It is risky, but I think the alternative of trying to mend decades of broken labor relations is even less likely to succeed. Horton is the hatchet man who will take the fall as the 'bad guy' by bringing AMR to its lowest point so that the white knight can ride in and save the day with an industry average contract that will seem extraordinary after a year or two of judge imposed labor terms.

AA onboard service hasnt been the best in the industry, to put it politely, and with the term sheet as a reality it will get marginally worse. Fortunately, AA doesnt rely on award winning smiles to get people onboard, it is the frequent flier perks and programs. As long as those stay intact (or grow, with a larger network offering) then the corporate contracts will stay where they are.

I wouldnt be surprised to see some sort of attractive buyout bundled with any merger attempt by USAirways. It would be in their best interest to clean out some of the more disgruntled employees, especially the frontline labor.