US Airways Snapback?
 

Anyone think this is going to happen?

The answer is.......................wha...........oh......... .I thought you said "US Airways snapped NECK ?".............well, the answer to that is yes, it's a certainty.

The answer to your question is "who knows" ?

Not until there is a change of control. There is no change of control with this clause in the East contract, thus there will be no partner at the dance for US Airways.

I thought Parker said recently that he had found a way around the change of control language and there would be no snap back with a merger.

What if Parker divested the east operation (to include all former U assets and employees) to a seperate company, then merge the west into AA and let the former U (east) go into chapter 7 liquidation and then take part in the purchase of desirable assets from the wreckage of the former U ?

Perhaps some similar plan. He's got to be thinking of ways to save this company in any way he can and he knows as long as the U pilots hold the company hostage it's ultimately finished.

He's going to have to get aggressive about neutering this situation as this cannot continue much longer. He should admit defeat and error, carve the cancer from AWA and act as necessary to save what's left.

So what exactly does Snap Back mean?? Besides the dirty little trick we used to play on girls shortly after they started wearing bras? Sorry for the ignorance here. There is a whole vocabulary I was not aware of before coming to the airline industry.

Snapback means that the concessions that were agreed to by the pilots lapse and the wages and (sometimes) the workrules revert to what they were before the concessions.

Almost all post 911 concessionary contract amendments (LOAs) had snapback clauses. US Airways pilots did not, although the AFA (F/As) did have snapback language in their LOA. The East pilots got a 35 million dollar (split among the East pilots) payment in lieu of snapbacks.

So 35 million divided by 3000 pilots is a little more than 10 grand apiece. I'd say the company came out ahead on that deal.

If they took 35 million as a settlement, what is the basis of their claim to recind LOA 93?

At least two problems with this line of thinking that I can think of and probably more;

1. What part of the former AW is it exactly that would benefit AA? The Phoenix Hub? Doubtful, too much low cost competition from WN that would certainly eat AA's lunch. Access to Asia or at least a location with natural flow to Asia? Negative. A 100+ Airbii when AA is rebuilding around the Boeing? Not likely.

So, What?

2. AA competitor's, WN specifically but likely DL and AI as well would make AA pay dearly to pick up former US assets at "distress sale" prices in CH 7, presuming the whole maneuver of splitting the Company and then selling one-half while bankrupting the other would even be legally plausible, not too mention politically where the largest problem likely lies. No, even if a fairy tale dream came true and you could "do" this, then the cost of that Philly Hub and the DCA slots, etc. just got too potentially expensive to make this worth the risk to AA or anybody else. IMHO of course.

But, you are certainly correct that Mr. Doug Parker has to be doing a lot of thinking about what his next move is. The status quo is unsustainable despite management's proclamation that "all is well." Not for long it won't be.

I think AA is much better sitting back for now and seeing how things go...the UA/CO thing, although likely, is far from being done with the same lack of issues as DL/NW. There will be opportunities in the future and those with the most cash and stronger balance sheets are likely to benefit.

Good luck to my colleagues at U, sincerely, in the big scheme of things the sooner you get your act together and get unified the more likely you'll be around in 5 years. Again, IMHO.

-Smalls

Nah, look for Delta to buy the west operation and an appropriate amount of 319/320 aircraft. East side. don't know??