TWU informer
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- Nov 4, 2003
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American Eagle For Sale
- Thread starter MiAAmi
- Start date
MCI transplant
Veteran
- Jun 4, 2003
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If we are just spinning hypotheses:
What would be the result of AMR spinning off AE to the shareholders and then someone like TPG backing a hostile takeover of JetBlue by AE.
In the abscense of a "concensual agreement between AA and any of the unions on the property," a prepackaged BK filing with a Sect. 1113 filing by AMR, with financing by TPG, leaves AA with many of the International flights operated by IBERIA and BRITISH AIRWAYS and the domestic operation conducted by an LCC with highly favorable ratings from customers and a common SABRE IT Platform. AA largely becomes a transaction handler making money of the seat trade through remittances from seats sold and an overhaul business that operates at OSV rates.
It is obvious that if the current Secretary of Transportation signs off on a deal allowing greater cross border ownership of US flagged air carriers and future fifth-freedom rights for EU carriers, the OBAMA administration expects that they can get Congress to sign off on the deal prior to the next election cycle.
The question is really about why none of the Unions on the AA property never applied to the NMB for Single-Carrier Status?
_____________________________________________________________
LINK PROVIDED:
Wall Street Private Capital- Soo Much Money, Soo little time.
June 24, 2010, 1:11 am
On Wall Street, So Much Cash, So Little Time
“…Private equity firms, where corporate takeovers are planned and plotted, today sit atop an estimated $500 billion. But the deal makers are desperate to find deals worth doing, and the clock is ticking…”
“…Private equity funds generally tie up investors’ money for 10 years. But they typically must invest all the money within the first three to five years of the funds’ life. For giant buyout funds raised in 2006 and 2007, at the height of the bubble, time is short. They must invest their money soon or return it to clients — presumably along with some of the management fees the firms have already collected. Some of the industry’s biggest players, like David M. Rubenstein of the Carlyle Group, Henry Kravis of Kohlberg Kravis Roberts and David Bonderman of TPG, have more than $10 billion apiece in uncommitted capital — what is known as “dry powder” — according to Preqin, an industry research firm…”
“…TPG — which, according to Preqin, has one of the largest stockpiles at more than $18 billion — has bid aggressively at several auctions, according to several investment bankers.
In fact, TPG has spent $9.2 billion so far this year, investing in 11 companies, including ones in India and Brazil. That makes TPG the industry’s top deal maker, according to Dealogic, a research firm. A spokesman for TPG declined to comment…”
____________________________________________________________
LINK PROVIDED:
US, EU sign next stage of Open Skies allowing foreign ownership of US Flagged Air Carriers and "fifth-freedom" rights.
EU, US expand airline 'open skies' deal
(AFP) – Jun 24, 2010
"...The new agreement, which was signed by US Transportation Secretary Ray LaHood, deals with the thornier issue of foreign ownership of airlines.
EU companies currently can hold no more than a 25-percent stake in US counterparts.
US operators on the other hand are already allowed to control 49 percent of European carriers, a difference which has long rankled with individual carriers..."
"...The accord calls for such restrictions on majority ownership to be lifted, but it must first be signed off by the US Congress and then the EU to take effect, an uncertain and lengthy process..."
______________________________________________
LINK PROVIDED:
NMB Representation Manual
19.4
Initiation of Procedure for Determination of a Single Transportation System
Any organization or individual may file an application, supported by evidence of representation or a showing of interest (See Section 19.601-2), seeking a NMB determination that a single transportation system exists.
19.501
Factors Indicating a Single Transportation System
The following are some indicia of a single transportation system:
(1) published combined schedules or combined routes;
(2) standardized uniforms;
(3) common marketing, markings or insignia;
(4) integrated essential operations such as
scheduling or dispatching;
(5) centralized labor and personnel operations;
(6) combined or common management, corporate officers, and board of directors;
(7) combined workforce; and,
(8) common or overlapping ownership.
19.6
Procedure After Finding Single Transportation System
If the NMB determines that a single transportation system exists, the investigation will proceed to address the representation of the proper craft or class. The rules regarding percentage of valid authorizations in NMB Rule §1206.2 (29 CFR § 1206.2) and bar rules in NMB Rule §1206.4 (29 CFR § 1206.4) do not apply to applications filed under this section.
19.7
Status of Representation Certifications
Existing certifications remain in effect until the NMB issues a new certification or dismissal.
What would be the result of AMR spinning off AE to the shareholders and then someone like TPG backing a hostile takeover of JetBlue by AE.
In the abscense of a "concensual agreement between AA and any of the unions on the property," a prepackaged BK filing with a Sect. 1113 filing by AMR, with financing by TPG, leaves AA with many of the International flights operated by IBERIA and BRITISH AIRWAYS and the domestic operation conducted by an LCC with highly favorable ratings from customers and a common SABRE IT Platform. AA largely becomes a transaction handler making money of the seat trade through remittances from seats sold and an overhaul business that operates at OSV rates.
It is obvious that if the current Secretary of Transportation signs off on a deal allowing greater cross border ownership of US flagged air carriers and future fifth-freedom rights for EU carriers, the OBAMA administration expects that they can get Congress to sign off on the deal prior to the next election cycle.
The question is really about why none of the Unions on the AA property never applied to the NMB for Single-Carrier Status?
_____________________________________________________________
LINK PROVIDED:
Wall Street Private Capital- Soo Much Money, Soo little time.
June 24, 2010, 1:11 am
On Wall Street, So Much Cash, So Little Time
“…Private equity firms, where corporate takeovers are planned and plotted, today sit atop an estimated $500 billion. But the deal makers are desperate to find deals worth doing, and the clock is ticking…”
“…Private equity funds generally tie up investors’ money for 10 years. But they typically must invest all the money within the first three to five years of the funds’ life. For giant buyout funds raised in 2006 and 2007, at the height of the bubble, time is short. They must invest their money soon or return it to clients — presumably along with some of the management fees the firms have already collected. Some of the industry’s biggest players, like David M. Rubenstein of the Carlyle Group, Henry Kravis of Kohlberg Kravis Roberts and David Bonderman of TPG, have more than $10 billion apiece in uncommitted capital — what is known as “dry powder” — according to Preqin, an industry research firm…”
“…TPG — which, according to Preqin, has one of the largest stockpiles at more than $18 billion — has bid aggressively at several auctions, according to several investment bankers.
In fact, TPG has spent $9.2 billion so far this year, investing in 11 companies, including ones in India and Brazil. That makes TPG the industry’s top deal maker, according to Dealogic, a research firm. A spokesman for TPG declined to comment…”
____________________________________________________________
LINK PROVIDED:
US, EU sign next stage of Open Skies allowing foreign ownership of US Flagged Air Carriers and "fifth-freedom" rights.
EU, US expand airline 'open skies' deal
(AFP) – Jun 24, 2010
"...The new agreement, which was signed by US Transportation Secretary Ray LaHood, deals with the thornier issue of foreign ownership of airlines.
EU companies currently can hold no more than a 25-percent stake in US counterparts.
US operators on the other hand are already allowed to control 49 percent of European carriers, a difference which has long rankled with individual carriers..."
"...The accord calls for such restrictions on majority ownership to be lifted, but it must first be signed off by the US Congress and then the EU to take effect, an uncertain and lengthy process..."
______________________________________________
LINK PROVIDED:
NMB Representation Manual
19.4
Initiation of Procedure for Determination of a Single Transportation System
Any organization or individual may file an application, supported by evidence of representation or a showing of interest (See Section 19.601-2), seeking a NMB determination that a single transportation system exists.
19.501
Factors Indicating a Single Transportation System
The following are some indicia of a single transportation system:
(1) published combined schedules or combined routes;
(2) standardized uniforms;
(3) common marketing, markings or insignia;
(4) integrated essential operations such as
scheduling or dispatching;
(5) centralized labor and personnel operations;
(6) combined or common management, corporate officers, and board of directors;
(7) combined workforce; and,
(8) common or overlapping ownership.
19.6
Procedure After Finding Single Transportation System
If the NMB determines that a single transportation system exists, the investigation will proceed to address the representation of the proper craft or class. The rules regarding percentage of valid authorizations in NMB Rule §1206.2 (29 CFR § 1206.2) and bar rules in NMB Rule §1206.4 (29 CFR § 1206.4) do not apply to applications filed under this section.
19.7
Status of Representation Certifications
Existing certifications remain in effect until the NMB issues a new certification or dismissal.
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
The AA-Jetblue conspiracy theories never cease to amaze me.
Common Sabre platform? Please. AA just signed up with HP to replace Sabre, so that's a non-starter as a basis to form a hypothetical merger...
IIRC, APA's scope clause prohibits regionals doing flying for AA from even owning jets over 70 seats, regardless if they're flying under contract for AA. Maybe that changed in the last contract...
APA tolerates Republic, but I doubt they'd tolerate Eagle owning Jetblue or v.v.
Common Sabre platform? Please. AA just signed up with HP to replace Sabre, so that's a non-starter as a basis to form a hypothetical merger...
IIRC, APA's scope clause prohibits regionals doing flying for AA from even owning jets over 70 seats, regardless if they're flying under contract for AA. Maybe that changed in the last contract...
APA tolerates Republic, but I doubt they'd tolerate Eagle owning Jetblue or v.v.
eolesen,
You seem to be slipping a bit...JetBlue now has SABRE, as do AE and AA, any deal inked to change that commonality could just as easily by voided; and, you conveniently avoided the reference to a prepackaged trip to BK with a Sect. 1113 filing to void the required contracts if any of the unions balk at granting the room AA desires to maneuver.
OBAMAs' DOT Secretary has signed off on cross ownership of the airlines, so the Administration must actually think they can obtain approval from congress.
AA/Iberia/BA perform the International flying; AA has already gotten relief from the ASM cap from the TWU for all markets jointly serviced by both AA and AE. AE is the worst performing regional carrier in the US, with AA at the bottom in on time dependability: JetBlue is not the best performing air carrier but it has positives and larger aircraft than AE with a total cost structure that is lower than either AA and AE.
LINK PROVIDED:
Bureau of Transportation Statistics: Operating Costs, Network, Regional and Low-Cost Carriers
http://www.bts.gov/press_releases/2010/bts031_10/html/bts031_10.html#table_09
As referenced from the story concerning private equity: getting the money to do the deal or finance required restructuring is not really an issue.
And lastly, and in closing, I began with, "If we are just spinning hypotheses,"...are you a little sensitive?
It is still in force. AA had to pay $20 million in damages when they deliberately violated APA scope on this issue. The Republic issue is a legal slight-of-hand that they are getting away with due to legal mumbo-jumbo.
What type of premium would the APA require to allow the deal I outlined, and to what extent can AMR continue the Republic "sleight-of-hand" during a transnational merger to continue the charade?
I can't imagine the APA allowing that under ANY circumstances whatsoever, since outsourcing it's jobs in that manner would completely emasculate the union. One thing you can count on, if AMR will continue to twist, obscure, parse, and outright violate any scope provision they can get away with. There is no honor nor gentlemen in this business.
And the possible owner is.....Republic!
http://www.indystar.com/article/20100707/BUSINESS/7070318
How many airlines would that make for Republic?
It looks like it is a race between Republic and Skywest to acquire all the feeder airlines. After they have pretty much monopolized that area they can charge whatever they want. What do you want to bet that their bid will come in just under what A/A can do it for internally?
BTW, rumor I heard at Skywest was they were looking at Comair.
http://www.indystar.com/article/20100707/BUSINESS/7070318
How many airlines would that make for Republic?
It looks like it is a race between Republic and Skywest to acquire all the feeder airlines. After they have pretty much monopolized that area they can charge whatever they want. What do you want to bet that their bid will come in just under what A/A can do it for internally?
BTW, rumor I heard at Skywest was they were looking at Comair.
I'm a little fuzzy on this one - not sure what the APA could have to say as Eaglet's chauffeurs are represented by ALPA, if memory serves correctly.
Sounds like AMR is busy setting up another turf war (APA vs: ALPA) and the obvious division 'twixt the troops for corporate gain, as usual.
eolesen
Veteran
- Jul 23, 2003
- 15,988
- 9,428
Sorry, but APA owns that turf battle free and clear. At one point, APA represented several of the carriers owned by AMR and flying as Eagle. The mainline guys managed to alienate the Eagle pilots enough under shared representation that they voted in ALPA (I don't think APA even put up a fight).
APA's scope clause with AA pretty clearly prohibits any feeder (whether they be owned or contracted) from being able to operate any airframe certified with more than 50 seats, with the exception of the ATR72's and the 45 or so CR7's at Eagle. Republic wound up restructuring as a corporation in order to keep Chautauqua legally separated from Republic (and now Frontier).
So, you can call it a divide & conquer, class warfare, whatever. The fact remains that anyone who buys Eagle is going to be hamstrung by the most restrictive and antiquated scope clause in the industry.
APA's scope clause with AA pretty clearly prohibits any feeder (whether they be owned or contracted) from being able to operate any airframe certified with more than 50 seats, with the exception of the ATR72's and the 45 or so CR7's at Eagle. Republic wound up restructuring as a corporation in order to keep Chautauqua legally separated from Republic (and now Frontier).
So, you can call it a divide & conquer, class warfare, whatever. The fact remains that anyone who buys Eagle is going to be hamstrung by the most restrictive and antiquated scope clause in the industry.
Hopeful
Veteran
- Dec 21, 2002
- 5,998
- 347
Thanks heavens for SCOPE...If it was abolished for any reason, EAGLE would become the domestic carrier while AA did international flying. The job loss as well as pay and benefit cuts would be devastating. It would be come the low cost leader of the industry.
But I assume that you think AA has no underlying reasons for wanting SCOPE eradicated.
The pilots locking in scope was a wise ingenious move whether it is antiquated or not. Why let this company win any more concessions costing jobs and pay and benefits....
And those affected would not just be pilots either!
Selling Eagle will eliminate SCOPE for good. If AMR spins AE off with an IPO they will still control the routes, a majority of the stock, and SCOPE IS DEAD
What allows Jet Blue and one world to operate as "feeders" Or is their a different definition for jetblue type arrangements?
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