View Full Version : American Airlines Nears Bankruptcy (merged)

11th Mar 2003, 02:20
From tomorrow's New York Times:

American Airlines Nears Bankruptcy


American Airlines has begun seeking commitments for up to $2 billion in financing should it decide to seek bankruptcy protection, a banker briefed on the plans said yesterday. The head of the airline's flight attendants' union said a Chapter 11 filing could come in the near future.

The preliminary talks between the AMR Corporation, the parent of American, and lenders are focused on raising $1 billion to $2 billion in debtor-in-possession financing, the banker said. The financing would be led by Citigroup, which issues a credit card that has a mileage reward program with American, the banker said.

While the company continued meetings yesterday with its labor unions, from which it is seeking $1.8 billion in wage and benefit concessions to avoid a Chapter 11 filing, the discussions with lenders indicate that American is seriously preparing for that possibility. American, which is based in Fort Worth, has said it needs to cut $4 billion a year in operating costs to remain solvent. Executives have identified $2 billion a year in savings by reconfiguring routes, cutting salaried jobs and other streamlining but maintain the unions must contribute the rest.

The chief executive, Donald J. Carty, has stressed that he wants to work with the company's unions to resolve the situation without a bankruptcy filing. He met yesterday with the board of the Association of Professional Flight Attendants at the group's annual convention in Fort Worth to discuss the airline's situation.

On Friday, the president of the union, John Ward, told members in a message posted on the association's Web site that the union thought a bankruptcy filing "may be sooner rather than later."

Speculation about the chances of a filing has circulated in the industry for some time, but Mr. Ward's prediction contributed to a 14 percent decline yesterday in the shares of AMR, which closed at $2.41. They have fallen 92 percent over the last year.

An American bankruptcy would be the third Chapter 11 filing in less than a year by a major airline. US Airways, which filed for bankruptcy last summer, hopes to emerge by March 31. Meanwhile, United Airlines, part of UAL, has not yet completed a restructuring plan in its Chapter 11 filing, which was made in December.

Mr. Ward said leaders of the flight attendants' union would continue to meet with the company to discuss concessions. "This certainly is not a position we would choose to be in, however, the situation is what it is and an AMR bankruptcy filing would only make this difficult situation worse," Mr. Ward told union members.

Mr. Ward said he did not expect management to relent on its request for $340 million in concessions from the flight attendants. "We must, however, move quickly to protect our contract from a bankruptcy judge and AMR's creditors," he said.

A spokesman for the airline, Todd Burke, refused to comment on Mr. Ward's warning. But he said the company had repeatedly told its unions that "time is of the essence." American lost $3.2 billion in 2002 and ended the year with $2.7 billion in cash on hand, of which $775 million was restricted, meaning it has about $2 billion to run its day-to-day operations.

That should be enough for the airline to operate through the spring, when it must secure concessions from its employees or face a bankruptcy filing, said Morten Beyer, the founder of Morten Beyer & Agnew, an airline industry consulting firm based in Arlington, Va. Several analysts have said that American, with its broad route structure and international flights, would be particularly vulnerable to negative effects of a war with Iraq and that a prolonged conflict would increase the chances of a bankruptcy filing.

However, Mr. Beyer said American would be more appealing to potential lenders than United, which encountered difficulties in arranging $1.5 billion in debtor-in-possession financing last December.

Although American's unions have thus far resisted its bid for concessions, Mr. Beyer said the relationship between labor and management there was less strained than at United, where unions are actively seeking an outside investor in hopes of replacing the management team led by the chief executive of United, Glenn F. Tilton.

The role of Citigroup in arranging the financing for American is reminiscent of a loan arranged by Bank One for United when it sought protection from its creditors.

"The talks are still very informal," said the banker involved in the discussions. "American's management is still optimistic that it can restructure its debts out of court."

A spokesman for Citigroup, Daniel Noonan, declined to comment.
Citigroup's American Airlines credit card is "the single most successful credit card in the country in terms of the dollars it generates in spending," said David Robertson, publisher of the Nilson Report, which tracks the credit card industry. The American card accounts for about 3 percent of Citigroup's annual earnings per share, according to a report issued yesterday by Jon Balkind, a banking analyst for Fox-Pitt, Kelton.

Earlier this year, American retained Weil, Gotshal & Manges, which specializes in bankruptcy cases, for advice on a potential filing.

11th Mar 2003, 02:22
10 March:

DALLAS (Reuters) - The union representing flight attendants at American Airlines said it sees the world's largest carrier filing for bankruptcy "sooner rather than later."

Meanwhile, American Airlines has quietly begun talks on Wall Street seeking up to $2 billion in bankruptcy financing should a Chapter 11 filing become necessary, a source familiar with the matter said Monday.

"APFA has reason to believe that the timing for an AMR bankruptcy may be sooner rather than later," Association of Professional Flight Attendants President John Ward said, adding that his union plans to meet with airline management in order to hammer out a relief package for the carrier.

Shares of American Airlines parent company AMR Corp. (AMR: down $0.39 to $2.42, Research, Estimates) shed more than 13 percent by midafternoon on the New York Stock Exchange.

Ward said in a communication with union members over the weekend that it is in the best interest of the union to do everything possible to avoid an AMR bankruptcy.

"This certainly is not a position we would choose to be in. However, the situation is what it is and an AMR bankruptcy filing would only make this difficult situation worse," Ward said.

When contracted by CNNfn, American said "time is of the essence and [American] is committed to working with its union leaders and employee groups to quickly find mutually acceptable solutions to its situation."

A source told Reuters Monday that the airline already is trying to negotiate bankruptcy financing.

"They're starting out with a very high, unreasonable request to raise $2 billion," said the source, who declined to be identified.

A spokesman for American declined to comment on the talks, which are said to be taking place with a number of financial institutions.

Several sources said the talks are in the preliminary stages and would involve the usual range of lenders to large bankruptcy cases, including Citigroup, J.P. Morgan Chase, CIT Group and perhaps Boeing Co. Citibank offers a credit card linked to American's frequent flyer program.

Ray Neidl, airline analyst with Blaylock & Partners, said he doesn't believe that AMR searching for bankruptcy financing is a sign that a filing is imminent.

"I think they're just getting ready for the war," he said. "Absent any major, unexpected negative impact from the war, I think they've got until the summer until they're facing a filing. I think they want to give employee groups until then to come up with the necessary savings. It seems like they're making progress there."

Late last month credit rating agency Standard & Poor's downgraded AMR's debt further into junk bond status, but it said at that time that the airline was looking at a possible mid-year bankruptcy filing.

"The downgrade reflects continuing heavy losses and diminishing liquidity, with the potential for a voluntary bankruptcy filing by midyear if American is not able to negotiate significant concessions from its labor groups," S&P analyst Philip Baggaley said in a statement Feb. 28.

AMR posted a record $3.2 billion net loss in 2002 and has outlined a goal to cut $4 billion in annual costs to stay afloat. It has hired bankruptcy lawyers and a financial advisory firm, sources have told Reuters.

Ignition Override
11th Mar 2003, 03:28
Good luck to everyone in danger of being furloughed at American (especially so many, very senior, former TWA guys who already were, or could been cut), and also to the AM. EAGLE pilots, many of which could be kicked out, according to one of our astute MEC guys, who was at our Local Council meeting today. This guy is quite knowledgable about the industry and its factors. He suspects that Carty and the crew in charge of American might not need as much money in concessions as they claim.

On another topic, his info. about USAirways is that all of their CEO's personal stock value depends on a succesful exit from Chapter 11, and so he is intensely motivated to lead the airline into a recovery.

Supposedly Delta might be a bit healthier than AMR, having bought out no airline etc.

16th Mar 2003, 04:59
AA in ch.11? Could'nt happen to a nicer airline!

Now their employees are going to get the same treatment they forced down the TWA employees' throats. Expect massive furloughs of AA people with a real sense of entitlement, who think the world owes them a living.

What comes around, goes around.

16th Mar 2003, 11:52
AA really are in serious trouble, like United they positioned themselves as the Businessmans airline. When the economy's good that's fine, huge revenue that disguises for a while their high cost base. But when the economy contracts and companies start cutting out business class tickets, that's when it starts to crumble, meanwhile Southwest and JetBlue go from strength to strength. AA's year end numbers were still down 15% on 2000. The operating margin was -15.2%.

AA are losing half a billion dollars a quarter! No airline can survive that. I think you'll see a low cost AA wing sooner rather then later,
the CFO Jeff Campbell has refused to rule that out.
They're also in talks to buyers for it's AMR Investment arm which runs employee retirement assets and mutual funds, worth 140-190 million dollars.

It does look though as if the unions will agree to labour cost reductions.

Lou Scannon
16th Mar 2003, 12:47
A report in the British "Mail on Sunday" suggests that British Airways have been asked to help their "Unofficial partner" but have declined.

16th Mar 2003, 19:51
I agree with you all, but there is one point I would dispute: AA unions will only give concessions with a GUN to their head, or forcibly in bankruptcy court. They will never simply 'agree' to it. History of anomisity with management and all.

If I was BA, I would'nt give AA a PENNY. It would be like throwing it in an incinerator.

Here is the wave of the future:

17th Mar 2003, 01:57
B767300, my my lad drinking bitter tea are we. Why the hatred of AA? Do you work for them by chance, or more like it, did you used to work for them?

B Sousa
17th Mar 2003, 02:41
As a lowly piece of SLF I think this is a good thread to ask the question? IF AA and all the others are going broke. Why is it that everytime I fly, the planes are fully packed. Is it because I travel between major hubs. What are the other cities doing, are they empty.......Maybe I could find leg room on an AA flight that goes from some little unknown VFR abandoned Military Base which we now have plenty of (Thank You Bill Clinton). I can see it now, 14 stops between some place outside L.A. to someplace outside New York. Greyhound better start buying busses.....

17th Mar 2003, 03:33
To all:
767300er is bitter and twisted because he got furloughed first, being post-TWA-in-bankruptcy date of hire. He thinks he would have been better off if AA had never gotten involved with him, when actually the reverse is true. Many of the analysts feel that the purchase of TWA is one of the major debt-burdens and lease burdens dragging AA down. It was an extremely ill-advised move, for which someone in management will one day be held accountable - just not yet....

Meanwhile, 767300ggrrrr whines about his lot in life; grow up, matey....pathetic, see-through performance. TWA would have been the first under, long-ago, without AA's intervention. You blame AA for your woes - in actual fact it was your decision to join TWA when they were already in bankruptcy that has gotten you where you are. Why didn't you go to a then-successful carrier earlier? Why did you stay with them? Did you have applications in at other majors, hmmm? You were happy to start at the bottom if you'd been called for interview, no doubt. We're not getting the whole story, are we? I think you're applying to EK; if you are, you had better change your attitude - they'll not want a grumble-weed on the team...:mad:

17th Mar 2003, 07:29
B Sousa, your question is a valid one, but as already pointed out in this thread, the actual yield for the airline is dependent on the client segment you focus on... In short, it's so very easy to lose big money with full airplanes.
The perfect example is what happened to Swissair. A few years ago, Swissair's board made the "strategic" decision to start it's own alliance, instead of joining one, and to develop the Zurich "Hub" at all costs..
This meant 2 things: Firstly, you have to go "buy" the passenger all over Europe to make him transit at Zurich. To do this, you buy shares in a rag-tag collection of broke airlines all over the continent, and have them do 3 flights a day to Zurich. Then, to get the passenger, you sell him an intercontinental ticket from Zurich at the same price he would get one from anywhere else in Europe. 3 years ago, some bright guy at Swissair figured out that over 60% of all long-haul passengers on it's airplanes were actually "imported" from Warsaw, Brussels, Lisbon, etc..etc..
In actual fact, they were "funding" the long-haul segments with passengers by offering the connecting flight to Zurich free...
Secondly, you pay your regional carrier (Crossair) fixed fees to operate flights from small feeder airports, again to bring long-haul passengers to Zurich. For years, the legend had it that Crossair was a "money maker" led by it's smart and aggressive CEO.. In actual fact, Crossair was getting fixed "wet-lease" -type contracts from Swissair, making up 80% of Crossair's revenue, again to carry pax to Zurich to fill all those long-haul birds...
What finally brought the card-house down was neither the operating loss of Swissair, nor the even smaller operating loss of Crossair, but all those billions of debt the Swissair group had contracted buying those "deadbeat" airlines like Sabena, Air Littoral and the likes...
You can easily see the parralel here: to keep those shiny "luxury liners" full, AA had to keep buying market shares, burdening it's debt with a collection of other carriers that really had no intrinsic value.
So in the end, you can have full airplanes with load factors of 80% and more, and still lose a lot of money, just because you had to go "buy" all those passengers.
The reason why Southwest and the likes will survive the crunch is quite simply because they don't do stuff like that. Either they operate a segment themselves, or when they buy somebody else's airplanes, they make sure that the cost basis is similar to their own. Of course, they don't have to worry about the staggering costs of a long haul operation either...
Wonderful world of aviation...

B Sousa
17th Mar 2003, 15:27
Very Interesting for sure, but the routes that I use ARE AA routes as far as I know. Im talking major hubs such as Miami, Dallas, Las Vegas etc. Is it that the other folks are routed out of their way between their takeoff and arrival destinations or or is the airline losing money on other non popular routes that I would not normally take??

Ignition Override
18th Mar 2003, 03:42
B 767300ER's references to certain interesting ironies in AA's unfortunate situation are quite valid. Any one in his situation could feel at least a little bitter about it, whether or not it is expressed to total strangers. Whoever has a career which can never be endangered, may certainly "cast the first stone".

My only question is that, after years of having given what were about 40% cuts in pilot pay to help their airline survive Icahn's ruthless theft of TWA's vital operating cash (never mind his control of, and profits from his large chunk of TWA's ticket stock), just why is it that the TWA pilot group can often be somehow implicated in, or linked to TWA's failure, even by fellow pilots? Are rationalizations necessary in order to craft a case for any quite cold-hearted arbitration of seniority lists? Another major used the magic word "expectations" with the arbitrator (whose results came out after more than three years of quiet contemplation: maybe he received some juicy baksheesh along the way), to try to keep all of the widebodie$ for themselves, and staple all the other pilots to the bottom.

(With seniority-based pay, mergers would be much easier.)

So many of the thousands of US airline pilots who have never walked in the shoes of a TWA pilot or those in very similar circumstances, can never understand the harsh struggle and daily anxiety they went through over several very long years, just trying to preserve their (career) company against unlimited greed from a former owner and his staff of attorneys, who have absolutely no conscience. TWA's decline from its earlier status as a glamorous, well-run carrier can not in any way be blamed on the employees, many of whom were stuck (by seniority and a little pension funding) at the carrier. So many of them could not simply leave.

Now the shoe is on the other foot. Nobody should feel true "Schadenfreude" about it, but American's pilots might end up with similar paycuts, as the TWA pilots were forced for years to endure.

1) This can have quite an effect on Final Average Earnings, if this clause is in a contract.
2) Never mind our government PBGC granting exemptions to pension funding. This shocking situation is far from over.
Recent articles in "Airways" magazine by Line Check Airman Rick Drury (also author of "My Secret War") highlight attitudes of at least a few Pan Am and United pilots many years ago, who were reportedly quite arrogant towards pilots with other airlines, whether talking in a Dublin pub, or on an employee bus.

Nobody's airline career is ironclad. They claimed that the Titanic was unsinkable, and later, that a certain Imperial Navy presented no threat to our Pacific Fleet in 1941 := . Stay tuned.

18th Mar 2003, 06:30
Interesting to note that the common stock price of Trans World Airlines was at its zenith just prior to when Howard Hughes sold his majority shareholding.
'Twas all down hill from there.
For all his foibles, Howard absolutely knew how to run an airline and inspire people, especially the latter.
'Course, walking away with over five hundred million was not so difficult.:rolleyes:

18th Mar 2003, 07:44
B Sousa:
Yes, that's exactly my point: the airplanes are always full between the major hubs! But if for that you had to go buy the passenger by "offering" him his connecting flight, then asking where you lose the money, on the full or the half-full airplane, is a moot point, is it not?
Networking is a complicated thing, and I don't understand half of it, but there's some stuff that just have to set off the alarm bells...

18th Mar 2003, 18:32
Hey B767300ER,

How many EAL pilots got date-of-hire at TWA post Lorenzo?!

24th Mar 2003, 22:22
To ALL: RAAMJET (note the cute little "AA" inside his username) is one of those arrogant, and most certainly ignorant, pilot we all read about and know who thinks 1) they are GOD'S gift to aviation, 2) that simply because he is an AA pilot he is superior to every other pilot and 3) that the world owes HIM a living.

Ramjet---With or WITHOUT TWA, AA is headed for BANKRUPTCY. If you ever cared to educate yourself (maybe you can't read?) about airline economics, you'd notice AA has the HIGHEST costs (labor included) in the industry after UA/US (gee, wonder where they're headed?). AA is bleeding red ink so fast, they'll be in Chapter 11 by the 3rd week of this war, and it would not have mattered if AA bought TWA. AA has lost more money in the past 2 years ($5.1 BILLION) than TWA ever lost in it's 75-year HISTORY. But, just like all the other dork-brained AA employees, they think the TWA acquisition was the cause of their current problems. AA's maket capitalization is currently $300 million LESS than it paid for ALL of TWA ($750 million).

Very shortly, you and AA will be in bankruptcy, and won't have anyone to blame but yourselves. And quite possibly, you'll soon be in my furloughed shoes, eh? They say 3000 pilots will get chopped. No matter, I'm sure with your sense of superiority and obvious great skill you could take up that new job as an entertainer---by walking on water. I'm only human and can't do such things, but since you're the better being, maybe you could show me how. I've always admired you AA pilots and your great attention to details---like wearing a starched uniform with starched underwear so it looks like you're trying to carry a corncob without using your hands.

PS---The seniority integration is by no means permanent; wait and see, you could easily be my co-pilot soon. (Edited for discretion)

25th Mar 2003, 03:36
"Very shortly, you and AA will be in bankruptcy, and won't have anyone to blame but yourselves."

B767300ER, I take it you blame employees for the hard times at AA rather than the economy, 911, management, and now the war. Now you are apparently also bringing a safety issue into the fray.

I can't remember if it was you or not, but not too long ago another poster that appeared to be overwhelmed by events was on the attack. There are agencies that help folks such as yourself that obviously need help with dealing with your current situation. I believe if you can't afford it, there is no cost. Time to get help. Events can overwhelm all of us, it is how we deal with adversity that shows our real character. Good luck.

25th Mar 2003, 03:55
I'm not blaming the employees for the red ink, I'm blaming AA employees, their unions and their management for my furlough. There is no rebutting that, I'm out of work with 7 years service while new-hire, just-off probation AA new-hire pilots who were'nt even HIRED when AA announced they would buy TWA, keep their job.

But, since you brought it up, AA F/As and mechanics have industry-leading contracts, and the pilots have been negotiating for one. Labor costs number about 40% of AA's overall costs, and while other carriers not in bankruptcy (NWA,DL,CO) are taking pay cuts AND furloughing, AA is doing NEITHER. Only ex-TWA employees ave been getting laid-off and so far NO pay reductions at AA have occured. The airline will most certainly end up in bankruptcy court because, in part, the unions refuse to help the company save money by taking pay cuts---which are most CERTAINLY necessary to avoid bankruptcy. This is new ground for AA and its employees, because they've been running an inefficient, unproductive and obviously money-losing operation without understanding that temporary pay reductions are necessary to stem the tide of red ink. No worry; when AA goes bankrupt, the judge and management will dictate much larger cuts than they would have taken otherwise---most likely 30%. Plus, there will be more furloughs if Ch.11 comes than not. Thanks to the stumbling and bumbling of AA 'unions', more of their employees will lose their jobs in the end.

If it was'nt for the TWA purchase, AA would have furloughed 2000 pilots and 5000 F/As. But try and tell them that; they think the world owes them a living and that they're somehow 'entitled' to their jobs. When the bankruptcy court and creditors' committee finishes gutting their contract and reducing their numbers, their perspective will change. It might even resemble what ex-TWA employees have been dealing with for 2 years.

25th Mar 2003, 04:46
Have to agree with 767 on one point at least....nearly every AA pilot that I have personally met (active...and especially retired) have their collective beaks well above ground effect. Difficult times ahead for AA and doubt too many at other airlines will shead a tear.

25th Mar 2003, 13:14
411A, I have to disagree with you on this. Having flown all the majors over the years, I have found the flight crews, both cabin and cockpit to be friendly and professional. I have not flown as much recently as in the past, so maybe some attitudes have changed. I would guess that ones own personal attitude would have alot to do with what they perceive however.

As far as the employee causing a company to go into BK, I would disagree. Management has to be held to account for that. Just my opinion.

25th Mar 2003, 14:58

With all due respect for your situation, you are omitting a major fact.

With your claimed seniority of 7 years at TWA, it puts you amongst a group that went to work a carrier that had been in the dregs for years. This may not apply to you, but many TWA guys I ran into and knew were playing the seniority/buyout game. They knew TWA had many guys facing retirement and were banking on making Captain in 5 years. In fact, with the AA deal, if everything didn't hit the fan post 9/11, the STL FO's would have been upgrading into their fenced STL narrow-body Ca jobs many years before their fellow native American FO's at other bases. Unfortunately the world took another turn.

25th Mar 2003, 16:40
Actually, the upgrade was running 7-8 years. I had 7 years and was still about 450 numbers away (approximately 1.5 years) from Captain. Now, being furloughed, it is a far away pipe dream that will be realized by some pilot hired at AA 5 years after I was hired at TWA.

Since the AA buyout, everything that has occured to the former TWA employees has been BAD. Out of 21,500 TWA employees working when the merger was announced, less than 8000 are left, and that is dwindling. Very shortly, AA won't have any TWA workers left to buffer them from suffering the same effects that other workers at UA,US,NW,DL and others have suffered. Since AA is currently bleeding the most red ink and is presently the most inefficient and unproductive US airline, don't you think THEIR employees might suffer the same fate as other carrier's employees?

25th Mar 2003, 16:44
I thought it was pretty obvious what has been going wrong with airlines in the US, but I might be wrong. I know that an airline that is not efficiently run will go down the gurgler first, but surely you can see that the real reason for all this woe is the drop in passenger loads? A small drop of around 2 percent would cause the accountants grief, and the huge reductions all the airlines are facing, of at least 20 percent (UA says their loads are down almost 40 percent, even though they have dropped 20 percent of their flights) must surely be the major reason for the bankruptcies.
Adding to that would be the fare cutting in a desperate attempt to get back market share, which would effectively make the revenue loss even higher, and it is a wonder that any airline survives.
And why the drop off in passengers? In my opinion it is due to the fear factor (Last year was the safest for airline passengers for many many years but that gets hardly any press. Rather, the govt and the media do their best to frighten people unnecessarily) and also to the insane and continuing TSA hassles at the airports. I don't know what to blame more, but I think the TSA feeds off the fear in order to grow itself, and they seem determined to destroy aviation in order to protect it.
A little common sense would help all the airlines, and all of us who want to make a living in aviation. Without it, we all will have to find another job.

28th Mar 2003, 23:56

As an AA guy, I don't take any comfort in the fact the TWA guys are getting whacked first. We are way beyond losing some "excess weight", but are now losing vital organs. Right now we are like a 747-400 that has lost 3 engines at "gear up".

Again, my comments and your situation is based on what was set in stone by APA pre 9/11, and not afterwards for some "furlough fodder" agenda.

From my own situation, AA upgrades had virtually stopped by the summer of 2001. I was a bottom Captain with 11 years of seniority, and that only came with a junior Christmas day simcheck. If things had remained stagnant, MOST of the AA upgrades would have occurred in STL exclusively for TWA guys mainly due to almost 50% of the Captains retiring over a 3.5 year period. That "MOST LIKELY", (no guarantees), would have put 1996 TWA hires as 8 year STL Captains by mid 2004. At AA, Captain upgrades ,"MOST LIKELY", (no guarantees), probably would have hovered around the 10-12 year mark with TWA guys making it in 7-8. I doubt we would have heard much from your group if the WTC towers were still standing.

These numbers are still "ballpark" guesses. The point is that pre 9/11, your deal wasn't that bad for your seniority. consider also the lack of early 1990 TWA hiring. The last guy hired in 1990 might have made Captain during Xmas of 2001 at his 11year point, but if he passed along with 52 guys junior to him, then *Presto*!, a 1995 hire makes Captain in 6 years. The point is that this very possibly could have occurred for the TWA guys, it was very unlikely for the AA side.Seniority can have a funny effect on things sometimes.

I wish you the best.

29th Mar 2003, 00:50
Boofhead, you're absolutely right. The TSA will chase away more passengers in the US than terrorists will, and they really need to come to the UK/Europe and see how it's done RIGHT. Our government is too beaurocratic and won't listen to reason, only throw money at the problem.

Capt.Lizad, its a shame you lost your seat. I feel for you. My argument, and most of my LLC colleagues agree, is that TWA pilots/FAs/Agents have been the only ones suffering furloughs since 9-11, not AA's. Why should only ex-TWA employees take the ultimate loss for something that unfortunately happened at AA while we were bystanders? Seniority is a fleeting, strange thing, but it is the ONLY protection we'd have if something awful like 9-11 or recession hits. I understand your analogies about AA/LLC upgrades, with respect to STL-fence restrictions, but all that will be moot if AA goes ch.11 next week.

The final numbers, which could get very ugly, will most likely be 2-3000 pilot furloughs, and that will be a total of up to 4100 pilot lay-offs. Out of that, 1400 will be ex-TWA pilots (or 60% of our entire list/roster) and 2700 will be AA (or less than 24% of AA's list). The senior TWA pilot to be furloughed will be an '85 hire (a Captain), while the senior AA pilot to be furloughed will be a... '99 hire( a VERY junior F/O). That is what this horrible integration has done---destroyed careers of long-time, veteran jet pilots at a major airline in exchange for protecting new-hire, inexperienced and less-qualified AA pilots who were only recently hired.

That is our perspective, hope you understand its quite different from yours.

PS Is Rubin still sending you 10 HI6s per day?

29th Mar 2003, 01:08
Oh dear....

I think Boofhead's reply is very much on the mark- the populace of the USA is confused and concerned since the turn of the century....it's going to take a long time for the national self-confidence to return, and in that time all of the US economy is going to suffer. An unfortunate side-effect is the dragging down of the world economy with it (Osama may well have hurt his own people as hard as the US....)

Those who know me well would disagree will all of your assertions; I volunteer my time to run a large charity, I've flown for 2 other major carriers worldwide and the military; I'm used to not blaming anybody else for my situation. A long time ago, a senior Capt at one of those airlines said to me, "if you're not happy, don't upset those around you trying their hardest - go quietly somewhere else". I've followed those words ever since, and try never to let lose with rhetoric on the flt deck or in the bar. We make our own beds....and so it is, that even though I'm not likely to be furloughed at present, I'm thinking of moving on...
I've been disgusted at the public venting and vitriol of many of the pilots and management here in the US, and even more disgusted at the waffle and squabble on the flt decks - leading to complete un-professionalism that I have personally witnessed. All the while, the clock and cash flow were ticking... I have read many posts on this forum whereby people have vented off perceived past injustices instead of just getting on with it. Unfortunately the airline seniority system aggravates the perceptions - "...I can't afford to go anywhere else...I'm stuck with it, so I'll live in a world of bitterness...".

You seem very much to me to be one of those.... move on, and you'll never look back, moreover you'll feel that you're in control of your destiny, not a union or manager with a grudge. I feel that I very much hit a raw nerve with you - you still haven't answered my questions: did you have an app. in with other carriers? Why did you join TWA when they were bankrupt?

29th Mar 2003, 02:57
Raamjet, I NEVER applied with AA, if that answers your question. I never wanted to work for an airline that treats its employees so poorly, and had such awful labor-management relations. There were also other things I did'nt like about it.

What difference does it make why I applied with TWA? What if I had a relative who worked there and loved it? Truth is, DL and TW and US were on my list, as I'm from the south, and all 3 interviewed me. I did'nt want to go to US after being at TWA 2 years, which was probably a good move, and DL did'nt hire me. I was very happy to stay at TWA, but the pay would've obviously been less on average. However, working at a safe, reliable, on-time airline (with better benefits than AA) where everybody gets along and has fun can make you forget about higher pay. I was very happy flying 767-intn'l until AA bought us, and ever since, only bad things have happened, and I've been furloughed. Our employees have suffered for all of AA's problems, and it is'nt right. It also is'nt right for an AA new-hire pilot hired 3 months AFTER the TWA buyout to keep working, and for me to get furloughed with 7 years.

The chapter 11 filing we've been talking about could come soon, so get ready. Carty will take a hatchet to your contract, cut your pay by up to 30% and wipe out your benefits---including some retirement benefits possibly. All because the Al-Qaeda Pilots Association won't play ball and give concessions---which might save the airline from bankruptcy and CERTAINLY would save pilot jobs. TWU and APFA will give up, but APA won't; pretty ignorant and short-sighted of them, huh?

You think you've got a corner on the market with past jobs? I was miltary, corporate, flight instructed and flew for 6 airlines (including AA), and know all about low pay, furloughs, bankruptcies and other bumps in the road. I'm certain my total flight time and experience in large aircraft rivals (or betters) yours, so I'll say this: You're not better than me, even if you think so; you're just LUCKIER.


29th Mar 2003, 03:49

Your 2nd paragraph I agree with in its entirety, particularly the part about lower pay can make a happy airline seem fun....happiest bunch I ever flew for was a commuter in UK. Pay and conditions were non-existent. People just got on with it, and were rewarded with smiling faces getting off the a/c. Job well done.

Your 3rd para is actually a little off the mark; I think the APA will accede to cuts - the APFA may not, TWU's half-way there already.
Either way, a judge is going to be deciding things really soon, and that may be better-off for AA in the long-run, or it may not.

I am not claiming to have a corner on the hours market, not that total time is a reflection of anything at all (I could never understand the US carriers' obsession with flt hours and degrees in octopi-sciences, to the detriment of understanding passenger relations or even bothering to learn that ICAO even exists...), I was merely indicating that I am not one of the strait-out-the-military-where's-my-paycheck-I'm-owed-this backgrounds, and yes, I've met many in the APA. Nor do I claim to be astronaut material - where do you get that assumption from?

You started this blabber on page one by lumping all AA pilots into the same boat - do you happen to know all 13000 of them, perchance? Yes, I read your first post and took offence at someone criticizing me without ever having met me or understanding my opinions on a position taken by a Union; re-read what you wrote on page one. I think you'll find that most people would take offence at anon. attacks. I also do not gloat at anyone's misfortune, your's included. My point is to move on, and don't let this shambles burn you for your future flying career. Otherwise, you'll find it just rubs off in the pub on other people who've had equally unfortunate times and don't want to hear it. Critique all you will, but save the personal attacks on those you've never met or spoken to.

Cheers, as we say in Scotland...

29th Mar 2003, 04:21
RRAAMJET, It is a pleasure to read someone with their head screwed on right. Life is short, make the most of it. Life is not fair. Make the best of it you can. It seems you realized that long ago.

B767300ER, you keep saying how your 7 years of seniority in the airlines makes you more experienced or something to that affect. To any, is 7 years alot in the airlines or is it a little?

stator vane
29th Mar 2003, 04:46
i have a ticket on American from LHR to STL and back-April 5th to the 14th.

i hope they keep going across the water until i can get back here.

i've been through four airlines and though i never made near what American pilots do or did, i cannot hold it against them. we never get what we are worth, we only get what we can negotiate.

West Coast
29th Mar 2003, 05:40
7 years is enough to have a stake in the outcome, 7 years is enough to have a family and a mortgage. No matter how you cut it up, TWA guys got porked.

29th Mar 2003, 10:48
Thank you, WestCoast; you're comments are factual AND appreciated. I never had a sense of entitlement, or thought the world owed me a living---but some apparently do.

I believe the poster from Belgique meant LGW-STL, not LHR. We only fly to Gatwick out of STL.http://www.starmanauctions.com/twa.gif

30th Mar 2003, 22:43
7 years is enough to have a stake in the outcome, 7 years is enough to have a family and a mortgage. No matter how you cut it up, TWA guys got porked.

West Coast, Well I guess by that definition 1 year is enough to have a family and a mortgage and a stake in the outcome. Seniority is a funny thing. The best definition I personally have ever heard of seniority is that "NUMBER 1" is senior, everyone else is junior. Back in the late 60's and 70's 7 years of seniority would get you a standby posiiton as a flight engineer, barely hanging on by your toe nails. The new attitude of entitlement and me me me means I suppose that at 7 years you are entitled to a Heavy Jet position flying world wide routes if that is what "YOU" want. What a crazy business, it goes up and it goes down, seems to never stay stagnant. I don't believe it has ever been a reliable place to work except for a lucky few that happened to be born at the correct time in life for the current life cycle of the business and all the stars are in alignment. But that is just not in the airline business, it really applies to alot of industries. Crazy business though.

West Coast
31st Mar 2003, 07:12
You are factually correct, if your number one, your number one. I however am not comfortable placing the line as to who rates and who doesn't. Seven years back in the 60's doesn't mean the same as it does now, nor will it in the future.

1st Apr 2003, 01:58
AMR Reaches Tentative Deal
With All Three of Its Unions


AMR Corp.'s American Airlines reached tentative agreements with all three of its unions Monday, averting a bankruptcy filing.

People close to the situation said pilots, mechanics and flight attendants have all signed tentative agreements giving the company $1.8 billion in annual labor savings. The company set a mid-day Monday deadline, saying it would have to seek Chapter 11 bankruptcy protection if it couldn't reach deals.

The tentative agreements will still have to be ratified by union members over the next two weeks.

Details of the pilot and flight-attendant deals weren't yet available. American's mechanics tentatively agreed to a 17.5% pay cut, according to the Transport Workers Union, plus changes in work rules and reduction in benefits. Other divisions of the TWU, such as baggage handlers, agreed to 16% pay cuts and other changes in work rules and benefits.

In exchange for the concessions, the TWU will receive stock options or other equity in AMR.

Many people close to the situation had believed that in the end, unions would agree to the company's plan and put the concessions out for a vote by rank-and-file members. The alternative -- bankruptcy -- means contracts would be completely voided and rewritten, threatening pension benefits and deeper cuts than American has proposed.

Late Sunday night, the company gave its pilots' union a document outlining what AMR would ask for in a Section 1113 proceeding in bankruptcy court. Several pilots characterized it as worse for them than, or at least the same as, the tentative agreement UAL Corp.'s United Airlines has negotiated with its pilots while in bankruptcy. While some pilots saw the move by management as an escalation of company demands, others said AMR management seemed to be trying to pressure them to take the company's offer, rather than the more painful bankruptcy routing.

A spokesman for American said the company hadn't increased its demand of $660 million in concessions from the pilots.

American has asked its mechanics and ground workers for $620 million in concessions. Seven of the eight divisions of that union have agreed, though the mechanics, who number 16,200, have yet to sign a tentative agreement. Flight attendants, who have been asked to give up $340 million in permanent, annual payroll costs, also haven't concluded a deal.

The company also is negotiating concessions with its creditors and vendors, such as aircraft-leasing companies. Many leasing companies have agreed to reduced rates, contingent on American's securing concessions from its labor unions. Should AMR file for bankruptcy, the airline would continue to maintain its flight schedules and frequent-flier programs.

People close to the situation said that if American wins cost cuts from both unions and creditors, it won't face immediate pressure for bankruptcy protection. A steep drop in travel because of a terrorist attack or prolonged war in Iraq could change that, as could a sharp, sustained increase in fuel prices.

American, which found itself badly weakened by a one-two punch of a depressed business-travel economy and the 2001 terrorist attacks, has already cut about $2 billion a year in operating expenses. The carrier simplified its fleet, rescheduled hub airports for more efficiency and slashed spending on everything from onboard food to ticket jackets. The company has said that if it can shed close to $4 billion in annual costs, American can be an efficient, competitive airline capable of rivaling low-cost carriers and maintaining its global reach.

Updated March 31, 2003 1:45 p.m.

1st Apr 2003, 02:25
'Averting a bankruptcy filing' FOR NOW.

We'll see how long this war lasts.