commavia
Topic Author
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 6:35 pm

A report out today from the WSJ details ongoing machinations in negotiations with the various creditors, stakeholders and constituencies surrounding AMR's emergence from bankruptcy. Lots going on behind the scenes - as one would expect.

The article refers to a letter sent to Horton by the heads of two hedge funds, both with large holdings of AMR debt. One, Appaloosa, is also a large holder of USAirways debt - although that holding is smaller than in AMR, and they are seen right now as open to either a merger or non-merger scenario if convinced one way or another. The article is not entirely clear on how or why AMR is not engaging sufficiently to the satisfaction of these two debtholders, as it hints that these two particular debtholders may have been less active in discussions of their own choice. Nonetheless, these two creditors seem to have their own ideas as to why.

The primary complaint of these two hedge funds is - apparently - that they believe AMR management is negotiating with a particular subset of creditors, particularly an ad hoc bondholders committee, to the apparent (whether intentional or unintentional) exclusion of others. They believe it is because the ad hoc bondholders committee appears more favorable to AMR's standalone plan. The letter reportedly alludes to a common refrain that nobody would find surprising - that AMR management is only begrudgingly dealing with Parker and still wants to steer AMR towards an independent emergence from Chapter 11. This will no doubt add fuel to that fire.

Perhaps most tellingly, if this article is to be believed - Horton has managed to convince - at least up until now - a subset of bondholders that have "offered to provide between $1 billion and $2 billion to finance American's exit from bankruptcy as an independent airline."

Hmmm ...
 
User avatar
Revelation
Posts: 13841
Joined: Wed Feb 09, 2005 9:37 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 6:53 pm

Some coverage of the above is at

http://www.bloomberg.com/news/2012-1...nds-over-talks-with-creditors.html

It'll be interesting to see if the Appaloosa/Marathon group can prove these things in a court and sue for damages.

Seems by going public they'd rather see AA's behavior change sooner rather than later.
Inspiration, move me brightly! Light the song with sense and color.
Hold away despair, more than this I will not ask.
Faced with mysteries dark and vast, statements just seem vain at last.
Some rise, some fall, some climb, to get to Terrapin!
 
commavia
Topic Author
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 7:41 pm

Quoting Revelation (Reply 1):
It'll be interesting to see if the Appaloosa/Marathon group can prove these things in a court and sue for damages.

Seems by going public they'd rather see AA's behavior change sooner rather than later.

Yep, or if these two particular creditors are simply using this as leverage to try and get a better deal - which is also possible. Should be interesting to see how this develops, and to see - over the coming weeks and months - if and/or how AMR management is able to win over any additional creditors or stakeholders towards a standalone plan, and/or if AMR ends up pursuing (voluntarily or involuntarily) a merger.
 
ldvaviation
Posts: 976
Joined: Sun Dec 21, 2008 7:21 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 8:05 pm

Quoting commavia (Reply 2):
Yep, or if these two particular creditors are simply using this as leverage to try and get a better deal - which is also possible. Should be interesting to see how this develops, and to see - over the coming weeks and months - if and/or how AMR management is able to win over any additional creditors or stakeholders towards a standalone plan, and/or if AMR ends up pursuing (voluntarily or involuntarily) a merger.

If the adhoc group of creditors holds the majority of AMR debt and is also in negotiations to provide $1 to 2 B of exit financing, I don't see what the problem is.

Too bad for the creditors who are left out. But Tom has a plan and he doesn't want anyone who is not onboard to muck things up.
 
commavia
Topic Author
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 8:32 pm

Quoting LDVAviation (Reply 3):
If the adhoc group of creditors holds the majority of AMR debt

Based on what I've read it does not sound like this ad hoc group holds anywhere close to a majority of AMR debt. They collectively do hold a lot of it, but not the majority by any stretch.

Interestingly, the article says that AMR invited Appaloosa to join this ad hoc group, and Marathon (the other hedge fund mentioned) actually did join the group earlier in the year, only to leave the group later.
 
Prost
Posts: 1883
Joined: Wed Oct 03, 2012 6:23 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 8:48 pm

Quoting LDVAviation (Reply 3):
If the adhoc group of creditors holds the majority of AMR debt and is also in negotiations to provide $1 to 2 B of exit financing, I don't see what the problem is.

I have two questions: First is if AMR has $5.1 Billion cash on hand, why do they need an additional 1-2 Billion? Is this linked to their fleet renewal?

The second question I have is what is the role of CEO during bankruptcy? I understand that the CEO is the steward of a companies' shareholders, but once bankruptcy is filed, that most likely wipes out any value they share holder has in the company. So does the CEO now report to the bond holders?
 
User avatar
par13del
Posts: 6678
Joined: Sun Dec 18, 2005 9:14 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 9:25 pm

Quoting Prost (Reply 5):
So does the CEO now report to the bond holders?

Or, who is pulling his strings or is he an independent contractor looking out for himself..........
Hhmmmmm, interesting question.
 
moman
Posts: 708
Joined: Tue Aug 10, 2004 7:17 am

RE: AMR Bankruptcy Court Thread - Part 4

Fri Oct 19, 2012 9:31 pm

Quoting Prost (Reply 5):

I have two questions: First is if AMR has $5.1 Billion cash on hand, why do they need an additional 1-2 Billion? Is this linked to their fleet renewal?

The second question I have is what is the role of CEO during bankruptcy? I understand that the CEO is the steward of a companies' shareholders, but once bankruptcy is filed, that most likely wipes out any value they share holder has in the company. So does the CEO now report to the bond holders?

First, the exit financing may be related to their operational expenses and restructuring. I'm not sure if they "need it" per se, but the bond holders/equity holders all must agree to the plan for the judge to approve the reorganization (i.e. emergence from bankruptcy.)

The CEO reports to all stakeholders - employees, debt holders, and common/preferred shareholders. Its likely true the common stock will be wiped out, as it's an unsecured obligation. But the CEO is still responsible for setting general strategic direction of the company.

As per the US Airways discussion above, it's very interesting to see how it all plays out. Very shrewd of American, in my opinion, to put a "keep quiet" clause in the non-disclosure document. Of course, the last US Airways employee I spoke with, a person who wouldn't have inside knowledge of such things, told me the deal was "all but signed".
AA Platinum Member - American Airlines Forever
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Sat Oct 20, 2012 6:05 pm

Quoting moman (Reply 7):
Of course, the last US Airways employee I spoke with, a person who wouldn't have inside knowledge of such things, told me the deal was "all but signed".

Just as AA employees I know, who also wouldn't know anything about a possible deal with US, have said everything from the deal is done to the deal will never happen. So, who knows!
 
BarryH
Posts: 61
Joined: Sat Sep 29, 2012 6:00 am

RE: AMR Bankruptcy Court Thread - Part 4

Sat Oct 20, 2012 11:37 pm

One of the reasons Parker is so hot for AMR while it's in bankruptcy is he'd be able to get it at a depressed value. That and the potential ability to dispose of additional and duplicate assets based on the needs of a combined US/AA post-bankruptcy. Horton, the judge, and various committees aren't idiots and know a streamlined AA post-bankruptcy would be able to command more in any combination. And that benefits all the stakeholders many of whom will likely receive equity in lieu of debt. Except maybe the union staff that could care less about anything other than seeing the current AA management team go. AA's stand-alone plan presentation will take the in- and post-bankruptcy valuation in to consideration when comparing it to an in-bankruptcy vs. post-bankruptcy combination.

Parker made the same arguments about a combination with DL when they were in bankruptcy and was rebuked because combining with another carrier while in a depressed financial state made no more sense then than it does now. There very well could and you could even argue should be a AA/US combination. Now's a great time for it to happen from a US vantage point. Not so much from an AA vantage point. And that's based on the difference between in- and post-bankruptcy valuations; not emotional leanings one way or the other. AA's financial performance metrics have been steadily rising even in the face of their operational challenges. Assuming a deal's reached with the pilots things will only continue to improve. Great for AA from a valuation standpoint. Not so much for Parker to whom the cost of AA post-bankruptcy could be 30% higher. And a re-borne AA would most likely be the stronger of the two entities and the acquirer vs. the acquiree. On a pure operational asset basis AA is the stronger of the two entities with transatlantic (including prime LHR slot ownership) and transpacific JVs and leadership in the burgeoning Latin America market. This isn't a checkers game, it's chess.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Mon Oct 29, 2012 2:48 pm

Planned in court this week. I do however strongly suspect the weather might force delays and reschedule.


o Extension for negotiations covering negotiations for 3 767s - N319, 320, 327
o Objection to 81 pending creditor trade claims
o Amend and supersed 193 pending creditor trade claims
o Reject 18 pending creditor trade claims
o Tentatively authorize modified lease term sheet covering 21 EJ135, 59 ERJ140 and 118 ERJ145 aircraft and allow $650mil security trustee claim against AMR. Also authorize 60-day extension to finalize agreement.
o Motion to extend exclusivity periods to March 28, 2013
o Authorize assumption of facility leases at ABQ and SAT
o Extension to negotiate facility leases at LAX, ONT, JFK, ORD, BDL, BNA, RNO, and ELP
o Authorize employment of Collateral Verifications, LLC as aircraft valuation consultant
o Hearing to extend automatic stay in adversary proceedings against AMR

=
From the desert to the sea, to all of Southern California
 
DLD9S
Posts: 155
Joined: Wed Jun 14, 2006 12:25 pm

RE: AMR Bankruptcy Court Thread - Part 4

Wed Oct 31, 2012 7:55 pm

Does anyone know if the meeting between AA and US happened yesterday? I am assuming not since it was supposed to be held at the NY offices of Weil, Gotshal & Manges, but maybe it had a change of locale?

Also what impact - if any - does the end of the NDA have on this meeting if it has been pushed till later.
717 727 737 747 757 767 777 DC9 DC10 M80 M90 M11 L10 AB6 333 340 319 320 321 ARJ CRJ EM2 EMJ SF3 146 100 BE1...
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Mon Nov 05, 2012 8:42 pm

As expected all court events from last week were postponed, and now rescheduled for November 8th, at a new venue - Federal Court House up in White Plains.
From the desert to the sea, to all of Southern California
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 09, 2012 3:40 pm

IRS and US Treasury Dept approve AMRs plan to freeze its pilot pensions.

The departments will allow an exemption that permits AMR to avoid offering lump-sum payouts as retirement benefit option, and instead simply offer monthly pension payments on accrued benefits in the frozen plan.

AMR had argued that the lump-sum payments would be a bank breaker, but it needed governmental approval for the exemption as pilots hired prior to 1983 still held such rights under regulations.


Story:
American Airlines gets OK to freeze (not terminate) pilot pensions
http://aviationblog.dallasnews.com/2...not-terminate-pilot-pensions.html/

=
From the desert to the sea, to all of Southern California
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 7:10 am

Both US Airways and AMR have briefed the creditors committee this week.

US Airways presented its case on Tuesday, while AMR CEO presented his views on Wednesday.

Reportedly any deal would provide the creditors a large share of the merged company.


Stories
http://aviationblog.dallasnews.com/2...th-american-airlines-is-good.html/
and
http://www.dallasnews.com/business/a...s-on-stock-in-potential-merger.ece

=
From the desert to the sea, to all of Southern California
 
Byrdluvs747
Posts: 2375
Joined: Thu Jul 15, 2004 5:25 am

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 7:56 am

Quoting LAXintl (Reply 14):

Reportedly any deal would provide the creditors a large share of the merged company.

I would assume that the AMR creditors would be the majority stakeholders in any new airline. If thats the case, how can it be guaranteed that Doug would remain as the CEO?
The 747: The hands who designed it were guided by god.
 
commavia
Topic Author
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 1:47 pm

Quoting LAXintl (Reply 14):
Both US Airways and AMR have briefed the creditors committee this week.

US Airways presented its case on Tuesday, while AMR CEO presented his views on Wednesday.

Reportedly any deal would provide the creditors a large share of the merged company.


Stories
http://aviationblog.dallasnews.com/2...th-american-airlines-is-good.html/
and
http://www.dallasnews.com/business/a...s-on-stock-in-potential-merger.ece

Based on the reporting in WSJ, it sounds as though the two sides are proceeding down two separate, parallel paths while at the same time negotiating the broad outlines, and eventually the details, of a merger. The big difference, not surprisingly, is over whose side's creditors/shareholders get what portion of the merged company, although it appears Parker has now essentially given in to the AMR side's demands for at least 70% of the combined company. Let's hope that if a merger does happen, it creates a viable, successful airline capable of delivering value and benefits to all of the combined company's stakeholders - including creditors, employees, and - critically - customers.
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 4:32 pm

If I had a large state in US Airways (individual shareholder, hedge fund manager, pension plan administrator, etc.), I would hate to see my stake significantly reduced in voting power, just to get a deal done with AMR/AA.

Would the shareholders of US have to approve a merger? If so, assuming that the creditors of AMR get the lion's share of the new stock, what are the chances that they would vote down a merger.

And frankly, if I am a part of the leadership of a US union, I'm not sure that I'm comfortable with a merger. Any combined collective bargaining group is going to be dominated by AA employees, both in terms of numbers of rank and file, as well as leadership.

The former TWA F/As will tell you have the APFA ran roughshod over them.

Granted, Congress changed the laws on how seniority lists are combined. Still, it becomes difficult for a US pilot, F/A, or mechanic to become a national officer of the union, with that many AA employees.
 
avek00
Posts: 3157
Joined: Mon Oct 25, 2004 5:56 am

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 4:37 pm

Horton is smartly trying to kill the deal by insisting on a massive share of the combined equity for American's creditors. It is going to be difficult for Parker to meet or counter the high bar Horton is setting.
Live life to the fullest.
 
commavia
Topic Author
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 8:34 pm

Quoting avek00 (Reply 18):
It is going to be difficult for Parker to meet or counter the high bar Horton is setting.

I'm not so sure. Parker has reportedly already come off his initial position of a 50/50 split to come up to the AMR position of 70/30. I think he is willing to throw basically anybody under the bus (including USAirways stockholders and employees) to get his deal done.

In other news, AA confirmed today that its solicitation for new flight attendant applicants was over 10x oversubscribed - 20,000+ applicants for 1,500 positions. With that large a disparity, is it any wonder that AA (and other airlines) get away with paying flight attendants and certain other airline employees what they do?
 
User avatar
par13del
Posts: 6678
Joined: Sun Dec 18, 2005 9:14 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 15, 2012 8:49 pm

Quoting commavia (Reply 19):
is it any wonder that AA (and other airlines) get away with paying flight attendants and certain other airline employees what they do?

Well, there are a large number of pilots out on furlough and or out of jobs yet the airlines all have to go to the pilots to get things done.
I think it is about the power that the job holds, not the number of persons on the outside looking in, flights cannot operate without F/A's, but the F/A unions do not appear to be as consolidated as the pilots, then again, the mechanics at NW were and look where it got them, so I still think it is about the power of the job.
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 16, 2012 6:51 am

First of all, we're in a bad economy. Any time an employer announces openings for 1500 people, far more than that number will apply.

Second, there is still a certain romanticism about jobs in the airline indusry, especially flight crews. The idea of being in New York today, San Francisco tomorrow, and Miami the day after still is attrractive, even if this is 2012 with a poor excuse for a coach product, as opposed to 1962, when jet travel was new, and coach customers were pampered.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Mon Nov 26, 2012 3:51 pm

Due to multiple delays and reschedules result of Hurricane Sandy, the BK court is back to work this week with an extremely busy agenda.

o Approval of assumption of payment and processing agreements related to credit card and merchant services
o Authorize issuance of subpoenas for testimony for PBGC
o Authorize Payment of fees for professional services and expenses rendered by special counsel and professional advisors
o Reimbursement of fees incurred by members of unsecured creditors committee
o Approval of settlement agreement covering 1 MD-80 aircraft: N59523
o Approval of settlement agreement covering 6 B757 aircraft: N614, 626, 627, 629, 632, 648
o Objection to 181 creditor claims against AMR found to be duplicates
o Amend and supersede creditor 193 claims against AMR
o Tentatively reject 18 claims against AMR with insufficient documentation
o Objection to waive 68 insured claims against AMR
o Objection to 14 deductible insured claims against AMR
o Objection to 16 claims for equity interest against AMR
o Approve 22 no liability claims against AMR
o Authority to retain and employ ICF SH&E, Inc. as consultants
o Authority to retain and employ Skyworks Capital, LLC as advisors
o Authority to retain and employ McKinsey
o Objection of claims related to special interest bonds at AFW
o Objection of claims related to airport revenue bonds at TUL
o Objection of claim related to airport revenue bonds at DFW
o Objection of claim related to airport subleases bonds at LAX
o Objections against various claims, indentures and notes.
o Authorize and approving amendments to bank processing agreements and reaffirmation of guaranty
o Approve settlement agreement with Sabre Inc.
o Authorize assumption of various facility leases and payment of cure amounts at BDL, LAX, and RNO
o Extension of time to negotiate facility leases at JFK, BWI, BNA, STL, ONT, LAX and SJU
o Approval of sale-leaseback agreement with Wilmington Trust Company company covering single 737: N992AN
o Motion for summary judgment in proceeding ALPA vs American Eagle Airlines

=
From the desert to the sea, to all of Southern California
 
User avatar
par13del
Posts: 6678
Joined: Sun Dec 18, 2005 9:14 pm

RE: AMR Bankruptcy Court Thread - Part 4

Mon Nov 26, 2012 3:58 pm

Quoting ckfred (Reply 17):
Granted, Congress changed the laws on how seniority lists are combined.

Which does not appear to have assisted the US East West North South groups get their act together, add in AA groups and we have airline armageddon, however, hope does spring eternal, the US group will put aside their differences to merge with AA and the AA groups will put aside their differences to get rid of AA management.
Cool
 
miaami
Posts: 613
Joined: Thu Jul 12, 2007 2:27 am

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 29, 2012 1:08 am

Interesting developement, could this sway the Pilots vote on their T/A?

http://www.bloomberg.com/news/2012-1...and-alone-american.html?cmpid=yhoo

[Edited 2012-11-28 17:22:01]
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 29, 2012 3:58 pm

Today is the 1-year anniversary since AMR filed Ch-11.   
From the desert to the sea, to all of Southern California
 
silentbob
Posts: 1539
Joined: Tue Aug 15, 2006 1:26 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Nov 29, 2012 5:01 pm

Quoting par13del (Reply 23):
Which does not appear to have assisted the US East West North South groups get their act together, add in AA groups and we have airline armageddon, however, hope does spring eternal, the US group will put aside their differences to merge with AA and the AA groups will put aside their differences to get rid of AA management.

That merger/integration started before the law was passed. Any new integration would be required to follow the steps laid down in the new law.
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 30, 2012 5:04 am

Quoting par13del (Reply 23):
Which does not appear to have assisted the US East West North South groups get their act together, add in AA groups and we have airline armageddon, however, hope does spring eternal, the US group will put aside their differences to merge with AA and the AA groups will put aside their differences to get rid of AA management.
Cool

Why not get rid of AMR management without merging with US? Doug Parker got his start at AA, and AA's culture is not noted for turning out great corporate leaders, as opposed to cultures at companies such as McDonald's or General Electric.

So, why get Doug Parker, who will be rehashed Carty, Arpey, and Horton?

Between the unions, they ought to convince some of the creditors/future AMR shareholders to look outside of the current management for new leadership. As I've said on other posts, try hiring an executive from a hotel chain or cruise line, since they know a thing or two about hospitality.

Heck, hire someone from Southwest. The folks at DAL seem to value the relationship between management and labor far more than the folks near DFW.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 30, 2012 5:58 pm

Horton and gang need to see that regardless of how things play out they will be shown the door.

Now with the bondholders clearly stating one of their conditions would be a new board, its clear come a US merger, or a standalone airline, AMR will have different leadership in charge.
From the desert to the sea, to all of Southern California
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 30, 2012 8:42 pm

Quoting LAXintl (Reply 28):
Horton and gang need to see that regardless of how things play out they will be shown the door.

Just remember that a lot of UA employees were mad at Glen Tilton and wanted him out, espeically since UA spent so much time in bankruptcy. Yet, Tilton and his team remained in charge upon discharge from Chapter 11, until the merger with CO.

This will all depend on how the new shareholders (mostly bondholders and AA's unions) feel about Horton and his team. If the unions can't find enough shareholders to side with them, they may very well leave Horton and his team in charge, especially if they believe AA will be better off in the long term as a standalone carrier.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 30, 2012 9:03 pm

AMR seeks to extend its exclusivity period until March 11, 2013 now. Currently this ends in January.

AMR wants keep control over bankruptcy
http://finance.yahoo.com/news/amr-se...s-keep-control-over-180712162.html

=
From the desert to the sea, to all of Southern California
 
ldvaviation
Posts: 976
Joined: Sun Dec 21, 2008 7:21 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Nov 30, 2012 9:09 pm

Quoting LAXintl (Reply 28):
Now with the bondholders clearly stating one of their conditions would be a new board, its clear come a US merger, or a standalone airline, AMR will have different leadership in charge.

Those bondholders do not hold a majority of the debt, about $900 million in total.

There are factions everywhere trying to influence the outcome. As of yet, there is no consensus, but there are more and more signs that the stand-alone plan might be the one that is gaining favor.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Wed Dec 05, 2012 9:58 pm

AE reached a TA with its dispatchers. AMR has now reached a deal with all its AE work groups.
From the desert to the sea, to all of Southern California
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Dec 07, 2012 7:30 pm

What time is the APA expected to announce the results of voting on the last T/A?
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Dec 07, 2012 7:40 pm

Just after I hit post, I saw the new thread about the pilots approving the T/A. So, where does AA go from here. And, how soon before AA starts the process to finalize the contract for the 787 order?
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Mon Dec 10, 2012 4:20 pm

A few court items for this week.

o Reimbursement of expenses incurred by members of unsecured creditors committee
o Objection of 18 creditor claims due insufficient documentation
o Proof of claim motion on ongoing patent claim case against AMR by Katz Technology Licensing
o Authorize employment and retention of Haynes and Boone LLP as special counsel


Of course the big news last week was APA approval of the contract TA, and also US Airways formal bid.

Regarding the APA contract, AMR has asked the court for permission to shorten the notice time frame before it can appear on the court calender for a hearing. Normally the court requirement is that hearing items must be listed with minimum 21-days notice. AMR is seeking a hearing as early as December 19th.
Basically it looks like AMR does not want this to be held up with holiday and new years schedule interruptions.
From the desert to the sea, to all of Southern California
 
commavia
Topic Author
Posts: 9744
Joined: Mon Apr 25, 2005 2:30 am

RE: AMR Bankruptcy Court Thread - Part 4

Mon Dec 17, 2012 11:01 pm

As has been previously reported, AMR CEO Tom Horton met last week with the Board of the AA pilot union to present his "vision" for the company's future. Apparently unhappy with the APA's characterization of the meeting/discussion, AA today released a heavily-redacted version of the presentation Horton gave to the APA board.

AA's accompanying message emphasized that Horton was agnostic on whether to merge or not, and now versus later, although that is hard to believe given his pronouncements to date, and given that his presentation seemed to be geared entirely towards a non-merged entity. Nonetheless, the presentation does offer some interesting points - many already known and discussed - about the standalone plan Horton is likely pitching to creditors. Among other notable things in the presentation:

- AA's restructuring to date has, in toto, rejected or renegotiated aircraft financing for over 400 aircraft, rejected or renegotiated over 9,000 vendor contracts, and "addressed" over 500 real estate leases

- AA believes its restructuring has produced a "leading non-labor cost position" among the U.S. majors

- 70% of AA's revenue comes from 25% of its customers

- [Redacted] new routes planned, with a focus on long-haul flying, with a "focus on global growth inline with traffic projections"

- AA's plan projects the need for approximately 1,650 newly-hired pilots by 2017, and expects substantially more rapid promotions to Captain

- AA claims that since December, "corporate account wins and renewals have accelerated YOY"

- AA currently serves 58 of the top 100 global city-pairs, second only to United (with 79) among the U.S. legacy carriers

- The presentation interestingly redacted the content under the subheading "Our ‘Next Generation Airport’ will open at DFW Terminal A this February" ... AA obviously feels this is highly proprietary, so I wonder what AA is planning to announce on this?

- While AA is already close to United and Delta in share of system ASMs in international markets, despite being smaller overall, AA plans to grow this share in the next five years to match United's current level of 43% of system ASMs being international

- The heavily-redacted slide on organic network growth shows two examples - one with BUF shown as a spoke connected to only a single hub (ORD), the other showing BOG as a spoke connected to only a single hub (MIA) ... the implication is obviously that the unredacted version shows growth from those spokes, and presumably implies growth from others, and we found out today what growth AA envisions for BOG (BOG-DFW starting "late 2013")

- Slides 30-36 are probably the most tantalizingly redacted in the deck, highlighted planned "Mainline New Routes By [Region]" year-by-year through 2017 ... the obvious takeaway is that mainline growth is going to be disproportionately international, which we already knew, and the fact that a line is included for "Middle East/India/Africa" does beg the question of where AA (mainline) is planned to serve in that region, let alone to Europe, Asia, Latin America, and domestic ... would be incredibly interesting to see the unredacted versions of those slides!

- Slide 37 shows the layout of AA's massive aircraft order book through 2017, most of which was already known, although it does also show a clear picture of the 787 delivery timeline, with 2 in 2014, 11 in 2015, and 13 in 2016, and then everything from 2017 onward for all aircraft redacted

- AA claims average "annual pilot pay" will substantially increase over the life of the new AA pilot contract

- A stacked column chart shows the anticipated pilot staffing by fleet group through 2017, and the substantially growing stack for the 737/A320/MD80 and substantially shrunken stack for 757/767 highlights the impending drawdown of 757s and rampup of new Boeing and Airbus narrowbodies

- Unsurprisingly, all of the proprietary financials - debt and capital structure, etc. - is entirely redacted
 
BarryH
Posts: 61
Joined: Sat Sep 29, 2012 6:00 am

RE: AMR Bankruptcy Court Thread - Part 4

Mon Dec 17, 2012 11:56 pm

Quoting commavia (Reply 36):
As has been previously reported, AMR CEO Tom Horton met last week with the Board of the AA pilot union to present his "vision" for the company's future. Apparently unhappy with the APA's characterization of the meeting/discussion, AA today released a heavily-redacted version of the presentation Horton gave to the APA board.

Since emotion is what's driving pilot sentiment I don't see anything that Horton or anyone tied to AA as it stands today could present that would change the pilot's thinking. I wonder what their reaction would be if, as sizable shareholders of the "new AA,” they were shown objective analysis that waiting two years to buy US would appreciate their holdings by several billion dollars? My guess is it wouldn't matter because the goal is to kill Horton; not to do what's best for AA or their personal futures. Their looking at the simplistic view that bigger=better and that a combined AA/US is automatically a better AA. There's an old adage, "be careful what you wish for, it may come true."

I kind of lost faith in them as business people when I heard they were trying to factor their percentage of ownership in the company for cash as soon as physically possible. With the savings extracted through bankruptcy and some incredibly powerful assets unless some cataclysmic event occurs cashing out now represents a 20-25% loss over waiting two years. C'est la vie.

P.S. - I don't mean to generalize all AA pilots in to the same category; quite a few here have expressed sound, objective, long-term thinking. The majority? Not so much.
 
ldvaviation
Posts: 976
Joined: Sun Dec 21, 2008 7:21 pm

RE: AMR Bankruptcy Court Thread - Part 4

Tue Dec 18, 2012 3:03 am

Quoting commavia (Reply 36):
The presentation interestingly redacted the content under the subheading "Our ‘Next Generation Airport’ will open at DFW Terminal A this February" ... AA obviously feels this is highly proprietary, so I wonder what AA is planning to announce on this?

Didn't the DFW Airport Board already give away some of the details in its description of the improvements to the terminal lobbies?
 
justplanenutz
Posts: 562
Joined: Fri Feb 10, 2006 9:48 am

RE: AMR Bankruptcy Court Thread - Part 4

Tue Dec 18, 2012 4:55 pm

Quoting BarryH (Reply 37):
Slide 37 shows the layout of AA's massive aircraft order book through 2017, most of which was already known, although it does also show a clear picture of the 787 delivery timeline, with 2 in 2014, 11 in 2015, and 13 in 2016, and then everything from 2017 onward for all aircraft redacted

It also shows that the remaining 5 772 orders in 2014-2016 will be taken as 77Ws. No big surprise, but I don't believe AA has said this before.

[Edited 2012-12-18 09:30:52]
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Tue Dec 18, 2012 5:03 pm

One last round of hearings this week before court holiday break.

o Objection to AMR motion for settlement with APA for supplement B pilot beneficiaries
o Objection to AMR motion to eliminate lump sum and installment benefits for APA members
o Reimbursement of expenses incurred by members of unsecured creditors committee
o Notice of hearing authorizing AA entry into CBA and settlement agreement with APA
o Notice of hearing for amendment of AA pilot retirement benefit program
o Authorize to enter into amended provisions on lease agreements covering 56 737 aircraft
o Extend exclusivity periods to May 10, 2013.
o Allowance and payment of professional fees
o Authorize assumption of certain unexpired facility leases at BWI, RSW, ORF, TUL and OKC
o Further extend time to negotiate facility leases at ATL, JFK, ORD, DTW, SFO, ELP, RDU
o Authorize AE to enter into CBA and settlement agreement with TWU
o Authorize AE to enter into CBA and settlement agreement with ALPA
o Authorize AE to enter into CBA and settlement agreement with AFL-CIO

=
From the desert to the sea, to all of Southern California
 
wolfpacker
Posts: 343
Joined: Tue Jun 29, 1999 2:35 am

RE: AMR Bankruptcy Court Thread - Part 4

Wed Dec 19, 2012 8:23 pm

 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Wed Jan 02, 2013 4:11 pm

With holidays over the court returns to business. Items scheduled for upcoming hearing.

o Lift of stay on pending Department of Labor litigation against AMR in 11th Circuit court.
o Consider motion of objection by Westinghouse Aircraft Leasing regarding proposed settlement on single B757 - N632AA
o Motion by USAPA for document discovery and testimony from AMR and US Airways
o Further delay in assumption or rejection of real-estate property and leases at LAX
o Motion of limited relief by U.S. Bank Trust National for protection in aircraft security agreements in case of default by AMR.
o Motion of limited relief by U.S. Bank Trust National for protection for pass through trust certificates in case of default by AMR.
o Notice of hearing approving settlement between AMR and City of St. Louis covering leases and property
o Notice of hearing approving rejection of leases and agreements between AMR and Wayne County Airport Authority
o Authorizing debtors to purchase 2 777-300ER aircraft from the Boeing Company.
o Notice of hearing authorizing AMR to sell property in London UK and fullfill related obligations
o Authorize use and lease agreements with Raleigh Durham Airport Authority
o Extension of time to negotiate regarding unexpired leases at JFK
o Motion for dismissal of proceeding of MCM Elegante Hotel versus American Eagle
o Motion for summary judgement in proceeding of ALPA versus Americn Eagle

=
From the desert to the sea, to all of Southern California
 
mffoda
Posts: 1017
Joined: Thu Apr 15, 2010 4:09 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Jan 03, 2013 1:41 pm

There is an update on the AA / Airbus order on the Dallas news website.... Kinda funny  http://aviationblog.dallasnews.com/2...s-but-were-not-sure-how-much.html/
harder than woodpecker lips...
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Thu Jan 03, 2013 3:54 pm

Quoting LAXintl (Reply 42):
o Motion by USAPA for document discovery and testimony from AMR and US Airways

What is this all about? Sounds to me as if USAPA has some qualms about the possible AA/US merger, and how the merger would affect US pilots in terms of the current seniority issues and seniority with AA pilots.

A friend of mine, who is an AA pilot, said that if AA and US merged, chances are that there would be some "fences" on the crew bases. US pilots don't want senior AA pilots switching to PHL, CLT, or PHX, while AA pilots don't want US pilots switching to LAX, DFW, MIA, ORD or LGA/JFK.
 
AADC10
Posts: 1507
Joined: Sat Nov 13, 2004 7:40 am

RE: AMR Bankruptcy Court Thread - Part 4

Thu Jan 03, 2013 6:38 pm

Quoting Prost (Reply 5):
So does the CEO now report to the bond holders?

Effectively yes. The CEO has to report to the Bankruptcy judge and court, which represents the interests of the bond holders and to some extent labor. The shareholders are at the back of the line and will likely be wiped out and new shares will be issued to bond holders.

Quoting commavia (Reply 19):
I'm not so sure. Parker has reportedly already come off his initial position of a 50/50 split to come up to the AMR position of 70/30. I think he is willing to throw basically anybody under the bus (including USAirways stockholders and employees) to get his deal done.

US will get run over if it does not make this deal. It is getting squashed by UA, DL and WN. Merged with AA it will have a size similar to UA and DL, if lacking the network balance of the other two. Failing to make the deal is also throwing them under the bus because US will struggle to survive alone.

Quoting ckfred (Reply 27):
Why not get rid of AMR management without merging with US? Doug Parker got his start at AA, and AA's culture is not noted for turning out great corporate leaders, as opposed to cultures at companies such as McDonald's or General Electric.

What are you talking about? AA under Bob Crandall in the 1980s brought together a bunch of young executives that AP called a "Brat Pack" that now run US, VX and NK, along with others that run various parts of the travel industry. AA clearly created more industry leaders that just about any airline. Maybe they did not meet your definition of "great" but they did better than any other airline's former execs.

http://news.yahoo.com/american-brat-...rline-ceos-came-age-173846806.html
 
aaexecplat
Posts: 351
Joined: Tue Sep 29, 2009 2:49 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Jan 04, 2013 11:03 am

Quoting AADC10 (Reply 45):
US will get run over if it does not make this deal. It is getting squashed by UA, DL and WN. Merged with AA it will have a size similar to UA and DL, if lacking the network balance of the other two. Failing to make the deal is also throwing them under the bus because US will struggle to survive alone.

The much bigger issue for US is the debt that is maturing in 2014 and the relatively low cash balance in hand...and the work groups pushing for industry wages. Dougie is up a creek without a paddle if the merger doesn't happen.
 
ckfred
Posts: 4715
Joined: Wed Apr 25, 2001 12:50 pm

RE: AMR Bankruptcy Court Thread - Part 4

Fri Jan 04, 2013 7:14 pm

Quoting AADC10 (Reply 45):
What are you talking about? AA under Bob Crandall in the 1980s brought together a bunch of young executives that AP called a "Brat Pack" that now run US, VX and NK, along with others that run various parts of the travel industry. AA clearly created more industry leaders that just about any airline. Maybe they did not meet your definition of "great" but they did better than any other airline's former execs.

NK is a miserable excuse for an airline. VX may have a great product, but it remains to be seen if they can become consistantly profitable. Any time I read a list of airlines people avoid because of service issues, US is on it.

I point out that Carty worked for AA/AMR for quite a while under Crandall before becoming CEO. Arpey was a career guy at AMR before his tenure as CEO. Neither was particularly successful.

If I were a creditor about to become a shareholder of the new AMR/AA, I think I would prefer someone you never worked at AA and would bring a fresh perspective to the company.
 
LAXintl
Posts: 20183
Joined: Wed May 24, 2000 12:12 pm

RE: AMR Bankruptcy Court Thread - Part 4

Wed Jan 09, 2013 10:21 pm

A nice surprise to many, but AMR now says that shares of the company might not be worthless and actually hold some equity upon BK exist.

If true, would be one of the only airlines that did not have it shares cancelled in recent times upon exit from court supervision.

AMR says stock may be worth something after bankruptcy exit after all
http://aviationblog.dallasnews.com/2...ething-after-bankruptcy-exit.html/

=
From the desert to the sea, to all of Southern California
 
User avatar
teme82
Posts: 1197
Joined: Fri Mar 23, 2007 6:38 am

RE: AMR Bankruptcy Court Thread - Part 4

Wed Jan 09, 2013 11:59 pm

Have to say that after hearing the talk of AA pilot's and FA's in London. Yeah I had same hotel for my stay in there. I must say that the pilots are a bit more happier than the FA's. Can't say exactly why. Listening multiple sources on the same time isn't so easy at all. And there is some issues with the ex-TWA crew's also. But the mood is that they all are glad that AA can exit Ch. 11 eventually.
Flying high and low

Who is online

Users browsing this forum: a380787, Aaron747, aflyingkiwi, Baidu [Spider], beachba, Bing [Bot], Bostrom, coolian2, CrimsonNL, Fiend, jay767, JerseyFlyer, Jetstar315, Kilopond, Prost, ThePointblank, tugpilot, Ugly51, ZKLOU and 271 guests