AA and US Merge?

[damajagua]

Does us air have any other way of surviving wihout a merger?
I say no no and hell to to NO; to a US/AA merger.
I rather AA stay smaller than becoming a BIGGER MESS!!!!

 

[Frank Szabo]

Does us air have any other way of surviving wihout a merger?
I say no no and hell to to NO; to a US/AA merger.
I rather AA stay smaller than becoming a BIGGER MESS!!!!

It's such a bad idea it's probably under consideration.

In any merger/acquisition, of primary importance is the treatment/payoffs of the executives. Regardless of the benefits or bad Karma that would follow, all that is ever considered is executive treatment, in my opinion.

A perfectly good company will be allowed to go to hell in a handbasket if the proper people are paid enough.

 

[jimntx]

How about farming out the line stations?

I'll tell you how well that works out. We brought an S80 into an outlying station last week with a maintenance issue that was supposed to be taken care of overnight. (Another crew was supposed to take it back out the next morning.) The maintenance guy is an "on call" contractor. He evidently doesn't like working at night; so, he simply didn't answer his phone. The next morning's flight was delayed over 2 hours while he worked on the problem.

It will do no good to suggest get another maintenance guy. In this particular station, there isn't one. Other airlines have maintenance in the station, but AA has managed to alienate them to the point that they are not interested in helping us in any way.

Word gets around in small stations. AA in one of its cost-saving moves, transferred all the station personnel from AA to AE so that they could slash their pay rates. These personnel are the friends, co-workers, and relatives of the people that work for the other airlines.

 

[LUVJAMESC4EVER]

Becker concedes that an AMR bankruptcy may be "plausible in the medium term," and faces a potential "liquidity crunch in the next 6-12 months." While its price plunged on imminent bankruptcy fears, it recovered 20 percent on Tuesday as some said the fears were misplaced. Indeed, some say the bankruptcy status is far from certain.

"In the short term, an American bankruptcy filing is not likely. There are no huge debt payments due and they've been able to stave off what might be the inevitable," Becker said.

With 4.2 billion in cash as of the end of the quarter, McAdoo said, it is "not a bankruptcy candidate." While it faces difficult cash demands on the route ahead, "The company has plenty of time to make adjustments."

 

[LUVJAMESC4EVER]

Put another way, if American had the same labor costs as US Airways -- which restructured in bankruptcy court in 2002 and 2004 -- it would save $2.2 billion a year, Cordle said.
http://www.boston.com/business/articles/2011/10/04/american_airlines_faces_turbulent_ride/?page=1
American had hoped that gap would shrink as employees at the other airlines negotiated higher wages in new contracts. But that has yet to happen.

The airline has other disadvantages:

-- More than $12.1 billion in outstanding debt, about the same amount as airlines twice its size.

-- An unfunded pension liability of $7.9 billion. For the most part, other airlines don't have traditional pension plans.

-- High borrowing costs. It agreed to pay 8.75 percent interest on $726 million it borrowed last week.

-- The oldest and least fuel-efficient fleet in the country.

 

[jimntx]

Quit salivating. US Airways is not going to merge with AA. I think both the management and the employees of AA would agree to Chapter 7 before that would happen. US Airways has done such a good job with its last merger. Don't you think they should finish it before looking at other merger candidates? You still have in actuality two separate airlines operating under the same name with a common management.

P.S. Extensive posting in bold and/or caps on Internet bulletin boards is the same as shouting in a discussion. It's rude.

 

[LUVJAMESC4EVER]

But if it continues to burn through its cash at its current rate, it won't have much left to keep it going if it eventually does head into bankruptcy. Without sufficient cash, American could go the way of the once iconic Pan Am or Eastern Airlines and simply cease operating. Such a scenario would put thousands of jobs at risk and hurt competition. That would not only be bad for the employees and pensioners of American, but it would also deliver a strong blow to the millions of business and leisure travelers that depend on the airline to move them around the world every day.


http://finance.fortune.cnn.com/2011/10/04/american-airlines-bankruptcy/?source=yahoo_quote

 

[WorldTraveler]

Put another way, if American had the same labor costs as US Airways -- which restructured in bankruptcy court in 2002 and 2004 -- it would save $2.2 billion a year, Cordle said.
http://www.boston.com/business/articles/2011/10/04/american_airlines_faces_turbulent_ride/?page=1
American had hoped that gap would shrink as employees at the other airlines negotiated higher wages in new contracts. But that has yet to happen.

The airline has other disadvantages:

-- More than $12.1 billion in outstanding debt, about the same amount as airlines twice its size.

-- An unfunded pension liability of $7.9 billion. For the most part, other airlines don't have traditional pension plans.

-- High borrowing costs. It agreed to pay 8.75 percent interest on $726 million it borrowed last week.

-- The oldest and least fuel-efficient fleet in the country.

except that these aren't completely accurate.
DL continues to have pension obligations and pays more to sustain its frozen pension plans than AA does.. and DL also pays 401K benefits for current retirement benefits.
.
AA's fuel cost per ASM was almost identical to DL's and better than pre-merger UA's. UA's fuel efficiency now is better than AA and DL's due to the much newer CO fleet.
.
Fleet age only matters if AA's maintenance costs are driven by that fleet age... I don't think there is any indication that is the problem.

 

[LUVJAMESC4EVER]

It possible?

As with that merger, consolidations provide companies greater synergies and improved pricing power that many analysts say are essential for the sector’s turnaround. The most likely candidate for a possible merger with American would be U.S. Airways, Herbst said. Mann, too, suggested that U.S. Airways may consider a bid.

Read more: http://www.foxbusiness.com/travel/2011/10/04/american-airlines-bankruptcy-may-pump-life-into-us-airlines/#ixzz1Zvf1w25f

 

[Mr Eagle]

It really doesn't mean much as far as the NMB is concerned. There'd either be an election to choose one of the unions or with AA's much greater mechanic headcount the IAM could be left out in the cold without an election. The situation was reversed in the US/HP merger - US had the most mechanics so the IAM became the bargaining agent for the combined group without an election IIRC.

Jim

Jim We DID in Fact Have a VOTE, It was Teamster's VS IAM.
Mr Eagle ,

 

[BoeingBoy]

Jim We DID in Fact Have a VOTE, It was Teamster's VS IAM.
Mr Eagle ,

I assume that was a vote of AA mechanics (and/or associated) to determine who would represent them. I was talking about a merger where different unions represent employees in the same craft/class at the merging carriers. Who would represent the combined class/craft at the merged carrier would have to be decided, either with an election or because one of the unions represented the preponderance of the craft/class.

Jim

 

[wings396]

Quit salivating. US Airways is not going to merge with AA. I think both the management and the employees of AA would agree to Chapter 7 before that would happen. US Airways has done such a good job with its last merger. Don't you think they should finish it before looking at other merger candidates? You still have in actuality two separate airlines operating under the same name with a common management.

P.S. Extensive posting in bold and/or caps on Internet bulletin boards is the same as shouting in a discussion. It's rude.

I think that you should poll your fellow AA employees prior to assuming that they would prefer CH 7 over a merger. I have been thru 3 mergers, and have always said I didn't care what airline my paycheck came from, as long as I got a paycheck every 2 weeks. While things at US may not be the greatest, they are not bad enough to prefer being unemployed and on the street looking for work. I'm sure AA has many senior people as does US, who would find it nearly impossible to find another job that would pay anything close to what they currently earn. I was on furlough myself for a while, and can say first hand that their Ain't much out there for a middle aged person who has been with the airlines for most of their lives. Maybe you are in a position to give the go ahead to the liquidation of AA with THOUSANDS of jobs lost forever, but I doubt the vast majority of the workforce is.

 

[damajagua]

I think that you should poll your fellow AA employees prior to assuming that they would prefer CH 7 over a merger. I have been thru 3 mergers, and have always said I didn't care what airline my paycheck came from, as long as I got a paycheck every 2 weeks. While things at US may not be the greatest, they are not bad enough to prefer being unemployed and on the street looking for work. I'm sure AA has many senior people as does US, who would find it nearly impossible to find another job that would pay anything close to what they currently earn. I was on furlough myself for a while, and can say first hand that their Ain't much out there for a middle aged person who has been with the airlines for most of their lives. Maybe you are in a position to give the go ahead to the liquidation of AA with THOUSANDS of jobs lost forever, but I doubt the vast majority of the workforce is.

actually I do believe the majority of employees would prefer liquidation before a merger with Usair.
All the Usair employees have to get over the idea of mergers. No one wants to marry the ugly
girl. AA is done with mergers. No no and no to a merger with Usair!!!!!!

 

[robbedagain]

would you rather see thousands of your AA employees thrown to the streets with the economy we're in now? I have some serious doubts about the employees wanting to go CH 7 Liquidation at least with a merger they would have jobs for the majoritiy may be you would like to go ch 7 and have no job

 

[Hopeful]

would you rather see thousands of your AA employees thrown to the streets with the economy we're in now? I have some serious doubts about the employees wanting to go CH 7 Liquidation at least with a merger they would have jobs for the majoritiy may be you would like to go ch 7 and have no job

Chapter 7?????????????
Really now..... All AA needs to do is file CH.11...screw the workers, creditiors and investors.....and that will be the end of that.....Until of course this management team still can't turn a profit and they file another CH.11 down the road...

Why liquidate, when you can screw people out of everything they had and still stay in business???????????