etops1
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TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 5:30 pm

Looks like TPG is going help USAirways finance teir bid for AA. Another positive step for USAirways.
http://www.reuters.com/article/2012/...air-jointbid-idUSBRE84U04Q20120531
 
tx2fl
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 7:37 pm

Interesting. Wonder what this means for job security/job creation for AA'ers..
 
qqflyboy
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 8:28 pm

Quoting TX2FL (Reply 1):
Wonder what this means for job security/job creation for AA'ers..

US Airways has already said its agreements with the three unions at AA would preserve roughly 40% of the job cuts AA has announced, including 2,300 flight attendant jobs and 400 pilot jobs. AA has announced 14,200 job cuts, and US anticipates saving ~ 6,000 of those positions.
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DeltaMD90
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 8:39 pm

Quoting qqflyboy (Reply 3):
AA has announced 14,200 job cuts, and US anticipates saving ~ 6,000 of those positions.

Interesting how this situation is unfolding. Basically US is able to admit that they are cutting many jobs (just not as much as AA's plan) and they look like the good guys. I wonder what the reaction would be if AA hadn't announced tentative job cuts...
Ironically I have never flown a Delta MD-90 :)
 
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flashmeister
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 9:21 pm

Quoting DeltaMD90 (Reply 4):
I wonder what the reaction would be if AA hadn't announced tentative job cuts...

AMR had to announce some cuts or no one would have taken their restructuring seriously.
 
ripcordd
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 10:39 pm

Quoting DeltaMD90 (Reply 4):

USAIR is offering less job cuts and less paay cuts.....So when you going from 2003 till 2018 without a paay raise as the TWU fleet service clerks are USAIR is walking on water to the current AA plan. It was USAIRs way to get the unions behind their merger offer...
 
SJUSXM
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 10:44 pm

I still don't quite get how US can seriously say that there would be less jobs cuts at a combined airline. Clearly if the two were to merge it wouldn't be current AA+current US. There clearly would be some draw down somewhere. Certainly more than AA is planning on eliminating on its own. Wouldn't this give a combined AA+US some 30,000 more employees than UA and DL who would be roughly the same size? How is that feasible?
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commavia
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 10:55 pm

Quoting SJUSXM (Reply 7):
I still don't quite get how US can seriously say that there would be less jobs cuts at a combined airline. Clearly if the two were to merge it wouldn't be current AA+current US. There clearly would be some draw down somewhere. Certainly more than AA is planning on eliminating on its own. Wouldn't this give a combined AA+US some 30,000 more employees than UA and DL who would be roughly the same size? How is that feasible?

One of the many questions USAirways still needs to answer with a greater level of specificity. The promises Parker has made to the unions are at this point just that - promises - and while they do seem to be better, in general, for the pilots and flight attendants, there seems to be little the USAirways is offering the TWU M&E employees that is all that much better than what AA has put on the table. USAirways doesn't appear to have made all that many meaningful promises of job protections for M&E at all.

It is rather questionable that USAirways thinks a combined 'new AA' would be fully competitive with more employees than either Delta or United despite being the same size. The devil, as they say, is in the details.
 
boeing773er
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 11:00 pm

Quoting SJUSXM (Reply 7):

Well US Airways Group has 30,900 Employes
AMR Corporation has 73,800 Employees.
Now combined this is 104,700 employees, minus the 6,000 US would eliminate that would make 98,700. That is about 12,000 more than United Continental Holdings while Delta Airlines (I couldn't get the exact group amount) has 75,000 employees. So they would be a tad bit oversized, and I'm sure in the time they would size down to UA and DL size once US finds out how the merger effects everything.
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chepos
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 11:09 pm

If ther merger occurs it is almost a given that HDQ would move from Tempe to Centreport, right there some employes would jump ship on the US side (HDQ employees). Keep in mind you will defnitely have job losses at the station level as you will have a lot of duplicate positions (just like what happened when DL and NWA joined forces- look at all the NWA mgmt people who lost their jobs). When mergers occur all departments are analyzed and extra fat is pushed out, on the contrary some departments grow as well. We will all have to wait and see what hapens.

Regards,

Chepos

[Edited 2012-05-31 16:17:33]
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Polot
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 11:15 pm

It is important to note, when talking about the number of employees, that they were talking about saving 6,000 jobs at American. Note that they carefully avoided mentioning any possible job cuts from the US side of things....
 
commavia
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RE: TPG And USAirways May Make Joint Bid On AA

Thu May 31, 2012 11:22 pm

Quoting poLot (Reply 11):
It is important to note, when talking about the number of employees, that they were talking about saving 6,000 jobs at American. Note that they carefully avoided mentioning any possible job cuts from the US side of things....

Exactly right, and yet another absolutely fascinating wrinkle in this whole thing ...
 
LAXdude1023
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 12:05 am

Quoting qqflyboy (Reply 3):
US Airways has already said its agreements with the three unions at AA would preserve roughly 40% of the job cuts AA has announced, including 2,300 flight attendant jobs and 400 pilot jobs. AA has announced 14,200 job cuts, and US anticipates saving ~ 6,000 of those positions.
Quoting DeltaMD90 (Reply 4):
Interesting how this situation is unfolding. Basically US is able to admit that they are cutting many jobs (just not as much as AA's plan) and they look like the good guys. I wonder what the reaction would be if AA hadn't announced tentative job cuts...

Nah, US will end up cutting just as many jobs. Its just those other jobs will come from US itself, not AA.

Im not opposed to the merger or US running the show, just thought that should be clarified. The US workforce better hang onto their hats.
It is what it is...
 
tx2fl
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 12:50 am

Quoting chepos (Reply 10):
If ther merger occurs it is almost a given that HDQ would move from Tempe to Centreport, right there some employes would jump ship on the US side (HDQ employees). Keep in mind you will defnitely have job losses at the station level as you will have a lot of duplicate positions (just like what happened when DL and NWA joined forces- look at all the NWA mgmt people who lost their jobs). When mergers occur all departments are analyzed and extra fat is pushed out, on the contrary some departments grow as well. We will all have to wait and see what hapens.

I know people at pretty much all of the airlines, a few former NW and former CO have gone to US lately, and I know a few AA'ers have jumped ship in the past year or so as well. From what I read online on salary forums, and understand from employees on both sides, AA lower-middle management makes 25-50% MORE than the same management jobs at US at the operational management/analyst level. Doubt that they'd keep the high cost employees..and if they tried to cut their pay people would probably look elsewhere. I read somewhere that an AA station manager makes upwards of 85-125K a year for the same size station that a US manager makes 50K-75K. How many people will gladly take a pay cut of 25-50K a year? One person I know from CO went to US and is making about 20K less for the same job they did with CO.
 
7673mech
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 1:12 am

It would be a real interesting merger.
Has US ever really completed their last merger in the cockpit or with the flight attendants?
Now they aim to add one of the most disenfranchised labor groups in the industry?

Gooood luck!
(For the thousands whose jobs are in the balance I mean this sincerely, even though I am typically an AA hater).
 
flybyguy
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 2:14 am

Quoting SJUSXM (Reply 7):
I still don't quite get how US can seriously say that there would be less jobs cuts at a combined airline. Clearly if the two were to merge it wouldn't be current AA+current US. There clearly would be some draw down somewhere. Certainly more than AA is planning on eliminating on its own. Wouldn't this give a combined AA+US some 30,000 more employees than UA and DL who would be roughly the same size? How is that feasible?

I totally agree. This is just the AA unions trying to give Horton his come-uppins with their short-term small thinking. USAirways once the merger is complete has zero intentions of preserving AA jobs and neither does the US unions. The AA union people are going to be at the bottom of the wrung at a US purchased AA. The corporate headquarters will move to where-ever Parker damn well pleases and outsourcing will happen carte blanche with all AA routes that aren't up to US snuff.

I think AA backed itself into this untenable corner by not merging with another large international carrier when it had the chance. Now all there's left is US, which is nothing more than a domestic trunk-line with a sprinkle of low yield international routes. This deal only benefits US Airways... and does nothing to expand international route diversity for the combined carrier like the UA/CO or DL/NW mergers did. The US/AA is just a forced merger that will end up as a Harvard business school case study definition for colossal business blunder... extensive web of low-yield domestic routes propped up by profits from Latin American destinations.
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HPRamper
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 3:24 am

Quoting SJUSXM (Reply 7):
I still don't quite get how US can seriously say that there would be less jobs cuts at a combined airline. Clearly if the two were to merge it wouldn't be current AA+current US. There clearly would be some draw down somewhere. Certainly more than AA is planning on eliminating on its own. Wouldn't this give a combined AA+US some 30,000 more employees than UA and DL who would be roughly the same size? How is that feasible?
Quoting LAXdude1023 (Reply 13):
Nah, US will end up cutting just as many jobs. Its just those other jobs will come from US itself, not AA.

Pretty simple...at many, many stations the combined number of flights will bring them above the staffing threshold, meaning jobs will be created, not lost. Well, jobs will be lost, but they will likely be from the ranks of ground handling contractors.

Quoting 7673mech (Reply 15):
Has US ever really completed their last merger in the cockpit or with the flight attendants?
Now they aim to add one of the most disenfranchised labor groups in the industry?

Gooood luck!

Sigh...this again? Ad nauseum...
 
rfields5421
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 3:34 am

Quoting TX2FL (Reply 1):
Wonder what this means for job security/job creation for AA'ers..

For the actual workers of the airline - a new boss and a new set of issues for contracts.

The main job threat of a US merger is in the executive office sections of AA - probably looking at near 100% job loss.

So of course the people who have done such a fantastic job running the airline the past 10 years are against some one actually coming in and looking at costs and where money gets lost in operations.
 
dsuairptman
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 3:43 am

Most of these airline mergers are un-nessecary and will create nothing but hardship outside the executive suite while reducing the consumers options in airlines. US only really wants AA because Parker wants to show how small he really is.  
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AA767400
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 4:13 am

Quoting flybyguy (Reply 16):
USAirways once the merger is complete has zero intentions of preserving AA jobs and neither does the US unions. The AA union people are going to be at the bottom of the wrung at a US purchased AA. The corporate headquarters will move to where-ever Parker damn well pleases and outsourcing will happen carte blanche with all AA routes that aren't up to US snuff.

There will be job cuts one way or another. However it will be on both sides of the spectrum. You are wrong however on several factors.

Headquarters will no doubt be in DFW. As they say, Everything's bigger in Texas. And this is no exception. The unions at AA will not be at the bottom of the US unions. Majority rules, and given that US FAs favor joining the APFA, the outcome is pretty clear. Stapling anyone to the bottom won't be happening due to the Macaskill-Bond amendment. Date of hire will be implemented, and that has been ironed out already.

The only thing that I agree on with you, is outsourcing jobs left and right. DL and UA have both done it, and AA/US will do it too. Outsourcing regionals left and right, and ground personnel. Job cuts for inflight will be mitigated by retirements. Because after armageddon, many will be leaving for sure.

Just my two cents.
  
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incitatus
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 1:25 pm

US has been walking around private equity firms with powerpoints on its magic merger and after six weeks this is all it has been able to muster - some vague headline on "working" with TPG. More likely US was finally permitted to show its presentation to a couple of private equity trainees.

There has been nothing material that US has been able to do. The agreement with the unions is not worth the paper it was written on, and all that it has accomplished is to scare off investors. Some of the articles are plain funny, even the Financial Times' one is a good piece of engineered news.
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ckfred
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 2:06 pm

There was an article in this past Sunday's Chicago Tribune about the poor performance at UA/CO, since they went to the single computer system. The UA CSA's are having problems with the old CO system, especially when they have to start making a large number of rebookings.

Passengers are complaining that flights are running late more frequently, and delays are longer, when aircraft have to be swapped or replacement crews have to be found.

Obviously, UA is going to see some passengers defect to AA, DL, WN, US, AS, B6, etc. It happens every time a carrier goes through a meltdown due to a merger, strike, severe weather, and the like.

US had some serious issues a few years ago, when dealing with the HP merger (the baggage pile-up at PHL comes to mind). The US and HP pilots haven't agreed to a common seniority list. So, why would they put themselves through that hell again.

By the same token, why would AA's employees want to put themselves into the eventual situation of irritating customers. When AA tried to fly through an F/A strike in the early 90s, it irritated a lot of customers. A lot swore off AA. The same thing happened, when the pilots staged a sick-out over the QQ merger.

AA picked up a lot of customers in 2000, after UA's pilots staged their summer sick-out.

AA employees know full-well what happens when things don't run smoothly. Passengers switch carriers for a good long while. Why put themselves in that kind of risk, knowingly?

It's one thing to lobby the creditors, who presumably will wind up with AMR shares upon exit from Chapter 11, to change the management team in due course. I personally think that the corporate culture that Bob Crandall created hasn't produced a number of talented CEOs, and it's time to start over. But a merger with US isn't the solution, at least not for the next 6 to 18 months.
 
william
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 3:19 pm

Well, raising capital will not be a problem for US it seems.

http://www.star-telegram.com/2012/05...investors-eager-to-buy-amr-us.html
 
LAXdude1023
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 3:20 pm

Quoting HPRamper (Reply 17):
Pretty simple...at many, many stations the combined number of flights will bring them above the staffing threshold, meaning jobs will be created, not lost. Well, jobs will be lost, but they will likely be from the ranks of ground handling contractors.


With respect, that is way to optimistic to be based in reality. The number of jobs that could be created that way will be far outnumbered by those that will be lost.

Again, I dont care if Doug Parker and the US team run the show at all. But people seem to be hanging on the rhetoric instead of taking these promises to their logical conclusion.

[Edited 2012-06-01 15:20:31 by srbmod]
It is what it is...
 
JFKPurser
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 4:42 pm

Quoting incitatus (Reply 21):
US has been walking around private equity firms with powerpoints on its magic merger and after six weeks this is all it has been able to muster - some vague headline on "working" with TPG. More likely US was finally permitted to show its presentation to a couple of private equity trainees.

There has been nothing material that US has been able to do. The agreement with the unions is not worth the paper it was written on, and all that it has accomplished is to scare off investors. Some of the articles are plain funny, even the Financial Times' one is a good piece of engineered news.

This statement shows how little knowledge and understanding you have of how much has actually been going on behind the scenes for months now. The momentum of interest and support this merger has long created on Wall Street is well known on all sides of this story, and is a matter of public record. And you might also be interested to know that when Parker first came to AA's unions, he made it very clear -- even at that early point in the process -- that money was not going to be an issue on making the merger happen -- that he already had plenty of backers lined up, and that was one of the main features of the proposal that solidified all three unions' support in his plan. You seem to form your opinion solely on what you read in the press. Much of what is actually happening is not reported -- or leaked. It seems strange to me that you -- or anyone for that matter -- would give so little credit to what US has been saying or doing, especially amid regular reports in the financial media that this merger has a 90% chance of happening. Of course, anyone is free to form their opinions by cherry-picking from the information which is available, or simply discounting it altogether. But, in the end, your statement is not making any of this go away. Good luck with that.

[Edited 2012-06-01 15:22:03 by srbmod]
 
qqflyboy
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 4:56 pm

While there's no question there will be job loses, US Airways plan, for now, means less of them. Another point to keep in mind is US is willing to help reduce it's head count by offering early outs and/or buyouts, something AA has refused to do. Which is crazy. AA could immediately reduce their employee costs by agreeing to the APFA's buyout proposal, which is cheaper than those recently offered at UA and DL. And that's just the flight attendants. Sure it'll be a one time cash hit, but we're talking about ~$40 million if 1,500 F/As accepted the buyout. It's a mere drop in the bucket for AA's $5.1 billion in the bank. On top of that, the company would save $34 million in the first year alone with 1,500 new, bottom of the scale flight attendants.
The views expressed are mine alone and do not necessarily reflect my employer’s views.
 
Flighty
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 5:01 pm

Quoting flybyguy (Reply 16):
The US/AA is just a forced merger that will end up as a Harvard business school case study definition for colossal business blunder... extensive web of low-yield domestic routes propped up by profits from Latin American destinations.

US today is doing OK... I don't get how you believe it would be harmed by AA... it would seem AA has a lot to offer US.

About prospective the cost cuts... AA has a lot of pricey infrastructure based on AA traditions and a heavy footprint. In a US/AA merger most of that property, those electronic systems, probably many thousands of staff would go away. The operation would become drastically more efficient, as US's has. Flight operations (and customer service) need not change at all.

Quoting ckfred (Reply 23):
US had some serious issues a few years ago, when dealing with the HP merger (the baggage pile-up at PHL comes to mind).

US and other recent mergers did have booking system consolidation issues. That is a gauntlet you go through in order to save hundreds of millions on a continual basis going forward.

The baggage pile-up in PHL is an example of problems that old US had before the merger that were essentially fixed by the merger.
 
commavia
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 5:21 pm

Quoting qqflyboy (Reply 33):
US Airways plan, for now, means less of them.

... at pre-merger AA (as others have already said).

Quoting qqflyboy (Reply 33):
Another point to keep in mind is US is willing to help reduce it's head count by offering early outs and/or buyouts, something AA has refused to do. Which is crazy.

Agreed. It is just stupid that AA won't agree to the buyouts. In fact - they should have done buyouts years ago.

Quoting Flighty (Reply 34):
... AA has a lot of pricey infrastructure based on AA traditions and a heavy footprint. In a US/AA merger most of that property, those electronic systems, probably many thousands of staff would go away. The operation would become drastically more efficient, as US's has.

I think a lot of that is very questionable. I suspect that the post-merger costs of this hypothetical merged 'new AA' entity would actually end up, in many if not most areas, closer to AA's costs than USAirawys'. A lot of the alleged "pricey infrastructure" that AA supposedly carries is simply the cost of doing business as a global airline. A large portion of that simply cannot be cut in the name of efficiency if Doug wants to continue to run a truly global airline - which USAirways by and large isn't today.

Quoting Flighty (Reply 34):
Flight operations (and customer service) need not change at all.

Well, I certainly hope not. But Doug's insistence on forcing lower quality, cheaper products and services onto USAirways after his last merger doesn't inspire much confidence.

Quoting Flighty (Reply 34):
US and other recent mergers did have booking system consolidation issues.

Interestingly here, AA has far more people trained on SABRE than USAirways does on SHARES, and USAirways, too, likely has more people at least familiar with SABRE than with SHARES, since pre-merger USAirways used SHARES.

Quoting Flighty (Reply 34):
That is a gauntlet you go through in order to save hundreds of millions on a continual basis going forward.

You get what you pay for - IT systems are a perfect example. While SABRE no doubt costs more than SHARES, it's also a far more capable system. I'll file that decision away with numerous others in the "Things I hope Doug doesn't F up if he gets a hold of AA" folder.
 
kl911
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 5:33 pm

Wow, that would be sweet. Very good news for US. Only one carrier in a country should be allowed the name of that country IMO.

Another positive thing is that those ugly AA planes will finally be painted.
 
incitatus
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 6:11 pm

Quoting JFKPurser (Reply 31):
Much of what is actually happening is not reported

Much is being reported about nothing happening. Headlines and articles about TPG and US are all of a non-committal type with unnamed sources. DL and TPG have as good a shot as US and TPG.



Quoting JFKPurser (Reply 31):
The momentum of interest and support this merger has long created on Wall Street is well known on all sides of this story, and is a matter of public record. And you might also be interested to know that when Parker first came to AA's unions, he made it very clear -- even at that early point in the process -- that money was not going to be an issue on making the merger happen

I am not that gullible. Show me the money.

Headlines need to read "US and Big Private Equity Firm X Partner to Pursue AMR Merger". Then I will assign some chance, still less than 50%, that something happens.

Quoting JFKPurser (Reply 31):
especially amid regular reports in the financial media that this merger has a 90% chance of happening.

Right now the chance is more like 0.9%. Mergers only have a 90% chance of happening right before they close, because many mergers do go wrong at the last minute. Give some thought to how far 90% is.

[Edited 2012-06-01 15:23:44 by srbmod]
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BDL757
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 6:41 pm

Quoting qqflyboy (Reply 33):
Another point to keep in mind is US is willing to help reduce it's head count by offering early outs and/or buyouts, something AA has refused to do. Which is crazy. AA could immediately reduce their employee costs by agreeing to the APFA's buyout proposal, which is cheaper than those recently offered at UA and DL. And that's just the flight attendants. Sure it'll be a one time cash hit, but we're talking about ~$40 million if 1,500 F/As accepted the buyout. It's a mere drop in the bucket for AA's $5.1 billion in the bank. On top of that, the company would save $34 million in the first year alone with 1,500 new, bottom of the scale flight attendants.

That's something I've never understood; why AA management was so unwilling to offer an early out program! They repeatedly pointed out that x% (can't remember what percent) of their workforce was topped out in pay and that x% of their workforce was over 50 yrs old yet they never gave anyone incentive to leave!
 
tx2fl
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 6:44 pm

Quoting commavia (Reply 36):
Quoting qqflyboy (Reply 33):
Another point to keep in mind is US is willing to help reduce it's head count by offering early outs and/or buyouts, something AA has refused to do. Which is crazy.

Agreed. It is just stupid that AA won't agree to the buyouts. In fact - they should have done buyouts years ago.

Yes they should have, but from what I've seen, they just want to save $ by making the employees so miserable that they quit or get fired. Then all they have to pay out is accrued vacation..
 
Flighty
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 6:58 pm

Quoting commavia (Reply 36):
You get what you pay for - IT systems are a perfect example. While SABRE no doubt costs more than SHARES, it's also a far more capable system. I'll file that decision away with numerous others in the "Things I hope Doug doesn't F up if he gets a hold of AA" folder.

SABRE is great, but it's not needed to run an airline. It could be seen as an optional expense. At a megacarrier that's real serious money. There are plenty of nice things to do with extra money, whether spending it on SABRE or something else.

Quoting commavia (Reply 36):
to run a truly global airline - which USAirways by and large isn't today.

Things the customer doesn't see, or need, are expenses without a penny of revenue to support them. It's just a different way of thinking...
 
commavia
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 10:03 pm

Parker's proposal, as written - though not, yet, actually signed and ratified by either side - does, in certain cases, certainly appear better from the "employment standpoint" of certain AA union labor groups, though perhaps not all.

For AA's pilots and flight attendants, the non-binding proposals Parker has agreed to do, indeed, seem better than the initial AA proposals (though not everyone seems to agree with even that). However, for certain other work groups - like M&E - they appear no better if not potentially worse in some critical areas like scope and job protection (i.e., it's hard to envision Parker keeping nearly any major overhaul work in Tulsa long-term if he has a contractual out to gradually outsource it).

Beyond that, the point I and others have made is that it is highly questionable - based solely on the proposals made to AA's unions - that the resulting company can be competitive seeing as it will be essentially the same size as Delta and United, but with quite a few more people. That is why it only seems logical that USAirways employees will likely bear the brunt of the remaining labor "right-sizing."

And, of course, that works just fine for Parker, who I doubt cares one bit about who gets laid off as long as he gets to whatever FTE target he's shooting for, and it of course works just fine for the AA unions who - at least pre-merger - have no responsibility or loyalty to the USAirways employees, and are only looking out for their own (as is, of course, their job).

All of this brings me back to the point I made in the first reply I made to this thread, which is that this will be yet another aspect of Parker's "plan" that he is eventually going to have to flesh out in more detail than the vague statements to the press and non-binding proposals made to another company's unions. The devil, as they say, is always in the details, and if the "details" of this transaction were to involve layoffs of thousands of USAirways employees - as seems inevitable - that will obviously come out at some point.

Quoting TX2FL (Reply 41):
but from what I've seen, they just want to save $ by making the employees so miserable that they quit or get fired. Then all they have to pay out is accrued vacation..

Exactly. Like with many things, AA management wants to do this on the cheap. Why pay somebody to leave if you can just make their pay, benefits and workplace so bad they'll leave for "free?" May not be nice, but that is absolutely the approach that AA has taken post-9/11. It is a stupid and short-sighted one, though, in my opinion.

Quoting Flighty (Reply 43):
SABRE is great, but it's not needed to run an airline.

It's not needed, but in my experience, nobody seems to have come up with a system that is more (or perhaps even comparably) stable, reliable, and capable, so until that day comes, I think it is a perfectly justified expense for AA - merger or not - to continue using a system that works. Period.

Quoting Flighty (Reply 43):
Things the customer doesn't see, or need, are expenses without a penny of revenue to support them. It's just a different way of thinking...

Then please allow me to provide another "different way of thinking." How much incremental business - in the form of switched corporate contracts, fed-up former top-tier FFs, etc. - has AA gained from other carriers in recent years as a direct result of those carriers' inability to make their IT systems sufficiently robust? My guess - though I have no data to prove it - is that it has not been inconsequential.

It's been nearly five years, and there are still USAirways (i.e., legacy USAirways, not America West) agents who grumble that SHARES cannot nor will it ever be able to do the things SABRE was. And, I think we know what many United agents (to say nothing of United customers) think of SHARES. And, lest we forget, many of these "things" absolutely are customer-facing and directly effect the ability of those agents to solve revenue-generating customers' problems and satisfy revenue-generating customers' requests. I have seen it first-hand myself with issues that a well-trained, experienced AA agent (and that's basically all that's left) can do in SABRE in literally seconds takes minutes with other airlines' agents, if the system they've been given is even capable of doing it at all.

SABRE is expensive, but it works - and that, in and of itself, has value that cannot necessarily be quantified directly but most definitely is "seen" by the customer and, in my opinion and personal experience, most definitely drives customer satisfaction and revenue generation/retention.

[Edited 2012-06-01 15:28:42 by srbmod]
 
Wingtips56
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RE: TPG And USAirways May Make Joint Bid On AA

Fri Jun 01, 2012 10:47 pm

Quoting commavia (Reply 33):
SABRE is expensive, but it works - and that, in and of itself, has value that cannot necessarily be quantified directly but most definitely is "seen" by the customer and, in my opinion and personal experience, most definitely drives customer satisfaction and revenue generation/retention.

On a side note, AA is not renewing it's contract with Sabre which expires in 2014, and is working on development of a new system with HP. Sabre has become too expensive and is too slow to adapt to changing market needs. However, the "Jetstream" project is still in development, while the exit from bankruptcy and/or the mis-guided merger with US would be expected to occur first.

AA rejected the Amadeus and other systems as not sufficient for their needs, especially in the airline-side ticketing programs and ancillary revenue collections. It would have been a big step back from what they currently have with Sabre. So that is why they are working on a wholly new system, which now hangs in the balance of what becomes of the airline.
Worked for WestAir, Apollo Airways, Desert Pacific, Western, AirCal and American Airlines (Retired)
 
Guest

RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 2:15 am

After reading the article, it still amazes me to think that AA believes they stand a chance to merge with B6...........I could be completely wrong, but I remember that the last speech that B6 CEO gave, he specifically stated "Organic Growth" and B6 wants to "Stand Alone"..... With that being said,.............. I believe if AA has a chance to exit Bankruptcy as a stand alone carrier and not merge with anyone, that is great, however if they are running out of options and need to consolidate rapidly, then they should seriously consider this merger with US Airways.......

Unfortunately this business has become that of survival of the fittest....... the people who suffer the most out of it all, are the employees that have dedicated there lives and there families lives, (ie; Holidays, Weekends, Nights) to keep the companies a float for years, and when the companies run out of juice due to poor management decisions, economic times, competition, etc. etc. the employees are then brushed aside like yesterdays news...... and to add insulte to injury, then the mployees are called digruntled.......... wouldnt you be if you dedicated your heart and soul into something for so many years and at the end, your left with nothing  
 
etops1
Topic Author
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 2:20 am

Quoting incitatus (Reply 20):

Sorry to sound DISRESPECTFUL but seriously have no clue as to what's going on with this transaction behind the scenes ...
 
slcdeltarumd11
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 2:32 am

I just flew DEN-DFW last week and a pilot and flight attendant both in seats on the flight were openly and publicly discussing the drama of this from their seats. I thought it was a little tacky or unprofessional but who can blaim them at this point. Basically their angle was the popular we cant be any worse off the pilot was a major fan of US taking them.

It seems like the better marriages happened this one is gonna be alot more work and difficult if it happens i expect much rougher waters ahead if they can somehow make this happen.
 
LAXdude1023
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 2:35 am

Quoting etops1 (Reply 36):

Do you? Simply being an FA and hearing gossip doesn't count.
It is what it is...
 
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fxramper
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 3:00 am

Is this a joke? I hope AA files chp 7 and bit pieces away before US (which still doesn't even have an abbreviation on this site) attempts to 'merge' with them.   
 
Beardown91737
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 5:10 am

Quoting AA767400 (Reply 19):
Everything's bigger in Texas.

You can fit two Texases in Alaska, three Metroplexes in SoCal, and New York City can hold 4x the population of Houston. Green Bay has more NFL teams than San Antonio.

Previous threads said that Parker stated the HQ would be in Ft Worth, but that could mean anything from everything going there to only a few dozen being in an executive office like Boeing does in Chicago while all the action is elsewhere. Most likely somewhere in between but keep in mind that there is cheap office space in Arizona too, and probably a surplus. It should be easier to dispense with any unneeded space in Fort Worth as companies fleeing California keep Texporting our jobs.

Quoting ckfred (Reply 21):
By the same token, why would AA's employees want to put themselves into the eventual situation of irritating customers.

To get rid of AA management. Then again, who is to say things won't get better working for US. Defintely a better website for booking flights, and I like US (PMHP) cabin crews.

Quoting commavia (Reply 33):

Beyond that, the point I and others have made is that it is highly questionable - based solely on the proposals made to AA's unions - that the resulting company can be competitive seeing as it will be essentially the same size as Delta and United, but with quite a few more people. That is why it only seems logical that USAirways employees will likely bear the brunt of the remaining labor "right-sizing."

The agreements are with AA unions. AA management and non-union staff have no assurances. If PMUS staff can do the job for less, then they will get the workload. After all, there is no A320 simulator in Fort Worth. Even without any assurances, current AA staff and management will still be needed. US is staffed to run US, and probably a bit understaffed like any other company in the USA right now. They will need a lot of AA's support staff to take on the additional airplanes, stations, and everything else it takes to run the combined company.

Quoting commavia (Reply 33):
Like with many things, AA management wants to do this on the cheap. Why pay somebody to leave if you can just make their pay, benefits and workplace so bad they'll leave for "free?" May not be nice, but that is absolutely the approach that AA has taken post-9/11. It is a stupid and short-sighted one, though, in my opinion.

So it is no mystery that AAers didn't band together with a "lets keep American our American" like happened at DL.
135 hrs PIC (mostly PA-28) - not current. Landings at MDW, PIA, JAN.
 
AAIL86
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 7:18 am

You can fit two Texases in Alaska, three Metroplexes in SoCal, and New York City can hold 4x the population of Houston. [/quote]

And depending on your definition of what constitutes an urban area, Mexico City and Delhi are larger then New York. So what?

Quoting Beardown91737 (Reply 40):
Previous threads said that Parker stated the HQ would be in Ft Worth, but that could mean anything from everything going there to only a few dozen being in an executive office like Boeing does in Chicago while all the action is elsewhere.

I have a sneaking suspicion that you don't like Texas much. Fair enough. And for the record, whatever you don't like about Texas doesn't change the fact that the economy here is going gangbusters compared to the rest of the country. Given AA's massive infrastructure already in place in the DFW area, it would be an extremely poor business decision to throw that away - but based on what you said above comparing the situation to Boeing's HQ in Chicago, you may not be aware of that...

Quoting Beardown91737 (Reply 40):
It should be easier to dispense with any unneeded space in Fort Worth as companies fleeing California keep Texporting our jobs.

Would you like to bet that in the event of an AA-US merger, the new AA HQ goes to Arizona???
The way to see by faith is to shut the eye of reason - Benjamim Franklin
 
F9Animal
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 11:14 am

I am not sure how I feel about a US/AA merger. Parker somehow turned US around, which is impressive. But, I think AA is just too much to absorb for US. I have not seen a plan on how to make a combined US/AA successful. I suspect the AA execs are determined to go solo, as they have been pretty voiced about remaining independent. Whatever happens, I just hope the employees come out okay. I personally don't like all of these mergers lately. Call me greedy, but I miss NW, CO, HP paint jobs streaking our skies. Everything is so uniformed now.
I Am A Different Animal!!
 
Guest

RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 12:01 pm

Quoting F9animal (Reply 42):
I just hope the employees come out okay. I personally don't like all of these mergers lately. Call me greedy, but I miss NW, CO, HP paint jobs streaking our skies. Everything is so uniformed now.

I do not think I can recall any airline merger where the employees were not compromised to some degree. However I do agree with you, about the glorious days of TWA, Eastern, Pan Am. The good old days of aviation.

Either way good luck to all the employees at AA and keep the faith.
 
LAXdude1023
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 1:33 pm

Quoting Beardown91737 (Reply 40):
Previous threads said that Parker stated the HQ would be in Ft Worth, but that could mean anything from everything going there to only a few dozen being in an executive office like Boeing does in Chicago while all the action is elsewhere. Most likely somewhere in between but keep in mind that there is cheap office space in Arizona too, and probably a surplus. It should be easier to dispense with any unneeded space in Fort Worth as companies fleeing California keep Texporting our jobs.

Im going to go out on a limb and say you dont like Texas?

Either way, the reality would be that the HQ is coming here and those who truly know the infrastructure in Phoenix vs Fort Worth will tell you that just about everything else will be coming here too. I do think the will keep something in Phoenix but probably not a whole lot.
It is what it is...
 
rfields5421
Posts: 5889
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 2:26 pm

Quoting Beardown91737 (Reply 40):
It should be easier to dispense with any unneeded space in Fort Worth

I don't know the current commercial real estate market in Phoenix, but in the DFW area right now it is poor. It would be almost impossible to dispose of the office buildings, warehouses, hangers and such which AA owns in the DFW area.

Not using them, or planning to leave them empty would add a lot of costs to any merger.
 
ckfred
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 6:10 pm

I don't understand either why AA won't do buy-outs. Not only would it save millions of dollars in the long run, as employees at the top of the scale would be replaced by new hires at the bottom of the scale. It would also make for a lot of happy employees who are stuck.

If you're an MD-80 F/O and presently unable to either move to Captain or move to a larger aircraft as an F/O without changing bases or flying reserve, getting several hundred of the oldest captains to retire ahead of mandatory retirement would open a lot of opportunities.

I've talked to F/As who are stuck on an aircraft type, because their seniority on a larger plane would mean a bad schedule or having to commute to another crew base.

People want to have some control of their schedules while advancing their careers. Doing buy-outs would achieve that.

What is AA's reason for not wanting to do buy-outs, considering that other carriers and much of the Fortune 500 have done it? Even government entities, such as public school systems, have done buy-outs to get older, higher paid employees off the payroll.
 
bobnwa
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 6:19 pm

Quoting kl911 (Reply 28):
Another positive thing is that those ugly AA planes will finally be painted.

I would bet that the majority of the flying public world disagree with that statement
 
AeroWesty
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 6:28 pm

Quoting slcdeltarumd11 (Reply 37):
Basically their angle was the popular we cant be any worse off the pilot was a major fan of US taking them

Last night the flight attendant's union formally placed the fate of their members either in the hands of the BK judge or a buyout candidate after last-ditch effort negotiations with AA broke down:

American, Flight Attendants Fail to Reach Deal

Not all that surprising considering the alliances and finances Parker has been building of late.
International Homo of Mystery
 
rfields5421
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RE: TPG And USAirways May Make Joint Bid On AA

Sat Jun 02, 2012 6:37 pm

Quoting ckfred (Reply 46):
What is AA's reason for not wanting to do buy-outs,

AA has done some buyouts in the past.

I cannot say their exact reason for not doing more - but buyouts do not resolve a big problem for AA - the underfunded pension system, and the cost of labor under current contracts.

When a company buys out older, senior workers - the company has to put up as cash unfunded parts of that person's future pension liability.

The presumption is that AA does not wish to (1) spend that much of their limited cash in bankruptcy, and (2) the airline wishes to push as much as possible of the future pension liability out onto the US taxpayers by cancelling the union contracts and pensions.

Buyouts will not do much to reduce the worker costs. Yes - there will be a temporary cut in total pay due to a smaller workforce and lower scale workers - however the same contracts would remain in force and according to AA - the root cause of the airline problems is the cost of labor under those contracts.

While AA has said they plan to reduce the workforce substantially, there will be a lot of cash payouts to employees eligible to retire no matter how they work the plan. But doing it as part of the bankruptcy and it being a force out situation will likely be much cheaper for the airline both in upfront cash and long run.

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