US Senate To Hold Hearing On Seniority System At TWA

[atabuy]

It seems to me that TWA was gasping it''s last breath when AA bought them.
For the employees of Twa, AA was their last chance from being on the street.

If they could have hung in until 9/11, that would have been the end of them for sure.
All TWA employees would have been on the street and looking for jobs. This means they would have started at the bottom. I think that is fair.

All unions can keep this from being an issue as far as seniority by putting a paragraph in their union book about union members being bought or merged with other carriers.

IMO, people make a choice of the airline they work for, not the union they belong to. So, if the airline they choose gets sold or merged, it is bad luck for them.
Why should union members of a successful airline suffer for the unsuccessful one.

Now if everyone wants to be listed by date of hire, then they would have to work out of a union hall, where they all belong to the same union, with all the same benefits, and might be working for any airline on any given day.

That would make all union members equal and true seniority would count.

I know some will disagree with this, but it would be the fairest way to proceed. Just think of the savings airlines could get with pilots working out of a hall.

 

[bicaal]

Once again, I will say to you TWA was not bankrupt and TWA''s ASMs gained AA almost 1/4th of the almost 1 billion dollars that the government gave after 9/11. So I do not think that 9/11 would have been our demise. The AA documents state, and please note that the unions from both airlines were to determine seniority, not just the acquiring carrier:
ANALYST BRIEFING
TWA LLC INTEGRATION

MAY 10, 2001









2


SAFE HARBOR


This presentation contains forward-looking statements within the meaning of the “safe harbor†provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations or beliefs of management and are subject to a number of factors and uncertainties that could cause actual results to differ materially from those described in this presentation. The forward-looking statements contained in this presentation address the anticipated benefits of acquiring TWA’s assets, the proposed acquisition of assets from United/US Airways, and the future financial and operating results of American with the acquired assets. Management undertakes no responsibility to update the information presented in these materials.

The following factors, among others, could cause actual results and benefits to differ materially from those described in this presentation: the inability to successfully integrate the operations of TWA; the ability of American to acquire and integrate assets from United/US Airways or the Northeast Shuttle operations into American’s existing operations; the inability of American to successfully integrate the workforce of TWA or any United/US Airways pilots to be employed by American; higher than expected acquisition costs for any of the described transactions; actions of competitors, including competitive or strategic responses to the pending transactions; and other factors, including but not limited to, those discussed in the section entitled “Forward-Looking Information†in Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2000, which section is incorporated herein by reference.




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OVERVIEW


TRANSACTION SUMMARY

FLEET PLAN UPDATE

REVENUE SYNERGIES

COST IMPLICATIONS

INTEGRATION COSTS

FINANCIAL IMPACT

INTEGRATION PLAN

GUIDANCE



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TRANSACTION SUMMARY


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TRANSACTION SUMMARY


ON JANUARY 10TH WE ANNOUNCED A SERIES OF THREE TRANSACTIONS DESIGNED TO STRENGTHEN THE AMERICAN NETWORK IN LIGHT OF COMPETITIVE CHANGES IN THE INDUSTRY


FIRST, AMERICAN AGREED TO PURCHASE SUBSTANTIALLY ALL OF THE ASSETS OF TWA, IN CONJUNCTION WITH ITS CHAPTER 11 BANKRUPTCY

SECOND, AMERICAN ALSO AGREED TO ACQUIRE KEY STRATEGIC ASSETS FROM UNITED/US AIRWAYS, INCLUDING UP TO 86 AIRCRAFT, GATES AND SLOTS AT FACILITY CONSTRAINED AIRPORTS, AND ONE-HALF OF THE US AIRWAYS SHUTTLE OPERATION

FINALLY, AMERICAN AGREED TO ACQUIRE A 49% STAKE IN DC AIR, WITH WHICH AMERICAN WOULD ENTER INTO AN EXCLUSIVE MARKETING AGREEMENT




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TRANSACTION SUMMARY


THESE TRANSATIONS WOULD PROVIDE AMERICAN SUBSTANTIAL BENEFITS:

ENHANCED SCOPE AND SCALE OF THE NETWORK

A THIRD MID-CONTINENT HUB TO AUGMENT DALLAS AND CHICAGO

GATES AND SLOTS AT KEY FACILITY CONSTRAINED AIRPORTS TO SUPPORT AMERICAN’S GROWTH

ACCESS TO A VALUABLE NORTHEAST SHUTTLE PRODUCT

THE LARGEST PRESENCE OF ANY CARRIER AT WASHINGTON REAGAN THROUGH THE DC AIR MARKETING AGREEMENT

ACCESS TO SUBSTANTIAL MAINTENANCE FACILITIES AND PERSONNEL TO SUPPORT INTERNAL GROWTH

WHILE MAINTAINING AMERICAN’S SOLID FINANCIAL POSITION AND STRATEGIC FLEXIBILITY



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TRANSACTION SUMMARY


THE FINANCIAL COMMITMENT ASSOCIATED WITH THE TRANSACTIONS WE PRESENTED IN JANUARY WAS PRUDENT






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TRANSACTION SUMMARY


SINCE THE TIMING OF THE TWA AND UNITED/US AIRWAYS DEALS HAS DIVERGED, WE WILL TODAY PROVIDE MORE SPECIFICS ON THE TWA DEAL ALONE





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TWA SUMMARY


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TWA DEAL SUMMARY


IN JANUARY, WE ANTICIPATED THAT THE TWA TRANSACTION ITSELF WOULD HAVE A VALUE OF $3.5 BILLION

$0.5 BILLION IN CASH

$3.0 BILLION IN ASSUMED LEASES


THIS VALUATION ASSUMED WE COULD RENEGOTIATE TWA’s LEASES TO BETTER REFLECT AMR’s CREDIT RATING

OUR INITIAL ESTIMATE OF THESE LEASE SAVINGS ON AN ANNUAL BASIS WAS $80-100 MILLION OR $0.5 BILLION ON A PV BASIS

BY THE TIME THAT OUR LEASE RESTRUCTURING NEGOTIATIONS WERE COMPLETE, OUR ACTUAL LEASE SAVINGS EXCEEDED $200 MILLION PER YEAR



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TWA DEAL SUMMARY


THEREFORE, DESPITE INCREASING OUR CASH OFFER BY $125 MILLION, THE TOTAL DEAL COST WAS REDUCED TO $2.8 BILLION, WELL BELOW OUR INITIAL ESTIMATE OF $3.5 BILLION



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TWA DEAL VALUATION


BASED ON COMPARABLE TRANSACTIONS, THE TWA TRANSACTION WAS COMPLETED ON FAVORABLE TERMS




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TRANSACTION STRUCTURE


THE TWA ACQUISITION WAS STRUCTURED AS AN ASSET PURCHASE IN BANKRUPTCY

THIS APPROACH ALLOWED US TO SELECTIVELY ACCEPT ASSETS, LEASES AND OTHER CONTRACTS


THIS STRUCTURE INHERENTLY CREATED BUILT-IN SYNERGIES, FOR EXAMPLE:

REVALUED OR REJECTED LEASES

ELIMINATED THE KARABU AGREEMENT

OFFERED THE OPPORTUNITY FOR OVERHEAD RATIONALIZATION




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TWA - WHAT WE ACQUIRED


THE TWA DEAL ULTIMATELY PROVIDED AMERICAN:

A NEW HUB IN ST LOUIS

MAINTENANCE FACILITIES IN KANSAS CITY, LOS ANGELES AND ST LOUIS

APPROXIMATELY 18,000 HIGHLY TRAINED PROFESSIONAL LINE EMPLOYEES

A 26% STAKE IN WORLDSPAN

KEY GATES AND SLOTS




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TWA - WHAT WE ACQUIRED


TWA HAD 188 LEASED GATES PRIOR TO THE TRANSACTION

AA ASSUMED LEASES ON 138 GATES

AA EITHER REJECTED LEASES OUTRIGHT OR NEGOTIATED A TRANSITION OUT OF 50 GATE LEASES TO BE COMPLETED BY YEAR END 2001





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TWA - WHAT WE ACQUIRED


THROUGH THE TWA TRANSACTION, AA ACQUIRED A TOTAL OF 171 SLOTS AT FIVE KEY AIRPORTS



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TWA - WHAT WE ACQUIRED


IN TOTAL, AA ACQUIRED 173 AIRCRAFT

ASSUMED LEASES ON 153 AIRCRAFT

PURCHASED 20 AIRCRAFT OFF LEASE

AA REJECTED 10 AIRCRAFT

3 X DC9s

7 X 767-200s



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FLEET SUMMARY


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FLEET SUMMARY


AMR’s FLEET PLAN HAS THREE KEY OBJECTIVES:

MINIMIZE THE NUMBER OF FLEET TYPES AND SUB-FLEET TYPES

PROVIDE FOR FLEXIBILITY TO SCALE THE SIZE OF THE FLEET AS MARKET CONDITIONS WARRANT

IMPROVE THE ONBOARD PRODUCT OFFERING AND CONSISTENCY


THE TWA FLEET INTEGRATION PLAN WAS STRUCTURED TO ENSURE CONSISTENCY WITH THESE KEY OBJECTIVES



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AT THE END OF 2000, THE TWA FLEET INCLUDED 183 ACTIVE AIRCRAFT, MOST OF WHICH WERE LEASED








IN ADDITION, TWA HAD FIRM ORDERS FOR 35 BOEING 717s, 38 AIRBUS 318s AND 25 AIRBUS 319s

THE FIRM AIRBUS ORDERS WERE REJECTED


TWA LLC FLEET SUMMARY



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TWA LLC FLEET SUMMARY


THE TERMS AND CONDITIONS OF TWA’s AIRCRAFT LEASES WERE RENEGOTIATED WITH THE FOLLOWING OBJECTIVES:


REDUCE LEASE COST TO A LEVEL CONSISTENT WITH AA’s CREDIT RATING

TAKE THE OPPORTUNITY TO BUILD THE FLEXIBILITY TO CONTINUE TO SIMPLIFY THE COMBINED AMERICAN AND TWA FLEETS ON AN ACCELERATED BASIS

MAINTAIN AS CLOSELY AS POSSIBLE THE SCALE OF TWA’s OPERATION BY KEEPING AS MANY OF THE TWA AIRCRAFT AS ECONOMICALLY JUSTIFIABLE FOR AT LEAST THE SHORT-TERM



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TWA LLC FLEET SUMMARY


IN ADDITION TO SUBSTANTIALLY REDUCING THE OVERALL LEASE EXPENSE, WE WERE ALSO ABLE TO ADJUST THE LEASE TERMS FOR NON-COMMON AIRCRAFT, CONSISTENT WITH OUR FLEET SIMPLIFICATION GOALS


FOR EXAMPLE, DC-9 LEASES WERE SHORTENED. HOWEVER, MANY MD-80 LEASES WERE EXTENDED OR THE UNITS WERE PURCHASED


ON AVERAGE AA’s NEWLY NEGOTIATED LEASE TERM WAS SIMILAR TO THAT UNDER TWA’s AGREEMENTS




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TWA LLC FLEET SUMMARY


ALTHOUGH TWA OPERATES MANY OF THE SAME FLEET TYPES AS AMERICAN, IT WOULD NOT BE ECONOMICAL TO KEEP ALL OF TWA’s AIRCRAFT FOR THE LONG-TERM

TWA’s 16 BOEING 767s HAVE PRATT & WHITNEY ENGINES WHILE AMERICAN’s 767’s ARE GE POWERED

IT IS NOT PRACTICAL TO RE-ENGINE TWA’s AIRCRAFT

IN ORDER TO AVOID THE COMPLEXITY OF A SMALL FLEET OF UNIQUE AIRCRAFT, WE CHOSE NOT TO TAKE ANY OF THE SEVEN 767-200s

ADDITIONALLY, WE PRIORITIZED THE NINE 767-300s FOR SHORT-TERM REPLACEMENT

SIMILARLY, TWA’s 27 BOEING 757s HAVE DIFFERENT ENGINES FROM AA’s FLEET. THUS WE COMPLETED SHORT-TERM DEALS FOR ALL 27 AIRCRAFT WITH LEASE EXPIRATIONS BETWEEN 2004 AND 2007




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TWA LLC FLEET SUMMARY


AT THE BEGINNING OF 2001, TWA OPERATED 22 DC9s - ALL BUT ONE OF WHICH ARE AT LEAST 31 YEARS OLD


AMERICAN DOES NOT OPERATE ANY DC9s

WE REJECTED THREE UNITS WHICH WERE AWAITING HEAVY MAINTENANCE (SAVING $3 MM/AIRCRAFT)

WE CONCLUDED SHORT-TERM LEASES ON THE OTHER 19 UNITS WITH LEASE EXPIRATIONS IMMEDIATELY PRECEEDING THEIR NEXT HEAVY MAINTENANCE VISIT

AS A RESULT, THE ENTIRE DC9 FLEET WILL BE RETIRED BY YEAR-END 2003





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TWA LLC FLEET SUMMARY


TWA’s 103 MD80s WERE GOOD CANDIDATES TO KEEP IN THE FLEET LONG-TERM, SUBJECT TO ACCEPTABLE LEASE TERMS, GIVEN THEIR COMMONALITY WITH AA’s MD-80s

ULTIMATELY, WE WERE ABLE TO REACH ACCEPTABLE TERMS FOR LONG-TERM COMMITMENTS ON 99 OF THE 103 TWA MD-80s

79 ARE ON LONG-TERM OPERATING LEASES

20 WERE PURCHASED OUTRIGHT

WE NEGOTIATED ACCEPTABLE SHORT-TERM LEASES ON THE REMAINING FOUR UNITS

IN ADDITION, AS PART OF THE OVERALL LEASE NEGOTIATION PROCESS, WE AGREED TO ENTER INTO SIX-YEAR OPERATING LEASES FOR FIVE INCREMENTAL MD80s




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TWA LLC FLEET SUMMARY


AT YEAR-END 2000, TWA HAD 15 BOEING 717s IN THE FLEET AND ANOTHER 35 ON FIRM ORDER

WHILE THE 717 IS NOT COMMON WITH OTHER AIRCRAFT IN THE COMBINED FLEET, WE WERE ABLE TO STRIKE AN ATTRACTIVE DEAL WITH BOEING


AS PART OF THE LEASE RENEGOTIATIONS, AA AGREED TO ACCEPT 15 OF THE 35 BOEING 717s WHICH TWA HAD ON ORDER. IN RETURN, AA RECEIVED:

A SUBSTANTIAL DISCOUNT ON TWA’s LEASE RATES

VERY FLEXIBLE EARLY RETURN PROVISIONS


ACCEPTING THE 717s THEREFORE PROVIDES AA WITH SIGNIFICANT FLEXIBILITY TO ADJUST CAPACITY



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ADDITIONAL FLEET CHANGES


OUR GOAL OF ELIMINATING THE PRATT POWERED B767s FROM THE AA/TW FLEET CREATED AN OPPORTUNITY TO ADDRESS MULTIPLE FLEET PLANNING OBJECTIVES


AS A RESULT, WE RECENTLY EXERCISED 15 767-300ER PURCHASE RIGHTS THAT WILL PERMIT THE FOLLOWING:

REPLACEMENT OF TW’s NINE MORE EXPENSIVE AND NON-COMMON 767-300ERs, THUS ELIMINATING A SUB-FLEET TYPE

REDEPLOYMENT OF A300s FROM THE NORTH ATLANTIC TO THE CARIBBEAN, THUS BETTER MATCHING THE NEEDS OF THOSE MISSIONS, AND THEREBY ELIMINATING ANOTHER SUB-FLEET TYPE

IMPROVED SCHEDULE EFFICIENCY FOR OUR EUROPE FLEET - CREATING A SAVINGS OF TWO WIDEBODY AIRCRAFT

REALLOCATION OF EXISTING CARIBBEAN ASSETS TO DOMESTIC FLYING, THUS ELIMINATING THE NEED TO ACQUIRE 19 NARROW BODY AIRCRAFT





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ADDITIONAL FLEET CHANGES


THE ARRIVAL OF THE NEW GE POWERED 767s WILL ELIMINATE THE NEED TO INTEGRATE A SMALL FLEET OF PRATT POWERED 767-300s FROM THE TWA LLC FLEET INTO AA’s LARGE FLEET OF 767s

AS WITH TWA’s 767-200 AIRCRAFT THAT WE DID NOT ACCEPT, IT IS NOT PRACTICAL TO RE-ENGINE THE PRATT POWERED AIRCRAFT

THE ECONOMICS OF THIS APPROACH WERE FURTHER ENHANCED BY THE FAVORABLE PRICING THAT BOTH BOEING AND GE WERE PREPARED TO PROVIDE





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ADDITIONAL FLEET CHANGES


WE CURRENTLY OPERATE 10 AIRBUS A300s TO LONDON IN A 3-CLASS CONFIGURATION AND ANOTHER 25 A300s TO THE CARIBBEAN IN A 2-CLASS CONFIGURATION


THE NEW WIDEBODY ORDER WILL ALLOW US TO REMOVE THE 10 3-CLASS A300s FROM EUROPEAN SERVICE AND REDEPLOY THEM TO THE CARIBBEAN - LEAVING ONLY 767-300 AND 777 AIRCRAFT IN EUROPE

DUE TO IMPROVED ROUTING EFFICIENCIES, THIS CHANGE RESULTS IN TWO LESS AIRCRAFT BEING NEEDED TO SUPPORT OUR EUROPEAN SERVICE

THIS APPROACH PROVIDES A MORE CONSISTENT PRODUCT FOR THE CUSTOMER

AND THE 10 EUROPEAN A300s WILL BE CONVERTED TO 2-CLASS SERVICE TO MATCH THE OTHER 25 UNITS, THEREBY ELIMINATING A SUB-FLEET TYPE






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ADDITIONAL FLEET CHANGES


AS THE CONVERTED A300s BEGIN CARIBBEAN FLYING, THEY WILL FREE-UP NARROW BODY 757 AND 737 AIRCRAFT

THESE AIRCRAFT WILL FLOW BACK INTO THE DOMESTIC SYSTEM




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ADDITIONAL FLEET CHANGES


THIS REASSIGNMENT OF AIRCRAFT WILL HAVE NO IMPACT ON OUR DOMESTIC GROWTH PLANS

AA’s DOMESTIC CAPACITY PLANS ARE CALIBRATED TO EXPECTATIONS FOR ECONOMIC GROWTH

THUS, THE SUBSTITUTION OF 767s FOR A300s ON THE NORTH ATLANTIC, WHICH LEADS TO THE SUBSTITUTION OF A300s FOR 757 AND 737 AIRCRAFT CURRENTLY OPERATING IN THE CARIBBEAN, ALLOWS AMERICAN TO AVOID ORDERING A SUBSTANTIAL NUMBER OF NARROW BODY AIRCRAFT

THE NARROWBODY AIRCRAFT WITHDRAWN FROM THE CARIBBEAN AND NOW AVAILABLE TO OPERATE DOMESTICALLY EQUATE TO APPROXIMATELY 19 737-800S




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RESULTING FLEET PLAN*


* FIRM ORDERS ONLY



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FLEET SUMMARY


BY YEAR-END 2003, THE VARIETY OF AIRCRAFT ACQUIRED FROM TWA WILL HAVE BEEN REDUCED FROM FIVE TO ONLY THREE FLEET TYPES

MD80s WHICH ARE COMMON WITH AA’s FLEET

717s WHICH WILL PROVIDE SIGNIFICANT FLEET FLEXIBILITY GOING FORWARD AND

757s WHICH HAVE A COMMON AIRFRAME BUT NON-COMMON ENGINES. WE HAVE THE FLEXIBILITY TO RETIRE THESE AIRCRAFT BETWEEN 2004 AND 2007


IN ADDITION, WE WILL ELIMINATE ANOTHER SUB-FLEET TYPE AT AA - THE 3 CLASS A300




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FLEET SUMMARY


WHILE MAKING SUBSTANTIAL PROGRESS TOWARDS FURTHER SIMPLIFYING THE COMBINED AA/TW FLEET, WE WERE ABLE TO REDUCE TW’s LEASE OBLIGATIONS BY APPROXIMATELY $200 MILLION PER YEAR AND, VIA OUR 717 AGREEMENT, PROVIDE AMERICAN WITH SIGNIFICANT FLEXIBILITY TO RATCHET DOWN CAPACITY AS BUSINESS CONDITIONS WARRANT




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REVENUE SYNERGIES


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REVENUE SYNERGIES


REVENUE SYNERGIES ARE A KEY COMPONENT OF THE VALUE OF THE TWA TRANSACTION TO AMR


TWA’S REVENUE ON A STAND ALONE BASIS WAS LIMITED BY:

KARABU TICKETING AGREEMENT

SINGLE-HUB NETWORK

LIMITED MARKET PRESENCE OUTSIDE ST LOUIS

A RELATIVELY WEAK FREQUENT FLYER PROGRAM

FEW AIRLINE PARTNERS, EITHER INTERNATIONALLY OR DOMESTICALLY

A RELATIVELY LIMITED NUMBER OF CORPORATE CONTRACTS

REVENUE SYNERGIES WILL ALSO ACCRUE TO AA



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REVENUE SYNERGIES


REVENUE SYNERGIES ARE EXPECTED TO GENERATE $400-500 MILLION ANNUALLY ON A STEADY STATE BASIS


THESE SYNERGIES WILL BE DRIVEN BY THE FOLLOWING FACTORS:

ELIMINATION OF THE KARABU TICKETING AGREEMENT

SCHEDULING EFFICIENCIES

SHARE SHIFT/CITY PRESENCE ENHANCEMENT

YIELD IMPROVEMENT RESULTING FROM:

INCREASED SHARE OF PREMIUM TRAFFIC AT TWA

AADVANTAGE PROGRAM

ALLIANCE RELATIONSHIPS



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REVENUE SYNERGIES


THE KARABU TICKETING AGREEMENT WAS ESTIMATED BY TWA TO BE COSTING THEM $80-100 MILLION PER YEAR IN LOST REVENUE


WHILE IT IS DIFFICULT TO PRECISELY VALIDATE, OUR ESTIMATES INDICATE THAT THESE NUMBERS ARE REASONABLE


BASED ON TWA’s FULL-YEAR 2000 REVENUE, THE KARABU AGREEMENT REPRESENTED A 3% DILUTION TO PASSENGER REVENUE




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REVENUE SYNERGIES


SCHEDULE EFFICIENCIES WILL ULTIMATELY ACCRUE TO BOTH TWA AND AA AS THE COLLECTIVE CAPACITY IS BEST ALLOCATED ACROSS THE ENTIRE NETWORK

SOME OF THESE CHANGES ARE ALREADY OCCURRING, INCLUDING SOME RECENTLY ANNOUNCED REDUCTIONS IN SAN JUAN FLYING

ADDITIONAL SCHEDULE ADJUSTMENTS WILL OCCUR OVER THE NEXT SEVERAL MONTHS


FURTHER REVENUE SYNERGIES WILL BE DERIVED AS THE NETWORKS ARE ULTIMATELY INTEGRATED



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AA AND TWA NON-STOP OVERLAP


TWA AND AA NON-STOP OVERLAP IS PRIMARILY CONCENTRATED IN THREE AREAS:

SJU AND THE CARIBBEAN

TRANSCON

HUB TO HUB/FOCUS CITY

COLLECTIVELY THESE MARKETS REPRESENT ABOUT 12% OF AA’s DOMESTIC CAPACITY




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REVENUE SYNERGIES


REVENUE INCREASES RESULTING FROM ENHANCED CITY PRESENCE OR SHARE SHIFT SHOULD ACCRUE TO BOTH THE TWA LLC AND AA NETWORK


AS DISCUSSED EARLIER, TWA BOLSTERS AA’s MARKET POSITION IN ALL KEY FOCUS CITIES

FOR EXAMPLE, IN LOS ANGELES, AA’s DOMESTIC MARKET SHARE WILL RISE FROM 16% TO 20%. BASED ON ‘S-CURVE’ ECONOMICS, THIS SHOULD RESULT IN AN EVEN LARGER INCREASE IN REVENUE SHARE


ADDITIONALLY, TWA’s HISTORIC REVENUE BASE WAS LIMITED BY A LACK OF SIGNIFICANT MARKET PRESENCE OUTSIDE OF ST. LOUIS






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REVENUE SYNERGIES


TO PUT THE COLLECTIVE REVENUE SYNERGIES IN CONTEXT, TWA’s UNIT REVENUE DEFICIT TO AA IN 2000, AFTER ADJUSTING FOR STAGE LENGTH AND CONFIGURATION, WAS 20%

OUR STEADY STATE REVENUE SYNERGY ESTIMATES EQUATE TO CLOSING TWO THIRDS, OR 12-15 POINTS OF THIS GAP

OR, PUT ANOTHER WAY, IT REPRESENTS A 2% UNIT REVENUE IMPROVEMENT ACROSS THE COMBINED AA/TWA NETWORK




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REVENUE SYNERGIES


REVENUE SYNERGIES WILL PHASE IN OVER TIME

KARABU BENEFITS SHOULD COME EARLY ON

SHARE SHIFT AND YIELD IMPROVEMENT SHOULD GROW OVER TIME



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COST IMPLICATIONS


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COST IMPLICATIONS


WHILE REVENUE SYNERGIES ARE LARGE, THE COST IMPACTS ARE MORE OF A MIXED BAG

THERE WILL BE LABOR COST INCREASES AS TWA LLC’s UNION EMPLOYEES ARE MOVED TO AA CONTRACTS

HOWEVER, THERE ARE SOME CLEAR COST SAVINGS THAT DO RESULT FROM THIS TRANSACTION



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COST IMPLICATIONS


LABOR COST INCREASES ARE EXPECTED AS TWA LLC EMPLOYEES ARE TRANSITIONED TO AA CONTRACTS

APPLICATION OF AA WAGE RATES AND WORK RULES IS EXPECTED NO LATER THAN JANUARY 1, 2002

ANNUAL COST OF THESE CHANGES IS ESTIMATED AT $260 MILLION



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COST SYNERGIES


OFFSETTING THE ADDED LABOR EXPENSE ARE ANNUAL COST SYNERGIES THAT ARE EXPECTED TO GENERATE MORE THAN $150 MILLION ON A STEADY STATE BASIS (EXCLUDING THE LEASE SAVINGS NOTED EARLIER) DRIVEN PRIMARILY BY:


ELIMINATION OF DUPLICATIVE OVERHEAD

REDUCED AND RATIONALIZED FACILITY RENTS

CONTRACT PURCHASING

FUEL PROGRAMS AND HEDGING



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COST SYNERGIES


BY CONSOLIDATING HEADQUARTER AND STAFF FUNCTIONS, WE WILL BE ABLE TO ELIMINATE A SUBSTANTIAL AMOUNT OF DUPLICATIVE OVERHEAD AND ASSOCIATED SPENDING

SOME OF THESE SAVINGS WILL OCCUR EARLY (E.G. ADVERTISING, LEGAL, FINANCE)

OTHERS WILL NOT MATERIALIZE UNTIL THE TWA LLC OPERATION IS FULLY INTEGRATED INTO THE SAME CRS HOST (SABRE) AS AMERICAN (E.G. COMPUTER SYSTEMS MAINTENANCE, INTEGRATED AIRPORT MANNING)




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COST SYNERGIES


BY RATIONALIZING THE COMBINED AA/TWA FACILITY NEEDS, WE ARE ABLE TO REDUCE AIRPORT RENTS

A NUMBER OF AIRPORT LEASES WERE REJECTED OUTRIGHT DURING THE ACQUISITION

OTHER LEASES WERE MODIFIED AND SHORTENED AS NECESSARY TO FACILITATE A SMOOTH INTEGRATION IN AIRPORTS WHERE THE COMBINED SPACE WAS MORE THAN NEEDED

IN SOME AIRPORTS, LIKE DFW AND LGA, WE HAVE KEPT ALL OF TWA’s GATES DESPITE THE FACT THAT TWA’s OWN SCHEDULE DOES NOT JUSTIFY THEM. IN THESE CITIES, THE COMBINED ENTITY WILL GAIN IMPROVED UTILIZATION FROM THESE FACILITIES AS THE OPERATIONS ARE INTEGRATED

THIS REPRESENTS A SAVINGS OF $85 MILLION ON A PRESENT VALUE BASIS




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COST SYNERGIES


ADDITIONAL COST SYNERGIES WILL BE GAINED BY APPLYING AA’s CONTRACT PURCHASING PROGRAMS TO TWA’s PROCUREMENT

DUE TO LIMITED RESOURCES, TWA HAD ONLY 20% OF THEIR PURCHASING UNDER CONTRACT

AA PURCHASES ABOUT 70% OF ITS SUPPLIES UNDER CONTRACT

THE COMBINED ENTITY WILL ALSO ACHIEVE EVEN GREATER SAVINGS THROUGH AA’s PARTICIPATION IN CORDIEM



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COST SYNERGIES


SAVINGS ARE ALSO EXPECTED FROM FUEL PURCHASING AND HEDGING

SOME SAVINGS WILL COME FROM LOWER INTO-PLANE FUEL EXPENSE AS TWA IS ROLLED INTO AA’s FUELING CONTRACTS

ADDITIONALLY, TWA LLC SHOULD BENEFIT FROM REDUCED EARNINGS VOLATILITY AS AMR’s HEDGE PROGRAM IS APPLIED TO THE LLC’s FUEL CONSUMPTION

IN ANTICIPATION OF THE TWA TRANSACTION CLOSING, AMR BEGAN INCREASING OUR HEDGE POSITIONS TO ACCOUNT FOR THE ADDED CONSUMPTION TWA WOULD BRING TO THE COMBINED ENTITY



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COST SYNERGIES


AS WITH THE REVENUE SYNERGIES, COST SYNERGIES WILL PHASE IN OVER TIME

OVERHEAD RATIONALIZATION SHOULD BEGIN THIS YEAR

FUEL HEDGES SHOULD ALSO BRING EARLY BENEFITS



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INTEGRATION COSTS


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INTEGRATION COST


WHILE THE EXPECTED REVENUE/COST SYNERGIES ARE GREAT, THERE ARE A NUMBER OF INTEGRATION COSTS WHICH WILL IMPACT EARLY RESULTS:


REQUIRED FLEET MODIFICATIONS

FACILITY INTEGRATION

TRAINING

OTHER ONE-TIME ITEMS

FACILITY UPDATES

SYSTEM CONVERSION

SEVERANCE/RELOCATION



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INTEGRATION COST


THESE COSTS WILL PRIMARILY OCCUR DURING THE FIRST THREE YEARS




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INTEGRATION COST


WE ARE CURRENTLY REFINING OUR ANALYSIS ON HOW THE VARIOUS INTEGRATION COSTS WILL BE TREATED FOR ACCOUNTING PURPOSES

WHILE MOST OF THE INTEGRATION RELATED COSTS WILL LIKELY BE CAPITALIZED, WE DO EXPECT 15-20% OF THE COSTS TO BE EXPENSED

THE REMAINDER WOULD BE DEPRECIATED




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FINANCIAL IMPACT


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CAPITAL SPENDING


IN LIGHT OF THE TWA ACQUISITION, THERE WILL BE AN INCREASE TO AMR’s BASE, NON-AIRCRAFT CAPITAL EXPENDITURE AS WE MOVE FORWARD

ADDITIONALLY, WHILE THE INCREMENTAL 767-300s WILL ADD MODESTLY TO TOTAL CAPITAL SPENDING, WE DO EXPECT OFFSETS IN TERMS OF LOWER NARROW-BODY ORDERS

BASED JUST ON RELATIVE SEATING CAPACITY, THE 10 REALLOCATED A300s WOULD EQUATE TO APPROXIMATELY 19 737-800s WORTH OF CAPACITY



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CAPITAL SPENDING


BASED ON THE ADDITION OF TWA, AND THE OTHER CHANGES WE HAVE MADE TO OUR PLAN, WE WOULD EXPECT THE FOLLOWING LEVELS OF CAPITAL SPENDING OVER THE NEXT TWA YEARS:




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BALANCE SHEET


DESPITE THE REVISIONS TO THE CAPTIAL PLAN, WE WILL MAINTAIN A VERY STRONG BALANCE SHEET

LIQUIDITY REMAINS STRONG DUE TO AVAILABLE CASH AND UNENCUMBERED ASSETS

AMR’s NET DEBT TO CAPITAL SHOULD PEAK AT 69% IN 2001

IN ADDITION, AMR’s COVERAGE RATIOS SHOULD SEE MINIMAL DECLINES FROM CURRENT LEVELS




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ACCRETION/DILUTION


WHEN WE ANNOUNCED THE TWA AND UNITED/DC AIR TRANSACTIONS BACK IN JANUARY, WE PROVIDED SOME EXPECTATIONS FOR ACCRETION/DILUTION

OUR ASSUMPTIONS WERE BASED ON ALL THREE DEALS GOING FORWARD UNDER A SIMILAR TIME FRAME


SINCE THE TIMING OF THESE DEALS HAS DIVERGED, WE WANTED TO PROVIDE AN UPDATE ON THE TWA DEAL ON ITS OWN



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ACCRETION/DILUTION


BASED ON THE SYNERGIES WE OUTLINED EARLIER, WE EXPECT TWA TO BE NICELY ACCRETIVE OVER TIME

IN FACT WE INDICATED RECENTLY THAT THE DEAL COULD BE NEUTRAL TO EARNINGS IN 2001

WHILE WE ARE STILL HOPEFUL THAT THIS WOULD BE THE CASE, WE HAVE YET TO SEE SIGNS THAT THE WEAK UNDERLYING REVENUE ENVIRONMENT IS TURNING AROUND

SINCE THE GENERAL ECONOMIC CLIMATE WILL IMPACT TWA’S REVENUE BASE, AS IT DOES AMERICAN’S, THERE IS SOME EARNINGS RISK IN THE NEAR TERM




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ACCRETION/DILUTION


NONETHELESS, WE DO EXPECT THAT AS THE REVENUE SYNERGIES BEGIN TO ACCELERATE IN 2002 AND BEYOND, THAT THE TRANSACTION WILL BE SUBSTANTIALLY ACCRETIVE TO EARNINGS




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INTEGRATING TWA INTO AA


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OVERVIEW


INTEGRATION PERSPECTIVES


INTEGRATION PLAN


LABOR INTEGRATION STATUS





66


INTEGRATION PERSPECTIVES


MERGING TWO AIRLINES IS EXTRAORDINARILY COMPLEX


IT REQUIRES CONSIDERATION OF COMPUTER SYSTEMS, CUSTOMER PROGRAMS, LABOR ISSUES, AND THEIR INTERDEPENDENCIES


AT THE SAME TIME, THERE EXISTS CONSIDERABLE FINANCIAL LEVERAGE TO MOVE FAST, PARTICULARLY ON MARKETING INTEGRATION



67


RECENT AIRLINE INTEGRATIONS


THE TRACK RECORD FOR RECENT AIRLINE INTEGRATIONS IS LESS THAN STELLAR


FOR INSTANCE, AIR CANADA, DURING THEIR INTEGRATION OF CANADIAN LAST YEAR, CREATED SIGNIFICANT CUSTOMER SERVICE AND EMPLOYEE ISSUES


THESE ISSUES WERE DRIVEN LARGELY BY THEIR EFFORTS TO FULLY INTEGRATE SCHEDULES BEFORE LABOR AND SYSTEMS



68


AA/TWA SUCCESSES TO DATE


WITH THAT BACKDROP, IT IS WORTH REVIEWING OUR SUCCESSES TO DATE WITH AA/TWA INTEGRATION


OVER 14,000 CONTRACTS WERE REVIEWED, OF WHICH ROUGHLY 5,000 WERE REPLACED OR RENEGOTIATED WITHIN A SIX-WEEK DUE DILIGENCE PERIOD


THE DEAL CLOSED ON APRIL 9, THE EARLIEST DATE POSSIBLE BASED ON THE BANKRUPTCY COURT SCHEDULE


TWA OPERATED SUCCESSFULLY AFTER CLOSE, WHICH REQUIRED TRANSFER OF FAA OPERATING CERTIFICATE, DOT ROUTE AUTHORITIES, AND A MYRIAD OF OTHER PERMITS UNIQUE TO A BANKRUPTCY SALE



69


INTEGRATION PLAN


Click to add sub-title



70


OVERVIEW


WE HAVE NOW BEEN ENGAGED IN INTEGRATION PLANNING FOR ALMOST 5 WEEKS SINCE THE DEAL CLOSED. THE RESULTS OF THIS EFFORT ARE:


A DETAILED PICTURE OF THE INTEGRATION OF KEY MARKETING AND STRATEGIC FUNCTIONS INTO AA DURING THE NEXT 2 MONTHS, WHICH WE REFER TO AS PHASE 1


A CLEAR CONCEPT OF HOW THE INTEGRATION OF OPERATING FUNCTIONS SHOULD PROCEED, ALTHOUGH NOT YET TO THE POINT OF A DETAILED PLAN



71


FUNCTIONS INVOLVED IN PHASE 1


EARLY IN THE PLANNING PROCESS, WE IDENTIFIED SEVERAL STAFF DEPARTMENTS WHICH WE FELT WERE CRITICAL TO IMPROVING TWA’S PROFITABILITY AND WHICH COULD BE TRANSITIONED WITHOUT MAJOR LABOR OR COMPUTER SYSTEM ISSUES


MARKETING FUNCTIONS INCLUDE PASSENGER SALES, REVENUE MANAGEMENT, SCHEDULING, AND ADVERTISING


KEY FINANCIAL FUNCTIONS INCLUDE TREASURY, PROFITABILITY ANALYSIS, PURCHASING, AUDITS, AND DISBURSEMENTS



72


PHASE 1 SCHEDULE


WE ARE MOVING FORWARD WITH AN AGGRESSIVE SCHEDULE TO TRANSFER THOSE PHASE 1 FUNCTIONS COMPLETELY BY MID-JULY


LATE-MAY TWA INFORMATION SESSIONS

EARLY-JUNE INTERVIEWS FOR AVAILABLE POSITIONS

MID-JUNE NEW ORGANIZATION FINALIZED

LATE-JUNE WORK TRANSFER BEGINS


TO ENSURE ACCURATE INTERNAL FINANCIAL DATA, THE SERVICES PROVIDED BY AA WILL BE TRANSFER PRICED BACK TO TWA AIRLINES LLC



73


OVERHEAD SAVINGS


IN THESE PHASE 1 FUNCTIONS BEING TRANSFERRED, TWA’S HEADCOUNT AVERAGED ABOUT 530 FULL-TIME EQUIVALENTS IN 2000


ON A STEADY-STATE BASIS, AA WILL NEED FAR LESS HEADCOUNT TO PERFORM THIS WORK


THESE SAVINGS ARE GENERALLY DRIVEN BY EITHER EFFICIENCIES DUE TO AA’S MORE SOPHISTICATED AUTOMATION OR SIMPLE SCALE ECONOMIES




74


TRANSITION PHASE


WHILE MOST OF THESE HEADCOUNT SAVINGS WILL OCCUR IMMEDIATELY, SOME WILL BE GRADUALLY TRANSITIONED


FOR INSTANCE, APPROXIMATELY 80 TRANSITION HEADS IN THESE GROUPS WILL NEED TO REMAIN AT TWA SIMPLY BECAUSE TWA IS CURRENTLY HOSTED IN WORLDSPAN


HEADCOUNT SAVINGS IN JULY 2001 IN THESE PHASE 1 FUNCTIONS, HOWEVER, WILL STILL BE SIGNIFICANT




75


PHASED INTEGRATION


WE ARE CONVINCED THAT A PHASED INTEGRATION MAKES THE MOST SENSE


PHASING ALLOWS US TO PROVIDE MANY OF THE CUSTOMER BENEFITS AND LEVERAGE THE AA BRAND QUICKLY


IN CONTRAST, MOVING QUICKLY ON OPERATIONS INTEGRATION IS SIMPLY NOT POSSIBLE, GIVEN OUR DIFFERENT AIRCRAFT AVIONICS, AIRCRAFT INTERIORS, CREW TRAINING, AND OPERATING PROCEDURES


FORTUNATELY, THE FINANCIAL LEVERAGE INVOLVED WITH INTEGRATING OPERATIONS IS NOT AS GREAT AS IT IS WITH MARKETING INTEGRATION



76


MARKETING STEPS TO DATE


BEFORE DISCUSSING OUR THOUGHTS ON OPERATIONS INTEGRATION, IT IS WORTHWHILE REVIEWING THE MARKETING STEPS WE HAVE TAKEN TO DATE


RECIPROCAL FREQUENT FLYER PROGRAMS


EXTENSION OF AA CORPORATE AND TRAVEL AGENCY PROGRAMS TO TWA FLYING


COMBINABLE FARES AND CONSISTENT FARE RULES


RECIPROCAL AIRPORT CLUB ACCESS



77


MARKETING STEPS IN 2ND HALF 2001


DURING THE 2ND HALF OF 2001, WE EXPECT TO CONTINUE WITH ADDITIONAL MARKETING STEPS


MORE ROOM RECONFIGURATION ON TWA LLC AIRCRAFT WILL BE EXPEDITED, WITH THE GOAL TO COMPLETE ALL AIRCRAFT THIS YEAR


INFLIGHT PRODUCTS AND SERVICE LEVELS WILL BE MODIFIED TO CONFORM TO AA’s WHERE POSSIBLE


AIRPORT CO-LOCATION AT SEVERAL AIRPORTS WILL LIKELY BE POSSIBLE BY YEAR-END, WITH SPECIAL ATTENTION FOCUSED ON HUB CITIES



78


OPERATIONS INTEGRATION OVERVIEW


OPERATIONS INTEGRATION IS NOT ONLY COMPLEX BECAUSE WE HAVE DIFFERENT AIRCRAFT; WE ALSO CONTROL OUR OPERATIONS WITH DIFFERENT AUTOMATION SYSTEMS


THROUGHOUT INTEGRATION, WE MUST WORK HARD TO MINIMIZE CUSTOMER SERVICE FAILURES


DESPITE THESE CHALLENGES, WE BELIEVE IT IS POSSIBLE TO INTEGRATE OPERATIONS AT A STEADY PACE AND TO START RECOGNIZING EFFICIENCIES THIS YEAR


THE KEY IS TO FULLY UNDERSTAND THE INTERDEPENDENCIES AND CRITICAL PATH ITEMS



79


LONG LEAD TIME ITEMS


OUR CURRENT THINKING IS THAT FULL OPERATIONAL INTEGRATION MAY TAKE AS LONG AS 3 TO 4 YEARS


THIS IS DRIVEN BY AIRCRAFT MODIFICATION, WHICH IS BASED ON PARTS DELIVERIES TAKING AS LONG AS 18 TO 24 MONTHS


IF THIS PRELIMINARY DATA IS CORRECT, WE WOULD BEGIN CONVERTING AIRCRAFT TO AA SPECIFICATIONS IN LATE 2002 OR EARLY 2003


THE AIRCRAFT CONVERSION SCHEDULE IS SIGNIFICANT TO FLIGHT CREW AND MAINTENANCE INTEGRATION, BOTH OF WHICH ARE GOVERNED BY SPECIFIC FAA OPERATING PROCEDURES



80


FLIGHT CREW/MAINTENANCE INTEGRATION


CONCEPTUALLY, AS EACH AIRCRAFT IS MODIFIED TO AA STANDARDS, IT PASSES ACROSS THE “FENCEâ€


OUR CURRENT TENTATIVE AGREEMENT WITH OUR PILOTS UNION ALLOWS FOR A PILOT “FENCE†THROUGH DECEMBER 31, 2004


TO THE EXTENT THAT EXISTING TWA AIRCRAFT ARE RETIRED OR MODIFIED FASTER THAN TWA PILOTS ARE RETIRING, TWA PILOTS WOULD BE ALLOWED TO CROSS OVER THE “FENCEâ€


THIS PROCESS ALLOWS THE EXISTING AA PILOT BIDDING SYSTEM TO CONTINUE, WHILE AVOIDING EXTRAORDINARY TRAINING REQUIREMENTS



81


AIRPORT/RESERVATIONS INTEGRATION


AIRPORT AND RESERVATIONS INTEGRATION CAN FOLLOW A MUCH DIFFERENT SCHEDULE


THE PRIMARY TECHNICAL ISSUES DRIVING AIRPORT AND RESERVATIONS INTEGRATION ARE AIRLINE MARKETING CODE AND CRS HOST CONVERSION


IT IS TECHNICALLY POSSIBLE TO CONVERT TWA FLIGHTS TO PREDOMINANTLY AA MARKETED FLIGHTS (AA*) VERY QUICKLY


THE QUESTION IS WHETHER WE CAN PRODUCE QUALITY CUSTOMER SERVICE AS QUICKLY



82


CHALLENGES TO AIRPORT/RESERVATIONS INTEGRATION


THE REAL CHALLENGE IN AIRPORT/RESERVATIONS INTEGRATION IS CONVERTING TO A COMMON REAL-TIME SYSTEM FOR OPERATIONS. WITHOUT THIS CHANGE:


AIRPORT AGENTS ARE LIMITED IN THEIR ABILITY TO PROVIDE SERVICE TO ALL CUSTOMERS


RESERVATIONS AGENTS FACE SITUATIONS WHERE THEY HAVE INCOMPLETE PASSENGER INFORMATION


GIVEN THE CRITICALITY OF THIS ISSUE, WE HAVE FOCUSED CONSIDERABLE RESOURCE ON EXPEDITING THE CONVERSION OF TWA’S HOST SYSTEM TO SABRE



83


KEY DRIVERS IN TWA’S SYSTEM CONVERSION


WE DO NOT YET HAVE ALL THE ANSWERS, BUT FOUR KEY ISSUES SEEM TO DRIVE THE SYSTEM CONVERSION


INFRASTRUCTURE FOR NEW SABRE HARDWARE AT EACH TWA AIRPORT LOCATION


INTERFACES BETWEEN SABRE AND TWA’S COMMERCIAL SYSTEMS CONTROLLING OPERATIONS


TRAINING TWA’S OPERATING PERSONNEL, PARTICULARLY AIRPORT AND RESERVATIONS AGENTS


SABRE/WORLDSPAN INTERFACE SOFTWARE TO ALLOW A PHASED AIRPORT CONVERSION



84


TIMING OF SYSTEM CONVERSION


GIVEN THAT WE DO NOT HAVE ALL THE ANSWERS AT THIS POINT, IT IS VERY DIFFICULT TO COMMIT TO TIMING OF CONVERSION


AT THIS JUNCTURE WE CAN COMMIT TO CONVERSION BY EARLY 2002, RECOGNIZING THAT IT WOULD BE QUITE CHALLENGING TO IMPLEMENT THIS CONVERSION DURING ANY PEAK TRAVEL PERIOD


WE ARE EXPEDITING THIS EFFORT WITH ALL AVAILABLE RESOURCES



85


INTERIM CODESHARING PLANS


DESPITE ALL THE CHALLENGES WITH DELIVERING PERFECT CUSTOMER SERVICE IN A CODESHARE PRIOR TO SYSTEM CUTOVER, WE WILL LIKELY START A FAIRLY MODEST LEVEL OF CODESHARING LATER THIS SUMMER


THIS WILL PROVIDE US SOME SCHEDULING FLEXIBILITY TO PURSUE BETTER OVERALL SYSTEM REVENUE OPPORTUNITIES


IT WILL ALSO GIVE US VALUABLE EXPERIENCE SHOULD UNFORESEEN EVENTS DELAY TWA’S CUTOVER TO SABRE



86


LABOR STATUS


Click to add sub-title



87


LABOR INTEGRATION


BRINGING TOGETHER TWA AND AA EMPLOYEES WILL BE KEY TO A SUCCESSFUL INTEGRATION


PRIOR AIRLINE MERGERS HAVE STUMBLED BECAUSE OF LABOR ISSUES


HOWEVER, THE TRANSACTIONS WE ANNOUNCED IN JANUARY, INCLUDING TWA, WERE SPECIFICALLY CONSTRUCTED TO BE BENEFICIAL TO LABOR, AS WELL AS TO SHAREHOLDERS AND CUSTOMERS




88


APA AGREEMENT


ON APRIL 9, IN CONJUNCTION WITH THE CLOSING, AMR AND THE APA ANNOUNCED A TENTATIVE AGREEMENT ON TRANSITION RELATED ISSUES


THE AGREEMENT DID NOT ADDRESS SENIORITY INTEGRATION


THIS AGREEMENT WOULD PROVIDE FOR THE SMOOTH INTEGRATION OF TWA INTO AMR WHILE ENSURING DESIRED PROTECTIONS FOR AA’S PILOTS


APA’S BOARD OF DIRECTORS IS SCHEDULED TO VOTE ON THIS AGREEMENT THIS MONTH



89


LABOR INTEGRATION


WHILE MANY ISSUES WOULD BE ADDRESSED WITH A RATIFIED APA AGREEMENT, THERE ARE STILL SOME OUTSTANDING ITEMS:


SENIORITY LIST INTEGRATION NEEDS TO BE DETERMINED BY THE UNIONS AT AA AND TWA

APA AND ALPA

APFA AND IAM

TWU AND IAM


AN INTEGRATION PLAN FOR AGENTS, WHICH ARE NOT UNIONIZED AT AA, BUT ARE REPRESENTED BY THE IAM AT TWA, NEEDS TO BE FINALIZED




90


LABOR REPRESENTATION


FOR THE IMMEDIATE TERM, TWA EMPLOYEES WILL CONTINUE TO BE REPRESENTED BY THEIR EXISTING UNIONS


ONCE SENIORITY INTEGRATION ISSUES ARE RESOLVED, WE ANTICIPATE THAT AMERICAN’S UNIONS WILL PETITION THE NATIONAL MEDIATION BOARD TO ALLOW THEM TO REPRESENT THE TWA EMPLOYEES

 

[michael707767]

----------------
On 6/10/2003 7:23:45 AM bicaal wrote:

Once again, I will say to you TWA was not bankrupt and TWA''s ASMs gained AA almost 1/4th of the almost 1 billion dollars that the government gave after 9/11. So I do not think that 9/11 would have been our demise. The AA documents state, and please note that the unions from both airlines were to determine seniority, not just the acquiring carrier:
----------------​

I have just one question for any of the TWA folks. I seem to remember that as a condition of the deal with AA, all of the unions at TWA waved any merger protections that were in their contracts. Is that true? Cause if it is, you guys screwed yourselves.

 

[Buck]

----------------
On 6/10/2003 7:30:57 AM michael707767 wrote:

----------------
On 6/10/2003 7:23:45 AM bicaal wrote:

Once again, I will say to you TWA was not bankrupt and TWA''s ASMs gained AA almost 1/4th of the almost 1 billion dollars that the government gave after 9/11. So I do not think that 9/11 would have been our demise. The AA documents state, and please note that the unions from both airlines were to determine seniority, not just the acquiring carrier:
----------------
​

First: Bicaal if you could edit some of the spaces, I for one would would be more interested in reading your entire post.




I have just one question for any of the TWA folks. I seem to remember that as a condition of the deal with AA, all of the unions at TWA waved any merger protections that were in their contracts. Is that true? Cause if it is, you guys screwed yourselves.


----------------​

I believe that the mechanic and related group did not waive their protections. Allegheny-Mohawk is in the TWU contract.

 

[MCI transplant]

----------------
On 6/10/2003 7:30:57 AM michael707767 wrote:

----------------
On 6/10/2003 7:23:45 AM bicaal wrote:

Once again, I will say to you TWA was not bankrupt and TWA''s ASMs gained AA almost 1/4th of the almost 1 billion dollars that the government gave after 9/11. So I do not think that 9/11 would have been our demise. The AA documents state, and please note that the unions from both airlines were to determine seniority, not just the acquiring carrier:
----------------​

I have just one question for any of the TWA folks. I seem to remember that as a condition of the deal with AA, all of the unions at TWA waved any merger protections that were in their contracts. Is that true? Cause if it is, you guys screwed yourselves.


----------------​

Again! You people "covenently" forget that a gun was put to our heads! We waved our merger protection "ONLY" because A.A./T.W.U.threatened to have our "whole" contract thrown out!!!And to add insult to injury,that same "Aligany/Mohawk language was written into the currant TWU contract!!!We are going over old ground here! It seems you people have a bad case of "Selective Memory"! Just by repeating these old arguments will not change the fact that TWA was an on going operation when A.A. came arround! TWA gave us $100.00 bonus for on time performance, a month before we went into Bankruptcy!Does that sound like a company in trouble? "BANKRUPTCY WAS A CONDITION OF SALE"!!! We were told it''s primary perpose was to seprated Uncle Carl from TWA! WRONG! It is estimated he was taking $200M a year off our bottem line,through the sale of cheap tickets through his company Karabue! In other words, if it wasn''t for him, we would have been making money!!!

 

[Buck]

It appears that those who post here that are former employees of TWA have a chip on their shoulder. Yes there are those at AA who are afraid of what intergration would or will bring. This fear creates the bias statements that appear in this forum. But the former TWA employee needs to realize that as long as they see themselves as TWA, the AA employees will treat the so. It is the "Us against Them" syndrome. Stop worrying and your respective collective bargaining agent will protect youe interests.

 

[firstamendment]

I keep hearing all this "you would be out of a job anyway" bull****. This is why you guys are called "Arrogant Airlines". You''re justification is that people who went through the interview process with American should somehow come first. What planet do you live on? American CHOSE to buy TWA. You buy the company, you buy the employees and that supercedes the application/interview process. Why do you people constantly want to blame TWA employees for your screwed up management decisions? In esscence, you are punishing the former TWA employees for your poor management decisions. Remember, American was willing to spend millions to be bigger than United, thinking the UAL/U transaction would make them #2. The reasons for buying TWA were all wrong to start with. So you punish them. That is sick.

As far as your management''s claim that they went with the presented senority list, this is lame. Nobody in management stopped and said, wow, this is too harsh? They apparently didn''t want to bother with those issues, so they gave all power to the unions. APFA ONLY looked after their own. You can make all the excuses, but their act was selfish and again arrogant.

You people are so arrogant you think you can predict the future. I am so sick of hearing that TWA would have been gone. Who knows. They only filed bk the last time because your company agreed to buy the assest, and btw, assests INCLUDE the employees. You SHOUD ALL be ashamed and embarrassed at the way you have treated those people. Even Delta integrated Western much fairly. If you want to but the TWA employees at the bottom for bidding purposes, thats one thing, but to put them below some 20 year old twink that has no clue as to how the world runs and destroy those who have kids in college and have mortages is heartless. You mean to tell me not one old AA (original) haggra f/a could empathize with the injustice of this? Dirty to the bone!

Now I can hear all the excuses, justifications, hate responses, on and on and on and on...trying to prove you are right so go ahead. I hope the TWA get their senority back and more. Even though they no longer exist, do your homework and look at who the judge sided with when Pan Am bought National and put the f/a''s at the bottom. The Pan Am f/a''s paid a big price for that decision and I hope the same happens here.

BTW, I am NOT affiliated with the former TWA or American.

 

[will fix for food]

----------------
On 6/7/2003 10:15:47 AM L1011Ret wrote:

Third, it will either add or subtract from the weight of the four lawsuits against APFA/AA by the F/As and the single lawsuit against APA/AA/ALPA by the pilots.

----------------​

Why is ALPA being named as a defendant? What was their role in all of this?

 

[latreal]

Why not? Don''t you know that everybody except the TWA employees got together to give them a raw deal. They got everything except bidding senority and its everyone elses fault except theirs, even though they signed it away (duress?, yeah right.)

 

[MCI transplant]

----------------
On 6/10/2003 141 PM latreal wrote:

Why not? Don''t you know that everybody except the TWA employees got together to give them a raw deal. They got everything except bidding senority and its everyone elses fault except theirs, even though they signed it away (duress?, yeah right.)

----------------​

Here we go again! "You willingly signed away your rights!" How many times can I say it? YES! We did under "DURESS"!!!!!!!!!! It was that or forfit our intire Contract!!!!!! Do your homework! It''s all public record! Or can''t you, or don''t want know the truth!

 

[bicaal]

Sorry if the format isn''t perfect. I am only trying to offer our side and can''t spend hours doing so. We exchanged articles 3 and 13 with the promise of fair treatment. Please read this Skyword issue and understand why we trusted fellow union members to act like brothers and sisters. P.S. I hope that our win will help the Reno f/as also.
Skyword • issue one • 2001 15
n mid 2000, and in response
to the possibility of a merger
between American and
Northwest the APFA appointed
a committee to research mergers
and acquisitions and to
make recommendations to the
Board. The committee members
are Susan French IDF, Judy
(Milne) Huckaby (IDF) and Anne
Loew (JFK), all long-time Union
advocates who have served in
various positions including
Division Representative, Base
Chairperson, Ad Hoc and the
AirCal Merger Team. Our committee
met with APFA General
Counsel, obtained research
material and began to study the
issues involved. Within a few
weeks, the prospect of any
imminent merger or acquisition
dimmed, and our Merger and
Acquisition Committee became
temporarily inactive.
With the recent news of a
potential merger with TWA,
and with possible other such
transactions on the horizon, the
Merger Committee was quickly
reactivated. This report will
touch upon some of the issues
our Union will face should this
acquisition proceed, but is by
no means intended as a comprehensive
summary.
Despite all of the concerns
each of us has, it is important
that we keep a few facts at
the forefront of our minds.
First of all, given the probable
merger of United and USAir, a
merger or acquisition between
American and another carrier
represents an understandable
competitive response by
American. So in that sense,
this acquisition is not a bad
thing, but is instead a benefit.
Secondly, although we each
consider every second that we
have put in at this company to
be sacred, we must acknowledge
that the myriad of seniority
integrations that have come
down over the past decades
as a result of arbitration
awards, and (rarely) agreements,
have not usually resulted
in the acquired carrier’s
workers being stapled to the
bottom of the seniority list.
You can be assured that this
Committee and your Union
will do all in its power to
responsibly protect your rights.
To briefly recap our history,
American Airlines has
acquired three other airlines.
Seniority and the other issues
were dealt with in the manner
that was considered appropriate
in the context of each of
those transactions. In the
1970s American purchased
TransCarribean Airlines. All of
those Flight Attendants were
given date-of-hire bidding
seniority. In the 1980s
American acquired AirCal, and
those Flight Attendants were
likewise given date-of-hire bidding
seniority by agreement
with the APFA. The most recent
acquisition was Reno Air.
There, the 300 or so very
junior Flight Attendants were
placed at the bottom of our
seniority list. A lawsuit challenging
that result was filed. It
was dismissed by the Federal
District Court and has been
appealed.
In those instances in which
Arbitrators have determined the
method of seniority integration,
among the factors considered
are the relative size and seniority
of each carrier, the financial
health of each carrier and the
benefits each carrier brings to
the other. The decisions have
ranged from granting full dateof-
hire seniority to no seniority,
with variations in between
those extremes, including for
example “ratio integrationâ€
meaning merging on a fixed
ratio, such as 1:3, 1:4, and so
forth, and “equal position†or
relative percentage integration.
Our committee will be studying
these decisions and other available
information on seniority
integrations with great care,
and we will not be rushed into
making hasty recommendations.
While bidding seniority is
uppermost in our concerns,
there are three other kinds of
seniority that must be considered
- pay seniority, company
seniority and credited years of
service for pension seniority.
Aside from the all important
“Where will I be on the seniority
list†question, a merger or
acquisition raises many important
and complex issues which
may include the need to negotiate
a merged collective bargaining
agreement, a “fence†-
meaning that the Flight
Attendants for each airline
would remain totally separate
and work under different work
rules, and be stationed at discrete
bases for a certain period
of time. While unlikely in
the American - TWA acquisition,
such transactions often
include the issue of which
union will survive and which
will disappear and whether
that decision will be made by
the National Mediation Board
or by election of the work
groups at each airline.
Our committee is looking forward
to this complex and difficult
task. We appreciate the
confidence placed in us by the
APFA Board, and we welcome
your questions and suggestions.
Finally, we would like to
remind you that whatever the
eventual seniority list outcome
is, we will be working side by
side with former TWA Flight
Attendants for many years,
whose careers have been
fraught with strikes, bankruptcy,
base closings, and many other
difficulties. It is our hope that
each of us will gain much from
the wisdom of our collective
experiences.
merger and acquisition page of TWA The Acquisition by the Merger and Acquisition Committee
Contact the
APFA Merger Committee:
APFA Headquarters
(800) 395-2732, ext. 8751
Susan French - ext. 8491
Ann Loew - ext. 8493
Judy Milne-Huckaby - ext. 8492
E-mail: [email protected]

 

[FA Mikey]

----------------
On 6/10/2003 1038 AM firstamendment wrote:

I keep hearing all this "you would be out of a job anyway" bull****. This is why you guys are called "Arrogant Airlines". You''re justification is that people who went through the interview process with American should somehow come first. What planet do you live on? American CHOSE to buy TWA. You buy the company, you buy the employees and that supercedes the application/interview process. Why do you people constantly want to blame TWA employees for your screwed up management decisions? In esscence, you are punishing the former TWA employees for your poor management decisions. Remember, American was willing to spend millions to be bigger than United, thinking the UAL/U transaction would make them #2. The reasons for buying TWA were all wrong to start with. So you punish them. That is sick.
----------------​

Sorry a corporate purchase does not supersede a signed union contract. That''s what sets our seniority. I do remember American was willing to spend and do whatever. It was the unions who said NO we didn''t like or want this deal to happen.

----------------
On 6/10/2003 1038 AM firstamendment wrote:

As far as your management''s claim that they went with the presented senority list, this is lame. Nobody in management stopped and said, wow, this is too harsh? They apparently didn''t want to bother with those issues, so they gave all power to the unions. APFA ONLY looked after their own. You can make all the excuses, but their act was selfish and again arrogant.
----------------​

No management didnt say it was to harsh. In fact they were the first to impose a staple on the agents. Unions issues? You mean signed union contracts. APFA''s only job is to look after there own. To other wise would break their fiduciary responcability. Is was only selfish and arrogant to those who didnt get free occupational seniority.

----------------
On 6/10/2003 1038 AM firstamendment wrote:
You people are so arrogant you think you can predict the future. I am so sick of hearing that TWA would have been gone. Who knows. They only filed bk the last time because your company agreed to buy the assest, and btw, assests INCLUDE the employees. You SHOUD ALL be ashamed and embarrassed at the way you have treated those people. Even Delta integrated Western much fairly. If you want to but the TWA employees at the bottom for bidding purposes, thats one thing, but to put them below some 20 year old twink that has no clue as to how the world runs and destroy those who have kids in college and have mortages is heartless. You mean to tell me not one old AA (original) haggra f/a could empathize with the injustice of this? Dirty to the bone!
----------------​

Well this is not a new thing. The same deal was given to the Reno air people. Like when SWA took over Morris and offered only interviews to the employee''s. If they were hired by Southwest there were given a seniority date based on the aquisition date.

----------------
On 6/10/2003 1038 AM firstamendment wrote:
Now I can hear all the excuses, justifications, hate responses, on and on and on and on...trying to prove you are right so go ahead. I hope the TWA get their senority back and more. Even though they no longer exist, do your homework and look at who the judge sided with when Pan Am bought National and put the f/a''s at the bottom. The Pan Am f/a''s paid a big price for that decision and I hope the same happens here.

BTW, I am NOT affiliated with the former TWA or American.

----------------​

How nice no affiliation and nothing to lose. Why stop with the seniority issue. There are a number of things you could go on about and tell us how we should live our to your idea of principles and beliefs. You had to go back to the early 80''s to find a judgement to side with your idea of seniority. Well its 2003 and like the Reno lawsuits that were thrown out it has no grounds.

 

[TransWorldONE]