US-AA Merger Articles (Merged Topics)

[firedougparker]

It's not just losing the HQ that many of us fear... it's losing PHX as a hub, just like LAS and PIT were butchered after the America West merger. And of course the job losses that would flow from that. Despite Doug's promises that there won't be any job losses, it's a crock.

 

[wings396]

It's been discussed many times, PIT was on the way out prior to HP's involvement. LAS was losing money, and would have needed a haircut with or without a merer.
If PHX is profitable, it will remain. I learned the hard way a few years ago, that employees are not a driving factor when it comes to any given city

 

[ChockJockey]

It's been discussed many times, PIT was on the way out prior to HP's involvement. LAS was losing money, and would have needed a haircut with or without a merer.
If PHX is profitable, it will remain. I learned the hard way a few years ago, that employees are not a driving factor when it comes to any given city

It doesn't matter. As a second-rate propagandist he's looking for anything and everything he can to twist and add to the collection of logical fallacies and hyperbole which is his website. Registering the domain name and then having it listed privately...that's put him (or his patrons) back about $45 right there. Though that might be a small price to pay to have Doug shaking in his boots...lololol...

 

[EastCheats]

Knight Ridder/Tribune 08/08/2012 4:49 AM ET
American-US Airways merger would hurt consumers, report says [Los Angeles Times]

08/08/2012 6:00 AM ET

Aug. 08--American Airlines and US Airways are, after some battling, now both publicly open to merging.
But a new report warns that such a merger, which would result in the nation's largest airline, could be bad for consumers because it might reduce competition, create strongholds at key airports and lead to higher fares.
The nonprofit think tank American Antitrust Institute in Washington and the Business Travel Coalition, which represents company travel managers, co-produced the report that will be released Wednesday.
"A US Airways-American combination poses potential concerns for competition and consumers," said Diana Moss, vice president of the institute and co-author of the report with Kevin Mitchell, chairman of the travel manager's coalition.
The two groups were careful to say that they don't oppose a merger, but they wanted to point out possible consequences.
American Airlines, the nation's fourth-largest carrier, has been the subject of merger rumors since its parent company, AMR Corp, filed for bankruptcy in November. US Airways, the nation's fifth-largest airline, has made no secret that it would be interested in a merger and has gotten support for one from American Airline's largest labor unions.
AMR, which had been on record as opposing a merger, changed its tune last month when its chief executive said the company would consider it.
An AMR spokesman declined to comment on the report by the two groups.
Scott Kirby, president of US Airways Group Inc. in Tempe, Ariz., said he had not read the report but dismissed suggestions that the proposed merger would hurt consumers.
Instead, he said, the merger would help US Airways and American Airlines better compete against bigger carriers such as Delta and United airlines, thus giving consumers more options for air travel.
"We are two complementary airlines that will make each other stronger," Kirby said.
If the merger takes place, US Airways also vowed to continue serving nine airports -- including Bob Hope Airport in Burbank -- that American stopped serving in the last year.
If American and US Airways come together, the resulting airline would control about 20% of market share, followed by Southwest with 18%, United with 17% and Delta with 16%, the report from the antitrust group and travel managers said.
Combined, the four airlines would control more than 70% of the national market, according to the report.
The report also said US Airways and American offer overlapping service on 22 routes, including flights to and from Los Angeles International, Phoenix Sky Harbor International, Dallas-Ft. Worth International, Chicago's O'Hare International and New York's La Guardia airport, among others.
The merger would create a monopoly or near monopoly on some of those routes, leading to "adverse competitive effects, including increases in fares, reduction in service, and loss of choice," the report said.
But Kirby argued that the two airlines complement each other, with US Airways prevailing in the East Coast and American strong in Chicago and Dallas. "There is no airport where we would dominate," he said.
Jan Brueckner, a UC Irvine economics professor, said he and his colleagues at the university have studied the effects of a hypothetical merger between US Airways and American and predicted a minimal effect on fares.
"I don't think anybody needs to worry about this merger," he said. "It just makes sense."
Brueckner added that most of the pressure that larger carriers face to keep fares low comes from low-cost airlines, such as Southwest Airlines, which recently bought AirTran Airways in Orlando, Fla.
[email protected]

 

[700UW]

The same is said about every airline merger, UA/CO and DL/NW.

Same old story every time.

 

[EastCheats]

American - US Airways Merger: Bad For The Consumer?

Wed 08 Aug 12 | 04:30 PM ET


The following transcript has not been checked for accuracy.down for man 15% a few minutes ago. dillard did beat expectations. think baggage fees, aisle seat fees, and others may be gets worse. there is a potential risk between a merger between they have higher fees, higher fairs, and let's flight options. we have the coauthor and henry hartefelt could could not disagree more. let's start with the fact that mergers are not new, u.s. airways is the result of mergers. you have airlines like southwest, and others. you also have the in fact that the fees help keep airline fares low. right nowy're 19% of what they would have been in 1995. you say airline mergers have not produced efficiencies that they claimed in the past. that's right, the skeleton in the closet here is the fact that a lot of airline mergers, particularly the large ones, have encountered significant integration problems most merger integing several things. and airlines are really not as able to project those integration problems at the time they propose their merger, and we think there is probably significant costs involved, these networks aren't particularlyimompl cent tear as they may be argued to be. henry, what about that? i disagree, let's look at delta a and northwest. that was a merger executed very, very well. we now have integrated work forces. they're working to standardize what makes sense to standardize for the aircraft. you have them flying delta routes. you are seeing continental and united go through the process, and they are taking steps to integrate those fleets. th is an america west merger, those will be ek if i if ied and they're working towards improve with labor relations and standardizing those contracts and you have already seen problem towards standardization and integration with employees there. but you have to believe when you have fewer players you have less competition allowing those fewer players to charge whatever they want? have you taken a look at the earnings reports and the margins for most airlines. my nephew's lemonade stand had a better margin than most airlines. thisa capital intensive business that's tough and littered with airlines that have gone out of business. maria, let's talk about that side of the coin, and it's not all about cost savings, let's talk about fewer airlines in the industry now. we've had six major mergers in the last six years. three have been huge mega mergers, this merger would create the big four players in the industry. so we lost competition, we need competition to keep fares low, quality high, give consumers choice, and ensure that the small consumers behind these large hubs are not starved of service because airlines are driving service to their large hubs. so let's consider the fact that these big mergers eliminated competition, and if efficiencies are real, then those will have to be huge to overcome some of the negative effects. we'll see, i think you make a good point on the margins, we'll leave it there, but it's something we'll come back to. another group warning of a looming disaster.
URL:http://video.cnbc.com/gallery/?video=3000107993
This transcript is generated by automated closed captioning, has not been edited, and may not be entirely accurate.
©2011 CNBC.com


http://video.cnbc.com/gallery/?video=3000107993&__source=yahoo%7Cheadline%7Cquote%7Cvideo%7C&par=yahoo

 

[wings396]

Sure it will put an end to those fares that date back to the 80's.....how Awful....

 

[EastCheats]

Sure it will put an end to those fares that date back to the 80's.....how Awful....

I'd make the winner of the debate Henry Hartefelt when he said,
"my nephew's lemonade stand had a better margin than most airlines"

 

[FWAAA]

Sure it will put an end to those fares that date back to the 80's.....how Awful....

One can hope. I recently compared AA's yield in 1981 with AA's yield in 2011, 30 years later. In 1981, AA's passenger revenue yield per mile was 12.13 cents. AA's consolidated yield in 2011 was a mere 25% higher at 15.15 cents. But those numbers aren't adjusted for inflation.

According to the Labor Dept's inflation calculator, to keep pace with inflation, AA's yield should have increased about 150%, all the way up to 30 cents per mile. Instead, it's only about half of that. Air travel today is a tremendous bargain.

 

[EastCheats]

Pilots Union Rejects Tentative Pact With American Airlines

http://online.wsj.co...1575899376.html

By SUSAN CAREY

Pilots Union Rejects Tentative Pact With American Airlines

• 
  Pilots Union Rejects Tentative Pact With American Airlines .Article Video Stock Quotes Comments (1) more in Business | Find New $LINKTEXTFIND$ ».smaller Larger facebooktwittergoogle pluslinked ininShare.0EmailPrintSave ↓ More .
  .smaller Larger
  By SUSAN CAREY
  The value of silver, at least at airline frequent-flier programs, has plummeted. Travelers complain airlines have taken perks away from their lowest level of elite status, which typically require flying 25,000 miles a year. Scott McCartney explains on Lunch Break.
  .The union representing American Airlines pilots rejected a concessionary, six-year contract offer by a vote of 61%, the Allied Pilots Association said Wednesday. The rejection is likely to put the issue before the U.S. Bankruptcy Court judge overseeing the reorganization of American parent AMR Corp. AAMRQ -0.40%
  "We are disappointed with the outcome of today's APA voting results," American said in a statement Wednesday, "as ratification would have been an important step forward in our restructuring." In voting that wrapped up Wednesday, 39%, or 2,935 pilots, voted for the deal, compared with 4,600 against.

• 
  American said it now awaits a ruling by U.S. Bankruptcy Judge Sean Lane on the company's motion to rescind the pilots' current labor agreement and impose more draconian terms on the group. The judge previously said he would rule on that motion and similar ones prompted by other unions' potential rejection of these final AMR offers on Aug. 15. But American's flight attendants currently are considering a last offer from the company and their voting won't conclude until Aug. 19, so the judge may wait until that result is known.

• 
  The pilots union said its board was meeting Wednesday with the union leadership to discuss what comes next. It provided no explanation for why the deal failed. If the group had approved it, pilots would have received modest raises, furlough protection, a boost in the company-provided contribution to their 401(k) plans and 13.5% equity in the reorganized AMR.

• 
  Separately, American's 11,000 mechanics narrowly approved a new contract offer after rejecting an earlier deal in May, the Transport Workers Union said Wednesday. The most recent vote, which passed by just 50.25%, means those workers won't face the possibility of having their current contract abrogated in court. A smaller group of 1,300 stores clerks represented by the TWU also approved their new contract by a 79% vote, reversing their May rejection of an earlier offer, the union said.

• 
  Now, all seven American work groups represented by the TWU have agreed to new contract terms, meaning 24,000 employees will receive modest pay increases and preserve some of the jobs that had been scheduled to be cut before the airline modified its offers to make them more attractive. "Nobody is happy with a concessionary agreement," said TWU International President James C. Little, "and our members are still waiting to see a business plan that instills confidence. But this result is a lot better than what our members would have faced with a court-imposed solution."

• 
  American said the TWU ratifications are "an important step forward in our restructuring."

• 
  The pilots, flight attendants and TWU in the spring endorsed a plan promoted by US Airways Group Inc. LCC +4.63%to bring AMR out of court protection through a merger. US Airways has been pursuing the larger airline for months. As part of that support, the unions have agreed to US Airways provisional contract terms that would govern them if that merger occurs as AMR's bankruptcy-exit plan.

• 
  AMR currently is working on a plan of reorganization that would have it come out of Chapter 11 on its own. But recently, the company bowed to its creditors' committee wishes that it explore merger alternatives that would be measured against the stand-alone plan. AMR recently sent US Airways a nondisclosure agreement which, if signed, would allow the two companies to share confidential financial information and determine if a combination makes sense. It isn't known when or if US Airways will sign the document.

• 
  The American pilots' failure to ratify their tentative agreement throws a wrench in AMR's plans to win all of its labor cost-savings through consensual negotiations, and creates labor uncertainty that could potentially hurt AMR's ability to raise capital. The pilots are at risk of essentially being shorn of any labor protections and facing a long road of bargaining ahead to restore myriad contract terms they would lose if Judge Lane throws out their current agreement.

• 
  It also could complicate the equation for US Airways, which offered the American pilots slightly better terms than they rejected Wednesday. AMR's financial creditors, who are interested in getting the best recovery in any plan of reorganization, may be drawn to a stand-alone AMR plan in which the pilots would make deeper sacrifices through a contract abrogation, rather than the more "costly" pilot labor terms contained in US Airways' provisional agreement with the American aviators. All three of American's big unions have seats on AMR's creditors committee.

• 
  Throughout the negotiations and voting process, the Allied Pilots Association said its objectives were to preserve as much of the pilots' contract terms as possible and "reinvigorate" AMR through a merger with US Airways, the union said in a recent bulletin. The APA may still favor the merger, but it won't have 13.5% of AMR's equity, which was going to give it a much bigger voice on the creditors committee.

• 
  Separately on Wednesday, the flight attendants union at US Airways reached a tentative agreement with the company on a contract that would cover 6,800 cabin crew members. Terms weren't disclosed. An earlier accord, reached in January after years of bargaining, was rejected by 75% of the group in March.

• 
  After new talks supervised by federal mediators, the deal was reached that lets the group vote on a new contract before any potential merger, the union said. The new accord, which is subject to member ratification, "would extend industry-leading job protections and overall economic improvements" to the group, said the Association of Flight Attendants union.

• 
  Like the US Airways pilots, the US Airways flight attendants have been working under two separate contracts since the 2005 merger of US Airways with America West Airlines. The failure to reach a common contract and a combined seniority list has forced US Airways to schedule the groups separately, and has kept them working under concessionary terms struck years ago. This hangover from a long-ago merger is one criticism among many that AMR executives have lobbed at US Airways in recent months.

• 
  Write to Susan Carey at [email protected]

• 
  

 

[EastCheats]

Business > Companies > AMR Corp.

Volume749.8K

Change–0.006 –1.22%

Last$0.48

08/10/2012 10:10 AM ET
AMR Corp.

AAMRQ: OTCQB; Industrials/Airlines
OTHER EXCHANGES: Mexico, Stockholmsborsen - cash, More »

David Crenshaw/Associated Press
Updated: June 22, 2012
AMR Corporation, with headquarters in Fort Worth, Tex., is the parent company of American Airlines.
In November 2011, AMR <a href="http://dealbook.nyti...p&st=cse">filed for bankruptcy protection in an effort to reduce labor costs and shed its heavy debt load.
American fell from the top carrier with domestic and international traffic to a distant third since the mergers of United and Continental Airlines, and Delta Air Lines and Northwest Airlines. American was the last of the major carriers to seek court protection and has struggled against these larger competitors in recent years as its losses mounted.
In June 2012, American Airlines and the union representing its pilots were close to reaching a deal on a new contract, a significant milestone in the ailing carrier&rsquo;s bankruptcy struggles. The accord potentially resolves a major sticking point with the carrier&rsquo;s most expensive employee group and a group critical to American&rsquo;s continued operation.
American, which has the highest labor costs in the industry, has said since filing for bankruptcy that it wants to cut its labor costs by $1.25 billion a year to be more competitive. In addition to reducing its labor costs, the airline also wants to eliminate 12,800 people from its work force, which currently numbers about 88,000.
Some unions, including those representing some ground workers, have reached a deal with American, meeting hundreds of times in negotiating sessions. Flight attendants, on the other hand, have shunned negotiations.
Still, analysts said, an endorsement from the pilots would not automatically translate into a vote of confidence for American&rsquo;s management.
The airline&rsquo;s management has said it aims to come out of bankruptcy by the end of 2012 and remain an independent carrier. But the carrier&rsquo;s carefully laid plans were upset by US Airways, which has been clamoring for a merger between the two airlines.
Read More...

In April 2012, US Airways, the fifth-largest domestic airline, struck an unusual behind-the-scenes deal with American&rsquo;s three main unions, representing pilots, flight attendants and ground employees, who all pledged to support a merger between the two carriers. That deal remains symbolic: US Airways has yet to make a formal offer for American.
But the pressure forced American to make a concession to its creditors and agree to consider mergers options while in bankruptcy. The company&rsquo;s current managers have until the end of September 2012 to complete their restructuring plan.
Background
The airline, once the top domestic and international carrier in the nation, missed out on the megamergers that reshaped the industry. As competition intensified, AMR responded by borrowing more and more, eventually pledging nearly all of its assets and leaving it heavily indebted. AMR&rsquo;s losses have totaled $12 billion since 2001.
In addition, American fell behind as low-cost carriers grew in prominence, and major airlines were forced to respond by cutting fares. The airline has also lost ground at some of its hubs, particularly New York and Chicago.

 

[firedougparker]

I don't see American abandoning either DFW or LAX. Therefore PHX is toast, even if for no other reason than geography.

And WOW did the AA pilots throw a spanner into the works with that vote. The wheels are coming off the merger bus quickly.

 

[wings396]

Really,,please tell.....

 

[nycbusdriver]

I don't see American abandoning either DFW or LAX. Therefore PHX is toast, even if for no other reason than geography.

And WOW did the AA pilots throw a spanner into the works with that vote. The wheels are coming off the merger bus quickly.

I think their rejection of Horton's offer make the merger more likely, and adds ammunition to the camp in favor of Parker being the boss. You may want to fire Doug Parker, but it sounds like the AA pilots want to hangtomhorton.

 

[EastCheats]

DALLAS (AP) &mdash; An airlines industry analyst says the vote by American Airlines pilots to reject the carrier's last contract offer could make a tie-up between American and US Airways more likely.
Analyst Hunter Keay of Wolfe Trahan & Co. said Friday that pilots could draw out contract negotiations with American, raising uncertainty about American's plan to restructure under bankruptcy protection and emerge as a stand-alone company.
The Allied Pilots Association supports a potential merger, but union leaders had narrowly endorsed a contract offer that would have given pilots a 13.5 percent stake in parent AMR Corp. after it emerges from Chapter 11. Rank-and-file pilots, however, rejected the offer by 61-to-39 percent in results announced Thursday.
A federal bankruptcy judge in New York is scheduled to rule Wednesday on American's request to throw out the union's current contract and temporarily impose less-generous terms on the pilots.
Keay said pilots "will soon have little left to lose" and could drag out negotiations on a longer-term contract.
An impasse with the pilots could create doubt about AMR's stand-alone restructuring plan and make US Airways' merger proposal more attractive to AMR's creditors, Keay said.
AMR issued a statement saying that it was reviewing a range of strategic alternatives and would "compare them with our own strong plan." The company, which has sent confidentiality agreements to several airlines that might be interested in discussing a merger, including US Airways, declined further comment.