For those following the US Airways/ American Air Merger
US Airways CEO won’t wait forever for merger
For those following the US Airways/ American Air Merger
US Airways quietly became creditor of American Airlines (story & original tweet via @JasonWhitely of @wfaachannel8)
4:09 pm: DEVELOPING: Waiting to hear any minute from Allied Pilots Assoc. on whether it’ll send @AmericanAir‘s last best offer to its 10,000 pilots.
4:19 pm: BREAKING: Board for @AmericanAir‘s pilots union votes to send AA’s last best offer to its 10,00 pilots.
4:31 pm: .@AmericanAir says its pleased: “We believe this agreement addresses needs of our pilots while achieving the goals of our business plan.”
4:33 pm: BREAKING: Judge now delaying decision on voiding flight attendants, TWU contracts until pilots vote. Takes 6 wks to collect results.
4:35 pm: BREAKING: @AmericanAir says its last offer to pilots saves all 400 jobs to be cut, gives a pay raise & equity stake in restructured AA.
6:11 pm: UPDATE: Pilots union board voted 9 to 7 to pass @AmericanAir‘s last best offer to 10,000 pilots. Insiders said the room eupted in applause.
6:12 pm: UPDATE: August 8 is the new deadline for American’s pilots to have voted on AA’s last best offer. This gives other unions time to negotiate.
7:24pm: UPDATE: AmericanAir says it’s “disappointed” the board of its pilots union did not let AA’s 10,000 pilots vote on AA’s final offer.
7:25 pm: UPDATE: AA’s final offer included pay increases, furlough protection, profit sharing, a frozen pension and an equity stake in the new AA.
8:07 pm: UPDATE: Pilots say they’re close to a deal w/ AmericanAir but need clarity on scheduling. They hope to keep negotiating.
5:22 pm: BREAKING: Sources say AA, pilots talked to bankruptcy judge in NYC this afternoon. He was supposed to rule on canceling contracts in the AM.
5:24 pm: More than 7,000 union jobs at AA remain at stake in ruling. Pilots say they’re close to an agreement. AA wants to talk to TWU, flight attendants (APFAunity)
5:49 pm: BREAKING: AA bankruptcy judge has postponed ruling on American’s Section 1113 motion for all unions until June 29.
5:50 pm: BREAKING: AmericanAir says the extension will not change the terms of our final offer to the pilots union.
6:54 pm: UPDATE: Pilots union will vote again on @AmericanAir’s final offer on 6/27. AA not renegotiating but will answer questions & clarify.
8:22 am: Flight attendants to call at least two of their three witnesses today. Adam Condrick will talk about the retirement plan.
8:25 am: Daniel Akins, an air transport economist, also to testify saying AAs problems stem from mergers by its competitors.
[unfortunately @JasonWhitely will not be covering the USAirways / American Airlines merger today as he returns home to DFW. It is not yet known if he will be returning to NYC to cover more at a later date, but I’ll do my best to keep up-to-date]
9:12 am: The Allied Pilots Assoc. to finish its case against American Airlines canceling their contracts. Jim Eaton finishes testimony this AM.
9:12 am: Waiting for judge to begin. It’s a thinner crowd in the overflow room today. Lots of folks have left.
9:18 am: Judge is in the courtroom. Court is in session.
9:24 am: Pilots have 2 witnesses left. Jim Eaton testifying on valuations this AM. AA will argue against Chris Heppner as an expert.
9:24 am: After Heppner and whether the judge allows him to testify, the pilot’s case is complete. Flight attendants will start this afternoon.
9:29 am: Cross-examination of APA’s Jim Eaton is underway. Currently discussing pilot outsourcing to regional jets.
9:30 am: Judge Lane taking a long lunch today so he can hold another hearing via conference call. But he said we’re staying late for APFA testimony.
9:36 am: APFA (flight attendants) President Laura Glading said she expects to testify this afternoon when pilots complete their case.
9:42 am: The unions case will finish by next Wednesday, May 23, judge said. TWU to present Friday or Monday. Next wk is most likely.
9:44 am: Rebuttals by American Airlines and its three unions will now happen on May 25 and then on May 29. Case is going slower than expected.
10:20 am: I did not know Flight Attendants generally not paid to board, deplane passengers, stow luggage, and help before departure, deplaning.
10:31 am: Cross-examination of APA’s Jim Eaton drilling down on AA wanting to fly regional jets. Mainline pilots argue it outsources their jobs.
10:33 am: AA says larger regional jets create jobs, fly add’l passengers to 5 big hubs. Regional feed today provides 10% of AA traffic, airline says.
10:45 am: Cross-examination of Jim Eaton is done. Re-direct was only a few questions. Now judge is considering what to do about Chris Heppner.
10:47 am: Pilots want to call Chris Heppner to talk about medical benefits. AA questions him as an expert.
10:49 am: Judge letting Heppner testify. Told AA to address whether it thinks he’s an expert on medical benefits in cross-examination.
11:24 am: Judge breaking until 1p central time so he can hold another hearing via conference call. Tweets will resume then.
[Break for Lunch > Stay Tuned for More this afternoon]
1:11 pm: Court back in session. Direct examination of Chris Heppner resuming.
1:56 pm: Re-direct underway on Heppner. His credibility & expertise on medical benefits attacked by AA is being built up again by pilots.
2:04 pm: Judge Sean Lane is impressive. He listens to all the testimony and sometimes follows up atty ? w/ his own questions. No jury. He’s it.
2:09 pm: Testimony from Chris Heppner is complete. Judge to now hear from each side whether his testimony can be considered as an “expert.”
2:12 pm: AA atty on Heppner: “He just knows what his computer tells him.” Airline said pilot’s expert doesn’t know details of what he testified.
2:18 pm: Judge on Heppner: “Is he an expert to talk about the utilization rates to the value of the [retiree medical benefits] plan design?”
2:21 pm: Judge on Heppner: “He doesn’t appear to take ownership of that anaylsis and that’s what troubles me.”
2:22 pm: Judge on Heppner: “He’s not able to put intellectual heft behind it which discounts his opinion.”
2:24 pm: “There are some weakenesses with that particular bit of testimony,” Judge Lane said on Heppner. Still, testimony is allowed in as evidence.
2:28 pm: Attorneys are adding exhibits and cleaning up a few things from pilots case. Flight attendants case to begin momentarily.
2:28 pm: Pilots case has taken two and a half days.
2:33 pm: “I have a lot of paper,” judge told attys. “I do have a blizzard of details. Judge asked attys to summarize & distill written arguments.
2:40 pm: We’re in a brief break – flight attendants about to start arguments. APFA President Laura Glading testifying first.
2:49 pm: AA UNION JOBS AT STAKE: 4,600 – TWU, 2,300 – Flight attendants, 400 – Pilots.
2:59 pm: AA JOB LOSSES: 12,800 union and non-union jobs to be eliminated as AA reorganizes. Most are union positions. That’s why they’re in court.
3:05 pm: AA and flight attendants say they can get APFA Pres Laura Glading on & off the stand by 5p today.
3:11 pm: Flight attendants beginning their opening statements.
3:12 pm:Flight attendants told me this morning the union has a live feed of testimony, too. For more on FAs, follow @APFAunity, too.
3:18 pm: Glading to testify about AA’s demand of $230M in concessions & how she believes fellow flight attendants will receive that.
3:19 pm: “What is on trial here is the [AA] proposal,” APFA atty Robert Clayman said. AA is asking flight attendants for $230M in cuts annually.
3:20 pm: “If AA’s cuts are imposed,” APFA atty said, flight attendants would make 30% below competitive rates.
3:21 pm: Attorney for flight attendants said AA’s proposed cuts on labor: “It far outstrips any other stakeholders sacrifice.”
3:25 pm: “If the company’s plan doesn’t work … obviously alternatives have to be considered,” said Robert Clayman, attorney for AA flight attendants.
3:28 pm: APFA said if AA is exploring a merger then its current standalone business plan is nothing more than a placeholder.
3:33 pm: APFA atty: AA doesn’t have the luxury of time. There’s an urgency it now must confront. Only cure is consolidation.
3:35 pm: APFA opening statements complete. Laura Glading called to the stand now.’
3:41 pm: LAYOFFS: 5,500 AA jobs already gone in bankruptcy. 2,900 TWU jobs eliminated w/ vote Tues. 2,600 more non-union jobs to be phased out, too.
4:02 pm: APFA’s Laura Glading said the last time @AmericanAir hired a flight attendant was 2000.
4:04 pm: Glading said she agreed to deep cuts in 2003 bc the company needed it and believed in AA’s business plan then. Not now.
4:04 pm: Glading said AA is asking for $230M in cuts from flight attendants. “It’s almost putting a gun in your hand and saying shoot me,” she said.
4:07 pm: Glading on AA’s proposal to cut $230M annually for next 6 yrs.: “It would be physically and financial impossible to get to that number.”
4:08 pm: Glading on AA’s reorganization plan: “You always want things to be successful. To work out. But I don’t believe this can.”
4:16 pm: Direct examination of Laura Glading is complete. AA beginning cross-examination right now.
4:33 pm: Like it did to pilots, AA pointed out that the flight attendants agreement with @USAirways is essentially just an agreement to agree.
4:38 pm: Laura Glading is done. Judge taking a two-minute break.. “so don’t wander too far,” he said
4:50 pm: American’s attorney said flight attendants dismissed the airline’s proposal before the entire plan was ever released.
4:51 pm: AA proposing $230M annually in cuts to flight attendants. @USAirways proposing $153M in cuts to them.
5:07 pm: Had to step out to record a report for our 6p news in DFW. Flight attendants lead negotiator, Anne Loew, is on the stand now.
5:09 pm: Loew said AA’s cuts over a 6yr period were beyond palatable. Direct is done. AA is beginning cross-examination now.
5:35 pm: Flight attendants refuse to eliminate premium pay for serving meals on domestic flights. FAs still set up carts, serve snacks, Loew said.
5:36 pm: Judge Lane said “this case isn’t going to be decided on snacks.” Urged attys to stick to salient points.
5:37 pm: Anne Loew is done. Two witnesses of the five flight attendants plan to call are finished.
5:43 pm: Flight attendants attorneys say they will finish their case on Friday. TWU to begin then. It plans to call 3 witnesses. TWU done by Mon/Tue.
5:44 pm: Rebuttals to begin next Tuesday.
5:47 pm: Court is adjourned until 9:30a Central time Thursday. “This has become a marathon, not a sprint,” Judge Lane said.
[Thursday 05/17/2012 Transcript of tweets via @JasonWhitely Will be posted in a new blogpost. For previous transcripts of this hearing follow our Blog and go to our USAir/AA Merger category under “Of Interest”
9:48 am: Cross-examination of Allison Clark is beginning. She testified to a lot of the proposals pilots made to AA.
951 am: AA STATEMENT: 5 TWU workgroups accepting agreements will save 1,300 jobs, get Early-Out pkg, future pay increases, & 401(k).
9:52 am: AA STATEMENT: “We realize this was a very difficult decision for our TWU-represented employees.”
9:56 am: AA STATEMENT: @AmericanAir disappointed the biggest TWU group opposed offer. AA to ask a judge to cancel their contracts.
9:59 am: UPDATE: If judge lets AA cancel TWU maintenance contracts, 4,600 jobs would be eliminated. AA says its offer would have saved almost 2,000.
11:13 am: TWU UPDATE: If Judge lets AA cancel contracts, these are projected job losses. #TULSA: 2,100 ALLIANCE FW: 1,200 And 1,300 others scattered.
11:16 am: Lawrence Rosselot testifying now for pilots. He’s an AA pilot and w/ the union. Will talk about airline stats, efficiency, and work rules.
11:57 am: Judge breaking for lunch. Cross-examination of Lawrence Rosselot continues in an hour.
[Breaking for Lunch hearing to resume in approx 1 hour]
12:44 am A NEW DEAL? AA tells me it will still try reach “consensual agreements” with two TWU groups that rejected its “final offer.” Talks continue.
12:46 am: UPDATE: The 5 TWU groups that accepted AA’s final offer still lose 2,900 jobs. Would have been worse. AA’s “final offer” offer saved 1,300.
01:16 pm: Back in court awaiting the judge to return from lunch. Most everyone is back. Fortunately the rain is moving out.
01:17 pm: …Tweeted too soon. Court is back in session. Lawrence Rosselot is back on the stand for cross-examination.
01:35 pm: UPDATE: AA revised job losses for TWU maintenance, store clerks if the judge lets the airline cancel contracts. Not 4,600. But about 4,475 .
2:28 pm: Rosselot done. James Eaton testifying now. He’s a Boston-based pilot. Testifying about outsourcing, codesharing. Saving mainline pilot jobs.
03:40 pm: Direct testimony on Eaton continues – deep discussion on codesharing. Uncertain how soon cross-examination will begin – if at all today.
03:46 pm: Eaton is defending APA’s stance against add’l codeshare flying. There’s also comparisons of how other airlines handle it.
03:50 pm: AA pilots have one more witness to call. It’s Christopher Heppner – exec from The Segal Comp. discussing pilot medical benefits.
03:53 pm: But AA objects to Heppner’s testimony as an expert on medical benefits. Judge to decide in the AM whether to let him testify.
03:54 pm: It now appears likely that AA flight attendants (APFA) will begin presenting their case to save contracts, jobs by tomorrow afternoon.
04:09 pm: Court recessed early. Cross-examination of Eaton continues in the morning. Heppner might go tomorrow. Flight attendants likely start Wednes.
04:10 pm: Flight attendants said their case will take about two days. TWU Maintenance and Store Clerks likely present cases Monday.
[My apologies, as I may have missed a few tweets.]
Monday May 14, 2012:
10:41 am: Direct-examination of Neil Roghair just completed. Court is in a ten minute recess.
10:44 am: ROGHAIR: “What’s been driving the decline of AA over the last couple years is the migration of business accts over to Delta and United.”
10:47 am: ROGHAIR ON @USAirways: ““We want to hitch our careers to a thriving and successful business plan.”
10:55 am: Judge Lane has returned. Cross-examination of Neil Roghair is beginning.
11:10 am: In cross-examination, @AmericanAir attorney grilling Neil Roghair on valuations, codesharing specifics.
12:01 pm: Judge taking a 1:15 lunch break. AA attorney has few more questions for Roghair when court resumes at 1:15p Central.
More to come…..
01:16 pm: Just got back up to court from a quick lunch. Awaiting Judge Lane to call court back to order. AA cross-examining Roghair a few more mins.
01:28 pm: Court resumes…
2:04 pm: Judge gave attorneys a brief recess to sort out a procedural issue.
2:25 pm: Both sides are done with Neil Roghair. Yearley and the NY firm he works for aid companies, employee groups in restructuring.
2:49 pm: Yearley on AA’s future profits, while slashing labor costs: “Analysts would be shocked at this level of profitability” in the future.
3:01 pm: Yearley said this isn’t the forum to weigh benefits a merger. But AA has a network problem. It’s never been an if but when AA consolidates.
3:08 pm: Yearley questions how AA decided this was the right time to invest in 460 new aircraft. And did AA consider alternatives to it?
3:10 pm: AA has said the largest aircraft order in history will reduce maintenance costs, be more fuel efficient & attract back high value customers.
3:18 pm: Yearley said no need canceling contracts should be rushed through the court right now especially as AA sits on $5-billion in cash.
3:19 pm: Yearley added AA has bragged recently that the airline’s recent performance [under existing labor contracts] has been the best in years.
3:57 pm: Yearley conceded that AA’s aircraft, products lack when compared to big competitors like Delta and United. Harder to attract biz customers.
3:58 pm: Yearley agreed with American Airlines attorneys that adding new aircraft and new amenities should help attract the high-value customer.
4:08 pm: With an hour left in the court day, AA attorney said he would not finish cross-examination of Andrew Yearley this evening.
4:09 pm: Pilots have four more witnesses to call after Yearley. Doubtful pilots will hand off to flight attendants by tomorrow.
4:11 pm: Judge taking a brief recess.
7:02 pm: Court recessed at 6:15p. Both sides done with Andrew Yearley. APA’s Allison Clark to testify Tues. about the company’s proposals.
7:05 pm: Big development Tues. will be whether the TWU ground wrkrs, mechanics accept or reject AA’s final offer. Results due at 8:30am-ish on Tues.
Will be continued in new post tomorrow 05/15/2012
@AmericanAir still expected to finish presenting its case to cancel labor contracts in NY Bankruptcy court this Friday.
@AmericanAir exec Jeff Brundage finished testimony in NYC bankruptcy court. He talked about need for cost reduction, history of negotiation.
@AmericanAir pilots, flight attendants, and ground workers unions begin presenting their cases against cancelling their contracts on May 14.
Will post as more available
9:26am Cross-examination of the airline analyst is mundane so far. Flight attendants atty is questioning Jerry Glass’ testimony, expertise. #aawfaa
9:37am AA atty objecting to Flight Attendants atty for not keeping questions on AA biz plan. The judge got a few laughs with his response. #aawfaa
9:38am JUDGE: “We’d like to finish this hearings sometime this calendar year. That’s why I want [attys] to connect the dots.” #aawfaa
9:41am JUDGE: “We seem to be hopscotching around.” APFA: “One of the probs the court is experiencing is you’re dealing with 3 diff groups.” #aawfaa
1:57am AA EXEC GOULET: “I think there are advantages to larger networks. Yes.” But she wouldn’t concede that AA must merge to grow. #aawfaa