How is the AA BK different from the others?
 

I need some good, objective opinions on this question. As you all know, it is nothing but doom and gloom over here regarding what's headed our way. I have always been one of the VERY few optimistic ones that think AMR will turn around and prosper into a world class airline within a few years.

OK, please give it to me straight:

1. USAir, UAL, DAL, NWA pilots: Was it pure doom and gloom when you guys got issued the initial 1113 term sheet?

2. Were your initial 1113 term sheets as bad as ours? Especially Scope: as I recall, every airline BK term sheet had massive scope concessions, but out of all of them, only UAL furloughed (737 fleet parked): everyone else recouped and started hiring again or are now hiring. How is it that Delta pilots got massive Scope concessions in BK and yet started hiring again shortly after??

3. Was there a massive rush for the door when you guys first read the term sheet?

I'll tell you: there are an amazing amount of AA pilots that want out: just look at the China job fair in MIA last week. TONS of guys are burned out and want nothing more to do with AMR. Guys here are convinced that AMR is done, will be sold off in pieces. But my question is, why? How is our BK different than anyone else's in the past? UAL did not get sold off. USAir did not... NWA merged with Delta. Why would AMR get sold off? Why wouldn't AMR exit BK like everyone else and start being profitable again like everyone else? Start hiring again and growing like everyone else?

I guess the jist of my question is:

1.How and why are we so drastically different than everyone else that went through?

2. People are saying that if AMR's scope concessions go through, it will be the end of AA domestic and they will only be an Int'l carrier. But how come United, USAir, Delta, etc also got HUGE scope concessions but look at their domestic today - it's still there! None of them ended up as Int'l carriers only.

Serious and objective answers are appreciated!
Thanks,
73

1. Yes.
2. Yes
3. After BK was filed, to the best of my recollection, it was too late to punt and get any of the bennies of early retirement. I am sure that sailing can correct my memory on that. From what I understand though, you have more of your retirement in your name than we did at DAL, so a rush for the door might be more doable there vice what we had at DAL. In our case though, most of the guys that left were going within a couple of years anyway.

I think that one thing that is different, and I am not sure of the specifics, but requirements for emergence are different. That is why DAL and NWA went when they did. As far as being sold off.. it is all RUMOR and SPECULATION. None of it means anything until you read it in the WS Journal...

As to number 2 in the "jist" section: This is just my opinion, but if AMR were to become an international carrier only (assuming that Eagle is NOT part of the equation), they won't last long as a stand alone even after BK. Look no further than what happened to Pan Am. An international carrier with no domestic feed is doomed. I don't mean to be scary in this regard, because what I am trying to say is that I think that rumor is bunk. Now... if AMR wants to make Eagle the majority of the domestic operation, and can get the scope "concessions" to do so, then that might be a distinct possibility. That is a bit disconcerting to me because of the downstream affect it can have in the rest of the industry.

Keep your chin up, BK sucks, because we are all control freaks, and what little control we DO have is gone. Maybe it is all just an illusion anyway..

1. It's NOT that radically different. BK laws have changed, but I don't think it changes the outcome that much. Banking laws (Dodd/Frank) changes things quite a bit, along with the fact that lenders are much more cautious. However, BO, if he's still in office, is not interested in an airline of AMRs size liquidating. It would be devistating to his political capital. AMR has LOTS of political capital. If you look at where their major hubs are, and how much AMR has "funded" the politicos in those hubs. AMR had one the largest legal and lobbying departments in the industry. Having said that, Wall Street and the major banks aren't going to fund a major bailout unless big changes are made, and I think this includes more consolidation. Which leads me to ...

2. I'm often wrong about my predictions of this industry, but I think there will be a partial liquidation of AMR. Some assets will be aquired by other carriers, and there might be a merger (or two) in the offing. I don't that major scope concessions are necessary unless other economic concessions don't happen. I think Eagle is most likely history, but if APA wants to keep pay, retirement, and workrules they might give on scope, saving Eagle, but resulting in deeper furloughs.

Unfortunately, but realistically, there are as many different motives at AMR as there are employees. Older employees are worried about different things than younger. Likewise, senior vs. junior. You get my drift. I hope and pray that all have a plan B (or C) to fall back on. I was prepared for ATA to furlough me, but I was not foreseeing it liquidate. I didn't think anyone was that stupid to let it disappear. It's coming up on four years, and financially we haven't recovered. Prepare for the worst, but expect it to be exponentially worse.

Good luck.

Thanks Hal and T square.

I quoted this part because I'm wondering if you Delta guys ever got the feeling that Delta wanted to run the entire Domestic operation with Delta Connection as AMR is hinting with Eagle?

No, I never did. that being said though, AMR (corporation) has what seemed to an outsider to be a different relationship with Eagle than DAL management did with CMR or ASA.. at least until they bought them. DAL management learned that they could whipsaw the RJ carriers against each other when they are NOT part of the corporation, vice what they can do as a wholly owned subsidiary. It always seemed to me that we should have figured a way to get CMR on the seniority list, and we would have owned that flying (eventually) but management decided to cut their losses and divest them. AMR management has taken a decidedly different tack by keeping Eagle and whipsawing you two against each other. But a question for you as I have not studied the term sheets; Are they really trying to get the A319s at Eagle?

Being at both OH and eagle, I can tell you the relationship between the mainline and wholly owned are 180 of each other. When I jump seat on DL now a days I still don't bring up OH, it just makes the flight to quiet.

PM sent to you sir.

TEN

1. Yes, major Doom and Gloom, some bought it hook line and sinker and were ready to give away...everyting! Others (myself included) figured it was a 'negotiating tactic' to extract maximum concessions "Or DELTA WILL DIE!" Right, sure it will...

2. When I read your 1113 term sheat, I was surprised, it is MUCH better than what Delta threw at us. In fact, yours today is about what we finally ended up with, after about a year of 'negotiating'.

3. Delta's massive rush to the door came in the 12 months prior to our filing bankruptcy, because of our Defined Benefit, 50% lump sum payout option.

A lot of guys had over a $3 Million in total DB coming their way, and they knew, based on the history of Eastern and US Air, CAL, UAL, etc. that if they waited too long and Delta filed, it would all be gone. So to get half of their DB, they retired early, taking the 50% lump. But once Delta filed, that option was gone, so nobody left -after- they filed, they all left just before.

There were a few guys who figured out that if they got a Divorce first, and in the settlement, they gave their 50% lump to their Ex-Wife, they could also keep their jobs, and guess what, they could even buy a condo in Florida, live there, and 'visit' the wife back in their old home! Win Win!

One guy got caught when he remarried his ex wife, so he wouldn't have to pay for her medical coverage, he was fired. I read somewhere recently that a CAL pilot pulled the same stunt but got away with it, after it went ot court. Maybe some of the CAL guys can give the details.

AA's bankruptcy is no different than the others, except they are late to the party, so they get to dance with the fat chicks. All the pretty airlines have merged, so there ain't much left to choose from.

The one thing for certain, nobody on Wall Street cares what the AA Pilots think, and no amount of AA Pilot concessions can save the airline if Management has other ideas, ie. merger, or chop-shop. It's not all about the Pilots. Management is going to screw everyone. They are going to dump the leases in St. Louis, they got with TWA, they are going to 'restructure' all their debt. Screwing the Pilots is just icing on the cake, but you are not the only target here. So keep your chin up, go to work, fly safe, don't become a statistic because you will be distracted when talking about all this crap in the cockpit, no doubt.

I have a lot of very good friends flying for AA, I wish you all the best.

Agree 100% with the above. AA just seems to be a day late and a dollar (or, several billion dollars) short on everything. I can't think of one successful timely strategic move they've made in the past decade. Lots of bad ones and lots of late ones, though.

I appreciate you're attempts to stay positive, AA73. Must be difficult out on the line these days.

Good luck to everyone.

Thanks Timbo, Mink, Ten and others who have responded.

Mink, actually it is very easy to stay positive on the line: I go to work with a smile on my face always aiming to have fun on the trip. And I do. Believe me, it spreads easily. But then again, I still greatly enjoy my job, taking the (not so shiny anymore!) jet flying on a 2 or 3 day trip.

Keep the replies coming if you can (UAL, USAir pilots, etc.)!

While you've gotten some good answers above, a couple stand out to me as inaccurate. Timbo stated:

He's wrong. Some examples:

Your term sheet and Delta's 1113C proposal were remarkably similar. Pre-merger Delta opened for 200 79 seat jets (previous 70 seat jet limit), your guys opened for 255 88 seat jets. In our case, management got 15 76 seat jets with a growth to 30 based on mainline fleet.

The disability and sick plans proposed by the two companies are similar, with yours having the "managed care" piece. We kept the definition of disabled as unable to exercise a first class medical. Your management wants Social Security definition (unable to do any work in any field). Sick got a rolling 300 hours over 3 years at full pay (our bank recharges but does not roll over to 240 annual hours every June 1 if you've been here 9 years) with the rest at 75%. Your guys want 36 hours or two occurences at full pay, then 60% after that.

Both companies basically proposed FARs for work rules and no rigs. We kept almost all of our rigs and rules.

On this I agree with Timbo.

The biggest difference I see not discussed for AMR is the change in the financial climate. DAL, LCC, UAL, and NWA all had ready access to the credit markets. Now, not so much. While AMR doesn't plan for DIP financing, I'm sure the current oil markets aren't making their business plan any easier. You guys lost over $1 billion real dollars last year. Also, PBGC has learned alot from UAL and DAL pension terminations. They're being way more aggressive with your management and the $4 billion in cash that AMR has.

Bankruptcy is no fun. Good luck.

Well unless you are a certain toolbag that ran the MEC there, I would have no problem talking to you. I know that most of the guys that work there are just trying to pad logbooks and get to a major. Sad that we treat our fellows like that...

The reason it seems worse for you is that is now happening to you. At UA we took huge hits to every aspect of our career.
You will make it through this, hopefully with your pension somewhat preserved. The PBGC is not willing to take you pension over as willingly as ours.
The worst news you hear won't come true. The best news you hear won't come true.

I was amazed your 1113 sheet had RAISES (although tiny), but no pay cuts.

China Lures U.S. Pilots Tired of 14-Year Wait for Captain

Interesting article, perhaps what most already know, but combined with age 65 it will be interesting to see what happens in the industry over the next decade.

Hi Timbo,

The devil is in the details: no pay cuts up front but elimination of night + int'l override PLUS the proposed pay banding vs. equipment pay = a pay cut for many of us.

Our negotiators continue with their counter proposals but the company has not indicated any initiative to budge. Looks like it might be getting ugly here soon. Many of our pilots really think AMR is the next Eastern based on this. I continue to remain confident we will hash out a deal and AMR will emerge - but the APA needs to start playing hard ball for that to happen.

Yup, we heard the same things (re. Eastern) when we were in BK. And Management (along with Wall Street) is giong to blame YOU GREEDY PILOTS for 'high costs' too.

But that sick leave proposal is...Sick!

One of the most important changes for AA vs. all the others that have declared is the competitive landscape that AA faces when trying to emerge. It's going to be very hard to shrink your airline while simultaneously trying to compete with the global behemoths that United/Star and Delta/Skyteam have turned into. I'm sure someone smarter than me can do this point more justice, but I just don't see how shrinking, or either of the USAir/JB/etc. merger possibilities often mentioned will allow AA to even come close to the revenue generation machines that United and DAL are now.

I certainly don't mean this as a slam on AA, and I'm not bragging on my airline...just making the point that the competitive environment is significantly changed from 5 years ago. I have several good friends at AA, and I hope you guys come out of this in great shape.

AA73,
It is sad we are even having this conversation. Slowplay posted some good facts so I won't repeat those.

-Nwa-our Doom and Gloom was not over whether we would survive or not but was more over the re-numeration that was occurring in our industry and at Northwest, putting pilot compensation at middle to lower middle class wages.

-Scope we made a deal and were willing to go to the mat over it for compass, giving us control and protection. Carl has well emoted that one of the valuable assets an airline has is its brand name and yet management teams, in this case Amr, seem desirous to outsource what is most valuable to them. It's as if they think there are an infinite number of pilots who are willing to work for food stamp wages and that passengers do not notice any difference between an RJ and a mainline flight. This definitely might not be the case if the FAA increases the min hrs for a FO to 1500. This maybe a classic case of be careful of what you wish for as you may get it. Specifically, if Amr gets the scope they want five years from the viewpoint of a broken/fractured product they'll be asking 'why' they gave away their most valuable asset, their brand name, to a dci that is detached and doesn't care, except of course for keeping its costs low.

Doom and Gloom for American? I'd say no as I believe a mass merger will occur. You will keep your job you just might not like your paycheck. But, that's what the first Doom and Gloom was all about.