WorldTraveler
Corn Field
- Dec 5, 2003
- 21,709
- 10,662
- Banned
- #16
I know most of you are employees but this discussion is being approached from a decidedly employee perspective. AMR will make their decision based on AA's strategy first and foremost. It is doubtful that AMR will repeat what happened at TWA since US' assets are probably worth as much as the ATSB loan which is one of the few debts that must be paid off. Just about everything else can be negotiated in bankruptcy.
The reason why employees are often take as part of an asset acquisition is because there are significant costs to the estate of the acquired company for it to have to terminate employees prior to selling the assets to another company. Further, US employees are now a pretty good bargain relative to AA employees given their lower pay scales and soon to be lack of pension obligations. To the degree possible, AA would rather acquire US assets and staff them w/ US employees while correcting the costs on the AA side of the company by improving productivity.
There will be a false sense of security in the industry this winter as fuel prices stay closer to $40/bbl but the underlying issues in the industry are unchanged - falling yields, excess capacity, severely imbalanced costs between the legacy and low cost carriers. The long term view says that unless US fails fairly quickly.
The reason why employees are often take as part of an asset acquisition is because there are significant costs to the estate of the acquired company for it to have to terminate employees prior to selling the assets to another company. Further, US employees are now a pretty good bargain relative to AA employees given their lower pay scales and soon to be lack of pension obligations. To the degree possible, AA would rather acquire US assets and staff them w/ US employees while correcting the costs on the AA side of the company by improving productivity.
There will be a false sense of security in the industry this winter as fuel prices stay closer to $40/bbl but the underlying issues in the industry are unchanged - falling yields, excess capacity, severely imbalanced costs between the legacy and low cost carriers. The long term view says that unless US fails fairly quickly.