AA CEO To Make Merger Decision Soon

allegiantflyer · Fri Jan 04, 2013 3:44 am

In these articles they talk about how AA CEO Tom Horton is about to make a merger decision in the next few weeks. He doesnt know when though,but it could be soon. This should be an interesting result and i can not wait to hear the Decisions in the upcoming weeks

http://www.dallasnews.com/business/a...will-come-in-a-matter-of-weeks.ece

http://www.star-telegram.com/2013/01...ness-briefs-american-airlines.html

JFKPurser · Fri Jan 04, 2013 3:59 am

He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

UA787DEN · Fri Jan 04, 2013 4:10 am

About time. I'm not surprised. This will start a war of merge vs. Don't merge.

And while the UCC might ultimately make this decision, a CEO might have a wee bit of (attempted) input.

Interesting if the expiration date of the non-disclosure agreement will slow or increase the speed of things, or let us know any info. I somehow doubt it.

dcann40 · Fri Jan 04, 2013 4:42 am

Quoting JFKPurser (Reply 1):
He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

Your post makes it sound as if the decision to merge has been made. It hasn't been (if the decision to merge had been made, it would also have been announced).

M&A is a very complicated affair and nothing is certain until the deal closes.

It's possible that a merger could take place while AA is in BK but, with every day that passes, that becomes less likely.

The UCC isn't looking to get the maximum value based on today, it has to be forward looking as well.

Given AA's newfound strength in the past nine months, the UCC may very well decide that it supports the company's emergence from BK as a standalone entity. Or not.

I take it that most people on this board don't have any kind of M&A background. While my airline background is nonexistent (as an employee), my M&A background is quite strong.

The only deal that's a done deal is one that has been signed by both parties. Anything else is speculation, even if a merger is announced.

P.S. The articles cited in the OP don't really give any indication that CEO Horton feels he is controlling the decision. It's his job as CEO to tell employees what he did, including saying that a decision is expected in a matter of weeks. That's not the same thing as what one poster here characterized as trying to make it seem as if he is controlling the decision. Horton's not stupid, in fact he seems to be a good manager. It would be foolhardy for him to say otherwise.

[Edited 2013-01-03 20:44:26]

PHX787 · Fri Jan 04, 2013 4:45 am

Quoting UA787DEN (Reply 2):
And while the UCC might ultimately make this decision, a CEO might have a wee bit of (attempted) input.

Stupid question- What's UCC? BK court?

I highly doubt this is going to happen. Too much going on with both sides right now. Good try but no dice. Thankfully.

deltal1011man · Fri Jan 04, 2013 4:55 am

Quoting dcann40 (Reply 3):

Your post makes it sound as if the decision to merge has been made. It hasn't been (if the decision to merge had been made, it would also have been announced).

Not at all. JFK is right. Horton isn't making the decision. period.

Horton does however wish he was nearly as powerful as he makes himself out to be. Yeah sure

[Edited 2013-01-03 20:56:14]

dcann40 · Fri Jan 04, 2013 4:56 am

Quoting PHX787 (Reply 4):
Stupid question- What's UCC? BK court?

Not a stupid question. It's the Unsecured Creditors Committee.

AA employees know this term because keep hearing it in a variety of venues with the intent that they should believe somehow that the UCC will somehow look past all of the significant disadvantages of a merger led by LCC (and there are many, all to AA's detriment). Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid. The UCC doesn't drink this beverage. Their job is to look out for themselves and it's become increasingly clear that having AA emerge from BK in tact will create more value to the unsecured creditors, even in the short term.

etops1 · Fri Jan 04, 2013 5:06 am

In the mean time AA FA's union signs the MOU to merge .
APFA Signs MOU
APFA has agreed to a Memorandum of Understanding (MOU), clarifying several points contained within the Bridge Agreement the union signed with US Airways last Spring. This MOU further illuminates the financial benefits of a merger to AMR’s creditors. APFA is currently operating under a judicially-enforceable non-disclosure agreement (NDA) with regards to merger discussions, which means that as long as this restriction is in place, we are not able to divulge specific details of the MOU.

AmericanAirlines + US Airways
"Our Future Depends On It"

BarryH · Fri Jan 04, 2013 5:08 am

Quoting JFKPurser (Reply 1):
He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

You're right, he's obviously an egomaniac. The use of the word "we" is just a smoke screen.

“As you know, we continue the process we embarked upon months ago to carefully assess how we can deliver the greatest value for our stakeholders and the best outcome for our people and customers,” Horton wrote.

“Together with our Board, and the Creditors’ Committee, we asked our unions and those of US Airways to join the discussions underway in order to better evaluate the potential benefits, costs and risks of a potential merger,” his letter said.

JFKPurser · Fri Jan 04, 2013 5:26 am

Quoting UA787DEN (Reply 2):
And while the UCC might ultimately make this decision, a CEO might have a wee bit of (attempted) input.

The only thing left for Horton to do at this point is stand in the room in front of them and beg.

Acey559 · Fri Jan 04, 2013 5:47 am

I'd look for some kind of news on January 9th. A merger wouldn't at all surprise me. I was very skeptical at first and still hope it doesn't happen, but I think the writing could be on the wall for this.

MAH4546 · Fri Jan 04, 2013 5:55 am

Quoting etops1 (Reply 7):
APFA has agreed to a Memorandum of Understanding (MOU), clarifying several points contained within the Bridge Agreement the union signed with US Airways last Spring. This MOU further illuminates the financial benefits of a merger to AMR’s creditors. APFA is currently operating under a judicially-enforceable non-disclosure agreement (NDA) with regards to merger discussions, which means that as long as this restriction is in place, we are not able to divulge specific details of the MOU.

Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

BarryH · Fri Jan 04, 2013 6:37 am

Quoting etops1 (Reply 7):
APFA has agreed to a Memorandum of Understanding (MOU),

They, like the pilots, have signed an MOU with themselves. Said MOU also gets them better terms than what's in the existing contract accepted under bankruptcy. Not really a hard agreement to get behind, no? They also signed an agreement with the CEO of a competing airline that wasn’t in a position to provide assurances of anything since US’ roll in AA’s bankruptcy is that of a subordinated debt holder through a desperate purchase of third-party debt to get closer to the process. Signing NDA’s and exchanging confidential financial data is a double-edged sword. People can look great in clothes but not so much when their naked. So there’s been lots of signing going on but none that points to a deal in bankruptcy being a sure thing.

MOU's being signed will only be exciting when the two US pilot union's and AFA sign the same documents the AA unions do. The rest is pure showmanship. I’ve heard nothing official or leaked from the multiple US unions regarding the AA union’s MOU’s which I’m guessing means they’re not ready to pop the champagne corks yet. There could be breakthrough that includes both US and AA's pilots unions or the face-to-face meetings could have driven them in to opposing camps. We here don't know and it's fun to take positions as an arm chair quarterback but nothing publically available (yet) points to a foregone conclusion either way.

F9Animal · Fri Jan 04, 2013 6:49 am

I am not excited to see a merger. I like US the way it is... And I prefer to see AA come out of bk healthy. But, in regards to a merger and the workers of both airlines involved. Doug Parker is very committed to keeping employees employed. I went through the US/HP merger. Most of us at US feared we were going to get screwed. Parker assured us he would do everything possible to avoid cuts in staff. Guess what? He did just that. I have high respect for Parker. He somehow turned US and HP into a profitable and healthy company. While it was a far from perfect merger, it has proven successful.

If AA and US merge, I will be saddened. I love both airlines. It really bums me that we have lost so many great named airlines lately with mergers. No more Northwest. No more Continental. No more America West. No more TWA. Now we migh not have US Airways. Less options for the people to choose. Kinda sucks!

BarryH · Fri Jan 04, 2013 6:58 am

Quoting F9animal (Reply 13):
Doug Parker is very committed to keeping employees employed.

Doug will do just fine for himself no matter what happens to the combined carrier once the deal's signed. So will the Executive Committee. No one running a billion dollar company got there by being purely benevolent. Similar largesse by AA's management led by Carty sent the union's over the edge. If the merger ends up borked and Doug parachutes out all the AA union's will have done is traded one villain for another and gained a huge mess to clean up in the process. The grass isn't always greener on the other side; sometimes it's just different.

"A few weeks ago I wrote a piece about what Doug Parker stood to gain if US Airways is allowed to buy American Airlines. At the time, I only had access to Doug's public salary info. But with special thanks to a little birdie at headquarters, I've learned a few more juicy details of just why Doug is pushing so hard for this merger. Even if Doug walks out on his job within two years after a merger, he will receive "change in control" payments worth about $18 million.

And it's not just Doug - the cronies all stand to gain from this. The top five executives would rake in about $40 million in gains."

http://firedougparker.org/

P.S. - The site being quoted isn't necessarily the most objective but change of control bonuses are pretty typical so while not verifiable publically the claims seem plausible.

F9Animal · Fri Jan 04, 2013 7:06 am

Interesting information there. But, wouldnt Parker have been in a similar financial position after the US merger? I am not cheerleading Parker. I just respect him because he kept his word. And I can name very very few airline CEOs that have kept their word. Do you think Parker would jump ship and run with the money? I am not so sure he is like that. He seems to really enjoy being where he is.

BarryH · Fri Jan 04, 2013 7:17 am

Quoting F9animal (Reply 15):
I am not so sure he is like that. He seems to really enjoy being where he is.

Running a combined AA/US is very different than a primarily U.S. carrier. The bankruptcy process is what it is. There are certain avenues that are followed and there's always a bunch of pissed off people involved in the process because they've lost a ton and all bankruptcy does is decide how much. Twice now, with DL and AA, Parker's done an end-run around the process and has come across as a petulant child both times. Nothing he did in either case could have changed the process and it doesn't reflect well on his business maturity and instill confidence in him running a combined company. While his DUI after the DL deal officially disappeared is "human," CEO's of billion dollar companies give up the right to do stupid things that mere mortals get to do. That didn't/doesn't reflect well on his credentials either.

Any opinions any of us have of either Parker or Horton are based on hearsay so it’s hard to really assess their mettle. You’d hope that the Board’s of both US and AA aren’t stupid though and that the CEO they’ve chosen to support is competent, qualified, and the best choice to return shareholder value. But if you look at HP Board’s can be pretty stupid themselves sometimes.

commavia · Fri Jan 04, 2013 11:15 am

Quoting F9animal (Reply 13):
Doug Parker is very committed to keeping employees employed.

Oh please. This merger is going to lead to thousands of layoffs. It's inevitable.

Quoting F9animal (Reply 13):
I have high respect for Parker. He somehow turned US and HP into a profitable and healthy company.

Yes, he has managed to "somehow" turn US and HP into a "profitable" company ... in large part by doing, ironically enough, what AA's unions so hate AA management for having allegedly done in the last decade.

You can't make this stuff up!

YYZbound · Fri Jan 04, 2013 12:33 pm

Quoting dcann40 (Reply 6):
Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid. The UCC doesn't drink this beverage.

AA's F/A union, as well as the other two...are part of the UCC actually

JoePatroni707 · Fri Jan 04, 2013 12:47 pm

Quoting commavia (Reply 17):
This merger is going to lead to thousands of layoffs. It's inevitable.

Probably well north of 10,000. From what I understand he will not offer a job to any current member of AA management from Horton on down to front line supervisors, plus there will be redundancies in cities like PHX, SAN, DEN , SJC where US has a larger presence thatn AA and the current USAir staff could easily handle the extra volume making AA employees surplus. Dougs primary obligation will be to protect jobs of USAir employees. So be careful of what you wish for AA peeps.

jfklganyc · Fri Jan 04, 2013 1:17 pm

Quoting mah4546 (Reply 11):
Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

Dude, I know you don't like losing your beloved AA, but don't do this to somebody.

I remember when Eagle was being spun off from AA (never happened) 5 years ago. I was an Eagle employee and was very worried. The flaming statements on here didn't help.

If that peresons job is really in jeopardy (which you certainly don't know about), they don't need you rubbing it in their faces.

And one more point, remember the company that is Bankrupt and the company that is taking over when you make statements like that

SeeTheWorld · Fri Jan 04, 2013 1:22 pm

Quoting dcann40 (Reply 6):
AA employees know this term because keep hearing it in a variety of venues with the intent that they should believe somehow that the UCC will somehow look past all of the significant disadvantages of a merger led by LCC (and there are many, all to AA's detriment). Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid. The UCC doesn't drink this beverage. Their job is to look out for themselves and it's become increasingly clear that having AA emerge from BK in tact will create more value to the unsecured creditors, even in the short term.

Since you know M&A and not airlines, you sure are coming across like you know exactly what should happen - no merger. I believe they are going to merge, regardless of the downsides and upsides of either option, because my 25 years of airline experience regarding scope and scale suggest that the pain of merging is better in the long term for competing with UA and DL and in the global airline industry. But, the UCC will decide, and their are nine voting groups .... just like the Supreme Court ... 5 votes wins ....

AAIL86 · Fri Jan 04, 2013 1:26 pm

Quoting commavia (Reply 17):

Yes, he has managed to "somehow" turn US and HP into a "profitable" company ... in large part by doing, ironically enough, what AA's unions so hate AA management for having allegedly done in the last decade.

Yep. Horton has been president for two years and CEO for only 13 months. In reality, Horton has never been given a chance to do things his own way. I'm no great defender of TH, but someone's going to be in charge - that's the reality of how human institutions work. I'd give DP a 6 month honeymoon before that sour taste puckers up again ...

Quoting JoePatroni707 (Reply 19):
Probably well north of 10,000. From what I understand he will not offer a job to any current member of AA management from Horton on down to front line supervisors, plus there will be redundancies in cities like PHX, SAN, DEN , SJC where US has a larger presence thatn AA and the current USAir staff could easily handle the extra volume making AA employees surplus. Dougs primary obligation will be to protect jobs of USAir employees. So be careful of what you wish for AA peeps.

Agreed on the 10,000+ number, and that AA could lose many higher level management positions (level 6ish and above).
From purely a practical standpoint, it won't be that easy to clean out middle management, because then they'd have to train new people to take over most of those jobs. Given the size differences between AA and US, even if DP is in charge and he brings over every single member of US' management - there won't be enough heads to run the show ...

Longhornmaniac · Fri Jan 04, 2013 1:28 pm

Quoting jfklganyc (Reply 20):

He's not being malicious, but if I understand him correctly, he (like many others, including myself) is growing very tired of the willful ignorance of so many front line employees regarding this situation. DP has done a great job of BSing to the applicable unions, and they are the only ones that can't seem to see right through it.

Cheers,
Cameron

rwy04lga · Fri Jan 04, 2013 1:33 pm

Quoting F9animal (Reply 13):
we have lost so many great named airlines

No mention of PanAm? But you include America West in the great name category???

Quoting commavia (Reply 17):
Oh please. This merger is going to lead to thousands of layoffs. It's inevitable.

That's what was said to the NW people...what happened??

YYZbound · Fri Jan 04, 2013 1:39 pm

According to A.netters this merger sounds like the apocalypse.

The Mayan calendar said the same thing

As an AA FA..who did NOT drink the kook aid.....I will openly say I don't want a merger....BUT, I have NO control over what happens.

None of us do

dcann40 · Fri Jan 04, 2013 1:48 pm

Quoting SeeTheWorld (Reply 21):
Since you know M&A and not airlines, you sure are coming across like you know exactly what should happen - no merger.

My opinion is simply that there is a chance it will happen - and a chance it won't but that it's becoming somewhat unlikely that a merger will happen during BK.

What will be telling is what happens following any kind of merger announcement, if there is one. That is all.

allegiantflyer · Fri Jan 04, 2013 2:41 pm

Quoting JoePatroni707 (Reply 19):
This merger is going to lead to thousands of layoffs. It's inevitable.

All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

ripcordd · Fri Jan 04, 2013 2:57 pm

Layoffs will be done by doh.

dcann40 · Fri Jan 04, 2013 2:59 pm

Quoting allegiantflyer (Reply 27):
All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

Please explain and do you mean this impacts every last AA employee?

BD338 · Fri Jan 04, 2013 3:17 pm

Quoting AAIL86 (Reply 22):
Agreed on the 10,000+ number, and that AA could lose many higher level management positions (level 6ish and above).

Is that on top of the AA layoffs in BK? How many did UA/CO and DL/NW layoff after their mergers? I don't recall that level.

ripcordd · Fri Jan 04, 2013 3:25 pm

Yes they figure they would have around 10k to many with the 2 companies merged. But I'm sure a lot will leave with a nice buyout

b727fa · Fri Jan 04, 2013 4:02 pm

Quoting allegiantflyer (Reply 27):

Quoting JoePatroni707 (Reply 19):
This merger is going to lead to thousands of layoffs. It's inevitable.

All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

Huh? That statement shows a serious lack of knowledge regarding labor law.

ripcordd · Fri Jan 04, 2013 4:19 pm

Its half right there is a new law because of the buyout of TWA by AA but it now goes by DOH

JoePatroni707 · Fri Jan 04, 2013 4:41 pm

Quoting allegiantflyer (Reply 27):
All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

That statement makes no sense at all. It would go strictly by seniority for front line employees. For managers (if any from AA survive which I doubt they will, thats the main reason the unions are so behind this deal) its strictly a popularity contest.

milemaster · Fri Jan 04, 2013 4:44 pm

There sure is a lot of projection going on with this discussion.

My .02 on the matter is that this merger has an extreme probability of happening in 2013. Regardless of whether it's US taking over AMR or AMR as the acquiring party after BK, it's happening, and it's bad news for consumers which is why I am not particularly thrilled about it either way. The only people who should be amped about it are the ones who think they're going to profit from it. I can tell you that's sure not going to be us passengers who have to fly a lot and pay for it.

The logic of "this merger has to happen to effectively compete with UA and DL" is really ignoring a lot of realities simply because of the "Legacy" designation of the AA and US brands. Where does it end? Will DL need to go shopping for another airline once AA merges with US? B6, AS, WN, etc all doomed to fail also if they don't merge? After all, they also compete with DL/UA/AA.

I fly both AA & US frequently today for different reasons/purposes and see few synergies where this merger is going benefit anyone but shareholders. I will say that when this merger does happen, it's looking more and more like AMR is going to go it alone and go after US later.

superjeff · Fri Jan 04, 2013 4:53 pm

Quoting BarryH (Reply 14):
Doug will do just fine for himself no matter what happens to the combined carrier once the deal's signed. So will the Executive Committee. No one running a billion dollar company got there by being purely benevolent. Similar largesse by AA's management led by Carty sent the union's over the edge. If the merger ends up borked and Doug parachutes out all the AA union's will have done is traded one villain for another and gained a huge mess to clean up in the process. The grass isn't always greener on the other side; sometimes it's just different.

"A few weeks ago I wrote a piece about what Doug Parker stood to gain if US Airways is allowed to buy American Airlines. At the time, I only had access to Doug's public salary info. But with special thanks to a little birdie at headquarters, I've learned a few more juicy details of just why Doug is pushing so hard for this merger. Even if Doug walks out on his job within two years after a merger, he will receive "change in control" payments worth about $18 million.

Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

USAirways757 · Fri Jan 04, 2013 5:27 pm

Sorry for going off topic here, but where would US's PIT maintenance programs go? Would they stay in PIT or go to Tulsa?

drmlnr1 · Fri Jan 04, 2013 5:28 pm

AA IMO will emerge as a stand alone carrier because they have become stronger. And with the delivery of their first 77W and soon the arrival of their first A320 family aircraft, they have forged a path to become profitable.

pnwtraveler · Fri Jan 04, 2013 5:56 pm

Quoting F9animal (Reply 13):
If AA and US merge, I will be saddened. I love both airlines. It really bums me that we have lost so many great named airlines lately with mergers. No more Northwest. No more Continental. No more America West. No more TWA. Now we migh not have US Airways. Less options for the people to choose. Kinda sucks!

That is true in that a number of US Legacies have now gone. Eastern, Pan Am, Braniff and others. Without these consolidations though in the US Market, a number of those Legacies will go under and won't be around anyways. It would likely be more efficient for AA to go under and US buy the pieces they want from the creditors, sign employees under a cheaper contract as new employees vs. retaining seniority and benefits however that will be adjusted. So while a solid AA on its own might be best for employees, a merger is a middle ground to total loss of job. I am sure that some of the efficiency gained by the merger will be loss of overlapping jobs, maybe not as dire as some are predicting if the new entity is much stronger after the merger.

kgaiflyer · Fri Jan 04, 2013 6:10 pm

Quoting superjeff (Reply 36):
Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

Funny story.

I was on US245 (PHX-YYC) yesterday morning. One of the FAs was in the aisle hawking the USAir bank card. We engaged in conversation (for instance, I still have my old NWA bank card--never converted it to DL).

The FA commented, "Then you'd better get ours with all its deals and advantages. They'll be gone when we become American Airlines."

I wonder what she knows that the rest of us don't?

WALmsp · Fri Jan 04, 2013 6:40 pm

Quoting F9animal (Reply 13):
If AA and US merge, I will be saddened. I love both airlines. It really bums me that we have lost so many great named airlines lately with mergers. No more Northwest. No more Continental. No more America West. No more TWA. Now we migh not have US Airways. Less options for the people to choose.

I have no personal stake in either carrier and unlike many of the posters on this forum, I do not know the intricacies and potential synergies of each carrier's operations. My sole reason for opposing the merger is the continuing decrease in the number of carriers. I like variety; I like options. As F9animal stated, both of these are going away. I was born and raised around Western Airlines and I have so many fond memories of the multitude of different airlines. My model collection reflects that, as the vast majority of my models constitute airlines that no longer exists.

I realize that in today's business world, my argument is irrelevant. I'm just tired of all the consolidation.

Quoting milemaster (Reply 35):
The logic of "this merger has to happen to effectively compete with UA and DL" is really ignoring a lot of realities simply because of the "Legacy" designation of the AA and US brands. Where does it end? Will DL need to go shopping for another airline once AA merges with US? B6, AS, WN, etc all doomed to fail also if they don't merge? After all, they also compete with DL/UA/AA.

Agreed. It is not necessary for everyone to become larger by consolidation in order to survive and succeed.

AA767400 · Fri Jan 04, 2013 6:41 pm

Quoting etops1 (Reply 7):
In the mean time AA FA's union signs the MOU to merge

I read that the other day. Question is, how does AFA/IAM play into this? What's their view on the merger? How do the US FAs feel about this merger? Are they informed of the MOU which would be implemented?

Quoting mah4546 (Reply 11):
Do you have a new job lined up? US employees will probably be the first to go, and be fired in greater number overall. Or do they not discuss the job cuts and have you convinced there won't be any? I guess they can't discuss that under the MOU?

You've said some pretty sinister things on here before, but this tops all. First of all - You, nor any other person on here know the numbers. Yes, there will be lay offs, but not necessarily his. A merged AA+US will see layoffs, but overall, that number will be reduced by buyouts and such. Implying that someone will be unemployed is rude, and shows hatred.

APFA/APA are in favor of a merger, and their dislike for management is evident. However, now that they both have contracts in place, AA can move forward with many aspects. Whether they merge or not, this portion as been accomplished.

For the record - I oppose this merger. It looks like a logistical nightmare. Particularly the ongoing US+HP union debate.

HPRamper · Fri Jan 04, 2013 6:55 pm

Quoting dcann40 (Reply 6):
AA employees know this term because keep hearing it in a variety of venues with the intent that they should believe somehow that the UCC will somehow look past all of the significant disadvantages of a merger led by LCC (and there are many, all to AA's detriment). Even AA's FA union signs its messages "AA+US - Our Future Depends On It," in an attempt to get more people to drink the Kool-Aid.

The Kool-Aid comes in more than one flavor.

Quoting commavia (Reply 17):
Yes, he has managed to "somehow" turn US and HP into a "profitable" company ... in large part by doing, ironically enough, what AA's unions so hate AA management for having allegedly done in the last decade.

Yet the US unions don't have the same animosity toward Parker. I think that's because 1. Most of the West union members received raises....and 2. Without the merger, 100% of the East employees would have been without a job.

When AA entered bankruptcy the unions were a lot more concerned about the possibility of liquidation so Parker looked like the white knight yet again. Now that AA has regained some stability, the merger looks less necessary and thus less attractive.

PRAirbus · Fri Jan 04, 2013 7:04 pm

Wish AA would tie up w/B6 and avoid the hassle of US/AA dramatic merger!

.

ckfred · Fri Jan 04, 2013 7:09 pm

Quoting JFKPurser (Reply 1):
He's actually not making the decision. The UCC is. Horton just wants the world to believe the choice to merge with US will be his. It won't be.

It all depends on who is running AA/AMR, when the company exits Chapter 11. It seems very likely that US will not merge with AA, before it exits bankruptcy. Assuming that the shareholders of the new AA/AMR retain Horton and his management team, the Horton will have a lot of say as to whether AA does eventually merge with US (or any other carrier).

Remember that no one thought Glenn Tilton would survive Chapter 11 as CEO of UA. Yet, he stuck around for exit from Chapter 11, the IPO, and negotiating the merger with CO.

AAIL86 · Fri Jan 04, 2013 7:09 pm

Quoting BD338 (Reply 30):
Is that on top of the AA layoffs in BK? How many did UA/CO and DL/NW layoff after their mergers? I don't recall that level.

Well it probably won't all be "layoffs". When someone in management loses their job, its strictly a termination with no recall rights. Also, many jobs will simply be lost to attrition because of redundant departments, etc. I'd except total employment at the combined carrier to be at least 10% lower at the merged one.

Quoting superjeff (Reply 36):
Don't forget the obvious here. The acquirer WOULD BE US, not AA. US may keep the AA name, but management would be US - You can argue about which airline has more comfy seats, cleaner airplanes, or better service, but US is the acquirer. If there is a merger, I'd bet on Doug Parker still being around, even if the combined company is called "American."

It remains to be seen who the aqquiring carrier would be. Even so, a company's culture is made up the people employeed there - and the majority of employees would come from American - even DP himself - who was in AA management for several years.

Quoting kgaiflyer (Reply 40):

The FA commented, "Then you'd better get ours with all its deals and advantages. They'll be gone when we become American Airlines."

I wonder what she knows that the rest of us don't?

She doesn't know any more then we do. In general, front line employees don't have inside information - especially about something this big.

Quoting milemaster (Reply 35):
it's happening, and it's bad news for consumers which is why I am not particularly thrilled about it either way.

Agreed. Airfares will go up considerably as a result....

dcann40 · Fri Jan 04, 2013 7:24 pm

Quoting HPRamper (Reply 43):
When AA entered bankruptcy the unions were a lot more concerned about the possibility of liquidation so Parker looked like the white knight yet again.

I cannot see how anyone viewed AA's trip to bankruptcy court as even being remotely close to the possibility of liquidation.

AA was unique among airline bankruptcies in that it did NOT require DIP financing. Instead, it went into BK with $4 billion+ in cash on hand. That does not in any way look like a Chapter 7 candidate to me, nor did it to anyone else.

Any talk of liquidation was scaremongering.

Maverick623 · Fri Jan 04, 2013 7:26 pm

Quoting F9animal (Reply 13):
Doug Parker is very committed to keeping employees employed

Doug Parker is committed to making money for himself and for the company (in that order). If you think you're more than an item on the balance sheet, you're sorely mistaken.

Quoting allegiantflyer (Reply 27):
All layoffs would have to be on the US side of the merger,AA employees cant because of the lawsuit from what happened with TWA

So you're saying that AA was deemed wrong for doing what they did to TWA, and then say they MUST do the same to US?

Quoting kgaiflyer (Reply 40):
I wonder what she knows that the rest of us don't?

Absolutely nothing.

JoePatroni707 · Fri Jan 04, 2013 7:28 pm

Quoting AAIL86 (Reply 46):
its strictly a termination with no recall rights.

and depending on the level of manager could be as little as two weeks pay total severance

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