LEE: No merger for American Airlines

FrequentFlierCA

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Feb 25, 2008
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Looks like not everyone is as enamored with this merger idea as AA's unions are. It's about time someone started pointing out the warts on this deal.

http://www.washingtontimes.com/news/2012/may/24/no-merger-for-american-airlines/

"US Airways‘ own history is a tumultuous one. In 2005, it announced a merger with America West. During the negotiations, the company claimed the deal would generate $600 million in revenues and integrate both airlines’ workforces. Instead, seven years later, the company’s operational labor groups remain divided along former lines and it has been unable to resolve disputes. According to US Airlines Pilots Association President Gary Hummel, “there have been very few tangible benefits for US Airways pilots as a result of the 2005 merger.”

Nor have customers benefitted from the previous US Airways merger. In fact, in the two years following the merger, US Airways finished last among the largest carriers in the number of customer complaints and reports of mishandled bags. Last year, almost a third of US Airways‘ flights arrived late, according to the Department of Transportation’s standards.

It may be a tough pill to swallow, but the only true remedy to American Airlines‘ problems is allowing the company to proceed through the restructuring process under bankruptcy protections. The carrier has not ruled out merger options after it has done so, but trying to coerce it into one now would be caustic not just for the airlines involved, but for the entire industry. And in that case, travelers across the United States are the ones who stomach the true costs."
 
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His opinion is meaningless, but let him rant away.
I'm sure his holiday weekend BBQ at Hortons place will be great....
 
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The author of this editorial is Timothy H. Lee who is the vice president of legal and public affairs at the Center for Individual Freedom. If you look at their website they are a far right organization who do not take kindly to the American worker. This guy is not an analyst who knows the airline industry. His opinion is only what his organization stands for.
 
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And in that case, travelers across the United States are the ones who stomach the true costs."

As well they should, its a business. They "sell" a product.....Duhhhh....
 
FF, are you kidding? This has got to be one of the more lame objections to the merger that I've read.

Don't you love the "stay out of the process" crap that is the same regurgitated line that AMR got it's local DFW/OK politicians to mouth awhile back? Don't you love Conservative right wing politicians and opinion writers asking for the govermnent to stay involved (the BK courts) instead of private enterprise taking the issue private?

It's a scam to keep Horton and his lame crew in power with goverment enforced labor contracts, (like a totalitarian state), until he can collect and operate several other carriers with BA/IAG investment.
 
I'm against a merger. It's not a good deal. AA doesnt need US Airway, we are better w/o them.

Agree nitro, I haven't seen anything compelling to Title I and there is nothing about Title II in the very lacking 3 pg pdf they call term sheets with US Airways.
There is a lot of info missing and Delta would be a much better partner if the goal is to be the most successful airline.
 
i highly doubt the govt would allow delta to swallow aa buti do believe that dl wuld split aa up d take what they want then ditch the rest fo a fire sale if you will
 
From the Washington Times article written by Timothy H. Lee: "The carrier has not ruled out merger options after it has done so, but trying to coerce it into one now would be caustic not just for the airlines involved, but for the entire industry".
I would describe the bankruptcy process as caustic itself for creditors and employees. Both of which help determine the sucess of BK.
The WHorton Gang only cares about enriching themselves at the expense of creditors and employees. Why should anyone think their opinion of the proper time to merge is anything more than the preservation of their treasure?
 
Agree nitro, I haven't seen anything compelling to Title I and there is nothing about Title II in the very lacking 3 pg pdf they call term sheets with US Airways.
There is a lot of info missing and Delta would be a much better partner if the goal is to be the most successful airline.

Yes, and I'm sure a Non Union Delta would do wonders for your group in a merger. The US deal may not be great, but it's better than what AA can/will offer. You need to look at the "Big Picture" with the long term viabilty of the airline in the coming years. Without this merger, AA will shrink and fall even further behind DL & UA.
 
Bob Owens weighed in with his stock "AA has $4 billion in cash and won't share any of it with the workers" post:

Lee is obviously an man who knows nothing of the history of the Airline industry. When you can fly cheaper than drive, when the cab ride costs more than the airfare and get there 10 times faster and still claim that flyers are not reaping the rewards from all that has happened its obvious that you have unrealistic expectations. Workers have bourn the brunt of it. He cites labor costs at 28% as if its high, in fact its lower than its ever been. Worker productivity as a measure of revenue has more than doubled while wages are lower than they were ten years ago. The fact is, and Mr Leee didnt bother himself with such things, is that wages as a perecentage of expense are lower than they ever were.

AA filed for Bankruptcy with over $4 billion in cash and over 500 new airplanes on order-none of those orders have been cancelled. Its mechanics are the lowest paid in the industry yet AA is asking to cut their contract by nearly 60%, They are demanding these cuts not so they can survive but rather so they can earn around $3 billion a year in profits. This is nothing less than corporate greed at its worst. what would you think of an individual who used bankruptcy the same way that American Airlines is unsing it? plenty of cash yet they dont want to pay for the things they want
.
 
There is much more in his post than that. Run down the list and dispute some more of it if you would please.
The big picture is that the airlines are using bankruptcy laws to excess. This would be great if the overall benefit to our economy wasn't missing. Middle class jobs are being needlessly destroyed to enrich people who have no knowledge or interest of how to make a company profitable without robbing the people that built it. Geniuses they are.
Bad for AA, the industry, and the country in the long run.
 
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Agree nitro, I haven't seen anything compelling to Title I and there is nothing about Title II in the very lacking 3 pg pdf they call term sheets with US Airways.
There is a lot of info missing and Delta would be a much better partner if the goal is to be the most successful airline.
Your Joking right ? AA and it's employees would be toast if DL gets its hands on them . Pease tell me why AA would be better off with DL?