Here's the company mumbo jumbo.
Reading between the lines it basically says everything remains ours UNLESS or UNTIL we merge. If that happens, we're hosed.
AA, BA, IB Joint Business Agreement Q&A
What is the Joint Business Agreement (JBA)?
It is an agreement to share revenue and reduce costs, co-ordinate networks and schedules and co-operate commercially on routes between the EU, Norway and Switzerland and the U.S./Canada/Mexico/ and US territories in the Caribbean.
Will AA own part of British Airways or Iberia, or vice versa?
BA and IB have announced that they are discussing a potential merger. BA already owns a portion of Iberia. AA does not have an ownership stake in either BA or Iberia and neither BA nor Iberia have an ownership stake in American. All three airlines have some codesharing agreements already in place.
Why are we doing this?
The JBA will provide greater customer choice with better connections, network, frequency, and frequent flyer benefits. It will also enable the airlines to operate more efficiently, reducing costs and increasing their ability to invest in new products and services.
ATI approval on transatlantic flights will enable oneworld carriers to compete more effectively with the Star and Skyteam alliances who already have ATI across the Atlantic.
Is this in reaction to the Delta/Northwest merger?
Industry consolidation is a marketplace reality and American must respond to remain competitive. Alliances have become increasingly important, and oneworld is at a disadvantage relative to Star and SkyTeam. Gaining antitrust immunity will allow the airlines to coordinate pricing, yield management, and schedules in ways that should bring American increased revenues. Closer coordination on costs may allow American to reduce costs and remain competitive.
What is antitrust immunity (ATI)?
Antitrust immunity allow airlines to coordinate schedules, pricing, yield management, and other functions so the public benefits from expanded and coordinated route networks and efficiencies. Since 1993, DOT has granted immunity to more than 25 alliances, allowing them to share information and coordinate efforts without the risk of antitrust enforcement.
A core requirement for US antitrust immunity is that the foreign carrier's homeland must have an open skies agreement with the United States.
What do the airlines have to do to gain antitrust immunity?
The Department of Transportation (DOT) has the authority to immunize alliances between U.S. and foreign airlines from the U.S. antitrust laws. The members of such an alliance file an application with DOT in a public docket. Other interested parties are allowed to comment on the application, and DOT issues a decision granting or denying immunity to the alliance.
What happens if ATI is not granted?
The airlines will continue to operate as now, but oneworld would continue to be at a competitive disadvantage to SkyTeam and Star. Consumers would not gain additional access to discounted fares, expanded connection opportunities, transatlantic frequent flyer benefits and a more seamless service.
Do we need European Union approval?
The EU's Director General for Competition will review the joint business agreement. We will proactively engage the Director General for Competition and other relevant EC Directorates who will open a consultation for interested parties. Unlike the U.S, there isn't a formal filing that takes place in the EU.
What difficulty or roadblocks exist in securing regulatory approval?
Our application would be very similar to the immunization requests made by SkyTeam and Star, which were approved.
What will this mean for oneworld?
Our plans to pursue an immunized global relationship will enable oneworld to better compete on the world stage by offering customers a greater level of seamless global connectivity.
This is impossible for any single airline to deliver on its own and difficult for any combination of airlines that does not operate under broad-based antitrust immunity. At the moment, oneworld is at a distinct disadvantage versus Sky Team and Star, each of which enjoys antitrust protection. With immunity, oneworld would be able to compete more effectively with SkyTeam and Star, increasing interalliance competition.
How is this different from existing alliances?
This is similar to the SkyTeam and Star immunized alliances. Without ATI, oneworld is at a competitive and regulatory disadvantage relative to the SkyTeam and Star alliances.
If we don't get ATI approval, does it mean the end of the oneworld alliance?
Not in the short term. However, its disadvantage in competing with Star and Skyteam would continue. Continental's addition to Star will also significantly enhance Star's competitive position in New York.
When do we think regulatory approval will be granted?
We hope that the Department will move expeditiously to grant antitrust immunity so that consumers can enjoy the benefits of enhanced interalliance competition. We believe that the process can be completed well before the end of 2009.
When will the implementation of the JBA begin after ATI is approved?
Our intention is within six months of approval being received.
How does this make each airline more competitive in a transforming global industry?
The ability to coordinate pricing, yield management, scheduling, sales, and marketing efforts will make the airlines better able to compete for business around the world.
Why are we doing this?
To compete and win on the world stage, we must be able to offer customers a level of seamless global connectivity that is impossible for any single airline to deliver on its own - and difficult for any combination of airlines that does not operate under broad-based antitrust immunity. We view this joint business agreement as our best chance to do that.
How does this bring financial stability to AA?We expect this agreement to help American generate needed additional revenue, which will give each airline a greater ability to invest in improved products and services for our customers. The financial benefits created by the joint business agreement, in combination with antitrust immunity, will allow American and the other participating airlines to be much more competitive on corporate contracts and to offer consumers greater access to discounted fares and routing choices - all of which could lead to additional revenue.
What does this mean to my future?
Our employees' long-term futures and job security are directly linked to the success of our airline, and that success is entirely dependent on our remaining competitive in the global marketplace. This agreement will help make us a stronger, more competitive, and more successful company - and that will enhance overall job security, and enable us to continue meeting our obligations while investing in the future of American Airlines.
It sounds like efficiencies will result in job loss. Will cost reductions be made by eliminating overlapping management functions?
This agreement is about the airlines becoming more efficient by working together and being better able to compete in the global aviation market. Ultimately, no one can predict what the future will hold. However, one of the key principals of the agreement is intended to ensure flying remains relatively proportional. The airlines plan to maintain separate workgroups with no integration of employees. The agreement allows us to enjoy many benefits and synergies while avoiding the costs and disruptions of integrating employees and systems.
BA and IB recently announced their planned merger will result in thousands of job cuts. Won't that extend to AA once we've joined them in this JBA?
British Airways and Iberia have announced that they are in talks about a possible merger. Under current ownership regulations, BA or Iberia could not merge with AA. The airlines plan to maintain separate workgroups with no integration of employees. The agreement allows us to enjoy many benefits and synergies while avoiding the costs and disruptions of integrating employees and systems.
This agreement is about the airlines becoming more efficient by working together and being better able to compete in the global aviation market. The cost reductions in the current plan do not include jobs but focus on joint working in areas such as purchasing.
How are American's unions likely to respond to this agreement?
We briefed our union leaders in advance of the announcement. We have carefully studied the industry landscape and, at this time, we believe this is the right decision for American given the current conditions. The airlines in the JBA plan to maintain separate workgroups with no integration of employees. It allows us to enjoy many benefits and synergies while avoiding the costs and disruptions of integrating employees and systems.
Isn't this just a way to outsource flying to other airlines?
This agreement is not about labor costs, but the revenue and cost synergies that will be produced by coordinated marketing and schedules. All of the participating airlines are expected to benefit from tighter coordination of schedules, increased codesharing opportunities, and the potential to launch new routes or sustain existing routes that would have been unviable for individual airlines. The cost reductions in the current plan do not include jobs, but focus on joint working in areas such as purchasing. One of the key principals of the agreement is intended to ensure flying remains relatively proportional.
How will flight crews be affected?
Our flight crews' jobs will not be affected. The airlines plan to maintain separate workgroups with no integration of employees. The agreement allows us to enjoy many benefits and synergies while avoiding the costs and disruptions of integrating employees and systems.
This agreement is about the airlines becoming more efficient by working together and being better able to compete in the global aviation market. The cost reductions in the current plan do not include jobs but focus on joint working in areas such as purchasing.
Will seat and base protection be extended to pilots?
No changes in pay or work rules are planned as a result of this agreement. The airlines intend to maintain separate employee groups and separate labor agreements or employment policies. AA employees will continue to work and be paid according to our labor agreements or company policies for our independent employees.
Will you be asking for APA's, APFA's and TWU's approval?
We briefed our union leaders in advance of the announcement. There is no contractual requirement for union approval of the agreement. We have carefully studied the industry landscape and we believe this is the right decision for American given the current conditions. We plan to maintain separate workgroups with no integration of employees. That's what makes this agreement so attractive. It allows us to enjoy many benefits and synergies while avoiding the costs and disruptions of integrating employees and systems.
Does the Joint Business Agreement violate our Scope clause with APA?
No. This agreement complies with all aspects of our labor agreements. We plan to maintain separate workgroups with no integration of employees. That's what makes this agreement so attractive. It allows us to enjoy many benefits and synergies while avoiding the costs and disruptions of integrating employees and systems. There is no contractual requirement for union approval of the agreement.
How will this affect Section 6 negotiations?
Negotiations with our unions will continue as planned. We look forward to reaching new agreements with each of our unions as soon as possible and remain committed to offering proposals that both strengthen the Company and resolve issues that are important to our employees.
How will compensation be affected for frontline or management employees?
No changes in pay or work conditions are planned as a result of this agreement.
Will any form of profit sharing or share ownership be extended to international employees?
There are no planned changes in pay or work rules resulting from this joint agreement. We plan to maintain separate employee groups and separate labor agreements or employment policies. AA employees will continue to work and be paid according to our labor agreements or company policies for our independent employees.
Whose pay scale will be used?
No changes in pay or work rules are planned as a result of this agreement. The airlines intend to maintain separate employee groups and separate labor agreements or employment policies. AA employees will continue to work and be paid according to our labor agreements or company policies for our independent employees.
Will we move our offices to BA's or IB's facilities?
The JBA does not obligate the airlines to co locate but we will explore opportunities to co-locate where feasible.It is far too early to know if, when or how any co-location would be implemented. We will work hard to keep everyone informed as the approval and JBA implementation process progress and share as much information as we can, as quickly as we can, regarding this and other aspects of the agreement.
Will we close any of our flight attendant bases in the U.S. or Latin America?
We do not currently anticipate a need for facilities closings, downsizing or restructuring that would result in any flight attendant base closures.
Will we close our reservations offices in Dublin or MCLA?
We do not currently anticipate a need for facilities closings, downsizing or restructuring that would result in lost jobs. Some facilities involved in the JBA may eventually co-locate in a single airport and/or facility. However, it is far too early to know if, when or how such plans will be implemented. We will work hard to keep everyone informed as the approval and JBA implementation process progress and share as much information as we can, as quickly as we can, regarding this and other aspects of the agreement.
Will this change how customers make reservations today?
No. Reservations will be made as usual.
If there is a problem with a reservation or an AAdvantage account, who does the customer contact to resolve the issue?
The customer would contact AA reservations and AAdvantage Customer Service as they do today.
Will anything in the AAdvantage program change today?
No. It is business as usual until antitrust immunity is granted and the JBA is implemented. We are hopeful that the JBA can be implemented within six months after antitrust immunity is granted.
Will the partnership affect the customer?s current frequent flyer relationship? Will the three frequent flyer programs merge?
Each airline will still be responsible for managing its own frequent flyer programs. Each program offers different opportunities for earning and redeeming miles, different elite status benefits and different terms and conditions.
How will this affect the frequent flyer benefits?
Currently, members of the American Airlines AAdvantage program, British Airways Executive Club and Iberia Plus program have reciprocal frequent flyer agreements. Under the Joint Business Agreement, members of the American Airlines AAdvantage program and British Airways Executive Club will be able to earn and redeem miles on each airlines' flights between the US and the UK, thus making all routes flown by American Airlines, British Airways and Iberia eligible for earning and redeeming AAdvantage miles.
Will the joint business agreement provide AAdvantage members the ability to use AAdvantage mileage award upgrades or systemwide upgrades on British Airways or Iberia flights?
The JBA encompasses mileage accrual and redemption on transatlantic services, however, reciprocal upgrade benefits are not included. We continually evaluate the program to identify opportunities to add value for our members.
Will AAdvantage members be able to earn elite status bonus miles on British Airways flights once again?
Each program offers different opportunities for earning and redeeming miles, different elite status benefits and different terms and conditions. Each carrier participating in the AAdvantage program determines whether elite bonus miles will be offered on their flights.
Will this impact the number of miles AAdvantage members may earn when flying on British Airways or Iberia? Will this make British Airways and/or Iberia flights accrue 100 percent of the miles flown on all fare classes?
Each program offers different opportunities for earning and redeeming miles, different elite status benefits and different terms and conditions. Each carrier participating in the AAdvantage program determines the eligible fare classes for mileage accrual and the percent of miles the carrier chooses to award.
Will customers be able to earn AAdvantage miles on the new codeshare flights?
Yes.
Will plans to upgrade and refurbish American Airlines? lounge areas at Heathrow continue?
There is no change as a result of today's announcement.
Will AA continue to have its own presence at Heathrow?
Yes. It is business as usual at all facilities. However, the opportunity to optimize facilities are co-location is something the JBA will allow the parties to consider.
Will AA move to Terminal 5 alongside BA at LHR?
There are no current plans for AA to move to Terminal 5 at Heathrow. However, co-location is something the JBA will allow the parties to consider.
Will AA move to Terminal X alongside BA at JFK or will they move to Terminal 8?
Specific facility issues have not been evaluated at this stage. There are no current plans for AA to move to Terminal 5 Heathrow or BA to move to Terminal 3 at JFK. However, co-location is something the JBA will allow the parties to consider.
Will AA continue to roll out its new lie-flat business class?
Yes. Today's announcement does not change the airlines' product strategies.
Will AA adopt BA's lie-flat business class?
Today's announcement does not change the airlines' product strategies.
