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Old 07-07-2016 | 04:31 PM
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Originally Posted by NoFlaps
Don't forget to include American Airlines in your history lesson. The pilots said "we aint doin it, let the judge decide". Then when the downturn was over, they raised their hands and said "remember us?". Much shorter time of concessions than VOLUNTEERING to take massive concessions and LOCKING it in with a signed contract.
Yeah - Not very different at all. They just had a MUCH higher starting point than F9. And, if you tell the whole story - AMR pilots took voluntary concessions too, and were rewarded for their efforts to avoid BK with... wait for it.... BK! They took their voluntary cuts years prior to the AMR BK in order to keep their pensions longer and more fully than the other legacy carriers who took the 1113 route in BK around the same time.

From the WSJ April 2, 2003 AMR to Cut Pilot Force by 20%, But Maintain Current Schedule - WSJ AMR to Cut Pilot Force by 20%, But Maintain Current Schedule

"Tuesday, details emerged of the hefty employee concessions. The deals pre-empted an immediate bankruptcy filing by AMR; the timing was so close that a company official told the pilot union's board Monday afternoon that lawyers were minutes from a New York courthouse and a decision was needed right away. Under Chapter 11, American could have sought to void the contracts. As part of the voluntary deal, American's pilots will take a 23% pay cut on May 1. A year later the pay cut drops to 17%, off current wages. Also on May 1 of next year pilots will start receiving annual 1.5% raises each year over the life of the six-year contract, according to the Allied Pilots Association. In exchange, employees get stock options, a boost in profit-sharing payments, nearly all their pension benefits and a pledge from the company to do its best to avoid a bankruptcy-law filing.
With extensive productivity changes, American will shed 2,500 pilot jobs this year, including retirements. The airline already has more than 1,000 pilots on furlough, and the new layoffs will drop a pilot corps to 10,000 from about 13,500.
"If we did not agree to these concessions, it became quite obvious ... that a bankruptcy judge would dictate the terms to us, and the cuts would be even deeper," John Darrah, president of the APA, said in an e-mail to union members.
Pilots agreed to $660 million in concessions. Mechanics and other ground workers agreed to $620 million in cuts, and flight attendants agreed to $340 million in company savings. Management and nonunionized workers will see pay cut by $180 million. Chairman and Chief Executive Donald Carty said his salary will fall by 33% and he will forgo a bonus for the third-consecutive year.
"I am very pleased that the company was able to avoid filing Chapter 11, but I must prepare you for what lies ahead," John Ward, president of the Association of Professional Flight Attendants, told his members. The union hasn't yet released details to its members, but Mr. Ward told them, "There is no denying it, $340 million in annual concessions from our contract isn't pretty."



AMR had billions in the bank prior to sinking it into CapEx, crying poor mouth and filing a prepackaged bankruptcy (DIP in place and the like). Their saying "we aint doin it, let the judge decide" didn't come until their original cuts were disregarded, and BK was happening.
http://www.nytimes.com/2012/12/08/bu...ract.html?_r=0

To round out the history lesson compare and contrast what pushed each company into BK.

Frontier had terrible management (P.T.) who sank tons of cash into buying aircraft with the intention of doing a sale / lease back if they need the cash later. Turns out that nobody wants to lease aircraft, at a decent rate, to a financially troubled airline, and PT's "piggy bank" money could only be gotten to by selling the airplanes outright. The BK filing took less than a week, and didn't have financing in place. It was forced by First Data's decision to increase credit card hold back to 100%.

AMR's BK was tied up with a neat bow before it was dropped on their shareholders and employees. AMR's board did it because they could make more money by doing so, not because they were going out of business without it. Their pilots gave twice; once voluntarily and once during BK.
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