Aa To Ask Judge To Cancel Labour Contracts

[internet]

http://www.theglobeandmail.com/report-on-business/international-news/us/american-airlines-to-ask-judge-to-cancel-labour-contracts/article2377929/

American Airlines plans to ask a federal bankruptcy judge next week to throw out its union contracts, if it can't reach cost-cutting deals with labour unions, according to a person familiar with the situation.

The company would seek to void several collective-bargaining agreements that have been under intense negotiations since American and parent AMR Corp. filed for bankruptcy protection Nov. 29.

[conehead]

Ouch.

[DEFCON]

CA's don't appear to be worth much anymore. They're negotiated and then beat down over their term or, thrown out the door along with pensions and every other benefit the employee once had. But, the execs will come out glowing no doubt?

[Don Hudson]

The term "contract" is probably a bit misleading. Labour contracts per se do not have the force of law.

[Moon The Loon]

The term "contract" is probably a bit misleading. Labour contracts per se do not have the force of law.

True, technically. But they are sanctioned by law, much the same as terms such as "as amended from time to time" or "incorporated by reference."

[Dropzone]

Some of the best advice I ever got...."The only security you will ever have is located between your two ears".

[dagger]

Do pilots drink different water than we do, is there a special Kool-Aid that causes them to think that the normal rules don't apply? I mean, why turn down a contract with 15% in base pay increases and a meaningful stake in the new AA, in order to get a worse agreement forced up their ass by a bankruptcy judge? Now they are going to get a bigger upfront wage cut, bigger layoffs, and the same or worse scope changes.

[rudder]

dagger,

It is more complicated than that. Under CH11, the court has the right to abrogate and impose a collective agreement only during the creditor protection period.

The AA pilots rejected the TA because a majority decided that they did not want to live with that agreement for 5-8 years (that is a 5 year term with the potential for 3 more years bogged down in the insane RLA negotiation process that governs airlines in the US). So, they have opted for a short term hit and the right to reach a CBA prior to CH11 exit which may be 12-18 months away.

You pick your poison. They picked theirs and while it is likely a lot of the 'candy' will not come in the final agreement, they believe that they will not have to give up work rules and scope to the degree that was contained in the TA. UAL/CAL has a pilot TA that apparently closely resembles the recent DAL pilot deal which means that in terms of benchmarking that the AA pilots might do well to see the UAL/CAL agreement put into place first and then resume negots.

[Dropzone]

If you end up in BANKRUPTCY you LOSE control of the process..........it appears that most cannot wrap their head around that concept.

[Mitch Cronin]

Sometime before the majority of us here expire, I expect we'll see a lean toward things like a general strike, and a growing sense (and use) of solidarity among like professionals in the "western world". For instance... How long will it take pilots in North America to realize if they all act as one body, they hold the tiller and can write their own terms? Same question for AME's and many others... The ease of mass communication these days virtually guarantees that some groups will be able to maximize their positions by some brand of mass cooperation. ...in fact, I'm surprised it's taken this long.

[boestar]

a "General" strike does not need a regulating body to occur. All it takes is for all pilots everywhere to stop. Same for ames and others. General strikes took place early in the 20th cenury and were the basis for labour unions.

[Mitch Cronin]

Hey! It just occurred to me.... Maybe if I lip off enough about this sort of thing, some fat cats 'll try to buy me off to shut me up?.... That'll work! I'll shut up for a price! Gimme GOLD! Big bunches of it... lemme sink a Spanish Galeon full of the stuff! I want to join the "I'm alright Jack" crowd!

Ooops, ..... sorry 'bout that, I got lost for a minute..... where were we?

Really though, the kind of attacks we've seen on the "working classes" in all sectors is just nuts. Something needs to change, and I'm sure it will, but the longer it takes, the further the pendulum will swing back afterward... and I doubt that'll be good either. ...if we even get that far before global financial meltdown

[CanadaEH]

Do you even think that an organized general strike could even occur and, if it did, have any positive benefit??

[Mitch Cronin]

Well... I'm certain the rails we see beneath our feet at the moment are headed straight for a cliff... I'm equally certain there will come a point when that truth becomes widely acknowledged.... so, I think the answer to both your questions is yes.

I think, as the "boomer" generation prepares for the handing over of the reigns, they'll find new priorities, worthy priorities, and we'll see a massive shift of attention towards righting many wrongs.

How's that for wishful thinking?

[conehead]

I think, as the "boomer" generation prepares for the handing over of the reigns, they'll find new priorities, worthy priorities, and we'll see a massive shift of attention towards righting many wrongs.

Always the optimist.

[deicer]

And, horror of horrors, only one bathroom

[conehead]

And, horror of horrors, only one bathroom

No way. Ain't gonna happen. Nope.

[W5]

AMR chief says merger decision may be weeks away: FT

(Reuters) - AMR Corp (AAMRQ.PK), the bankrupt parent of American Airlines, is in the middle of reviewing strategic options that include a merger and will likely make a decision with weeks, according to an interview with the company's chief executive, which was published on the Financial Times' website on Sunday.

"It's probably even a matter of weeks," the Financial Times cited AMR CEO Tom Horton as saying on the question of when a decision on a merger would come. "We're in the middle of that right now."

The third-largest U.S. carrier has begun to review strategic alternatives, including a merger with US Airways Group Inc (LCC), to determine whether merging with a rival will generate more in recoveries for American's creditors than going it alone.

AMR told its staff last month it had sent a non-disclosure agreement to US Airways for its review of a possible merger and that it had also dispatched similar agreements to other potential merger parties.

AMR filed for bankruptcy in November 2011, citing untenable labor costs. It won court approval last month to extend through December 28 its exclusive right to present a plan to emerge from bankruptcy.

"It may be an attractive option under the right circumstances," the Financial Times quoted Horton as saying on the possibility of merging with US Airways. "Our view (earlier this year) was not that that combination was unwise. It was that that was not the right time to discuss it."

Horton added that there were potentially meaningful revenue synergies from a combination with US Airways, but stressed that other combinations would be considered and that remaining independent was also an option, according to the interview.

The AMR CEO was clear that after any merger, his airline would remain part of oneworld, the airline code-sharing alliance centered on International Airlines Group (IAG.L), the parent of British Airways. US Airways is a member of Star Alliance, led by United Airlines (UAL) and Deutsche Lufthansa AG (LHA.DE).

IAG said on Sunday it may consider taking a stake in American Airlines if American welcomed such a move.

[AME]

In my ever so humble opinion if the ability to enter CCAA or Chapter 11 was removed and companies either sank or swam based on their business plan the industry would be a whole lot better off.

just what I think

[mrlupin]

In my ever so humble opinion if the ability to enter CCAA or Chapter 11 was removed and companies either sank or swam based on their business plan the industry would be a whole lot better off.

just what I think

I second that.

[W5]

American Airlines renews push to void pilot contracts

http://finance.yahoo.com/news/american-airlines-renews-push-void-202637909.html

Reuters) - The parent of American Airlines on Friday renewed its push to void its collective bargaining agreement with its pilots' union, two days after a federal bankruptcy judge rejected an earlier effort.

U.S. Bankruptcy Judge Sean Lane in Manhattan, who oversees the Chapter 11 proceedings of American Airlines' parent AMR Corp (AAMRQ.PK), had objected to what he called the carrier's proposed "unfettered discretion" under its earlier proposal to temporarily lay off pilots and engage in code-sharing.

AMR said its revised plan addresses these concerns by retaining current contractual limits on furloughs and setting restrictions on the ability of the third-largest U.S. airline to enter code-sharing relationships.

"We believe both of those changes properly address the court's concern," and will help AMR "keep moving forward to achieve the savings and flexibility needed for our successful restructuring," AMR spokesman Bruce Hicks said in a statement.

Tom Hoban, a union spokesman, said he hopes AMR will return to the bargaining table before Lane has a chance to rule.

"The company is a little tone-deaf in taking into account the 8,000 pilots' state of mind," he said in an interview. "It is embarking on a scorched-earth policy, when the goal should be a consensual agreement that recognizes the sacrifices the pilots have made and reflects the competitive landscape. To rush this process doesn't behoove either party."

A hearing on the revised plan is scheduled for September 4.

Lane's decision on Wednesday was unexpected and set back Fort Worth, Texas-based AMR in its effort to save more than $1 billion a year in labor costs, including $315 million from the pilots union.

The new code-sharing proposal would let AMR enter new relationships with other U.S. carriers and their regional partners, subject to limits based on seating and miles traveled.

It also would allow restricted code-sharing relationships with Alaska Air Group Inc's (ALK) Alaska Airlines and Hawaiian Holdings Inc's (HA) Hawaiian Airlines.

"American has taken heed of the court's decision as to the deficiencies of its previously open-ended domestic code-sharing proposal and has made a revised proposal that imposes real limits," Todd Duffield, a lawyer for AMR, said in a filing.

AMR's creditors committee has supported the carrier's bid to abandon union contracts, and has said it would not be difficult for the carrier to address the judge's concerns.

Lane on Wednesday also said "significant" concessions from the pilots were needed before AMR could emerge from Chapter 11, though he rejected an argument by unions that AMR must consider a merger with smaller rival US Airways Group Inc (LCC).

The pilots' union last week overwhelmingly rejected AMR's best and final contract offer.

AMR's flight attendants union is scheduled on Sunday to finish voting on their own final contract offer from management.

The carrier has already reached consensual labor terms with the Transport Workers Union, which represents ground workers.

The case is In re AMR Corp et al, U.S. Bankruptcy Court, Southern District of New York, No. 11-15463.

[W5]

American Airlines flight attendants accept contract offer

http://finance.yahoo.com/news/american-airlines-flight-attendants-accept-170029935.html

NEW YORK (Reuters) - Flight attendants at American Airlines on Sunday accepted the company's last and final contract offer, a decision that will help the bankrupt carrier in its bid to cut labor costs.

The Association of Professional Flight Attendants said in a statement that the vote was 59.52 percent in favor of the offer. It said 92.8 percent of the 13,544 eligible voters cast ballots.

The approval by the flight attendants eliminates the need for American parent AMR Corp to attempt to void those contracts and impose stricter labor terms. Union-represented ground workers have already approved new contracts with concessions.

AMR Corp spokesman, Bruce Hicks, said in a statement that the vote is an important step in the company's restructuring.

"We know this was not an easy decision for our flight attendants and we are very pleased with the choice they made," Hicks said.

The flight attendants' vote leaves pilots, who soundly rejected a tentative contract earlier this month, as American's only major work group that has not reached consensual deals with givebacks.

AMR has said it needs to save $1.06 billion in overall labor costs per year, and about $842 million from its unions.

The flight attendants' union said in its statement on the vote that it "will now continue our strong and concise message that we have zero confidence in this management team."

American renewed a request to the U.S. Bankruptcy Court in New York on Friday seeking to terminate its existing collective bargaining agreements with the Allied Pilots Association union and impose more draconian terms. That move followed an August 15 ruling by U.S. Judge Sean Lane denying American's original motion in part because it would give the carrier unrestricted ability to temporarily lay off pilots and engage in code-sharing.

Pilots voted down American's final contract offer by a margin of 61 percent to 39 percent on August 8. Should the bankruptcy court permit American to scrap the pilots' current contract, the carrier would still need to negotiate a long-term deal.

Resolving labor issues would allow American Airlines to shift focus to its planned emergence from bankruptcy and whether it will do so alone or as part of a merger. Last month, the carrier began sending non-disclosure agreements to potential merger partners.

American has started reviewing potential mergers, including a deal with US Airways Group, to determine whether merging with another carrier would offer greater value than emerging as a standalone carrier.

Leaders of the airline's flight attendants' union had urged members to accept AMR's offer. AMR's creditors committee had also weighed in last week, urging the unions to reach consensual contracts rather than be left at the mercy of abrogated deals the court could permit.

[W5]

AMR, U.S. Airways say evaluating potential merger

http://finance.yahoo...-142651387.html

Reuters) - American Airlines parent AMR Corp (AAMRQ.PK) and US Airways Group Inc (LCC) have signed a non-disclosure agreement as they evaluate a potential merger that would create an airline that rivals leader United Continental Holdings Inc (UAL) in scope.

The two carriers said on Friday they agreed to share confidential information, work with bankrupt AMR's creditors committee, and not talk to third parties about any terms of their possible combination.

American has also signed non-disclosure agreements with other parties, according to a memo the company sent to managers on Friday. It did not identify the other parties, and a spokesman for AMR declined to elaborate.

Many analysts consider US Airways to be the leading contender for AMR, which filed for Chapter 11 bankruptcy protection in November. Combined, US Airways and AMR had $37 billion in revenue in 2011, about equal with United Continental, the world's biggest carrier.

American Airlines initially said it would prefer to emerge from bankruptcy on a standalone basis, but has grudgingly responded to pressure from creditors to consider a merger as its best option for competing with United Continental and Delta Air Lines Inc (DAL), which are themselves the products of mergers.

A source familiar with the situation said the non-disclosure agreement is fairly restrictive as it prevents US Airways from discussing specific terms of a combination with third parties including labor unions and private equity firms that might be interested in a stake, or other airlines.

US Airways, which declined to comment beyond the news release, has been aggressively campaigning for a merger with AMR. Earlier this year, US Airways won the backing of three unions that represent American ramp workers, pilots and flight attendants by promising to preserve thousands of jobs post-merger.

US Airways, based in Tempe, Arizona, has also reached out to Fort Worth, Texas-based American's creditors and has spoken with U.S. lawmakers about the possibility of a tie-up with American.

In a staff memo on Friday, US Airways Chief Executive Doug Parker said the non-disclosure agreement with American would likely stay in place until a deal has been reached, or talks fail.

"We are pleased to be working directly with American to study a potential merger and we consider this very good news," Parker wrote. He added that the carrier "will not be able to be as open and candid about the discussions with American as we usually are about issues that are important to us."

Shares of US Airways were up 1.7 percent to $10.58 in afternoon trading, while shares of AMR were up 3 percent to 46.6 cents.

Morningstar analyst Basili Alukos said it would be in the best interests of American and US Airways to combine.

"You would have the international operations of AMR and the lower cost structure of US Airways," Alukos said.

Add:

American Airlines, US Airways enter into merger talks Written by The Canadian Press

Aug. 31, 2012, New York, N.Y. - American Airlines and US Airways are one step closer to a potential merger.

The companies said Friday they signed legal documents allowing them to confidentially exchange information. But a deal is still far from reality.

"It does not mean we are merging — it simply means we have agreed to work together to discuss and analyze a potential merger,'' US Airways CEO Doug Parker said in a letter to employees Friday.

Such a merger would put the combined airline on par with the world's largest — United Continental Holdings Inc. — and the

slightly smaller Delta Air Lines.

Parker has been pushing for a merger since American's parent company, AMR Corp., entered bankruptcy protection on Nov. 29, 2011. American Airlines CEO Tom Horton has said his airline is weighing several options, including remaining independent or merging with one of several airlines, including US Airways Group Inc.

In a note to all American Airlines managers Friday, the airline said it is cutting its expenses in bankruptcy court and is "also

now looking at other strategic options that could make the new American even stronger.''

The signing of non-disclosure agreements means the companies will not share their discussions with outside parties. The airlines

warned in a joint press release that they will not "provide any further announcements regarding the status of any such discussions unless'' a merger is ready to be announced or if the talks fall apart.

US Airways' stock price rose nearly 4 per cent to $10.89 shortly after the market opened Friday. The merger talk announcement came before trading began.