Will AA sit this one out?

[aafsc]

Buddy, you are so naive that it is almost refreshing. Actually, it is quaint how you believe that you or any other member has any sway in the business that is union representation. Let me assure you that if an action has any potential to disrupt the flow of dues dollars, it WILL be avoided.

I will not dignify your baseless personal attack on the former TWA employees except to urge you to seek out some counseling for what must be an overriding feeling of guilt.

Wasn't the twaer's dues flows into the IAM and ALPA disrupted when they deleted the labor protections as a condition of the asset sale to AA; knowing they would eventually lose the twa membership to AA's unions?

It is some of the twaers that need counseling. They have posted numerous times about nAAtives "suffering the same fate" as they did. I have no guilt at all; I'm just amazed that they think they are entitled to come from an airline that failed, where they made far less (putting downward pressure on industry compensation) to the top of a successful airline's seniority list and enjoying the highest legacy compensation that they had no hand in fighting for. They just can't get over the fact that they all did not reap the fruits that the nAAtives fought for.

 

[Wretched Wrench]

"Delta's management on Tuesday filed a five-year business reorganization plan that it hopes will lift it from Chapter 11. The plan officially rejects the $8.4 billion takeover proposal by US Airways Group made in November.





http://www.forbes.com/markets/2006/12/19/d...9markets05.html

 

[Bob Owens]

You are right, it is nothing more than a hypothetical situation started by an ex-twaer who is just dying for something bad to happen to nAAtives because they refused to step aside and let the twa people have full seniority from their cadaver of an airline which would have resulted in nAAtives being stapled under them. Unlike the desperate twa people, the nAAtives would not stand for the relinquishment of labor protections in their contracts.

No they just let them roll the date back and take away 25% of their pay, but taking away the LPPs(which they did when it comes to system protection) oh yes, that they will not stand for. Please, lets face it, the nAAtives you speak about have been industry leading when it comes to concessions, all the way back to the eighties and B-scale, and they had no excuse, AA never went BK, but the nAAtives willingly gave up more than any other workers out there.

 

[aafsc]

No they just let them roll the date back and take away 25% of their pay, but taking away the LPPs(which they did when it comes to system protection) oh yes, that they will not stand for. Please, lets face it, the nAAtives you speak about have been industry leading when it comes to concessions, all the way back to the eighties and B-scale, and they had no excuse, AA never went BK, but the nAAtives willingly gave up more than any other workers out there.

I disagree. It depends on what "nAAtives" you are talking about. If you are talking about those who were hired after the early 1980s, yes they came in on the B-scale. But those on payroll before the early 1980s took no paycut. The new hire B-scalers "took the hit" for them in terms of wages while the incumbants remained untouched. By the way, who ratified the B-scale agreements at AA? Wage protected incumbants perhaps? At EAL, we (incumbants) took paycut after paycut IN ADDITION TO a B-scale. Also, the nAAtives did not give up more than any other workers out there. CO, PA, EAL, People Express, and Northeastern made a lot less than AA people. In fact, the concessions at EAL actually started in the mid 1970s (I was a kid then and can still remember my father being highly pi$$ed). It started with a wage freeze, followed next contract by a 3.5% pay cut. In the early 1980s, the pay cut went to 18% followed by B-scale in the 1985 contract. But 18% and B-scale wasn't enough, Borman demanded 20%; IAM said "no". EAL was sold to Lorenzo who demanded 50%; the IAM subsequently struck the company. At EAL we were pointing to, and demanding parity with, the payscale's of the incumbants at UA and AA just as you point to, and demand parity with, the SWA AMT's pay rates.

 

[MCI transplant]

Wasn't the twaer's dues flows into the IAM and ALPA disrupted when they deleted the labor protections as a condition of the asset sale to AA; knowing they would eventually lose the twa membership to AA's unions?

It is some of the twaers that need counseling. They have posted numerous times about nAAtives "suffering the same fate" as they did. I have no guilt at all; I'm just amazed that they think they are entitled to come from an airline that failed, where they made far less (putting downward pressure on industry compensation) to the top of a successful airline's seniority list and enjoying the highest legacy compensation that they had no hand in fighting for. They just can't get over the fact that they all did not reap the fruits that the nAAtives fought for.

<_< -----Face it aa! It seems he has you pegged! 😛

 

[MCI transplant]

No they just let them roll the date back and take away 25% of their pay, but taking away the LPPs(which they did when it comes to system protection) oh yes, that they will not stand for. Please, lets face it, the nAAtives you speak about have been industry leading when it comes to concessions, all the way back to the eighties and B-scale, and they had no excuse, AA never went BK, but the nAAtives willingly gave up more than any other workers out there.

<_< ----- Touché! Bob!--- The man is paranoid! He's been looking for those school bus, full of exTWAers, come down I95 too long! Even if the Michigan lawsuit was won by that exTWAer, it wouldn't give us all full Seniority! But he don't know that! 😛

 

[MAH4546]

AA's best merger partner would be Delta Airlines, hands down.

*Similar fleets.
*They could merge their JFK operations into a true hub.
*Close Cincinnati.
*Gain a real west coast hub in Salt Lake City.
*Gain key new frequencies to South America.
*Close down what is left of St. Louis.

A combined AA/DL would have perfectly located hubs in Atlanta, Chicago, Dallas, Miami, New York City-JFK, Salt Lake City, and San Juan, compatable Boeing fleets, and a vast international network everywhere, with the only weak spot being Asia.

There would definitly be some "rightsizing", with AA likely closing St. Louis and Cincinnati, and with the Atlanta hub most likely seeing a 25-35% drop in daily flights (though that would still keep it at 700+ daily flights).

I'm not taking into consideration any labour issues here, whihc would obviously be huge hurdles. I'm just looking at network and fleet, and AA/DL makes the most sense, IMO.

 

[aafsc]

<_< ----- Touché! Bob!--- The man is paranoid! He's been looking for those school bus, full of exTWAers, come down I95 too long! Even if the Michigan lawsuit was won by that exTWAer, it wouldn't give us all full Seniority! But he don't know that! 😛

Yes I do. I know exactly what his argument is. I also know it would probably upset a lot of other twaers if he won because it could mean someone (a twaer) with 25 years in STL would be placed ahead of a 40 year twaer in MIA or any other 4/10/01 city. It would also mean that if a 40 year twaer from a 4/10 /01 city went to STL, he/she would be below a 30 year twaer. It's strange that no one seems to have a problem with the fact that when a twaer goes to STL from a 25% or 4/10/01 station he/she gets all their twa seniority back but when they go to a 25% or 4/10/01 city from STL and lose their twa seniority, they complain.

 

[IORFA]

What about DFW?

 

[RowUnderDCA]

AA's best merger partner would be Delta Airlines, hands down.

*Similar fleets.
*They could merge their JFK operations into a true hub.
*Close Cincinnati.
*Gain a real west coast hub in Salt Lake City.
*Gain key new frequencies to South America.
*Close down what is left of St. Louis.

A combined AA/DL would have perfectly located hubs in Atlanta, Chicago, Miami, New York City-JFK, Salt Lake City, and San Juan, compatable Boeing fleets, and a vast international network everywhere, with the only weak spot being Asia.

There would definitly be some "rightsizing", with AA likely closing St. Louis and Cincinnati, and with the Atlanta hub most likely seeing a 25-35% drop in daily flights (though that would still keep it at 700+ daily flights).

I'm not taking into consideration any labour issues here, whihc would obviously be huge hurdles. I'm just looking at network and fleet, and AA/DL makes the most sense, IMO.

They've been my pick in the office pool for months now. But, of course, you'd add DFW to the list of hubs, but I don't think ATL would be cut 25%! Maybe 5%

 

[aafsc]

AA's best merger partner would be Delta Airlines, hands down.

*Similar fleets.
*They could merge their JFK operations into a true hub.
*Close Cincinnati.
*Gain a real west coast hub in Salt Lake City.
*Gain key new frequencies to South America.
*Close down what is left of St. Louis.

A combined AA/DL would have perfectly located hubs in Atlanta, Chicago, Miami, New York City-JFK, Salt Lake City, and San Juan, compatable Boeing fleets, and a vast international network everywhere, with the only weak spot being Asia.

There would definitly be some "rightsizing", with AA likely closing St. Louis and Cincinnati, and with the Atlanta hub most likely seeing a 25-35% drop in daily flights (though that would still keep it at 700+ daily flights).

I'm not taking into consideration any labour issues here, whihc would obviously be huge hurdles. I'm just looking at network and fleet, and AA/DL makes the most sense, IMO.

Mark, you bring up some good points and I agree with your analysis. However, airline mergers are extremely painful; both in terms of employee seniority issues and the time and effort required of management to integrate the two (or possibly three in Parker's case). Mergers are a reality in a capitalist society. Given this reality, one must obtain a merger partner where the "gain" greatly exceeds the "pain".
If AA feels the need to find a merger partner in order to stay competitive with others, in my opinion, it should be NW. Why? Because AA has very little in the Asian region and would get the NRT hub, China rights, and other Asian cities along with NW's market share overnight. It would also acquire a very nice freighter operation which AA could synergystically tie into the rest of it's network. I think that AA may have an aversion to mergers but if they decided to go after NW, the "gain" would definately outweigh the "pain" unlike the twa asset purchase where the "pain" far far exceeded the infinitesimal "gain" .In my opinion, NW would be the best choice for AA, followed by UA (DOJ would never allow that one) then DL, then US. If by some long shot AA ended up with DL, AA could really take advantage of the bankruptcy code just as Parker does. AA could dump DL's CVG hub and walk away from that old outdated Pam Am terminal after it rejected the leases and move DLs flights to the new terminal. Some have speculated that there could be as few as two legacies and 2 or 3 discount airlines. Maybe UA,CO,US and AA,NW,DL (AA could really take advantage of both Ch-11 cases there) along with discounters being SW, a possible merge of B6,NK,F9 and possibly FL. I doubt the 2 legacy, 3 discount scenario because the government and American public feel that they are ENTITLED and have a constitional right to cheap airfares with filet minon service (strange that they don't feel the same way about the health-care system). To keep ticket prices down they need many carriers. The would be merger catalyst of US/DL may not even takeoff.

 

[MAH4546]

They've been my pick in the office pool for months now. But, of course, you'd add DFW to the list of hubs, but I don't think ATL would be cut 25%! Maybe 5%

Duh! Forgot Dallas.

Atlanta would definitley see hefty cuts. Remember, the hub already has 1,100+ daily flights. A 30% cut will still be 750+ daily flights. One of the reasons for mergers is to reduce capacity and streamline operations. Cutting Atlanta a significant amount is a no-brainer. Caribbean and LatAm routes would probably be sliced outside of key routes (like GRU, MBJ, CCS, EZE) to not compete with Miami; European operations would be streamlined (though not significantly, IMO) as now O'Hare can act as a better second gateway to Europe; and with Dallas serving the same West-->Southeast connecting purpose, there would not be the need for so much Atlanta capacity. Atlanta and Dallas, IMO, would be about equal in hub size, ~750 flights. I could imagine:

1) Dallas ~750
1) Atlanta ~750
3) Chicago ~550
4) Salt Lake City ~350
4) Miami ~325
5) JFK ~275
6) San Juan ~130

I honestly think, full heartedly that from an operations-only perspective, AA/DL makes more sense than combining any other two US majors.

 

[eolesen]

I honestly think, full heartedly that from an operations-only perspective, AA/DL makes more sense than combining any other two US majors.

I'll disagree on a few points.

First of all, SLC is a regional hub and a freak of geography more than anything else. 71% of their departures are props and RJ's. Only 30% of the traffic actually is heading to/from SLC, and a fair degree of that appears to be coming in on the aforementioned RJ's. Being the seat of the LDS drives a lot more of that traffic than you'd think...

CVG isn't much better -- only 25% O&D and 79% regional.

LAX on the otherhand is 70% O&D, and the hub is simply a benefit to fill up the remaining seats. It's profitable, so why abandon it in favor of being the LDS's hometown airline?

Honestly, AA could get the same benefits from merging with DL as they'd get from buying another 20 777's and 50 737's. And they wouldn't have to take on any of the debt or integration issues that buying up DL would entail.

 

[Redbone]

I wonder what the industry will look like a year after super lean competitive killing machines like post BK NWA and DAL hits the skies. They have changed far more drastically than UAL or twice Bankrupt U.S...esp. with NWA showing a $750 million yearly profit while STILL in BK. (thanks to it's rape of employees)

NWA's exit is sched. for the first half of 07.

 

[FrugalFlyerv2.0]

I wonder what the industry will look like a year after super lean competitive killing machines like post BK NWA and DAL hits the skies. They have changed far more drastically than UAL or twice Bankrupt U.S...esp. with NWA showing a $750 million yearly profit while STILL in BK. (thanks to it's rape of employees)

Recently I purchased a ticket on NW for ~$135 (including taxes & fees) for DCA-DTW-DCA. Now when I drive it costs me ~$125 (gasoline and tolls). Once there is no more money to take from employees, how much profits is NW going to make?