PBGC and MERGER

[usa1]

As soon as the merger closes in just over a week, US Airways and American Airlines will both be wholly-owned subsidiaries of the new parent company.    Your employer will still be US AIrways.   And your employer will remain US Airways until the airlines are actually combined.    That might be a year or more away.   
 
As a pedantic legal matter, even once the two airlines are combined into one, that airline will be the corporate successor to US Airways (and the corporate successor to AA), so if the PBGC requires that you terminate employment to begin collecting your PBGC-guaranteed pension, the PBGC has a fairly good argument that you need to terminate employment from new AA once the airlines are combined in order to begin pay status.    

 
You're right. That will be their argument. But they shouldn't have argued the "name issue" after the AWA take over of US though. 

 

[mike33]

On paper the ownership will change with the new stock that was filed with the 8-k filing

 

[usa1]

On paper the ownership will change with the new stock that was filed with the 8-k filing

Also correct ... that's why I'm still holding out hope for the right outcome. It's also correct that those in Washington think they can do what they want when they want. But that's what happens as more and more of us become dependent on a government check. That be me when I retire.

 

[700UW]

There was new stock issued with the US/HP merger also.

 

[FLYUSAIRWAYS]

 I have a good feeling that the PBGC will be getting hundreds of phone calls on December 10th.  Should we call them now, and tell them to put on extra staff, so our wait time won't be a major issue???? 

 

[usa1]

Here's a copy of their ruling when AWA took over of US.

http://www.pbgc.gov/\Documents\apbletter\Decision--U.S.-Airways-2011-06-20.pdf
 

Thus, under the terms of the CE Plan, a participant is not eligible to receive a pension benefit prior
to his normal retirement date if the participant is employed by US Airways, Inc., its corporate
successors or a surviving corporation resulting from any merger or consolidation of US Airways, Inc.
with any other corporation.

The Merger of US Airways Group, Inc. with America West Holdings Corporation

Did Not Result in a Change of Your Employer

You assert that following the merger of US Airways Group, Inc. and America West Holdings
Corporation, your employer, US Airways, Inc. was a "new company." You further assert that as you
work for a "new company" you should be eligible to receive benefits while still employed by US
Airways, Inc. US Airways, Inc. underwent changes as a result of a Chapter 11 reorganization, As
explained below, however, the Board finds that your employer, US Airways, Inc., did not become a
new company (or a new Employer under the Plan) as a result of the merger of US Airways Group,
Inc. and America West Holdings Corporation. Instead, your current employer, US Airways, Inc, is
the same employer who employed you when your Plan terminated.
For purposes of this decision, the entities involved in the merger transaction are defined as
follows:

• US Airways Group, Inc.:. ("US Airways Group") the parent company of US Airways, Inc.
• US Airways, Inc.: ("US Airways") a certificated air carrier and US Airways Group's principal
operating subsidiary.
• Barbell Acquisition Corporation: ("Barbell") a subsidiary holding group created by US
Airways Group to effectuate a merger with America West Holdings Corporation.
• America West Holdings Corporation: ("America West Holdings") the parent company of
America West Airlines, Inc.
• America West Airli~es, Inc: ("A WA") a certificated air carrier and America West Holdings
Corporation's principal operating subsidiary.

On September 12, 2004, US Airways Group and its domestic subsidiaries filed voluntary petitions
for reorganization under Chapter 11 of the United States Bankruptcy Code. As part of the
reorganization, US Airways Group reduced labor, pension and benefit costs and other operating
expenses of US Airways. US Airways Group also entered into agreerp.ents with new equity investors
for contributions totaling approximately $500 million to the reorganized US Airways Group and
announced a planned merger between US Airways Group and America West Holdings.


On May 19,2005, US Airways Group entered into an agreement and plan of merger with America
West Holdings. 1 To accomplish the merger, US Airways Group created a wholly-owned subsidiary,
Barbell Acquisition Corporation. US Airways Group then merged Barbell into America West
Holdings by exchanging all ofthe shares ofBarbell (which were shares ofUS Airways Group) for all
of the shares of America West Holdings. The stock of America West Holdings was then cancelled,
and any holder of that stock before the transaction received a pro rata amount of US Airways Group
stock. To complete the transaction, Barbell's corporate identity was extinguished and America West
Holdings became a wholly-owned subsidiary of US Airways Group.2 The merger transaction cannot
be characterized asan asset purchase by America West Holdings. Charts of the pre-merger and post­
merger corporate structures are at Enclosure 3.
US Airways, the company that employed you, was a wholly-owned subsidiary of US Air Group
before and after the merger. Following the merger, US Airways continued to exist as a separate
corporate entity and remained a certificated air carrier and subsidiary of US Airways Group. A W A
was a wholly owned subsidiary of America West Holdings ·before and after the merger. US Airways
and AW A both continued operating after the merger of their respective parent companies. You
correctly note that the merger agreement filed with the SEC states that after Barbell Acquisition
Corporation and America West Holdings merged, Barbell's corporate existens:e ceased and America
West Holding will be the survivor' corporation. This fact does not impact the corporate identity of
your employer, US Airways Inc.

For a period of time after the merger, US Airways and A W A each operated as a certificated air
carrier. On September 25, 2007, AWA surrendered its Federal Aviation Administration ("FAA")
operating certificate and all mainline airline operations were subsequently conducted under
US Airways' FAA operating certificate.3 A WA transferred substantially all of its assets and
liabilities to US Airways. US Airways Group contributed 100% of its equity interest in America
West Holdings to US Airways. As a result of the transfer, America West Holdings and AWA
became wholly-owned subsidiaries of US Airways. You remained employed with US Airways
throughout these transactions. The transactions did not result in your being employed by a different
employer.

In the supplemental material you submitted you assert the transaction between US Airways and
America West should be characterized as an asset purchase. As already discussed, the Board
disagrees with your assertion. As established by the SEC filings, including the Agreement and Plan
of Merger, the transaction between US Airways Group and America West Holdings was a merger.
America West Holdings was treated as the acquiring company in the merger for accounting purposes
only.4 The Board concludes that based on all of the evidence presented, you have remained
employed with US Airways, Inc., the Employer as defined by the Plan.

 

[700UW]

So US will become a subsidiary of AAL Group, so you will still be working for US Airways.

 

[jimntx]

And, I expect the powers that be will keep things in that state for as long as possible.  I wonder if there is some similar ruling for frozen (but not dumped on PBGC) pensions which would make those of us from the AA side of the house eligible to draw our pensions while still working for AAL?

 

[700UW]

Your pension at AA wasnt terminated and turned over to the PBGC, so no your not in the same circumstances as the PMUS workers.
 
So no you cant draw your pension while you are employed by AA.

 

[usa1]

For a period of time after the merger, US Airways and A W A each operated as a certificated air
carrier. On September 25, 2007, AWA surrendered its Federal Aviation Administration ("FAA")
operating certificate and all mainline airline operations were subsequently conducted under
US Airways' FAA operating certificate.  AWA transferred substantially all of its assets and
liabilities to US Airways. US Airways Group contributed 100% of its equity interest in America
West Holdings to US Airways.
 

 
This may be the key? I have heard we will be using the American operating cert.

 

[700UW]

The operating certificate had nothing to do with how the PBGC views the merger.
 
The AOC is just the permit to operate an airline.
 
The reason they kept the US certificate is that HP had no 767s, no E190s nor A330s on their certificate to operate those aircraft.
 
The only A/C AA doesnt operate that US has is the A330 and E190s.

 

[usa1]

The quote above is their words (PBGC) .... as to why I still worked for US Airways on paper even though AWA actually took over. Could it be in the best interest of New American to use the American cert due to intl flight agreements or some other reason? PBGC can't have it both ways .....  based on their argument last time I believe it comes down to the surviving cert. 

 

[blue collar]

 
This may be the key? I have heard we will be using the American operating cert.

I don't think the ops cert has anything to do with it, the following sentence has a lot more to do with it than the ops cert.

 

[700UW]

The operating certificate has nothing to do with the financial make up of how the merger is done.
 
Have to agree with Blue Collar:

 

AWA transferred substantially all of its assets and liabilities to US Airways. US Airways Group contributed 100% of its equity interest in America West Holdings to US Airways.
 
 

And USA1 you are trying to cherry pick, this is all way above us, its gonna be left up to the lawyers and financial experts.

 

[usa1]

this is all way above us, its gonna be left up to the lawyers and financial experts.

 
True! Just hope our union team looks out for us .... they are well compensated to do just that.