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AA And TLV  
User currently offlineetops1 From United States of America, joined Nov 2005, 1092 posts, RR: 1
Posted (1 year 7 months 22 hours ago) and read 11408 times:

I hate to rehash this but can someone with factual knowledge explain to me what is the situation between AA and Tel Aviv ? Is AA banned from flying into TLV? Thank you .

77 replies: All unread, showing first 25:
 
User currently offlinePacNWJet From United States of America, joined Sep 2000, 980 posts, RR: 0
Reply 1, posted (1 year 7 months 21 hours ago) and read 11295 times:

There was a lot of discussion about this in a thread a couple of years ago:

Rumor: AA Looking At DXB And TLV! (by GlobalCabotage Dec 30 2010 in Civil Aviation)

Here is what the person in Reply #57 said:

Israel has some rather stiff laws when it comes to retirement and pensions. When AA canceled TW's old TLV route, they skipped out on paying these pensions and these retirements. Thus, the fear is now that if one of AA's aircraft were to land in TLV, it could potentially be confiscated as collateral. Granted, if AA wanted to start service to TLV - I'm sure this could be rectified easily enough with an 8 figure check.

I don't know if the person who posted this comment is fully knowledgeable, but the post sounds like it is based on a good understanding of the matter.


User currently offlineLAXintl From United States of America, joined May 2000, 25416 posts, RR: 49
Reply 2, posted (1 year 7 months 21 hours ago) and read 11171 times:

In summary from a document I hold:


Having learnt that the claims of TWA employees in Israel were ignored and they did not receive payments for whose contacts were terminated following TWA's insolvency, the court decided that proceedings would be carried on in order to secure the employees' claims under Israeli law.

The court ordered that the Israeli employees should be paid in a manner similar to the payment made to the employees discharged by TWA in France, somewhat in excess of the sums due the employees as preferred payments under Israeli law.

The court ordered further that, settling of claims against assets in favor of Israeli creditors is deserving of special interest under Israeli law and that dues and severance payments owed to employees holds same stature as other debts such as sums to tax authorities.

Under Israeli law, ancillary proceedings may be upheld if the company does business or holds assets in Israel. In such case, the ancillary award should serve the purpose of justice and efficiency. The fact that these judgments are ancillary means that plaintiff are restricted to collecting assets situated in Israel.



At the time of TWA’s hasty withdrawal in 2001, the claims of 102 ex-employees amounted to $13 million.



From the desert to the sea, to all of Southern California
User currently offlineetops1 From United States of America, joined Nov 2005, 1092 posts, RR: 1
Reply 3, posted (1 year 7 months 21 hours ago) and read 11132 times:

Thank you very much . That explains a lot .

User currently offlinerangercarp From United States of America, joined Nov 2009, 144 posts, RR: 0
Reply 4, posted (1 year 7 months 20 hours ago) and read 11070 times:

I still do not understand how these debts were transferred to AA. Wouldn't they have been settled in TWA's bankruptcy? My understanding is that AA simply bought TWA's assets out of bankruptcy, but did not assume any of its debts.


iwgbtp!
User currently offlineairtechy From United States of America, joined Dec 2006, 502 posts, RR: 0
Reply 5, posted (1 year 7 months 18 hours ago) and read 10681 times:

.......and doesn't US Airways fly to TLV. How will this be handled after the merger?

Jim


User currently offlineByrdluvs747 From United States of America, joined Jul 2004, 2361 posts, RR: 1
Reply 6, posted (1 year 7 months 17 hours ago) and read 10522 times:

Quoting airtechy (Reply 5):
How will this be handled after the merger?

Simple. AA pays or AA leaves.



The 747: The hands who designed it were guided by god.
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13608 posts, RR: 61
Reply 7, posted (1 year 7 months 15 hours ago) and read 10319 times:
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Quoting Byrdluvs747 (Reply 6):
Simple. AA pays or AA leaves.

Or AA appeals and has the case re-opened for review. Plenty of time between now and SOC status...



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlinejmc1975 From Israel, joined Sep 2000, 3279 posts, RR: 15
Reply 8, posted (1 year 7 months 14 hours ago) and read 10275 times:

Quoting Byrdluvs747 (Reply 6):
Quoting airtechy (Reply 5):
How will this be handled after the merger?

Simple. AA pays or AA leaves.
Quoting EA CO AS (Reply 7):
Or AA appeals and has the case re-opened for review. Plenty of time between now and SOC status...

It's important to keep in mind the positive relationship and economic impact that US Airways has had on TLV and the Israeli economy since they entered the market in 2009. US employs Israeli airport staff as well as corporate sales personnel in TLV. Their daily A330 has been generating airport rents and landing fees during its four years of operation. That said, it very well could be in the best interest of the Israeli government to forgive the debt that an obsolete airline (TWA) once owed them from over a decade ago, and embrace the new US/AA entity with an enhanced relationship that builds upon the past four years.

[Edited 2013-02-24 00:59:11]


.......
User currently offlinely7e7 From Israel, joined Jun 2004, 2256 posts, RR: 19
Reply 9, posted (1 year 7 months 14 hours ago) and read 10254 times:

Quoting jmc1975 (Reply 8):

And forgo pensions for people who are entitled to receive them? Not going to happen. And if it does for a reason you mentioned - expect a criminal investigation into the underlying conflict of interests.



2 things are endless: ignorance and space
User currently offlinejmc1975 From Israel, joined Sep 2000, 3279 posts, RR: 15
Reply 10, posted (1 year 7 months 14 hours ago) and read 10232 times:

Quoting ly7e7 (Reply 9):
And forgo pensions for people who are entitled to receive them?

Absolutely! TWA does not exist anymore. There is no need to turn against a trusted company doing business in Israel. The key word here is forgiveness.



.......
User currently onlineAeroWesty From United States of America, joined Oct 2004, 20640 posts, RR: 62
Reply 11, posted (1 year 7 months 14 hours ago) and read 10215 times:

Quoting jmc1975 (Reply 8):
That said, it very well could be in the best interest of the Israeli government to forgive the debt that an obsolete airline (TWA) once owed them from over a decade ago

I thought it was individuals who were owed the money, not the Israeli government.



International Homo of Mystery
User currently offlinely7e7 From Israel, joined Jun 2004, 2256 posts, RR: 19
Reply 12, posted (1 year 7 months 13 hours ago) and read 10168 times:

Quoting jmc1975 (Reply 10):

AA legally owns the debt of TWA, hence the argument of TWA not existing anymore is completely irrelevant. Forgiveness should be sought with people who were left without their pension savings. And the court ruling clearly sides with them. With all due respect to US and its contribution to the business in TLV - people's pensions come first.



2 things are endless: ignorance and space
User currently offlinemilesrich From United States of America, joined Jul 2003, 2000 posts, RR: 6
Reply 13, posted (1 year 7 months 11 hours ago) and read 9539 times:

Quoting ly7e7 (Reply 12):
AA legally owns the debt of TWA, hence the argument of TWA not existing anymore is completely irrelevant. Forgiveness should be sought with people who were left without their pension savings. And the court ruling clearly sides with them. With all due respect to US and its contribution to the business in TLV - people's pensions come first.

How does the AA bankruptcy affect this? Does Israel not recognize US Bankruptcy Law? Was the TWA pension of these employees picked up by the Israeli government? Or under Israeli law, are pension liabilities "nondischargeable" in bankruptcy? I used the quotes because corporations do NOT receive a discharge under Title 11 in the USA. The "old" American ceases to exist when it comes out of Bankruptcy and a new entity is created.


User currently offlineklwright69 From Saudi Arabia, joined Jan 2000, 2046 posts, RR: 3
Reply 14, posted (1 year 7 months 10 hours ago) and read 9409 times:

Quoting milesrich (Reply 13):
Does Israel not recognize US Bankruptcy Law?

Doubtful. Each country treats debt and bankruptcy differently. USA laws are US jurisdiction, they don't apply in other countries.

You can't run up debts in another country and file bankruptcy in the USA to discharge them. Bankruptcy in the USA will prevent creditors from COLLECTING that debt in the USA. But if you return to that country, you become subject to their laws.

AA may very well have to arrive at some settlement before flying into Israel. The fact they TWA doesn't exist anymore, and hasn't for a long time, is not relevant, since TW did not just stop flying, they were taken over by AA.


User currently offlinecrAAzy From United States of America, joined Jan 2008, 791 posts, RR: 0
Reply 15, posted (1 year 7 months 9 hours ago) and read 9091 times:
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I don't understand why people keep thinking that AA is not flying into TLV because of the TWA obligations they inherited.

AA has stated time and time again that has no plans of flying into the middle east, the reasons why, and that they're more than happy to let their partners do the flying.

Whether that mindset changes with the "new" American has yet to be seen; however, I ask yourself:

1. What routes into TLV would AA fly?
2. Can AA offer a better/more secure overall product?
3. How many daily flights would AA have into TLV?
4. What impact would AA's entry into the market from it's hubs have on El AL?
5. What costs will be incurred keeping if the station is kept open? What are the costs of closing the station?
6. Unlike US, does AA really need a marginal route like TLV in it's system to drive profits?

What ever it decides, this is going to be one of the first decisions that US has to make before the "New" American becomes an official entity if they don't want to lose an A330   .


User currently offlineCO7e7 From United States of America, joined Dec 2004, 2849 posts, RR: 2
Reply 16, posted (1 year 7 months 8 hours ago) and read 8700 times:

Quoting crAAzy (Reply 15):
1. What routes into TLV would AA fly?

I'll put my money on ORD and/or MIA

Quoting crAAzy (Reply 15):
3. How many daily flights would AA have into TLV?

2

It'll be interesting to see what happens once the merger is complete. I guess its only a matter of time till they make a decision, one way or another.


User currently offlineklwright69 From Saudi Arabia, joined Jan 2000, 2046 posts, RR: 3
Reply 17, posted (1 year 7 months 8 hours ago) and read 8595 times:

I recall that AA did not continue TW's TLV flight due to "economic reasons."

This allowed CO to take the NYC-TLV market by storm in their absence. When CO entered, it was only Tower Air and TWA.

But CrAAzy really is right. We don't know if AA will even continue the TLV route. We don't know their intentions. We hear TLV is great for US, but ultimately we don't know.


User currently offlinedlphoenix From United States of America, joined Aug 2007, 420 posts, RR: 0
Reply 18, posted (1 year 7 months 8 hours ago) and read 8403 times:

Quoting crAAzy (Reply 15):
I don't understand why people keep thinking that AA is not flying into TLV because of the TWA obligations they inherited.

AA has stated time and time again that has no plans of flying into the middle east....

Bear in mind the the new AA will be led by a person who was i charge when US started flying to Israel, a route they claim is very profitable.
Discontinuing a route that was introduced by the new CEO is a tad harder than not starting a new route.

Quoting crAAzy (Reply 15):

What ever it decides, this is going to be one of the first decisions that US has to make before the "New" American becomes an official entity if they don't want to lose an A330 .

They will not lose an A330, but they are at risk of having ticket revenues withheld until debt is covered. I assume the route profits are higher than the debt and matter will be therefore settled. It will be then be categorized as an "integration expense" (which will be dwarfed by the cost of integrating the IT systems, operation procedures and other integration costs).


User currently offlineklwright69 From Saudi Arabia, joined Jan 2000, 2046 posts, RR: 3
Reply 19, posted (1 year 7 months 8 hours ago) and read 8340 times:

I agree with DLPhoenix. They will probably have to settle to continue TLV. And they will probably want to continue it.

This money is owed in Israel, US bankruptcy code does not apply.

[Edited 2013-02-24 07:26:03]

User currently offlinedlphoenix From United States of America, joined Aug 2007, 420 posts, RR: 0
Reply 20, posted (1 year 7 months 7 hours ago) and read 8263 times:

Quoting rangercarp (Reply 4):
I still do not understand how these debts were transferred to AA. Wouldn't they have been settled in TWA's bankruptcy? My understanding is that AA simply bought TWA's assets out of bankruptcy, but did not assume any of its debts.

Under Israeli corporate law the employees are second priority creditors (the first being government taxes). Banks and other lenders are lower down the ladder. Foreign companies who set up Israeli subsidiaries commit to settle Israeli debt according to Israeli corporate law (in other words, the parent copay is liable). This is no different than most other foreign subsidiaries.
As such, AA which bought TWA assets was responsible for paying out the Israeli debt before paying any other creditors. The same will apply to the new AA which will be paying the old AA creditors.

Hope this helps shed some light.

DLP


User currently offline4engines4lnghll From United States of America, joined Aug 2010, 64 posts, RR: 0
Reply 21, posted (1 year 7 months 6 hours ago) and read 7854 times:

Could the same thing that happened to TW/AA happen to US/AA?


4engines4lnghll
User currently offlinebobloblaw From United States of America, joined Jan 2012, 1725 posts, RR: 1
Reply 22, posted (1 year 7 months 6 hours ago) and read 7837 times:

Quoting crAAzy (Reply 15):
6. Unlike US, does AA really need a marginal route like TLV in it's system to drive profits?

Its marginal and profitable?


User currently offlineripcordd From United States of America, joined Apr 2000, 1168 posts, RR: 1
Reply 23, posted (1 year 7 months 6 hours ago) and read 7715 times:

But here is the thing AA bought pieces of TWA and they claim they didnt buy the TLV operation of TWA. Now they have or will form a new airline on paper no more AMR or American Airlines so I wonder how that will take in count in TLV....

User currently offlineLAXintl From United States of America, joined May 2000, 25416 posts, RR: 49
Reply 24, posted (1 year 7 months 6 hours ago) and read 7649 times:

This debt is not to the Israeli government, but the 102 individual employees who were rightfully due severance and retirement payments under local laws for their long service to TWA (some had 30-year seniority).

They went to court, they got their judgement.

The manner TWA pulled out of Israel was literally overnight, with the airplane not showing up from one day to the other with employees, passengers being left in the open.

Quoting milesrich (Reply 13):
How does the AA bankruptcy affect this? Does Israel not recognize US Bankruptcy Law?

AMR very early in its BK process filed with the US court to make it clear they did not seek to discharge any foreign debts. Its foreign creditors represented about 15% of its total debt, and any BK court action to stay its foreign debts would likely not be enforceable anyhow while subjecting AMR myriad of local legal challenges further complicating the reorganization process and risking those operations.

AMR within weeks of its BK filing was very concerned about foreign airspace and airport access, fuel availability and vendor provided services could be compromised if AMR is unable to meet its obligations including payment of foreign taxes and fees which were running about $250mil in arrears already and sought court permission to expedite payment as any interruptions incurred by actions of foreign governments, companies or courts would diminish the value of the AMR estate and was key AA maintain its international operations on an uninterrupted basis.

This was all detailed in the master AMR BK thread.

Quoting dlphoenix (Reply 20):
Under Israeli corporate law the employees are second priority creditors (the first being government taxes).

If you read reply 2, the claims were elevated by the court to hold the same status as any tax debts.



From the desert to the sea, to all of Southern California
25 mayor : I wonder how much DL's service JFK-TLV, starting in '91, had to do with TW losing money on the route? As I recall, for a short time it was only Tower
26 ckfred : I would assume that if US flights to Tel Aviv are profitable, then Doug Parker and his senior management aren't about to end service, just to avoid pa
27 Post contains images EA CO AS : While those former TW employees may feel shafted, (and frankly, I still don't understand how any court could possibly have sided with them - AA didn'
28 LAXintl : March 2001, after the AMR acquisition was announced and TWA was in BK already. Per AMR press releases at the time: "AMR's American Airlines unit had
29 LAXintl : Here is the scenario. If you employ people, and you let them go, you must provide severance payment per the law in Israel. While America might be a e
30 dlphoenix : The employees not only feel shafted, they have a court ruling that confirms that. I think you are overlooking the fact that any international company
31 ultrapig : I'm a bankruptcy lawyer. The law is clear. Under US law AA and USAIR are not liable for any of TWA's obligations. AA bought TWA's assets under 11 USC
32 Post contains images mayor : Okay, but what about the lobby display??
33 Navion : Finally a cogent comment on this issue. Very well said. To make AA responsible in this situation would be unfair and worse, would set an ominious pre
34 LAXintl : Sure it is.. see below. Simply put US BK process does not free parties from compliance of relevant foreign laws or foreign court orders.
35 Navion : Which is why I said "To make AA responsible in this situation would be unfair and worse, would set an ominious precedent for any business venture in
36 Post contains images EA CO AS : I understand, except AA never employed a single one of those people in Israel. Not one. No, as previously cited, AMR bought most of TWA's assets and
37 LJ : The presedents have already been set. You may think that this is something which doesn't happen often, but in reality it happens more than you know.
38 AussieItaliano : Except that an Israeli court HAS made AA responsible. When foreign airlines fly to the USA, they are not permitted to exercise their interpretation o
39 laca773 : I'm very interested in knowing how US does on PHL-TLV? How are the yields? How do they do in J? Paid versus non-rev/reward seats? The bottom line is A
40 EA CO AS : Previously it wasn't worth AA spending any money on going back to court since they had no intention of serving Israel. Since that has likely changed,
41 sankaps : How does the above statement then reconcile with this April 2001 press release upon deal closure that LAXIntl posted earlier? "American Airlines beca
42 toobz : I'll try to shed some light on this to our US members. The US employers and employees are normally "at will". Both parties can disengage at any time f
43 Post contains images crAAzy : This debt likely had more to do with aircraft payments/leases, facilities, gate leases, taxes, etc. that were acquired. They did not just assume all
44 usflyer msp : That AA is dead. The management of the new AA has different priorities. The PHL-TLV has done great for US and I don't see them dropping it, even if t
45 toobz : crAAzy..For AA to say that and mean it doesn't make sense. They would LOVE to fly TLV. They CAN'T without paying 10s of millions. That's why they don'
46 jmc1975 : Why would they dump a bunch of added capacity on a route that has limited network connectivity? A MIA-TLV route would only capture local traffic and
47 Post contains links LAXintl : According to CO CEO Larry Kellner, Tel Aviv was their most profitable longhaul service back in 2006. http://www.globes.co.il/serveen/globes/docview.as
48 Navion : It's just like me drinking booze in Saudi Arabia. I don't think there's anything wrong with having a beer, but under Saudi law, I would be subject to
49 MAH4546 : Maybe because it's a huge local market of around 115 PDEW? It would also capture connections from LatAm and Florida.
50 BigGSFO : South Florida, I believe, is #3 in US-Israel traffic, behind New York and Los Angeles. There is demand, albeit maybe not daily or high yield.[Edited
51 MAH4546 : Definitely large enough to support daily service. Not high yielding, but fares are average.
52 EA CO AS : Because you write press releases to be understood by about an 8th grade level; you don't confuse the hell out of 99% of the news-reading public by sa
53 Post contains images Schweigend : Very much true. Old AA must have had a "bug up their butt" about TLV -- why didn't they just pay the $20mil, or whatever the judgment is, since airli
54 mayor : I wish DL would establish either a second TLV flight at JFK or another hub. When DL originally took over the PA route, they suffered from the fact th
55 catiii : When DL took over PA's ops at TLV, wasn't the operation a daily 727 to ORY, which they then moved to FRA and operated with a 762 before they got out
56 mayor : When I was there for the transition in '91, the flight was TLV-Paris-JFK with an A310-200/300. I don't believe they ever had FRA service because the
57 ripcordd : Sure you can make AA pay but after BK and a merger with US AIR there will be a brand new company no longer the old AA it will be a new AA maybe it wil
58 Schweigend : But why would AA want to "get around" paying up? Relatively speaking, it is not a large amount of money, and morally it is the right thing to do.
59 sankaps : I disagree. Press Releases for major events like this are carefully worded and vetted by all kinds of lawyers and approved by the CEO and the Board.
60 realsim : I'm sure the labour law in Israel, being similar to the European ones, will consider the new holding of AA the successor company, and then they will
61 LJ : Not entirely correct, though it probably does apply to AA/US (as far as I know). If AA and US were to remain seperate legal entities, then the claim
62 jfk787nyc : That is totally not true -- First of all most Israelis have 10 year USA Multi-Visit visas in their passports - Miami is the Third largest destination
63 gilesdavies : From what I understand the PHL-TLV route has excellent loads and is one of US Airways' most profitable routes... Like others have said, I doubt they w
64 sankaps : They could try this. But equally the Israeli govt could refuse to give this new entity rights to TLV.
65 deltacto : "When I was there for the transition in '91, the flight was TLV-Paris-JFK with an A310-200/300. I don't believe they ever had FRA service because the
66 Post contains links deltacto : Correction - JFK-TLV nonstop started June 1, 2001 and was discontinued shortly after 9/11 http://news.airwise.com/story/view/1169073730.html
67 mayor : Thanks for the info. I do remember that the F/As that were based in TLV, would fly to Paris in the morning, spend all day there (shopping, probably)
68 Post contains images jmc1975 : So in other words, it sounds like a good market for EL AL to potentially re-enter, perhaps on a 3-4x/wk basis. Wait...oh I feel it coming!
69 a380us : Actually a number of airlines did this as I recall BA, AF, and KL, and this was done for political reasons as airlines were not allowed to fly to bot
70 rfields5421 : An argument could be made that because AA announced the purchase before the BK filing, AA assumed the responsibilities of TWA. Also, bankruptcy in th
71 LAXintl : Not sure what happened by last week we had a thread about AA looking to do MIA-TLV. Apparently this was mentioned by US executives. Was this a naive c
72 rfields5421 : Which executives? I would not expect executives, or workers, in most divisions of the airline to be aware there are any issues. Certainly not on the
73 HPRamper : I'm pretty sure that if we know about it, the appropriate executives also know about it, and have for a long time.
74 Post contains links Miami : My tread was deleted when I said that AA-US are planning to launch Tel-Aviv from MIA and JFK. It was deleted because I didn't give a " good"source. It
75 etops1 : This entireJFK/ MIA-TLV thing is totally false . The article is BS . AA has not stated any intentions of introducing either route after the merger . I
76 LAXdude1023 : To be fair, using another message board as a sources is kind of bunk.
77 AADC10 : The amount might actually be fairly large. The amount of $10 million was floated early in the thread. Add a dozen years of interest and penalties, th
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