HA files Chapter 11, NW Invokes Force Majure

For those who are convinved that the need for concessions are a company ploy at busting the unions....

HA filed for bankruptcy Friday. They plan on business as usual, and said that they don't intend to re-open labor contracts which were renegotiated prior to the filing, and don't expect any further layoffs than what was agreed to pre-filing. They said the biggest reason for filing was their inability to get lessors (including Boeing) to cut lease rates to what HAL thought were more realistic. HAL has recently taken delivery of a bunch of 717s and 763s to replace their DC9 and DC10 fleets. AA has some exposure here as well, especially if they try to return their remaining DC10s early.

NWA, who has no agreements with their unions yet, is invoking force majure, and cutting 12% reduction of their April schedule, including the parking of 20 aircraft (mix not announced, but it does not look like a single fleet type). Along with the cut, they're furloughing 250 pilots (in addition to 70 already planned to be furloughed in April and May), 820 IAM (ramp/passenger), 1,400 IBT represented FA's, 2000 AMFA AMT's, 125 AMFA cleaners, and 300 management.

UAL and CAL are also reducing capacity for April. CAL is releasing 1200 employees, including 125 pilots, 500 res, and 350 airport agents. No word on layoffs at UAL, but I suspect they're waiting for their contracts to be voided first...

That's not something made up for Jetwire, folks. That's reality outside the confines of AMR.

Force majure is a very messy thing to do, but not as messy as filing for bankruptcy. I don't think NWA will be alone in looking at using those clauses as a way to make serious changes outside of bankruptcy.
 

RV4

Veteran
Aug 20, 2002
1,885
80
www.usaviation.com
Sounds like others have sound business plans and make the tough decisions while AA toys with their labor groups and argue over the cost of man hours,

AA strategy still smells are appears to be only a ploy to me.
 

FA Mikey

Veteran
Aug 19, 2002
4,421
301
miami
goldwatermiller08.com
AA has done zero to increase the utilization of their crews. Nothing to improve the obviously broken fare structure. The strategy of survival rests squarely on the backs of the workers. We will have to subsidize rock bottom fares, disgusting waste of products, as well as poor crew utilization.
 

DB Cooper

Member
Aug 20, 2002
70
0
Seat 18C
www.usaviation.com
UA has indeed invoked force majeure. The are systematically closing their IND maintenance base by imposing unpaid temporary leave upon 1,100 mechanics. By invoking force majeure, UA has circumvented federal law requiring a 60 day advanced notice of a plant closure. The current mechanics contract has clauses that preclude the sale/closure of UA''s three maintenance bases at SFO, OAK and IND. UA is using the Iraqi invasion as a basis to invoke force majeure, and impose arbitrary changes that would ordinarily violate labor agreements. Although UA has filed a Sec. 1113 motion seeking BK court approval to abrogate CBA''s, UA is not waiting for the judge to rule upon their motion. Force majeure enables UA to impose changes immediately. Since the airlines have a "herd" mentality, it is likely the other network carriers will exploit FM to impose changes upon their employees also.
 

AAmech

Veteran
Aug 22, 2002
766
1
----------------
On 3/23/2003 5:31:54 AM RV4 wrote:


Sounds like others have sound business plans and make the tough decisions while AA toys with their labor groups and argue over the cost of man hours,

AA strategy still smells are appears to be only a ploy to me.

----------------​
Boy I think your way off here! Look around the industry and you''ll see that most airlines have done NOTHING but lay off some employees and drop a few routes. Other than that there''s been very little change in their operation. Heck, CO just announced they would close their CTO''s! AA made that move Sept/01! A year and a half ago! Have you forgotten about de-peaking the hubs? That was a daring move that other airlines are scared to death to try! AA had the largest reduction in costs year-over-year than any other airline! By Far too! Most other airlines stayed about the same.
 

WXGuesser

Advanced
Aug 20, 2002
234
0
www.usaviation.com
----------------
On 3/24/2003 12:30:46 AM DB Cooper wrote:

UA has indeed invoked force majeure. The are systematically closing their IND maintenance base by imposing unpaid temporary leave upon 1,100 mechanics. By invoking force majeure, UA has circumvented federal law requiring a 60 day advanced notice of a plant closure. The current mechanics contract has clauses that preclude the sale/closure of UA's three maintenance bases at SFO, OAK and IND. UA is using the Iraqi invasion as a basis to invoke force majeure, and impose arbitrary changes that would ordinarily violate labor agreements. Although UA has filed a Sec. 1113 motion seeking BK court approval to abrogate CBA's, UA is not waiting for the judge to rule upon their motion. Force majeure enables UA to impose changes immediately. Since the airlines have a "herd" mentality, it is likely the other network carriers will exploit FM to impose changes upon their employees also.

----------------​


Gee, really?

AMR would never do that... naw, not never in a million years..

{SARCASM!}

At least this time there is actually a "national war emergency" unlike the last time when they RIFfed people.

TANSTAAFL....
 

mga707

Veteran
Aug 19, 2002
1,330
2
----------------
On 3/24/2003 9:17:36 AM AAmech wrote:

----------------
On 3/23/2003 5:31:54 AM RV4 wrote:


Sounds like others have sound business plans and make the tough decisions while AA toys with their labor groups and argue over the cost of man hours,

AA strategy still smells are appears to be only a ploy to me.

----------------​
Boy I think your way off here! Look around the industry and you''ll see that most airlines have done NOTHING but lay off some employees and drop a few routes. Other than that there''s been very little change in their operation. Heck, CO just announced they would close their CTO''s! AA made that move Sept/01! A year and a half ago! Have you forgotten about de-peaking the hubs? That was a daring move that other airlines are scared to death to try! AA had the largest reduction in costs year-over-year than any other airline! By Far too! Most other airlines stayed about the same.

----------------​

Don''t put America West in that group. Probably because they had little to lose--they were teetering on oblivion--they launched a bold business fare simplification after 9/11. In some ways very similar to AA''s "Value Pricing" of a decade ago.
That, and the fact that they were the first to get a loan application in and approved, brought them back from the edge, or at least gave them a lot more breathing room.