New Merger Rumor

[ord78]

Sorry about that - forgot to include the link to Bob Herbst's site:

http://www.airlinefinancials.com/airline_data_comparisons.html

There's one workgroup where US wages are not far behind AA's wages: mechanics and related. That looks to me like a testaement to just how worthless the TWU has been for AA's mechanics. US slashed the pay of all of its employees in its two bankruptcies (and HP years earlier in its Ch 11) yet the AA TWU-represented employees were not able to negotiate higher pay during the years of Section 6 negotiations (other than the failed TA, which had plenty of concessions to match its pay raises).

Great, thanks for the info and the link.

 

[FWAAA]

Have you compare the passenger service groups at US and AA pay benefits scope and work rules.

No, I didn't. Frankly, I couldn't care less how they compare. The fact is that AA's total wage and benefit expense is about $2.2 billion higher than it would be if AA enjoyed the pay scales, work rules and benefits of US Airways. Overall, US is a very low-wage, low benefit airline. And despite the very low wages and benefits, US barely scratched out a profit last year.

Given that the US pilots and FAs are unionized, and make thousands less, on average, than their average counterparts at AA, I doubt the US agents are any better off than AA's agents, but if you have stats to the contrary, feel free to post them.

 

[john john]

There's one workgroup where US wages are not far behind AA's wages: mechanics and related.

Scope is way better that what AA PSA have now among other things.but if you have stats to the contrary, feel free to post them.

 

[BoeingBoy]

Scope is way better that what AA PSA have now among other things.

But I bet you don't have a dollar figure for how much extra that "way better" scope costs per year.

Jim

 

[john john]

But I bet you don't have a dollar figure for how much extra that "way better" scope costs per year.

Jim

I couldn't care less

what FWAAA said

 

[robbedagain]

the profit sharing was probably a bit more than 350 each but remember fleet service and may be the mechanics (not sure about them thoguh) only group(s) that didnt receive any profit sharing at all. But we do have the IAM natl pension

 

[Buck]

the profit sharing was probably a bit more than 350 each but remember fleet service and may be the mechanics (not sure about them thoguh) only group(s) that didnt receive any profit sharing at all. But we do have the IAM natl pension

Is that in the AFL-CIO Reserve Fund?

 

[Buck]

http://www.chicagotribune.com/business/breaking/chi-ceo-says-american-not-opposed-to-merger-at-some-point-20120315,0,7935730.story

 

[WorldTraveler]

Everyone who continues to argue that AA and US would make good merger partners MUST read the data FWAAA linked. I know that not everyone can understand statistics but without understanding the statistics that are on these spreadsheets, it is impossible to argue that AA and US should merge.
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Focusing on just the second page of the 2010 airline summary page (which shows a number of actual and calculated statistics) makes it clear that US is neither a network carrier in the sense of AA, DL, and UA and it is also not a true low cost carrier.
Despite the fact that US management changed its stock symbol to LCC coming out of BK as an attempt to prove that it is a low cost carrier, the statistics show that it clearly is not. US people earn salaries (including benefits and profit sharing) at levels a fraction of other carriers yet the low wages and very commendable fuel economy numbers cannot generate profits on par with either smaller low fare carriers or smaller network carriers.
The statistics show that US, despite having an east coast rick network with strength in the largest markets in the country, does not generate revenues on par with the larger network carriers - or have the efficiency that the low fare carriers have to make their earnings go further.
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Anyone who realistically thinks that any network airline, AA included, is going to acquire US for any purpose other than to dismantle them clearly does not understand that US' business would sink another carrier unless dramatic changes were implemented very quickly.
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Whether it is by shareholders outside of BK or creditors inside of BK, there will a full scale examination of the financial aspects of any proposed mergers, and it takes very little examination to show that US simply cannot be combined with any other network or low fare carrier on any basis other than to be dismantled.
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And thinking that US will manage to convince creditors, banks, and investors while keeping the Whole Truth out of the picture is pure fantasy.
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Yes, Buck, AA may be forced to consider a merger at some point in order to satisfy their creditors but if that day comes, there will be no shortage of due diligence.

 

[Buck]

I just posted a very current link. Take it or leave it, I was not practicing any kind of attack on you.

 

[WorldTraveler]

I just posted a very current link. Take it or leave it, I was not practicing any kind of attack on you.

I'm not saying you are and I'm sorry if it sounded that way....
I am just saying that AA is now acknowledging that a merger may be necessary... they think it will be later rather than sooner and they do have several months before creditors will start to say that they expect some sort of plan to come together showing that AA is capable of competing again.... but that evidence does need to begin to become apparent.
.
The due diligence part is not targeted at you but simply to note that any merger esp. one involving an airline the size of AA will be gone over with an enormous amount of experts looking to validate that the business plan proposed under the merger is viable, esp. since the likelihood is that there will be more than one option on the table for AA should they start talking merger.
The reality remains that US will not just walk in and say they want to merge with AA, convince the creditors it is a done deal, and then walk out of court w/ AA's hand. There will be counterproposals and any merger partner will have to demonstrate to a very high standard that they can deliver the highest value to AA/AMR's creditors/shareholders depending on where AA is in the BK or emergence process.
Any business plan will have to demonstrate that AA will be capable of competing with its known competitors plus some margin of change that will happen in the industry.

 

[Buck]

AMR Chief Racing Against the Clock

Article Stock Quotes Comments MORE IN BUSINESS »

BY SUSAN CAREY AND JACK NICAS

CHICAGO—American Airlines parent AMR Corp. fears that an extended stay in bankruptcy-court protection heightens the risk of being taken over or broken up, Chief Executive Tom Horton said in an interview.

"Any of those things could happen," said Mr. Horton, a longtime AMR executive who took the top job the day the company filed for bankruptcy nearly four months ago. "Breakup the company, sell off the parts, a combination where someone acquires the company in a way that is not advantageous to our people." The CEO didn't rule out a deal once the company emerges from bankruptcy.

Mr. Horton said ...

 

[WorldTraveler]

...which is part of the threat that labor has to hold over the company... and mgmt can try to hold over labor as well.
Given that AA is now 4 months into BK and the fleet issues have not been settled and labor agreements are nowhere near, AA still has a long ways to go....
Horton may intend for AA to emerge before any deals are entertained, but the reality is that once AA gets the cutting behind them, they became very fair game for a takeover. If AA keeps somewhat to the timetable for how other airline BKs have progressed, the end of the exclusivity period for AA to propose a reorg plan and finalizing the biggest cuts will come about the same time.
Of course labor wants to push the cuts further out until it can see how it might fare under other scenarios....

 

[AA89]

http://www.chicagotribune.com/business/breaking/chi-ceo-says-american-not-opposed-to-merger-at-some-point-20120315,0,7935730.story

I like the part where Tom "Honey Badger" Horton states that they are looking at proposals for oursourcing airplane maintenance.
If my workgroup weren't the one affected I might think it's funny. First you announce that you are closing a maintenance base and laying off 4600 mechanics and you are just now gonna see how much you can get it done elswhere for?

Is this what he makes the big $$$$$ for?

 

[AANOTOK]

AMR Chief Racing Against the Clock

Article Stock Quotes Comments MORE IN BUSINESS »

BY SUSAN CAREY AND JACK NICAS

CHICAGO—American Airlines parent AMR Corp. fears that an extended stay in bankruptcy-court protection heightens the risk of being taken over or broken up, Chief Executive Tom Horton said in an interview.

"Any of those things could happen," said Mr. Horton, a longtime AMR executive who took the top job the day the company filed for bankruptcy nearly four months ago. "Breakup the company, sell off the parts, a combination where someone acquires the company in a way that is not advantageous to our people." The CEO didn't rule out a deal once the company emerges from bankruptcy.

Mr. Horton said ...

The picture is so much more clearer now.