American Airlines Nears Bankruptcy (merged)
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American Airlines Nears Bankruptcy
From tomorrow's New York Times:
American Airlines Nears Bankruptcy
By MICHELINE MAYNARD and RIVA D. ATLAS
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.
American Airlines Nears Bankruptcy
By MICHELINE MAYNARD and RIVA D. ATLAS
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.
Ecce Homo! Loquitur...
AMR seeks bankruptcy funding.
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.
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.
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.
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.
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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.
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.
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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.
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.
Last edited by OneWorld22; 16th Mar 2003 at 13:56.
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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:
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:
Gatvol
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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.....
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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...
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...
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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...
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...
Gatvol
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FlyMD
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??
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??
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.
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.
Last edited by Ignition Override; 28th Mar 2003 at 09:49.
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Howard was...THE man.
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.
'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.
Join Date: Mar 2003
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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...
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...
AA nears bankruptcy
Join Date: Sep 2002
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AA Near Bankruptcy---Read it and Weep!
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)
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)
Last edited by B767300ER; 29th Mar 2003 at 00:56.
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"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.
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.
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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.
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.
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snootie...?
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.