norcal
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 3:05 pm

A quick internet search found this article, I'm glad the new media is finally reporting this stuff:

LONDON (Reuters) - Buried deep in American Airlines' Chapter 11 bankruptcy filing is a striking asset -- a town house in one of London's most expensive residential streets that property experts say could be worth up to $30 million.

UK regulatory filings show the house has been used as a residence for senior executives, including the current chairman and chief executive Thomas Horton, since the airline bought it in the early 1990s.

The plush residence in Cottesmore Gardens -- recently named Britain's 10th most expensive address by property firm Zoopla --


http://finance.yahoo.com/news/Exclus...ican-Airlines-rb-38862952.html?x=0

This property and any other like it should be sold immediately. If AMR wants to destroy the retirements of thousands of employees then management should not get perks like this.
 
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Acey559
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:22 pm

I received an email from the Eagle MEC last night announcing the furlough of the 20 pilots that started class December 5th. The went home to complete their week of computer-based training and were told not to come back. As of yet there are no public plans to furlough more, but I don't think it's a good sign. Probably time to start updating the resume again.  
In Dixie Land I'll take my stand to live and die in Dixie.
 
FlyASAGuy2005
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:25 pm

Don't worry Acey, the Delta family will gladly take you. A bunch of new RJ flying in 2012 with LGA gaining hub status.
What gets measured gets done.
 
commavia
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:42 pm

Quoting norcal (Reply 49):
Here's a question, why does AMR own a private residence located at 16 Cottesmore Gardens London W8? Which executive is this for? I wonder what other kind of wasteful spending is going to be uncovered in the bankruptcy process.

While I'm certainly not defending or justifying AMR's actions, I think it remains to be seen just how "wasteful" this real estate really was.

The executive who lived here was almost certainly AMR's VP of Europe, and now VP of International, who has for most of the time since the "early 1990s" been an American (nationality) living in London for a temporary period of a few years. Anybody with experience with London hotels or real estate knows how astoundingly expensive they can be - particularly in good areas with convenient access (and that area of Kensington/Knightsbridge is on the same tube line as Hounslow). I've got to think corporate housing in London isn't cheap (although of course it could certainly have been gotten for less than the price of a mansion in a posh neighborhood).

AMR says they bought the property in the "early 1990s," and implied at a lower price than at today's - U.K. real estate prices have still not receded from the recent boom as much as in the U.S. They certainly didn't need to be in Knightsbridge/High Street Kensington, and a more practical location would have been closer to Heathrow. But, nonetheless, at a (likely substantially) lower early 1990s price, amortized over decades, when factoring in housing cost for a usually-expact executive living there plus hotel costs for other visiting AMR executives, it may well have been a not-so-wasteful decision at the time.

Nonetheless, for me (avowed airline nerd that I am), this mansion in London is actually among the least interesting things in that section of the filing. Far more fascinating to me were the listings of other AMR/AA properties - both on- and off-airport - around the world. There was so rather intriguing holdings on that list.

Quoting FlyASAGuy2005 (Reply 52):
Don't worry Acey, the Delta family will gladly take you. A bunch of new RJ flying in 2012 with LGA gaining hub status.

Is Delta really going to be net-adding a "bunch of RJ flying" in the future? It seems that Delta - like just about every other U.S. carrier - is actively looking to get out of RJ capacity whenever the opportunity arises. I was under the impression that the new LGA buildup would be funded primarily by the drawdown of existing RJ flying elsewhere (mostly CVG and MEM). I wouldn't be surprised if we see an announcement in the relatively near future outlining the plans for LGA and perhaps the accompanying reductions in some of the flying at other stations.
 
FlyASAGuy2005
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:49 pm

Quoting commavia (Reply 53):
Is Delta really going to be net-adding a "bunch of RJ flying" in the future? It seems that Delta - like just about every other U.S. carrier - is actively looking to get out of RJ capacity whenever the opportunity arises. I was under the impression that the new LGA buildup would be funded primarily by the drawdown of existing RJ flying elsewhere (mostly CVG and MEM). I wouldn't be surprised if we see an announcement in the relatively near future outlining the plans for LGA and perhaps the accompanying reductions in some of the flying at other stations.



That is true but the fact of the matter is, everyone is understaffed. Hiring was being held awaiting the outcome of the slot swap. Drawdown or not, they need pilots, especially ASA and Pinnacle. Talk to any EV FO/Captain. They've been flying 3-4 day trips back to back for over a year now. On the 9E side, they are stretched so thin it's not even funny. Crews are timing out and getting stuck in outstations causing other flights to cancel. Happened every single day during the summer and they're no better now than they were. On the DL side, DCA has been running bare bones since last year, having to pull TDY guys from other stations to work the ramp and gates because they didn't want to do too much hiring and have to let people go come 2012.
What gets measured gets done.
 
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seabosdca
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:54 pm

Quoting commavia (Reply 53):
But, nonetheless, at a (likely substantially) lower early 1990s price, amortized over decades, when factoring in housing cost for a usually-expact executive living there plus hotel costs for other visiting AMR executives, it may well have been a not-so-wasteful decision at the time.

I'll grant you this for the sake of argument, although plenty of other large companies get by with putting their overseas executives in ordinary corporate apartments, not mansions. Still not cheap, but much cheaper than this, even in the early 1990s. It's not like this was ever anything but one of the wealthiest blocks in London.

But today, with the company in Chapter 11, it would still be ridiculous to keep it, no matter how good a decision it may have been at the time. The creditors could certainly use $15 million (after finding new, less ostentatious housing) and keeping the property would just play into the existing view of AA as a place where everyone except top management (shareholders, employees, suppliers) was asked to sacrifice for the sake of the company.
 
commavia
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 4:58 pm

Quoting seabosdca (Reply 55):
I'll grant you this for the sake of argument, although plenty of other large companies get by with putting their overseas executives in ordinary corporate apartments, not mansions.

Absolutely - as I said in my reply. There's no doubt they could have found a far cheaper alternative, but in the heady days of the "early 1990s" when AMR was in a far different position financially, they obviously went the needlessly extravagant route.

Quoting seabosdca (Reply 55):
But today, with the company in Chapter 11, it would still be ridiculous to keep it, no matter how good a decision it may have been at the time.

Sure. And I don't think anybody - including at AMR - expects this place to survive bankruptcy. They will almost certainly offload it, as well they should. They should have sold it a long time ago.
 
norcal
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 5:02 pm

Quoting commavia (Reply 53):
While I'm certainly not defending or justifying AMR's actions, I think it remains to be seen just how "wasteful" this real estate really was.

The executive who lived here was almost certainly AMR's VP of Europe, and now VP of International, who has for most of the time since the "early 1990s" been an American (nationality) living in London for a temporary period of a few years.

Really? A $30 million mansion isn't wasteful?!?!? A far cheaper flat could have been purchased or rented if something like this was really needed for an executive.

Quoting commavia (Reply 53):
Nonetheless, for me (avowed airline nerd that I am), this mansion in London is actually among the least interesting things in that section of the filing.

It goes to the deeper problem of the attitude of AMR management. Constantly demanding employees take concessions and blaming them for everything wrong with the company while never making cuts themselves and taking millions in bonuses while enjoying perks like a $30 million mansion.

It's actions like this that really rile up AMR employees and cause the resistance we've seen to changes in productivity and pay over the years that are necessary. It's this lack of common sense amongst AMR management that is most troubling. If they'd stop doing this stuff they'd stop giving the unions ammunition to fight the necessary changes.
 
LAXdude1023
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 5:15 pm

Quoting norcal (Reply 57):
Really? A $30 million mansion isn't wasteful?!?!?

When they bought it, it was much cheaper and the airline was profitable.

Thats why I say the problem wasnt that they bought it, but rather that they didnt sell it when AA fell on hard times after 9/11.
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VictorKilo
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 5:19 pm

Quoting norcal (Reply 57):
Really? A $30 million mansion isn't wasteful?!?!? A far cheaper flat could have been purchased or rented if something like this was really needed for an executive.

The sad truth is that the investment in this mansion by AA was a better investment than an investment in AA itself.
 
micstatic
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 5:22 pm

Quoting norcal (Reply 57):
Really? A $30 million mansion isn't wasteful?!?!? A far cheaper flat could have been purchased or rented if something like this was really needed for an executive.

Agree totally wasteful. Although they may make a real estate profit when they flip it, so atleast their is a silver lining.

Quoting norcal (Reply 57):
It goes to the deeper problem of the attitude of AMR management. Constantly demanding employees take concessions and blaming them for everything wrong with the company while never making cuts themselves and taking millions in bonuses while enjoying perks like a $30 million mansion.

It's actions like this that really rile up AMR employees and cause the resistance we've seen to changes in productivity and pay over the years that are necessary. It's this lack of common sense amongst AMR management that is most troubling. If they'd stop doing this stuff they'd stop giving the unions ammunition to fight the necessary changes.

I think AA's management is the worst in the industry. I also think they have some of the most militant and negative employees in the industry. Heck, in any industry. If the entitlement and negativity doesn't end they might as well go chapter 7. Obviously I don't want to see that, but enough is enough already.
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norcal
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 5:51 pm

Quoting micstatic (Reply 60):
I also think they have some of the most militant and negative employees in the industry. Heck, in any industry. If the entitlement and negativity doesn't end they might as well go chapter 7. Obviously I don't want to see that, but enough is enough already

Why do you think they are so negative and militant compared to Delta, United, and especially JetBlue and Southwest.

One answer:

Management

If there existed a better relationship between management and labor then all the problems that AMR is currently facing would have been solved years ago. If AMR management had been right there in the trenches with the employees taking concessions right after the employees did in 2003 then this would be a very different company today. Instead they got greedy and took bonuses rewarding themselves for their "hard work." Really? Who did the actual work? Who made the sacrifices that saved AMR back then?

If AMR management had shared in the sacrifices back then AA would be a very different airline today. They didn't and thus created the militant employee groups that exist now.

Management gets the union it deserves which is why a place like JetBlue has continuously voted down unions despite ALPA's hard drives. They trust their management and have a working relationship with them hence no need to unionize.

Quoting LAXdude1023 (Reply 58):
When they bought it, it was much cheaper and the airline was profitable.

Who cares! There was never a need to give such an extravagant piece of property to an executive. People get so up in arms over our government's wasteful spending but then don't get pissed about stuff like this and occasionally defend it. Does no one see the irony? There was never a need for a mansion no matter how profitable the airline was. It's wasteful spending! A reasonable 3 bedroom apartment in a decent neighborhood would have been more than adequate.
 
micstatic
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 6:11 pm

Quoting norcal (Reply 61):
Why do you think they are so negative and militant compared to Delta, United, and especially JetBlue and Southwest.

One answer:

Management

If there existed a better relationship between management and labor then all the problems that AMR is currently facing would have been solved years ago. If AMR management had been right there in the trenches with the employees taking concessions right after the employees did in 2003 then this would be a very different company today. Instead they got greedy and took bonuses rewarding themselves for their "hard work." Really? Who did the actual work? Who made the sacrifices that saved AMR back then?

If AMR management had shared in the sacrifices back then AA would be a very different airline today. They didn't and thus created the militant employee groups that exist now.

Management gets the union it deserves which is why a place like JetBlue has continuously voted down unions despite ALPA's hard drives. They trust their management and have a working relationship with them hence no need to unionize.

Don't think anybody is defending management. In fact, I went as far as to call it the worst managed airline in the business. But it's been pointed out to you many times on here, that many executives are losing a ton of money just by filing for bankruptcy protection. Jetblue is a young company and they work hard. AA employees will always look backward instead of forward, thus making any positive culture impossible.

Quoting norcal (Reply 61):
Who cares! There was never a need to give such an extravagant piece of property to an executive. People get so up in arms over our government's wasteful spending but then don't get pissed about stuff like this and occasionally defend it. Does no one see the irony? There was never a need for a mansion no matter how profitable the airline was. It's wasteful spending! A reasonable 3 bedroom apartment in a decent neighborhood would have been more than adequate.

Everybody agrees. I think egregious spending like this will rise to the surface during the CH11 process and get killed.
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commavia
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 6:17 pm

Quoting norcal (Reply 57):
Really? A $30 million mansion isn't wasteful?!?!?

It wasn't $30M when they bought it.

Quoting norcal (Reply 57):
A far cheaper flat could have been purchased or rented if something like this was really needed for an executive.

As I already said.

Quoting norcal (Reply 57):
Constantly demanding employees take concessions and blaming them for everything wrong with the company

No member of AMR management has ever blamed employees for "everything wrong with the company."

Quoting norcal (Reply 57):
while never making cuts themselves

AMR's management has made substantial cuts. Maybe somebody who doesn't work at AMR's headquarters wouldn't know that, but tell the non-union folks that work at headquarters that AMR manaegment has "never [made] cuts."

There are plenty of managers at AMR that are smart, motivated, hard-working, and frankly, critical to the future success of the business. There are also plenty that are total useless wastes of life that should have been fired years ago. But neither of those facts mitigates that AMR managers have, indeed, experienced substantial cuts to their own personal finances as well since 2001.

Quoting norcal (Reply 57):
and taking millions in bonuses

Taking millions in stock options - as the unions wanted and supported - much of which are now effectively worthless.

Quoting norcal (Reply 61):
Why do you think they are so negative and militant compared to Delta, United, and especially JetBlue and Southwest.

One answer:

Management

That is needlessly overly simplistic. It's a two-way street. Management and labor both have a long way to go, and neither is entirely absolved of blame for what has gone wrong, nor totally deserving of the credit for what has gone right.
 
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seabosdca
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 6:48 pm

Quoting norcal (Reply 61):
If AMR management had been right there in the trenches with the employees taking concessions right after the employees did in 2003 then this would be a very different company today.

   Specifically, the most visible way to take concessions is to forgo bonuses. People don't know the details of bonuses and don't know if options end up underwater and worthless. They do know that management got a bonus while they took a pay cut.

Quoting norcal (Reply 61):
There was never a need for a mansion no matter how profitable the airline was. It's wasteful spending! A reasonable 3 bedroom apartment in a decent neighborhood would have been more than adequate.

   commavia, I know you've acknowledged this. I'm just reiterating it because it's so symptomatic of the larger issue here.

Quoting commavia (Reply 63):
but tell the non-union folks that work at headquarters that AMR manaegment has "never [made] cuts."

"The non-union folks who work at headquarters" is a lot more people than just the C-suite. I'm sure the people outside the C-suite took the same cuts as the rest of the employees. The criticism here is directed at senior management, who made the completely boneheaded move of taking bonuses at the same time they imposed concessions on everyone else. AA has never been a perfect labor environment, but that step -- all by itself -- started the descent into the poisonous atmosphere that exists today.

[Edited 2011-12-14 10:49:48]
 
norcal
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 6:51 pm

Quoting commavia (Reply 63):
It wasn't $30M when they bought it.

It's still a mansion, which is the point. The mansion is wasteful.

Explain to me why a mansion was needed? Who cares if it wasn't $30 million when they bought it. It's still a heck of a lot more expensive then a more reasonable residence they could have gotten at the time.

Quoting commavia (Reply 63):
AMR's management has made substantial cuts. Maybe somebody who doesn't work at AMR's headquarters wouldn't know that, but tell the non-union folks that work at headquarters that AMR manaegment has "never [made] cuts."

We're discussing top level executives. There isn't a bonus they haven't taken.

Quoting micstatic (Reply 62):
But it's been pointed out to you many times on here, that many executives are losing a ton of money just by filing for bankruptcy protection. Jetblue is a young company and they work hard.

They'll make it all back when they are reissued tons of new stock and cash as bonuses upon emergence for the "good job" they've done in bankruptcy. They'll end up coming out ahead.

The people that are going to be wiped out in all of this are the employees and common stock holders. Management won't suffer at all.

The age of the employee has nothing to do with how hard they work. It's all about corporate culture and AMR management has fostered an environment of fear. There are a ton of former AA pilots (and other furloughed legacy pilots) at JetBlue (and other carriers like Southwest and Virgin America) right now and they don't create a fuss because they are treated well by management.

Quoting commavia (Reply 63):
It's a two-way street. Management and labor both have a long way to go, and neither is entirely absolved of blame for what has gone wrong, nor totally deserving of the credit for what has gone right.

Like I said before if management hadn't done what they did years ago we wouldn't be in this situation. Management is leadership, you lead by example. They need to make the first step to begin the healing process. I haven't seen any attempt ever by AMR management to attempt this. Just more bonuses, it's like rubbing salt in a wound.
 
commavia
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 7:04 pm

Quoting norcal (Reply 65):
It's still a mansion, which is the point. The mansion is wasteful.

Explain to me why a mansion was needed?

To be honest, I can't. As you might imagine, I wasn't exactly in the meeting twenty years ago where the purchase of this property was approved.

However, I can definitely imagine how an expenditure like this definitely could have been justified by management if the price at the time was right, the financing and tax implications were favorable, the executive housing and hotel costs in London were become untenable (which I find entirely plausible), and AMR decided they needed somewhere in central London to maintain a more visible corporate presence.

Again - not defending it, and not justifying it. But I can see how in a different time, when AMR had just stepped into its massive presence at Heathrow, and in the U.K., and was trying desperately to increase its profile there in its high stakes competition against then-arch-enemy BA, this could have been sold as reasonable to senior AA management at the time.

Quoting norcal (Reply 65):
We're discussing top level executives. There isn't a bonus they haven't taken.

Again, virtually of AMR senior leaders' performance compensation in the past decade has been stock-based. This is precisely how the unions wanted it, as it aligned the incentives of management with those of employees: if everyone (including the rank-and-file) got stock options, AMR management was incenvitized to drive the stock price up.

Quoting norcal (Reply 65):
Like I said before if management hadn't done what they did years ago we wouldn't be in this situation.

And if the unions had accepted reality earlier AA may not be in this state. It's impossible to say, but again - everyone had a role to play.

Quoting norcal (Reply 65):
Management is leadership, you lead by example. They need to make the first step to begin the healing process.

Well, I agree that management is about leadership, and that leadership does start with setting the example. AA management has a long way to go in that process. But, alas, if some elements of AA's unions continue to refuse to accept the reality that the world has changed, and their cost is out of line with the market, that, too, is going to short circuit (or prevent) the "healing process."

AMR isn't the only organization that is going to be badly in need of "leadership" in the months and years ahead. The same will definitely be true of AA's largest unions, all of whom are going to have to walk the tight rope between internal union politics and breaking gently to their members the reality that AA's labor costs are going to have to come down if the company is to survive long-term.

"Leadership" is a two-way street.
 
micstatic
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 7:10 pm

Quoting norcal (Reply 65):
We're discussing top level executives. There isn't a bonus they haven't taken.

Not true. Arpey who resisted CH11 in the first place didn't take his golden parachute.

Quoting norcal (Reply 65):
Like I said before if management hadn't done what they did years ago we wouldn't be in this situation. Management is leadership, you lead by example. They need to make the first step to begin the healing process. I haven't seen any attempt ever by AMR management to attempt this. Just more bonuses, it's like rubbing salt in a wound.

There has been quite a bit of turnover in AMR management since the CH11 filing. II would assume even if every manager was new, you would still refer to them as the same management that caused these problems. While workers did take paycuts or concessions in the past, I would argue that in todays new normal world, those jobs don't derserve the pay and work rules they used to. I didn't get a raise last year, but a member of senior management did. I don't go stomp my feet in his office because I work for him. He doesn't work for me. We are not equals. It sucks, but it is the reality.
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norcal
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 7:36 pm

Quoting commavia (Reply 66):
However, I can definitely imagine how an expenditure like this definitely could have been justified by management if the price at the time was right, the financing and tax implications were favorable, the executive housing and hotel costs in London were become untenable (which I find entirely plausible), and AMR decided they needed somewhere in central London to maintain a more visible corporate presence.

It should have been a reasonable sized flat, not a mansion.

Quoting commavia (Reply 66):
But, alas, if some elements of AA's unions continue to refuse to accept the reality that the world has changed, and their cost is out of line with the market, that, too, is going to short circuit (or prevent) the "healing process."

The union leadership at AMR has been very out of touch with reality for a while, but how do you think they remain in power when more sane leaders could take the reins?

It's not because the majority of labor is somehow stupid and lives in the past. It's because of the bonuses. On the one hand AMR management asks for concession after concession but then award themselves bonuses. It's like throwing gasoline on a fire, if they agreed not to take bonuses as a sign that they understand and respect what labor has done and sacrificed over the years they wouldn't have had these problems and AMR would be very different. Their greed fuels hardline union leadership. What arguments do moderates have for working with the company when the hardliners can simply say, "All of your sacrifices are just going to be used by management to award themselves more bonuses. They've done it in the past and they never appreciate the sacrifices we make, so why should we give them anything?"

If AMR management took steps to demonstrate they are interested in changing then things would be different. Plenty of former AMR employees have gone on to different airlines and proved to be hard working employees who will sacrifice for the company. Heck current AMR employees did plenty of sacrificing for AMR only to watch their sacrifices result in bonuses and management coming back asking for more. It's the culture at American, fostered by management, that has led AMR to where it is. Yes it is a 2-way street but management needs to make the first step since it was their actions that can be directly traced back to the problem.

It gets to a certain point where employees become so disillusioned with their management that the majority simply don't care what happens anymore and a minority becomes extremely militant. Take a look at Eastern for an example of how bad relations and culture can destroy a company.

Quoting micstatic (Reply 67):
I didn't get a raise last year, but a member of senior management did. I don't go stomp my feet in his office because I work for him. He doesn't work for me. We are not equals. It sucks, but it is the reality.

But did your manager say, "I'm going to eliminate and take back your retirement, increase your health care costs, make you work more for less pay (assuming I don't straight up fire you) while I give myself a nice bonus while blaming you for bankrupting the company." doubt it.

Quoting micstatic (Reply 67):
There has been quite a bit of turnover in AMR management since the CH11 filing. II would assume even if every manager was new, you would still refer to them as the same management that caused these problems.

Those managers left on their own accord, they weren't laid off. Arpey already has another job.

The problem with AMR management over the years has been no matter how many new people come in all the same old ideas and strategies come out. The same production is put on but it's just different people running the show. You have to change your actions and attitudes in order to see different results.
 
commavia
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 7:56 pm

Quoting norcal (Reply 68):
The union leadership at AMR has been very out of touch with reality for a while, but how do you think they remain in power when more sane leaders could take the reins?

The union leaders have certainly used the stock options to turn management into villains - that boogie man certainly has helped, no question. But, again, the heads of the unions are all politicians, and just like many (most?) politicians, they have used fear and boogie men in place of actual leadership themselves, particularly considering the history (now long swept under the rug) of how these union "leaders" themselves were strongly in favor of the stock option performance compensation plan for management back in 2003.

Again - "leadership" is a two-way street.

Quoting norcal (Reply 68):
It's not because the majority of labor is somehow stupid and lives in the past. It's because of the bonuses.

It's not that simple. It's certainly not because the labor rank-and-file are stupid, but it's also not simply because of the bonuses.

Quoting norcal (Reply 68):
On the one hand AMR management asks for concession after concession but then award themselves bonuses.

First off, AMR management did not "award themselves" anything. Continuing to propagate this myth just furthers the misinformation campaign that has already so contributed to poisoning the waters.

Secondly, the stock options - not bonuses, stock options - that management was awarded was based on a very simple, straightforward formula set forth back in 2003 that everyone, including the unions, understood and wholeheartedly endorsed and supported.

Quoting norcal (Reply 68):
if they agreed not to take bonuses as a sign that they understand and respect what labor has done and sacrificed over the years they wouldn't have had these problems and AMR would be very different.

I'm with you to a point about not taking the bonuses as a recognition of the sacrifices that rank-and-file employees have made. I, however, do not for one second believe that doing this would have ultimately changed the outcome - for the unions or the company.

Quoting norcal (Reply 68):
Heck current AMR employees did plenty of sacrificing for AMR only to watch their sacrifices result in bonuses and management coming back asking for more.

Not quite. The sacrifices made by AA employees - from management down to rank-and-file - were not tied to the performance-based stock options given to 1,000 managers (nor, for that matter, the millions of stock options given to rank-and-file employees). The stock options had no cash cost to the company, whereas the paychecks every employee gets every week, plus their benefits, and the productivity they produce, all do have very real cash costs for the company. One does not compete with, or detract from, the other.
 
micstatic
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 8:11 pm

Quoting norcal (Reply 68):
But did your manager say, "I'm going to eliminate and take back your retirement, increase your health care costs, make you work more for less pay (assuming I don't straight up fire you) while I give myself a nice bonus while blaming you for bankrupting the company." doubt it.

He didn't need to. For one, I don't have a pension. Anybody with a brain knows pensions are unsustainable, and possibly a ponzi scheme.

Yes, like most companies our health care costs have gone up. The reason is because the national cost of healthcare continues to increase. I don't like it, but it is reality.

In American's case. It's management and its union management have failed.
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par13del
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RE: AMR Bankruptcy Court Thread

Wed Dec 14, 2011 8:41 pm

Quoting seabosdca (Reply 64):
The criticism here is directed at senior management, who made the completely boneheaded move of taking bonuses at the same time they imposed concessions on everyone else.
Quoting norcal (Reply 65):
We're discussing top level executives. There isn't a bonus they haven't taken.
Quoting commavia (Reply 66):
Again, virtually of AMR senior leaders' performance compensation in the past decade has been stock-based. This is precisely how the unions wanted it, as it aligned the incentives of management with those of employees: if everyone (including the rank-and-file) got stock options, AMR management was incenvitized to drive the stock price up.
Quoting commavia (Reply 69):
First off, AMR management did not "award themselves" anything. Continuing to propagate this myth just furthers the misinformation campaign that has already so contributed to poisoning the waters.

Was wondering why it took so long for this myth to appear.
Companies who are loosing money hire agressive managers to come in and make changes, if they lower the loss the Board of Directors usually give a bonus even if the company is still in a loss making position, AA is not the first, second or last company to do this.
Yes the managers could have declined the bonus to stay on good graces with the staff but since the board actually runs the company other than a feel good story it may not have influenced the direction that the board was taking.

The unions were angry before Chpt.11 and are still angry now that they are in Chpt.11, I won't question the merits of their anger, I'm just sitting on the sidelines to see the end result and how it affects my future travels, will they leave, will they stay and take reductions, or stay and continue the fight, in either case, I hope that they can start to heal their own hurt as no one is really going to do it for them.
 
JA
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 5:52 am

I think that most people analyzing a company with revenues of $20B+ per year don't seem to understand how you make that kind of revenue.

The $30M mansion is both a residence and an entertainment venue. When you are courting the business of European financial firms, you may have to throw a party or two. Try doing that at a 3 bedroom flat in an ordinary neighborhood. A substantial amount of business gets done at corporate parties. With the neighborhood being described as posh, I am taking a guess that C-level staff might live down the street. Numerous financial firms have large outposts or headquarters in London. AA has numerous corporate contracts that have continued to float them through this difficult time. How have they protected these contracts?

Now, if you can't understand how investing $15M-20M in a mansion once so that you can protect your corporate contracts in Europe and beyond would be useful, then you don't understand how that world works. It takes money to make money and I would argue that AA should KEEP it if they are planning on continuing to be a global airline.
 
justplanenutz
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 12:47 pm

Here's a pretty good summary of the AMR executive compensation issue from the hometown newspaper:

"Executive pay at American doesn't have much room to go down. Despite the griping about bonuses, former CEO Gerard Arpey was paid more like a utility infielder than a big-time chairman. That's because three-fourths of his realized pay was in stock, and he kept the vast majority of shares as the price plunged.
By my calculations, Arpey made about $15 million in the past nine years. That's $1.7 million annually, roughly one-sixth the going rate for a Fortune 500 CEO."

Arpey certainly had his flaws as a CEO, but being overpaid doesn't appear to be one of them. And, he left without the typical golden parachute.


Read more: http://www.star-telegram.com/2011/12...unions-objected.html#ixzz1gbekz3lk
 
micstatic
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 12:54 pm

Another disturbing point about the attitudes of come American employees I came across yesturday. Here is an excerpt from the flight attendant group:

"Our overworked Flight Attendants spend their too short layovers in noisy accommodations that aspire to be called basic, while AMR executives have been resting their heads in the quiet luxury of one of the world's most exclusive enclaves.

Link: http://aviationblog.dallasnews.com/a...ican-airlines-flight-atten-11.html

I thought AA has the least productive workforce no? I remember seeing data kicked around the site measuring employee productivity. They feel they are overworked. I just feel that the entire statement in the link above is militant and bizare for a company that is fighting for its life.
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MillwallSean
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 1:12 pm

Quoting JA (Reply 72):

The $30M mansion is both a residence and an entertainment venue. When you are courting the business of European financial firms, you may have to throw a party or two. Try doing that at a 3 bedroom flat in an ordinary neighborhood. A substantial amount of business gets done at corporate parties. With the neighborhood being described as posh, I am taking a guess that C-level staff might live down the street. Numerous financial firms have large outposts or headquarters in London. AA has numerous corporate contracts that have continued to float them through this difficult time. How have they protected these contracts?

Now, if you can't understand how investing $15M-20M in a mansion once so that you can protect your corporate contracts in Europe and beyond would be useful, then you don't understand how that world works. It takes money to make money and I would argue that AA should KEEP it if they are planning on continuing to be a global airline.

What you dont understand is that there is NO other company that sees the need to invest in a house on that street or in that neighbourhood. No other company would ever imagine representing in that neighbourhood simply because that place isnt for representation in the first place.
Representation in London is done at private clubs, venues are provided for members. A house in kensington isnt the place for corporate functions even the thought of it is laughable and show no understanding ofd the finer parts of london at all...

Im a Londoner and I know this area. No company in their right mind would set an executive up there. Nor is it a place where extensive representation works or would be allowed.

representation in londonisnt done in peoples homes. Its done in clubs. If its done im homes its done in mansions not kensington houses. mansions tend to be located ion the home counties. Look at where the guide Michelin restaurants are for example...

Why AA kept this place is beyond any normal Londoner. If it was a sheikh from Saudi or Abu Dhabi then it might be understandable but moneyloosing AA at an address no other company can afford. thats just a bad joke.
No One Likes Us - We Dont Care.
 
LAXdude1023
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 2:35 pm

Quoting justplanenutz (Reply 73):
"Our overworked Flight Attendants spend their too short layovers in noisy accommodations that aspire to be called basic, while AMR executives have been resting their heads in the quiet luxury of one of the world's most exclusive enclaves.

Link: http://aviationblog.dallasnews.com/a....html
Quoting justplanenutz (Reply 73):
"Executive pay at American doesn't have much room to go down. Despite the griping about bonuses, former CEO Gerard Arpey was paid more like a utility infielder than a big-time chairman. That's because three-fourths of his realized pay was in stock, and he kept the vast majority of shares as the price plunged.
By my calculations, Arpey made about $15 million in the past nine years. That's $1.7 million annually, roughly one-sixth the going rate for a Fortune 500 CEO."

Arpey certainly had his flaws as a CEO, but being overpaid doesn't appear to be one of them. And, he left without the typical golden parachute.


Read more: http://www.star-telegram.com/2011/12...kz3lk

So, everyone at AA is a victim???

I dont think its the FA's that AA is trying to get more productivity out of. I think its the Pilots.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
stlgph
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 2:47 pm

crossing the wires this morning -- AMR is looking to lay off 218 workers from Eagle.
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Acey559
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 4:51 pm

Quoting stlgph (Reply 77):

The new-hire class got furloughed and they're in talks with lessors to return all DFW ATRs by the end of this month or sometime in January. No word yet on specifics, but things are looking grim. I'm waiting for the ERJ decision, myself.  
In Dixie Land I'll take my stand to live and die in Dixie.
 
stlgph
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 5:02 pm

http://www.bloomberg.com/news/2011-1...ompany-may-be-takeover-target.html

...AMR Corp. (AMR) “most certainly” will cut jobs as the parent of American Airlines revamps its fleet and flight network and may become a takeover target during its bankruptcy, Chief Executive Officer Tom Horton said.

American, the third-biggest U.S. airline, will make decisions “in the coming weeks” about aircraft and the size and shape of its route system, determining how many workers it requires and what it needs to negotiate in labor contracts, he said in a letter to employees today.
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LAXintl
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 5:39 pm

Some various news from this weeks two-day court hearings:

o Court affirmed that permanent presiding Judge over the AMR case will be Sean Lane. Judge Lane has been on the bench since 2001.
o This weeks court hearing was the first time the newly formed creditors committee has met in full. They requested a broad set of operational and financial data from AMR.
o Court establish processes for payment of claims from vendors outstanding from prior to BK petition.
o Court affirmed acquisition of 32 aircraft planned for delivery in 2012. Virtually all planned deliveries are covered by previously entered sale-lease back transactions.
o AMR stated its intention to draw up a "wish-list" under BK section 1113 of labor agreement changes. Any adjustments sought must be reached jointly with unions. Only after good faith bargaining can the list be presented to the court for potential direct action.


Next schedules hearing is December 22nd.
Some tentative topics expected to be covered then are motions seeking to terminate property and aircraft/engine leases, along with demands for prepayment of obligations from critical vendors such as fuel suppliers.
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justplanenutz
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 5:49 pm

Quoting LAXdude1023 (Reply 76):
So, everyone at AA is a victim???

I didn't say Arpey was a victim. But perhaps he's not a villain either.
 
stlgph
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RE: AMR Bankruptcy Court Thread

Thu Dec 15, 2011 8:13 pm

update -

223 Eagle pilots & flight attendants may get laid off around the time period of Feb 13th, following the return of the planes in January.

[Edited 2011-12-15 12:14:32]
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ckfred
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RE: AMR Bankruptcy Court Thread

Fri Dec 16, 2011 4:37 pm

Quoting norcal (Reply 49):
Here's a question, why does AMR own a private residence located at 16 Cottesmore Gardens London W8? Which executive is this for? I wonder what other kind of wasteful spending is going to be uncovered in the bankruptcy process.
Quoting norcal (Reply 50):
This property and any other like it should be sold immediately. If AMR wants to destroy the retirements of thousands of employees then management should not get perks like this.

One thing to remember is that AA probably needed to entertain people from various entities, whether it was executives from oneworld members, potential corporate customers, vendors, and government officials. Having a residence in an upscale neighborhood probably added far more to AMR's bottom line than it cost AA to buy and maintain the residence.

And let's face it, people in busines of any kind have to entertain customers/clients and potential customers/clients. I got to go to a MLB game in a luxury box, because my former employer's bank liked to entertain customers. And I've taken plenty of cleints and potential clients to lunch and dinner at expensive restaurants. Considering the amount of work needed to create oneworld, probably a fair amount of discussions and negotiations took place in that residence.

That said, considering the amount of debt that AMR/AA is carrying, it needs to go. However, don't put it on the market at a rock-bottom price. That is just bad business. Price it to get top dollar, or should I say top pound?
 
nomorerjs
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RE: AMR Bankruptcy Court Thread

Fri Dec 16, 2011 9:45 pm

Having worked for a company that spent two years in Chapter 11 and went from 3,000 employees to 350, I wish AMR the best. They won't be as bad off as my former employer, but many sacrifices will be made. I feel for the Eagle people as it looks like the 50 seaters and less are goners as well as the props. AA HQ employees need to watch out as well, overhead is looked at carefully. If you are not in the KERP (Key Employee Retention Program) or have a 2-3 month payout (usually for managers and above), start looking.
 
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LAXintl
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RE: AMR Bankruptcy Court Thread

Sat Dec 17, 2011 2:57 am

The Pension Benefit Guaranty Corporation issued a open letter to AMR in response to some comments from its counsel that it might look to back out of its pension responsibilities.


December 16, 2011

WASHINGTON--Pension Benefit Guaranty Corporation Director Josh Gotbaum released the following statement today in response to comments made by American Airlines' Counsel Harvey Miller:

When American Airlines filed for bankruptcy they took great pains to say to their customers that nothing will change, that they will still have their frequent flyer miles and service will continue. But they didn't make the same promises to their employees about the future of their pensions.

Recent comments by the company's bankruptcy counsel, Harvey Miller, suggest that American wants to back out of its retirement commitments. For that to happen, American will have to prove it can't successfully reorganize if the pensions continue.

Mr. Miller also said that traditional pensions no longer work because of unpredictable market conditions. That may come as a surprise to the 60 million Americans that have them. Traditional pensions remain the best option for a secure retirement for most people. Those who have moved into 401K-type plans are discovering that investing is hard, the results are far from guaranteed, and they may end up having to work longer than expected. A defined benefit is always there, you can't outlive it, and it gives people real retirement security.

PBGC has helped dozens of companies in bankruptcy keep their pensions, so their employees and retirees get the benefits they worked for.

For instance, Visteon, the former Ford Motor Co. auto-parts subsidiary, initially planned to terminate three of its pension plans in bankruptcy. We showed Visteon they could reorganize successfully without terminating their employees' plans. Today, the company's 23,000 workers and retirees continue to receive all the benefits they've earned.

Contrary to Mr. Miller's comments, airlines have reorganized successfully without damaging the retirement security of workers and retirees. In the most recent airline bankruptcies, Northwest Airlines emerged without terminating its plans. Delta terminated its pilots plan, but reorganized with its other plans intact.

PBGC is a pension safety net, not a convenient option for companies that want to sidestep their retirement commitments. We step in when we have to and pay all benefits the law allows. When the agency assumed airline plans in the past, many people's pensions were cut, in some cases dramatically. That's why PBGC always tries first to preserve plans. We will continue to encourage American to fix its financial problems and still keep its pension plans.



Clearly the PBCG sitting on the creditors committee will not easily vote on any plan that dumps the plans into the governments lap.


Story:
http://aviationblog.dallasnews.com/a...pbgc-to-american-airlines-you.html

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LAXdude1023
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RE: AMR Bankruptcy Court Thread

Sat Dec 17, 2011 4:06 am

Quoting LAXintl (Reply 85):

Yet, it's pretty clear that AA can't go on with the pensions as they are. Something has to give.
FOR THE LOVE OF GOD BRING BACK THE PAYWALL!!!!
 
Danfearn77
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RE: AMR Bankruptcy Court Thread

Sat Dec 17, 2011 8:38 pm

I don't usually like this question but seems as I know nothing about chapter 11 or AA's future, here goes (please don't flame me!)

Am I safe to book a flight on AA this coming November? Or is it a risk?
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LAXintl
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RE: AMR Bankruptcy Court Thread

Sat Dec 17, 2011 9:45 pm

While I believe AA will be around come next November, its network shape and scale will likely be different.

With AA looking to remove aircraft from its fleet at a rather quick pace, the subsequent remaining flight schedule and routes served could be flux for quite some time. Only this week the new CEO stated its inevitable that the company would likely have to shrink regain its financial footing in the short term.

Anyhow, US airline schedules are rarely firm beyond about 90-days, so anything you see listed for next November is simply a place holder schedule without much clarity behind it.
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StuckInCA
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RE: AMR Bankruptcy Court Thread

Sat Dec 17, 2011 10:56 pm

Quoting LAXintl (Reply 85):
Recent comments by the company's bankruptcy counsel, Harvey Miller, suggest that American wants to back out of its retirement commitments. For that to happen, American will have to prove it can't successfully reorganize if the pensions continue.

I'm guessing that won't be hard to prove.
 
phlwok
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RE: AMR Bankruptcy Court Thread

Sat Dec 17, 2011 11:32 pm

Quoting LAXintl (Reply 88):
While I believe AA will be around come next November, its network shape and scale will likely be different.

With AA looking to remove aircraft from its fleet at a rather quick pace, the subsequent remaining flight schedule and routes served could be flux for quite some time. Only this week the new CEO stated its inevitable that the company would likely have to shrink regain its financial footing in the short term.

It's pretty rare for a company to make a run through Chapter 11 and not emerge smaller. Much of that downsizing comes from leveraging bankruptcy's ability to shed expensive items, leases, debts, etc., more easily. I don't think the question is whether AA will emerge smaller, but by how much, and how painful it is along the way for all involved.
 
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LAXintl
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RE: AMR Bankruptcy Court Thread

Tue Dec 20, 2011 5:03 pm

As previously mentioned the next round of hearings is scheduled for this Thursday.


Items scheduled to be heard include:

o AMR request for relief and ability to immediately reject some aircraft/engines and facility leases. (I’ve listed them on the bottom)
o 45-day extension request by AMR to comply with US Trustee requirement in cash management reporting
o Authorize AMR to pay various pre-BK obligations owed to foreign creditors
o Authorizing AMR to pay pre-BK obligations to fuel vendors and enter into pre-payment agreement as needed
o Authorizing AMR to pay pre-BK obligations to ‘critical vendors’ and honor ongoing agreements
o Approving relief by baring utility companies from refusing, discontinuing or discriminating against AMR due to commencement of BK case.
o Fulfillment of pre BK obligations with GDS, ARC, ACH, alliance partners, cargo and travel agent agreements in areas of billing and settlement.
o Extension of 60-day timeline to accept or reject aircraft equipment agreements
o Lift stay, and permit Sabre Holdings Corp to pursue claims against AMR in appropriate Federal District Court.
o Authorizing AMR make payments in relation to 25 Boeing aircraft due by end of 2012 and allowing Boeing to make applicable deliveries
o Authorize claims from December 2009 AA331 accident in Jamaica to proceed


F-100
N1402K
N1403M
N1404D
N1405J

MD-80
N227AA
N249AA
N251AA
N452AA
N453AA
N457AA
N458AA
N459AA
N460AA
N461AA
N462AA
N463AA
N464AA
N465AA
N569AA
N570AA
N571AA
N939AS
N940AS
N941AS

Facilities
-MCI Overhaul Base
-MDW terminal facilities


Separately I see some airports (DFW & LAX) are pushing for a permanent court order directing AMR to turn over collected PFC charges, and clarifying that such monies are not part of the AMR estate and cannot be used as security against 3rd party claims.

Airports ask for AA fees to be separated in bankruptcy case
http://www.tulsaworld.com/business/a...icleid=20111220_45_E1_ToUSip755103

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masseybrown
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RE: AMR Bankruptcy Court Thread

Tue Dec 20, 2011 6:31 pm

LAXintl, Thanks for your detailed postings. Is there a specific bankruptcy website, as there has been for other airlines? Or is it the court docket site you use?
 
realsim
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RE: AMR Bankruptcy Court Thread

Tue Dec 20, 2011 7:34 pm

Quoting LAXintl (Reply 91):
o Authorizing AMR make payments in relation to 25 Boeing aircraft due by end of 2012 and allowing Boeing to make applicable deliveries

Good news, as it means that AA goes ahead with the their fleet renewal plan. However, the original schedule was to get 28 738s aircraft in 2012, and 33 in 2013 (13 from the old order, and 20 from the big order made some months ago).

Since the S80 started arriving in MAR09, 91 738s have been delivered and 76 aircraft have been retired (69 S80s and 7 752s). This means that next year 40 S80s could be retired before reaching the number of aircraft they had in MAR09 (although their MD fleet is so huge that they still will be ~165 left...).

Quoting MasseyBrown (Reply 92):
LAXintl, Thanks for your detailed postings. Is there a specific bankruptcy website, as there has been for other airlines? Or is it the court docket site you use?

There's a specific website: http://amrcaseinfo.com/
 
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LAXintl
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RE: AMR Bankruptcy Court Thread

Thu Dec 22, 2011 10:30 pm

On Thursday, Bankruptcy Judge Sean Lane, approved AMRs request and can proceed with its ongoing Boeing order, and that the carrier can also cancel leases and return 24 aircraft, engines and related equipment. AMR will be providing a yet to be determined termination charges covering the effected aircraft to their owners.

In a bit of a surprise, the US Trustee that oversees bankruptcies came out with concerns over AMRs $4bil cash holdings, with notice that some of its investment and cash usage practices do not comply with federal rules covering activity during bankruptcy. The judge will hold a future hearing and requested more information from AMR on its investments and practices and a report on how much it would cost potentially to bring them into compliance.
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FlyASAGuy2005
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RE: AMR Bankruptcy Court Thread

Thu Dec 22, 2011 10:58 pm

What's your take on that exactly?
What gets measured gets done.
 
cslusarc
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RE: AMR Bankruptcy Court Thread

Thu Dec 22, 2011 11:13 pm

Quoting LAXintl (Reply 91):
o Authorize AMR to pay various pre-BK obligations owed to foreign creditors

Why do some foreign creditors have priority over domestic creditors?
--cslusarc from YWG
 
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LAXintl
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RE: AMR Bankruptcy Court Thread

Fri Dec 23, 2011 1:09 am

Quoting FlyASAGuy2005 (Reply 95):
What's your take on that exactly?

I don't know but I suspect AMR has investments - could be as mild as speculative fuel hedging to various other things that utilize cash that the US Trustee has some concerns over.

Quoting cslusarc (Reply 96):
Why do some foreign creditors have priority over domestic creditors?

In the motions is basically states its while foreign creditors represent a smaller grouping (15% of total), they are critical for ongoing operations and represent 40% of company revenues. Everything from foreign airspace and airport access, to fuel availability and vendor provided services could be compromised if AMR is unable to meet its obligations including payment of foreign taxes and fees (which its about $250mil in arrears already).
Any interruptions incurred by actions of foreign governments, companies or courts would diminish the value of the AMR estate and its key AA maintain its international operations on an uninterrupted basis.

Also its pointed out any action a US BK Court to stay its foreign debts might not be enforceable anyhow and could subject AMR myriad of local legal challenges further complicating the process and risking those operations.


So sounds like AMR simply does not want to tangle with foreign parties.
From the desert to the sea, to all of Southern California
 
AeroWesty
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RE: AMR Bankruptcy Court Thread

Fri Dec 23, 2011 1:30 am

Quoting LAXintl (Reply 94):
In a bit of a surprise, the US Trustee that oversees bankruptcies came out with concerns over AMRs $4bil cash holdings, with notice that some of its investment and cash usage practices do not comply with federal rules covering activity during bankruptcy.

Interesting that one of the motions was to get a 45-day extension for reporting cash management activity. The only time I ever worked on a Christmas Day was when a company I worked for in the 80s filed BK the day before Thanksgiving. Our first cash mgmt. report was due Dec. 26th, and our lawyers said to make the deadline with no excuses, whatever the cost in terms of overtime, holiday pay, or inconvenience to staff.
International Homo of Mystery
 
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LAXintl
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RE: AMR Bankruptcy Court Thread

Tue Dec 27, 2011 5:42 pm

There are two scheduled hearings in the AMR case this week.

o Appointment of claims agent to help register, process and verify the estimated 100,000+ claims to be filed against AMR during its BK process.
o Approval of revised agreement with Citibank to enable American to engage in fuel hedging activities including requiring it to provide collateral along with payment of fees, charges and expenses. Citibank would also get first priority lien and security interest in collateral incase of default.

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