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AMR Bankruptcy Court Thread Part 3  
User currently offlineSA7700 From South Africa, joined Dec 2003, 3431 posts, RR: 26
Posted (2 years 3 months 5 days 23 hours ago) and read 20758 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, 11840 posts, RR: 62
Reply 1, posted (2 years 3 months 5 days 22 hours ago) and read 20745 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, 1101 posts, RR: 5
Reply 2, posted (2 years 3 months 5 days 22 hours ago) and read 20696 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, 1101 posts, RR: 5
Reply 3, posted (2 years 3 months 5 days 22 hours ago) and read 20653 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, 5297 posts, RR: 1
Reply 4, posted (2 years 3 months 5 days 22 hours ago) and read 20637 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 (2 years 3 months 5 days 21 hours ago) and read 20520 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, 1101 posts, RR: 5
Reply 6, posted (2 years 3 months 5 days 18 hours ago) and read 20238 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 (2 years 3 months 5 days 3 hours ago) and read 19838 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 (2 years 3 months 5 days 1 hour ago) and read 19704 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.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlineLDVAviation From United States of America, joined Dec 2008, 1101 posts, RR: 5
Reply 9, posted (2 years 3 months 5 days 1 hour ago) and read 19693 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 offlinepar13del From Bahamas, joined Dec 2005, 7498 posts, RR: 8
Reply 10, posted (2 years 3 months 5 days 1 hour ago) and read 19643 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, 11840 posts, RR: 62
Reply 11, posted (2 years 3 months 5 days ago) and read 19626 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, 1101 posts, RR: 5
Reply 12, posted (2 years 3 months 5 days ago) and read 19579 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, 11840 posts, RR: 62
Reply 13, posted (2 years 3 months 5 days ago) and read 19567 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, 899 posts, RR: 1
Reply 14, posted (2 years 3 months 5 days ago) and read 19532 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 (2 years 3 months 5 days ago) and read 19522 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, 4050 posts, RR: 13
Reply 16, posted (2 years 3 months 4 days 23 hours ago) and read 19487 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.



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User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 17, posted (2 years 3 months 4 days 23 hours ago) and read 19446 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, 1101 posts, RR: 5
Reply 18, posted (2 years 3 months 4 days 21 hours ago) and read 19120 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, 1101 posts, RR: 5
Reply 19, posted (2 years 3 months 4 days 21 hours ago) and read 19099 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 (2 years 3 months 4 days 20 hours ago) and read 18999 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 (2 years 3 months 4 days 20 hours ago) and read 18983 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, 26025 posts, RR: 50
Reply 22, posted (2 years 3 months 4 days 20 hours ago) and read 18953 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, 11840 posts, RR: 62
Reply 23, posted (2 years 3 months 4 days 19 hours ago) and read 18938 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, 4050 posts, RR: 13
Reply 24, posted (2 years 3 months 4 days 19 hours ago) and read 18897 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?



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User currently offlinejustplanenutz From United States of America, joined Feb 2006, 546 posts, RR: 1
Reply 25, posted (2 years 3 months 4 days 19 hours ago) and read 19043 times:

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 short weeks that Horton has his revised 1113, maybe an injunction against an APA strike (with a potentially long litigation pending) and the guy who everyone knows will ink a back to work order at 12:01 in any strike for the next 4 years wins (and he is apparently leading in many polls). Think the UCC won't take notice of that?

User currently offlinenorcal From United States of America, joined Mar 2005, 2459 posts, RR: 5
Reply 26, posted (2 years 3 months 4 days 19 hours ago) and read 19035 times:

Quoting commavia (Reply 23):
How astoundingly counterproductive.

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 M.A.D. They might not do it, but it's a possibility and I don't think it ever should have come to this. I think a realistic TA by management would have bought peace and turned morale around. I think that would have fostered pride in American and gotten everyone to do everything they could to speed the bankruptcy process along and be as efficient as possible (i.e. operate like Southwest). Instead I think you'll see absenteeism rise and everyone start doing just their job descriptions which will cost the company millions in lost efficiency.

Quoting commavia (Reply 23):
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

How so? If AMR imposes the term sheet then that puts pressure on all the other airlines to try and match their labor costs. The big problem with this industry is that management always turns to employees for cuts when times are tough. As soon as they get them, either voluntarily or through chapter 11, they turn around and expand rapidly into markets (case in point AMR's plan is to expand 20% in the cornerstones) which dilutes yields and erases all the benefits of those concessions. Next the competitors do the exact same thing and every airline is back to losing money again and the cycle repeats. It's a race to the bottom that has no end in sight and employees are sick of it.

As an employee what would be your motivation to give up a significant amount of pay if you know all that's going to happen is management will squander it and come back demanding more cuts and blaming you for the company's woes? It's just like giving money to a drug addict every time they come back begging for money to "clean up their life," how many times will you fall for the same line and watch the same story unfold?

At some point there needs to be a structural change in the way business is done and that just doesn't happen.

Quoting commavia (Reply 23):
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?

Yes I do remember saying that and would just like to point out an ex-American pilots aren't going to fly for Eagle or SkyWest and sit reserve for $20,000 a year.

Also there is nothing "alleged" about it. Richard Cohen is very concerned about the upcoming shortage.

Quoting commavia (Reply 23):
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?

You assume all of them would go back to work. Many will simply retire, many probably will quit if the term sheet is imposed. Furthermore that would be temporary respite at best. These guys are old and when they hit 65 they are done, assuming they can all hold medicals that long. There is an expiration date and quite honestly I doubt Delta or United would hire a 60 year old AA pilot knowing they just have to fill his spot in a few years. Training a pilot is very expensive.

Furthermore other carriers will grow to fill the void AA would leave. Would it be a 100% match of capacity? No, but over a several years other carriers will jump on AA's old routes. It's not like Miami would cease to have it's flight schedule because AA disappears. Someone will pick up the pieces. That demand wouldn't evaporate.

Quoting commavia (Reply 23):
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.

Yes there are more 76 seaters but DCI is getting cut back significantly and will have fewer planes 450 vs. the 600+ they have now. The old contract actually allowed large regional jet growth that was tied to mainline growth. The new contract has a hard number of aircraft. There are also bigger restrictions placed on code sharing and joint ventures in the new contract.

All those provisions would be big improvements for AMR though over the current APA contract.

Quoting commavia (Reply 23):
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.

It's not just compensation but also the environment that AMR employees work under. It's very different from those companies that treat employees with respect. There are many ways besides money to make employees happy and I think a lot of why AMR employees are upset is not the money but the attitude of management towards employees. Basically how everything is "labor's fault."

I'd say the thousands of people working at regional airlines, at least the pilots, see that as a stepping stone. There are also a lot of people who made lateral moves from regionals to places like Spirit and JetBlue because the pay was better. They may or may not stay there when the legacies start hiring. Some might jump ship again.

Quoting commavia (Reply 23):
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.

The fall out from the bonuses post 2003 concessions was simply too big of a pill for labor to swallow. Arpey inherited a lot of that mess but then again kept taking bonuses. I think if the executives had done the morally right thing and hadn't taken bonuses they would have found a much more willing pilot group. That event fueled the extremism from APA and poisoned the labor/management well. I agree it's a two way street, but I think in this case labor made the first move in 2003 and nothing was matched by the senior execs.

The term sheet just screams, "business as usual," for AMR and employees. There was a better way, one that would have built a company with a cost structure that could compete with everyone but also a culture that is better. Cost structures are easy to match, good culture isn't and good culture sets a company up for long term success.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7759 posts, RR: 25
Reply 27, posted (2 years 3 months 4 days 19 hours ago) and read 19283 times:

Quoting norcal (Reply 15):
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?

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.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 28, posted (2 years 3 months 4 days 18 hours ago) and read 19259 times:

Quoting norcal (Reply 26):
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 M.A.D.

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 (at least in the United States) to withhold. It's called at-will employment, and it's precisely how private industry exerts pressure on 93.1% (as of last year) of the workers in the non-government economy, and it is also how 93.1% of workers in the non-government economy exert pressure right back at private industry. It's always that second part that people seem to forget, overlook or downplay.

Taken to its furthest extreme, if every AA pilot simply resigned tomorrow, the company would liquidate. Period.

Quoting norcal (Reply 26):
Yes there are more 76 seaters but DCI is getting cut back significantly and will have fewer planes 450 vs. the 600+ they have now.

Okay - so I go back to my original question in response to your earlier statement: is that somehow an indictment of the economics of outsourcing pilot jobs in general, or an indictment of the economics of 50-seat regional jets in particular?

Quoting norcal (Reply 26):
It's not just compensation but also the environment that AMR employees work under. It's very different from those companies that treat employees with respect.

Fair.

Quoting norcal (Reply 26):
Basically how everything is "labor's fault."

I get that. It is unfair for anyone to say or imply that everything is "labor's fault." But, it is equally unfair for anyone to say or imply (as the unions do continuously) that everything is "management's fault." While it is true that management made multiple suboptimal decisions, and/or missed out on several key strategic opportunities, over the course of the last decade, it is also true that, in many if not most of those cases, management was actually probably make the best, most economically rational and reasonable decision given the uncompetitive strictures they were having to operate within.

It is not wholly unlike the fiscal situation our country in general finds itself in. Think of AMR management as Congress, the union members as taxpayers, and the union contracts as federal entitlements (Social Security, Medicare, etc.) that the taxpayers both benefit from, but also drive the cost of. In our country today, Congress could literally eliminate the entire discretionary portion of the federal budget (that means 100% of national defense, foreign diplomacy, environmental protection, social services, education, etc.) and still be almost running deficits because of the crushing (and rapidly-growing) burden of entitlements. Until Congress is able and willing to address that massive elephant in the room, all the other budget proposals are simply using a hammer to chip away at a mountain. It was much the same with AMR and its union contracts. In many cases, AMR management did the best they could to keep AMR competitive in as many places as possible as the world changed and the rest of the industry “reset” during 2002-2006. But at some point, the elephant left in the room were the structural inefficiencies, legacy costs, and revenue strictures that perennially kept AMR uncompetitive with its post-bankruptcy peers.

So, for example, AMR should have invested in their fleet (new jets and refurbishing old jet) earlier and faster, like Delta and United did, but was starved of the required capital to do so by the labor and pension obligations those competitors had long ago jettisoned in bankruptcy. AMR should have shifted more of their network to 70-90-seat jets, particularly in Chicago, like all of its legacy peers did, in order to optimize capacity and maximize revenue, but they were unable to do so due to contract restrictions. In order to stay competitive, AMR should have outsourced its heavy overhauls and/or turned its maintenance infrastructure into a profit center, but to some extent it was prohibited from doing so by union protections (although management ineptitude did play a role). AMR should never have “handed” their valuable post-TWA JFK franchise (slots) to Delta as they did, but of course it made sense given AMR’s structural cost disadvantages, as AA had little hope of making money at JFK as post-bankruptcy Delta did. And AMR should have been more proactive and aggressive, sooner, at further expanding internationally and maintaining their post-9/11 lead as America’s “most international” legacy carrier. But, alas, they were restricted to a certain extent in doing so because of a union contract.

This is perhaps one of the clearest examples of how AMR’s union contracts made AMR uncompetitive – not just in terms of directly adding cost, but also in terms of restricting AMR’s ability to remain competitive and generate revenue. As I understand it (and please correct me if I'm wrong), the pilot contract’s “international baseline” provision provided a strong disincentive for AMR to take risks when growing internationally, by punitively linking AMR’s international codesharing relationships to AMR’s own international network growth. AMR had to be extremely risk-averse in adding new routes because doing so, and then potentially retreating, would permanently “reset” the thresholds AMR must meet in order to expand global partnerships. Perhaps even more adversely, once AA did take the plunge into a new market, the provision incentivized the company to keep the flying going, perhaps if only marginally profitable or even unprofitable, because cutting it could trigger a reduction in the amount of international codesharing AMR was contractually permitted to do, even if that codesharing had nothing to do with the given route in question, and even if that codesharing was actually quite profitable for AMR overall. Perhaps that explains why AA kept its Chicago-Delhi flight operating for seven years despite the obvious economic challenges the route faced – that one single route alone generated such a large portion of AMR’s system ASMs, that cutting it would likely have triggered AMR to reduce its codesharing with global partners, and thus deprive AMR of badly needed revenue. Looking at the relative ease and impunity with which Delta and United not only rapidly grew their global networks post-bankruptcy, but in addition also rapidly grew their global codesharing partnerships, just serves to highlight how grossly uncompetitive this provision of the APA contract really was.

Quoting norcal (Reply 26):
The fall out from the bonuses post 2003 concessions was simply too big of a pill for labor to swallow.

No question. But it is ironic, since it is a pill the unions specifically asked for and actively supported right up until it started working precisely as they intended it to.



[Edited 2012-08-24 15:51:35]

User currently offlineLDVAviation From United States of America, joined Dec 2008, 1101 posts, RR: 5
Reply 29, posted (2 years 3 months 4 days 16 hours ago) and read 19118 times:

Quoting norcal (Reply 26):
The fall out from the bonuses post 2003 concessions was simply too big of a pill for labor to swallow. Arpey inherited a lot of that mess but then again kept taking bonuses. I think if the executives had done the morally right thing and hadn't taken bonuses they would have found a much more willing pilot group. That event fueled the extremism from APA and poisoned the labor/management well. I agree it's a two way street, but I think in this case labor made the first move in 2003 and nothing was matched by the senior execs.

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 those bonuses and that those bonuses were what management got in return for the concessions it (management) made. The unions got stock options too (as Commavia illustrated above), but they didn't get as much as management because they kept more of their salary and benefits. What was morally wrong about any of this?

The morally wrong thing came later, when the unions tried to make it seem as if management was rewarding themselves at the expense of the employees. They were not rewarding themselves any more than the employees were with their industry leading contracts. Despite the structural changes to the industry, Arpey continued to honor those contracts, but the unions did not have the moral rectitude to own up to the fact that the management bonuses were no different than the portion of their wages the unions had not given up in concessions.

Quoting norcal (Reply 26):
How so? If AMR imposes the term sheet then that puts pressure on all the other airlines to try and match their labor costs. The big problem with this industry is that management always turns to employees for cuts when times are tough. As soon as they get them, either voluntarily or through chapter 11, they turn around and expand rapidly into markets (case in point AMR's plan is to expand 20% in the cornerstones) which dilutes yields and erases all the benefits of those concessions. Next the competitors do the exact same thing and every airline is back to losing money again and the cycle repeats. It's a race to the bottom that has no end in sight and employees are sick of it.

As an employee what would be your motivation to give up a significant amount of pay if you know all that's going to happen is management will squander it and come back demanding more cuts and blaming you for the company's woes? It's just like giving money to a drug addict every time they come back begging for money to "clean up their life," how many times will you fall for the same line and watch the same story unfold?

At some point there needs to be a structural change in the way business is done and that just doesn't happen.

Times aren't tough. Times have changed. All the other legacy airlines used the bankruptcy courts to lower their labor costs far below what AA got through voluntary concessions. Do you not see that that is the current economic reality?

As to AMR in particular, what did they squander?

First of all, they did the opposite of what you claim they did. In the face of the structural changes to the industry following the emergence from bankruptcy of all their legacy competitors, AMR pulled back from many domestic markets and did not venture into new international markets (e.g., Africa). But who can blame them? They had the highest labor costs. To keep the whole house of cards from falling, they had to stick to markets where they could still command the revenue premium to justify the salaries of their employees.

On the cost side, excluding salaries/benefits and fuel, AMR has done a better job since 2003 of cutting non-labor costs than the purported savior US Airways. Excluding labor costs, AMR actually has a lower unit cost than US.

So what exactly was squandered? The airline reduced its non-labor costs and tried to run the network in such a way as to justify its employee salaries. In many circles, that would be considered responsible, albeit conservative, management.

Now, why didn't it work? The economic reality had changed. See above. And, it became more and more difficult to sustain that revenue premium when your legacy competitors could use the financial advantages gained from bankruptcy to grow their own networks.

As to structural change, the lack of rationality in the way the legacy airlines operate inures to the benefit of the unions.

No other industry has bargained away its ability to outsource. Well, just one, the US automobile industry. And we saw what happened there. The entire industry almost imploded.

In no other industry do the employees feel entitled to the revenue premium a company earns on its goods. Why should they? The wages of the workers who make luxury handbags do not see their wages rise in sync with the premium customers pay for those handbags.

In no other industry do employees expect to be paid what their peers are paid at another company, regardless of the particular economic circumstances of that company. Yes, wages are comparable for competitive purposes. But there is no pattern bargaining. There is no parity plus one percent.

Would you support these rational changes to the way business is done in the airline business? I doubt it.


User currently offlineincitatus From Brazil, joined Feb 2005, 4050 posts, RR: 13
Reply 30, posted (2 years 3 months 4 days 15 hours ago) and read 19016 times:

Quoting norcal (Reply 26):
The big problem with this industry is that management always turns to employees for cuts when times are tough. As soon as they get them, either voluntarily or through chapter 11, they turn around and expand rapidly into markets (case in point AMR's plan is to expand 20% in the cornerstones) which dilutes yields and erases all the benefits of those concessions. Next the competitors do the exact same thing and every airline is back to losing money again and the cycle repeats. It's a race to the bottom that has no end in sight and employees are sick of it.

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. Whenever airline employees push wages above market, it attracts investors to new airlines. There is no hiding from the labor market in the US.



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User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 31, posted (2 years 3 months 3 days 22 hours ago) and read 18759 times:

Quoting norcal (Reply 26):
(case in point AMR's plan is to expand 20% in the cornerstones)

Increase departures by 20%. That does not mean increase capacity by 20%. That is not what the company releases have said. They have CONTINUALLY stated that this will increase capacity by a modest 3% or so. The big effects of this will be replacing 140 seat MD80s with smaller planes (E90, CR7 etc) that would be permitted by a new scope clause. This presumably would increase yield as you can now compete with the likes of say a UA in ORD by offering a competitive product based on frequency, which as we have seen in the past, is what is demanded of an airline over size.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlinePITingres From United States of America, joined Dec 2007, 1160 posts, RR: 13
Reply 32, posted (2 years 3 months 3 days 21 hours ago) and read 18716 times:

Quoting justplanenutz (Reply 25):
Imagine in 9 short weeks that Horton has his revised 1113, maybe an injunction against an APA strike (with a potentially long litigation pending) and the guy who everyone knows will ink a back to work order at 12:01 in any strike for the next 4 years wins

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 issue from the Oval Office? I can think of maybe one time this happened in the last 3 decades, and the employees in question were government employees, not corporate employees.

In any case, I fail to understand how biting off one's nose makes one's face feel any better.



Fly, you fools! Fly!
User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 33, posted (2 years 3 months 3 days 21 hours ago) and read 18705 times:

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 be comical if all this wasn't so serious. I am about as realistic as it gets when it comes to AA and APA. I voted yes, but I am under no false illusions where all this is headed. I honestly feel in my gut, that all the above is mute. I honestly believe that when the judge rules, this will truly be the end of AA as we know it. It will continue, we just don't know in which form and it will not happen overnight, but it will be very sad indeed. I believe that the US/AA combination will occur at some point, but I am not sure whether that will be a good thing or not. The AA/APA fight (and yes BOTH sides are responsible) will tear this airline apart.

User currently offlineklkla From United States of America, joined Jul 2004, 941 posts, RR: 0
Reply 34, posted (2 years 3 months 2 days 19 hours ago) and read 18290 times:

Quoting incitatus (Reply 30):
A big part in what you call race to the bottom is played by new entrants.

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 driving up THEIR costs to a level playing field.


User currently offlinejustplanenutz From United States of America, joined Feb 2006, 546 posts, RR: 1
Reply 35, posted (2 years 3 months 2 days 19 hours ago) and read 18270 times:

Quoting PITingres (Reply 32):
What on earth makes anyone think that a back-to-work order would issue from the Oval Office?

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 controversy threatens substantially to interrupt interstate commerce in any section of the nation, the NMB is required to notify the President of the United States, who may, at his discretion, create a fact-finding Presidential Emergency Board."

http://www.pennfedbmwe.org/Docs/reference/RLA_Simplified.html

The RLA is by it's nature a political process, and the guy in the Oval Office appoints the NMB, PEB and plays a major role in whether Congress will impose a settlement if the PEB fails.


User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 36, posted (2 years 3 months 2 days 17 hours ago) and read 18164 times:

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 board voted to direct the officers of the union to prepare to take a strike vote. The vote will be taken, if AA tries to implement the term sheet that is subject to AA's Section 1113.

The question that jumps out is whether the pilots are simply trying exert some negotiating leverage? Or is there enough resolve at APA (both leadership and full membership) to walk.

I remember during the UA bankruptcy that the F/As were putting out daily press releases and updating their web site as to preparations for CHAOS strikes. The F/As felt they were getting a raw deal.

Yet, despite the preparations, the F/As never implemented CHAOS. They got a negotiated contract.

Further, the creditors' committee members, other than the unions, (and presumably future AMR shareholders) put out a statement saying that while they want to see a negotiated contract with the pilots, manaagement should not offer any additional economic benefit to the APA. In other words, between pay, benefits, work rules, scope, and ownership in the reorganized AA, the creditors feel that APA is getting all that management can afford during bankruptcy and the first few years after discharge.

APA is in a pretty tough spot. Obviously, the rank and file want a better contract than what was voted on. I'm assuming that a substantial portion of the membership is willing to strike (even if that sends AA into Chapter 7 liquidation). Yet, a lot of interested parties believe that the T/A is as good a contract as AA can offer for the next few years.

By the same token, I'm not sure how well settled the law is, regarding whether a bargaining unit that is subject to the provisions of the RLA can strike after a contract is imposed under Section 1113 of the Bankruptcy Code. I think there is some case law out there, but I'm pretty sure that the U.S. Supreme Court hasn't ruled, and I don't know if the 2nd Circuit Court of Appeals (which covers New York) has issued a decision.

If the pilots strike, I can see AMR going into court for an injunction and an award of damages, as they did during the work slow down over the QQ merger.

Even a strike of a few days could have some serious consquences for AA. And if AA were to prevail on the injuction, the creditors would be pushing for a huge damage award from APA.


User currently offlinepar13del From Bahamas, joined Dec 2005, 7498 posts, RR: 8
Reply 37, posted (2 years 3 months 2 days 17 hours ago) and read 18114 times:

Quoting ckfred (Reply 36):
If the pilots strike, I can see AMR going into court for an injunction and an award of damages, as they did during the work slow down over the QQ merger.

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 shareholders will be motivated to do a deal, good luck with that one, by that time it will be beyond economics, it will be about pride and who really is in charge. Better to invest your money where you have control versus the inmates running the asylum.

Quoting ckfred (Reply 36):
Even a strike of a few days could have some serious consquences for AA.

Chpt.7 will not create a merger option with US, simply allow DL and UA the better option of coming in and buying up the assets as in routes, not staff and their problems.


User currently onlinelightsaber From United States of America, joined Jan 2005, 13440 posts, RR: 100
Reply 38, posted (2 years 3 months 2 days 17 hours ago) and read 18103 times:
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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 flow and I see issues:
http://www.bloomberg.com/quote/AMR:GR/cash-flow

That negative investment cash flow has to be due to writing off aircraft they are exiting leases. But still, there is only so far that can go (however, the A319 replacement of the MD-80 will help quite a bit).

Quoting norcal (Reply 7):
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?

There need to be structural changes (as you note later). That includes employee work rules and thus how many employees. Thus time to stop dragging the feet and act.

Quoting aluminumtubing (Reply 33):
I believe that the US/AA combination will occur at some point, but I am not sure whether that will be a good thing or not. The AA/APA fight (and yes BOTH sides are responsible) will tear this airline apart.

I see a possibility of a better airline. New equipment will help. More automation during check in (I like the new LAX process, much better than the old 'snake line.') But if AA doesn't get up per employee productivity... forget it. The A319s, hopefully with paperless cockpits, will be a HUGE boon. The same with replacing 752s with 739ERs.

Quoting SJUSXM (Reply 31):
The big effects of this will be replacing 140 seat MD80s with smaller planes (E90, CR7 etc) that would be permitted by a new scope clause. This presumably would increase yield as you can now compete with the likes of say a UA in ORD by offering a competitive product based on frequency, which as we have seen in the past, is what is demanded of an airline over size.

Not only replace the MD80s with some smaller aircraft (I hope for MRJs and C-series, but lets see), but also replace 50-seat RJs with more 70 seat flying. If that isn't agreed to, just write off AA. DL is going that way and it will change the industry. Lead, follow, or get out of the way...

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 39, posted (2 years 3 months 2 days 3 hours ago) and read 17804 times:

Quoting lightsaber (Reply 38):
Not only replace the MD80s with some smaller aircraft (I hope for MRJs and C-series, but lets see), but also replace 50-seat RJs with more 70 seat flying. If that isn't agreed to, just write off AA. DL is going that way and it will change the industry. Lead, follow, or get out of the way...

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.,

Here's a thought. AA's commuter carrier(s) fly up to the Canadair 900 (and retire all Embrear 135s and 140s quickly, and phase out the 145s), while mainline flies the C-Series.

Over time, AA and its commuter carrier(s) would have 3 manufacturers, Airbus, Boeing, and Canadair. You reduce the number of manufacturers to deal with. The commuter carrier has 1 type. Every plane flying for AA has a first-class cabin.


User currently onlinelightsaber From United States of America, joined Jan 2005, 13440 posts, RR: 100
Reply 40, posted (2 years 3 months 2 days 2 hours ago) and read 17756 times:
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Quoting par13del (Reply 37):
Chpt.7 will not create a merger option with US, simply allow DL and UA the better option of coming in and buying up the assets as in routes, not staff and their problems.
Quoting ckfred (Reply 39):
but doesn US Express fly the Embrear 170, while mainline fliies the 190? That may not be an ideal situation for AA/Eagle.,

Why?

Quoting ckfred (Reply 39):
while mainline flies the C-Series.

At what rate? And why no MRJ/E170?


Quoting ckfred (Reply 39):
The commuter carrier has 1 type.

You picked a type that is losing favor. Why not the other airframes? AMR needs to bid out their regional flying. I do not see a complete end to 50 seat flying, not until the MRJ; it is the first larger airframe with the same per flight costs as the CR2. The others cost more per flight. Once the MRJ is out and 'debugged,' I see a very rapid end to the 50 seaters. (Why fly fewer seats when the cost per flight is the same?)

Quoting ckfred (Reply 39):
Every plane flying for AA has a first-class cabin.

While I like that idea, I'm not certain enough routes will pay for the cabin.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineenilria From Canada, joined Feb 2008, 7550 posts, RR: 14
Reply 41, posted (2 years 3 months 2 days 1 hour ago) and read 17679 times:

Quoting commavia (Reply 1):

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

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

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 least 20% productivity gains among the AMR pilots, that alone equals a 20% layoff even at existing flying levels. My guess is that if you mix the hours guarantee (-15%) with the productivity gain and weigh it across the whole pilot group, you are talking about a 27+% layoff of pilots. Regardless of what guarantees are in there they will find a way to make that happen because otherwise it will just happen in the impending Ch11 of the new AA/US. PHX and alot of CLT will not work with these higher AA labor costs. Additionally, the huge productivity gains directly translate to layoffs. They would need to expand DFW/MIA/ORD by something like 50% to absorb the higher productivity and shut PHX and downsize CLT. Won't happen... Either there is a loophole or it just sets up future Ch11 relief on the layoff clause.

Also, no discussion of the "West pilots". How do they figure in all of this?


User currently offlinepar13del From Bahamas, joined Dec 2005, 7498 posts, RR: 8
Reply 42, posted (2 years 3 months 2 days ago) and read 17543 times:

Quoting enilria (Reply 41):
There is a guarantee of the number of hours to be flown and that it won't fall more than 15-20%.
Quoting enilria (Reply 41):
Regardless of what guarantees are in there they will find a way to make that happen because otherwise it will just happen in the impending Ch11 of the new AA/US.

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 needs to be viable in the eyes of the labour groups who can be counted on to make AA's life miserable while in Chpt.11


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 43, posted (2 years 3 months 1 day 22 hours ago) and read 17439 times:

Quoting par13del (Reply 42):

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 needs to be viable in the eyes of the labour groups who can be counted on to make AA's life miserable while in Chpt.11

You are right, defined benefit plans are toast. Unions, both private and public sector) have demanded generous plans over the decades which were impossible to maintain, and companies and local Governments agreed to them.

I don't think the majority of AA employees disagree with this, at least I don't. Making AA's life miserable in chapter 11, is not the point of most employees. While the unions need to share some of the blame, AA's management team has always demonstrated its desire to go after employees rather than competitors. All we want is to have this team replaced with one that wants to manage an airiine. That's really the whole idea.


User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 44, posted (2 years 3 months 1 day 17 hours ago) and read 17219 times:

Quoting aluminumtubing (Reply 43):
I don't think the majority of AA employees disagree with this, at least I don't. Making AA's life miserable in chapter 11, is not the point of most employees. While the unions need to share some of the blame, AA's management team has always demonstrated its desire to go after employees rather than competitors. All we want is to have this team replaced with one that wants to manage an airiine. That's really the whole idea.

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 did not groom the best talent to run the carrier after his retirement. I've yet to find an AA employee who think Carty, Arpey, or Horton is in the same league as Crandall, in terms of leadership qualities and ability to run the company.

So, why think Doug Parker is the company's savior? He got his start at AA at about the same time as Horton and Arpey, when Crandall was CEO. Yes, he may have a different personality. But then, Carty's personality was the polar opposite of Crandall's. Carty was a geniunely personable guy, while the words that often described Crandall were brusque and abrasive.

Yet, in terms of the way the ran the company and dealt with labor, Carty and Crandall weren't that different.

AA would be better off if it got a new CEO and new COO who never worked a day at AA. I think the CEO should be someone who never worked for an airline, but rather, in another sector of the travel industry (I'm thinking hotels or cruise lines), since they seem to better understand how to take care of a customer. That's something that the airline industry has forgotten, especially since 9/11.

But, you need someone who understands how to make an airline work on a daily basis, which means a seasoned veteran.

Perhaps someone from Jet Blue or Southwest who doesn't want to wait for their CEOs to retire and wants to run an airline now.

If the APA takes the last T/A, with more than 10% ownership interest, plus the APFA's 3%, it wouldn't take that much more to convince other owner/creditors to find a new CEO and management team.


User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 45, posted (2 years 3 months 1 day 17 hours ago) and read 17156 times:

Quoting aluminumtubing (Reply 43):
I don't think the majority of AA employees disagree with this, at least I don't.

Agreed.

However, AA's unions - the unions, not necessarily the employees themselves writ large - in my view, have spent the last five years fighting reality. Several of the key unions simply refused - flat out refused - to accept the reality that the world had changed and the deep, meaningful, admirable concessions they gave in 2003 simply were not sufficient after Delta, Northwest, United and USAirways (twice) went through bankruptcy, and went about shredding their union contracts. After Delta, Northwest, United and USAirways went about systematically freezing and/or dumping their defined benefit pensions, outsourcing overhauls, eviscerating scope, replacing (collectively) hundreds of mainline jets with large RJs, rapidly expanding codesharing relationships (both domestically and internationally), etc., there was simply no way that AA was ever going to be able to compete effectively within the confines of the 2003 contracts. It was simply not possible, and no amount of management acumen or sticktoitiveness was going to change that.

AA tried for years to impress upon the unions these indisputable facts, but many of the unions took the position of "not only no to additional concessions, but we actually want to raise labor costs." This was, in my view, counterproductive and short-sighted in hindsight.

Quoting aluminumtubing (Reply 43):
AA's management team has always demonstrated its desire to go after employees rather than competitors. All we want is to have this team replaced with one that wants to manage an airiine. That's really the whole idea.

I don't know if I'd say "always." Management was quite focused on the competition, to the great benefit of the company and its employees, through the 1980s and most of the 1990s - basically, the Crandall years.

And as for since then, I commiserate with your disappointment at AA's loss of its once-legendary aggressiveness and innovation, and seeming will to compete. But, again, it bears repeating that AA (management and labor) was fighting a battle with at least one hand tied behind its collective back. Its competitors brilliantly used bankruptcy to put AMR - and by extension AMR's employees - at a massive competitive advantage that snowballed as time went on, with higher labor and other operating costs leading to AA being less cost-competitive in domestic and international markets, which led to retrenchment, which hit revenue, which - coupled with the higher labor and operating costs - starved the company of capital needed to invest in technology and new aircraft, and on and on. It was a vicious cycle from which AA was ultimately not able to extract itself.

Quoting ckfred (Reply 44):
But, Crandall did not groom the best talent to run the carrier after his retirement. I've yet to find an AA employee who think Carty, Arpey, or Horton is in the same league as Crandall, in terms of leadership qualities and ability to run the company.

Crandall didn't groom an equal as his successor because he couldn't - he had no equal. Frankly, I don't think there has been an intellect (or personality) like him in the airline industry since he retired. Would anybody debate that Carty, Arpey and Horton are hardly in the "same league" as Crandall? I doubt it. But then again, I think it would be nearly impossible to find another airline executive in general recently who would fit that description.

Quoting ckfred (Reply 44):
So, why think Doug Parker is the company's savior?

I don't think the unions are under any allusion that Doug Parker is the company's "savior."

But they don't, frankly, seem to care at this point. The unions so viscerally hate Horton, his management team, and all they represent, and seem to generally blame that management team entirely for everything has gone wrong in the last decade, to the point that the unions are now willing to take virtually any even seemingly half-qualified alternative. Parker fits the bill.

Plus, of course, there is the undeniable fact that Parker has been a skillful opportunist, and sensing his moment, has been whispering the contractual sweet nothings in the AA unions' ears that are precisely what they want to hear right now.

[Edited 2012-08-27 17:39:30]

User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 46, posted (2 years 3 months 1 day 13 hours ago) and read 16996 times:

Quoting ckfred (Reply 44):
So, why think Doug Parker is the company's savior? He got his start at AA at about the same time as Horton and Arpey, when Crandall was CEO.

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 pact with the devil. Yes, replacing our senior management team with outsiders would probably offer the best hope, but I don't think that will happen. Most people here just seem to think that Parker would simply be the lesser of two evils given the circumstances. You are right about Crandall. While he was tough, he truly believed in AA and was far more interested in killing the competition than the employees. Since Carty, that has changed to the detriment of AA.

I believe the unions need to recognize the need to be competitive in the changing climate of the industry. However, AA management is zeroing in on the kill instead of working with us to be competitive contract wise. I am not naive. We are in bankruptcy and AA has the AAdvantage. However, I am afraid that going to the mat with us will ultimately be a murder suicide. The situation WILL become untenable. In what form, I truly do not know. I can sense the most anger I have ever witnessed among the pilots at AA. At some point, there may very well be a work stoppage, legal or not. I truly hope cooler heads will prevail on both sides, but I am losing optimism.

[Edited 2012-08-27 20:55:15]

[Edited 2012-08-27 20:55:40]

User currently offlineCoronado From United States of America, joined Jun 1999, 1204 posts, RR: 2
Reply 47, posted (2 years 3 months 1 day 3 hours ago) and read 16759 times:
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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. Please revisit your comments using actual information pertaining to the airline. Thanks


The Original Coronado: First CV jet flights RG CV 990 July 1965; DL CV 880 July 1965; Spantax CV990 Feb 1973
User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 48, posted (2 years 3 months 1 day 3 hours ago) and read 16773 times:

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. Discussions schedule for this week with the APA and USAPA in Dallas have been cancelled.

User currently offlineincitatus From Brazil, joined Feb 2005, 4050 posts, RR: 13
Reply 49, posted (2 years 3 months 1 day 3 hours ago) and read 16753 times:

Quoting aluminumtubing (Reply 46):
. I am not naive.

The face it: The 60% voting against an agreement made a big mistake.



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User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 50, posted (2 years 3 months 1 day 3 hours ago) and read 16735 times:

Quoting incitatus (Reply 49):
The face it: The 60% voting against an agreement made a big mistake.

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, I can tell you it is going to get ugly.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 51, posted (2 years 3 months 1 day 3 hours ago) and read 16729 times:

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, 589
o Negotiation extension covering 130 Embraer aircraft
o Proposed stipulation covering added protection of aircraft finance parties pending outcome of 1110 motions.


Seems like many of these aircraft talks are truly dragging on. So much for the normal 60-day accept or reject window intended by law.



From the desert to the sea, to all of Southern California
User currently offlineLAXdude1023 From India, joined Sep 2006, 7759 posts, RR: 25
Reply 52, posted (2 years 3 months 1 day 3 hours ago) and read 16798 times:

Quoting commavia (Reply 48):
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. Discussions schedule for this week with the APA and USAPA in Dallas have been cancelled.


(sarcasm on)

The unions will love this.

(sarcasm off)



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 53, posted (2 years 3 months 1 day 2 hours ago) and read 16750 times:

Quoting commavia (Reply 48):
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. Discussions schedule for this week with the APA and USAPA in Dallas have been cancelled.



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 at all. Now that the AA management is willing to share information and maybe negotiate a consensual merger, the US management is willing to break off communication with the AA unions. The AA unions need to remember that the US management team came from the same corporate culture that the current AA management team. So replacing the current AA management team with the US management team is like replacing six eggs with half a dozen eggs. In the end it is all the same.


User currently offlineLAXdude1023 From India, joined Sep 2006, 7759 posts, RR: 25
Reply 54, posted (2 years 3 months 1 day 2 hours ago) and read 16726 times:

Quoting TWA85 (Reply 53):
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 at all. Now that the AA management is willing to share information and maybe negotiate a consensual merger, the US management is willing to break off communication with the AA unions. The AA unions need to remember that the US management team came from the same corporate culture that the current AA management team. So replacing the current AA management team with the US management team is like replacing six eggs with half a dozen eggs. In the end it is all the same.

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 of the union heads really believed the sweet nothings Doug Parker was telling them.



Stewed...Lewd...Crude...Irreverent...Belligerent
User currently offlineLDVAviation From United States of America, joined Dec 2008, 1101 posts, RR: 5
Reply 55, posted (2 years 3 months 1 day 1 hour ago) and read 16664 times:

Quoting commavia (Reply 45):
Crandall didn't groom an equal as his successor because he couldn't - he had no equal. Frankly, I don't think there has been an intellect (or personality) like him in the airline industry since he retired. Would anybody debate that Carty, Arpey and Horton are hardly in the "same league" as Crandall? I doubt it. But then again, I think it would be nearly impossible to find another airline executive in general recently who would fit that description.

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 it is. Along the same lines, one might find fault in his decision not to acquire Northwest. He almost gave up on such ideas after it became clear that Congress and the DOJ had become under his tenure averse to large mergers. He was also late to the alliance game because he had been an opponent of the DOT policy that allowed international airlines to codeshare with US Airlines. He thought that that would eventually undermine the ability of US airlines to fly long, thin international routes. Though he was right, when it was clear there was no going back, he overplayed his hand by choosing BA as a partner. It would take three DOT applications for immunity, over 7+ years before that alliance was ever approved and by that time Crandall was long retired. Finally, Crandall was the one who bargained away AA's ability to outsource (the scope clause). After he retired, he said it was perhaps his biggest regret as CEO. He never should have put that on the table.

Quoting aluminumtubing (Reply 46):
While he was tough, he truly believed in AA and was far more interested in killing the competition than the employees. Since Carty, that has changed to the detriment of AA.

Speaking of misinformation, seems you are just as guilty as us "outsiders." Crandall was as interested in killing the employees as he was the competition. He implemented a two-tier, pilot wage scale during his tenure. Yes, the very thing APA doesn't want now Crandall forced the APA to accept during his tenure. If that wasn't enough, he was also of the opinion that being a FA was not a long term career and should not be compensated as such. When the FA's subsequently struck the airline in 1993, Crandall threatened to replace the whole group and (if I remember correctly) started hiring replacements. The strike and Crandall's efforts to break a union were halted by President Clinton who forced the two sides into binding arbitration.

By using the full leverage of the 1113 section of the Bankruptcy Code, Horton is acting more like Crandall than Arpey or Carty ever did.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 56, posted (2 years 3 months 1 day 1 hour ago) and read 16638 times:

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 debate.

While interesting, if you guys want to debate the stance of the unions vis-a-vis the company, suggest someone start a new thread with that as its subject.

If we stray off topic here, I'm sure Mods will end up locking this one.



From the desert to the sea, to all of Southern California
User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 57, posted (2 years 3 months 1 day 1 hour ago) and read 16610 times:

Quoting commavia (Reply 48):
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. Discussions schedule for this week with the APA and USAPA in Dallas have been cancelled.

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 NDA was already signed were false.


User currently offlinebobnwa From United States of America, joined Dec 2000, 6517 posts, RR: 9
Reply 58, posted (2 years 3 months 1 day 1 hour ago) and read 16585 times:

Quoting commavia (Reply 45):
Crandall didn't groom an equal as his successor because he couldn't - he had no equal

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 the AA innovations credited to Crandall. Plaskett had one of the brightest minds in the industry


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 59, posted (2 years 3 months 1 day 1 hour ago) and read 16592 times:

Quoting LDVAviation (Reply 55):
Crandall was as interested in killing the employees as he was the competition.

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. There is a difference between being tough and being incompetent and vindictive. I am not the least bit naive, I know exactly what is going on.


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1101 posts, RR: 5
Reply 60, posted (2 years 3 months 23 hours ago) and read 16450 times:

Quoting aluminumtubing (Reply 59):
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. There is a difference between being tough and being incompetent and vindictive. I am not the least bit naive, I know exactly what is going on.

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 faults, including his vindictiveness after the FA did not take his last offer. You might also want to read about how he got cut out of buying Pan Am's Asian route network. He offered Pan Am more money than United, but his personality got in the way of making a deal. Incompetence? You make the call.


User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 61, posted (2 years 3 months 21 hours ago) and read 16319 times:

Has there been any negotiations between AA and the APA since AA filed its revised 1113c term sheet?

User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 62, posted (2 years 3 months 19 hours ago) and read 16229 times:

Quoting TWA85 (Reply 61):
Has there been any negotiations between AA and the APA since AA filed its revised 1113c term sheet?

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.


User currently offlineLDVAviation From United States of America, joined Dec 2008, 1101 posts, RR: 5
Reply 63, posted (2 years 2 months 4 weeks 1 day 17 hours ago) and read 15904 times:

Well, well, well... While Parker has been negotiating with the pilots who have no money, Horton has been negotiating with people who do:

http://finance.yahoo.com/news/amr-wo...-possible-financing-222237912.html

I have been saying that the merger would have already happened if there was money behind the proposition. At one point, Parker even said he had the support of Wall Street banks. Of course, he also said that he thought he could do the deal without borrowing any money. LOL.

So, where's is the money? Apparently, Horton has it or may have it soon. Given Horton's track record, is anyone really surprised?

[Edited 2012-08-29 17:00:16]

User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 64, posted (2 years 2 months 4 weeks 1 day 13 hours ago) and read 15668 times:

Quoting commavia (Reply 45):
Crandall didn't groom an equal as his successor because he couldn't - he had no equal. Frankly, I don't think there has been an intellect (or personality) like him in the airline industry since he retired. Would anybody debate that Carty, Arpey and Horton are hardly in the "same league" as Crandall? I doubt it. But then again, I think it would be nearly impossible to find another airline executive in general recently who would fit that description.

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 example is McDonald's. Jim Cantalupo was turning the company around, when he suddenly died of a heart attack. Charlie Bell stepped and continued to improve the company, until he was diagnosed with cancer and had to step down. Then came Jim Skinner who followed through on the turnaround that Cantalupo and Bell started and decided to make McD a stop for coffee drinkers, to take on Starbucks and Dunkin Donuts.

None of Crandall's successors seem to have a vision of what AA ought to be, as well as knowing how to keep the competition out of its major markets, whether its Jet Blue at BOS or DL at JFK or UA and WN in Chicago.

Quoting commavia (Reply 45):
I don't think the unions are under any allusion that Doug Parker is the company's "savior."

But they don't, frankly, seem to care at this point. The unions so viscerally hate Horton, his management team, and all they represent, and seem to generally blame that management team entirely for everything has gone wrong in the last decade, to the point that the unions are now willing to take virtually any even seemingly half-qualified alternative. Parker fits the bill.

Rather than sell the company to US and deal with the headaches that will follow a merger (US/HP and UA/CO), espeically in terms of merging seniority lists, just fire Horton and his team and bring in some fresh talent, while leaving AA independent. Remember that the employees at UA were fed up with Steve Wolf, created the ESOP, fired Wolf, and brought in Gerald Greenwald from Chrysler. There were some missteps, but I think Greenwald did a credible job and certainly had the support of most employees.

I've said a number of times on various threads that there are two places AA could look for a new CEO and COO. First would be companies in the travel sector, but outside of the airline industry. Cruise lines and hotel chains come to mind, since they still seem to have some idea of how to treat guests. If you remember back when UAL Corp. consisted of UA and Western International Hotels, the CEO of UAL and UA always came up through hotel chain. The board believed that hotels were a better background for the "big picture" guy, rather than the airline.

Second would be someone who is a senior executive with a carrier that is doing well, but seems doesn't seem to be heading towards becoming CEO of the company. I'm think B6, WN, or AS.


User currently offlineSydscott From Australia, joined Oct 2003, 3135 posts, RR: 20
Reply 65, posted (2 years 2 months 4 weeks 1 day 11 hours ago) and read 15588 times:

Quoting ckfred (Reply 64):
Second would be someone who is a senior executive with a carrier that is doing well, but seems doesn't seem to be heading towards becoming CEO of the company. I'm think B6, WN, or AS.

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 significant lack of Airline and transport industry experience on the Board. If you were going to start a cleanout of Management I'd suggest you'd start at the top and appoint people with appropriate experience to judge the CEO and COO.

The problem is who to appoint as a Director however there are some obvious candidates with significant airline experience out there such as;

- Gordon Bethune - a no brainer;
- Herb Kelleher - a no brainer;
- Sir Rod Eddngton - former MD of Cathay Pacific and British Airways;
- Bruce Buchanan - former CEO of Jetstar;
- David Neeleman - founder of Jetblue
- Jürgen Weber - former CEO and a current member of the Supervisory Board at LH

You get the picture. AA needs more Airline, and travel industry, operators to supervise and hold accountable the Management team and to better develop the Executive as a whole.


User currently offlinegemuser From Australia, joined Nov 2003, 5763 posts, RR: 6
Reply 66, posted (2 years 2 months 4 weeks 1 day 7 hours ago) and read 15482 times:

Quoting Sydscott (Reply 65):
Bruce Buchanan - former CEO of Jetstar;

Former??? Not according to their web site!

Gemuser



DC23468910;B72172273373G73873H74374475275376377L77W;A319 320321332333343;BAe146;C402;DHC6;F27;L188;MD80MD85
User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 67, posted (2 years 2 months 4 weeks 1 day 3 hours ago) and read 15325 times:

Quoting Sydscott (Reply 65):
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 significant lack of Airline and transport industry experience on the Board. If you were going to start a cleanout of Management I'd suggest you'd start at the top and appoint people with appropriate experience to judge the CEO and COO.

The problem is who to appoint as a Director however there are some obvious candidates with significant airline experience out there such as;

- Gordon Bethune - a no brainer;
- Herb Kelleher - a no brainer;
- Sir Rod Eddngton - former MD of Cathay Pacific and British Airways;
- Bruce Buchanan - former CEO of Jetstar;
- David Neeleman - founder of Jetblue
- Jürgen Weber - former CEO and a current member of the Supervisory Board at LH

You get the picture. AA needs more Airline, and travel industry, operators to supervise and hold accountable the Management team and to better develop the Executive as a whole.

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. My father worked for a large company that started out in the meat packing business. On the board of directors was a former Chief of Naval Operations of the U.S. Navy, the CEO of a farm equipment and truck manufacturer, and the CEO of a concrete and coal mining company.

If you remember back to the 1990s, the board of General Motors decided that Bob Stempel was not the person who was going to make tough decisions about closing plants and other cuts. Who was leading that move? The director who had been CEO of Proctor & Gamble, which makes consumer products like laundry detergent and toothpaste.

The concept that is taught in business schools and loved by Wall Street is that a board should be composed of members with backgrounds in various industries, as well as backgrounds in operations, finance, investing, and adademia.

Assuming that the pilots eventually accept the last T/A, which gave them 13.5% of the stock, and they can work with APFA, which gets 3% of the stock, then can allign themselves with other shareholders who can create a new board of directors and start a search for a new management team.


User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 68, posted (2 years 2 months 4 weeks 1 day 3 hours ago) and read 15317 times:

Quoting LAXintl (Reply 51):
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, 589
o Negotiation extension covering 130 Embraer aircraft
o Proposed stipulation covering added protection of aircraft finance parties pending outcome of 1110 motions.


Seems like many of these aircraft talks are truly dragging on. So much for the normal 60-day accept or reject window intended by law.



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's and 11 A319's on order. It is possible that AA may be stalling negotiations for the Embraer aircraft while waiting for the outcome of the 1113c motion. If AA is allowed more code-sharing under the 1113c term sheet, then those A320's and A319's could be designated for MQ with AA code-sharing on those flights with MQ. In turn the 130 Embraer aircraft could gradually be phased out as the A320's and A319's are delivered. If AA isn't allowed more code-sharing, then AA would most likely need to negotiate better long term leases for the Embraer aircraft.


User currently offlineiFlyLOTs From United States of America, joined Apr 2012, 492 posts, RR: 0
Reply 69, posted (2 years 2 months 4 weeks 1 day 2 hours ago) and read 15243 times:

Quoting TWA85 (Reply 68):
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's and 11 A319's on order. It is possible that AA may be stalling negotiations for the Embraer aircraft while waiting for the outcome of the 1113c motion. If AA is allowed more code-sharing under the 1113c term sheet, then those A320's and A319's could be designated for MQ with AA code-sharing on those flights with MQ. In turn the 130 Embraer aircraft could gradually be phased out as the A320's and A319's are delivered.

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



"...stay hungry, stay foolish" -Steve Jobs
User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 70, posted (2 years 2 months 4 weeks 1 day ago) and read 15121 times:

Quoting ckfred (Reply 67):
Assuming that the pilots eventually accept the last T/A, which gave them 13.5% of the stock, and they can work with APFA, which gets 3% of the stock, then can allign themselves with other shareholders who can create a new board of directors and start a search for a new management team.

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 exception of the 13.5% ownership. If they think they're going to get one thing more than the last T/A they're dilusional.

Quoting TWA85 (Reply 68):
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's and 11 A319's on order. It is possible that AA may be stalling negotiations for the Embraer aircraft while waiting for the outcome of the 1113c motion. If AA is allowed more code-sharing under the 1113c term sheet, then those A320's and A319's could be designated for MQ with AA code-sharing on those flights with MQ. In turn the 130 Embraer aircraft could gradually be phased out as the A320's and A319's are delivered. If AA isn't allowed more code-sharing, then AA would most likely need to negotiate better long term leases for the Embraer aircraft.

Under the ammended 1113 (and the original for that matter) AA cannot give the A319s/320s to MQ without them having



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 71, posted (2 years 2 months 4 weeks 1 day ago) and read 15147 times:

130 is coincidental.

In reality there are 200+Embraer planes they are still negotiating over. Those additional ones were covered by another court hearing date.



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 72, posted (2 years 2 months 3 weeks 3 days 3 hours ago) and read 14629 times:

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 aircraft – N584, 587, 588, 589

=



From the desert to the sea, to all of Southern California
User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 73, posted (2 years 2 months 3 weeks 3 days 1 hour ago) and read 14527 times:

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 hearing on the amended motion should take less time?

Now, for the important questions

1. Assuming that the judge grants the 1113 motion, how long before AA implements the term sheet?
2. How quickly can APA start balloting to authorize a strike?
3. How quickly after APA puts a strike authorization to a vote before it announces results?
4. If the pilots authorize a strike, how soon after the announcement before the pilots walk?


User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 74, posted (2 years 2 months 3 weeks 3 days 1 hour ago) and read 14479 times:

Quoting ckfred (Reply 73):
4. If the pilots authorize a strike, how soon after the announcement before the pilots walk?

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 they would not strike without legal permission.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 75, posted (2 years 2 months 3 weeks 3 days 1 hour ago) and read 14480 times:

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:
http://aviationblog.dallasnews.com/2...ith-american-airlines-pilots.html/

Also the judge has another hearing at 430pm on his docket, so I don't think he will have the time be be bogged down today.

As far as implementing the termsheet, it was always my understanding AMR wanted to implement everything in one shot. AMR has yet to schedule a 1113 hearing on the mechanics that rejected their proposal, nor has had hearings for the court to enter and accept the TWU and APFA workgroups that accepted their agreements.

Lastly, the way crew scheduling works, you'd probably need a good 60-days to get the new rules programmed and build the schedules within the new pay and scheduling guidelines.



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 76, posted (2 years 2 months 3 weeks 2 days 19 hours ago) and read 14249 times:

U.S. Bankruptcy Judge Sean Lane ruled Tuesday that American Airlines can abrogate its collective bargaining agreement with the Allied Pilots Association.

Judge lets American Airlines toss out its pilots contract
http://aviationblog.dallasnews.com/2...-toss-out-its-pilots-contract.html

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From the desert to the sea, to all of Southern California
User currently offlinecrAAzy From United States of America, joined Jan 2008, 802 posts, RR: 0
Reply 77, posted (2 years 2 months 3 weeks 2 days 19 hours ago) and read 14361 times:
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Gotta feel bad for the pilots but I think the judge had little alternative given the overwhelming vote against the previous contract proposal this late in the game. This continues to be a roller coaster ride.

I wonder if we'll see AA go ahead and look for approval to confirm the 787 order or if they'll hold off to see how things shake out over the next year or two?


User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 78, posted (2 years 2 months 3 weeks 2 days 18 hours ago) and read 14229 times:

Quoting LAXintl (Reply 75):
As far as implementing the termsheet, it was always my understanding AMR wanted to implement everything in one shot. AMR has yet to schedule a 1113 hearing on the mechanics that rejected their proposal, nor has had hearings for the court to enter and accept the TWU and APFA workgroups that accepted their agreements.

Lastly, the way crew scheduling works, you'd probably need a good 60-days to get the new rules programmed and build the schedules within the new pay and scheduling guidelines.

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 the pilots rejected.

There is a hearing scheduled for the 14th on the implementation of the agreed upon contracts-the two TWU ones referenced above and the APFA.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 79, posted (2 years 2 months 3 weeks 2 days 18 hours ago) and read 14204 times:

Quoting SJUSXM (Reply 78):
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 the pilots rejected.

See Reply 22.

AE Mechanics rejected their proposal 65-35 margin.



From the desert to the sea, to all of Southern California
User currently offlineflyfree727 From United States of America, joined Jul 2007, 682 posts, RR: 0
Reply 80, posted (2 years 2 months 3 weeks 2 days 17 hours ago) and read 14162 times:

Quoting LAXintl (Reply 75):
Lastly, the way crew scheduling works, you'd probably need a good 60-days to get the new rules programmed and build the schedules within the new pay and scheduling guidelines.

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 will happen for the remainder of 2012 according to AA's temporary implementation schedule.
Right now they are probably trying to get the new hire curric up to date for the return of furloughs and training to replace the HUNDREDS of fa's that have submitted for the early out option so far. Training not necessarily meaning "new hire" training, but training for thousands of FA's that will now be required to be intl qualified.

AA ORD


User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 81, posted (2 years 2 months 3 weeks 2 days 17 hours ago) and read 14140 times:

Quoting flyfree727 (Reply 80):
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 will happen for the remainder of 2012 according to AA's temporary implementation schedule.
Right now they are probably trying to get the new hire curric up to date for the return of furloughs and training to replace the HUNDREDS of fa's that have submitted for the early out option so far. Training not necessarily meaning "new hire" training, but training for thousands of FA's that will now be required to be intl qualified.

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 senior bases (i.e., IDFW, LAX-I, etc.) or because of the eventual combination of domestic/international, or both? In the short-run, which do you think is going to be driving the bigger training requirement? I would guess it's the demographics of the retirees, but would be interested to get your take.


User currently offlineflyfree727 From United States of America, joined Jul 2007, 682 posts, RR: 0
Reply 82, posted (2 years 2 months 3 weeks 2 days 17 hours ago) and read 14048 times:

Quoting commavia (Reply 81):
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 senior bases (i.e., IDFW, LAX-I, etc.) or because of the eventual combination of domestic/international, or both? In the short-run, which do you think is going to be driving the bigger training requirement? I would guess it's the demographics of the retirees, but would be interested to get your take.

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 early 60's, but have been flying less than 25 years. True, most that leave will be both. Close to retirement "age" and senior with AA. The training is two fold. Some will be to replace the vacancies left by many "AA Senior" fa's that fly intl, and to provide INTL training the more "AA junior" fa's that serve reserve. AA is going to start cross-utilizing reserves in Jan to fly both DOM and INTL. AA has indicated the intl training for DOM reserves will start approx 60 days after the LBFO is signed. The running count today is 750 have proffered for the early out, and the proffer doesn't even close until Sept 20th. TODAY there was an early out meeting in ORD with 200+ in attendance. As with most proffers, the majority "put in" during the last couple of days, so if this trend continues, this number could grow substantially before the deadline.

AA ORD


User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 83, posted (2 years 2 months 3 weeks 2 days 16 hours ago) and read 13982 times:

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 without a contract between AA and APA. But, he also said that AA should not offer any more economic benefit than what was offered in the T/A that the pilots rejected.

In a nutshell, the creditors are saying:

A. Management should make every effort to patch things up with the APA, in order to get the rank and file to vote again on the T/A or a variation of it.

B. APA members need to understand that they can't get a better deal than what was offered and take it.

Maybe if some of the members of the committee, sat in on the negotiations, they could get management and APA to find some common ground.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 84, posted (2 years 2 months 3 weeks 2 days 16 hours ago) and read 13959 times:

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 mistake” that AMR has to have a contract with pilots, Butler told U.S. Bankruptcy Judge Sean Lane.

So it will indeed be imperative that AA comes up with an consensual deal with its pilots, and any unions that continue to disagree about term sheet proposals.

1113 motion was the nuclear option for the company, and any future business plan or investment cannot view it as means for long term prosperity or for labor peace. Ultimately one way or the other the two sides need to meet and agree to something.

So me says the ball is yet again back in AMRs court to come up with something that is more palatable for the pilots. Otherwise AMR will sit in a holding pattern trying to craft its future business plans without a solid foundation to emerge from court protection.



From the desert to the sea, to all of Southern California
User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 85, posted (2 years 2 months 3 weeks 2 days 16 hours ago) and read 13953 times:

Quoting LAXintl (Reply 79):
See Reply 22.

AE Mechanics rejected their proposal 65-35 margin

I was referencing AA only, it seems as if Eagle is quite aways behind AA in terms of their reorganization.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 86, posted (2 years 2 months 3 weeks 2 days 16 hours ago) and read 13941 times:

Quoting LAXintl (Reply 84):
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 mistake” that AMR has to have a contract with pilots, Butler told U.S. Bankruptcy Judge Sean Lane.

So it will indeed be imperative that AA comes up with an consensual deal with its pilots, and any unions that continue to disagree about term sheet proposals.

1113 motion was the nuclear option for the company, and any future business plan or investment cannot view it as means for long term prosperity or for labor peace. Ultimately one way or the other the two sides need to meet and agree to something.

So me says the ball is yet again back in AMRs court to come up with something that is more palatable for the pilots. Otherwise AMR will sit in a holding pattern trying to craft its future business plans without a solid foundation to emerge from court protection.

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 part. Also in that same statement was this: "...Accordingly, the Committee decided today that it will oppose any new efforts to transfer additional economic value from general unsecured creditors to American’s unionized employees."

The UCC is sending clear messages - but they seem somewhat contradictory. They seem to be imploring AMR to get a consensual deal with the pilots, but they also seem to be imploring the pilots to take the deal already on the table.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 87, posted (2 years 2 months 3 weeks 2 days 3 hours ago) and read 13608 times:

A few things this morning.

Creditors committee reaffirms its desire to see a consensual deal with the pilots.

Creditors committee: American Airlines must have pilots deal before leaving bankruptcy
http://aviationblog.dallasnews.com/2...al-before-leaving-bankruptcy.html/


APA says AA better be careful in implementing any changes. Union will not act as the mouth piece for the company to explain or support any unilateral changes. Members need to watch out for each other and maintain professionalism.

APA president urges American Airlines to be careful in implementing changes
http://aviationblog.dallasnews.com/2...eful-in-implementing-changes.html/


And AA says it still desires a consensual agreement with the pilots and will shortly disclose how it plans to implement the judges ruling.

American Airlines: We’ll be disclosing our plans to pilots in the near future
http://aviationblog.dallasnews.com/2...to-pilots-in-the-near-future.html/

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From the desert to the sea, to all of Southern California
User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 88, posted (2 years 2 months 3 weeks 2 days 1 hour ago) and read 13484 times:

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 needs to understand that the UCC will wind up as shareholders of the reorganized AMR/AA, including the APFA. I don't know if any of the TWU work groups are getting stock in the new AMR. But, I'm starting to see a possible scenerio were the pilots have no equity in the new AMR, while other work groups do.

Ask any UA F/A how he or she liked working for every other employee group (pilots, mechanics, CSAs, white-collar employees, etc.), because the F/As didn't agree to an ownership interest in the ESOP. There were a lot of hard feelings.

By the same token, the last T/A gave the pilots 13.5% of the company. If APA took that 13.5%, plus APFA's 3%, and the ownership interest of TWU work groups, they could have a lot of control, after exit from Chapter 11, to create a new board of directors, put in place a new senior management team, and influence a possible merger with US.

If APA won't take the last T/A or a new version of it, there will be some very irritated UCC members who, as shareholders and possibly board members, aren't going to be very sympathic to pilot issues.


User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 89, posted (2 years 2 months 3 weeks 2 days ago) and read 13454 times:

Quoting LAXintl (Reply 87):
Creditors committee reaffirms its desire to see a consensual deal with the pilots.

Although, again, interestingly enough the same UCC lawyer who yesterday reiterated the UCC's desire for a consensual deal later clarified that this was not, in fact, actually "required" per se, and further reiterated that the UCC does not support any additional economic value going to the pilots beyond the deal they already rejected.

Never a dull moment ...

Quoting LAXintl (Reply 87):
APA says AA better be careful in implementing any changes.

Agreed. All parties - including management and the unions - should tread carefully.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 90, posted (2 years 2 months 3 weeks 2 days ago) and read 13431 times:

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 disastrous to implement and operate under the 1113. One way or the other the pilots need to be walked to something they can sign off on.

Without such an agreement there simply is too much unknown and risk to base a future business strategy on, or build confidence in creditors or prospective investors.



From the desert to the sea, to all of Southern California
User currently offlineRevelation From United States of America, joined Feb 2005, 12856 posts, RR: 25
Reply 91, posted (2 years 2 months 3 weeks 1 day 23 hours ago) and read 13357 times:

Quoting ckfred (Reply 83):
In a nutshell, the creditors are saying:

A. Management should make every effort to patch things up with the APA, in order to get the rank and file to vote again on the T/A or a variation of it.

B. APA members need to understand that they can't get a better deal than what was offered and take it.

Seems to me they ask the impossible.

Quoting LAXintl (Reply 84):
1113 motion was the nuclear option for the company, and any future business plan or investment cannot view it as means for long term prosperity or for labor peace. Ultimately one way or the other the two sides need to meet and agree to something.

Nuclear indeed. Seems the APA reaction is to tell AMR to go ahead and impose the 1113 based contract.

Quoting LAXintl (Reply 90):

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.

They have a pretty good idea of what the pilots are willing to accept but they aren't willing to go that far.

Quoting LAXintl (Reply 90):
I think it would be disastrous to implement and operate under the 1113. One way or the other the pilots need to be walked to something they can sign off on.

The horse is being lead to water and is refusing to drink. The horse thinks it should be offered champagne instead of water, at the very least table wine or beer.

Quoting LAXintl (Reply 90):
Without such an agreement there simply is too much unknown and risk to base a future business strategy on, or build confidence in creditors or prospective investors.

Pretty much explains the union strategy, doesn't it?



Inspiration, move me brightly!
User currently offlineADent From United States of America, joined Dec 2006, 1397 posts, RR: 2
Reply 92, posted (2 years 2 months 3 weeks 1 day 23 hours ago) and read 13302 times:

Quoting ckfred (Reply 88):
Ask any UA F/A how he or she liked working for every other employee group (pilots, mechanics, CSAs, white-collar employees, etc.), because the F/As didn't agree to an ownership interest in the ESOP. There were a lot of hard feelings.

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 cut).


User currently offlineapodino From United States of America, joined Apr 2005, 4304 posts, RR: 6
Reply 93, posted (2 years 2 months 3 weeks 1 day 11 hours ago) and read 13086 times:

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.

http://www.flightglobal.com/news/art...arge-regional-jet-contract-376120/


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 94, posted (2 years 2 months 3 weeks ago) and read 12789 times:

AE FA's approved their termsheet proposal.

Flight attendants at American Eagle approve new contract
http://aviationblog.dallasnews.com/2...n-eagle-approve-new-contract.html/


Also AA says it will begin sharing details about how it plans to roll out labor changes following next weeks court hearing due to approve the APFA and TWU pacts.

Unions will begin hearing American Airlines’ plans after next week’s court hearing
http://aviationblog.dallasnews.com/2...ter-next-weeks-court-hearing.html/

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From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 95, posted (2 years 2 months 2 weeks 6 days 18 hours ago) and read 12668 times:

AMR is looking to throw out 3 contracts over at AE.

Company has requested 1113 motion for the mechanics, dispatchers, and training instructors which they company has not been able to reach deals with.

The hearing to void the three contracts is scheduled for October 23rd.



From the desert to the sea, to all of Southern California
User currently offlinerj777 From United States of America, joined Dec 2000, 1882 posts, RR: 2
Reply 96, posted (2 years 2 months 2 weeks 6 days 12 hours ago) and read 12471 times:

Maybe Republic will use those C-Series planes they've got on order for an American tie-up.

User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 97, posted (2 years 2 months 2 weeks 4 days 2 hours ago) and read 12209 times:

Republic ordered the CS300 --- that's a 130 seat airplane.

Even under AAs imposed termsheet the ceiling for regional airplanes is 88 seats.



From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 98, posted (2 years 2 months 2 weeks 3 days 22 hours ago) and read 12205 times:

AMR notifies the TWU it intends to shut the AFW maintenance base in December. 1,100 positions eliminated.
Total maintenance staff cuts systemwide will be 1,708 according to the company.


American Airlines to close Alliance maintenance base by mid-December
http://aviationblog.dallasnews.com/2...tenance-base-by-mid-december.html/

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From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 99, posted (2 years 2 months 2 weeks 1 day 20 hours ago) and read 12028 times:

Court approved APFA and TWU contracts.

Bankruptcy court approves contracts between American Airlines and APFA, TWU
http://aviationblog.dallasnews.com/2...erican-airlines-and-apfa-twu.html/

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From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 100, posted (2 years 2 months 2 weeks 1 day 1 hour ago) and read 11855 times:

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 learn American Airlines’ schedule for implementing changes
http://aviationblog.dallasnews.com/2...ule-for-implementing-changes.html/

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From the desert to the sea, to all of Southern California
User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 101, posted (2 years 2 months 2 weeks 1 day 1 hour ago) and read 11839 times:

Quoting LAXintl (Reply 98):
AMR notifies the TWU it intends to shut the AFW maintenance base in December. 1,100 positions eliminated.
Total maintenance staff cuts systemwide will be 1,708 according to the company.

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 outsourcing others? Of are certain aspects fo aircraft maintenance across the fleet being outsourced?

C. What happens to the Rolls-Royce engine maintenance facility at AFW? The number of AA planes with RR engines is going to decline over time. The 757s will slowly disappear. AA's 787s will have GE engines. None of the 737s or Airbuses have RR engines. If AA takes delivery of any 772s in the future, those will be the only new aircraft with RR engiens.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 102, posted (2 years 2 months 2 weeks 2 hours ago) and read 11668 times:

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 reassignment of work at individual stations which represents about 15% savings.

Last document I have has the following current airframe work going outside -
6 lines of 737 work
4 lines of MD80 work
2 lines of 757 work
1 line of 767 work
1 line of 777 work.
Additionally internally some shifts will take place such as DFW will pick up a former AFW 777 special visit line, and TUL picks up a 767 line.
For other items - blade and vane shop, window shop, 777 seat, 767 thrust reverser, flight controls and door shop will also be outsourced.

In the future, both the A319 and 777-300 fleets are slated to be outsourced.

Any new work (eg future fleet types) will also be subject to the 35% provision, however AA does have flexibility if economics of scale for individual items don't lend to inhouse work. They also have ability to now not have to hire local AA personal at larger overseas stations but instead use contractors for line work. (EZE, SCL, GRU, GIG, LHR, NRT)


Regarding TAESL, this is a joint-venture with Rolls Royce and no changes are projected. Interestingly actually AA said is expects TAESL volumes would grow as it can bring in more outside customer work aboard once AA work volume decreases in the coming years. They expect TAESL to remain competitive. So its not the end of the world for those guys.



From the desert to the sea, to all of Southern California
User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 103, posted (2 years 2 months 1 week 4 days 1 hour ago) and read 11381 times:

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-204349270.html

Is there any plan for further negotiations to come up with a consensual labor agreement, or will the imposed contract be the status quo for the time being? It will be in the best interest of all parties involved for AA and the APA to negotiate a consensual agreement prior to exiting bankruptcy, or AA faces the possibility of a post bankruptcy strike. Also per flightstats.com, AA has already canceled 85 flights today and has an average on time rating of 67.5%. This is an obvious sign that the pilots are beginning to take matters into their own hands. How long does AA plan to survive like this?


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 104, posted (2 years 2 months 1 week 4 days ago) and read 11275 times:

Quoting TWA85 (Reply 103):

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 inordinate amount of confusion among the pilots. Not good here right now. No surprise, I am sure.

[Edited 2012-09-17 10:04:34]

User currently offlinejustplanenutz From United States of America, joined Feb 2006, 546 posts, RR: 1
Reply 105, posted (2 years 2 months 1 week 4 days ago) and read 11197 times:

Quoting TWA85 (Reply 103):
As expected, the AA pilots are not happy about the terms of an imposed contract from AA.

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 those stuck at the bottom of the seniority list for a decade are the most unhappy. AA appears to have about 2,500 surplus pilots ( I am guessing somewhat here based on 1,000 active and 1,500 on furlough). If a consensual agreement with APA is not in the cards, why not take the additional savings from the term sheet (vs. TA) and spend that buying out that surplus? Hopefully, this would:
1) Create a less senior pilot group (read less expensive)
2) Allow AA to hire off the street going forward (again, less expensive)
3) Replace disaffected pilots with new hires (who know and accept the deal going in)
4) Provide upward pilot mobility, increasing pilot pay along the way
4) Be a one-time expense and not increase structural costs

I know normal retirements (200-300/year) and the end of the age 65 retirement holiday would eliminate the surplus over time, but the pilot group would still be very senior and most likely unhappy. It seems to be me that a buyout targeted at the middle of the seniority list could be a positive step towards resolving this dispute.


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 106, posted (2 years 2 months 1 week 3 days 23 hours ago) and read 11082 times:

Quoting justplanenutz (Reply 105):
1) Which demographic at APA is the angriest?

All!


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 107, posted (2 years 2 months 1 week 3 days 21 hours ago) and read 10981 times:

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 unknowns as AA tries to craft a post BK business plan.

Even the judge when granting the 1113 motion emplored the parties to work it out:

“Let me just say one last thing. Just because this is a renewed motion doesn’t mean that it’s any less difficult for purposes of employees. I have a lot of sympathy for the employees, the pilots, just as I did when we had our original trial. It’s a set of circumstances that nobody is happy about. And I wish you all good luck in trying to work out an agreement and hope that the good faith that was evident in earlier discussions carries over to any discussions moving forward.

“And so I hope that all the parties can move beyond my ruling today to do what they’re going to have to do, whether I rule for American, for the pilots, for anyone, which is to come up with an agreement, and that is something that’s got to happen.

“And in some ways I’m the most important person here, because I have to issue a ruling, and in some ways I’m the least important person here because I have no ability to actually work out an agreement between American Airlines and the APA, and that’s something that you all have to do and I have no power to do it for you.”




And related -

APA will appeal the judges ruling to a Federal Appeal Court.
http://www.bloomberg.com/news/2012-0...ver-contract-rejection-ruling.html

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From the desert to the sea, to all of Southern California
User currently offlinejustplanenutz From United States of America, joined Feb 2006, 546 posts, RR: 1
Reply 108, posted (2 years 2 months 1 week 3 days 21 hours ago) and read 10888 times:

Quoting aluminumtubing (Reply 106):
All!

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 recently less unhappy than the others. Were those the near-retirement folks who wanted to lock in the equity stake and then ride out only a few more years? And, of the 61%, how many would be mollified by the prospect of near term advancement and attendant pay raises?


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 109, posted (2 years 2 months 1 week 3 days 20 hours ago) and read 10819 times:

Quoting justplanenutz (Reply 108):
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 recently less unhappy than the others. Were those the near-retirement folks who wanted to lock in the equity stake and then ride out only a few more years? And, of the 61%, how many would be mollified by the prospect of near term advancement and attendant pay raises?

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 have to realize that going forward, AA has be fe cost competitive. However, they are restructuring in Chapter 11. They are not bankrupt. With 5.5 billion in cash, the pilots wan't to be competitive with the industry, not below and there is no reason to be. Management and the UCC want to get their money from the employees and that alone is not right.

And for the record, I voted yes.


User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 110, posted (2 years 2 months 1 week 3 days 19 hours ago) and read 10775 times:

[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 industry standards is to make up for what AA has lost out to their competitors since their other have emerged from their own bankruptcies. AA might also be trying to prevent what happened between 2003-2007. After AA's employee's agreed to steep concessions to avoid bankruptcy back in 2003, which by far was VERY commendable on the employee's part, AA's competitors managed to undercut AA's labor costs while in bankruptcy which rendered the already steep concessions of the AA's employees virtually ineffective. By makings more drastic cuts now, it prevents AA's competitors from undercutting AA's labor costs again in the future whether it be via new consensually negotiated contracts or the worst case scenario another trip through bankruptcy. Once again, this doesn't make AA's decisions any more right or wrong. AA decisions just demonstrates that AA doesn't want to be just competitive, AA also wants to thrive after bankruptcy.


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 111, posted (2 years 2 months 1 week 3 days 19 hours ago) and read 10740 times:

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 between needing to be competitive and what AA is doing. Currently, management is being very childish and vindictive. And yes, you can say so are the unions. I work here day in and day out. I know exactly what is going on.

A serious game is being played out right now. It would behoove AA management, the UCC and APA to get together and fix this. The alternate is real and it is not pretty.


User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 112, posted (2 years 2 months 1 week 3 days 19 hours ago) and read 10693 times:

Quoting aluminumtubing (Reply 111):
A serious game is being played out right now. It would behoove AA management, the UCC and APA to get together and fix this. The alternate is real and it is not pretty.

Agreed! Hopefuly an agreement can be made before it is too late.


User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 113, posted (2 years 2 months 1 week 3 days 16 hours ago) and read 10562 times:

Quoting aluminumtubing (Reply 111):
Currently, management is being very childish and vindictive

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 offered 17% and then imposed 17% after a no vote, what would have been the incentive for the pilots to vote yes in the first place? By placing 20% cuts, which was the original plan, the onus goes back to the pilots to come back and start talking again and maybe compromise for the first time in five years.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 114, posted (2 years 2 months 1 week 3 days 15 hours ago) and read 10518 times:

Quoting SJUSXM (Reply 113):
the onus goes back to the pilots to come back and start talking again and maybe compromise for the first time in five years.

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 been going to meetings far more prepared than management both prior to and after the filing.

The pilots offered some very innovative options to the company which they completely ignored that truly would have been a win for both sides. It involved both productivity and flexibility. APA with the help of ALPA presented many proposals complete with cost / benefit analysis.

Are you an AA pilot privy to all the facts and dealings?

Also, I truly hope I don't come across as superior, but the pilots come with significantly more education, training and responsibility than most of the other employee groups by and large. In fact the mechanics and pilots are the highly skilled workers, and feel we / they should not be lumped into the same group as some of the others. Flame me if you will, but that is the reality of the situation. So is the law of supply and demand. Hence a compromise needs to be found.

And again, for the record, I am not a union radical. I in fact voted yes.

Also, I can assure you that the APA is not calling for any illegal actions. In fact, the leadership has gone out of its way to make sure nothing illegal is occurring. I am also under the impression that the pilot sick list is lower than historical norms. In fact, according to the computer information, most pilots are still flying their full regular schedules. The company has been short on pilots for a long time.


User currently offlineSJUSXM From United States of America, joined Aug 2006, 294 posts, RR: 0
Reply 115, posted (2 years 2 months 1 week 3 days 13 hours ago) and read 10372 times:

Quoting aluminumtubing (Reply 114):
Are you an AA pilot privy to all the facts and dealings?

Also, I truly hope I don't come across as superior, but the pilots come with significantly more education, training and responsibility than most of the other employee groups by and large. In fact the mechanics and pilots are the highly skilled workers, and feel we / they should not be lumped into the same group as some of the others. Flame me if you will, but that is the reality of the situation. So is the law of supply and demand. Hence a compromise needs to be found.

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 base and cost to become a pilot/mechanic. Thus you should take fewer concessions? But, you're already compensated more than the other groups like the flight attendants. So that gap according to you should increase instead of stay the same. I'm not lumping in the non-union employees here, because they're going to get the same % concessions as everyone else without having to vote for it.

This last week, I saw a pilot talk a flight crew into what eventually resulted in a cancelled flight because of an INOP lavatory. Long story behind that one.
Two pilots in a massive shouting match at the gate area that had to be broken up by the station manager.
A pilot walk off the flight three minutes prior to departure to get paperwork, then get 'lost'. That's what he said I kid you not.
And another flight delayed by three minor mx issues that I was informed by the gate agent that would have normally just been passed on and dealt with in the hub at the completion of the flight.
While the union leadership has continually, and rightly so, argued against illegal actions, there are large pockets of the membership that are taking things in their own hands and in turn screwing many of the other employees that then have to deal with customers. The front line (nonunion!) employees are the ones that are dealing with the consequences of increased mx writeups and shenanigans.

Causing an operational nightmare for the airline will only result in disaster that will cost plenty of jobs. They're shooting themselves in the foot.



AT7, ER3, ER4, ER5, CR7, E70, E75, F100, M82, M83, 722, 732, 738, 752, 762, 763, AB6, 320, 321, 772, 77W
User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 116, posted (2 years 2 months 1 week 3 days 6 hours ago) and read 10243 times:

Quoting SJUSXM (Reply 115):
So following your logic, you shouldn't be grouped with the others because of a larger education base and cost to become a pilot/mechanic.

Yes, that is correct.

[Edited 2012-09-18 04:24:48]

User currently offlinemoo From Falkland Islands, joined May 2007, 4061 posts, RR: 4
Reply 117, posted (2 years 2 months 1 week 3 days 6 hours ago) and read 10235 times:

Quoting aluminumtubing (Reply 104):
APA is refusing to be AA's messenger. AA is having to deal directly with the pilots.

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 is refusing to get involved between the company and the employees it has been chosen to represent for this, that has to have negative knock on effect in future negotiations...


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 118, posted (2 years 2 months 1 week 3 days 6 hours ago) and read 10220 times:

Quoting moo (Reply 117):

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 a contract, but one does not exist.


User currently offlinemoo From Falkland Islands, joined May 2007, 4061 posts, RR: 4
Reply 119, posted (2 years 2 months 1 week 3 days 5 hours ago) and read 10171 times:

Quoting aluminumtubing (Reply 118):
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 a contract, but one does not exist.

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 threats and all sorts of things...

APA are the chosen representation of their members, so if they aren't representing them they are skating on very thin ice imho. They are doing this to be deliberately difficult - and courts love that.


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 120, posted (2 years 2 months 1 week 3 days 4 hours ago) and read 10105 times:

Quoting moo (Reply 119):

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 pilots fault.


User currently offlinepar13del From Bahamas, joined Dec 2005, 7498 posts, RR: 8
Reply 121, posted (2 years 2 months 1 week 3 days 4 hours ago) and read 10113 times:

Quoting LAXintl (Reply 84):
Otherwise AMR will sit in a holding pattern trying to craft its future business plans without a solid foundation to emerge from court protection.

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, how is the real question  
Quoting TWA85 (Reply 103):
This is an obvious sign that the pilots are beginning to take matters into their own hands. How long does AA plan to survive like this?

AA, the creditors, the pilots, the board?????

Quoting LAXintl (Reply 107):
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 unknowns as AA tries to craft a post BK business plan.
Quoting LAXintl (Reply 107):
Even the judge when granting the 1113 motion emplored the parties to work it out:

To my mind the wrong people are doing the talking and being takked to, the Creditors are the ones who are the driving force behind everything, management is supposed to be their mouth piece just like the unions are for the workers.
It seems as if the creditors want to have their cake and eat it too, as one suggested, maybe they should sit at the table rather than send their proxy, time is rapidly running out.
Even if new management is bought in the creditors and their mandate will remain the same, unless its not about the deal but who is dealing the cards.


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 122, posted (2 years 2 months 1 week 3 days 3 hours ago) and read 10071 times:

Quoting par13del (Reply 121):
To my mind the wrong people are doing the talking and being takked to, the Creditors are the ones who are the driving force behind everything, management is supposed to be their mouth piece just like the unions are for the workers.
It seems as if the creditors want to have their cake and eat it too, as one suggested, maybe they should sit at the table rather than send their proxy, time is rapidly running out.
Even if new management is bought in the creditors and their mandate will remain the same, unless its not about the deal but who is dealing the cards.

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 ALL. It's kind of like Congress, isn't it.


User currently offlinemoo From Falkland Islands, joined May 2007, 4061 posts, RR: 4
Reply 123, posted (2 years 2 months 1 week 3 days 3 hours ago) and read 10058 times:

Quoting aluminumtubing (Reply 120):
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 pilots fault.

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 rather than through APA themselves.

They can't have it both ways - if they aren't dealing with AA on this issue, and instead (as you suggested) are forcing AA to talk *directly* to the pilots, then they are skating on very thin ice with regard to future negotiations. APA have used legal processes to put themselves between AA and the pilots - if they are abandoning that position in this case, thats some interesting precedent AA can use in the future.

I don't feel that this form of "representation" is appropriate, because it isn't representation - if of course what you suggested is at all true.


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 124, posted (2 years 2 months 1 week 3 days 3 hours ago) and read 10070 times:

Quoting moo (Reply 123):
They can't have it both ways - if they aren't dealing with AA on this issue, and instead (as you suggested) are forcing AA to talk *directly* to the pilots, then they are skating on very thin ice with regard to future negotiations.

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 "tactics".


User currently offlinemoo From Falkland Islands, joined May 2007, 4061 posts, RR: 4
Reply 125, posted (2 years 2 months 1 week 3 days 3 hours ago) and read 10049 times:

Quoting aluminumtubing (Reply 124):
I absolutely guarantee you, that if the company wants future negotiations, they will have them with the APA.

Then what are you talking about?


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 126, posted (2 years 2 months 1 week 3 days 3 hours ago) and read 10059 times:

Quoting moo (Reply 125):
Then what are you talking about?

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 the contract for AA pilots. They were unable obviously to negotiate a contract. AA was granted the ability to void the contract, which they did. The leaders of APA said without a contract, they will not make AA's life easier by explaining the new work rules to the pilots. That would be helpful to AA, and besides, without a contract written in stone, the possible constant changes could make the job impossible for them anyway. So, they decided that without a contract, they (APA) had nothing to administer. So, without a contract for APA to administer, it was AA's job to try to explain all the new work rules, etc to the 8000 pilots individually. And trust me, there is a lot of confusion. Both sides claim they want a consensual agreement. As soon as AA says they want to talk, APA will be there in an attempt to negotiate a contract. APA still represents the pilots, but until AA is ready to talk, there is not much they can really do.

I know it is easy to blame the pilots for everything. We can be part of the solution if management is serious. Most pilots I fly with are ex military officers and trust me there is more honor in one of their fingers than the entire bodies of most management types at AA who have only served themselves. Corny....maybe, but.....


User currently offlineincitatus From Brazil, joined Feb 2005, 4050 posts, RR: 13
Reply 127, posted (2 years 2 months 1 week 3 days 2 hours ago) and read 10238 times:

Quoting aluminumtubing (Reply 114):
And again, for the record, I am not a union radical. I in fact voted yes.

Eventually you will come to terms with what is happening.

http://en.wikipedia.org/wiki/K%C3%BCbler-Ross_model



Stop pop up ads
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 128, posted (2 years 2 months 1 week 3 days 2 hours ago) and read 10245 times:

Busy agenda this week in court.

o Further extension to negotiate covering entire Embraer fleet
o About two dozen professional services and expense reimbursement request from vendors assisting with the BK
o Expense claim from Willis Lease Finance for required engine refurbishment on rejected leases
o Order modifying automatic stay to allow action to commence and proceed to judgment against American Airlines in Los Angeles Superior Court.
o Motion for relief of stay on pending litigation against AMR Corporation in US District Court NY
o Proposed orders granting objection to claims
o Motion approval to pay certain workers comp fees
o Approve settlement respective to 4 Fokker F-100 aircraft and pass through trust agreement – N1402, 1403, 1404 and 1405
o Authorizing entry into new lease transaction for four MD-80 aircraft and subject 1991 series bonds
o Renewed motion by US Bank Trust for adequate protection for property
o Authorizing AMR to enter into sale/lease back transaction with Guggenheim Aviation Partners covering 2 B777-300ER aircraft
o Motion authorizing AMR to renew insurance programs and grant security interest
o Assumption of various airport leases and operating agreements at ABQ and CMH
o Hearing to establish procedure for handling of facilities revenue bond guarantee claims
o Application to employees Zolfo Cooper, LLC as financial advisors on retiree committee
o Authorization to employ Deloitte Financial Advisory Services as consultants
o Hearing to authorize AvAirPros to provide supplemental benchmarking, business negotiation and financial analysis
o Authorizing the employment of Haynes and Boone, LLP as special counsel
o Approving claims objection procedure
o Extension of time to assume or reject various property leases and operating agreements at ORD, LAX, SFO, STL,. BNA, MSY, JFK, RDU, RNO and DTW

=



From the desert to the sea, to all of Southern California
User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 129, posted (2 years 2 months 1 week 3 days 2 hours ago) and read 10203 times:

Quoting incitatus (Reply 127):

Absolutely true! And I am fully prepared to abandon this ship if necessary when it sinks. I am just contributing a pilots perspective.

[Edited 2012-09-18 08:21:19]

[Edited 2012-09-18 08:49:29]

User currently offlinejustplanenutz From United States of America, joined Feb 2006, 546 posts, RR: 1
Reply 130, posted (2 years 2 months 1 week 3 days 1 hour ago) and read 10100 times:

Quoting aluminumtubing (Reply 122):
It's kind of like Congress, isn't it.

Not exactly the best benchmark for making hard, reality-based decisions! Seems to me Congress generally looks for the short-term path of least resistance and not what is in the long-term best interest of the country. But, that is another story....


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 131, posted (2 years 2 months 1 week 23 hours ago) and read 9735 times:

AMR bondholders getting nervous as the value of their aircraft collateral diminishes.


AMR bondholders demand payment, say planes neglected
http://finance.yahoo.com/news/amr-bo...mand-payment-planes-214430659.html

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From the desert to the sea, to all of Southern California
User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 132, posted (2 years 2 months 1 week 16 hours ago) and read 9463 times:

Quoting LAXintl (Reply 102):
In the future, both the A319 and 777-300 fleets are slated to be outsourced.

What about the A321s? Will they be outsourced with the A319s, or will that stay in-house?

Quoting aluminumtubing (Reply 109):
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 have to realize that going forward, AA has be fe cost competitive. However, they are restructuring in Chapter 11. They are not bankrupt. With 5.5 billion in cash, the pilots wan't to be competitive with the industry, not below and there is no reason to be. Management and the UCC want to get their money from the employees and that alone is not right.

But, while AA had over $5 billion in cash, it also used that cash to tied them during the bankruptcy. Most debtors, including UA, DL, and NW, had to find debto-in-possession financing (DIP), which often carries a hefty interest rate. I'm not a BK expert, but the DIP lender certainly wants to get paid, especially if the debtor has to convert from a Chapter 11 filing to a Chapter 7.

By filing Chapter 11 with a healthy cash balance, AA saved itself a lot of money on interest, plus that is one less entity that has to approve everything.

The one question that I would like answered is what ownership interests did pilots at NW, UA, and DL get upon exit from Chapter 11? Granted, airlines are lousy investments. Jim Cramer has said repeated not to invest in airlines for the long term, but rather only for the short term, if you do a good job of following stock picks.

One has to assume that the new AMR stock will increase over time, assuming that AA starts to expand and starts to get some corporate contracts that it lost to DL/NW and UA/CO.

I know a lot of people who have said that they had wished they had taken the stock, rather than the cash, because the stock would have been more profitable 5 to 10 years later.

Quoting LAXintl (Reply 131):
AMR bondholders getting nervous as the value of their aircraft collateral diminishes.

I highly doubt that AA is neglecting airplanes. A friend of mine is an AA pilot for almost 23 years, and he's never felt that AA has neglected mainentance or deferred maintenance as long as possible.

What probably has bond holders upset is that once AA retires the MD-80s, they will just become scrap. The price of oil has made them virtually impossible to resell. The 757s, on the other hand, can probably keep on going hauling freight or going to airlines that just never buy new planes.


User currently offlineB377 From United States of America, joined Apr 2005, 140 posts, RR: 0
Reply 133, posted (2 years 2 months 1 week 16 hours ago) and read 9450 times:

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 which were not contested. In particular the court approved the following unopposed motions:
1. Motions to approve nineteen (19) interim and/or final fee applications of various professionals (i.e. various law firms, financial advisors and accounting firms) retained by either American or the Creditors Committee for the period starting November 29, 2011 and ending March 31, 2012;

2. Motion filed by American to approve Fee Letter to pay fees and expenses of an ad hoc group of American note holders . The fee letter authorizes American to pay the hourly legal fees (and expenses) of the ad hoc group and a $150,000 monthly fee to the ad hoc group's financial advisor. The fees and expenses will only be paid for work performed in connection with due diligence in connection with exploring the ad hoc group's interest in possibly providing financing for a plan of reorganization.

3. Three motions filed by American to approve three settlement/restructuring agreements with respect to certain aircraft leases;

4. Motion filed by American to approve administrative procedures for filing and processing objections to claims;

5. Motion filed by American to approve renewal of insurance premium financing agreement;

6. Motion filed by American to assume certain leases of non-residential real property;

7. Three motions filed by American to amend or supplement retention agreements for the following professional firms (a) Deloitte Financial Advisory Services, (b) AvAirPros and (c) Haynes & Boone (special counsel)

8. Motion filed by Section 1114 Committee of Retired Employees to retain Zolfo Cooper, LLC as bankruptcy consultants and financial advisors;

9. Five motions filed by American objecting to claims of certain creditors who assert claims for goods delivered to American within 20 days of the filing of the chapter 11 case. These types of claims are entitled to priority and payment in full under section 503 (b)(9)of the bankruptcy code. To the extent creditors filed responses to the objections, the matters will be adjourned to a date to be determined.

In addition to the uncontested matters, the court heard and denied two motions and adjourned one motion filed by creditors.AMR A summary of these three matters are set forth below:

1. The court denied the motion of the AMR Retirees Pension Protection Corp. ("RPPC") seeking reimbursement of professional fees and expenses for making a "substantial contribution" to the bankruptcy case under section 503 (b)(3)(D) and (b)(4) of the Bankruptcy Code. RPPC, a non-profit entity funded by certain retirees, previously filed a motion earlier in the case seeking the appointment of an official committee of retirees. Before the motion was heard, the U.S. Trustee appointed a retiree committee because American sought to amend its retiree benefits. Under the Bankruptcy Code the appointment of a retiree committee is required when a debtor seeks to modify retiree benefits. The U.S. Trustee, American and the Creditors Committee objected to the substantial contribution motion primarily on the basis that the retiree committee was appointed by virtue of the requirements of the Bankruptcy Code as opposed to the actions of the RPPC. The court agreed with the objecting parties and denied the motion.

2. The court denied the joint motion of Manufacturers and Traders Trust Company, as indenture trustee, and Marathon Asset Management, LP to establish procedures for adjudicating certain revenue bond guaranty claims. American and the Creditors Committee objected to the motion on the grounds that American, as the debtor, has the right to control the timing and process for commencing litigation relating to claims that may be disputed. The court agreed with American and the Creditors Committee and denied the motion.

3. The court adjourned a motion filed by U.S. Bank Trust National Association, as trustee, (the "Trustee") for an order conditioning American's use of certain aircraft in which the Trustee holds a lien upon American's payment to the Trustee of adequate protection payments. The Trustee holds a lien on certain aircraft and engines (the "Collateral") to secure a claim in excess of $450 million. The Trustee claims that the value of the Collateral is decreasing and that it is entitled to receive adequate protection payments from American to protect it from the risk that the Collateral will decrease to the point that it will not be sufficient to cover the amount of the claim that is secured by the Collateral. American and the Creditors Committee objected to the motion on the grounds that the value of the Collateral is well in excess of the claim amount and, therefore, the Trustee is not at risk and is not entitled to adequate protection payments. The court did not rule on the motion but instead adjourned the hearing to a date to be determined so that the parties can present testimony regarding valuation and other issues that may be relevant.


User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 134, posted (2 years 2 months 1 week 16 hours ago) and read 9417 times:

Quoting ckfred (Reply 132):
But, while AA had over $5 billion in cash, it also used that cash to tied them during the bankruptcy. Most debtors, including UA, DL, and NW, had to find debto-in-possession financing (DIP), which often carries a hefty interest rate. I'm not a BK expert, but the DIP lender certainly wants to get paid, especially if the debtor has to convert from a Chapter 11 filing to a Chapter 7.

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 to file chapter 11 and reorganize to reduce their bloated cost structure, labor included. Agree or not, the pilots feel that AA is over reaching on what they expect out of the pilots. And as a moderate, I do as well. I don't know the amount of stock some other airlines were offered. I think Delta may have paid in cash versus stock. I would be more apt to invest in a company making square wheels than in an airline.

[Edited 2012-09-20 18:38:35]

[Edited 2012-09-20 18:41:35]

User currently offlineLAXtoATL From United States of America, joined Oct 2009, 1616 posts, RR: 2
Reply 135, posted (2 years 2 months 1 week 14 hours ago) and read 9235 times:

Quoting ckfred (Reply 132):
By filing Chapter 11 with a healthy cash balance, AA saved itself a lot of money on interest, plus that is one less entity that has to approve everything.

They are already paying interest on that money!


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 136, posted (2 years 2 months 1 week 13 hours ago) and read 9234 times:

Quoting ckfred (Reply 132):
What about the A321s? Will they be outsourced with the A319s, or will that stay in-house?

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 handling an entire family of planes in house.

Quoting ckfred (Reply 132):
I highly doubt that AA is neglecting airplanes.

Maybe not neglecting on purpose, but the shape of aircraft has been less than ideal.
Reminds me of Pan Am in later years.

In my court summaries I've had a couple court items where leasing companies and banks putting in for claims on returned aircraft and engines. Aircraft have been returned in less than ideal and contractually required condition costing these parties added expenses. Most recently Willis Lease Finance had claims for added engine refurbishments.



From the desert to the sea, to all of Southern California
User currently offlinecommavia From United States of America, joined Apr 2005, 11840 posts, RR: 62
Reply 137, posted (2 years 2 months 1 week 13 hours ago) and read 9213 times:

Quoting LAXintl (Reply 136):
Maybe not neglecting on purpose, but the shape of aircraft has been less than ideal.
Reminds me of Pan Am in later years.

  

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 worn - in particular the ones that will be heading to Roswell within a matter of months - but I wouldn't go as far as you did in describing the AA fleet. In general I don't find AA planes any particularly worse that those I've been on of late at Delta, USAirways, etc. - I think just about all the major U.S. airlines are about the same in that regard nowadays.

And, needless to say, seeing as AA is now taking delivery of shiny, brand new 737s at a rate of nearly 1 per week, I think things are generally heading very much in the right direction when it comes to the state of AA's fleets - both inside and out.


User currently onlinefutureualpilot From United States of America, joined May 2000, 2608 posts, RR: 8
Reply 138, posted (2 years 2 months 1 week 11 hours ago) and read 9149 times:

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 pilots, but before you do any further, give this a read:




"I'm just here to do a job, my job.

5:00 AM show for a 6 o'clock go in SFO this morning. Took the 4:40 shuttle from the short layover, and after 4 stops, got through security at 5:10. Straight to the jet which sat all night.

Parking brake pressure sat around 2,000 PSI, in the orange band.
3 of the 4 main tires with low pressure.
A chip in a fan blade in the left engine.
Cracked taxi light.
2 of the 3 exterior emergency exit placards under the FO window deteriorated.
Exterior Evacuation Slide placard on the forward galley door deteriorated.

Did I mention this thing sat all night at a maintenance base?

Anyway, a MX team showed up to work. Then they quit. Apparently AA schedules a maintenance shift change right at the morning push with all the so-called critical flights. New team shows up. Work is being done with all the passengers politely watching from their assigned seats. Departure time keeps getting pushed back. At 7:00, the #1 tells us the flight is canceled and they're deadheading on the 7:10 flight to DFW. So are we. Maintenance tells me the jet is OTS because 2 brake metering valves are leaking.

We gather our stuff, (well most of it, my CA left his earpiece in the jet), and head to the new gate. A manager, Kevin, is working the 7:10 flight. He's stressing. Tells us he's putting us on the next flight, not this one, and to leave him alone. No problem, just means we will be late for our return flight, but we aren't in charge of manning, deadheading, scheduling or SFO, so we sit in those cool round red chairs out of the way and watch the show. Long lines, cell phones out everywhere, agents gate checking bags, and the manager running around trying to keep up.

7:10 comes and goes. The gate door is shut. A gate agent makes the following page in the terminal, "Kevin, return to gate 57. The captain (working the flight) wants to talk to you." Kevin refused to talk to him. The door opens again, and agents are sending down more passengers. Important-looking people are talking to their respective travel departments and jockeying for position at the gate to get the last few seats. Apparently, they tried to close the flight out with 20 empty seats and a long line at the gate from our canceled flight. The captain called bull[Content Deleted].

Our names are called. We weave through the important people to the gate. The agent looks at us, "What's up?" "We don't know, you called our names." "Oh, you're deadheading?" Again, we don't know. "Go sit down." OK.

5 minutes later, our names are called again. "You're on. We're checking your bags." "How will we get our bags in DFW?" They are "Escort Tagged". They will be brought up the jet bridge in DFW with strollers and wheel chairs. "OK, cool". All middle seats in coach, my favorite! We push at 7:33, 23 minutes late. Critical flight canceled and another D+23... We arrive in DFW A+8...

On a side note, our crew breakfasts were not provided on the deadhead, so we hadn't eaten since the night prior.

Our departure back to SFO was scheduled at 12:40, so we figured AA had the flight boarded and ready. We are standing on the jetbridge waiting for our bags. Passengers are deplaning. They're done. The crew leaves and another shows up. Still no bags. Oh , and no keys or vests to go find our bags. We wait. After all, baggage handlers know how to do their jobs, and it's not my job to prod everybody along. We're all highly trained professionals. They board the next flight so we clear the jetbridge into the gate area. They finish and the agent asks us what's going on. We tell her the story. She goes to check. At that time, almost an hour after we arrived, crew tracking calls. "Why aren't you at the next flight?" Captain tells her our story. Here we are. No bags, no manuals, no keys, no nothing. Oh and by the way, we haven't eaten since last night. Tracking says nourishment's hotels and limos' arena.

Tracking calls back. She called the ramp manager. The ramp manager gave her the crew chief's cell phone number. She asked the chief about our bags with the "Escort Tags" on them. He told her no way was he going to carry them up the jetbridge stairs so he left them on the ramp. After a while, he took them to baggage claim. She said he was pissed. We told her that's fine, just have them delivered to the departure gate, which did board on time, ready to go at 12:40. It's now 13:40-ish.

Nobody can deliver our "escort bags" to the new gate, so we go outside security and grab 'em. Come back through security in D, catch the train over to C and to the new gate. No agent, door shut. (Remember when a key would allow us to get to the jet? Not my problem anymore.) Screw it. I walk to McDonald's. Did I mention we hadn't eaten since the night before and it's 14:00 now?. I get back to the gate. The captain's studying the 18-foot-long flight plan. The agent lets me down the jetbridge.

Upon entering the jet, the flight attendant says, "Can you make a PA and tell these passengers why you're late?" She's standing next to a first class passenger in the galley. I say, "Well hi there, I'm Bill. How are you?" Eyeballing my little McDonald's bag, she says, "I'm not getting paid, we boarded over an hour ago, and I can't get off to get food like you have." "Hey I'm sorry, we haven't eaten since yesterday. We deadheaded in and AA lost our bags." I look at the passenger and say, "Hey there, how are you? Can you believe AA would lose our luggage?" He understood and was in a good mood. No problem with him. Just the FA.

I walk around the jet. The captain comes down and we start making our nests. "Cabin's ready." SLAM. Ahhhh, peace behind the cockpit door. I've come to really like that door over the years. We're loading the box, flipping switches, all that cool stuff we do before we get paid. DING, DING. Captain answers, Yes? "Why aren't we moving yet?" Well, we just got here. Now we're running all those checklists we do before we go fly. A few minutes later, DING, DING. Yess? "Can you make a PA and tell these passengers why we're still sitting here?" I'm not making this up.

Finally time to push. 14:50 local. D+130 minutes. BANG. The tow bar breaks. DING, DING. Yesss? "What was that??" Don't worry about it. We have it under control. Please let us do our jobs. MX inspects the jet. No problem. Meanwhile, the agent lets PAX off - without their bags... We can't leave without them. We finally push at 15:52 local. D+192.


After the flight, one of the passenger got in the captain's face as he was deplaning, pointed his finger in his face and said, "You're a THUG! A union THUG! The captain replied, "Sir, you don't know me, but I assure you I'm nothing like that." Yes you ARE! A union THUG! and left.

Maintenance came on and asked who the thug is. Captain fessed up. He laughed. Then he talked about a flight that canceled this morning because the crew "wrote up 19 items 20 minutes before departure". He got a bull[Content Deleted] look from the captain. Then he said, "Of course, the jet did sit here all night with our night shift."

We get to the hotel and on the elevator. A guy says, "Hey, you're not the pilots that just came in from Dallas..." We braced and admitted it. No punches, but he said, "We heard you went to lunch before coming to the plane." He knows that not to be true now.


The hardest part about this day was refraining from repeatedly stepping into the other departments and telling fellow employees what needs to be done. It is engrained in usto anticipate and fix problems we see coming. Once I overcame the urge to tell others how to do their jobs, it actually became quite entertaining to watch the operation.

[Edited 2012-09-20 22:45:53]"

[Edited 2012-09-20 22:47:52]


Life is better when you surf.
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 139, posted (2 years 2 months 1 week ago) and read 8972 times:

According to APFA, 2205 flight attendants opted to the early out option by yesterdays deadline.

Also TWU says its work groups (mechanics and related) had 1226 elect to take the money and run.



From the desert to the sea, to all of Southern California
User currently offlineHPRamper From United States of America, joined May 2005, 4102 posts, RR: 8
Reply 140, posted (2 years 2 months 6 days 22 hours ago) and read 8858 times:

Quoting LAXintl (Reply 139):
According to APFA, 2205 flight attendants opted to the early out option by yesterdays deadline.

Also TWU says its work groups (mechanics and related) had 1226 elect to take the money and run.

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 group above and beyond the layoffs?


User currently offlineOB1504 From United States of America, joined Jul 2004, 3433 posts, RR: 6
Reply 141, posted (2 years 2 months 6 days 16 hours ago) and read 8689 times:

Quoting HPRamper (Reply 140):
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 group above and beyond the layoffs?

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 much as possible, and that they're hoping that maybe only 40% of those told their jobs were at risk will actually end up on the street with nothing.


User currently offlineckfred From United States of America, joined Apr 2001, 5297 posts, RR: 1
Reply 142, posted (2 years 2 months 6 days 15 hours ago) and read 8650 times:

Quoting aluminumtubing (Reply 134):
My point is that AA is not bankrupt.

If your liabilities are greater than your assets, then you are technically bankrupt. Granted, the average person who buys a house maybe be bankrupt, but unless he has large credit card bills, selling the assets pays the bills.

AA could sell all of its assets, and still not have cash to pay all of its bills. Thus, the Chapter 11 filing.

Quoting aluminumtubing (Reply 134):
I would be more apt to invest in a company making square wheels than in an airline.

But, there are plenty of suckers who think that when a company goes public, the stock will always run up. Ask anyone who bought Facebook.

By the same token, people will always apply the Peter Lynch principle (If you buy a good or service, and everyone else buys that good or service, invest in the company). I had AMR stock for a long time, because I'm a loyal AA flyer, and many of my friends were flying AA becuase it was the preferred carrier with their employers, especially after the United. sickout in 2000.

Quoting LAXtoATL (Reply 135):
They are already paying interest on that money!

That may be, but they are probably paying a lower rate, because the cash was had through loans secured by aircarft and other assets. DIP financing is basically secured by nothing except the company's good faith effort to reorganize and exit bankruptcy.


User currently offlineflyfree727 From United States of America, joined Jul 2007, 682 posts, RR: 0
Reply 143, posted (2 years 2 months 6 days 14 hours ago) and read 8622 times:

Quoting HPRamper (Reply 140):
How much of a dent does that make in the workforce?

I would expect to see AA recruiting FA's by years end...

AA ORD


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 144, posted (2 years 2 months 3 days 2 hours ago) and read 8270 times:

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 advisers

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From the desert to the sea, to all of Southern California
User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 145, posted (2 years 2 months 3 days 1 hour ago) and read 8202 times:

http://finance.yahoo.com/news/americ...-ready-resume-talks-013034366.html

AA has requested to resume negotiations with the APA. Hopefully a deal can get done this timae around given the amount of chaos going at AA for the time being.


User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 146, posted (2 years 1 month 2 weeks 6 days ago) and read 7816 times:

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 overhaul and repairs of rejected engines returned in conditions failing to meet air worthiness standards with missing parts and records.
o Authorize assumption of certain unexpired leases of real property along with payment of cure amounts at RIC, CLE, MDT and TUL
o Authorize rejection of certain leases and real property at SFO, MSY, IND and MCI
o Extension of time to assume or reject leases or real property at LAX, JFK, SHV, TUL, OKC, SJU, RNO, and EWR
o Motion extend automatic stay in various pending litigation against AMR Corp.
o Motion to authorize American Eagle to make payment and exercise purchase agreement with Premier Engineering
o Auhorize sale of real property in Tucson Arizona (former reservations call center)
o Authorize to retain and employ Grant Thortnton LLP as consultants
o Authorize AA to enter into sale/lease back transaction with Avalon Aerospace covering 5 737-800 and single 777-300ER delivery.
o Motion to authorize AMR to seek and obtain secured aircraft financing and grant security interest liens.
o Motion to authorize AMR to seek refinancing of existing loans relating to aircraft
o Setting date for motion of Bank of New York for adequate protection as indenture trustee
o Approve settlement agreement covering single MD-80 aircraft - N59523
o Approve settlement agreements covering 5 B757 aircraft - N614, 626, 629, 632 and 648AA.
o Extension of time to negotiation covering 1 MD-80 aircraft - N495AA
o Extension of time to negotiation covering 1 B757 aircraft - N636AM
o Extension of time to negotiation covering Embraer regional jet fleet.
o Motion by Aeritas for payment of administrative expenses related to patent infringements
o Agreement between Wells Fargo Bank and Willis Lease Finance covering aircraft and engine claims


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From the desert to the sea, to all of Southern California
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 147, posted (2 years 1 month 2 weeks 5 days 21 hours ago) and read 7649 times:

Eagle ALPA pilots approve their term sheet proposal by 75-25% margin.

Story:
http://aviationblog.dallasnews.com/2...ve-their-tentative-agreement.html/

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From the desert to the sea, to all of Southern California
User currently offlineTWA85 From United States of America, joined Feb 2012, 225 posts, RR: 0
Reply 148, posted (2 years 1 month 2 weeks 4 days 21 hours ago) and read 7263 times:

What is the status of the most recent negotiations between AA and the APA?

User currently offlinealuminumtubing From United States of America, joined Jul 2008, 367 posts, RR: 12
Reply 149, posted (2 years 1 month 2 weeks 4 days 21 hours ago) and read 7220 times:

Quoting TWA85 (Reply 148):
What is the status of the most recent negotiations between AA and the APA?

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. His words, but I would take everything from either side at this point with a grain of salt. We received an email from our local APA reps yesterday stating they started negotiating in ernest yesterday (Monday) after dealing with preliminaries last week. They stated the APA board / negotiators told AA that a LBFO2 was dead in the water if that was their intent. That, and a email to the pilots from the APA negotiating committee stated they would not present the pilots with any contract offer from AA that would not be industry standard. I have met our negotiated committee chairman, and I believe him to be an above board guy with integrity. The APA stated that we should know by the time the APA board of directors meet starting next Monday, whether or not AA is serious about coming up off the LBFO. I honestly think you will see both sides compromise in the short term, and that we will have a industry standard contract. That of course includes the good and the bad. In other words, Delta/United pay, but their scope provisions as well. In my heart of hearts, I think something may come out of this. It has to, because the alternative is pretty damn ugly. The good news, is that things are pretty quiet right now. Quiet is always good. It usually means something is going on. These are just the facts as of right now. I personally see some potentially interesting twists and turns that could occur, but right now, I am just waiting and hoping we might hear something by the middle of next week as to where this is headed.

[Edited 2012-10-09 13:35:40]