Official: AMR Bankrupt

[Wretched Wrench]

I am curious as to what kind of retirement and benefit enhancement they gave Arpey. Probably a well-kept secret. Golden parachutes and retention bonuses are part and parcel of airline bankruptcies.

Is SERP still in effect?

 

[care2purchasefood?]

Ed, from the Ed Show on MSNBC shares his thoughts about American Airlines filing Chapter 11:

Ed blasts AA Execs!

Glad I no longer work for this crAApy airline. I got a real job with better pay and benefits. I might not have the free travel, but who can D2 anyway? I like the fact I travel for work and rack up the miles. I wish all my former AA'ers the best of luck. My advice to you, STICK IT TO HORTON aka HORNTON and the rest of the jerks!

 

[swamt]

Is that your BMW in your profile picture, concessions are tough. DUMBASS

That's what he drives. Ask him what the wifey drives. And those are only the daily drivers. If they have kids, bet the first one to hit 16 gets the BMW for a commuter back and forth from school. But I will say this. If we all were making the same amount as the pilots, my kids too would be driving the same cars for a school commuter. However, my wifey wants the new 2012 Jag XF or XK Coupe, and I will make it happen, but it will take some changes to make it happen. In other words, don't knock the man for what he drives, we all live within our means, the pilots have higher means than we (mechanics) do, we have higher means than F/A's do, and so on. BTW if it is a status quo you want to live by then by yourself a BMW used, no one will ever know you bought it used, hell that pilot your slamming more than likely bought it used and saved 50%. If he didn't, then maybe I might call him a dumbass...

 

[700UW]

Actually your wrong, AWA didnt raise any money for the merger.

US raised all the money with the help of Seabury and Associates, Airbus, Air Wisconsin, Air Canada and several investment firms invested in the new US.

I stand corrected. But I knew Air Canada was involved somehow 😉


Actually AWA did also have a large part in getting all the investors together. It was a joint effort from what I remember reading.

Wrong again,

Read this

But America West did not have enough cash to lift US Airways out of bankruptcy. It was up to Luth, the US Airways adviser, to find enough investment money to piece the deal together and give the combined company a fighting chance to thrive in the battered airline industry.

Luth and US Airways had serious discussions with more than a dozen investors. They all requested shared participation in a merged airline -- no one wanted to take on all the risk. The Retirement Systems of Alabama, which rescued US Airways from its first bankruptcy in 2003 with a $240 million investment, stands to lose it all if US Airways emerges from bankruptcy and issues new stock.

Luth went after the companies that had something to gain from an investment in US Airways and America West. Aircraft maker Airbus agreed to provide $250 million in exchange for US Airways' pledge to buy dozens of A320 jets in the future. Regional commuter carrier Air Wisconsin Airlines made a $125 million investment in exchange for a jet services partnership. The Appleton, Wis.-based airline will fly for the merged carrier on a contract basis.

Credit card companies may provide $300 million in order to reach new customers. And once-bankrupt Air Canada offered $75 million, good for a 7 percent stake in the new company, in exchange for the rights to bid on the maintenance contract for the new carrier's fleet of 361 jets.

Air Canada was the last in line.

 

[700UW]

Not so, they ruled that the injunction blocking the strike was legal, not that striking was illegal and it was never brought to supreme court.

Court Affirms Ruling Against Airline Strike

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By REUTERS
Published: March 30, 2007

Flight attendants at Northwest Airlines are not allowed to strike, a federal appeals court ruled yesterday, affirming a lower court ruling and lifting a cloud hanging over the bankrupt carrier.

The ruling, from the Federal Court of Appeals for the Second Circuit, protects Northwest from a potentially devastating strike threatened by the workers after Northwest voided their labor contract last year with court permission.

It also seems to clear up a legal question about the rights of workers to take job actions against a bankrupt employer.

The appeals court agreed with Judge Victor Marrero of Federal District Court in New York, who said last year that Northwest’s flight attendants, represented by the Association of Flight Attendants, did not have the right to strike under the circumstances.

The union may appeal to the United States Supreme Court, but did not immediately say whether it would do so.

The workers threatened to strike last July after a bankruptcy judge allowed Northwest to void their labor contract and impose wage and benefit cuts. The unionized workers had twice rejected a negotiated contract.

 

[brokenwrench]

...........I don't want this to happen, but after seeing how close he came to getting Delta, I would not bet against him.

Doug never was close to getting Delta. The Parker and Kirby wonder boy show never was able to get more than 2 Yeah votes from the creditor committe. And from what i understand there performance in front of the commitee was never very impressive.

 

[FWAAA]

Not so, they ruled that the injunction blocking the strike was legal, not that striking was illegal and it was never brought to supreme court.

Here's what the Second Circuit Court of Appeals actually said in the AFA appeal:

The District Court for the Southern District of New York (Victor Marrero, Judge ) issued a preliminary injunction precluding the AFA and its members from engaging in any form of work stoppage.   It held that any such work stoppage would cause irreparable harm and, at this juncture, violate the Railway Labor Act. On this basis, the district court concluded that the Norris-LaGuardia Act did not deprive it of jurisdiction to issue the injunction.

We agree, but for substantially different reasons than those advanced by the district court.   We hold that Section 2 (First) of the Railway Labor Act forbids an immediate strike when a bankruptcy court approves a debtor-carrier's rejection of a collective-bargaining agreement that is subject to the Railway Labor Act and permits it to impose new terms, and the propriety of that approval is not on appeal.

http://caselaw.findlaw.com/us-2nd-circuit/1034838.html

I realize that you haven't graduated from law school but here's a quick primer: Do you see the words "We hold" in bold above? That's generally a clear signal that what follows is precisly the "holding" of the court, and that's key, since that's their ruling in the appeal. Looks to me like the court held that the RLA forbids immediate self-help when your contract is abrogated, but make sure you ask the worthless union's lawyers for their opinion on this language.

The US Supreme Court didn't rule in the case? That's not surprising, since the Supreme Court typically decides fewer than 100 cases each year out of the thousands of petitions filed with it annually. That's really irrelevant, since the Second Circuit decision is the law of the land within the Second Circuit, which includes NYC and the Bankruptcy Court hearing AA's bankruptcy case.

 

[WorldTraveler]

What people fail to realize its not just about AA or US Airways. 3 large hub and spoke carriers have much less competition than the 5 currently operating. With a merger of US/AA there will be 3 large carriers and with less competition will be able to raise fares. The industry is far too fragmented with everyone competing for the same seats. In case nobody has noticed that is the whole reason for the DL/NW and UA/CO hookup too lessen competition and strengthen the networks.

that is all true... but there is no assurance that US might be the one that is deemed no longer necessary... and that is exactly what Parker is fighting won't happen. Remember, all of this bravada about going after AA is just US' way of making clear that they don't have the network to be able to survive longterm in a consolidated industry.
.
I can also assure you that the rest of the airlines DO NOT want Doug Parker running one of the remaining megacarriers and given that they have bigger pockets and could find an interest in some of AA's assets, those other carriers will do what they have to do to protect their interests long term.
US can figure out the best way possible to protect its own.
...............
There will be no massive seat sale... capacity will come out of AA's system rather quickly.. analysts expected them to do that months ago but AA could not because they couldn't get the costs out.. in BK the costs CAN come out and capacity will come out as well in order to improve AA's revenue performance.
.
The mere fact that US had a massive seat sale going into BK is probably a clue that is NOT the way to do it... and it was largely driven by the fact that US did not have cash to fund its BK while AA does.
NK has already launched off the assault on AA's franchise with 4 new routes from DFW... two of them were former FL routes which has to close DFW but 2 are new routes... granted, NK is not going to pull away AA's key business passengers but they do show the freedom with which competitors use another carrier's BK in order to grow their own franchise.
.......

Bob,
I can only shake my head that you act so outraged when the whole BK process has been repeated so many times that the only question is how much worse it can get for AA employees... you can't realistically think that you will fare better than the employees of formerly BK companies did
.
AA will shove deep cuts down the throats of its employees and dismantle as much of its operation as it deems necessary to make the company viable in its eyes long term.
And don't underestimate their desire to ensure that they create a company that even though still unionized does not have the problem areas that have allowed labor-mgmt conflict in the past.
BK is a brutal, brutal process but it is designed first and foremost to give the company the opportunity to restructure on its own and it gives the company enormously powerful tools to do that.
The chances that AA/AMR WON'T achieve what it needs is slim to none - but a whole lot of other entities including labor and a lot of airplane lessors will pay a high price to make it work.

 

[767one]

I think that when it's said that the pilots have more lose to it's referring to their pensions which if dumped in the PBGC would probably exceed the max payout. Bob from USAir? says he is only getting 40% of his pension after 30 years.

I think I need to clarify that for you. I'm only getting about 40% of my defined benefit plan. AA pilots have both a defined benefit plan AND a defined contribution plan. In the 1970's the Allegheny pilots stopped their defined contribution plan and that did not come back until after the 1st BK. when they trashed our DB plan. I don't know if other employees groups at AA have both DC and DB plans but what you have to watch out for in BK court is that your company will try and overstate the underfunding of your DB plan. Make sure that there is a good auditor working for your side because the BK judge will take the company's word as gospel unless you present a good case quickly.

Best of luck to you all,


Bob

 

[767one]

Bob, you are aware AA pilots pension consists of both a defined benefit, as well as a defined contribution? Defined contribution is hard money. Not sure how future payments will wash out. As for the defined benefit, at last required by law report that number was in the neighborhood of 90%.

Granted, yours was pretty ugly with the 100% loss. By structure, ours is very different.

Thanks for wishes....

Good deal on the DC plan. Allegheny actually had one in the early 70's in addition to the DB plan. They went to a DB plan after the Mohawk merger and the company would not talk about another DC plan until after they had plundered our DB plan. With our early furloughs and in particular after the Eastern BK my wife and I decided to live on F/O pay and even though I have been a Capt. since 1985 so in a sense we funded our own retirement.

All the best,

Bob

 

[RevThruster]

that is all true... but there is no assurance that US might be the one that is deemed no longer necessary... and that is exactly what Parker is fighting won't happen. Remember, all of this bravada about going after AA is just US' way of making clear that they don't have the network to be able to survive longterm in a consolidated industry.
.
I can also assure you that the rest of the airlines DO NOT want Doug Parker running one of the remaining megacarriers and given that they have bigger pockets and could find an interest in some of AA's assets, those other carriers will do what they have to do to protect their interests long term.
US can figure out the best way possible to protect its own.


WorldTraveler, you are not looking at what is going on. AA IS BANKRUPT - NOT USAIRWAYS!! In TODAYS environment, AA is the one that is unprofitable, and its cost structure and network among MANY other things is what put it there. Longterm is anyones guess, but USAIRWAYS is profitable and AA is CERTAINLY NOT! Most of the airlines would rather AA go belly up than USAIRWAYS for obvious reasons. If I were sitting in an executive suite at DAL or UAL or SWA or JBLU even, I would be devising a plan to make it as hard as possible for AA to come out of BK. I would want their market share in ORD, LAX, NYC, and DFW/MIA - It would be MUCH more beneficial to see the demise of AA over US.

 

[767one]

There was nothing to mull. There is only so much you can do. The union has brought in many many consultants and based upon their recommendation we are better fighting in bankruptcy court rather than give away the farm then get even less in bankruptcy court. I'm glad you are not negotiating for our group.

I agree with you 100%. At USAirways we pilots gave before BK to "save" the company and our pension. The first thing the company did in BK was take the pension, benefits, retiree healthcare, vacation, working conditions etc,etc. Don't give them anything, make them work for everything they take from you. Bottom line is that At USAirways many years after the BK we are still working for BK wages and our management has rewarded themselves well for our efforts.

Good luck to you all,


Bob

 

[WorldTraveler]

WorldTraveler, you are not looking at what is going on. AA IS BANKRUPT - NOT USAIRWAYS!! In TODAYS environment, AA is the one that is unprofitable, and its cost structure and network among MANY other things is what put it there. Longterm is anyones guess, but USAIRWAYS is profitable and AA is CERTAINLY NOT! Most of the airlines would rather AA go belly up than USAIRWAYS for obvious reasons. If I were sitting in an executive suite at DAL or UAL or SWA or JBLU even, I would be devising a plan to make it as hard as possible for AA to come out of BK. I would want their market share in ORD, LAX, NYC, and DFW/MIA - It would be MUCH more beneficial to see the demise of AA over US.

you don't seem to understand that the Chapter 11 process offers considerable exclusivity to AMR to clean itself up... and doesn't allow for unsolicited offers for a defined period of time.
You also don't seem to understand or accept that AMR has the tools it needs to restructure its business - the same set of tools that CO and US have used twice and every other network carrier has used once.
You also don't understand or want ot accept that even if it comes down to unsolicited offers for AA/AMR, there is little chance that US can outbid other parties who would be just as interested in acquiring AA.

Of course every other executive at other airlines are looking at how they can pick off AA's best revenue and make it difficult to turn the company around but that doesn't mean AA can't succeed at restructuring, and even if they don't that US will end up "the winner".
.
I have a feeling a whole lot of people would disagree with you about which airline they would prefer to fail.... your narrowminded, self-centered focus is more than a tad apparent.
.
Put away your fantasies of AA fixing US' problems... AA has their time to fix their house and that is what they are going to do.

 

[767one]

lots of speculation on what the company will or will not do.....but, one thing is for sure, every work group, including management, will see reductions in pay and benefits, and work rules will be one-sided. The company decimated our labor agreements in 2003 within 10 minutes, and the NEW employment contract between AA and labor will look similar to a self-imposed "yellow dog" contract. Will NOT be good for anyone!

bottom line.....start looking for better employment opprotunities, I'm done with AA and the aviation industry!!!!


GOOD LUCK TO ALL!!!!!

I agree with almost everything you said. The only exception I have is that management will only give the impression of taking a big paycut while actually rewarding themselves well for your contributions to the survival of the company.

Regards

 

[Pi brat]

I'm sorry to see this happen to you guys. Having been through it twice I can say it is no fun, but try to focus on the other thing in your life and not let this ruin you. We saw too many families torn apart over here, but most have survived.

Good luck.