US-AA Merger Articles (Merged Topics)

[Dont call me Shirley]

http://www.star-telegram.com/2012/06/20/4047905/us-airways-brings-the-fight-to.html​

t's not personal; it's just management.
And it's one reason that US Airways' CEO Doug Parker is being treated as if he's riding to the rescue.
Parker came to North Texas on Monday to make his case for a merger with American Airlines. He brought along American's three union chiefs and their unconditional endorsements, met with newspapers in Fort Worth and Dallas, and also made the TV news...

Read more here: http://www.star-telegram.com/2012/06/20/4047905/us-airways-brings-the-fight-to.html#storylink=cpy

 

[signals]

1) How would US Airways make a profit if it's paying a higher rate to American workers and bumping up its own low-paid staff? How would it merge seniority lists?

2)They're willing to bet the company on a plan to create the world's largest airline, even if it takes years to combine unions, fleets and computer systems

Read more here: http://www.star-tele...l#storylink=cpy​

3)Horton has said that a stand-alone American can add billions, too, by growing the cornerstone markets and cutting labor costs. American doesn't see much gain from adding US Airways,

Read more here: http://www.star-tele...l#storylink=cpy​

4)"It can only be fixed one way: through a merger with US Airways. But the good news is it can be fixed, and can be fixed like that," Parker said, snapping his fingers.

There is so much said in this article. I'll just touch a few points.

1)It's going to pay a higher rate to AMERICAN workers and bump up US workers. Does this mean that he will pay the AA staff high and just give a small raise to US staff? What about the seniority list? Will the problem be solved by making ALL US pilots FOs? Did APFA remove that 'stickey' little clause from their contract, and are they willing to do so?

2)Apparently TIME is on Parker's side, because another 7+year war, works!

3)American is twice the size of US. At least twice. US as a whole has more to gain. In case you haven't noticed, parts of this article are talking about the benefits to the company moreso than the benefits for the workers. If you don't see it, Sgt. Parker's American Sideshow Band is using labor as a shield.

4)Look at #2 closely. If labor is going to take, a-hem, years, what is Parker going to fix quickly by snapping his fingers?

Kool Ade now being served!

Read more here: http://www.star-tele...l#storylink=cpy​

Read more here: http://www.star-tele...l#storylink=cpy​

 

[robbedagain]

ill pass the kool aid thanks but no thank

 

[flybynite]

Am I the only one that thinks a lot of pixie dust is being thrown around?

 

[firedougparker]

Am I the only one that thinks a lot of pixie dust is being thrown around?

Not at all. There are many of us with you which is why we started the campaign to get Doug fired. We think he has totally lost focus on our company and our issues, and wants to play with the shiny new toy that is American Airlines.

While this merger might be good for the execs, it will not be good for the rank and file, you can bet on that. Let Doug put his promises of better wages and no job losses IN WRITING. That is, no jobs lost, no route of frequency reductions. Because that's what mergers do - they save money by reducing "duplications", meaning US. And I have a feeling there would be a lot of "duplications" with this merger...

 

[Watdahail?]

1) How would US Airways make a profit if it's paying a higher rate to American workers and bumping up its own low-paid staff? How would it merge seniority lists?

If I'm not mistaken, US AMT's, FSC's, Agents, FA pay is very comperable anyways. Biggest gaps between AA/US pay are with the Pilots, and AA's grossly overpaid management starting at level 4 and above. As far as management is concerned, a pay cut could always be implemented for the "old" AA managers to bring them down to the "new" AA manager scale. Or, if US managers are as low as I've heard (Somethin like AA station manager makes 85K a year for the same kind of station US Manager makes 55K a year) AA manager could be taken down to 70K while US Manager taken "up" to 65K. No more cost, just cost redistributed. You'll find alot of stations where AA/US both operate and darn straight the lower cost US Managers will stay and AA's will get the boot. The managers taking a 15-20K a year pay cut will probably just say screw it and look elsewhere.

 

[signals]

Am I the only one that thinks a lot of pixie dust is being thrown around?

Don't look at me. Much like anyone else, I am just giving my opinion on speculation of what may happen.

 

[firedougparker]

And here we go... things are finally starting to bubble to the surface. USAPA is skeptical about a merger with AA. Rightfully so!

http://www.charlotteobserver.com/2012/06/21/3331106/pilots-union-seeks-assurances.html

 

[BungeeJumper]

USAPA is skeptical about a merger with AA. Rightfully so!

USAPA becomes irrelevant if the merger occurs.

 

[signals]

Ironically, so does US Airways as a whole.

 

[USA320Pilot]

This week will be interesting in regards to AMR’s contract discussions with its unions, decisions made by union leaders, and the affects these talks will have on the Texas-based company’s bankruptcy proceeding.

Today and tomorrow APA’s BOD’s will discuss and then vote on whether or not to accept the company’s Last Best Offer (LBO). AMR’s proposed Term Sheet represents a 20% cut off of the pilot’s book rates, which are after deep concessions of top of the labor cost cuts the pilots provided a few years ago, and the new LBO is a 17% reduction. Through APA’s negotiations the pilot’s annual concession dropped from $350 million per year to about $315 million per year.

However, according to the Dallas News not only are the pilot negotiations fluid, but so are AMR’s negotiations with APFA and all of the TWU units (5 of which already have agreed to the company’s Term Sheet as their next CBA).

Today the Dallas News reported:

We have a flurry of union activity at American Airlines as we see the approach of Friday, the latest deadline for U.S. Bankruptcy Judge Sean Lane to issue a big ruling.

The Transport Workers Union and American Airlines management sit down Tuesday and Wednesday to negotiate better deals for TWU members.

The reason: Five contracts approved by TWU groups in May included “me-too” clauses that promised that the TWU members would enjoy any gains negotiated by other labor groups.

That provision was triggered last week when American revised its proposal to the Allied Pilots Association, including a 15 percent reduction in the cost-cutting demanded of pilots.

“Plans to restart negotiations for the two TWU work groups that did not accept earlier offers has been communicated to AMR,” the TWU said in a Tuesday announcement. “Negotiators for the maintenance and stores bargaining units are expected to meet with the company after the ‘me-too’ talks conclude.

American has a motion pending before Judge Lane to reject its labor agreements. Lane has a Friday deadline to rule on the motion. But things are moving.

The Allied Pilots Association board of directors is meeting this week to review the company’s offer. The board last Wednesday voted 11-5 not to accept it as a tentative agreement, saying much of it was too vague and that they hadn’t had sufficient time to review it. But Lane a day later gave them until this Wednesday to take another look at it.

The five TWU units accepted the company’s “last, best and final offer” in May. The “me-too” clause means they can get whatever the pilots got, prompting this week’s talks.

TWU told the company late last week that they want new negotiating dates for the two units that turned the May offer, the mechanics and related employees and the maintenance stores employees.

The Association of Professional Flight Attendants said late Monday that there’ll be new talks. “APFA and the Company have been in contact with each other regarding negotiations and both parties have expressed their desire to return to the table,” the union said in a special hotline.

"Our goal remains reaching consensual agreements with all of our unions,” American Airlines spokesman Bruce Hicks said Tuesday, “and we look forward to resuming negotiations with the APFA.”

All this activity comes as Judge Lane prepares to issue his ruling. The deadline has moved from May 23 to June 6 to June 22 and now to this Friday, June 29.

But, as the APFA told flight attendants late Monday, “this situation is extremely fluid and we are in uncharted territory.”

According to the APA LGA Domicile Reps in an update to their members on June 22, 2012:

What are our choices?

We can accept the contract that was presented to us, keep the unsecured claim that comes along with it, live with it for 6 years, and then hope that consolidation along with contractual improvements will happen sooner. If consolidation doesn’t happen along the way, then we’re stuck with what we’ve inked for 6 years (likely much longer given AMR’s history of delay tactics) if the membership consensually votes yes to accept it.

We can reject the contract offer and expect our contract to be abrogated with the worst case being the term sheet. You may have seen a Company sponsored link comparing the proposed final offer to the AMR term sheet.

Apparently, and not surprisingly to us, as of this morning we are still in disagreement with AMR as to what the terms are of the Company’s last proposal. Once APA can get clarity as to what the final proposal terms are, there will be a comparison posted on our website. Please look to the APA website for our comparison of the two positions. In the meantime, we recommend you view any Company interpretations with a healthy dose of skepticism.

If we reject the proposal we could possibly lose our claim. On the plus side, as the Company exits bankruptcy we can start negotiations again. While the court has the ability to allow AMR to reject our current contract and impose elements of their term sheet as they desire, the duration of any implemented terms after bankruptcy exit cannot be imposed upon us.

The time it will take to exit bankruptcy is an unknown although the law changed in 2005 and exit is supposed to happen within 18 months. Once AMR exits bankruptcy we would return to bargaining for a new contract, under the NMB/RLA process, while continuing to work under the changes made via AMR’s term sheet implementation. What the effects of any implementation would look like is uncertain but we could expect them to worsen as time moves on.

Mike and I believe consolidation will happen. The network possibilities that consolidation presents and the revenue generating capability they provide can’t be ignored. Whether it happens in bankruptcy or outside of bankruptcy (like DAL and UAL did) still is an unknown but AMR has clearly indicated their preference for any consolidation to occur post-bankruptcy.

We would prefer to see it happen within bankruptcy for better long-term benefits to both the successor company and to the pilot group. The bankruptcy process seems to hamper the process of consolidation because the Debtor and the Unsecured Creditors Committee hold the keys.

Furthermore, the Dallas News said last Friday, “The simple math would indicate that the $370 million in cuts for pilots will be reduced to about $315 million. If all the cuts are adjusted to 17 percent from 20 percent, that would reduce the total employee-related cuts from $1.25 billion to $1.06 billion, and the union portion of it from $990 million to $842 million.”

Therefore, the 17% labor annual cost cuts across-the-board would increase AMR’s standalone business plan annual costs by $190 million per year or $1.14 billion over the LBO contract’s 6-year term(s) for labor.

However, on June 18, APFA President Laura Gladding told the Fort Worth Star-Telegram, “Their (AMR's) shortfall on revenue is so far at ways what it is in labor costs. So what he wants to do at least in our case, okay, so we don’t have two tracks going because the company has asked from us an 1113 term sheet that would put us 30 percent below anyone in the industry. Nobody is going to vote for that. I’m not going to send it out. I’ve said it in court, I’ll say it again, nobody is going to vote to put themselves on the street 2,300 furloughs, they’re really really horrible cuts in pay. I mean the company says no cuts in pay. They take away incentives, international pay, it will be 17 percent pay cuts when you consider all the different things that they’re doing. That would be on top of the 33 percent we took in 2003. People can’t afford it, they’re not going to vote for it. Company hasn’t moved off that. I would sign off on a contract. I would send something out to the membership if the company agreed to open their books to US Air. Because we need this to happen in bankruptcy. And that’s better for the labor unions obviously, much better for the labor unions, but I think it’s better for everyone on the whole because I think if Tom Horton gets out of bankruptcy and does exactly what we think he’ll do and that is try to buy US Air himself, it’s a very very risky proposition and then you’ve got all of these labor groups with very very difficult concessionary agreements, what kind of airline are you going to run with employees like that?”

An argument can be made that the UCC and Ad Hoc Committee Bondholders will not be too happy with AMR increasing its labor costs nearly $1.2 billion over 6 years. Typically creditors are paid by the debtor in post emergence newly issued equity in a formal reorganization, which tends to grow and have a capital gain based on earnings. According to Scott Kirby in a Crew News session held with US Airways’ with employees last week airline post bankruptcy payments to the creditors averages 3 to 5 cents on the dollar, which is projected to be much lower than US Airways’ proposal for AMR’s POR.

On June 7 Bloomberg reported:

- American Airlines reorganization value of $22b through a merger w/ US Airways(LCC), $4b higher than standalone valuation, Morningstar analyst Basili Alukos said in a note this morning. Merger w/ LCC is “essential” for AMR to shrink $2b rev[enue] gap vs the industry.

- $22b valuation would imply 73% recovery for creditors w/ impaired liabilities, incl. senior unsecured bondholders; would face 21% downside if AMR didn’t merge w/ LCC.

- Morningstar sees LCC shareholders having 30% downside w/ no deal; sees 59% upside if merger takes place, achieves all projected synergies

- Morningstar sees rev. synergies $1.5b annually in AMR-LCC deal.

According to Alukos, the Unsecured Creditors' are projected to recover .73 cents on the dollar with a merger and a 21% downside without one. He also agrees with US Airways' business plan that projects a synergies revenue of $1.5 billion a year with the combined airline."

Therefore, could AMR’s LBO negotiations with its unions actually increase the odds the merger will proceed this summer? Why? Because on a relative basis US Airways’ merger plan will provide creditors even more money than AMR’s initial standalone plan because on a standalone basis AMR’s costs will increase if its new LBOs are accepted by all of its labor groups.

Meanwhile, Doug Parker told shareholders at US Airways’ annual shareholder meeting earlier this month that merger talks (with AMR, US Airways, and the UCC) would begin after the bankruptcy judge rules on the state of the union's contracts. Doug indicated US Airways is making "great progress" toward a merger, he has won backing on Wall Street for a takeover bid, and US Airways has received "tremendous" merger support from bondholders and analysts for a merger with American.

And, last week at US Airways’ Crew News session Scott Kirby indicated that merger negotiations would heat up with AMR in couple of weeks after the company’s S.1113 process is complete, which is likely why the Fort Worth Star-Telegram recently indicated “ Wall Street is predicting that a bid from Parker for AMR could come this summer. Maxim Group analyst Ray Niedl has given a US Airways/American merger a 90 percent chance of happening. ‘A merger is the most logical choice in our opinion.’”

Kirby noted that all of AMR's unions will continue to lobby for the proposed US Airways merger following the completion of their contract talks with AMR, the merger has a "high probability" of proceeding, and in every one of the 200-300 merger presentations he has presented all of to politicians, investors, analysts, unions, and creditors he has spoken to supports an AMR-US Airways merger.

Finally, last week Holly Hegeman made an interesting observation. Hegeman said, “Instead of distributing weak "atta boy" letters from other business partners, the AMR management team and Tom Horton should get out and show people the "Standalone Plan" and persuade people who might be skeptical instead of talking to people who are paid to agree with them. The airline should be trying to convince its unions, who have hired strong independent advisors like Lazard and Jeffries, to give up their hopes of a merger with US Airways because AMR's plan offers a much better future. But no, all we get is more truthiness. That's the problem. To convince people with facts, you need a plan that works and that is better than the US Airways plan that has now been presented to both the unions and analysts. And therein lies the problem – no such plan exists. Instead, Tom Horton and the American management team continue to try to hide the ball and use delay tactics in hopes they can somehow get out of bankruptcy before the facts overwhelm the "created" truthiness. The airline appears to be running on "process" and ignoring substance. Ignoring the world around you, pretending things aren’t as they really are…and pushing your truthiness through solicited "atta boy" letters from business partners sounds sadly more and more Uniquely American to me.”

USA320Pilot

 

[USA320Pilot]

Last Wednesday Scott Kirby told employees direct merger discussions with AMR, AMR's UCC, US Airways and their advisors would begin after AMR and its unions either reached consensual agreements with TAs/LBOs ratified or Judge Lane orders AMR's S.1113 motion.

Either way the UCC wants the AA labor concession piece known for a back up standalone plan in case the merger does not precede and to compare the standalone plan to the merger plan.

As soon as AMR’s labor contracts are determined, either by a consensual or court imposed cut, Scott indicated direct merger negotiations between the two companies will proceed.

USA320Pilot

 

[Freighterguynow]

Hot air and hair plugs

 

[USA320Pilot]

This week will be interesting in regards to AMR’s contract discussions with its unions, decisions made by union leaders, and the affects these talks will have on the Texas-based company’s bankruptcy proceeding.

Today and tomorrow APA’s BOD’s will discuss and then vote on whether or not to accept the company’s Last Best Offer (LBO). AMR’s proposed Term Sheet represents a 20% cut off of the pilot’s book rates, which are after deep concessions of top of the labor cost cuts the pilots provided a few years ago, and the new LBO is a 17% reduction. Through APA’s negotiations the pilot’s annual concession dropped from $350 million per year to about $315 million per year.

However, according to the Dallas News not only are the pilot negotiations fluid, but so are AMR’s negotiations with APFA and all of the TWU units (5 of which already have agreed to the company’s Term Sheet as their next CBA).

Today the Dallas News reported:

We have a flurry of union activity at American Airlines as we see the approach of Friday, the latest deadline for U.S. Bankruptcy Judge Sean Lane to issue a big ruling.

The Transport Workers Union and American Airlines management sit down Tuesday and Wednesday to negotiate better deals for TWU members.

The reason: Five contracts approved by TWU groups in May included “me-too” clauses that promised that the TWU members would enjoy any gains negotiated by other labor groups.

That provision was triggered last week when American revised its proposal to the Allied Pilots Association, including a 15 percent reduction in the cost-cutting demanded of pilots.

“Plans to restart negotiations for the two TWU work groups that did not accept earlier offers has been communicated to AMR,” the TWU said in a Tuesday announcement. “Negotiators for the maintenance and stores bargaining units are expected to meet with the company after the ‘me-too’ talks conclude.

American has a motion pending before Judge Lane to reject its labor agreements. Lane has a Friday deadline to rule on the motion. But things are moving.

The Allied Pilots Association board of directors is meeting this week to review the company’s offer. The board last Wednesday voted 11-5 not to accept it as a tentative agreement, saying much of it was too vague and that they hadn’t had sufficient time to review it. But Lane a day later gave them until this Wednesday to take another look at it.

The five TWU units accepted the company’s “last, best and final offer” in May. The “me-too” clause means they can get whatever the pilots got, prompting this week’s talks.

TWU told the company late last week that they want new negotiating dates for the two units that turned the May offer, the mechanics and related employees and the maintenance stores employees.

The Association of Professional Flight Attendants said late Monday that there’ll be new talks. “APFA and the Company have been in contact with each other regarding negotiations and both parties have expressed their desire to return to the table,” the union said in a special hotline.

"Our goal remains reaching consensual agreements with all of our unions,” American Airlines spokesman Bruce Hicks said Tuesday, “and we look forward to resuming negotiations with the APFA.”

All this activity comes as Judge Lane prepares to issue his ruling. The deadline has moved from May 23 to June 6 to June 22 and now to this Friday, June 29.

But, as the APFA told flight attendants late Monday, “this situation is extremely fluid and we are in uncharted territory.”

According to the APA LGA Domicile Reps in an update to their members on June 22, 2012:

What are our choices?

We can accept the contract that was presented to us, keep the unsecured claim that comes along with it, live with it for 6 years, and then hope that consolidation along with contractual improvements will happen sooner. If consolidation doesn’t happen along the way, then we’re stuck with what we’ve inked for 6 years (likely much longer given AMR’s history of delay tactics) if the membership consensually votes yes to accept it.

We can reject the contract offer and expect our contract to be abrogated with the worst case being the term sheet. You may have seen a Company sponsored link comparing the proposed final offer to the AMR term sheet.

Apparently, and not surprisingly to us, as of this morning we are still in disagreement with AMR as to what the terms are of the Company’s last proposal. Once APA can get clarity as to what the final proposal terms are, there will be a comparison posted on our website. Please look to the APA website for our comparison of the two positions. In the meantime, we recommend you view any Company interpretations with a healthy dose of skepticism.

If we reject the proposal we could possibly lose our claim. On the plus side, as the Company exits bankruptcy we can start negotiations again. While the court has the ability to allow AMR to reject our current contract and impose elements of their term sheet as they desire, the duration of any implemented terms after bankruptcy exit cannot be imposed upon us.

The time it will take to exit bankruptcy is an unknown although the law changed in 2005 and exit is supposed to happen within 18 months. Once AMR exits bankruptcy we would return to bargaining for a new contract, under the NMB/RLA process, while continuing to work under the changes made via AMR’s term sheet implementation. What the effects of any implementation would look like is uncertain but we could expect them to worsen as time moves on.

Mike and I believe consolidation will happen. The network possibilities that consolidation presents and the revenue generating capability they provide can’t be ignored. Whether it happens in bankruptcy or outside of bankruptcy (like DAL and UAL did) still is an unknown but AMR has clearly indicated their preference for any consolidation to occur post-bankruptcy.

We would prefer to see it happen within bankruptcy for better long-term benefits to both the successor company and to the pilot group. The bankruptcy process seems to hamper the process of consolidation because the Debtor and the Unsecured Creditors Committee hold the keys.

Furthermore, the Dallas News said last Friday, “The simple math would indicate that the $370 million in cuts for pilots will be reduced to about $315 million. If all the cuts are adjusted to 17 percent from 20 percent, that would reduce the total employee-related cuts from $1.25 billion to $1.06 billion, and the union portion of it from $990 million to $842 million.”

Therefore, the 17% labor annual cost cuts across-the-board would increase AMR’s standalone business plan annual costs by $190 million per year or $1.14 billion over the LBO contract’s 6-year term(s) for labor.

However, on June 18, APFA President Laura Gladding told the Fort Worth Star-Telegram, “Their (AMR's) shortfall on revenue is so far at ways what it is in labor costs. So what he wants to do at least in our case, okay, so we don’t have two tracks going because the company has asked from us an 1113 term sheet that would put us 30 percent below anyone in the industry. Nobody is going to vote for that. I’m not going to send it out. I’ve said it in court, I’ll say it again, nobody is going to vote to put themselves on the street 2,300 furloughs, they’re really really horrible cuts in pay. I mean the company says no cuts in pay. They take away incentives, international pay, it will be 17 percent pay cuts when you consider all the different things that they’re doing. That would be on top of the 33 percent we took in 2003. People can’t afford it, they’re not going to vote for it. Company hasn’t moved off that. I would sign off on a contract. I would send something out to the membership if the company agreed to open their books to US Air. Because we need this to happen in bankruptcy. And that’s better for the labor unions obviously, much better for the labor unions, but I think it’s better for everyone on the whole because I think if Tom Horton gets out of bankruptcy and does exactly what we think he’ll do and that is try to buy US Air himself, it’s a very very risky proposition and then you’ve got all of these labor groups with very very difficult concessionary agreements, what kind of airline are you going to run with employees like that?”

An argument can be made that the UCC and Ad Hoc Committee Bondholders will not be too happy with AMR increasing its labor costs nearly $1.2 billion over 6 years. Typically creditors are paid by the debtor in post emergence newly issued equity in a formal reorganization, which tends to grow and have a capital gain based on earnings. According to Scott Kirby in a Crew News session held with US Airways’ with employees last week airline post bankruptcy payments to the creditors averages 3 to 5 cents on the dollar, which is projected to be much lower than US Airways’ proposal for AMR’s POR.

On June 7 Bloomberg reported:

- American Airlines reorganization value of $22b through a merger w/ US Airways(LCC), $4b higher than standalone valuation, Morningstar analyst Basili Alukos said in a note this morning. Merger w/ LCC is “essential” for AMR to shrink $2b rev[enue] gap vs the industry.

- $22b valuation would imply 73% recovery for creditors w/ impaired liabilities, incl. senior unsecured bondholders; would face 21% downside if AMR didn’t merge w/ LCC.

- Morningstar sees LCC shareholders having 30% downside w/ no deal; sees 59% upside if merger takes place, achieves all projected synergies

- Morningstar sees rev. synergies $1.5b annually in AMR-LCC deal.

According to Alukos, the Unsecured Creditors' are projected to recover .73 cents on the dollar with a merger and a 21% downside without one. He also agrees with US Airways' business plan that projects a synergies revenue of $1.5 billion a year with the combined airline."

Therefore, could AMR’s LBO negotiations with its unions actually increase the odds the merger will proceed this summer? Why? Because on a relative basis US Airways’ merger plan will provide creditors even more money than AMR’s initial standalone plan because on a standalone basis AMR’s costs will increase if its new LBOs are accepted by all of its labor groups.

Meanwhile, Doug Parker told shareholders at US Airways’ annual shareholder meeting earlier this month that merger talks (with AMR, US Airways, and the UCC) would begin after the bankruptcy judge rules on the state of the union's contracts. Doug indicated US Airways is making "great progress" toward a merger, he has won backing on Wall Street for a takeover bid, and US Airways has received "tremendous" merger support from bondholders and analysts for a merger with American.

And, last week at US Airways’ Crew News session Scott Kirby indicated that merger negotiations would heat up with AMR in couple of weeks after the company’s S.1113 process is complete, which is likely why the Fort Worth Star-Telegram recently indicated “ Wall Street is predicting that a bid from Parker for AMR could come this summer. Maxim Group analyst Ray Niedl has given a US Airways/American merger a 90 percent chance of happening. ‘A merger is the most logical choice in our opinion.’”

Kirby noted that all of AMR's unions will continue to lobby for the proposed US Airways merger following the completion of their contract talks with AMR, the merger has a "high probability" of proceeding, and in every one of the 200-300 merger presentations he has presented all of to politicians, investors, analysts, unions, and creditors he has spoken to supports an AMR-US Airways merger.

Finally, last week Holly Hegeman made an interesting observation. Hegeman said, “Instead of distributing weak "atta boy" letters from other business partners, the AMR management team and Tom Horton should get out and show people the "Standalone Plan" and persuade people who might be skeptical instead of talking to people who are paid to agree with them. The airline should be trying to convince its unions, who have hired strong independent advisors like Lazard and Jeffries, to give up their hopes of a merger with US Airways because AMR's plan offers a much better future. But no, all we get is more truthiness. That's the problem. To convince people with facts, you need a plan that works and that is better than the US Airways plan that has now been presented to both the unions and analysts. And therein lies the problem – no such plan exists. Instead, Tom Horton and the American management team continue to try to hide the ball and use delay tactics in hopes they can somehow get out of bankruptcy before the facts overwhelm the "created" truthiness. The airline appears to be running on "process" and ignoring substance. Ignoring the world around you, pretending things aren’t as they really are…and pushing your truthiness through solicited "atta boy" letters from business partners sounds sadly more and more Uniquely American to me.”

USA320Pilot

The latest APA LGA Domicile letter to their pilots makes a vague reference to the possibility of "losing their claim" if they refuse to accept the terms offered by AMR and the Judge rejects their current CBA. It appears they're talking about the claim (loss of pension) that allows them a position on the UCC.

It appears as if APA is not real sure themselves of the possibility of "losing their claim"...they could just be throwing it our there as a potential result. But, if this did happen and the judge rejects their current CBA, this could allow AMR to implement their LBO and removes APA from their position on the UCC.

That would also remove APA from a position that allows them to actively lobby for a merger to the other UCC members.

Therefore, besides the reasons I articulated in regards to increasing AMR's POR cost and potentially decreasing the recovery percentage for other creditors...APA's acceptance of AMR's LBO will ensure that they have a voice within the UCC in support of a merger.

Meanwhile, the company's APA LBO sates, "APA agrees not to object to or contest the issuance of equity or other consideration in the Bankruptcy Cases to the Company’s non-union and management employees, in respect of the sacrifices made by them in furtherance of the Company’s effort to restructure or as incentive for the non-union and management employees’ future service to the Company."

USA320Pilot

 

[Geno]

Just in..............APA BoD passed the LBO......9-7. Going to membership for vote.