Doug Parker's Letter to employees

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Signed Agreements with Three Unions at American Airlines: An Important Message from CEO Doug Parker: 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
 
The euphoria would be short lived after a merger, as both sides would resume normal company/union adversarial postures.
 
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Signed Agreements with Three Unions at American Airlines: An Important Message from CEO Doug Parker: April 20, 2012

Dear Fellow Employees –

.....
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.


And there is the hook right there.... "I'll promise you pay raises to get you to industry standard" (what does that mean anyway - if it is average, then don't hesitate to say so.... otherwise, it probalby isn't).
.
I'll raise US salaries to AA levels and save 6000 AA jobs... but makes no commitment to saving the existing level of US jobs.
.
The devil is in the details and this is nothing more than promises to people who are desperately looking for them - even if they cannot be delivered.

IS a few years of Euphoria worth it if it is followed by another Bk filing because promises were made that could never be made?

Remember, US has had MULTIPLE trips through BK... and they still pay their employees bottom of the barrel wages and have below average revenue generation.
 
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<_< ----- I'm wondering what is going through AA's management's collective minds now? If they're not careful, they may lose the whole thing! That's one of the chances you take when you take it into BK! -------- What will their store bought advisors tell them to do now? :rolleyes:
 
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<_< ----- I'm wondering what is going through AA's management's collective minds now? If they're not careful, they may lose the whole thing! That's one of the chances you take when you take it into BK! -------- What will their store bought advisors tell them to do now? :rolleyes:
press on with the 1113 process unless all of the creditors believe their needs are best met by considering other alternatives - and then if that happens, open the bidding to all potential bidders - and then pick the plan that provides the best return, including AA emerging as a standalone carrier.
 
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A merger reduces the risk of future BKs, not increases it for both and while I am sure some US jobs will be cut we are all still much better off in the long run being employed by one of the big 4.
 
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IS a few years of Euphoria worth it if it is followed by another Bk filing because promises were made that could never be made?

Oh, sure Doug can deliver on those promises. He has told the US pilots time and time again at the monthly crew meetings that the reason US cannot pay industry standard is that US does not have the critical mass and mega-hubs that the big five, then the big the big four, big three, etc.

These hubs gave those other carriers huge pricing power which US does not have. He said that US would pay industry standard once it merged with a carrier with those assets. He repeated it many, many times over the past few years.

So, of course he will deliver on those promises. A sharp business savvy guy like him would never have said that if it weren't absolutely true.

- - - - - - - - - - -

A fine example of Tongue-in-Cheek
 
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What will likely happen now is the judge will not extend the current exclusivity period again. AA already had one extension. However, if there's another option on the table, the creditors can file an objection to further extensions, which opens up the possibility for US to present its plan directly to the judge (on behalf of the creditors).

I have to think AA management is talking to US management behind the scenes at this point. I just don't see this being "hostile" at the end of the day.
 
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I have to think AA management is talking to US management behind the scenes at this point. I just don't see this being "hostile" at the end of the day.
but you really don't know that, do you? You also don't know if the rest of the creditors (non-labor) believe a US merger is in AMR's best interests?
And I can assure you that if US speaks to the creditors regarding a potential merger, so will other parties... because the creditors will consider every option and choose the best one.
And it is far from certain that US would end up as the best option at that point.
 
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Wow, as a frequent flyer and business owner it amazes me at the lack of foresight so many people have. I would ask the AA Unions this:

1) If US Airways was so great with labor why are they still basically operating under two sets of agreements?
2) If US Ariways management was so great, why have they continually been looking for a date to the prom, with no one willing to take them?
3) If you think your management team controls your destiny, YOUR WRONG, the frequent flyers do.

There are many PLTs & EXPs and many more that are international business travelers like myself that have chosen to fly American because of the U.S. airlines it has the best service, especially internationally. Many of us who don't fly Emirates or these other "better" service airlines because the mileage we accumulate on them are useless to us anytime we want to fly anywhere in the Americas, and their service from the U.S. always takes you to some out of the way stopover. We are the ones who spend our money because of the service we get from AA, both the service from the flight crews as well as ground and ticketing, as well as the service from the planes themselves. Granted, I think we are all looking forward to a new fleet of airplanes and upgraded amenities, but its still better than anything anyone else in this country offers. I mean UnitedContinental doesn't even offer a true first class on many international flights ----> their international BusinessFirst is a joke, especially at the price point.

I view US Airlines as an expensive low-cost carrier. I view it as another southwest but assigned seating. I have flown US AIR and I mean NO DISRESPECT TO ANY OF THEIR HARDWORKING EMPLOYEES but to me this is just a step down for AA as far as service.

This is an attempt by AA Unions to get leverage, by getting into bed with a management team that has a history of making big acquisitions, not of making big strides in making their company better. The merger happens, the combined airlines will scuttle, and they will begin layoffs. At least with the bankruptcy and AA you know the layoffs upfront. Those layoffs will still happen in a merged airline.

US AIRWAYS WANTS YOUR SOUTH AMERICAN AND INTERNATIONAL ROUTE STRUCTURE. US Airways brings NOTHING to the table. You are all being used.

Cheers,
777 / 767 / 787
 
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Wow, as a frequent flyer and business owner it amazes me at the lack of foresight so many people have. I would ask the AA Unions this:

1) If US Airways was so great with labor why are they still basically operating under two sets of agreements?
2) If US Ariways management was so great, why have they continually been looking for a date to the prom, with no one willing to take them?
3) If you think your management team controls your destiny, YOUR WRONG, the frequent flyers do.

There are many PLTs & EXPs and many more that are international business travelers like myself that have chosen to fly American because of the U.S. airlines it has the best service, especially internationally. Many of us who don't fly Emirates or these other "better" service airlines because the mileage we accumulate on them are useless to us anytime we want to fly anywhere in the Americas, and their service from the U.S. always takes you to some out of the way stopover. We are the ones who spend our money because of the service we get from AA, both the service from the flight crews as well as ground and ticketing, as well as the service from the planes themselves. Granted, I think we are all looking forward to a new fleet of airplanes and upgraded amenities, but its still better than anything anyone else in this country offers. I mean UnitedContinental doesn't even offer a true first class on many international flights ----> their international BusinessFirst is a joke, especially at the price point.

I view US Airlines as an expensive low-cost carrier. I view it as another southwest but assigned seating. I have flown US AIR and I mean NO DISRESPECT TO ANY OF THEIR HARDWORKING EMPLOYEES but to me this is just a step down for AA as far as service.

This is an attempt by AA Unions to get leverage, by getting into bed with a management team that has a history of making big acquisitions, not of making big strides in making their company better. The merger happens, the combined airlines will scuttle, and they will begin layoffs. At least with the bankruptcy and AA you know the layoffs upfront. Those layoffs will still happen in a merged airline.

US AIRWAYS WANTS YOUR SOUTH AMERICAN AND INTERNATIONAL ROUTE STRUCTURE. US Airways brings NOTHING to the table. You are all being used.

Cheers,
777 / 767 / 787

So, you're against?
 
but if AA stand alone plan continues, AA emerges from CH 11 it wont be long before theyre right back in it! As far US bringing nothing, well the East Coast is the most heavily populated region AA has virtually nothing in the East US has DCA strong presence AA hardly anything. I wouldnt be counting the chickens before they hatch. I believe what DP has done now is thrown a curve ball to mgmt of AA yet at the same time they are attracting creditors and as some unsecured creditors (not labor) have been pressing for AA US merger. I believe that US/AA could be on par with DL/UA but as a US employee I would not want a merger with AA but it is out of our hands. WT you do make good point that "is US the best point" I believe in the end that US will most likely be their only option as I dont see the US Govt allowing DL to take AA one scenario I see is TPG and BA luring US out of Star and into One World But make no mistake DP is a more of money man and has the resources to gather a merger
 
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Wow, as a frequent flyer and business owner it amazes me at the lack of foresight so many people have. I would ask the AA Unions this:

1) If US Airways was so great with labor why are they still basically operating under two sets of agreements?
2) If US Ariways management was so great, why have they continually been looking for a date to the prom, with no one willing to take them?
3) If you think your management team controls your destiny, YOUR WRONG, the frequent flyers do.

There are many PLTs & EXPs and many more that are international business travelers like myself that have chosen to fly American because of the U.S. airlines it has the best service, especially internationally. Many of us who don't fly Emirates or these other "better" service airlines because the mileage we accumulate on them are useless to us anytime we want to fly anywhere in the Americas, and their service from the U.S. always takes you to some out of the way stopover. We are the ones who spend our money because of the service we get from AA, both the service from the flight crews as well as ground and ticketing, as well as the service from the planes themselves. Granted, I think we are all looking forward to a new fleet of airplanes and upgraded amenities, but its still better than anything anyone else in this country offers. I mean UnitedContinental doesn't even offer a true first class on many international flights ----> their international BusinessFirst is a joke, especially at the price point.

I view US Airlines as an expensive low-cost carrier. I view it as another southwest but assigned seating. I have flown US AIR and I mean NO DISRESPECT TO ANY OF THEIR HARDWORKING EMPLOYEES but to me this is just a step down for AA as far as service.

This is an attempt by AA Unions to get leverage, by getting into bed with a management team that has a history of making big acquisitions, not of making big strides in making their company better. The merger happens, the combined airlines will scuttle, and they will begin layoffs. At least with the bankruptcy and AA you know the layoffs upfront. Those layoffs will still happen in a merged airline.

US AIRWAYS WANTS YOUR SOUTH AMERICAN AND INTERNATIONAL ROUTE STRUCTURE. US Airways brings NOTHING to the table. You are all being used.

Cheers,
777 / 767 / 787


Lotta talk for a guy who doesn't have a dog in the fight. Money talks and BS walks. Why would the unions at AA, or for that matter - any employee group at AA get behind AA management? To get sucked into a 6 year contract that keeps us at the bottom of the industry for the duration. If Doug Parker wants to merge employee groups, and keep them happy - better pay and benefits are the answer. So, if this deal torpedoes Tom Horton and company from screwing us even more - well then I'm all for it. Let's see the deals now, and fine tune them.