the 2003 concessions didn't cost them their jobs/pensions altogether.

Quoting LDVAviation (Reply 9):
Whatever the case, AA pilots have had their day in court. And the judge has in effect concluded that the pilots did not give up nearly enough in their token concessionary contract of 2003.

I wouldn't call the concessions AA's pilots or any other employees gave up in 2003 "token" by any stretch. They were real, they were tangible, and they were large.

But, as has often been said, the only problem is that while everyone - AMR and the unions - thought they were sufficiently large and substantial in 2003, within only a few years they were proven to be not nearly large or substantial enough once virtually all of AMR's legacy peers were in bankruptcy and got far deeper concessions from their work groups. That's why in the immediate period after AMR's 2003 concessions, the 2003-2005 period, AMR was the darling of the legacy airlines, outperforming all of them financially, getting great press and P.R., and favorable coverage from Wall Street analysts and "experts" (many of the same people weighing in now). It was only around 2006-2008, when the industry had restructured to labor costs well below AMR's, that their financial performance began to lag. Ironically, but not coincidentally, that was also precisely when AMR's 2003 contracts were up, and AMR began telling their unions that more would have to be given, to which the unions - at that time - told the company where to go (Arpey=murderer, "restore and more," etc.).

[Edited 2012-08-24 09:38:01]

User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 12, posted (1 year 11 months 2 days 22 hours ago) and read 19411 times:

Quoting commavia (Reply 11):
Well, the AA unions now feel that they, once again, shouldn't have to endure the economic reality that has hit their counterparts at other airlines because they can essentially skip the bankruptcy concessions (and by extension several years of bankruptcy contract allowing their employer to "catch up") step and go right to the richer-contract-arising-from-merger step. They claim a "new AA" would be bigger, stronger, and more competitive, and thus be able to pay them more right off the bat. They may be right. We'll see.

I hope no investor comes forward and gives them the chance. There would such a serious moral hazard to that. First, AA employees took advantage of Arpey's moral aversion to bankruptcy. Now, they would be taking advantage of Parker's morally-questionable desire to complete a merger at all costs.

What a despicable business this is turning out to be? And, here I thought it was bad when United terminated its pension plans. This would be much worse.

It is turning out to be a battle of good versus evil. And, from my perspective, Horton represents the good side.


User currently offlinecommavia From United States of America, joined Apr 2005, 11409 posts, RR: 62
Reply 13, posted (1 year 11 months 2 days 22 hours ago) and read 19399 times:

Quoting LDVAviation (Reply 12):
I hope no investor comes forward and gives them the chance.

I have complete and total faith in the market to make the right decision long-term. Parker and the unions are convinced they have the right answer and can make it work. If the market decides they can, I say give them the chance. And if they succeed, great - lots of people will benefit as a result. And if they don't, so be it - they all knew going in what it was they were getting in to (or at least they elected leaders responsible for knowing).

Quoting LDVAviation (Reply 12):
First, AA employees took advantage of Arpey's moral aversion to bankruptcy. Now, they would be taking advantage of Parker's morally-questionable desire to complete a merger at all costs.

Again - the unions all think they have the right answer. They have all gone "all in" on Parker. Now let the chips fall where they may. They're making a bet - we may soon all get to see how that bet turns out. It's there call to make, and their right to make it - and they will live with the results one way or another, as they know.


User currently offlinephxa340 From United States of America, joined Mar 2012, 880 posts, RR: 1
Reply 14, posted (1 year 11 months 2 days 21 hours ago) and read 19364 times:

Quoting commavia (Reply 13):
complete and total faith in the market to make the right decision long-term.

Unfortunately, this has been proven false. The market chases short term gains rather than long term viability. This is being discussed heavily on Capital Hill has boards of companies are chasing quick dollars rather than investing in the future on companies. The market will do whatever makes AA produce a quick buck for them to profit then bail.

Short Term = A merger is a beautiful thing
Long Term = A merger is a disaster of epic labor porportions


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 15, posted (1 year 11 months 2 days 21 hours ago) and read 19354 times:

Quoting LDVAviation (Reply 9):
You keep glossing over this crucial fact. AMR is in bankruptcy.

No I'm not, I'm simply pointing out that past companies e.g. Continental, have gone for the labor jugular during bankruptcy it hasn't worked out long term for the organization.

I don't know how much clearer I can make this cuts need to be made but AMR has way over stepped its bound. They don't need to operate like a regional airline in order to get there and if they do impose this term sheet its going to do a lot of damage to the long term survivability of the company. There are intangible aspects here like employee morale that can and will negatively affect the company. Happy employees make airlines like Southwest and JetBlue better than the competition. Miserable employees drive customers away.

Of course if APA does walk then chapter 7 comes along shortly there after, what then for the creditors? Will the term sheet have been worth it then?

Quoting LDVAviation (Reply 9):
It has to pay back its creditors for claims on the estate. It has to increase its return on capital in order to attract new investment, to make good on the equity it uses to satisfy claims on the estate, to pay off the debt it will still have after bankruptcy, and to finance the new planes, interiors, and systems that are crucial to its transformation.

Absolutely, but AMR needs employees on board and giving 100% every day in order to make the company successful. This is a service industry and its the front line employees that make or break the travel experience. Angry employees will drive customers elsewhere and then there won't be money to invest in the company or repay creditors

Quoting LDVAviation (Reply 9):
They can't give it all to the employees and expect to start borrowing again.

I am in no way advocating giving everything to employees. I'm just saying don't take everything from them either. Strike a balance. A TA close to Delta would represent significant concessions by the pilots. Huge gains for the company with scope, code share, work rules, etc.

AMR for years has said they need to be more competitive with Delta and United. I agree, however they don't need to be bleed employees dry.

This is a chance for AMR to retool the company, not only structurally, but also culturally for long term success. Instead this looks like it'll be Lorenzo de-ja-vu.

Quoting commavia (Reply 11):
AA has not been able to spend nearly the last decade shifting nearly as much of their mainline domestic network to non-owned regional operators like Delta, United and USAirways has

Outsourcing isn't a long term viable solution, as Delta recognized with it's recent contract, the regionals are going to be in serious trouble in the next few years when their pilots bail for greener pastures with no one to replace them.

AA could have 300+ E-190s at Eagle (based on the term sheet) + an unlimited number of 50 seaters but they won't have enough pilots to staff them.


User currently offlineincitatus From Brazil, joined Feb 2005, 4000 posts, RR: 13
Reply 16, posted (1 year 11 months 2 days 21 hours ago) and read 19319 times:

Quoting norcal (Reply 15):
Of course if APA does walk then chapter 7 comes along shortly there after

While this is not a good scenario, I would like to see it play out just to watch what happens after. It just seems very naive to assume it works out this way.


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 17, posted (1 year 11 months 2 days 21 hours ago) and read 19278 times:

Quoting incitatus (Reply 16):
It just seems very naive to assume it works out this way.

Why? No pilots = no flights = no revenue. How does the company avoid liquidation?


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 18, posted (1 year 11 months 2 days 19 hours ago) and read 18952 times:

Quoting norcal (Reply 17):
Why? No pilots = no flights = no revenue. How does the company avoid liquidation?

It is not that simple. It is unlawful for the APA to stage any work action. That is the case law. Acknowledge the facts before you go concocting wild scenarios.

This is also a two-way street. It is not like the pilots don't have anything to lose. How about their senoritiy, their pensions, their jobs? You think Delta is going to hire all the AA pilots at the same seniority level and make good on their pensions. LOL.

Given all that, Chapter 7 (liquidation) is not as automatic as you make it seem. See S&P's opinion on the APA's announcement that the union would take a strike vote. It amounted to a big yawn.


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1036 posts, RR: 5
Reply 19, posted (1 year 11 months 2 days 19 hours ago) and read 18931 times:

Quoting norcal (Reply 15):
No I'm not, I'm simply pointing out that past companies e.g. Continental, have gone for the labor jugular during bankruptcy it hasn't worked out long term for the organization.

Actually, it did.

Despite its size, Continental thrived after its two turns in bankruptcy court because the tone Lorenzo set with labor made it easier for the executives that followed to position the airline and grow the network.

You misrepresent the facts if you want us to believe that Continental had to merge with United because of what Lorenzo did. Quite the contrary, Continental was an attractive merger partner and its executives ended up managing the new United in part because of some of the things Lorenzo did so many years ago.


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 20, posted (1 year 11 months 2 days 18 hours ago) and read 18831 times:

Quoting LDVAviation (Reply 18):
It is not that simple. It is unlawful for the APA to stage any work action. That is the case law. Acknowledge the facts before you go concocting wild scenarios.

What's the judge going to do? Throw thousands of American pilots in jail for contempt of court? He can't force American pilots to work. Legal or not they may walk and it could be the death of the company.

Even if a significant number of them just decide to quit or retire it will be bad news. Flights will be cancelled and training costs will skyrocket as the company tries to make adjustments.

Quoting LDVAviation (Reply 19):
Despite its size, Continental thrived after its two turns in bankruptcy court because the tone Lorenzo set with labor made it easier for the executives that followed to position the airline and grow the network.

Are you kidding? Do you honestly think Lorenzo turned around Continental?!?!? It was Gordon Bethune that turned around Continental and created a new culture of employee/management cooperation. You should really read, "From Worst to First," it would change your perspective on Lorenzo as a hero. Or simply look at how companies like Southwest and JetBlue handle employee relations.

The Lorenzo method is a ticket for disaster. Industries as labor intensive as airlines need labor peace and investing somewhat in employees buys that and makes everything much smoother. I am in no way saying give labor everything they want but on the same hand don't take everything from them either.

Quoting LDVAviation (Reply 19):
You misrepresent the facts if you want us to believe that Continental had to merge with United because of what Lorenzo did.

No I never said that. Continental was heading for a third, and probably final bankruptcy, despite the two previous bankruptcies. This was back in the early 90's way before United ever entered the picture. Continental was a miserable company after Lorenzo, it was Gordon Bethune that saved Continental from Lorenzo.

Quoting LDVAviation (Reply 19):
Quite the contrary, Continental was an attractive merger partner and its executives ended up managing the new United in part because of some of the things Lorenzo did so many years ago.

No that simply isn't true. First of all Lorenzo nearly destroyed Continental and it wasn't his policies that made the company successful. It was Gordon Bethune and the "Go Forward Plan," that saved Continental. If anything Jeff Smisek is drifting away from what Bethune built and back towards a worse relationship with employees. That is one of the reasons why the United/Continental merger has been no where near as smooth as Delta/Northwest.

http://www.forbes.com/sites/raywang/...in-next-gen-customer-experience/2/


User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 21, posted (1 year 11 months 2 days 17 hours ago) and read 18815 times:

Quoting LDVAviation (Reply 18):
How about their senoritiy, their pensions, their jobs? You think Delta is going to hire all the AA pilots at the same seniority level and make good on their pensions. LOL.

At some point it simply isn't worth it to come to work anymore and I think all of them fully know what will happen if the company liquidates. I'm sure many of them saw Eastern unfold. It's a dangerous game of chicken they are playing, it's M.A.D.

My point is it shouldn't be like this, but this is typical AMR management style. Instead of turning a page on new employee relations and offering an industry standard contract, which would make the company competitive, they are trying to smash the employees into oblivion. It isn't needed and it's counterproductive to building an airline that'll last. Lorenzo showed us what happens when you hit employees with a hammer. Gordon Bethune showed us what happens when you offer an olive branch.

Again I'm not saying give employees everything. Just be realistic about what is needed. Offering a term sheet worse than US Airways and close to a regional airline when American has such strong revenue numbers is an over reach.


User currently offlineLAXintl From United States of America, joined May 2000, 24788 posts, RR: 46
Reply 22, posted (1 year 11 months 2 days 17 hours ago) and read 18785 times:

Some more work groups have made their opinions known on AMRs contract offers.

The AE mechanic group voted 65% against the companies term sheet proposal.

While AE fleet service employees voted 67% to accept the companies proposal.

Both groups are represented by the TWU.



From the desert to the sea, to all of Southern California
User currently offlinecommavia From United States of America, joined Apr 2005, 11409 posts, RR: 62
Reply 23, posted (1 year 11 months 2 days 17 hours ago) and read 18770 times:

Quoting phxa340 (Reply 14):
Unfortunately, this has been proven false.

Not at all. Notice how I said "long-term." I agree that in the short-run, bad decisions will naturally be made - that's natural and inevitable. But over the long-run, the market will always allocate resources most efficiently to the most successful enterprises. That is why, for example, AA, Delta and United survived deregulation and the 1980s intact while Braniff, Pan Am and Eastern ultimately didn't.

Quoting norcal (Reply 15):
I don't know how much clearer I can make this cuts need to be made but AMR has way over stepped its bound.

It's funny - I'm reminded of the mantra I hear AA union members repeating over and over - "management teams get the unions they deserve." Perhaps its a 2-way street. AMR's management could have handled this entire thing differently, and better, both before and after bankruptcy. But, on the flip side, maybe if the APA had been willing, 5 years ago, to come a bit more off of some issues like pensions, scope, productivity, etc., rather than implying Arpey was a murderer, "restore and more," putting up billboards saying AA's planes were unsafe, proposing 55% raises retroactive to 1993 and Superbowl Sunday as a holiday, etc., the company could have lowered its costs and become more competitive earlier, and avoided this fate altogether.

As I have said countless times, both sides - AMR management and AMR's unions - deserve enormous credit for the enormous amount they were able to achieve, but they also both deserve responsibility for where AMR is today. To a certain extent, AMR's unions were either unwilling or unable to accept economic reality staring them in the face when the world (and industry) around them was changing, and AMR management was unwilling or unable to accept that fact and file for bankruptcy sooner. The truth is that both sides have been - at one time or another - ridiculous, unrealistic, intransigent, "greedy," and detached from reality over the last decade. It has not just been management and repeating that line is simply ignorant and myopic, from my perspective.

But, alas, everyone is where they are now. Hindsight is 20/20.

Quoting norcal (Reply 15):
Of course if APA does walk then chapter 7 comes along shortly there after

How astoundingly counterproductive. Not only would those pilots be forfeiting their careers and far more of their pensions, but they would also be totally screwing over the vaunted "profession" though so often proclaim their concern for. Remember your whole line about how the regionals are dying and airlines are allegedly not going to have pilots in five years to fly their jets? Well, problem solved if AA liquidates - you now have a massive pool of unemployed pilots looking for a job. Supply and demand - what would that do to the prevailing cost of a pilot on the open market?

Not saying there aren't irrational people who think the way you're describing - but I'm just calling it what it is: irrational. If they really want to screw the company, but not their peers, the best course of action would be not to run AMR into the ground, but rather to simply resign and get a job elsewhere.

Quoting norcal (Reply 15):
Absolutely, but AMR needs employees on board and giving 100% every day in order to make the company successful. This is a service industry and its the front line employees that make or break the travel experience. Angry employees will drive customers elsewhere and then there won't be money to invest in the company or repay creditors

I don't disagree with you, but I always find it remarkable that AA's unions continually state that AMR's concessions are too severe and unnecessary (which they may well be) because AA needs happy employees. The extension of this logic is that employees won't do their jobs happily for these wages. It's remarkable because there are thousands of people in the U.S. working at regional airlines, to say nothing of JetBlue, Frontier, Spirit, Allegiant, etc. who make less overall than AMR's employees, and yet somehow they manage to come into work happy.

Quoting norcal (Reply 15):
Outsourcing isn't a long term viable solution, as Delta recognized with it's recent contract, the regionals are going to be in serious trouble in the next few years when their pilots bail for greener pastures with no one to replace them.

Funny - you must have been reading a different contract than I did, and than many Delta and industry pilots did who are unhappy with what was passed. By my reading, the new Delta contract wholly endorses outsourcing of pilot jobs to regionals - just not to 50-seaters. Correct me if I'm wrong - Delta is actually able to increase the number of large RJs under the new scope provision, right? Seems to me that is, if anything, hardly an indictment of the long-term viability of outsourcing in general, but merely of 50-seaters specifically.


User currently offlineincitatus From Brazil, joined Feb 2005, 4000 posts, RR: 13
Reply 24, posted (1 year 11 months 2 days 17 hours ago) and read 18729 times:

Quoting norcal (Reply 20):
Throw thousands of American pilots in jail for contempt of court?

You really haven't thought this through. Fines are a common imposition for contempt of court.

Quoting norcal (Reply 21):
Offering a term sheet worse than US Airways

Wasn't there a ~60% vote for the term sheet?


25 justplanenutz : I can't believe no one has brought up the looming Presidential election as an important factor in the APA vs. Horton vs. Parker saga. Imagine in 9 sho
26 norcal : True but there really aren't any card they have since the RLA and the bankruptcy code has stripped labor of all its power. They have nothing left but
27 LAXdude1023 : No, if the APA walks the get ordered back to work as Unions have time and time again when they try this while their employer is in Chapter 11.
28 commavia : They can leave. It always amazes me that people overlook the ultimate power they have. Human labor is a service, which its provider is always free (a
29 LDVAviation : Are you serious? Not only do you refuse to acknowledge that AA is in bankruptcy, but you also refuse to acknowledge that the unions signed off on tho
30 incitatus : That is a very narrow description of the competitive dynamics of air travel. A big part in what you call race to the bottom is played by new entrants
31 SJUSXM : Increase departures by 20%. That does not mean increase capacity by 20%. That is not what the company releases have said. They have CONTINUALLY state
32 PITingres : Here's a better one: imagine that we're electing a President, not a King. Sheesh. What on earth makes anyone think that a back-to-work order would is
33 aluminumtubing : With all due respect, you gotta love all the arm chair quarterbacking from the "outsiders". There is so much misinformation out there, that it would b
34 klkla : Very true. If the unions wanted to protect the living standards of their members they should have been more effective at organizing new entrants and
35 Post contains links justplanenutz : Um, maybe because of the RLA: "If either labor or management decline voluntary arbitration, and if in the opinion of the NMB the continuance of the c
36 ckfred : I was looking at the APA web site to see if there was any comment about the F/As ratifying their agreement, when I saw something interesting. The APA
37 par13del : The courts would award damages and essentially bankrupt the APA a second time. Their strategy may be that while the damage is being done AA and the s
38 Post contains links lightsaber : Does anyone have a link to the work rule changes at AA? I agree it would be better if the pilots had a negotiated contract, but I look at AMR's cash f
39 ckfred : Correct me if I'm wrong, but doesn US Express fly the Embrear 170, while mainline fliies the 190? That may not be an ideal situation for AA/Eagle., H
40 lightsaber : Why? At what rate? And why no MRJ/E170? You picked a type that is losing favor. Why not the other airframes? AMR needs to bid out their regional flyi
41 enilria : Here's the trick. There is a guarantee of the number of hours to be flown and that it won't fall more than 15-20%. Also, expect that there will be at
42 par13del : Somthing like defined pension plans which are going the way of the Dodo. Anyway, it is not whether this plan is viable in the long term, it just need
43 aluminumtubing : You are right, defined benefit plans are toast. Unions, both private and public sector) have demanded generous plans over the decades which were impo
44 ckfred : Here's the point I've tried to make. Bob Crandall made AA the dominant carrier in the U.S. It was innovative, and it grew massively. But, Crandall di
45 commavia : Agreed. However, AA's unions - the unions, not necessarily the employees themselves writ large - in my view, have spent the last five years fighting
46 aluminumtubing : I have been with AA for almost 30 years, and for me, the jury is still out as to whether US is a good deal for us, or if we would just be making a pa
47 Coronado : Light saber. The cash flow study at Bloomberg is NOT for AMR the airline. Your link is for an Australian mining company with a similar stock symbol. P
48 commavia : News out this morning: Parker has signed AMR's NDA, a stipulation of which was that all direct negotiations with AMR unions must cease immediately. Di
49 incitatus : The face it: The 60% voting against an agreement made a big mistake.
50 aluminumtubing : For the record, I voted for it... I am not saying I agree or disagree with a job action. I am just telling it like it is. If something doesn't give,
51 LAXintl : A few fleet related matters this week for the court: o Further negotiations extension covering 8 MD-80 aircraft – N577, 578, 579, 580, 584, 587, 588
52 LAXdude1023 : (sarcasm on) The unions will love this. (sarcasm off)
53 TWA85 : This just goes to show the the US management team is only willing to play nice with the AA unions as long as the AA management is not willing to play
54 LAXdude1023 : This is all to true. To me, it was blatantly obvious that the US management was using the unions and vice-versa from the beginning. But I think a lot
55 LDVAviation : Crandall made mistakes too. Under his watch, United purchased Pan Am's Asian route network. I know it is a complicated story, but the outcome is what
56 LAXintl : Fellas -- appreciate if you guys could be mindful that the topic of this thread is about BK court happenings and not broader union or AA history debat
57 commavia : Not so fast. Now USAirways is saying they are still considering whether to sign the NDA, and that earlier reports to the contrary from USAPA that the
58 bobnwa : I think under Crandall, AA did produce an excellant successor by the name of Thomas Plaskett who was VP of marketing he was responsible for many of t
59 aluminumtubing : I disagree. I have spoken with him personally many times. He was an extremely tough negotiator, but once hands were shaken, he was an honorable man.
60 LDVAviation : One last comment and I will drop the subject. Go back and read the newspaper articles about the 1993 FA strike. You have glossed over a lot of his fa
61 TWA85 : Has there been any negotiations between AA and the APA since AA filed its revised 1113c term sheet?
62 aluminumtubing : We have been told that no, there have not been any negotiations. Also, there is conflicting information as to whether US has signed the NDA or not.
63 Post contains links LDVAviation : Well, well, well... While Parker has been negotiating with the pilots who have no money, Horton has been negotiating with people who do: http://financ
64 ckfred : You're right that AA was never going to find another Bob Crandall. But, a company with a good culture grooms executives to succeed. The textbook exam
65 Post contains links Sydscott : Looking at AA's Board of Directors, http://www.aa.com/i18n/amrcorp/corpo...teInformation/board-directors.jsp, it appears to me that there is a signif
66 gemuser : Former??? Not according to their web site! Gemuser
67 ckfred : If you look at the board of directors of a typical U.S. company in the Fortune 500, most directors have backgrounds outside of a company's industry.
68 TWA85 : The interesting part of this information in regards to the 130 Embaer aircraft that they are still in negotiations for, is that AA also has 130 A320'
69 iFlyLOTs : I think that its just a coincidence, because AA also has 130 737s on order. I doubt that they would put A32Xs in MQ and put the 737s in AA
70 SJUSXM : I think that specific section of the last TA is off the table. I think the pilots can get a revote on the TA with everything the same with the except
71 LAXintl : 130 is coincidental. In reality there are 200+Embraer planes they are still negotiating over. Those additional ones were covered by another court hear
72 LAXintl : Besides the scheduled 1113 hearing for the pilots, this week court only has a single other item. o Further negotiations extension covering 4 MD-80 air
73 ckfred : What time is the hearing before Judge Lane? I would assume that since Judge Lane went through the first 1113 motion, that the portion of today's heari
74 SJUSXM : The pilots cannot legally strike, they have to be granted permission to do so via the National Mediation Board. This is unlikely. The APA has said th
75 Post contains links LAXintl : Hearing is at 1pm. However its far from clear that it will be a straight forward hearing. APA is putting in a few motions. You can read about it at: h
76 Post contains links LAXintl : U.S. Bankruptcy Judge Sean Lane ruled Tuesday that American Airlines can abrogate its collective bargaining agreement with the Allied Pilots Associati
77 crAAzy : Gotta feel bad for the pilots but I think the judge had little alternative given the overwhelming vote against the previous contract proposal this lat
78 SJUSXM : The mechanics that rejected the original proposal when the first five groups agreed, came back and accepted the revised term sheet at the same time t
79 LAXintl : See Reply 22. AE Mechanics rejected their proposal 65-35 margin.
80 flyfree727 : AA would be so lucky! They have stated that the full scheduling changes won't be implemented until 4Q13, at the EARLIEST for fa's. Very few changes w
81 commavia : Do you think the massive amount of training is going to be required because of the number of retirements being more heavily weighted towards the more
82 flyfree727 : I think it is going to be a mix of both. Many fa's that are taking the buy out are "senior" in age but junior in seniority. I kinow many leaving are
83 ckfred : One interesting point. The attorney for the creditors' committee said in court that the committee won't agree to the exit of AMR/AA from bankruptcy wi
84 LAXintl : I think the creditors committee is quite right. Matter of fact the words used by their attorney was - "There has to be a deal.” “Let there be no m
85 SJUSXM : I was referencing AA only, it seems as if Eagle is quite aways behind AA in terms of their reorganization.
86 commavia : Agreed. Though let us not forget the UCC's unequivocal pronouncement of August 16th, of which the UCC's support for consensual agreements was only a
87 Post contains links LAXintl : A few things this morning. Creditors committee reaffirms its desire to see a consensual deal with the pilots. Creditors committee: American Airlines m
88 ckfred : I understand that the pilots want something better than the last T/A. Yet, management and the UCC feel that T/A was the best AA could offer. The APA n
89 Post contains links commavia : Although, again, interestingly enough the same UCC lawyer who yesterday reiterated the UCC's desire for a consensual deal later clarified that this w
90 LAXintl : I’ll say it again, but seems to me, ball is back in AA’s court to extend the olive branch to the pilots again and make peace. I think it would be
91 Revelation : Seems to me they ask the impossible. Nuclear indeed. Seems the APA reaction is to tell AMR to go ahead and impose the 1113 based contract. They have
92 ADent : Also ask any UA F/A how they now feel about not taking a pay cut to pay for the ESOP, while the other groups did (at least the white-collar took pay
93 Post contains links apodino : Well...in the aftermath of Lane's ruling it now looks like Republic is trying to cash in now that the APA contract is out by picking up 70 seat flying
94 Post contains links LAXintl : AE FA's approved their termsheet proposal. Flight attendants at American Eagle approve new contract http://aviationblog.dallasnews.com/2...n-eagle-app
95 LAXintl : AMR is looking to throw out 3 contracts over at AE. Company has requested 1113 motion for the mechanics, dispatchers, and training instructors which t
96 rj777 : Maybe Republic will use those C-Series planes they've got on order for an American tie-up.
97 LAXintl : Republic ordered the CS300 --- that's a 130 seat airplane. Even under AAs imposed termsheet the ceiling for regional airplanes is 88 seats.
98 Post contains links LAXintl : AMR notifies the TWU it intends to shut the AFW maintenance base in December. 1,100 positions eliminated. Total maintenance staff cuts systemwide will
99 Post contains links LAXintl : Court approved APFA and TWU contracts. Bankruptcy court approves contracts between American Airlines and APFA, TWU http://aviationblog.dallasnews.com/
100 Post contains links LAXintl : AA tells APA how it plans to begin implementing the pilot changes. Long process commencing in November that will take till 2014 to complete. Pilots le
101 ckfred : Not completely related to this thread, but: A. Who will be getting the outsourced work? B. Is AA keeping certain aircraft models in-house and outsour
102 LAXintl : Well the approved contract allows for 35% of AA's annual maintenance spend (wages, material) to be contracted out. It also allows various reduction or
103 Post contains links TWA85 : As expected, the AA pilots are not happy about the terms of an imposed contract from AA. http://finance.yahoo.com/news/union-...ader-says-aa-pilots-20
104 aluminumtubing : It's going to get very interesting here. Also , APA is refusing to be AA's messenger. AA is having to deal directly with the pilots. There is an inor
105 justplanenutz : Two questions: 1) Which demographic at APA is the angriest? 2) What buyout number would it take to allow them to move on to something else? I presume
106 aluminumtubing : All!
107 Post contains links LAXintl : AA has to come to an agreement with its pilots as working under an imposed agreement is far from productive in the long run, and leaves a huge unknown
108 justplanenutz : I understand that none are happy with the present situation, but it has been a very long time since the opposite was true. 39% are obviously and rece
109 aluminumtubing : Both the yes voters and no voters were spread out fairly evenly as far as I can tell. I honestly don't know what it will take. Folks on both sides ha
110 TWA85 : [quote=aluminumtubing,reply=109] With out saying if it is right or wrong, the primary force driving behind AA's desire to have labor contracts below i
111 aluminumtubing : TWA85.... Trust me, I understand what you are saying. I certainly would like to be competitive. I don't need to be at the top. There is a difference b
112 TWA85 : Agreed! Hopefuly an agreement can be made before it is too late.
113 SJUSXM : When all the other work groups accepted 17% cuts, and the pilots didn't but were offered the same thing. How is that being vindictive? If the company
114 aluminumtubing : The pilots have been compromising far more that the media portrays. I can assure you, I know exactly what the pilots have been offering. They had bee
115 SJUSXM : I am not an AA pilot. I applaud you for voting yes. So following your logic, you shouldn't be grouped with the others because of a larger education b
116 aluminumtubing : Yes, that is correct.[Edited 2012-09-18 04:24:48]
117 moo : If that is true, as the designated union the pilots have chosen to represent them, how are they not already the legally nominated messenger? If APA i
118 aluminumtubing : APA is willing to meet at any time in an attempt to reach a solution that will work for BOTH sides. However, APA is tasked with the administration of
119 moo : In any other situation, the APA would be screaming bloody murder if AA management were to talk to their members directly, there would be legal threat
120 aluminumtubing : They may not be representing the pilots in a manner YOU feel is appropriate. It will take BOTH sides showing give and take. I know, it's all the pilo
121 Post contains images par13del : Ah no, I think the Chpt.11 laws were changed to prevent other following UA's example, fuel is not unlimited on this flight, they will be coming down,
122 aluminumtubing : All sides need to sit down and come up with a solution that provides some compromise (wins and losses) for all sides. Either that or ALL sides lose A
123 moo : My point stands - in any other circumstance, the APA would be threatening all sorts of things if AA management talked directly to APA union members r
124 aluminumtubing : I absolutely guarantee you, that if the company wants future negotiations, they will have them with the APA. We will have to agree to disagree on the
125 moo : Then what are you talking about?
126 aluminumtubing : Maybe I was not being clear. The APA as we know, is the bargaining representative of the pilots in the service of AA. They negotiate and administer t
127 Post contains links incitatus : Eventually you will come to terms with what is happening. http://en.wikipedia.org/wiki/K%C3%BCbler-Ross_model
128 LAXintl : Busy agenda this week in court. o Further extension to negotiate covering entire Embraer fleet o About two dozen professional services and expense rei
129 aluminumtubing : Absolutely true! And I am fully prepared to abandon this ship if necessary when it sinks. I am just contributing a pilots perspective.[Edited 2012-09
130 justplanenutz : Not exactly the best benchmark for making hard, reality-based decisions! Seems to me Congress generally looks for the short-term path of least resist
131 Post contains links LAXintl : AMR bondholders getting nervous as the value of their aircraft collateral diminishes. AMR bondholders demand payment, say planes neglected http://fina
132 ckfred : What about the A321s? Will they be outsourced with the A319s, or will that stay in-house? But, while AA had over $5 billion in cash, it also used tha
133 B377 : Latest court update courtesy TWU.org: A hearing was held before the bankruptcy court today (9/20/2012) in connection with various matters, most of whi
134 aluminumtubing : I fully understand all that (DIP financing, etc). I am quite well versed on the subject. My point is that AA is not bankrupt. They absolutely needed
135 LAXtoATL : They are already paying interest on that money!
136 LAXintl : Not announced. But considering A319s will be handled by vendors, I can see the logic of doing same with the A321. AA can probably get away by not han
137 Post contains images commavia : Oh please. I should no better than to be surprised, but it's hardly that bad. I would certainly agree that AA has some planes looking quite old and w
138 futureualpilot : I'll preface this by saying I received this second hand and I was told this was written by a 737 FO at AA. I know the a.net crowd loves to dump on pil
139 LAXintl : According to APFA, 2205 flight attendants opted to the early out option by yesterdays deadline. Also TWU says its work groups (mechanics and related)
140 HPRamper : How much of a dent does that make in the workforce? And were those numbers part of those who were issued layoff notices, or is this a whole different
141 OB1504 : I think they're part of those who were issued layoff notices. The union has said that it is working to reduce the amount of involuntary layoffs by as
142 ckfred : If your liabilities are greater than your assets, then you are technically bankrupt. Granted, the average person who buys a house maybe be bankrupt,
143 flyfree727 : I would expect to see AA recruiting FA's by years end... AA ORD
144 LAXintl : A few short items this week o Negotiations extension covering 3 B777 aircraft - N760, 761 and 784 o Approving retention of SkyWorks Capital, LLC as ad
145 Post contains links TWA85 : http://finance.yahoo.com/news/americ...-ready-resume-talks-013034366.html AA has requested to resume negotiations with the APA. Hopefully a deal can g
146 LAXintl : A busier week for court. o Motion by APA for stay of 1113 order rejecting CBA pending appeal o Allow Willis Lease & Finance claims for required ov
147 Post contains links LAXintl : Eagle ALPA pilots approve their term sheet proposal by 75-25% margin. Story: http://aviationblog.dallasnews.com/2...ve-their-tentative-agreement.html/
148 TWA85 : What is the status of the most recent negotiations between AA and the APA?
149 aluminumtubing : No one really knows for sure. I spoke with a senior manager of the flight department that I had on my flight yesterday, and he said he was optimistic
150 Post contains links commavia : And for some good news (for a change), AA yesterday announced its September revenue numbers which were, for the sixth straight month, leading the pack
151 aluminumtubing : Delta and United. Equity piece is via the UCC and is still supported. There are some "investors" who apparently are willing to buy out the pilots sta
152 commavia : And what, exactly, does that mean? Delta and United pilots have higher base rates, but between them the two carriers have hundreds of large RJs flyin
153 aluminumtubing : As I mentioned in my post just a bit earlier, it will more than likely include the pay, and their scope provisions as well. Industry standards are in
154 commavia : Seems entirely moderate, realistic and fair. Let's hope the "teach Horton a lesson" crowd does not overrule that moderation. My understanding was tha
155 Post contains images aluminumtubing : While there are certainly a few numbnuts soaring high above us, I truly think there are enough moderates among the thousands of pilots. They did INIT
156 Post contains links av8r915 : Interesting read on this subject: http://www.slate.com/articles/busine...n_keep_its_seats_bolted_down_.html "The bankruptcy process gave American mana
157 SJUSXM : With the "me too" clause in the other contracts (APFA, TWU), if the pilots are given anything beyond the LBFO2 (17% cost savings vs. the 20% in the im
158 Post contains links and images futureualpilot : Labor groups seem to have an increasingly worsening case of Stockholm Syndrome in this country. There is a fine line between working with a company t
159 Post contains images commavia : Not that plain, and not that simple. Far more complicated. There is plenty of blame to go around, and people just repeating the same falsehood (every
160 Post contains images futureualpilot : If you read my other posts about the AMR bankruptcy in the number of threads where it has been discussed, you'll see that I've stated multiple times
161 pu : . If labour equally shares the blame for the past failures and current turmoil at AA, then labour likewise shares the credit for past success, correc
162 commavia : Well that's what CEOs make. Given the substantial financial and legal responsibilities they take on, and given the training that is required in order
163 pu : Then management deserves the BULK of the blame for AA's situation... ....because you can't say labour is equally to blame for past successes and fail
164 commavia : Again - you can assign percentages if you want. I'm not. I'm simply saying that there is plenty of blame to go around, and that "percentage of blame"
165 futureualpilot : Yet the years of training, the financial, legal and much more importantly, safety responsibilities of pilots mean they should be paid less, despite a
166 pu : No. . A bad decision is bad because of its results. And ONLY its results. . A bad decision does not become a good decision, an "ok" decision or merel
167 commavia : That's not what I said. My comments in this thread were in regard to the article - not what I or anyone else believes is a fair wage for AA's pilots.
168 commavia : No. I am not confusing anything. For the very last time - the statement I am making is that in my opinion some of the things the blog author lists as
169 pu : For the very last time? We'll see... What began as a blanket apology for management mistakes at AA: And an injunction against anyone daring to make a
170 LAXdude1023 : I think that. Look at Delta and what they did after Chapter 11. Labor and management came together, they were energized, and they were on the same pa
171 LDVAviation : Not true for several reasons: (1) Without a payrate in the APA contract, management has not been able to unilaterally commit to purchasing 787's. The
172 pu : Everything you say is reasonable and I agree. As far as it goes. . But what is the difference between AA and your Delta example? . Its management tha
173 aluminumtubing : My understanding is that there will be a work around that problem. It is a problem AA management got themselves into and they will have to find a way
174 pu : Did management sign the contract without a 787 payrate, a contract with a scope clause that proved unprofitable - and a contract that allegedly put AA
175 futureualpilot : I believe APA agreed to pay rates to have mainline pilots fly 70 seaters, so the option was there, but I cannot recall why things never went forward
176 LAXdude1023 : My point was that its not just the management thats different, but labor is very different as well. The American unions are a lot more militant than
177 gegarrenton : I wouldn't quite go that far.
178 delta2ual : I understand where you're coming from, but half a million isn't too disgusting compared to many others. Unfortunately, it is no longer about making a
179 pu : Agreed, but why are you stopping at the conclusion that the unions are "more militant" - which is undoubtedly a proximate cause of AA's difficulties?
180 gegarrenton : Yeah, that's a pretty false statement. Groups of people have a variety of external and internal factors that cause and result from their various pers
181 pu : You're implying that the unique personal aspects across the different labour groups at all the carriers are producing different labour relations...wh
182 LAXdude1023 : You wont get any argument from me that AA's management has been uninspiring at best and really bad at worst. However, the APA has tried really hard t
183 pu : Ok, I hear you and mostly agree with you. One thing about the oft-repeated China route...isn't that small fry? AA's stunning lack of an Asian route s
184 PITingres : Not at all, but I think you are making a big mistake in ignoring the personalities of the individual. All it takes is a few guys in labor and managem
185 LDVAviation : When AA signed that contract, there was no 787. Should AA also have negotiated a 797 pay rate? You know for another plane that didn't exist at the ti
186 pu : You've hit precisely on our point of disagreement. YES, WN and DL "got the nice guys" in management who highly value their employees. WN officially s
187 LDVAviation : The "nice" guys, huh? Wasn't Richard Anderson at Northwest when the decision was made to lockout the mechanics in a contract dispute? And, prior to b
188 gegarrenton : LOL. This is one of the more interesting things I have heard lately. Exactly. I think Leo Mullin is who you are looking for.
189 LAXdude1023 : Perhaps at the end for DL, but Delta went through some guys that made Arpey and Horton look like Gandhi. Leo Mullin is an excellent example of that.
190 pu : The dedication to defending ignorance and management's right to see no further than tomorrow is impressive. In well run companies, unknown contingenc
191 PITingres : I'm afraid that this whole line of argument has reached the point where it probably belongs in non-aviation. Anyone who thinks that success or failure
192 pu : I myself think the adults are fine discussing the causes of AA's bankruptcy as long it remains civil. The great things AA has done over the years: in
193 LDVAviation : Can you be consistent? You were the one who argued that management at AA should have unilaterally made changes to labor rates when the price of labor
194 pu : Where exactly? My point is that mangement OWNS the decisions it makes, including the contractual provisions it agrees to. I don't believe I've gone v
195 pu : Thanks for proving my point so precisely, "professor". Prior to bankruptcy Delta had a CEO in the AA tradition of treating employees as cost centers.
196 JoeCanuck : So management is entirely to blame for any company's problems and employees are always blameless? If that is the case, then there is no case for empl
197 pu : For "any company's problems" and "always blameless" -- why jump to such such universal and blanket words/extremes from what I wrote? I have no commen
198 par13del : AA has thousands of pilots flying hundreds of planes, exactly how many presidents / CEO's? The ability to effect change on a company wide basis is gr
199 JoeCanuck : Then the employee is responsible by accepting the contract and working under conditions they seemed to have found fatally flawed. They obviously thou
200 pu : Disagree. Labour's signature on their contract signifies ONLY complicity in the terms of the contract. Everything else is entirely the responsibility
201 gegarrenton : This thread has gone plaid.
202 par13del : The legal system does work slowly and deliberately, we just gotta wait for more filings, rulings, motions, etc.
203 LAXintl : Slow planned week for court. o Extension of negotiations covering 2 MD-80 aircraft - N9621, 978. =
204 Post contains links commavia : Today AMR and the UCC have jointly requested a 1-month extension to AMR's period of exclusivity to develop a restructuring plan. AMR and the UCC agree
205 flyfree727 : Pretty much status quo.. They have no idea/thoughts on any business plan. I'm thinking they might be fearing some sort of hostile takover once their
206 Post contains images commavia : They have no plan, or you (and others) don't like the plan they do have? Possible - perhaps the UCC is supporting the extension so as to give themsel
207 flyfree727 : "They" requested an extension to "develop a plan".. Their words, not mine. They didn't request the extention to 'finalize" their plan. Also, implemen
208 commavia : I was summarizing - the actual language in the filing is more time to "negotiate the terms of a chapter 11 plan." And either way, splitting hairs - t
209 Post contains links commavia : For some more positive news, today AMR reported a 3Q profit of $110M (net of reorganization-related special items). Still not where it needs to be for
210 Post contains links LAXintl : How about view it for what it is -- American Airlines parent AMR posts wider loss http://www.reuters.com/article/2012/...nair-results-idUSBRE89G0QK201
211 Post contains images commavia : Yes - how about we do that. "What it is" is a net profit net of extraordinary items. Excluding extraordinary items isn't somehow dishonest - just as
212 LAXintl : To my knowledge, I have consistently posted ending Net numbers in my threads. That is the final result after all the fluff in between. Its a rather co
213 commavia : I don't think it's "tea leaves" if it's published numbers. And this isn't about "fanboys" or anybody else. Excluding special items for the purposes o
214 LDVAviation : Been fighting this fight since we first starting discussing the number of gates AA would get in the new TBIT. BTW, AA was one of the airlines that wa
215 Post contains links and images SA7700 : This thread will be locked as it has become quite long. Any posts added after the thread lock will be removed for housekeeping purposes only. Please f
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