washingtonian
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:07 pm

Is this unprecedented? Making deals with the unions independent from management? Seems odd to me but I'm no bankruptcy expert...To clarify: This is NOT a merger. But it appears that US management has reached agreements (signed? binding? or letters of intent?) with three major AA unions regarding a future merger...


AMR Unions Call for Merger Talks With US Airways

Should the takeover succeed, US Airways CEO Doug Parker will have struck a deal with three major airline unions, creating an industry giant.

The contracts would cover American Airlines workers if there's a merger with US Airways. However, US Airways says no deal on a merger has been made.

US Airways says the deals are with the Transport Workers Union, the Association of Professional Flight Attendants, and the Allied Pilots Association.

[Edited 2012-04-20 07:08:19]

[Edited 2012-04-20 07:45:17]

[Edited 2012-04-20 09:15:50 by SA7700]
 
swafa
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:23 pm

Talked to an AA f/a enroute from PHX to LAX last night who mentioned this. I didn't believe her at the time. She said that, based on what she is hearing on her end, the f/a's are hoping for a merger with US Airways. They feel like their chances are better there. Also, she mentioned that in these negotiations the AA pilots were offered "Delta pay, plus 3%". Not exactly sure how to interpret that.
 
SonomaFlyer
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:25 pm

***IRONY ALERT***

US reaches deals with AA pilots on a "proposed" future combined airline but still has no contract with its own pilots.

US is making a serious play but how will this combined company work with the labor relations at US so fractured as it is?
 
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kc135topboom
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:25 pm

This is a hostile take-over attempt by US. Reaching a deal with the unions costs them no money, yet. But they still have to make a deal with the AA creditors (and that will cost them money), who then have to go to the Bankruptcy Judge for approval. AA will be able to challange this in court, and right now it could go either way. Then there is the US Government who will look at the take-over to determine if it can legally begin the process.

The mainline AA is nearly twice the size of US. AA is aloso still sitting on some $4B USD to be able to fight a take-over, if they really want to.

The big problem I see here is if AA successfully fights off a hostile take-over from US, their cash reserves will be very low, and if DL decides to try a hostile take-over, they will be taken over.
 
flyfree727
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:29 pm

Quoting KC135TopBoom (Reply 3):
AA is aloso still sitting on some $4B USD to be able to fight a take-over, if they really want to.

5.6 billion as of end of 1Q

AA ORD
 
nycdave
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:42 pm

Looks like US learned from the HP merger experience. Smart move, and probably appealing to the creditors who are otherwise going to be looking at serious labor discontent if they try to make draconian cuts in bankruptcy rather than take a merger deal that preserves most jobs.
 
JetBlueGuy2006
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 2:52 pm

 
eastern023
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:01 pm

If US took over AA; how would the new combined airline rank against UA and DL?
AA will Rise Again!
 
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Acey559
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:06 pm

After the absolutely atrocious term sheet the flight attendants and pilots were presented with recently, one wonders if this isn't the employees trying to turn the tables on management and play hardball. They may be serious about a merger but it could also be a very ballsy negotiating tactic. Time to grab the popcorn and watch the show. I do hope for the best possible outcome though, I know how badly this process stinks.
 
oflanigan
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:07 pm

Isn't all the money AA is sitting on earmarked for day to day operations to keep the airline running, not to fend off any merger or acquisition?
 
mogandoCI
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:22 pm

Quoting eastern023 (Reply 7):
If US took over AA; how would the new combined airline rank against UA and DL?

Assuming 2011 pax numbers hold, US+AA matches DL and surpasses UA.

That's assuming zero slot divesture and capacity trimming. Nor does this take into the account of the loyalty factor - when US jumps to oneworld, how would star alliance pax react? Follow US to oneworld or switch to more UA flying ?

In terms of destinations covered, it would be a slight increase over existing AA but probably fall short of UA or DL.
 
rj777
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:31 pm

If US takes over, wouldn't US be the purchasing airline though?

I'm willing to bet, however (and I don't want to say what I'm willing to bet) that the name will be one of 3 things:

-US Airlines
-American Airlines
-American Airways

And if you are wondering how they would operate the A330's alongside the 777s, ask DL. They seem to be pulling it off quite nicely.
 
flyingbronco05
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:33 pm

So AA Unions will negotiate with USAirways but not AA. This is screwed up. I hope AA takes this to the judge and screws AA unions over.

In this bankruptcy, USAirways is not allowed to do a hostile takeover. I don't see AA merging with USAirways. I do believe, from what I hear from bankruptcy lawyers, is that if this is true and AA unions are negotiating with other people and not their present employer, the judge can grant AA whatever it needs to be profitable which would be HORRIBLE terms to the AA unions.

This reason is why AE is working WITH AA, not against them.

FB05
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b727fa
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:35 pm

My guess is they'd use "American Airlines" with the US paint/branding ala "United" on Continental paint/branding.
My comments/opinions are my own and are not to be construed as the opinion(s) of my employer.
 
commavia
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:37 pm

AvWeek is reporting some more details of the agreements: apparently Parker agreed to the APFA's buyout proposal (AMR was stupid to not work with APFA on this weeks ago), but the Parker plan would also mean "some maintenance jobs still [would] be lost." Parker has also apparently signed up - at least in principle - to DOH seniority integration, which the article dryly notes "could adversely affect the legacy America West Airlines staff." Parker has apparently also agreed to no furloughs for any "current active" pilots or flight attendants.

Still interested to see what the USAirways unions have to say about all this, seeing as they appear to have been nonexistent in this process thus far. So the AMR unions have been negotiating with another company behind their own management's back, and the USAirways management has been negoiating with the AMR unions behind their own unions' backs. This will be absolutely fascinating to watch.
 
eaglepower83
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:39 pm

Very interesting.
I really hope this doesn't damage either company or the employees.....but I also hope it helps loosten the stranglehold UA has on my primary route; BDL - ORD..........I'd like to fly AA now that the UA merger is in veritable chaos.
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:46 pm

Letter to US Employees fro Doug Parker:

-------------------------
Dear Fellow Employees –

Today, we filed a statement (a form called an 8-K) with the Securities and Exchange Commission disclosing that we have signed agreements with the three unions that represent nearly 55,000 American Airlines employees. These unions are the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU), which represents all of American Airlines' mechanics and fleet service employees. Shortly after our disclosure, these three unions issued a public statement announcing their support of a US Airways-American Airlines merger and that they have agreed to terms that would govern collective bargaining agreements for their members at the merged airline. I want to explain to you why we have done this and what it means.

First of all, today's news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen including gaining the support of AMR's creditors, its management team and its Board of Directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.

All of you have heard me talk about the benefits consolidation has created for US Airways and our industry. You have also heard me say that US Airways does not need to merge with anyone, as evidenced by our team's outstanding results. That is still the case, but after studying American Airlines' current state and their future plans, we have concluded that a merger with American, while they are undergoing their bankruptcy restructuring, represents a unique opportunity that we should not ignore. These beliefs are shared by the three American labor unions and we are delighted to have their support. Like us, they recognize the potential of a merger to improve the current and future careers of both airlines' employees.

Combining American Airlines and US Airways would create a preeminent airline with the enhanced scale and breadth required to compete more effectively and profitably. Our intention would be to put our two complementary networks together, maintaining both airlines' existing hubs and aircraft, and create an airline that could compete successfully with United, Delta and other carriers within our industry. A merged airline would provide competitive, industry-standard compensation and benefits, as well as improved job security and advancement opportunities for all employees of the combined airline. Most importantly, in American's standalone strategy, over 13,000 employees at American will lose their jobs. Our merger contemplates saving at least 6,200 of these positions. For the US Airways team, the agreements we have reached with the unions representing employees at American would also provide enhancements to the compensation and benefits currently in place here.

Today is one step in what will be a much longer process. For now, it remains business as usual. We must continue to provide the outstanding service that customers have come to expect from US Airways.

In the meantime, if you have any questions, please stay connected via Wings (www.wings.usairways.com) and we will continue to provide updates on our progress. Thanks for all that you continue to do to take care of our customers. Together, whether a merger is our future or not, we will continue to run a great airline and have a bright future ahead of us.

Sincerely,

Doug
 
eastern023
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:46 pm

Quoting rj777 (Reply 11):
I'm willing to bet, however (and I don't want to say what I'm willing to bet) that the name will be one of 3 things:

-US Airlines
-American Airlines
-American Airways

Definetely would stay American Airlines. Worldwide brand recognition; not US Airlines, not American Airways or any other variation.

Quoting B727FA (Reply 13):
My guess is they'd use "American Airlines" with the US paint/branding ala "United" on Continental paint/branding.

The livery is a different story. I like the US Airways white and blue livery. It may work nicely for American and American Eagle.
AA will Rise Again!
 
goomba
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:50 pm

My guess is they'd use "American Airlines" with the US paint/branding ala "United" on Continental paint/branding.

It would be better to get away from the unpainted aluminum look from a cost perspective anyways. It costs AA more money to polish their unpainted birds than it would if they were painted and cleaned. So I'm told...
 
eastern023
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:50 pm

Name: eastern023
Date: 2012-04-20 08:46:51


Quoting rj777 (Reply 11):
I'm willing to bet, however (and I don't want to say what I'm willing to bet) that the name will be one of 3 things:

-US Airlines
-American Airlines
-American Airways

Definetely would stay American Airlines. Worldwide brand recognition; not US Airlines, not American Airways or any other variation.

Quoting B727FA (Reply 13):
My guess is they'd use "American Airlines" with the US paint/branding ala "United" on Continental paint/branding.

The livery is a different story. I like the US Airways white and blue livery. It may work nicely for American and American Eagle.
AA will Rise Again!
 
randyh3253
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:51 pm

Quoting commavia (Reply 14):

Per this site http://www.marketwatch.com/story/us-...rike-deal-2012-04-20?siteid=yhoof2
the U.S. Airways Unions support the plan.
 
stlgph
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 3:54 pm

Quoting eastern023 (Reply 7):

If US took over AA; how would the new combined airline rank against UA and DL?

American would be the largest in terms of passenger miles flown.

Keeping the AA name is simple.

1. More appealing to the AA board.

2. More appealing to the local DFW market, which is considerably stronger than Phoenix and to keep them from all running to Southwest, the "other local" airline.

3. American name has a stronger international branding than US Airways. Also the American brand is strong in Latin America and the whole network out of Miami.

4. More appealing to a larger congressional delegation when it comes to future regulations discussion.
if assumptions could fly, airliners.net would be the world's busiest airport
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:00 pm

Here are the details from APFA concerning how this will affect FAs. From www.apfa.org

-------------------------------

US Airways Q&A
This is APFA President Laura Glading with a Special Hotline Update for Friday morning, April 20, 2012.


The purpose of this address is to provide our members with the most critical facts. As you know, American Airlines management has made several excessive demands of our contract since filing for bankruptcy protection last November. Not only were their demands unreasonable, but their business plan was uninspired and not viable. My fellow union leaders and I had no choice but to evaluate alternatives.

Along with my counterparts at APA and TWU, I was approached by members of the US Airways’ management team who were interested in discussing a potential merger. Each of us – individually – came to the conclusion that a merger would be the best plan for our membership and the most successful option for the reorganization of our Company. In the days that followed APFA leadership, supported by our team of professionals, met with representatives from US Airways to hash out the details of how a merger would affect our flight attendants.

This agreement puts flight attendants in a far better position than any proposal American Airlines management has made. Equally important - is the business plan US Airways has put forward, which I strongly believe will bring American Airlines back to profitability and competitiveness. A combined US Airways and American Airlines will eliminate the competitive advantage of Delta and United and making us relatively competitive in both size and network.

After careful consideration, the APFA Board of Directors voted unanimously to sign an agreement in principle with US Airways, knowing that it was in the best interest of the membership.

Of course, this plan is not a perfect solution and we expect there to be bumps in the road, but I am confident that it is the best and most viable option available to us. More information can be found below and we will continue to update as material becomes available. Please check back frequently for the best and most accurate information.


Joint Union Press Release Regarding US Airways


Bridge Term Sheet Highlights

Early Out APFA's proposal accepted
No Furloughs
Wage Increases: 2.5% on effective date. 1.5% annually over next 5 years.
Retirement: Pension plan frozen. Replaced with a 401(k) contribution.
Current employees will receive automatic 401(k) contributions for 5 years, with no match requirement. Contribution levels as follows:
9.9% age 50 +
6.75% age 40 – 50
5.5% age 39 – below
At the conclusion of the 5 year period, all FAs would receive a 3% contribution with up to a 5.5% match.
Active Health Benefits: Better than AA’s proposed plan
Retiree Health Benefits: Implementation of Voluntary Employee Beneficiary Association (VEBA).
Bidding: Preferential Bidding System (PBS) with our input
Reserve:
Incorporate earlier Reserve assignment notification
Add AM/PM Ready Reserve shifts.
Allow Reserve pick-up on days off to be paid on top of guarantee.
Current reserve rotation will be maintained.
Sequence Pay Protection: APFA proposal
Schedule Maximum:
Minimum of seventy (70) credit hours and a maximum of ninety (90) credit hours per bid period.
Flex in the maximum line value by an annual amount of twenty (20) hours, but in no case more than five (5) hours during any given month.
Incentive Pay/Per Diem: Incentive pay eliminated. Per diem rates increased to:
Domestic: $2.00
International: $2.20
International Override:
$3.00 per hour for each international leg. Override for deadhead, trip and duty rigs and trips “not flown” consistent with CBA
Combined Domestic & International Operation
Current Duty Rigs Preserved
Expedited Negotiations for New Contract: Negotiations for a market based contract will take place immediately following a single-carrier certification. If an agreement cannot be reached within 60 days of the certification the matter will be submitted to final binding arbitration.
Maintain all other provisions in our current Contract including:
Vacation accrual and pay
Current PVDs
Sick hour use and current sick policy
Current Hotel language
ATC/ Code 59
Galley pay

What the Analysts are Saying

Throughout the bankruptcy, financial and aviation industry analysts have been advocating for consolidation. Most are in agreement that the only way for American Airlines to stay competitive is to merge with another carrier.
See the links below for articles from some of the country's leading minds and publications:


http://blogs.star-telegram.com/sky_talk/american_airlines/
http://beta.fool.com/tdalmoe/2012/04...ticker=LCC&source=eogyholnk0000001
http://business.time.com/2012/02/06/...-worst-managed-airline-in-america/
http://blogs.wsj.com/deals/2012/04/1...-dont-mess-with-american-airlines/
http://travel.usatoday.com/flights/p...-TopStories+(Travel+-+Top+Stories)
http://www.charlotteobserver.com/201...an-ceo-pans-us-airways-merger.html
http://www.nycaviation.com/2012/03/a...ain-name-purchases-to-be-believed/
http://www.bloomberg.com/news/2012-0...mr-creditors-on-takeover-plan.html
http://travel.usatoday.com/flights/p...erger-us-airways-ceo-says/653851/1
http://bottomline.msnbc.msn.com/_new...acquire-american-out-of-bankruptcy
http://www.bloomberg.com/news/2012-0...es-merger-to-fill-revenue-gap.html
http://blogs.barrons.com/stockstowat...r-american-airlines-merger-report/
http://www.forbes.com/sites/thestree...ant-deal-could-help-merger-effort/
http://www.thestreet.com/story/11383...s-airlines.html?cm_ven=forbeslinks
http://www.tulsaworld.com/business/a...icleid=20120126_45_E1_CUTLIN603027
http://www.independent.co.uk/news/bu...ey-to-us-merger-mania-6298050.html

APFA FAQs:
US Airways’ Bid for American Airlines

WHY A MERGER NOW?

Q. Why now?
A. To say that American Airlines is facing a challenging time is an understatement. Despite the sacrifices we have made over the years, management’s business plan and strategy for emerging from bankruptcy is not a workable solution for the survivability of our company or our careers. American Airlines’ plan includes gutting our contract, and leaves us no option other than to evaluate alternatives. After extensive discussions and study, we strongly believe that US Airways’ management team can help restore and grow American Airlines and sustain a future for our membership.

After much consultation with our attorneys, financial advisors and analysts, it is clear that a merger with another carrier is inevitable; the question is not if, but when, and with which carrier.
We strongly believe US Airways has presented us with an opportunity that is in the best interest of our flight attendants both individually and collectively.
Q. What is the short-term benefit?
A. Throughout the bankruptcy process, American Airlines has focused almost exclusively on its “cost” and “labor” problems. In an attempt to restructure and save the jobs of the dysfunctional management team, American Airlines has submitted a proposal to the bankruptcy court that would decimate our pay, weaken our work rules, cut our benefits, and cost thousands of flight attendants their jobs.
As APFA and other industry professionals have been saying for years, American’s problem is not with its costs, but with its revenues. And US Airways agrees. We’ve reached an interim agreement, referred to as a ‘bridge term sheet,’ with US Airways that would preserve - to a far greater extent - our jobs, pay, work rules and benefits than would American’s draconian, destructive plan.
Q. What are the long-term benefits?
A. The most recent industry mergers of Delta/Northwest and United/Continental have created two large airline competitors. They have strengthened their alliances and have taken market share away from American, leading to decreased revenue. This is the greatest factor contributing to the demise of the American Airlines we once knew.
The transaction with US Airways will make American among the nation’s largest carriers. US Airways’ plan strengthens our market position and creates critical opportunities for growth now rather than years down the road. Our airline’s future is far brighter with this transaction and the US Airways team.
Critical to us, under the bridge term sheet for flight attendants, US Airways has agreed that if it buys American, there will be an expedited negotiations process that will result in a joint contract that, as a whole, is market-based.
Q. When would our bridge term sheet take effect?
A. After American emerges from bankruptcy and US Airways takes control of American.

Q. Why couldn’t we just wait for American to buy US Airways after it gets out of Bankruptcy?
A. First, bankruptcy will be a lengthy process that takes many, many months. In the interim, if the bankruptcy court approves the Company’s proposal, we would suffer for many years with excessive and unnecessary job cuts, pay and benefit reductions, and diminished work rules. Second, American may not be in a position to make a transaction happen once it emerges from bankruptcy. Third, our competitors are not going to stand still and wait for American to play “catch-up.” And finally, an American acquisition of US Airways would leave the current management team in place – a management team that no longer deserves our confidence.
Q. I heardDelta was interested; wouldn’t they be a better choice than US Airways?
A. Delta has never reached out to APFA to discuss a potential purchase. Also, APFA and our professionals believe that the U.S. government would likely have significant anti-trust issues with a Delta-American transaction. To address those concerns, Delta would have to break up the company; take over certain assets and/or hubs while United and otherairlines could pick from what was left over. There is no certainty for flight attendants in this plan. Clearly, this is not a path that would be in our best interest.
Q. Will the name of the merged carrier be American or US Airways.
A. American.
Q.Where will Corporate Headquarters be located?
A. US Airways plans onkeeping the headquarters for the merged carrier in Dallas-Fort Worth.
Q.What are the US Airways base cities?
A. Philadelphia, Washington DC, Phoenix, Charlotte.
Q.How will seniority integration be handled if US Airways buys American?
A.Under Federal law (McCaskill-Bond Amendment) APFA and AFA will try to reach agreement on seniority integration. If anagreement cannot be reached, under McCaskill-Bond the matter must be submitted to binding arbitration.

Q. What happens if US Airways’ offer to buy American Airlines is not approved?
A. We would continue to work through the bankruptcy process.
 
chepos
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:04 pm

Oh brother, the coming months/weeks will prove interesting.
I have said it before and say it again, mergers are not necesaily good for us employees. I have met so many NWA, CO and UAL employees let go from their positions when their respective mergers happened that this always malkes me very nervous. ALAS, all I can do is fasten my seatbelt and get ready for the rrollercoaster ride ahead.

Regards,

Chepos
Fly the Flag!!!!
 
coachclass
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:16 pm

Quoting rj777 (Reply 11):

I'm willing to bet, however (and I don't want to say what I'm willing to bet) that the name will be one of 3 things:

-US Airlines
-American Airlines
-American Airways

Maybe, "U.S. American"

My concern about the merger, apart from the decreasing competition among airlines, is the constant rush to the bottom in terms of service and the abusive charges and fees. At one time, American used to promote its self as the preeminent airline in the U.S. I wish the new merger would re-brand itself as a full service airline rather than the likely low cost carrier that a US Airways merger would take it.

I think there is a large enough traveling public that would rather fly a Hilton or Marriott (even Holiday Inn) than fly the Motel 6's. I don't think an airliner with divided cabins with 4-5 different levels of service is the answer. I shy away from United, especially for international services for that reason.
 
commavia
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:17 pm

I say good. First off, this was always inevitable - USAirways was always going to attempt a hostile takeover of AMR in bankruptcy either way, and the union agreements just add another angle.

Beyond that, frankly, I think this could be a big positive for lots of constituencies. The unions - and at least elements of their memberships - are obviously happy with this deal. The pilots and flight attendants appear to be the big winners here, with the TWU still bracing for some harsh reality. If the employees can walk away from this deal with a little bit more of their pay and benefits than otherwise, than fine.

And as for the resultant company, if it can actually be competitive and successful even with those higher labor costs (relative to the AMR term sheets), then fine. Parker and the unions are obviously banking on the scale of the combined airline to be able to finance higher labor costs. In the context of Delta and United (thus far), that would seem to be logical. From a network perspective, this airline really would be a powerhouse in many places, with an extremely strong and complimentary combined network - quite impressive. Plus, there are those 450+ new jets set to arrive over the next few years.

I am happy - though not surprised - to see that the name 'American' and the DFW headquarters will be retained. That the AA name would be kept was pretty much always obvious - it was clearly the larger, more powerful, and more recognizable brand. The headquarters was always likely to remain in DFW, too, as the corporate infrastructure here dwarfs what USAirways has ever had in Tempe. Plus, the political pressure on this deal is going to be immense, so keeping the HQ in the home of the second largest congressional delegation was a no-brainer. Plus, that will likely also allay some fears from the AA side of too much change happening too fast.

My only apprehension now, selfishly, with this type of a deal - if it comes to pass - is with some of the smaller, and some might say more 'trivial' things. The AA brand, name, history and legacy is far older, and more storied, than anything at USAirways, or certainly America West. Admirals Clubs date to 1936. AAdvantage is more than 30 years old. Flight 1 has been NYC-LAX for over 60 years. They seem small, but I must honestly say they do matter - to me, and I suspect to a lot of other people as well. Plus, beyond all that, AA has - today - a vastly superior product and service in many ways, and a better FF program. I sincerely hope that Parker doesn't screw with all the things AA has, and has always had, right in an attempt to fix the few things that need to be fixed.
 
randyh3253
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:18 pm

I just hope in all this that while I expect AAdvantage to be the FF program they keep many of the Dividend Miles options. For example two years ago I flew enough to be Chairmans, last year only enough to be Platinum but with the "buy up," program I was able to buy my Chairmans status back...hope they keep that.
 
phlwok
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:20 pm

Quoting flyingbronco05 (Reply 12):
So AA Unions will negotiate with USAirways but not AA. This is screwed up. I hope AA takes this to the judge and screws AA unions over.

Maybe the US unions should negotiate with AA management to solve their own problems. Just kidding.

More seriously, the AA unions may have come to the conclusion that there is nothing to be gained by negotiating with the company and thus are trying to be more creative.

Quoting flyingbronco05 (Reply 12):
In this bankruptcy, USAirways is not allowed to do a hostile takeover. I don't see AA merging with USAirways. I do believe, from what I hear from bankruptcy lawyers, is that if this is true and AA unions are negotiating with other people and not their present employer, the judge can grant AA whatever it needs to be profitable which would be HORRIBLE terms to the AA unions.

Don't underestimate the wild things that can happen in bankruptcy. Judges have wide latitude to approve things that many folks may think a bit crazy. If US makes a compelling case to others on the creditor's committee, they might land AA by pulling them out of Ch 11, acquire them immediately after exit, do some sort of liquidation and asset purchase (shedding whatever they don't want), and probably a whole host of things I haven't thought of.

I don't particularly want this merger/acquisition either, but with today's announcement I have to admit it would seem more likely.
 
WA707atMSP
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:27 pm

Quoting commavia (Reply 14):
So the AMR unions have been negotiating with another company behind their own management's back, and the USAirways management has been negoiating with the AMR unions behind their own unions' backs. This will be absolutely fascinating to watch.

I've said (and been flamed for) many times that I think US should focus on fixing the residual of the US / HP merger before they even think about taking over AA. Once the ex-HP and ex-US employees have been combined into one seniority list, then US can think about another merger. Until then, US should focus 100% on getting its own house in order.

In 1987, Frank Lorenzo tried to combine Continental, New York Air, and PeoplExpress on the same day, without thinking of the implications the triple merger would have on his employees. The ensuing meltdown left Continental with a horrible reputation for customer service that took nearly ten years to erase.

Dougie thinks "taking over AA would be a once in a lifetime chance to ensure US / AA becomes one of the big three", but he has NOT thought through the fact that if the merger goes badly (which, given how badly the US / HP merger has gone, is pretty likely), the ensuing debacle could leave the combined airline mortally wounded.

I still think the best solution for AA's problems would be to fix itself on its own in BK, then merge with JetBlue after AA has used BK to get its own house in order.
Seaholm Maples are #1!
 
ripcordd
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:29 pm

This will show the judge that AA managment has not negoiated in good faith if an outside company can come in a matter of weeks and reach 3 deals.
 
ldvaviation
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:31 pm

Quoting rj777 (Reply 11):
If US takes over, wouldn't US be the purchasing airline though?

I'm willing to bet, however (and I don't want to say what I'm willing to bet) that the name will be one of 3 things:

-US Airlines
-American Airlines
-American Airways

And if you are wondering how they would operate the A330's alongside the 777s, ask DL. They seem to be pulling it off quite nicely.

Apparently, Parker told the AA unions the combined airline would retain the American name and its HDQ in Dallas...

In principle, there is nothing wrong with this merger. In fact, there could be a lot that is good with it. If Parker got the pilots to agree to a B-scale to fly the 190's at JetBlue rates at mainline, the new AA could be a category killer.

I do find what is happening curious for at least three reasons:

(1) Typicallly, in negotiations with labor, management plays one labor group against another to gain the better deal, regional pilots versus mainline pilots for instance. Here, it seems the unions played one management team against another. Here is the rub. If AA and US merge, there will be no one left to play. So, for their own sake, the AA unions better have gotten it right or they might finally have to face up to their own role in causing the problems at AA in the first place.

(2) The combined airline will most certainly stay in oneworld. Given BA's leadership in one world, it will be interesting to see BA work with the old US, the new American. For those who don't remember, BA tried to control US way back in the 80's. BA was ahead of the curve in wanting to gain access to the US market. It bought a "minority" share in the old US which had conditions tied to it that effectively gave BA some control of the airline. This was illegal, of course, since the ownership rules in the industry were pretty much the same back then as they are now. The old USAir management didn't like it much either and the two severed ties rather acrimoniously. In principle, because I imagine most of the managers from those days are long gone, BA and US would have come full circle.

(3) Didn't it all start with US Airways? Prior to 9/11, US was the belle of the ball. Everyone wanted her --- her shuttle, her eastern route network, all of the slots at National and LaGuardia, and the only other viable southeastern hub. United tried to woo her first, but that failed. Then after 9/11, everyone lost interest in US. Airlines became more interested in growing their international ASM's. US was largely a domestic carrier, in some very important markets, but still a domestic carrier. So, the attention shifted to Northwest and Continental. I don't think the rationale for taking over US ever really stopped making sense. In a global open skies regime, command of domestic traffic flows through key US cities remains important.
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:32 pm

Quoting B727FA (Reply 13):
My guess is they'd use "American Airlines" with the US paint/branding ala "United" on Continental paint/branding.

AA has already been developing a new brand image -- this is something they have acknowledged internally and confirmed with employees. It will involve a new logo and livery.
 
phxa340
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:34 pm

I don't see the other creditors going along with this unless Parker is willing to put his money where is mouth is. US doesn't bring a lot to the table. AA as a standalone carrier would probably do better and outperform US if they can reduce their costs. Unless Boeing as a creditor sees an opportunity to get back a loyal Airbus customer in US

Quoting ripcordd (Reply 30):
This will show the judge that AA managment has not negoiated in good faith if an outside company can come in a matter of weeks and reach 3 deals.

Or ... that the Unions are just so pissed at management they don't want to talk to them anymore. The Unions are going to do whats good for them, the creditors are going to do whats good for them. All I have to say is as of now , only 33% of the people who matter are on board , I will take more interest when it hits 51%.
 
PlaneAdmirer
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:41 pm

Please keep in mind that AMR is still in its Exclusivity Period - meaning no one else can propose a plan or reorganizatoin besides the debtor for now. If US gets a deal now, AMR's management and board will have to bless it and go along with it. I believe that management has until September which isn't that far in the future.

AMR's biggest mistake was not filing on the same day that Delta and NW filed, the day before the law changed. Their honor was their downfall. Sad.
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:46 pm

Quoting PHXA340 (Reply 33):
All I have to say is as of now , only 33% of the people who matter are on board , I will take more interest when it hits 51%.

Rumor from within the machine is that PBGC is solidly aligned with union plans, along with Boeing. Same machine that told me a week ago this was all about to happen. Just sayin.

[Edited 2012-04-20 09:48:58]
 
sbworcs
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:53 pm

Can you imagine the uproar (and it has happened) where the management have made agreements with staff behind the unions back?
The best way forwards is upwards!
 
phxa340
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:57 pm

Quoting JFKPurser (Reply 35):
Rumor from within the machine is that PBGC is solidly aligned with union plans, along with Boeing. Same machine that told me a week ago this was all about to happen. Just sayin.

I have no reason to doubt ya about PBGC , as far as Boeing goes, I would love to pick their brain to understand their reasoning ... unless Parker has worked out a deal to become a Boeing customer once again.
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 4:58 pm

Quoting PlaneAdmirer (Reply 36):
AMR's biggest mistake was not filing on the same day that Delta and NW filed, the day before the law changed. Their honor was their downfall. Sad.

Actually, this "mistake" was to the advantage of AMR employees. The terms AA had on the table in the event of a BK filing back on 2003 war fear worse than the cuts that were agreed to to stave off BK. By agreeing to these cuts, AA employees were able to preserve a much greater percentage of their overall pay, benefit packages and pensions -- for a full nine years longer than the airlines you mention -- all of which ended up doing much worse under BK terms at their respective carriers. Of course, as we are seeing now, the playing field is being leveled. It certainly postponed the inevitable, but the overall value of that postponement to most AAers was huge. It is important to keep this in perspective.
 
jfk777
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:01 pm

Quoting swafa (Reply 1):
Talked to an AA f/a enroute from PHX to LAX last night who mentioned this. I didn't believe her at the time. She said that, based on what she is hearing on her end, the f/a's are hoping for a merger with US Airways. They feel like their chances are better there. Also, she mentioned that in these negotiations the AA pilots were offered "Delta pay, plus 3%". Not exactly sure how to interpret that.

What is so bad about Delta pay + 3% ? Its a new world AA pilots ?
 
bjorn14
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:04 pm

Quoting KC135TopBoom (Reply 3):
The big problem I see here is if AA successfully fights off a hostile take-over from US, their cash reserves will be very low, and if DL decides to try a hostile take-over, they will be taken over.

The big problem for AA is that they don't have a say in the matter anymore....a judge and a few creditors do.

The interesting thing with US/AA unions deal is that AA was looking to get out of those expensive labor contracts through BK and now it looks like US just gave the unions more money. I wonder how that's going to work out.
"I want to know the voice of God the rest is just details" --A. Einstein
 
ldvaviation
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:06 pm

Quoting JFKPurser (Reply 32):
AA has already been developing a new brand image -- this is something they have acknowledged internally and confirmed with employees. It will involve a new logo and livery.

Now, let's talk more about that... If you can get us some early concept drawings, I will throw my support behind the US merger. LOL.

Quoting PlaneAdmirer (Reply 36):
AMR's biggest mistake was not filing on the same day that Delta and NW filed, the day before the law changed. Their honor was their downfall. Sad.

There is no honor in this business, if there ever was. Bob Crandall told Charlie Rose he would have declared bankruptcy when United did. Carty was wrong to try to get concessions outside of bankruptcy. It just backfired on everybody, because the unions didn't even give management credit for preserving their pensions and more of their pay.
 
us330
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:09 pm

Quoting ripcordd (Reply 30):
This will show the judge that AA managment has not negoiated in good faith if an outside company can come in a matter of weeks and reach 3 deals.

Not reaching a deal is not evidence of not being in good faith--and its hard to prove "lack of good faith." To not negotiate in good faith, they would have to show that AA management was actively undermining their own efforts. Just because another party makes a better offer doesn't mean that the other party did not negotiate in good faith.
 
MaverickM11
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:12 pm

Quoting jfk777 (Reply 40):
What is so bad about Delta pay + 3% ? Its a new world AA pilots ?

Scope, I suspect
E pur si muove -Galileo
 
oflanigan
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:14 pm

Quoting PHXA340 (Reply 38):
Parker has worked out a deal to become a Boeing customer once again.

It sounds like he has stating that current orders including B737's would continue.
 
phxa340
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:17 pm

Quoting oflanigan (Reply 45):
It sounds like he has stating that current orders including B737's would continue.

Right but they would still be included even if this merger didn't happen , Boeing has more to lose if they become merged with US. I am wondering if US has committed to Boeing that their long haul fleet will be built around the 777/787 as was AA's plan.
 
commavia
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:30 pm

Quoting JFKPurser (Reply 39):
By agreeing to these cuts, AA employees were able to preserve a much greater percentage of their overall pay, benefit packages and pensions -- for a full nine years longer than the airlines you mention -- all of which ended up doing much worse under BK terms at their respective carriers. Of course, as we are seeing now, the playing field is being leveled. It certainly postponed the inevitable, but the overall value of that postponement to most AAers was huge. It is important to keep this in perspective.

Gerard Arpey, is that you?  
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:33 pm

Quoting commavia (Reply 26):
Beyond that, frankly, I think this could be a big positive for lots of constituencies. The unions - and at least elements of their memberships - are obviously happy with this deal. The pilots and flight attendants appear to be the big winners here, with the TWU still bracing for some harsh reality. If the employees can walk away from this deal with a little bit more of their pay and benefits than otherwise, than fine.

How a heightened employee morale plays into the overall economic future of any New AA is rarely acknowledged or discussed. And obviously, Horton and AMR just really don't give a damn about it. Having 55,000 union employees who have all but decided for the rest of their careers to do the bare minimum expected of them, take their paychecks and go home rather than going the "extra mile" is just a really bad business decision -- argue as much as you want against human nature.

I cannot place enough emphasis on how positively this US deal weighs in on employee morale. There is a hope and enthusiasm about this plan among AAers that I have not seen in a decade. The chatter is overwhelmingly positive, and, at least initially, there seems to be the impression of a (US) management team suddenly willing to listen to at least one word of what we have to say.

[Edited 2012-04-20 10:37:22]
 
JFKPurser
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:40 pm

Quoting commavia (Reply 47):
Gerard Arpey, is that you?

Touche! Arpey was no Crandall, and I'm sure he had the best intentions. We are where we are. That's all I'm going to say about 2003.
 
mogandoCI
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:43 pm

Quoting JFKPurser (Reply 39):
Actually, this "mistake" was to the advantage of AMR employees. The terms AA had on the table in the event of a BK filing back on 2003 war fear worse than the cuts that were agreed to to stave off BK. By agreeing to these cuts, AA employees were able to preserve a much greater percentage of their overall pay, benefit packages and pensions -- for a full nine years longer than the airlines you mention -- all of which ended up doing much worse under BK terms at their respective carriers. Of course, as we are seeing now, the playing field is being leveled. It certainly postponed the inevitable, but the overall value of that postponement to most AAers was huge. It is important to keep this in perspective.

Or was it ? By doing BKs early in the decade, they've all cleaned their balance sheets and restored profitability by middle of the decade, and allowing them to cherry pick the best merger partner that maximizes synergy.

DL got NW that provided them with MSP, DTW, and a huge Asian network, both nonstop and out of NRT.

UA got CO that provided them with NYC, IAH, and a much more significant LatAm and European network.

But now, all the choices are gone. US adds only a handful of destinations in Europe, but still leaves gaps in the northwest, Asia, and most emerging markets not called Brazil.
 
billreid
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US Airways Strikes Merger Deal With AA Unions Part 1

Fri Apr 20, 2012 5:56 pm

Quoting flyingbronco05 (Reply 12):
In this bankruptcy, USAirways is not allowed to do a hostile takeover. I don't see AA merging with USAirways. I do believe, from what I hear from bankruptcy lawyers, is that if this is true and AA unions are negotiating with other people and not their present employer, the judge can grant AA whatever it needs to be profitable which would be HORRIBLE terms to the AA unions.

It is not a Hostile takeover. It is working with each member of the Creditors committee and getting all the ducks in a row. Parker learnt a great deal with his attempted DL merger and he has all his Ducks ligned up in a row. He has a plan and alot of legal council advising him on strategy. He didn't get to where he is without understanding how to use resources, of which he has tons of.

Quoting commavia (Reply 14):
So the AMR unions have been negotiating with another company behind their own management's back, and the USAirways management has been negoiating with the AMR unions behind their own unions' backs.

No. The unions have negotiated under contingency. And on top of that AA was fully aware of what was taking place. It has been widely written that Parker was talking to the committee members.
Why do you assume that AA is riding around with blinders on? The assumption should be that Parker is talking to everyone to get this done.

Quoting bjorn14 (Reply 41):
The big problem for AA is that they don't have a say in the matter anymore....a judge and a few creditors do.

Correct.

The biggest problem for AA is that Parker clearly understood that if the Unions agreed with him, he effectively terminally damaged a downline labor relationship between AA and the Unions if a merger did not occur. Imagine how AMR gets along with its work force if they resist. Therefore the game becomes "check-mate", "fait-acompli", what a brilliant move.
At this point....... The Borg has won. Resistance is futile.
Some people don't get it. Business is about making MONEY!