This should be the "light bulb" moment for the Pro LCC + AA cheerleaders.
US doesn't offer anything near what you think it does to AA.
We'll have new hires rolling in before you know it, building from scratch what "Team Tempe" thinks we need.
Potential suitors circle American Airlines
- Thread starter Mr Eagle
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US doesn't offer anything near what you think it does to AA.
We'll have new hires rolling in before you know it, building from scratch what "Team Tempe" thinks we need.
Beancounter
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Aand you'll be doing it under an imposed bankruptcy contract. If Parker offered you a Delta +1% contract wouldn't you prefer that? Hey, I hope you fight the merger, I won't have to worry about a furlough. Seriously, I hope in the end it works out for the AA employees.
If Parker offered US employees Delta + 1%, US would quickly lose hundreds of millions of dollars and bankruptcy would soon follow. If Parker acquires AA and offers everyone Delta + 1%, the combined entity would lose even more money and the combined entity would be back in Ch 11.
US employees brag about the profits at US, but the secret to those profits is reflected in your paystubs and your W-2s that will be mailed out next week.
Beancounter
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Yes, US giving just Delta pay rates would financially harm the company.
No, a combined AA/US would create enough revenue to cover a Delta+1% contract.
The AA work groups haven't been able to make the decisions they need to yet. I don't know if they'll be able to during bankruptcy.
ChockJockey
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I think some people already got theirs.
You forgot to add along with Delta +1 the new airline would be a global carrier of choice? Shades of Steve Wolfe?
Those pay rates would sink the company. Maybe not the AA side, but the LCC side (you're making regional rates and barely making it) would drag the whole beneath the surface.
The AA employes will have little to say about this, if it every shows up on the table. The only point the employees will get a voice would be while in BK, and only then in committee with the other creditors. LCC would have to bring in soo much money that if successful, the new company would have a horrendous debt load.
Post BK, it would be up to the AA board....
Besides, haven't you heard, Tempe is willing to disassemble the current LCC network and attach it in parasitic like fashion to the AA network. We'd get to integrate LCC people with their seniority, then suffer furloughs of our own people, vs. growing organically... The best way.
http://www.thefloridanewsjournal.com/2012/01/20/us-airways-make-offer-buy-or-merge-american-airlines-industry-changing
signals
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From the article:
The deal, however, is far from certain yet, with American previously saying they wanted to remain on their own.
USA320Pilot
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Dealtalk: As suitors circle, AMR has upper hand in any deal
A deal with Delta, the No. 2 U.S. carrier, is unlikely because of the high antitrust hurdles, experts say.
US Airways Chief Executive Doug Parker has long promoted consolidation as a means to slim down in an industry plagued by overcapacity, but it still has the challenge of having to integrate its own labor groups following its 2005 merger with America West Airlines.
People familiar with the industry agree that US Airways does need scale and American Airlines is seen as the only obvious dance partner for them, but without US Airways first integrating its separate labor houses, any merger wouldn't be appealing to American Airlines.
"They're long on desire but short on ability," said one of the sources.
Click here to read the story.
A deal with Delta, the No. 2 U.S. carrier, is unlikely because of the high antitrust hurdles, experts say.
US Airways Chief Executive Doug Parker has long promoted consolidation as a means to slim down in an industry plagued by overcapacity, but it still has the challenge of having to integrate its own labor groups following its 2005 merger with America West Airlines.
People familiar with the industry agree that US Airways does need scale and American Airlines is seen as the only obvious dance partner for them, but without US Airways first integrating its separate labor houses, any merger wouldn't be appealing to American Airlines.
"They're long on desire but short on ability," said one of the sources.
Click here to read the story.
The bolded part is not going to be an easy sell. I expect AA to cut employee costs rather deeply.
As an example, DL reported slightly more than 50% more revenue than AA will report for 2011 yet had total labor expenses just barely above AA's labor expenses (about 8% more than AA spent on labor in 2011). To get down to DL labor costs, AA will have to cut deeply. But DL labor costs represent a raise for US employees.
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