Ahhhh...memories.

Carl

Interesting, thanks.

Global,

The direct answer...I lived it.
I also have friends/co-workers who were in management and friends/co-workers who were on the MEC side. The bankruptcy transcripts where AA outbid Icahn and Jay Alix/Boeing should be readily available.
You can search 10K's til you turn blue but even a mediocre accountant can make profits disappear. Every airline in this country hides their money. Take a look at American right now. Labor contracts in nego and they cry crocodile tears about how they're losing money and that's what the 10k shows...so it must be true right?
But every April they have no trouble finding a couple hundred million bucks to lay on the big boys at the crystal palace in the form of bonuses.

If you want to verify the veracity of my statements you can contact the one TWA pilot who sat on the BOD of TWA. Or you can wait until he finishes writing the book and read it for yourself. Compton retired to Florida with a tidy $4M exit bonus....you can give him a call and ask him.

No. The TWA pilots did NOT get a vote. The TWA pilots had no voice whatsoever in the integration. The APA drafted and implemented the entire integration (known as Supplement CC) without any input or discussion with the TWA pilots or their MEC. That's why it's commonly referred to as a "Cram Down". Essentially, AA and APA crammed their methodology down the TWA pilots throats and said "too bad, that's the way it's going to be".

Less than 2 years later AA furloughed 15 year TWA Captains straight from the left seat to the street.

The laughable thing about all of it is if you talk to a junior AA F/O today most will tell you the TWA guys and Supp CC are responsible for ruining their careers. I'm still scratching my head and trying to figure that one out.

"Two great airlines - One great future" .....yeah right.

Actually, I was looking for something not as subjective....no offense.

If the bankruptcy transcripts illustrating your points are readily available, could you post a link please, specifically to the bidding you are referring to? They aren't readily available to me.

I don't agree with your comments about airlines "hiding" money. They are required to account for their revenue and expenses using GAAP rules. If you are aware and have proof of an airline "hiding" anything I am sure the SEC would love to have a conversation with you.

Unfortunately, I don't think I will be able to get the court transcripts. If anyone knows how to get them , please post.

Global you haven't been in the industrty very long if you honestly believe companies, including or especially airlines don't manipulate accounting practices to reflect what they want. There is nothing illegal with most of it, accelerating expenses in one year, writing down assets etc make it very easy to claim poverty while business is booming. Just look at the press reporting today regarding earnings reports, some spin United's $500+ million profit as great news and others make it sound disappointing.

Oh, I believe airlines can do exactly what you are describing. A business, for example, could accelerate depreciation of certain assets, which may make bottom line numbers look better for that reporting period. However, if you accelerate it now you lose that depreciation later- it catches up with you eventually.

What I don't believe, however, is that an airline can "hide" assets like cash, real property, etc. If they were and it wasn't accounted for, that would be illegal. That was the implication that All Nighter was making I believe, and I disagree with that.

Global,

No offense taken. The BK transcripts are available but I'll have to do some digging in my archives and perhaps contact a couple of the TWA pilots directly involved in the whole affair at the time to get a reference to them. They're a matter of public record and they're out there somewhere.

It's America...you're entitled to disagree. However, if you think every large company out there isn't able to legally hide money by taking advantage of the loopholes in GAAP and the tax code you're severely deluded. There are myriad ways for even a half-wit accountant to legally take cash off the books, and the SEC has no interest in such legal shenanigans...only the illegal kind.

I can tell you this...any research you do will bring you right back around to exactly what I said happened. It's been 10 years so my recollection of a few of the minor complexities may be a little rusty but my account above is essentially accurate.

My point is: Saying that TWA would have been out of business anyway is misinformed and inaccurate. Would TWA have eventually gone away on their own? Maybe. But if that were the case why would AA invest a very large chunk of cash to buy a competitor that AA's room full of Harvard MBA's thought was going away anyway? They could have waited for the fire sale and bought the assets for pennies on the dollar with no labor integration headaches. AA has a history of buying competitors they can't eliminate any other way, and TWA was in a resurgence. TWA's "Focus City" strategy in San Juan was putting a serious dent in AA's large Puerto Rico operation and AA simply would not suffer that. The purchase of TWA as an on-going entity gave AA "largest airline in the world" status and eliminated a competitor. AA was also the largest operator of MD-80's in the world and TWA had an entire fleet of the newest MD-80's built. TWA also had a load of active and dormant route authorities that AA now owns. AA sold TWA's Worldspan ownership interest and made back nearly the entire cash outlay they originally paid for TWA. All in all, a great deal for AA....not so much for the TWA employees who were stapled and furloughed into a black hole.

And how does all this relate to the instant conversation?....ALPA left the TWA pilots to twist in the wind without fair representation exactly as the jury determined. The funny thing is, ALPA was courting the AA pilots and APA to return to the ALPA fold. Once the deal was done, APA looked at ALPO and said "if this is the way you represent your members we don't want anything to do with you". Ironic, wouldn't you say?

Yes, if you could find the transcripts to the court case, the actual testimony, that would be great. I have a paralegal buddy but he only sent me the stuff I had mostly already on that TWA court website. I'm not looking to nitpick your points about the sequence of events. I just want to read the case and the testimony.

Color me deluded. The shareholders own the corporation. The Board is supposed to be a steward of the corporation. If any member of the board and/or management took cash, property, whatever, "out of the company" illegally, then they are stealing from the shareholders. Period. Agree to disagree.

Now I did find TWA's 10K filings. I did see, for example, where TWA prepaid some obligations, but the prepayments were accounted for as a company asset. It is very easy to see and was a line item on their 10K. Also, TWA was losing significant amounts of money for the 3 years leading up to their last filed 10K, at a time when other airlines were very profitable. Management might have been moving money from one column to another, but there is no way in my opinion they were cooking the books to the tune of those losses. Again, agree to disagree.

To answer your comment about why AA would want to get TWA in a prepackaged deal vs. waiting for bankruptcy and picking up the pieces, I would assume they would not want to risk loss of control of the deal, hence the pre-packaged agreement. And I read that ticket deal was costing TWA an estimated 100M - 150M annually. Now there is some stealing right there!

I am not disputing that ALPA did something wrong. They were found guilty by a jury- there's not much more to say about that. When will financial damages be determined?

Anyway, thanks for getting the transcripts if you can.

They have a very warped perspective, for sure. Instead of thanking their lucky stars for the TWA buyout and staple-job, which allowed them to continue working while TWA pilots hired prior to them were furloughed, they're complaining about their careers!

"Two Great Airlines, One great future---for THEM!"