misterwl

American Airlines sees ‘good progress’ in talks with pilots, deal by Nov. 1 | LeveragedLoan.com

American sees 'good progress' in talks with pilots, deal by Nov. 1

American Airlines sees ‘good progress’ in talks with pilots, deal by Nov. 1 | LeveragedLoan.com

justfun

Don't think this is going to happen. We are too far away on scope and several other key issues, such as length of contract, actual credit for our A fund going away, not talking about an equity stake in the company in lieu of the hard money. If this gets to the BOD, I don't see it getting sent to the membership for ratification. The BOD is well aware of what it will take to get a deal passed, they have communicated this to AMR, but they don't seem to understand. The line pilots know that this is up to them. This is going to be a long drawn out situation. The UCC needs to understand that if they want 50 cents on the dollar then we need to have a decent deal, one that recognizes what we have given up in the past, ie 2003, and what we bring to the table. If the UCC fails to realize what we bring to the table, then they will be hard pressed to get 20 cents on the dollar.

The junior pilots are done with all the crap that has gone here since 9/11. Our careers have gone nowhere, our pensions are being stolen, never having a pay raise, while working for 1992 payrates while our buying power has diminished by 30%. We will burn this place down! The UCC and AMR need to realize this, but I don't think that they do. Our BOD is trying to keep a lid on this, but I don't think that they will be able to do that. There is a lit powder keg out on the line that is getting ready to go off. Horton was in our training cafeteria the other day giving a speech, and he was told that if the changes that are scheduled to be implemented in November go into effect, that there will would be hell to pay. If he thought September was bad, wait till November. He may have heard a bit of it, because instead of us getting no retirement contribution starting we will instead get 11% into a our supersaver program.

This will be interesting.

eaglefly

Yes, this next attempt has real potential for disaster. It's well known certain reps who were weak in the past are still rubbery, so what happens at the BOD level is one thing. The other thing is what happens at the line level. IMO, management believes and has possibly convinced the UCC that they can get a new agreement marginal on pay rates and still very weak on scope a 50%+1 approval from the pilots. The BOD promised the pilots no LBFO 2 and if they pass such a thing and try to sell it like last time, there will be an uproar and it will be APA on the defensive just like the company. Should that occur, they may convert some who were on the fence before, but others who voted yes previously are now angry, so I think such a TA would still fail. If the next TA fails, current APA leaders won't get a third chance and the UCC would then be left with either continuing to support Horton and presenting a stand alone plan with no pilots contract or turning to Parker who has 3 signed contracts in his pocket.

If Horton somehow succeeds in moving forward and exiting chapter 11 with the pilots in this situation, I believe senior pilot attrition will be severe next summer and there will be no ability for AMR to stop it and it will be devastating to AA ops and anyone who banked on equity like most of the creditors will lose large amounts of value and will be powerless to stop it. The only way to stop excessive attrition, would be a very good Industry leading contract, which means they end up paying more in the long run for putting themselves in a position of lost leverage.

Many pilots believe its better to wait until AA is out of bankruptcy to deal on a contract instead of negotiating a bankruptcy contract in bankruptcy. If a TA develops and is sent to the pilots that is perceived as LBFO 2, all it will likely do is ensure the UCC has the 2 clear cut choices above. Once out of bankruptcy, there IS no UCC that has any say about anything and they are then just hostages to a situation they have no control or influence of. I think that if that is the position they are in next summer, it means most of their value is tethered to a stock price that will probably plummet right out of the gate as AA likely begins it official (and possibly final) implosion. That's a very helpless place to be for bankruptcy creditors who once had influence but chose to join the philosophy of "kicking the can" for too long, which has proven to fail repeatedly.

Personally, I'm already a "no" vote as that is my mindset based on what I've heard. It will be up to AMR and the APA to convince me otherwise. Threats and intimidation need not apply. I consider myself a moderate and understand the present situation, so if its something even I can't swallow, it will indeed be a deal to walk away from regardless of the consequences. It should be a good show though, so stay tuned.

ForeverFO

That is truly a shame. I had been hearing good things from the talks... apparently that is not the case.

I had a suspicion that there would be an attempt in early October to "can kick" through the critical holiday months in some fashion, but if it truly is a LBFO V 2.0, then it's over.

Why in the hell can't they negotiate a short contract? I suspect LBFO I would have passed if it was a 2 year contract with limitations on how long a new contract could be forged after the amenable date.

Is AMR really this shortsighted and stupid to lose it all? They'd get their YES vote with a simple contract that is even close to parity with Delta or the new UAL deal.

flybywire44

Negotiating Update for Oct. 30, 2012

posted on October 30, 2012 11:41
Fellow pilots,

This update will be somewhat longer than normal as we try to give you as much information and perspective as possible regarding the current circumstances.
Sometimes, at the end-game, things tend to get quiet, as the parties struggle to determine whether a deal is genuinely attainable. Dynamics at the negotiating table are an endless emotional rollercoaster. Sometimes things get so contentious that we need to take healthy breaks and park certain subjects and even change up the personalities on both sides to keep things moving forward in a professional manner. At other times, we build momentum and a healthy amount of progress is made.
Suffice it to say that we (the Negotiating Committee, National Officers and Board of Directors) hear you loud and clear. With your vote, you are the final authority in the decision-making process. We are mindful of that fact every day we spend at the negotiating table.
In this current round of negotiations, we have confirmed what many of you believed — that there are improvements to be had compared to management's “last, best, final offer” (LBFO). A number of those improvements have already surfaced at the table. By rejecting the original TA, the membership gave us the tools to be able to go further in the bankruptcy process than any other pilot group has dared to go. Ultimately, we believe management will make the moves they need to make on the remaining key deal points so we can embrace an industry-standard contract and look forward to rebuilding our careers.
Reaching a deal in bankruptcy means we strive to achieve the maximum value possible in a process where an agreement must ultimately be approved by a bankruptcy judge. Before approving an agreement, a judge must evaluate a number of legal standards and inputs from the debtor and the Unsecured Creditors’ Committee (UCC). On a number of issues, the UCC recognizes our genuine concerns and they continue to confirm their commitment to our 13.5 percent equity claim, as long as an agreement is reached “promptly and such agreement is within reasonably justifiable economic parameters.”
To receive bankruptcy court approval for our claim, we need to reach an agreement approved by the bankruptcy court judge. If no agreement is reached, AMR has the right to impose work rules and we must litigate for our claim. While we may be ultimately successful, this approach carries risks, especially without the weight of the UCC on our side and in light of some difficult case law.
So what are the options ahead?
At the risk of stating the obvious, that "Green Book with Delta Rates" or "Delta Rates on Date-of-Signing With No Gives on Scope" are things we would love to deliver in this process, but not anything we can realistically expect the UCC to support or the bankruptcy judge to approve. The only path to those goals would be to acknowledge that we won't achieve an agreement inside bankruptcy, and that we are willing to accept whatever rocky ride lies ahead and whatever time it takes to reach those goals. That is a potential path, but it carries with it a great deal of risk and uncertainty. We must all decide on our path together. We should be mindful that our advisers tell us the current market appears to value our equity claim at a level that would provide a six-figure cash payout per pilot on average. Our advisers anticipate that such a payout could be realized at or near AMR’s emergence from bankruptcy for those pilots who elect for a payout at that time. We’re unwilling to accept any deal based solely upon an equity stake, but part of the decision involves weighing the potential "bird in hand" against the "path less traveled" where we would have to litigate for the claim.
Is an industry-standard contract achievable inside bankruptcy? Our opinion is yes. But we don't want to play cute with words or try to spin things, so let's review the surreal process over the past 12 months and examine what "industry standards" include.
When AMR filed Chapter 11 bankruptcy, we were flooded with phone calls and e-mails asking us how much we thought the pay cuts would be. After negotiations with AMR in February and March 2012 failed to produce any results, US Airways management entered the picture and we negotiated a conditional labor agreement (CLA) with them that served several purposes. The CLA preserves a very substantial amount of the Green Book, with nearly half of the concessions accounted for by freezing our defined-benefit pension plan. The CLA is a historic document and puts more tangible pressure on AMR management than any other labor group has ever been able to exert on a management inside the bankruptcy process.
Following a very contentious court process in May 2012, we entered into court-directed mediated talks with AMR. No agreement was reached and we were left with an LBFO to take to the membership for a vote. The overwhelming “no” vote was less about the contents of the potential contract ― and more a collective decision to go down a different path than the one put in front of us. We are now approaching the point where we will need to collectively make another major decision together.
"Industry standard" likely connotes different things to different pilots. Universally, we all seem to agree that we want Delta pay rates—pay rates that more appropriately compensate us for the enormous responsibility we assume each time we sit down in a cockpit. From there, it gets more complex.
The following are elements of the tentative agreement we all recently voted upon that could be fairly characterized as industry standard:
- Green Book duty rigs (close to Delta)
- No night pay (same as Delta and United)
- International override only paid for trips flown (same as Delta and United)
- Frozen defined benefit plan with 14% follow-on plan (vs. terminated plan and 15% at Delta, terminated plan with 16% at United, 9.2% 401(k) match at Southwest)
- Distance learning paid at 1 for 3 rate (same as Delta)
- Sequence protection notification and obligation period (close approximation to Delta provisions)
- Rapid reaccrual limited to hours used (same as carriers who have rapid reaccrual)
- Elimination of 46-hour max sick charge on reserve (other carriers charge for trips missed. Delta has a unique annual sick program)
- Sick sellback at retirement to a health retirement account up to $25,000 (no retiree medical at Delta)
- PBS (Delta, United, Continental, America West)
- 84-hour monthly average line value (same as Delta, lower than United, Southwest, FedEx, UPS, US Airways and America West)
- Active medical cost-sharing approximately 20% (same range as Delta)
- Pay banding (yes at United, no at Delta)
- We were the only pilot group with no contractual sick verification
- Total vacation value at 10-year point and 24-year point, in line with industry average for legacy carriers
- Reserve 18 days for 73 hours (most carriers 18 days or more. Industry average 18.6)
- Scope: 79-seat jets (Delta, 76-seat jets, 86k max MTOW)
- Codeshare: 50% limit of domestic ASMs (Delta fairly restrictive, United must only notify union of code-shares)
Our point is that a pursuit of Delta pay rates must be accompanied by an intellectually honest acknowledgement that many provisions in the Delta contract (and most likely the new United agreement) are concessions from the Green Book. We encourage all pilots to review the Delta Contract Comparison for more details on what constitutes “industry standard.”
So what’s next?
There is potential for an agreement with AMR in the days ahead, but it all comes down to a number of moves management will need to make on key deal points to bring us into the realm of industry standard. If an agreement comes to fruition and is approved by the membership, we would secure the claim. We would also strengthen our position on the UCC to influence strategic alternatives, the selection of future management and the makeup of the reorganized airline’s board of directors. Our advisers have had extensive discussions with large financial creditors that hold substantial unsecured claims and are confident in the alignment of interests around the need for the appointment of a new board of directors at the airline. The board would then appoint management to lead the reorganized company.
We all need to evaluate any agreement on its merits and as something we might live with for some time. We also need to view an agreement as a potential path to the US Airways CLA. Your Board of Directors has given the Negotiating Committee clear guidance on what to pursue at the bargaining table. The onus is now on management to take the conversation where it should have gone a long time ago.
We are proud to represent all of you at the negotiating table in this very challenging process.

Your APA Negotiating Committee

ForeverFO

This thing has been a real roller coaster.

Something we at AA have to accept is that, in the past, we've had a few contractural elements that were exceptional... in that AA simply did it quite DIFFERENT, not necessarily better or worse, than other legacies.

Sick, vacation, retirement, bidding, etc. These are going to be brought in-line. Giant retirement lump sums are gone forever. Lines are going to be higher time. Work rules are going to change.

If what is described above is presented as a package, AND with a secured 13.5% equity stake, I'd be leaning towards a yes vote, and I think a TA would pass.

Phuz

They mention 79 seat scope, i would suggest that is sub-standard industry wide. Only usair has outsourced airframes running at 79 seats. As legacy airlines go, airways is the smallest. Delta maxes at 76 seats and united at 70. If amr pushes 79 it will put more pressure on delta and united to further relax scope. Outsourcing scope may not affect you directly and/or immediately but it will tarnish your brand and diminishes your negotiating clout in the future. Please consider these facts and retain as much scope as possible.

Night Hawk 6

Here you go again. Why do pilots feel satisfied negotiating a deal based on a promise of what might happen down the road. "Take this deal and each pilot MAY get a six figure check." What a bunch of chumps if the AA pilots fall for this type of deal again. Come on guys and gals have you already forgotten 2003? If the judge will not approve an industry LEADING contract then suck it up and prepare for a battle in the streets post BK. Don't be fooled again!

Night Hawk 6

As a summary of industry wide pilot compensation, scope and work rules this statement is a testament as to how far the airline pilot profession has fallen since deregulation. The "associations" have failed to protect the profession and been slow to react to the new post deregulation industry, conducting business like it is still 1975. Remember, a narrow body captain working only 75 hours a month at DAL in 1978 had an income equal to what we only hope a 777 captain makes today working many more hours with far fewer benefits. Unfortunately most pilots are ignorant of their history and are more interested in how many gizmos they can carry in their backpacks than trying to learn from their history. Very sad.

eaglefly

it appears much of the APA leadership remains out of touch with the pilots who sent THEM a message as much as they did AMR with the faliure of the first TA. Perhaps a "groundhog day" moment is in order. Should that occur, I'd expect many of the reps to be recalled and months of delay for another chance at any type of consensual agreement, unless the UCC just plows ahead with Horton wthout the pilots or punts to Parker with the pilots.