American Eagle For Sale

[will fix for food]

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OK.."E", I'm with you so far.

Think back to the days, when AA used the BAC-111 to fly the "dinky" routes.

Along those lines, If AA can dump AAdvantage, and Eagle as successfully as Sabre, then go for it.

I agree with you, AA still needs to "feed itself" IN-HOUSE, prompting the Need for E-jets, very soon(like YESTERDAY).

Go FORWARD, with the Intention of going into BK, ...............But.............if, while traveling along that road, AA is able to reach agreements with APA/APFA for things like payrates for E-jets, then so be it !


Your turn !

If Eagle is spun off you can bet they will get E-Jets themselves, even if it is under another certificate.

If A/A is going to get E-Jets the company is going to go for payrates that are competative with Eagle's (and other feeders) costs. The APA was offered the CRJ-700's now if they could do it on a cost neutral basis. We all know how that turned out. Eagle's costs would go down even further with larger and more aircraft after a spin-off. A/A would have to match that new figure. My question is how much are the work groups willing to give back in the future to fly the E-Jets?

FWIW, I guesstimate the American mechanics would have to currently work for about $23.00/hour to receive the same compensation as an Eagle mechanic when the benefits are factored in. Of course, if they are pushing for BK and the pension is eliminated then that might get the A/A mechs another buck or two an hour.

 

[FrugalFlyerv2.0]

The true conspirist in me says AA is setting the stage for a pre-packaged bankruptcy. If they go thru the process of separating Eagle and AAdvantage now, it's also one or two less things for the banks to try and attach leins to later. It also makes it less attractive for someone else to buy up AMR.

Scope is one of the key issues that are handcuffing AMR from having the same level of recovery that some of the other carriers have enjoyed... Take that away either at the negotiating table or in court, and AMR's future looks a lot different. I don't give it any chance of being modified contractually, so that leaves bankruptcy.

So when would be a good time for AA to file chapter 11? Now or the next economic downturn (recession)?

 

[eolesen]

It all depends on oil.

If oil keeps climbing, there will eventually be a breaking point where AMR is forced to file because they won't be able to continue operating while also being handcuffed to the the current workrules and scope clauses. It was a measure of last resort in 2003. I'm not so sure there will be a lot of hesitation if cash starts flowing out the door like it did in 2001.

It's naive to believe that the unions will restructure contracts consensually, and nobody at the NMB is going to declare a cooling off period until after the next administration is seated. It could happen, but I doubt it.

 

[TWU informer]

It all depends on oil.

If oil keeps climbing, there will eventually be a breaking point where AMR is forced to file because they won't be able to continue operating while also being handcuffed to the the current workrules and scope clauses. It was a measure of last resort in 2003. I'm not so sure there will be a lot of hesitation if cash starts flowing out the door like it did in 2001.

It's naive to believe that the unions will restructure contracts consensually, and nobody at the NMB is going to declare a cooling off period until after the next administration is seated. It could happen, but I doubt it.

Not only a "cooling off period" but a PEB within the last month..

11/29/2007 Labor
Bush appoints Presidential Emergency Board to help resolve Amtrak labor dispute

President Bush recently established Emergency Board 242, effective Dec. 1, to investigate collective bargaining disputes between Amtrak and several labor unions.

The board will conduct a hearing and make a settlement recommendation within 30 days. No work stoppages are permitted following the creation of the emergency board and for 30 days after the board issues its report to the president.

In late October, the National Mediation Board released Amtrak and eight unions from statutory mediation, and the parties began a 30-day cooling-off period on Nov. 1. The national intercity passenger railroad is seeking agreements with the Transportation Communications International Union, Brotherhood of Maintenance of Way Employes, International Brotherhood of Electrical Workers, Brotherhood of Railroad Signalmen, Joint Council of Carmen, American Train Dispatchers Association, National Conference of Firemen and Oilers, and International Association of Machinists.

However, our amendable dates at AA are not even until next year and the Railway Labor Act is a slow mover. I doubt anyone at AA would get a cooling off period under this administration. So although I do agree with your opinion. I had to show that the NMB is currently fully active along with Bush to stop labor from flexing any muscle.

 

[FrugalFlyerv2.0]

It all depends on oil.

If oil keeps climbing, there will eventually be a breaking point where AMR is forced to file because they won't be able to continue operating while also being handcuffed to the the current workrules and scope clauses. It was a measure of last resort in 2003. I'm not so sure there will be a lot of hesitation if cash starts flowing out the door like it did in 2001.

It's naive to believe that the unions will restructure contracts consensually, and nobody at the NMB is going to declare a cooling off period until after the next administration is seated. It could happen, but I doubt it.

OK - on one hand I'll agree with you (File Chapter 11 when oil is X dollars above $100 or whatever the threshold amount is). But, and maybe it is just me, but I still can't see AMR filing chapter 11 bankruptcy. I don't know, something about their corporate culture tells me that Chapter 11 is the very last resort. If oil keeps on climbing I see other carriers 'dying' first (either liquidating or severely downsizing) and AMR remaining 'alive'. AMR has furniture to burn to keep the house warm, so to speak, whereas the other lagacy carriers have very few or none assets. Just my $0.02 and FYI I've been wrong before.

 

[donttouchthebeauty]

OK - on one hand I'll agree with you (File Chapter 11 when oil is X dollars above $100 or whatever the threshold amount is). But, and maybe it is just me, but I still can't see AMR filing chapter 11 bankruptcy. I don't know, something about their corporate culture tells me that Chapter 11 is the very last resort. If oil keeps on climbing I see other carriers 'dying' first (either liquidating or severely downsizing) and AMR remaining 'alive'. AMR has furniture to burn to keep the house warm, so to speak, whereas the other lagacy carriers have very few or none assets. Just my $0.02 and FYI I've been wrong before.

Are you serious, lets face the facts... AMR has the same assets that everyone else has.. and guess what?? They are the first to start selling them off. It wasn't long ago when the knowledgeable AA posters were swearing it was the end of UAL when they started talking about the sell of Mileage Plus and Maint.... Now we have just the oppoisite happening, but hey you have plenty of that wood - so burn away!!! Everyone has a FF program, many airlines have their own regionals as feeders, DAL, US, i believe NWA still has some as well... I guess we have all sold off our assets and no one noticed.. This is nothing more than a sneaky ploy by AMR mgmt.. Its negotiating time... When you start selling assets, I highly doubt you will be getting anything in negotiations, unless its a nice kick in the mouth... Look for more concessions or look for the big BK and I'm not talking Burger King.. AMR should have filed in 2003 like everyone else.. Hopefully you guys set the standard and raise the bar, like you say you do, I have a feeling this isn't going to be a pretty couple of years though... LOOK at your profits versus the other majors and then factor in your NEW RAISES you will be getting and that will tell you who will be dying off first, or filing BK last... Way to stay optimistic though..

 

[eolesen]

But, and maybe it is just me, but I still can't see AMR filing chapter 11 bankruptcy. I don't know, something about their corporate culture tells me that Chapter 11 is the very last resort. If oil keeps on climbing I see other carriers 'dying' first (either liquidating or severely downsizing) and AMR remaining 'alive'. AMR has furniture to burn to keep the house warm, so to speak, whereas the other lagacy carriers have very few or none assets. Just my $0.02 and FYI I've been wrong before.

Still, bankruptcy phobia still runs pretty deep at AMR -- Crandall spent a lot of time criticizing bankrupt competitors during President's Conferences and other avenues, and there's still a lot of his influence around. Heck, you'll still catch him from time to time being quoted about how the bankruptcy laws have been abused.

Personally, I see bankruptcy as the ultimate badge of failure. But I know people who had to file personally because they felt they had no choice (for some it was the only alternative, for others it was the path of least resistance).

Regardless of how I or RLC feel about it, I don't think AMR will hesitate next time around, especially if they're able to pre-package a filing.

There's no sense burning the furniture or spinning off the assets if you can simply stiff the creditors and shred the contracts. NWA and DL didn't lose hardly anything in bankruptcy. Neither did US or UA. So, as long as Eagle, Beacon and AAdvantage are well protected, there's not a lot of risk.

Gary Kennedy's legal team is pretty smart, and AA gets to benefit from a whole bunch of case law that didn't exist in 2003. The key piece came courtesy of AFA. By not walking off the job when they could have, they allowed a ruling to hit the books that will be used over and over again to make the case that S1113 arbrogation of a labor contract does not give unions the right to engage in self-help.

Are you serious, lets face the facts... AMR has the same assets that everyone else has..

Sure. All airline have assets. But AMR just happens to have a larger number of unencumbered assets. Most other airlines had to mortgage everything from their headquarters buildings to the bag carts and tugs. So, if UAL liquidates, they can try to sell assets, but most of them are already leined by creditors, so there's not much left for the estate to recover.

I guess we have all sold off our assets and no one noticed..

For the most part, you did sell off your assets --- the bank owns most of the previously bankrupt carriers, not the shareholders...

But don't let the facts hit you in the a$$...

 

[aafsc]

Sorry, your post is just a lot of hot air without substance. TWA had $150 million cash on Jan 10. You make things up to suite your narrow hateful view of things. Where does your bitterness come from? What do you care what my wife's wishes are? I never said anything about my wife's wishes. My wife has never posted here. I think your post is slanderous, abusive and threatening. Why would AA have any desire to want someone like you as an employee? Maybe you should leave AA as surely you cannot contribute anything to AA with your hateful attitude. Why not see if they can offer you some counseling?

They may have had $150 million in cash on JAN 10 but you omit the fact that a $100 million note had to be paid; this in addition to payroll and fuel would have left cash till dry. I fail to see how my post was "slanderous, abusive, or threatening"; you perceive any post contrary to the "TWA line" as such. I have an excellent work record at AA with MANY letters of commendation that I received LONG before the TWAers ever arrived. You arrogantly imply that I am not worthy of employment at AA (when you have never seen my employee file) simply because I oppose your position. You and others like you have a lot of nerve, you bust into AA and come on these boards and attack the very people that made possible to some for a completed career, recall for others, and retiree medical and passes for some who never even worked here.

NOW TO STAY ON TOPIC.

I feel that AMR should go in the opposite direction with regards to Eagle. They should merge Eagle into AA. This would help AA in a number of ways. First, as of now, it is difficult to recruit pilots at the regionals due to the very low pay. If AA merged all Eagle flying into AA,new hire pilots would tolerate the low pay flying the smallest planes because they know they will eventually get to fly the 777; they would be on the AA seniority list so it would just be a matter of time. Next, if they merged the two, that would eliminate the Eagle management and administrative structure which would save millions. Training costs would be lowered because turnover would be reduced and quality would improve. Of course many things would have to be negotiated with the three labor groups but I feel it is possible. Eagle employees are already the highest paid in the regional sector, but it is possible the synergies and the elimination of redundancies can offset this.

Obstacles to merging AA with AE would obviously be mostly upper AE management. Their jobs would disappear. Others could be bought out or found a place through attrition. A reason AMR might not merge them is because of finances. As long as AE is separate it could be sold or used as collateral to borrow against. But as others have noted, it appears as though they have been setting up AE to stand on it's own for a while.

 

[CynicalResAgent]

I thought one main reason that they kept regionals separate was so that if they had a contract come due and went on strik it would not affect the whole operation.

for example Comair went on strike but other Delta affiliates and Delta operated. Now if you merge Eagle into AA and have one giant airline with (I don't know how many planes you guys have but combined with AA and AE I would imagine its over 1,000 or close to it.....don't mean to offend if I am off by a lot.) My point is that those combined pilots would have much larger bargaining pull and that would not be wanted by the guys at the top.

Keep them separate, keep them divided and wear them down with their contacts a different times....If all pilots were united it would be a management worst nightmare..... just my opinion as a nonpilot.

 

[FrugalFlyerv2.0]

Found this article in the Toronto Star.

There are some things in there that perhaps AMR and / or those pushing AMR to spin off/sell AE, AAdvantage, etc. should consider:

Ups, downs of a spinoff

Some excerps:

... ... ... after a dizzying three years punctuated by two income trust offerings, one regular IPO and a private sale, some are beginning to wonder whether efforts to "unlock hidden value" in Air Canada could ultimately prove to be an exercise in corporate alchemy, a misguided attempt to turn airline-grade aluminum into investing gold.

"What was gained by the frequent-flyer program was lost primarily by the mainline airline," Kevin Crissey, an analyst at UBS Investment Research, wrote in a recent research note.

Several analysts say the market is viewing Air Canada for what it really is: A legacy carrier stripped of its most lucrative parts.

"When you take out those cash cushions, you end up with a riskier airline," says Roger King, an analyst with CreditSights.

 

[AirwAr]

I thought one main reason that they kept regionals separate was so that if they had a contract come due and went on strik it would not affect the whole operation.

for example Comair went on strike but other Delta affiliates and Delta operated. Now if you merge Eagle into AA and have one giant airline with (I don't know how many planes you guys have but combined with AA and AE I would imagine its over 1,000 or close to it.....don't mean to offend if I am off by a lot.) My point is that those combined pilots would have much larger bargaining pull and that would not be wanted by the guys at the top.

Keep them separate, keep them divided and wear them down with their contacts a different times....If all pilots were united it would be a management worst nightmare..... just my opinion as a nonpilot.

I believe the main reason for keeping them separate is to have lower costs at Eagle. Eagle pays less and has fewer benefits.

IMHO, your point about them being separate so that "a strike would not affect the whole operation" is off target. Sure, AA could probably operate many of its flights if Eagle were to strike, but not the other way around. When the flight attendants struck in the 90's, Eagle effectively shut down. Sure there were some flights, but there was nowhere close to enough business to keep AMR alive with just Eagle flights. In addition, there is no way Eagle would fly "struck" work. In other words, if Eagle wasn't already flying the route before the strike, they would not fly it in place of AA during the strike.

NOW, you have a valid point if you want to talk about the main reason why a mainline carrier would choose to have many regional carriers, rather than just one carrier. If they have 4 regional carriers and one goes on strike, only 25% of their feed would be affected. "Keep them separate, keep them divided and wear them down with their contacts at different times"

 

[Barfbag]

Do anyone know if Prinair routes became Eagle's. Does AA still keep some routes intra-island in the Caribbean?

 

[MCI transplant]

They may have had $150 million in cash on JAN 10 but you omit the fact that a $100 million note had to be paid; this in addition to payroll and fuel would have left cash till dry. I fail to see how my post was "slanderous, abusive, or threatening"; you perceive any post contrary to the "TWA line" as such. I have an excellent work record at AA with MANY letters of commendation that I received LONG before the TWAers ever arrived. You arrogantly imply that I am not worthy of employment at AA (when you have never seen my employee file) simply because I oppose your position. You and others like you have a lot of nerve, you bust into AA and come on these boards and attack the very people that made possible to some for a completed career, recall for others, and retiree medical and passes for some who never even worked here.

NOW TO STAY ON TOPIC.

I feel that AMR should go in the opposite direction with regards to Eagle. They should merge Eagle into AA. This would help AA in a number of ways. First, as of now, it is difficult to recruit pilots at the regionals due to the very low pay. If AA merged all Eagle flying into AA,new hire pilots would tolerate the low pay flying the smallest planes because they know they will eventually get to fly the 777; they would be on the AA seniority list so it would just be a matter of time. Next, if they merged the two, that would eliminate the Eagle management and administrative structure which would save millions. Training costs would be lowered because turnover would be reduced and quality would improve. Of course many things would have to be negotiated with the three labor groups but I feel it is possible. Eagle employees are already the highest paid in the regional sector, but it is possible the synergies and the elimination of redundancies can offset this.

Obstacles to merging AA with AE would obviously be mostly upper AE management. Their jobs would disappear. Others could be bought out or found a place through attrition. A reason AMR might not merge them is because of finances. As long as AE is separate it could be sold or used as collateral to borrow against. But as others have noted, it appears as though they have been setting up AE to stand on it's own for a while.

<_< ------ Just as a side-note here aa, that $100 mil. note was due. But at the time, there was no panic over it, because every one felt that it could be renegotiated. But at this point in time, we'll never know, now will we?------- As for the Eagle thing, for once I tend to agree with you!

 

[The Goose]

America's airline management has taken an "out side of the box" approach to the current state of affairs. That is where Bankruptcy came in. This was their opportunity to up the stakes and get rich.

It is now time for US aviation employees to realize the stakes have changed. We MUST adapt and change as well. No longer can we think as individual carriers, that is what their new strategy is built upon. We must now think as they do, if they can use bankruptcy (with the government's backing) to strip employees of 65 years of labor gains, we must fight back in the same manner.

It is my belief that every airline Union in America must fight to remove the NO STRIKE (a by product of the mid 1980s, right about when the pay of airline CEO's begin to RISE) clause in their contracts. They must then use the "solidarity" threat to force a return to an equal footing for this industry. If the US gov. can support a status quo of 500% pay difference in management to labor, we must force change and prove to the country, from a united front that a return to pay ratios commensurate to the 1980s, and as they exist in Europe TODAY, is in the best interest of this "vital" industry of the US economy.

The ability to stage a sympathy strike across the nation will alter the unchecked financial rape that has occurred over the last 20 years.

Very nice thoughts, but - because of the rising cost of everything and the financial squeeze to airline mechanics (and anyone else who actually works for a living), I doubt if such a thing would ever happen due to fear of losing their status quo. By injecting fear into the equation the twu gained the company its concessions in 2003. By the twu's supposed whining about the cash bonuses management was going to get, the award was changed to stock; much more profitable for the execs and, no doubt, the twu officers whom I believe were paid off to complain.

Things will have to get much worse before any group will collectively grow a set of 'nads and deal with the problem.

 

[MERV]

AMR studies letting Eagle leave American's roost
By DAVID KOENIG , 07.02.10, 03:09 PM EDT


DALLAS -- For the second time in three years, American Airlines' parent is considering whether to sell or spin off regional carrier American Eagle, which ranks near the bottom of government statistics for airline service.

American, like the other major airlines, needs to cut costs. Outsourcing flights that connect travelers between American's hub airports and smaller cities will help it do that.


http://www.forbes.com/feeds/ap/2010/07/02/business-financial-administration-us-amr-american-eagle_7740422.html?partner=alerts