What now?
 

After the rejected TA and the judge's ruling, the American pilots should probably reconsider where they are. If any American pilot has not read the ruling they should read it today. From what I read the judge said:

• American went bankrupt because their network was too small and they did not have enough feed. This has caused a serious revenue problem as the high value customers are abandoning them. Part of the reorganization will be to increase code sharing and RJ flying to fix that (did you read that Mesabah? Your crew room lawyering is once again shown to be wrong)
• He does not care if the APA thinks that merging with US Airways is the best course of action, no merger has been agreed to
• The company's witnesses were more credible than the APA's
• Under Chapter 11, necessary changes do not mean the minimum to survive, it means enough changes to create a successful company
• The APA's theory of "convergence", or that other labor groups would eventually catch up to their costs is not a credible plan of reorganization
• Management does not have to lower their cost reduction targets to show good faith bargaining

The creditor's committee just spoke up also. Remember the current owners of the company, the stock holders are getting wiped out. The creditors are going to be the new owners. That is why they have a say about what goes on. This is what they said:

• We supported labor getting a claim (ownership stake) in the new AMR, but only if they added value through agreeing to a contract
• If the APA does not add any value with a rejection, they will get no ownership
• Each day that goes along, value is slipping out of the APA's hands

These are not my words, those are the words of the people who hold your fate in their hands.


The judge's ruling has basically shattered all of the forum ideas about how the APA would prevail. The last and most brain dead forum idea is that American needs them to sign a contract so badly, they will come crawling back to negotiate. This is the most ridiculous statement to date. They don't need you to have a deal, they are getting their own deal sewn up by the judge in about two weeks.


So you have two options:

1. Agree to a crappy contract that contains a substantial claim in the reorganized American. Just to reiterate, the 13% claim that the Delta pilots got from their bankruptcy netted out to $1,300,000,000. That's a lot of zeroes there.
2. Accept and even worse contract rejection and get no claim

Financially, there is no choice, Option 1 is the only way to go. Emotionally, if the American pilots feel the need to throw away money in order to make some statement to somebody somewhere, then you can make that choice.

There you have it, folks. alfa has told you exactly what's going on and what your choices are. It's official now.

Kind of difficult to run an airline without pilots, or ticked off ones for that matter. We shall see how things play out, but I am proud of them for standing up to incompetent management.

Ooooooo, I bet you guys are scared now!!!! So scary.

This is the typical mainline pilot look at things.... outsource more "feed" and all will be fine.

Are you aware that sometimes a 757 "feeds" an A330... or a MD88 feeds a 737?

What is "feed" ? By definition of 50% of the pilots in this country, it's an RJ pilot paycheck that can barely "feed" a family.... let's create more of those jobs in order to save American. That's the way.

Have to disagree with the squirrely little sports cars assessment and advice. This isn't Delta management we're dealing with, but instead a completely different ethical standard from them. First of all, the 13.5% claim is an undetermined amount and may be nowhere near the Delta figure. Secondly, it is AMR that gets to decide the form of compensation of that claim and many agree it would be stock, not cash. Even if cash, after being heavily taxed and divided over the life of what could easily be a decade long sentence of hell like the UAL pilots have lived with, it would add up for most pilots a very small monthy boost.

Since many pilots can expect a 100% pay cut via furlough and many others still drastic reductions in compensation as a result of downgrades due to massive outsourcing, the 13.5% claim is an example of a bad auto lease claiming no money down, but devistating on the details and on the back end. Other common references could be "sham", "con" and "sucker punch". No, I think it's safe to say while it would be better then not having one, the claim isn't worth the price being asked to pay for it.

I think most of us know that this BK is a sham and the game is hopelessly rigged against us. Therefore, I and many others expect Lane to abrogate in the very near future. As one management type claimed, it will indeed be "uncertainty and pain" and likely not just the pilots. But, sooner or later, this BK will run its course and it will transition to a different arena and a different game. THAT is likely when any changes will occur. IMO, once clear of BK and the pilots having been likely existing in a state of tyranny for many months, I think many will move on and attrition will escalate to a hundred to perhaps several hundred/month. May 2013 is the 18 month limit that AMR has to be clear of BK by and that will coincide perfectly with the dawn of a heavy summer flying requirement and potentially a concurrent high attrition rate similar to the level that force AMR to play their BK card months early in November 2011.

When those two situations collide, there's going to be a lot of deaf ears among those pilots still hanging around AA should sobbing, crying and begging be heard from other directions. The worse conditions get, I think the more will leave and it will be catch-22. What's happening now is simply more of kicking the can and limping along. Unfortunately, it will be the current creditors and future management and shareholders that will have this tossed in their lap and I don't think many of them realize it won't matter to pilots who have been abused to this degree how bad their pain is then.

I don't think many of them are really looking that far forward and realizing the downside of continuing, advocating or assisting in this level of attack on pilots that very shortly may really have little left to lose and are too old to take the punches anymore. At that point, whomever is in charge of what may likely be a madhouse will have to fork over some serious bucks to stop the bleeding. You'd think the creditors would be concerned about this, but perhaps they've been listening to the limping can kickers so long, they've stopped thinking ?

Just my .02 on this ever tightening graveyard spiral of a BK process and what could be an unforeseen, but likely aftermath.

T-Hawk, is that you?
Horton is calling you for his coffee!

This is from the judge's ruling (they are not contiguous paragraphs, just quotes):

The March 21 Proposal would allow American’s regional partners to fly aircraft with a maximum of 88 seats and a MTOW of 114,500 pounds. (AA Ex. 918). The maximum number of regional jets of 51 to 88 seats would be capped at the greater of 255 or 50% of the total number of mainline aircraft in use at the time. (AA Ex. 918; American’s APA Motion at 23 n.18). The maximum number of regional jets of 50 seats or less would remain at 110% of the narrow body aircraft flown at the mainline at the time. (AA Ex. 918). Additionally, the distinction between owned and non-owned commuter carriers would be eliminated—all would be operated as if owned. (AA Ex. 918). Based on current fleet size, the APA calculates that the March 21 Proposal would permit the Company to use 536 regional jets of up to 50 seats and 304 regional jets of 51 to 88 seats. (Eaton Decl. ¶ 25). The APA’s primary objection relates to the use of the larger regional jets.

The Court finds, therefore, that American has shown that the request in the March 21 Proposal is reasonable and necessary when compared to its network competitors.

This is a comparison between the TA the American pilots voted down and what there new working conditions will be if they let the judge rule:

https://dl.dropbox.com/u/39382899/Comparison.JPG

So you can yell at me all you want. I am just the weatherman, you can scream at me for telling you that it is raining, or you can go find an umbrella. If this fight is about RJ's the choice is pretty stark. The TA had terms much more favorable to the American pilots than the judges ruling will be. Read his decision, let me know how you think this will go.

Little children can hurl insults on this forum all day. Let me know how that works for you in the real world.

Another interesting sidenote was that the judge said that AMR decided to freeze, rather than terminate the pension plans, which will result in significant cost to the company. Additionally, he also said that the matter of pensions are not before the court. Draw your own conclusions about that. This ruling, and the one to come are only concerned with the pilots' contract, not the retirement plan.

Is that you Moak?

Yeah, we'll see about that. Let's see what a judge that's an expert at labor law has to say.

Hey are you dense? That is what the judge said. Don't blame me for what the judge said. Really, some of you guys are so childish.

Was supposed to be TIC but forgot the smiley thingy

So, Not only do you know everything there is to know about DAL pilots, but also AMR pilots now too?

Your arrogance continues to astound...

We know that the judge is likely to grant he company's request to abrogate the contracts. But do you think that AMR will get another contract with APA if they have 200 E-190 being flown by regionals while the other legacies are limited to CRJ 900 and E-175. How many guys do you think will stick around working down to FAR and a hit on pay(loss of work rules). APA is likely to be better off from the events in the last few weeks. I believe the judge has set a hearing for Sep 4, from there we are likely to see instructions from the judge. This is going to cost AMR another month or so at least. The longer this happens the shorter AA runs on pilots and the closer we get to those 777-300 getting on property and creating a training bubble as senior guys get fed up and walk away. 400 pilots in the fall created a mess last year, AMR has it fresh on their minds. Listen to what Eagle fly says, if AMR makes it bad enough that guys just leave AMR is stuck! they won't be able to get people on property fast enough.

A story is always better with pictures.

redacted... picture issue.

You raise an interesting premise. This is not flamebait, but rather a legitimate question. What makes you think the senior guys will be the ones to walk away? It is they that have the most to lose in that scenario. In the ruling, the judge stated that the average retirement is over $1 million. Average. That means some are worth more.. some less. It isn't hard to figure which ones are worth more. And as was also pointed out, the company offered.. to freeze, rather than terminate those pensions. So why would those senior guys walk away from that? Now if those pensions get terminated, you might have a point, but if there is still money in the bank.. why would they leave first of all, and second, where would they go?

Another question: Why is American running short on pilots? Is it due to temporary events like sick outs, or are guys quitting?


And if eagle's premise is valid.. not saying it is or isn't, and enough guys leave, my bet is that management would sell the remaining pieces to the highest bidder. His premise is that the pilots would force a fire sale, and ultimately a Chapter 7. All those 737 slots and the 777-300s you speak of are worth a lot of coin in that case, and the South America book is worth a small fortune. I get the burn it down feeling that is there, but all the forum bluster aside, what will be gained by going nuclear? Guys might feel better for a little while, but how long will that feeling last when you are looking to M R Rats for a job?

Again, the above is not intended in any way as flamebait. I am just trying to understand the thought processes that are going on.

FTB always nails it.Are you the FO running in ATL?You would make the council updates worth looking at.

Alfa,
How long is Horton going to be able to hide under the judge's skirt? Why get lock in a POS contract for years and years? Horton needs the pilots if he wants a successful restructuring. With DAL and UAL (soon to be public) coming to terms, why should APA settle for a LONG term contract significantly substandard to these. Do you think they should have authorized unlimited code-share and regional feed? APA didn't think so and I applaud them for this. I wouldn't want to vote my flying away either.

T,

My understanding is the PBGC was quick to tell AMR that they will not be able to just dump the pensions onto the taxpayers. I haven't looked it up myself but I was told that the % per ticket to fund AMR's frozen pension is less before bancruptcy than other carriers after bankruptcy.

Why would senior pilots lose anything if they leave? As long as they give proper notice they shouldn't lose anything correct? Or am completely bass ackwards?

TC

On a side note
 

It seems many of the experts the APA used did not earn their pay.

Under the medical benefits section the judge states that the APA expert received his cost savings figures from a software program. He didn't know how many people the software utilized or any other assumptions the software had programmed.

Page 62 of the judgement

TC

To be honest, it is you that sounds like the defensive little child. If you want to put out your OPINION on this issue, fine, but expect it to questioned by those directly involved in the situation. Now as far as your assertions above, YOU MISS THE REAL POINT ENTIRELY (but that's understandable considering you're in the stadium parking lot peeking through the fence instead of not only not in the stands, but not on the playing field) :cool:.

In regards to the TA scope provisions, THAT agreement allows presently approximately 375 RJ's and could include the E-190 as the term "comparable aircraft" is a contractually meaningless definition. In fact, a large percentage of the TA DID NOT EVEN HAVE FINAL CONTRACT LANGUAGE AT THE TIME OF VOTE DEADLINE, so in effect, much of the TA MEANT NOTHING (at least nothing defendable). Additionally, the codesharing provisions allow for other carriers to fly another 300 or so aircraft of ANY SIZE that would replace AA domestic flying. At that point the game is over anyway for most of the AA pilot group and it matters little whether its 79 or 88 seats as WITH the TA, AMR can place perhaps 700 aircraft into future service ranging from small RJ/turboprops, up to ANY size aircraft flying domestically. The TA was giving up virtually everything anyway and destroying any possible leverage for a decade (or more), so that coupled with the other provisions that put AA pilots SQUARELY at the bottom of the coming playing field in compensation and in fact, by a significant margin, made the decesion clear for most pilots. There was simply nothing to work with in the TA.

Your argument, while it MAY appear to have merit as TECHNICALLY the TA was better then the 1113, in reality it does NOT have merit as REALISTICALLY, the TA ensures it's all over for most AA pilots. BTW, considering the age of this pilot group, this TA would have been the LAST contract for the majority of pilots here and basically they'd be finishing their careers in the worst situation possible. As it stands now, there still is a potential future to be negotiated at some point that will likely provide much better then this garbage, sandbag TA. I must say I find it odd you're so emotionally aggressive regarding another pilot group that didn't see things the way you do and you seem to be taking it personally. I'm sorry most aren't buying your erronous advice. This leads me to suspicions you either have another motive (self-interest) or perhaps you are another poser pretending to be a pilot.

Just why ARE you so emotional about the AA pilots situation ? :confused:

AMR wanted that outcome for the pesnions. Initially, AMR stated the intention to terminate, but then the PBGC put leins on many South American assets (that are not protected in BK) and that leverage forced them to retreat to a freeze. The PBGC is something like 40-50 billion under water as it is and adding another 8 billion from AMR is a back-breaker, so Gothy did what he had to do.

"Leverage".........what a concept, eh ?

At any rate, once this BK is over and the PBGC doesn't have the ability to put leins on assets (loss of leverage) or have judges to influence, I'd expect AMR to terminate in the future as it saves money. That would fit perfectly with their M.O., IMO. BTW, when that happens, guess whose paychecks will likely be the place to find $$$ to make that up for the PBGC ?

Yep, the taxpayers (look for more $$$ skimmed from your paychecks in the future).

There's still several pathways for the ultimate resolution of this situation and really none of us can predict what pathway will result. Horton has claimed that a "merger decision" will be forthcoming within weeks which could be their rejection of anything while in BK, or IMO a deal with Parker for U or possibly a Jet Blue hook-up (maybe both ! ;)). I think Horton is feeling greater pressure from the creditors to not tip over the apple cart in this process if one of his motivations is maximum payout for himself (which IMO IS one of his motivations). AMR is HARD UP to abrogate to at least 1113 provisions and there may be many reasons for this;


- You'll note that through all of this AMR has YET to place a single RJ replacement/expenasion order, which indicates risk-averse financiers are reluctant to commit to sitting on a volcano at this time, under these circumstances. Considering aircraft delivery times and ramp-up hiring/training, you'd think they would have moved already if they could and they are antsy to begin their POR which hasn't happened yet.

- Perhaps they feel that the best deal to save face and demonstrate to all that THEY are in control of their labor (especially their pilots) is to return to the table as the one with perceived leverage with AA pilots operating under "uncertainty and pain" with no contract ?

- One pathway out is an agreement between Horton, Parker, the creditors and the judge for a U merger within BK, but that would guarantee a minimum payout (stock and bonuses, etc.) upon exit for Horton and his team along with a transition period that lets Horton manage the situation until some point in the future when Parker takes over. If they can technically proclaim a merger while still in BK, then the CLA that the APA inked with Parker becomes the offical CBA for AA pilots which would defuse the AA pilot contract situation until the reorganization is complete and BK is exited. That CLA has terms that are WELL below those that would be at Delta or United in the future and thus beancounters and cash-dispensers alike would be satisfied with that outcome and the ball could begin rolling for all concerned.

- Perhaps Horton will announce a hook-up with Jet Blue and then use SLI issues as leverage and a fear-stick against AA pilots to capitulate to a substandard CBA ?

* Yes, I know JB management has made certain statements of their lack of interest in hook-ups, but that would be exactly what should be said if there was something in the works as opposed to the opposite, so statements like these are meaningless. Isn't it odd how AA has relinquished the Carribean, Boston and to a lessor degree JFK to JB so easily ?

Why would they do that ?



At any rate, I think AMR is now telling the creditors that the pilot labor end-game is near and to be patient just a bit longer. Likely, on Sept. 4, it seems Lane will have the boxes checked to grant AMR's abrogation request and then after that, I expect them to sit down with the APA and make a move.

What move, is the $64,000 question. As far as AA flying off the rails in the interim, tI agree that it depends on what level they begin a TRUE assault on the pilots (up to now, it's been abstract and not reality). If pilots are now forced to work days off, reassigned with impunity, etc., and watching their paychecks collapse in the process (along with NO pension contributions) and even perhaps token terminations, then many pilots will simply choose fight or flight as their lives will simply become unmanageable. Personally, I can't comprehend a management that would create such a situation and have those affected out there operating aircraft, but at any rate, EITHER of those possibilities are bad for all parties and I think flight will be the most likely, thus my prediction of increasing and uncontrollable attrition. It won't be a labor statement, simply (mostly) older men in their 50's and even 60's simply not able to exist like that and rationalizing other options with their lives. 777's and 737's may quite quickly have to be parked as any hiring/training would take 3-4 months per pilot to replace pilots who gave 0-2 weeks notice of retirement/resignation. You can see how that could get out-of-hand quickly. As it stands now, AA is very short in most statuses, begging for pilots to fly premium on days off. The Holiday season will be approaching and that would be a bad time to lose 3-500 pilots on short-notice. A situation like that may be looked upon as evidence of the apple cart indeed beginning its roll.

For all concerned, it is hoped that whatever moves and plays are imminent over the next weeks and months that stability be maintained so as to maximize a viable path out of this mess. This BK is now at the point where things HAVE TO BEGIN TO HAPPEN. Personally, I give it 50/50. No copout there, just no idea which way this mess (and it IS a mess) will go.

This whole process is a sham and completely one-sided agianst labor. It is theoretically SUPPOSED to "ensure all are treated fairly", but clearly that isn't the reality. The legal stage is deliberatley set up to provide all the leverage to crush workers in this process, it simply becoming a game of a small percentage of players maximizing personal wealth by the TRANSFER OF WEALTH from labor to them. You'll note they declared bankruptcy with almost 5 billion in cash (1 billion of that they legally withheld from pension funding during the previous years) and so far in 9 months have added another billion after paying exhorbitant fees to multiple advisors.

You'll also note during this same 9 month period they have yet to institute a single, solitary labor cut and still they've made a billion in 9 months. You'd have to be a certifed idiot to not see what's really happening here. AA pilots see it and they are at least resisting it with every ability they have and not capitualting to every fable and story read to them designed to seize their money (past, present and future) as easily as possible like alfaromeo is advocating.

He also had it all figured out for the US Airways and United pilots too.

It is beyond arrogance but not in his mind.

He is afraid that the concessions that the AA pilots might be forced to take will under cut Delta and weaken his position in the future. Which is quite ironic, really.

If that's the case, I think he's looking at this situation backwards. The TA provisions would be more devistating over a ten-year or longer period to the interests of United or Delta pilots interests, whereas the "uncertainty and pain" of the 1113 is certain to have a much shorter shelf life.

Maybe it's like we stumbled on to the apc version of one of those carnival booths that guess your age and stuff? It's just a little different...

http://i938.photobucket.com/albums/a...d/TEMP1-55.png

Looks like the MIA reps may be replaced soon and a effort now is officially underway to boot the LAX reps. One ORD rep may soon need to be replaced because of LTD limits.

This could change the make-up of the BOD completely to more hard-core and make any future agreements more difficult to even get to the membership as it should be. Most agree that no more sub-standard agreements should get past the BOD as that was the message the membership sent with the ratification rejection.

If anything, it looks like things are going to become even more polarized as we get toward the holidays.

Here is my take on what's about to happen.

1. Lane allows AMR to dump the pilot contract. AMR in typical school yard bully fashion threatens us with nuclear war unless we approve a last ditch proposal.

2. APA membership rejects.

3. December exclusivity deadline looms with AMR management increasingly desperate.

4. A. Lane grants AMR motion to extend exclusivity for the full 18months, where all the stops are pulled to get us to agree to something so they can field a POR.
Or.
B. Lane terminates exclusivity and Parker is allowed to present a POR with APA on board with a CLA in place. A LCC takeover is then a real possibility.

AA claims to want to exit BK as an independent. APA knows that we cannot get a Delta style contract while in bankrupcy. Therefore, in my opinion, the idea is to try and hold out with the 1113 in place in the HOPE that AMR will be able to exit and then immediately enter in to section 6.
AA can't take delivery of the 787 without an agreement ( or so I'm told).. There are a lot of variables coming in to play that is granting us leverage we have never before had. If we do a serious gut check and hold the line I think there is some serious short term pain on the horizon with some long term gain around the corner.

Clear as mud?

I consider 1. highly likely. 2. would require another capitulation by the new APA president and BOD which would result in bedlam if any such NLBFO (New Last, Best Final Offer) was another sub-standard bill-of-goods devoid of final language and littered with gaping holes for abuse. At that point, the whole process might collapse while blanket recalls occurred and an entire new representational structure was rebuilt. That could take months.

At that point 3. would almost certainly come and go and then yes, the creditors would have to decide whether to stick with the limping can-kickers or try a new tack. At any rate, I think it prudent that the pilots should expect AMR to make good on their threats of uncertainty and pain. Most aboard should plan on no life for awhile and those junior should prepare for the possibility of no paycheck.

Personally, I wouldn't be surprised if they played the nuclear option of the threat of fragmentation should the pilots not capitulate to their demands. The concept of using terror and fear against the pilots has been in play and that may escalate. Nothing should surprise AA pilots at this point.

Agree with Eaglefly. Lane will not allow the contract to be abrogated. His strategy now will be to delay ruling so that AA/APA can give birth to Son of LBFO.

Lane is under pressure from the UCC to get a contract done.

I believe he absolutely will allow abrogation.

It is definitely within the realm of possibility. I am prepared for abrogation. The only reason I don't think he'll do it is because of what I read between the lines from his denial last week. Despite the spin from the company and industry experts, the judge denying abrogation based on those two things speaks VOLUMES, loud and clear: the judge does not want to abrogate, under pressure from the UCC.

Keep in mind this is JMO and will gladly admit if I'm wrong.

As stated in my previous post, I consider abrogation more likely then not. It allows AMR a much wider threat selection then without it, but in the interest of avoiding excessive conflict for the near future, Lane MIGHT admonsih both parties to not go overboard and behind the scenes I'll bet the creditors are as nervous as a long-tailed cat in a room full of rocking chairs. Regardless of what Lane says, I think how hot AA becomes depends on how high AMR turns the gas knob up. Actual existance under 1113 is uncharted territory for all, not just pilots. I just don't see a resolution as long as AMR clings to that LBFO and its "required" economics as a gauntlet and unless and until flexibility there happens, we're just kicking the can and limping along...........I don't think we all can do that forever as BK only lasts for so long.

I know I can do it for 8 months though or until furlough whichever occurs first. :D

I believe the contract will be abrogated as well, the question is what will be the limit on what AMR can get away with in terms of imposed conditions. Obviously, there are other laws governing that and the judge will be throwing out the RLA will his ruling. It's akin to a company filing bankruptcy and using it to pay its workers below minimum wage. The bankruptcy judge virtually has no limits on his power, however, it will be up to an appellate judge to determine what those limits are.

I would be getting outside council on this as well, I would not trust union attorney's, they have already bungled much of this case so far.

I almost want him to allow abrogation. Do it sooner rather than later vs. a prolonged teeth-pulling of fake negotiations where AMR continues to "kick the can" with the ultimate goal of seeing the APA cave to a grossly substandard deal. We gave it up in '03, and they're thinking, "they'll cave again. Scare them enough, they'll roll over."

So you are saying that the attorneys that the independent union has hired are not very good? I mean, there is no conflict of interest, those lawyers aren't working for anybody else.. ostensibly... and (in your words) they bungled the case) Hmmmmm THAT is very interesting. How do you know that the next attorneys will be any better? Maybe ALPA doesn't suck as bad as everybody thinks. Naaaaahh couldn't be THAT..