AMR Unions Rumored to Back US Airways Takeover Offer

Discussion in 'American Airlines | AAdvantage' started by DestinationDavid, Apr 19, 2012.  |  Print Topic

  1. DestinationDavid
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    LINK.

    American Airlines’ three largest unions have agreed to support a possible takeover offer from US Airways Group Inc. (LCC) rather than remain independent, three people familiar with the matter said.

    The groups plan to say that they believe they can reach better terms with US Airways than what they expect if American parent AMR Corp. (AAMRQ) exits bankruptcy by itself, according to the people, who asked not to be identified because the talks are private.

    The labor consensus has emerged as Fort Worth, Texas-based American prepares to ask a federal bankruptcy court on April 23 for permission to void existing union contracts and impose new terms in its quest to cut 13,000 union jobs. A ruling on the request may not occur until early June.
     
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  2. autolycus

    autolycus Gold Member

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    An interesting and potentially significant development. But... unless the unions own a large share of AMR or are somehow going to end up with particularly favorable, and otherwise unprecedented, treatment like UAW got in the GM bankruptcy, I'm not sure how much this support is really going to mean. Definitely an interesting bit nonetheless.
     
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  3. TheBeerHunter
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    TheBeerHunter Silver Member

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    Sorry, but I think the unions are being really shortsighted here. Time will tell, of course.
     
  4. DestinationDavid
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    The three unions are 33% of the votes on the unsecured creditors committee. They're not exactly powerless.

    It's all still hearsay and speculation though. Interesting chatter, but I'm not expecting anything from any of it.
     
  5. autolycus

    autolycus Gold Member

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    Yeah, 1/3 of unsecured creditors committee definitely puts them at the table. Of course they'd be at the table either way because of the desire of most investors to have employees who actually work well with the company instead of go on strike. :)

    I'm biased, being in ATL, but I still wonder what Blackstone looked at and decided wrt Delta. Not that I would ever expect the unions to support a buyout from Delta, considering Delta's ability to keep all but the pilots' union from organizing.
     
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  6. DestinationDavid
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    I'm more open to a US merger than a DL merger. I really, really dislike DL's loyalty program.
     
  7. autolycus

    autolycus Gold Member

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    Don't want to spend 40k skypesos to get most award tickets for domestic US travel? :)

    I have no preference at all, honestly. I just enjoy watching the drama.
     
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  8. mrredskin
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    mrredskin Gold Member

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    and we wonder why there are such issues with corporations...
     
  9. folex386

    folex386 Gold Member

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    I enjoy watching the drama, just hope nothing too bad comes out of it!
     
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  10. DestinationDavid
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    Watching drama is fun, but there's a chance this drama might actually leap off the screen and involve us in the plotline. Won't be so fun then. :D
     
  11. mowogo
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    mowogo Gold Member

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    That is just when you get to activate your Aluminum Status :p
     
  12. MLW20
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    I just hope that AA can emerge from bankruptcy still standing on it's own. Consolidation is bad news.
     
  13. LETTERBOY
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    I'd like both US & AA to remain as they are, but I don't think it'd be the end of the world if they merged.
     
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  14. jbcarioca
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    jbcarioca Gold Member

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    The WSJ article posted last night online repeats most of the prior news but adds some flavor to the situation.
    http://online.wsj.com/article/SB10001424052702303425504577354493373319140.html?mod=googlenews_wsj
    Based on the history of labor relations on both sides it is easy to imagine that the AMR unions are simply trying to increase pressure on AMR management and, perhaps more importantly, the judge hearing the petition for pension fund dissolution and labor contract changes.

    Still, this does have the ring of possible truth, and may be supported by US unions because of the vast increase in opportunity the merger could provide. The AMR ones might envision fewer negative change after merger than they'd probably have stand-alone.

    The rest of the creditors might be the key to this, at least as far as the judge is concerned, because they could pressure AMR management quite effectively. AMR exclusive right to propose reorganization won't be worth much without lender support.

    I have begun to take this seriously.

    Personally, I'd end out without either EXP or CP. Somehow I wager CP would go. It seems fairly obvious the merged entity would be OW.
     
  15. PointsCashMiles

    PointsCashMiles Silver Member

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    Breaking News Headline on cnnmoney.com:

    No included article at this point
     
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  16. HaveMilesWillTravel
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  17. jbcarioca
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  18. marcwint55

    marcwint55 Gold Member

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    In my opinion it is truly amazing how unions can help bankrupt a company (along with fuel guzzling planes ) and then have so much influence regarding an exit strategy for the company. I would love to see a non union airline evolve from this bankruptcy. The unions are responsible for all of us paying higher costs in a day and age when the evils that brought them into existence are for the most part a thing of the past.
     
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  19. HeathrowGuy
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    HeathrowGuy Gold Member

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    Rapacious Greed is dead!? Did you sleep through 2008!? :p
     
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  20. DestinationDavid
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    The APA press release on this annoucement has an interesting section in the middle called "The New American Airlines" that seems to give some insight into what some are curious about should a merger happen: LINK.

    First and foremost, the combined carrier will be branded American Airlines, based in Fort Worth Texas and headquartered at CentrePort. It will be comparable in size and scope to Delta and United, with a robust domestic network capable of supporting significant international expansion. American Airlines’ relationship with oneworld will be maintained and strengthened. All of American Airlines’ aircraft orders with Boeing and Airbus will proceed. The former US Airways route system will be realigned with the American Airlines system to add more cities, more markets and better frequencies. The new American Airlines, under a lean, energetic and highly capable management team, will be able to compete on an equal footing to win back high-value customers. On the East Coast, which is the largest and most lucrative airline market in the world, American Airlines will go from No. 5 to a strong No. 1. In the Midwest, we will go from No. 4 to No. 1. In Miami, our dominance to South America will be enhanced by stronger East Coast traffic flows. For the first time in years, American Airlines will be in a position of strength in Chicago.
     
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  21. chz2215

    chz2215 Silver Member

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    Assuming this happens how long do you think it would take to be operating as 1 airline?
     
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  22. HeathrowGuy
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    Over a year even under best fast track scenarios to get a SOC.
     
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  23. jbcarioca
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    Even after the SOC, operational integration from client perspective, meaning us and everyone else, will still not be instant.
     
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  24. Aktchi
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    US CEO Doug Parker to Employees: "Signed Agreements with Three Unions at American Airlines

    "April 20, 2012

    "Dear Fellow Employees –

    Today, we filed a statement (a form called an 8-K) with the Securities and Exchange Commission disclosing that we have signed agreements with the three unions that represent nearly 55,000 American Airlines employees. These unions are the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU), which represents all of American Airlines’ mechanics and fleet service employees. Shortly after our disclosure, these three unions issued a public statement announcing their support of a US Airways-American Airlines merger and that they have agreed to terms that would govern collective bargaining agreements for their members at the merged airline. I want to explain to you why we have done this and what it means.

    "First of all, today’s news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen including gaining the support of AMR’s creditors, its management team and its Board of Directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.

    "All of you have heard me talk about the benefits consolidation has created for US Airways and our industry. You have also heard me say that US Airways does not need to merge with anyone, as evidenced by our team’s outstanding results. That is still the case, but after studying American Airlines’ current state and their future plans, we have concluded that a merger with American, while they are undergoing their bankruptcy restructuring, represents a unique opportunity that we should not ignore. These beliefs are shared by the three American labor unions and we are delighted to have their support. Like us, they recognize the potential of a merger to improve the current and future careers of both airlines’ employees.

    "Combining American Airlines and US Airways would create a preeminent airline with the enhanced scale and breadth required to compete more effectively and profitably. Our intention would be to put our two complementary networks together, maintaining both airlines’ existing hubs and aircraft, and create an airline that could compete successfully with United, Delta and other carriers within our industry. A merged airline would provide competitive, industry-standard compensation and benefits, as well as improved job security and advancement opportunities for all employees of the combined airline. Most importantly, in American’s standalone strategy, over 13,000 employees at American will lose their jobs. Our merger contemplates saving at least 6,200 of these positions. For the US Airways team, the agreements we have reached with the unions representing employees at American would also provide enhancements to the compensation and benefits currently in place here.

    Today is one step in what will be a much longer process. For now, it remains business as usual. We must continue to provide the outstanding service that customers have come to expect from US Airways.

    "In the meantime, if you have any questions, please stay connected via Wings (www.wings.usairways.com) and we will continue to provide updates on our progress. Thanks for all that you continue to do to take care of our customers. Together, whether a merger is our future or not, we will continue to run a great airline and have a bright future ahead of us.
    Sincerely,

    Doug"
     
  25. TrippePanAM

    TrippePanAM Gold Member

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    like american at all? ;)


    So to just head off the bickering at the pass the AA brand and the USAirways brand should both be trashed and the new combined carrier should revive teh TWA brand name which is owned by American Airlines. Thus frequent filers can just be baffled and i don't have to read about gripping from AA elites.....

    in all serous the AA name would survive but the actual airline in the model and way it operates would be USairways. This is a hostile takeover of AA by USAIRWAYS. this is not a merger of equals even though it is being called a merger. US would acquire the AA brand name but anyone who thinks it would be like AA today needs to do some research. American would be aligned on its operating level to US and be restrucutered to match the US ideologies. The reason behind the AA brand suriving is this name and its history. It has a more global presence than US.

    The New AA would be "US" just called AA with US management and a lot more US policies..... and fliers will still be irrtiated because the new AA advantage program will mirror Skymiles and Mileage plus more than likely and be based on profit. cash is king especially in this industry


    US has strong position in thje carribbean and the US route network would not be abandoned to move to the 5 corners strategy. US has a stronghold at DCA extremly valuable the CLT hub solidifies the east coast. PHL speaks for itself. and Boston Logan and the shuttle routes. yup

    PHX well rounds out the west coast. the AA hubs and AA intl route network make this a strategic movie by US management given the merger between UA and CO.... the combined new AA would be in strong position to compete with UA and DL in all the markets those carriers fly.
     
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