In 2011 John Leahy of Airbus was voted the most influential person. Who do you think is the most influential this year? We’ll hide the results until the voting is complete.
From the Allied Pilots Association leadership to its membership:
The APA Board of Directors reconvened today at 9 a.m. at union headquarters as part of the ongoing four-party negotiations between American Airlines and US Airways management, APA and the US Airline Pilots Association (USAPA) on behalf of US Airways’ pilots.
These negotiations are aimed at reaching a Memorandum of Understanding (MOU), or interim agreement, to address each pilot group’s respective concerns if the two carriers proceed to merge. The MOU would serve as the transition agreement and would also include improvements to our newly ratified collective bargaining agreement.
Some have suggested that the only way APA should “agree” to a merger is to first negotiate an integrated seniority list with USAPA. Major corporate mergers involving represented employee groups don’t work that way. No legal mechanism exists that would allow union-represented employees to interfere with a major transaction such as a merger. With McCaskill-Bond the law of the land, unless management predicates a merger on an integrated seniority list—much as we saw at Southwest in their acquisition of Air Tran–we are left to pick up the pieces after the merger has occurred.
While APA’s institutional position has consistently been one of support for a merger between the two carriers within bankruptcy, support for a merger at this juncture is not unanimous within the union. Likewise, AMR management has not embraced the concept of expediting a merger before restructuring concludes and clearly wants to retain control of the corporation and consider a merger on their terms following exit from bankruptcy. Keep in mind that AMR management has executed four different mergers—beginning with Trans Caribbean and ending with TWA—while completely disregarding the impact on our pilots’ seniority. I doubt that pilot seniority is anywhere near the top of their concerns right now. Likewise, I doubt that pilot seniority would be a key consideration if they were to execute a merger with US Airways, JetBlue or any other carrier following an independent exit from bankruptcy.
Instead, what we’re seeing is likely a deliberate attempt to sew fear amongst our pilots in an effort to derail consensual merger talks. A small group of pilots, with assistance from AMR management and a former CEO [here and here], has been advancing the notion that an integrated list should be a precondition to any further consideration of a merger. Their motives are crystal clear: hold on to the reins of power and control any merger on their terms. To be clear, fundamental capital transactions such as a merger involve a large number of parties. By virtue of the 13.5 percent equity stake we now hold as part of our ratified agreement, APA can exert influence over various aspects of a merger as a major stakeholder in AMR. However, we don’t have the ability to stop the clock and make everyone else wait while we sort through all of the issues associated with an integrated seniority list. To suggest otherwise is disingenuous, and simply ignorant of the law and the facts.
Our advisers have indicated that if we do not finalize an MOU in the very near future, in all likelihood there will be no merger before American Airlines exits restructuring. An MOU specifying wages and working conditions for the pilots, along with interim seniority protection in the form of fences, would enable creditors to identify synergies that would result from a merger of the two carriers. Absent an MOU, the financial benefits of a merger would remain unclear.
We all understand that seniority is extremely important to our careers. Of course, your seniority number is irrevocably tied to the airline you work for, so it’s likewise critical for your employer to be able to compete and thrive. The analysts who study our industry and make judgments about which airlines are best positioned in the marketplace have been virtually unanimous in the view that a merger with US Airways represents the best way to address our airline’s current deficiencies. Make no mistake—a merger of some sort is inevitable. The questions before us: Who do you want at the helm and do you want the ability to have some control over the process? In a post-bankruptcy merger, we would have little ability to influence any potential leadership changes at American Airlines and would represent nothing more than a speed bump.
It’s worth revisiting some of the reasons why the APA leadership decided several months ago that despite the inherent difficulties, a merger with US Airways represents the best path to a reinvigorated American Airlines and, by extension, a brighter future for us all. With the mergers of Delta-Northwest and United-Continental, American Airlines now stands at a distant third (and, by some measures, fourth in the U.S. industry) in terms of our revenue base and route network. A merger with US Airways is essential for both carriers and represents the quickest way to recapture the critical mass essential to competing effectively with those two carriers.
We have seen a model for a successfully arbitrated seniority integration at Delta-Northwest using fences and a ratio methodology based on a percentile seniority list ranking. Also, if an American Airlines-US Airways seniority integration were to be arbitrated, our attorneys have indicated that the ongoing seniority dispute between “West” and “East” at US Airways would be settled as part of the process and should not have any negative impact on an arbitrator’s decision under the McCaskill-Bond statute.
Many analysts believe that American Airlines finds itself in its present predicament because of an excessively cautious approach to consolidation during the past several years. Instead of vigorously pursuing Northwest Airlines as a remedy to American Airlines’ deficiencies in the Asian network, they sat on the sidelines as the rest of the industry flew by. How much longer should we wait before deciding that something needs to happen to fix American Airlines’ revenue and network disparities? Merging within bankruptcy also affords APA opportunities to “re-attack” sooner rather than later to capture additional contractual value in the form of a transition agreement/MOU for our members. On the other hand, a “wait and see” approach would ensure that American Airlines exits Chapter 11 restructuring as an independent carrier with our newly ratified contract. At that point we would have no mechanism for making any near-term contractual improvements, and little ability to influence the management structure or strategic direction of the corporation.
If the four parties agree to an MOU/transition agreement, we would proceed to the next phase of the process, which would involve the creditors assessing the financial benefits of a merger. If a merger meets with their approval, a series of additional steps would have to occur before a merger is approved and the new company exits restructuring, including consideration by the two companies’ boards of directors; antitrust review by the federal government; and approval of a plan of reorganization by the Unsecured Creditors’ Committee and the bankruptcy court.
Upon exit from restructuring, an application for single-employer status with the National Mediation Board must be made, which would take approximately six months. Once single-employer status is declared, we would go through a process to determine the bargaining agent for the pilots. After that we would begin negotiating a joint collective bargaining agreement (JCBA), which would focus primarily on reconciling and integrating the US Airways pilots into the American Airlines operation. This JCBA must be completed within 24 months of a plan of reorganization being approved. If not, it would be submitted to binding arbitration for any remaining open items. Seniority integration negotiations would then commence. In the interim, we would operate in accordance with the protections stipulated by the MOU, including fences and provisions to ensure that pilots on the American Airlines seniority list would operate any aircraft delivered as part of the previously announced aircraft orders.
Fellow pilots, we understand your keen interest in the ongoing MOU negotiations, and we will continue to provide updates as developments warrant.
Thank you for remaining engaged in determining our collective futures.
First Officer Dennis Tajer
Allied Pilots Association (APA)
APA Industry Analysis Committee – Chairman
APA Communications Committee
We put two polls into the public domain this week, asking whether SPEEA and Boeing will reach an agreement next month; and if not, will SPEEA strike (a target date is Feb. 1).
The results are in: 61% expect no agreement when talks resume Jan. 9 and 57% expect SPEEA to strike. (These figures reflect results as of this writing. The data may change after this post because polling is still open.)
The percentages are a significant drop from the 96% vote that rejected the Boeing contract offer in October, but it should be noted there is no new offer on the table for SPEEA members to read and evaluate.
Additionally, this poll is of our readers and not specific to SPEEA.
Clearly the expectations are not good.
SPEEA’s executive director, Ray Goforth, is on record expecting talks to fail immediately when they resume because the gap between the union asks and the Boeing positions are so far apart. A strike vote will be solicited once talks break off.
Unlike the IAM 751, which requires a two-thirds affirmative vote for a strike, SPEEA requires only a simple majority.
2013 stands to be a pretty eventful year, and we’ve listed thoughts for you to vote on. We’ll hide results until voting is complete.
Now a key question: SPEEA and Boeing are on a collision course. Talks resume Jan. 9, but SPEEA already is on record believing talks will immediately collapse. A strike date of Feb. 1 is targeted, but membership has to take a strike vote before a walk out can occur. It’s your turn to vote:
If a contract agreement is not reached, will SPEEA actually go on strike or will talks continue?
A year ago we asked the following question and received the results. Now that 2012 is all but over, do you agree with your own forecasts?
What is the most momentous event you predict for 2012?
|Boeing doesn’ t ramp of 787 as expected||28%|
|Airbus slips its schedule for the A350||23%|
|Boeing meets ramp up expectations for the 787||12%|
|Airbus stays on schedule with the A350||11%|
|US Airways makes a bid for American Airlines||10%|
|Bombardier has first flight of CSeries by year end||9%|
|American Airlines tells US Airways to sniff its own exhaust||4%|
|Bombardier’s first flight for CSeries slips into 2013||2%|
E-190 v Superjet v Bombardier: With the finding that the pilot of the demo flight of the Sukhoi SSJ 100 Superjet simply flew into a mountain in Indonesia, rather than there being a problem with the airplane, the cloud has been lifted from the aircraft. So the direct match-up of the SSJ vs the Embraer E-190 can now be compared and this article does so. Bombardier’s CRJ-900 and CRJ-1000 also compete.
China’s Aviation: Airbus and Boeing think China pose the greatest threat in the future, but this analyst is less enthusiastic.
WestJet of Canada: The low cost carrier took a bold step to order up to 45 Bombardier Q400s to feed itself. Now it’s using speed dating to decide where to fly the airplanes.
Crandall speaks on AA-US merger: Former American Airlines CEO Robert Crandall weighs in on the merger between American Airlines and US Airways.
All the nominations seem in, and we’ve added a few of our own. Now it’s time to vote for the Best Airplane/Airport Movies (limited to commercially-based airplanes this time).
There is a separate poll for the Worst Airplane/Airport Movie. Some movies appear on both lists, reflecting differences of opinion.
We’re going to hide the results until voting is done.
It’s Christmas Eve but there is some news despite this being a slow day.
CSeries and London City Airport: The downtown airport is a highly challenging one. Aircraft have a challenging approach. The runway is short. British Airways operates the Airbus A318 to New York with a refueling stop westbound. Bombardier says its CSeries can do the trip non-stop. This article provides some detail.
New Life for BAe-146: This airplane didn’t have much to recommend it. In its original 3×3 configuration, it was a cramped airplane. It had four engines. The original engines were unreliable. But here’s a new life for them.
SPEEA’s next step: The Boeing engineers’ union takes another step to prepare for a strike, beginning Feb. 1.
Ed Colodny on US Airways mergers: He headed Allegheny Airlines and US Air for years, guiding the carrier through four mergers–including Piedmont Airlines, which critics widely considered that he screwed up, and PSA, which US did screw up. The Street gets his thoughts on the potential American Airlines merger.
GEnx PIPs slip a bit: The Performance Improvement Package program for the GEnx engine that powers the Boeing 787 and 747-8 has slipped a bit, according to this article.
Let’s lighten up over the Christmas holiday and get some good reader participation.
How about submitting as many nominations as you want for the Best Movies involving airliners and/or airports. These can be as recent as Denzel Washington’s “Flight” or as old as…whatever.
These can be dramas such as The High and the Mighty or spoofs such as Airplane. We’re also going to allow Island in the Sky, which although a war movie used DC-3s/C-47s, which of course are airliners. The Terminal is an example of an “airport” movie. The Castaway, while having an airplane a key element and having a major scene at the Memphis Airport, isn’t really a movie that falls into either category.
Make your case in nominating these movies. When it appears nominations have petered off, we’ll compile them into a poll for voting.
We also have a separate poll for the Worst Airplane Movie.