Will AA declare bankruptcy?

Will AA declare bankruptcy?


  • Total voters
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Super FLUF

Senior
Jun 10, 2011
313
206
Well.....since the other thread was closed....

There are no less than a dozen bankruptcy related threads on page one of the pilot's message board. Opinions vary over the entire spectrum. Word leaking out that Ourpay & co. told the APA BOD they wanted a (concessionary) agreement in place that they (management) approve of by 10/1 or they would file BK and get what they want there.

Here is the latest blast.

Fellow pilots,

As your elected leaders, we are mindful that we face continued uncertainty in our economy in general and at American Airlines in particular. We’re seeing stock market volatility, high unemployment and sluggish economic growth. Meanwhile, AMR’s market capitalization—the value of outstanding shares of the company’s stock—has declined significantly, with some Wall Street analysts advocating court supervised restructuring as the best path for our airline. There is understandable concern about what our future may hold.

Your National Officers and Board of Directors have been focused on the steps necessary to keep the union and its membership well-prepared. Since taking office in July 2010, we have established the Industry Analysis Ad Hoc Committee and Contingency Committee charged with thoroughly researching the facts on airline economics, mergers, acquisitions and reorganization. We frequently consult with the union’s legal team and other outside advisers to arm ourselves—and our membership—with as much reliable information as possible.

Additionally, your National Officers are meeting regularly with senior management to ask the questions that need to be asked. We’ve had our own internal analysts as well as ALPA’s E&FA group providing real-time updates regarding the airline’s financial and operational performance. Based on our analysis, we do not see any current liquidity problem at AMR. In 2003, AMR had less than $1 billion in cash, versus more than $5 billion today. Of course, further economic downturn, fuel price spikes or other exogenous shocks could change the outlook fairly quickly, so we will continue watching the situation closely.

Uncertain times provide fertile breeding ground for rumors and speculation—much of it inaccurate. We believe you are much better served by factual information. As always, our primary goal is to protect our members and to that end, we ask that you stay informed and use the well-researched information APA provides—not emotion-driven rumors—as you weigh important career-related decisions in the coming days and months.

We encourage you to read everything issued by APA headquarters including the weekly News Digest. Also be sure to attend any domicile union meetings and Family Awareness gatherings.
Use the APA Pension Committee as a resource. We recently posted the pension update for September on alliedpilots.org. It contains valuable information—read it! Also, the current issue of Flightline features an article by Pension Committee Chairman First Officer Michael MacMurdy entitled, “What would a PBGC distress termination mean to me?” It is another must-read for all pilots, and addresses common questions and misconceptions heard on the line. E-mail [email protected] with any questions you have about your retirement benefits.

We will continue communicating with you frequently in the coming days and weeks as developments warrant. Our focus, once again, will be on information you can use.
 
Uncertain times provide fertile breeding ground for rumors and speculation—much of it inaccurate. We believe you are much better served by factual information. As always, our primary goal is to protect our members and to that end, we ask that you stay informed and use the well-researched information APA provides—not emotion-driven rumors—as you weigh important career-related decisions in the coming days and months.
Sure would be nice to have a union that does it's own research and educates its members.
 
They will file as soon as they believe there is no other way out and they are tired of losing revenue to other airlines.

from the article
"scant $1.1 billion in equity market value representing only 6 percent of adjusted enterprise value"... less than the value of JetBlue and half the value of Alaska, 20% of the value of DAL and UAL... even less compared to LUV.
 
Personally, I don't think it will happen unless creditors force a bankruptcy--which they can do. I can't imagine the world's largest collection of control freaks willingly giving up control of the company and its finances to a Federal judge--none of whom "see the big picture." They're worse than employees in that respect. :lol:
 
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Arpey's well-documented aversion to Ch 11 will keep AA out of bankruptcy court until the company runs low on cash or until the board removes Arpey and replaces him with someone less morally opposed to bankrupty. As others have pointed out, it's probably inevitable that AMR will eventually file unless the employees agree to modify their employment contracts to provide labor cost savings, either by further wage rate reductions or (more likely) increased productivity (primarily the APA and APFA).
 
Let them file! Who cares! They bluffed in 2003 and they're bluffing again. I will vote NO again like I did in 2003 for any reductions/concessions in our contract. We voted NO in 2003 and the worthless APFA allowed for an, "extra" 24 hours to change your vote. Gee... can we say paid off? I think so!

This company has tanked in multiple ways. Let this place fail and fade away into the sunset!
 
One things for sure SuperFluf,
AA is not going to file bankruptcy for the twu or the APFA, so how far off are you guys on pay vs. other airlines? And what about the scope, what do you need?
 
It will take a while. Within a year. They'll line up financing from British/Iberia or another source to create OneWorld Corp. But they'll use BK to get rid of the MD80s, ERJs, Eagle debt and some of the union scope. Don't be mistaken. Everything will be lined up before hand so they don't "lose control" to some judge.
 
One things for sure SuperFluf, AA is not going to file bankruptcy for the twu or the APFA, so how far off are you guys on pay vs. other airlines? And what about the scope, what do you need?

To put things in perspective, "DISCOUNT" airline Southwest pays their pilots about 30% more. So yes, we would need 30% immediately, just to match SWA. As you know, work groups usually try to leapfrog peers at other airlines to keep raising the bar. If we did that, now we are looking at a raise in the 35-40% range. Interesting that if we even got a 50% raise today, we would still be making less than the UAL and DAL pilots were making 11 years ago. (Time for the management shills to chime in and tell everyone that the sole cause of UAL and DAL going into BK was the pilot's contract)

At any rate, the biggest issue now is not pay, it is scope. What good is a pay raise if you are either furloughed or pushed back 10-20 years in career progression and earning potential. Furthermore, if you look at the personal losses from stagnation or sliding backwards in bid status(i.e. pilot stuck as F.O. not upgrading to Captain) the numbers are in the 100's of thousands.

Loosening of scope is extremely bad news for everyone else on property as well. More flying farmed out to other carriers through "code share" means less jobs needed all around. Less pilots, mechanics, flight attendants, ramp workers, CSAs etc.. This is the AA management wet dream - collect revenue for doing nothing. Slap the AA code on other airlines and collect money for them doing the work. All the while not having to tolerate the pesky labor brick scum.

It is obvious from what I have been hearing at the negotiating table that the issue of scope is managements biggest target as well. Their opener asked for MASSIVE outsourcing of flying to JetBlue, Alaska, USAirways, and other sundry regional airlines. Not only would the other larger airlines eat up mainline flying, but management wanted the right to have regionals fly much larger aircraft. In other words, you could kiss a ton of the current S-80 routes good bye.

As of right now, we are trying to recapture much of what we have lost in the past on scope. Obviously, management has other plans. One thing is for sure - we are not going to give an inch, and the APA board has told Ourpay, Horton, and Brundage this to their face. If management takes any scope gains, it will be done in an 1113c proceeding in bankruptcy court.

Best of luck to everyone.