Maintaining a Cost Advantage Is Critical for US Airways

[BoeingBoy]

Whose corner is APA in?

Article

Jim

 

[AAviator]

Whose corner is APA in?

Article

Jim

HEY! Where did I hear "All hat no cattle" before?

 

[USA320Pilot]

Whose corner is APA in?

Article

Jim

That's a good question. Doug Parker has said he will not make a hostile merger attempt and APA has told the news media they "may be welcome to allow labor unions to negotiate with new management" in a merger scenario.

According to ATA SmartBrief, "US Airways is said to be briefing creditors of AMR Corp. on plans for a possible merger with American Airlines, sources say. US Airways would seek to create a merger plan before American's parent exits bankruptcy protection, a move that Allied Pilots Association spokesman Tom Hoban says may be welcome to allow labor unions to negotiate with new management."

Is APA posturing for less concessions or is AMR management very, very concerned they are losing control of the bankruptcy process and their jobs because creditor committee support is growing for a merger?

If AMR management was so certain they could independently restructure withour a merger than why speak to the news media about a hostile merger Doug Parker has publicly said he would not do?

Today's Bloomberg report and Hale's comments could indicate a desperate attempt by AMR to influence others to try to stop a deal.

Time will tell what will happen, but we know one thing. AMR management is doing a lot of public negotiating for a company that states it is certain it can provide a stronger return for its creditors than a corporate combination.

Hummm...

 

[USA320Pilot]

Breaking forum rules? Who's asking for peoples identity almost daily? Since when are you the rules police? I see they pulled your "Chips Corner" from you a few years ago.. Does that association entitle you to break the forum rules yourself??

Re: Tom Hobans statement.. Do you think it wise to explore/consider options when someone has a gun pointed to your head? Thats what BK brought us. You may not believe me, but Dave Bates is going to talk with anyone who has an offer that best suits the long term interests of the APA represented pilots. Do you think that maybe TPG, or IAG, or DAL may spend some time with the APA reps during this process?? Hmmmmm? But back to Tom Hoban, and your question.. Unlike your union, ours will publicly take a shot at management, beyond the "they won't negotiate with us" crying your union does. Yes Tom Hoban said that.. Was it an expression of desire to do something specifically with LCC? Ha ha ha ha.. In your dreams. (Tell me, do you honestly think he meant APA desires a deal with LCC?)

I do believe Bates has been to Tempe. I would expect him to go and listen to what can be of benefit to AA pilots. Its part of the process Chip. He will go and talk with DAL.. He will go and talk with TPG. He will go and talk with IAG.. He will go and talk with anyone else that come forward.. He (our seat on the UCC) may also vote in favor of our stand alone plan.. lets not put our cart before the horse here Chip, we all know you're all too familiar with how this works....

The question I have for you is, will you be able to handle that when the time comes?

Did I answer your question? Good.

Your turn.

I don't ask for names in public. When people break forum rules I ask for their indentity in a PM. You're the one using names and breaking the rules. I wonder why? Concerned about your bankruptcy and that your lifestyle about to change? I would be concerned too.

 

[BoeingBoy]

I would note the word "may" in the APA statements...nothing like a good rock solid maybe...

Jim

 

[USA320Pilot]

That's a good question. Doug Parker has said he will not make a hostile merger attempt and APA has told the news media they "may be welcome to allow labor unions to negotiate with new management" in a merger scenario.

According to ATA SmartBrief, "US Airways is said to be briefing creditors of AMR Corp. on plans for a possible merger with American Airlines, sources say. US Airways would seek to create a merger plan before American's parent exits bankruptcy protection, a move that Allied Pilots Association spokesman Tom Hoban says may be welcome to allow labor unions to negotiate with new management."

Is APA posturing for less concessions or is AMR management very, very concerned they are losing control of the bankruptcy process and their jobs because creditor committee support is growing for a merger?

If AMR management was so certain they could independently restructure withour a merger than why speak to the news media about a hostile merger Doug Parker has publicly said he would not do?

Today's Bloomberg report and Hale's comments could indicate a desperate attempt by AMR to influence others to try to stop a deal.

Time will tell what will happen, but we know one thing. AMR management is doing a lot of public negotiating for a company that states it is certain it can provide a stronger return for its creditors than a corporate combination.

Hummm...

I find it strange that AMR is talking so much to the news media about a merger. If a merger and acquisition by US Airways was not on the front burner than why talk at all? Where's AMR's confidence in its business plan if it has to repeatedly speak to the press about the merits of a stand-alone company? And, could AMR's negative comments about US Airways be more about fear, uncertainty, and doubt by the management team?

In addition, I doubt a Vice President for Flight has the authority to publicly make comments to the news media without approval from the company's "executive suite" and corporate communications.

Interesting news to chew on...

 

[Phoenix]

It is my understanding APA President Dave Bates and other AA union leaders have met with Doug Parker and AA’s unions are favorable towards a merger. Why? The combined US Airways and AA will generate profits that neither can independently.

A merger between the two companies could yield more than $1.5 billion per year in added revenue and cost savings, officials with US Airways are telling American’s creditors. That’s according to a report in the Wall Street Journal that cites people familiar with the situation.

According to ATA SmartBrief, "US Airways is said to be briefing creditors of AMR Corp. on plans for a possible merger with American Airlines, sources say. US Airways would seek to create a merger plan before American's parent exits bankruptcy protection, a move that Allied Pilots Association spokesman Tom Hoban says may be welcome to allow labor unions to negotiate with new management."

Click here to read the story.

According to Bloomberg, "The leverage pendulum has swung fairly decisively toward US Airways if the company should choose to come to AMR’s labor groups with alternatives to what’s probably going to be fairly draconian cuts,” said Wolfe Trahan’s Keay. “Creditors suddenly have a lot of leverage because of that conditional provision for exclusivity.”
Tom Hoban, a spokesman for the Allied Pilots Association, said that if the union couldn’t reach a consensual labor agreement with AMR as the carrier seeks to rework contracts, the group might be willing to work with new management brought in as the result of a merger.“We’ll consider all options on the table,” Hoban said.

Click here to read the story.

In my opinion, AA employees may have two options: Merger with US Airways and obtain industry leading contracts, which means less of a S.1113 haircut or remain independent and run the risk of fragmentation with bottom of the barrel contracts.

The dreaded haircut.............. Don't fear the scissors and clippers.. fear the barber that has lost his hair.

 

[USA320Pilot]

delete

 

[767one]

Breaking forum rules? Who's asking for peoples identity almost daily? Since when are you the rules police? I see they pulled your "Chips Corner" from you a few years ago.. Does that association entitle you to break the forum rules yourself??

Re: Tom Hobans statement.. Do you think it wise to explore/consider options when someone has a gun pointed to your head? Thats what BK brought us. You may not believe me, but Dave Bates is going to talk with anyone who has an offer that best suits the long term interests of the APA represented pilots. Do you think that maybe TPG, or IAG, or DAL may spend some time with the APA reps during this process?? Hmmmmm? But back to Tom Hoban, and your question.. Unlike your union, ours will publicly take a shot at management, beyond the "they won't negotiate with us" crying your union does. Yes Tom Hoban said that.. Was it an expression of desire to do something specifically with LCC? Ha ha ha ha.. In your dreams. (Tell me, do you honestly think he meant APA desires a deal with LCC?)

I do believe Bates has been to Tempe. I would expect him to go and listen to what can be of benefit to AA pilots. Its part of the process Chip. He will go and talk with DAL.. He will go and talk with TPG. He will go and talk with IAG.. He will go and talk with anyone else that come forward.. He (our seat on the UCC) may also vote in favor of our stand alone plan.. lets not put our cart before the horse here Chip, we all know you're all too familiar with how this works....

The question I have for you is, will you be able to handle that when the time comes?
Did I answer your question? Good.

Your turn.

Oh my gosh you said the C word. That got me sent to the cornfield for a bit.

 

[767one]

Depends on how you define "rational"..


Bean, could you direct me to where I get my LCC parking pass???? This is soooo in the bag, I might as well get measured for my LCC uniform! Why not?? I'm off until Thursday!!!

You won't get measured for a uniform at LCC. We have what is called "one size fits none". Whats a parking pass? Now you can enjoy your time off until thursday. I'm enjoying my time off....they bought my DUB trip just before my vacation and they bought the previous 4 trips. Only downside is that my Guiness low level light is on.

 

[Iclubbabyseals]

US Airways does not have the ability to pay the same wages as other airlines because of it's costs and position.

Wow. Truly insightful, in a mentally regressive manner.

In my business, if I took on greater debt, that would justify lower employee compensation? Did you just fall off a turnip truck? Did your mom just spit you out?

 

[Iclubbabyseals]

Only downside is that my Guiness low level light is on.

Totally with you. The only Guiness is one within the city limits. Don't know why.

A mystery, just like why they let USA320 here, a serial violator of the rules, but, here he is, hair plugs and all.

 

[BoeingBoy]

In addition, I doubt a Vice President for Flight has the authority to publicly make comments to the news media without approval from the company's "executive suite" and corporate communications.

Isn't it interesting that other than acknowledging hiring advisors to look at the potential of a merger (and repeatedly saying US doesn't need to merge), all the talk from US comes from "unnamed sources"....guess that means there's no substance there...

Jim

 

[Beancounter]

Wow. Truly insightful, in a mentally regressive manner.

In my business, if I took on greater debt, that would justify lower employee compensation? Did you just fall off a turnip truck? Did your mom just spit you out?

Boy, where do I start? Your name? Intelligence level? Maturity level? Integrity level? Let's face it, you're just not worth my time.

Bean

 

[flyingskier]

Bill Swelbar, a Research Engineer in MIT’s International Center for Air Transportation, where he is affiliated with the Global Airline Industry Program and Airline Industry Consortium said earlier this month, "Maintaining a Cost Advantage Is Critical for US Airways - US Airways suffers from a stage length adjusted unit revenue disadvantage versus its legacy carrier peers – even more than American. But it also enjoys a stage length adjusted unit cost advantage versus these rivals – much more than American. Despite the revenue generating deficiency of US Airways’ network, the Tempe-based airline is producing very good revenue results relative to the industry."

"US Airways’ revenue disadvantage is offset by maintaining its cost advantage – and most of that advantage is very low labor costs relative to the industry. As a result, US Airways’ pre-tax margins are impressive given its structural deficiencies. The cost advantage the carrier enjoys cannot be overstated nor can the company hide behind the fact a significant portion of its profit performance can be found in lower labor costs. By contrast, United and Continental are only now beginning to navigate what it might cost to buy labor peace, particularly among the pilot groups. US Airways has not explored what labor peace would cost, probably because maintaining the status quo is more cost effective. Or did the flight attendants say in their vote that what US Airways could afford was not sufficient to buy labor peace?," Swelbar noted.

Hummm???

AMR Executive Says Pilots Doubt Idea of US Airways Merger

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Skier