US Airways vs American Airlines Merger
April 23, 2012
Here is a transcript of the mornings posts (more will be posted as it is available)
8:20am “A merger w/ @USAirways is the path we must take,” AA Flight Attendants Union Pres Laura Glading said at NY rally. “Get this merger done!”
@AmericanAir Union Leader at rally in NYC: “We will not stand by and let the judiciary gut our families.”
@AmericanAir union wrkrs in NY chanting: “AA got bailed out. We got sold out.” Referencing concessions keeping AA out of bankruptcy in 2003.
9:11am AA BANKRUPTCY: TWU agreed to send @AmericanAir’s last offer to membership for a vote. Tally not known until next wk.
9:11am Just got inside the NY Bankruptcy court. Courtroom is packed. Two overflow rooms w/ TV of proceedings are jammed as well.
9:33am AA BANKRUPTCY: Why is NYC hearing a big deal? Almost $1B in cuts on the line including 13K jobs. @AmericanAir is 1 of largest DFW emplyrs.
9:58am AA BANKRUPTCY: @AmericanAir atty says management earns “below market” salaries while union employees earn above market pay.
10:32am AA BANKRUPTCY: Pilots Union atty: “How we got here is more in the company’s declarations than Mr. Gallagher’s (AA Atty) presentation.”
10:32am AA BANKRUPTCY: Pilots union atty says @AmericanAir pilots took 23% pay decrease in 2003. That’s 1992 levels.
10:35am AA BANKRUPTCY: Pilots union atty tells NYC judge that labor has been betrayed with @AmericanAir executive bonuses & compensation.
10:50am AA BANKRUPTCY: @AmericanAir pilots union atty expects AA to merge post-bankruptcy. Unions suggest do it now and save jobs.
10:55am AA BANKRUPTCY: Atty for flight attendants giving opening now. Says avg age for @AmericanAir FA is 51. Avg salary is $45K .
10:57am AA BANKRUPTCY: Flight attendants atty says labor went through ‘bankruptcy’ in 2003 – it was out of court. We gave AA exactly what it needed.
1:18pm DEVELOPING: @AmericanAir says it offered TWU ground workers new offer that will save “substantial # of jobs.” Membership now voting on it.
1:20pm AA BANKRUPTCY: Attorneys representing all six sides (unions, airline, pension org, and unsecured creditors) finished opening statements.
1:20pm AA BANKRUPTCY: Airline now calling 1st of its 12 witnesses. It’s an analyst detailing @AmericanAir’s performance against competitors.
1:54am DEVELOPING: @AmericanAir quietly made a new offer to TWU ground workers that would save several thousand jobs. Wrkrs voting on it this wk.
April 24, 2012
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
April 26, 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
May 14, 2012
[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
May 15, 2012
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.
May 16, 2012
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”
June 20, 2012
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.
June 21, 2012
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.
June 27, 2012
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.
July 12, 2012
US Airways quietly became creditor of American Airlines (story & original tweet via @JasonWhitely of @wfaachannel8)
July 18, 2012
US Airways CEO won’t wait forever for merger
The CEO of US Airways says the airline may or may not be willing to wait for a merger until after American Airlines emerges from bankruptcy protection.
Read More HERE (Story via @wfaachannel8)
Sept 04, 2012
AmericanAir: “There is no sense of accomplishment in this outcome… Our goal remains to reach a consensual agreement with our pilots.”
AmericanAir: “We will be sharing the implementation plan with the APA, and will communicate details … to pilots in the coming days.”
AmericanAir pilots say they’re in “operating limbo” w/o a contract. @AlliedPilots insist crews will fly w/ professionalism.
If AmericanAir “goes nuclear,” & imposes entire term sheet or overreaches @AlliedPilots say, the APA will send out a strike ballot.
Also read @NBCDFW‘s story: Bankruptcy Judge Voids American Airlines Pilot Contracts