APA Approves Contract with American

Discussion in 'American Airlines | AAdvantage' started by DestinationDavid, Dec 7, 2012.  |  Print Topic

  1. DestinationDavid
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    Members of the Allied Pilots Association voted to approve a tentative agreement with American Airlines Friday, the APA says.
    According to the APA, about 96 percent of the pilots voted with 73.78 percent in favor of the agreement.
    “We are pleased our pilots supported and ratified this agreement, which is an important step forward in our restructuring," said Denise Lynn, American Airlines senior vice president. "This agreement addresses the priorities identified by the APA during collaborative talks. Today’s ratification gives us the certainty we need for American to successfully restructure, providing opportunity and growth for all of our people and stakeholders. The modernization of our company is well underway, and we remain focused on emerging as a competitive, world-class airline.”
    With the court's approval, all of the airline's work groups are now be under new collective bargaining agreements as the airline continues working to emerge from bankruptcy.
     
  2. DestinationDavid
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    APA's Twitter feed notes that despite ratification they will still support a US/AA merger.
     
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  3. CO FF

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    Given that USAir is still operating 2 separate pilots unions b/c they couldn't work it out amongst themselves, I'm not sure that the Creditors' Committees will feel the same way...and that's all that matters.
     
  4. Mike Reed

    Mike Reed Gold Member

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    Any of them that want are free to go work for US instead. :)
     
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  5. From NYC
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  6. DestinationDavid
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    Only a matter of time at this point, IMHO. I think a merger is a done deal, it's just a matter of when and how. Finalizing contracts with all three labor groups puts AA in a stronger position.

    Edited to Add: As Reuters runs with this story - US Air makes AMR formal merger offer, deal possible by next month - LINK.
     
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  7. Mike Reed

    Mike Reed Gold Member

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    That's rather interesting. Especially the proposed split - 70% AMR / 30% LCC (with AMR actually wanting closer to 80/20). That implies two things:

    1) Doug wouldn't be in control (this is always negotiable, I suppose, but it would be hard for him to assert why he should lead vs. Horton, who's walked AA through this process rather well)

    2) The LCC labor issues would be likely be dominated by the existing AMR contracts and agreements if AMR had majority control. That's if the LCC agreements even existed past the point of LCC ceasing to exist...
     
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  8. LETTERBOY
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    I read somewhere (I think it was on Gary's blog, but I can't recall for certain) that Dougie would balk at an 80-20 split.

    I've read also read in several places that Dougie would walk away if he wasn't in control. And given how eager/desperate he's been for a merger, that makes sense.
     
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  9. Wandering Aramean
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    Who runs it in the end isn't decided by the split of shares.

    As for the labor issues, the idea is that once they get all three unions under a single umbrella AA's APA group would be so much larger that they could vote as a block and wipe out the issues from the legacy US and HP unions. No idea if that would actually happen but that's part of the plan.
     
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  10. Travel2Food
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    Correct. The board will decide who runs it, though the merger may be conditioned on certain things (including management). The AA employees garner so much hatred for AA management that I'd bet they insist on Parker running it.

    As for the labor issues, if that's attempted I can almost guarantee that it will result in more unrest, not less. Given that US has botched the integration of US and HP, there is no assurance that they will do better here. The only real guarantee is that passengers will end up paying the price (if US takes over). In that light, I note that US/CO has not integrated to the passenger's benefit despite having the former CO CEO running things. DL was more successful.
     
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  11. Mike Reed

    Mike Reed Gold Member

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    Parker is still running [corrected: close to] the red, where Horton has moved into the black and continues to improve.

    THAT's what matters to the creditors as to who runs things going forward.

    With the labor issues at US, one could expect THEIR employees to prefer Horton.
     
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  12. Wandering Aramean
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    Huh??

    US has been profitable lately, not in the red. And that is in spite of the labor issues. Parker has a history of actually making money running the airline for many years. Has basically no history right now.
     
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  13. Mike Reed

    Mike Reed Gold Member

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    Corrected. I'm actually working my way back through their financials right now, focusing on their outstanding pension costs, etc. The restated '09 earnings and reclassified '10 earnings aren't helping. :)
     
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  14. LETTERBOY
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    I think that may be a risky plan, considering the antics that APA has pulled (rejecting the 1st contract, the slow-down, etc.) and given how militant some of them are. I don't think it would be wise to assume they'll act a certain way.

    And the US employees hate Parker just as much.
     
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  15. From NYC
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    But even in his CO days, Smisek always played the bad guy with customers, looking to eke out what he could. This was the role he played at all 4 CO Do’s when it was he and Kellner doing the presentation and Q&A at the end. It’s been no surprise to me that the long-time customer has taken somewhat of a back seat to running a profitable business. Or trying to.
     
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  16. LETTERBOY
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    That really shouldn't be a surprise to anyone. If you don't have a profitable business, there will be no long-time customers.
     
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  17. jbcarioca
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    A corollary might be: since the airline industry has never had long term net profits, nearly all airlines are probably long-term unstable. The evidence supports such assertions pretty strongly, does it not?

    Even such bastions of positive outlook as SQ and CX have (ir)regular bouts of losses. Recall Volcanos?, SARS? Because airlines are always subject to climactic and environmental disasters, and political ones too., it is not very easy to imagine long term airline success.

    Airplane manufacturers, airline suppliers and servicing industries are another matter entirely, they'll do fine.

    Will a merged AA and UA be long term profitable? No, probably not.
    Will either on it's own do that? No.
    Will they both still have the sky high interest rates that they both do now? Yes!
    Take a quick look at the US deal with Barclays. Imagine a 5.5% interest rate today in US$ secured against Dividend Miles that US can just print on demand. That is a great deal for Barclays, but for US too since they're not exactly overwhelmed with offers of cheap funding. Will the combined entity be more creditworthy? Probably not!
     
  18. Travel2Food
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    And Parker is no different than Smisek from tha aspect. At any of the airlines, it's no longer about long-term customer, loyalty, or market share..... It's about profitability and maximizing revenue. Delta has done perhaps the best management-wise (and they've long been known for good management), but they don't coddle frequent travelers or worry too much about LVCs - the focus is all HVC.
     
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  19. From NYC
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    During SMD2, Parker was very upfront that baggage fees were what got US into the black. "Do you think we're really going to get rid of that billion dollars?!" We all may hate fees and such, but they ain't going away anytime soon.
     
  20. Mike Reed

    Mike Reed Gold Member

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    Well, yes and no. I was there, too. He was also careful to point out that it was coincidental that their baggage revenue equaled (roughly) their net profits that year, emphasizing instead how much of the up-front and underground operations cost related solely to checked bags. From ticket counters where bags are checked to infrastructure to move them to/from planes to equipment to load/unload them... lots of actual cost that could be cut dramatically if everything were carryon (not to mention extra cargo ops space), but how unrealistic that was - hence bag charges for people that check bags and use the infrastructure.

    Sent from my iPhone using milepoint
     
  21. From NYC
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    Funny how those kinds of coincidences happen.

    Let alone the fact that all the infrastructure for checking bags was already in place and operational well before US started charging for checked bags. It's not as though all of that came into place against the bottom line once charging for checked bags went live. So, charging for checking offset those already existing costs and put them into profit.
     
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