Letter to APA Pilots Opposing US Airways Merger
Dear APA Pilots Opposing US Airways Merger,
I appreciate your prudent concern towards the possible merger. This is a time that every American and US Airways pilot should be weighing the risks and merits of the proposed merger.
As you are aware, many third party investment advisors have considered the prospects of an American and US Airways Merger. The weight of their findings and how it would enhance the careers of American pilots has been staggering:
- AirlineFinancials.com - 20APR2012 - "American_and_US_Airways_ver_2.pdf" 788K (Attached)
- Rodman & Renshaw - 26JUL2012 - "LCC Stock Review - LLC Stock Review — Rodman July12.pdf" 360K (Attached)
- USAPA - Summer 2012 - "AMR & LCC Explained.pdf" 2186K (Attached)
- Boyd Group International - AMR Bankruptcy... - 1DEC2011 - "AMR Bankruptcy - Time For Reality -- Boyd Group.pdf" 425K (Attached)
This merger is unique in that American would be merging with the oldest pilot group in the United States. I offer you these statistics to consider:
- 915 or 18% of US Airways pilots are over age 60 at US Airways.
- 683 East pilots ≥ 60 years old
- 232 West pilots ≥ 60 years old
- A minimum of 1,200 pilots or 24% are expected to retire from US Airways in the next 5 years.
- ~1900 pilots or 37% will retire from US Airways in the next 7 years.
- ~8% of US Airways pilots were hired after 2008.
- American will see ~900 pilots retire in the next 5 years and ~1500 in the next 7.
- Two classes of 20 pilots will be hired a month at US Airways for the next 5 years—2,400 pilots
- Your AA Pilot Seniority Loss Chart grossly overlooks the above statistics and more:
- Loss of a senioity number does not capture the value of the current and future US Airways fleet.
- The Loss of Pilot Seniority Chart is ~2100 numbers in error by 2017 and ~3400 number off by 2019.
- Seniority Integration is at least 2 years away—your chart should recognize the 2012-2014 US Airways retirements of 630 pilots in its first data block.
- Looking down the road it becomes clear that mid to low seniority American pilots will benefit from the retirement of 6,397 pilots between 2019 and 2025.
The greater number of near-term US Airways retirements represent a short-term opportunity for American Pilots under a Date of Hire seniority scheme.
US Airways Fleet, aircraft deliveries and growth are also worth considering:
- Current US Airways Fleet:
- A330-300: 9, A330-200: 7, 767-200ER: 10, 757-200: 24, A321: 75, A320: 72, 737-400: 32, A319: 93, E190: 20
- US Airways has 5 A330-200 deliveries in 2013 and 3 A330-200 deliveries in 2014.
- Deliveries of 18 A350-800 and 4 A350-900 are scheduled to begin in 2017 and extend through 2019 Is this order is a overstated??? Did not US Airways cancel some of these orders?
- 16 A321 deliveries to replace retiring B737-400s in 2013; 30 A320 family aircraft scheduled to be delivered between 2014 and 2015
- CLT-London Heathrow (LHR) daily service on A330-200 aircraft to begin in March 2013
- CLT-Sao Paulo, Brazil (GRU) daily service on B767-200ER aircraft to begin in May 2013
- PHL-Shannon, Ireland (SNN) seasonal daily service on B757-200 aircraft to resume in May 2013 after a four year hiatus
- CLT-Sao Paulo, Brazil (GRU) daily service to begin in early 2013 with 767-200ER
- Route authority for additional daily service to GRU starting in 2015 was acquired from Delta in 2012.
I encourage you to realize that the United States and other western economies are in financial decline. Deceptive market metrics and inflationary monitory policies are effectively masking the lasting damage from the 2008 recession. I invite you to visit the website
shadowstats.com. Western economies will continue to decline. America will see increased taxation, austerity and slow GDP growth. No fundamental change has been made to the American economy since 2008. Survival of American as a preeminent airline necessitates consolidation for longterm survival.
Who is John Gault?
Is American suited to stand alone if Sabotage comes to America? Is American suited to weather another economic recession? How exposed would American be if a recession occurred during the merger?
American needs to be bigger in order to compete. Absent a merger, American otherwise may face a
"slow death" from Delta (and VA), United, Spirit, Southwest, foreign carriers and US Airways with its industry-lacking, but ultra competitive pilot contract. I implore you to imagine for a second how the addition of US Airways passenger feed would drive substantial upgaging and international growth. Analysts repeatedly state that merged American could support growth in Asia. What about Australia and Africa?
The possibility of AMR/LCC Seniority List Integration is at least two years away and would likely be implemented lastly after CBA. This timeline is currently being negotiated by APA and USAPA. A simple and conservative 3 year fence from date of SLI would preserve AA flying for 5 years from today. This would give the Unsecured Creditors Committee productivity sooner and allow American pilots to realize 1,200 or 24% of US Airways pilot retirements. Maybe American pilots will require a longer seniority fence? Further restrictions including protection of widebody flying should also be considered. However, I do concede the disadvantageous nature of a SLI that incorporates the Nicolai award to American pilots, but even still the benefits and of a merged American cannot be outweighed. American and US Airways pilots should embrace this merger as an opportunity with an open-minded spirit of cooperation and compromise.
A merger is bigger than any of us and we owe it to each other as pilots to collect all of the facts first before we decide whether or not to build the worlds biggest airline—American Airways.
Thank you for your consideration.