Sky Talk

AMR says it lost $807 million in March because of restructuring charges

In a bankruptcy filing made on Monday, AMR Corp. posted a $807 million loss for the month of March.

The Fort Worth-based carrier said it spent $856 million on reorganization items, including $841 million in aircraft financing renegotiations and lease rejections. AMR also spent $15 million on professional consulting fees.

Without the bankruptcy restructuring items, AMR reported a profit of $49 million for the month.

The company had $2.198 billion in revenues in March and ended the month with $4.8 billion in cash and short-term investments.

-Andrea Ahles

Monday Midday Must-Reads

-New York Times columnist Ron Lieber thinks that American Airlines customers should get their own committee during the bankruptcy process. "A customers’ committee would have no legal standing. Frequent-flier miles, after all, are not real currency, so members of American’s AAdvantage program are not creditors in bankruptcy court. But the airline does not exist or persist without its frequent travelers, and many of the people involved in the bankruptcy conversation seem to be taking their loyalty for granted," Lieber writes. Click here to read his full column.

-Eric Emery may not have been laid off yet from his job as a mechanic at American Airlines, but the North Texas man is preparing for the worst, holding a "layoff sale" over the weekend at his house, according to this CBS11 report.

-Flying this summer for vacation will be a litler more expensive, thanks to higher fuel prices. A USA Today article said that airfares are up 3 percent compared to last summer and 18 percent higher than 2010.

-Andrea Ahles

 

 

US Airways agreements would save over 3,500 TWU jobs

US Airways agreed to save 1,500 mechanics jobs and 2,042 ground crew positions as part of its proposed labor contracts with the Transport Workers Union, according to documents released by the union on Friday.

The agreements, however, include plans to shutter the Alliance maintenance facility in Fort Worth just like American Airlines’ current proposals that are being debated in bankruptcy court.

Last week, American’s three largest unions announced their support for a possible takeover bid by US Airways and said they already had preliminary labor agreements with the Tempe, Ariz.-based carrier. Currently, American is asking the bankruptcy court to reject its labor contracts and impose concessionary agreements which would cut 8,500 TWU jobs.

US Airways said it would not cut 450 mechanics and related positions in Tulsa and 250 jobs at various airport maintenance stations. If a merger of US Airways and American is completed, the carrier will also protect 4,500 Tulsa aircraft maintenance technicians from furloughs.

It would also not outsource 1,390 ground crew positions at 30 airports around the U.S and 625 cargo and mail handling workers at New York JFK, Los Angeles, Dallas/Fort Worth and Miami airports.

The airline would also offer an "enhanced severance program" with a severance allowance of $22,500 to TWU workers who were over 45, had over 15 years of work experience and relinquish recall rights. Only 1,500 TWU workers would be able to participate in that program.

American had offered its unions a profit sharing deal once the company emerged from bankruptcy. The US Airways offer does not include any profit sharing and limits TWU members' 401(k) company match up to 3 percent of eligible earnings. American had offered a 5.5 percent match to TWU members.

Although it released the details of the US Airways term sheets, the TWU is still planning to allow its members to vote on American’s final offers, which the company has said includes fewer job cuts. A ratification vote "could take place very soon."

Click here to download the Fleet Services term sheet

Click here to download the Flight Dispatchers term sheet

Click here to download the Simulator Instructors term sheet

Click here to download the Mechanic and Related term sheet

Click here to download the Maintenance Control Technicians term sheet

Click here to download the Simulator Technicians term sheet

Click here to download the Stock Clerks term sheet

UPDATE: Here is a statement from American spokesman Bruce Hicks regarding the proposed US Airways labor contracts. “As we’ve said from the start, American Airlines’ goal is to reach consensual agreements with all of our unions. That’s why we’ve worked hard with the TWU over the last several weeks on proposals that meet the company’s necessary cost savings and addresses many of the TWU’s concerns. Our settlement proposals, which we expect the TWU will make public in a few days, will save more than 3,000 jobs.”

-Andrea Ahles

DFW Airport hosts "Vote Travel" bus

Dallas/Fort Worth Airport hosted the U.S. Travel Association's Vote Travel Bus on Friday.

The travel organization is hoping to raise awareness about travel industry's impact on the economy during an election year.

For example, DFW Airport said it annually creates $16 billion in economic impact and supports about 300,000 local jobs.

The bus tour is scheduled to stop in 38 cities to promote travel policies such as reducing security and visa hassles associated with travel, the USTA said.

Photo courtesy of DFW Airport

-Andrea Ahles

APFA tells members to post comments on news articles about American bankruptcy

In a note to American Airlines flight attendants Thursday night, the Association of Professional Flight Attendants told its members to post comments on news articles about the carrier's bankruptcy proceeding.

"When you come across an article whether it's in our favor or not, scroll to the bottom and add a few constructive comments," the hotline message said. "Please keep your comments to the point, professional and non-personal. Management would never be able to keep up with 16,000 flight attendants defending our position in the press."

The APFA also said there will be a joint event between the APFA, the pilots union and the mechanics and ground crew workers union in the next few weeks with details to be forthcoming. The three unions last week announced their support for a possible takeover bid from US Airways.

Keep reading for the full hotline.

-Andrea Ahles

APFA HOTLINE UPDATE
This is Leslie Mayo with an APFA Hotline Update for Thursday, April 26, 2012.
 
NY BANKRUPTCY HEARINGS
We are aware that many of you are anxious for details of the proceedings this week in New York as management blames labor for all its problems. Once we receive details from our professionals who are participating in the bankruptcy hearings we will be able to communicate that information to you. Thank you for your patience.
 
CALLING ALL ONLINE-SAVVY FAS:
APFA needs your help managing some of the news articles related to the 1113 hearings in New York this week. When you come across an article whether it's in our favor or not, scroll to the bottom and add a few constructive comments. If you would like help with talking points, go to www.apfa.org and click on the US Airways Q&As link for documents relating to APFA's Bridge Term Agreement with US Airways. Talking points will be uploaded shortly. Please keep your comments to the point, professional and non-personal. Management would never be able to keep up with 16,000 flight attendants defending our position in the press. Feel free to send us copies of your work. We may even post some online. email to communications@apfa.org.
 
The Wall Street Journal is conducting an online poll about whether a US Airways/AA merger is a good idea. Visit http://goo.gl/zKJ8k to show your support.
 
Upcoming APFA, APA and TWU Event in the Works
We already have the next joint event involving all three unions in the works. As soon as we can, we will release details re: date, time and location. It is expected to take place within the next 3 weeks so stay tuned.
 
Thanks to everyone who sent in a photo of their union pin with light for our virtual candlelight vigil before the picketing event. Some of the photos can be found on apfa.org. We still have several more to load so bear with us. Also, picketing photos and videos are abundant. We are collecting those from emails and Facebook - as many as we can find. If you have some photos you would like for us to publish, please email them to communications@apfa.org.
 
United Airlines Interim Reciprocal Cabinseat Travel Update
Some of you are still experiencing problems traveling under the interim procedures set forth by United. Hopefully the following information will resolve any issues FAs still may be having.
 
When traveling on Skywest flights operated by United Express, no advance listing is required. Proceed to the gate and complete the paper jumpseat form. You will not be placed on the standy list - instead, the agent will accommodate you based on the form. United has assured us they will send reminders to Skywest agents for consistency with this policy. If the agent is not familiar with this procedure, politely refer them to the following reference in their SHARES reservations system: GG OO JUMP. AA FAs may want to carry a copy of this form and instructions found on the Flight Service website.
 
If you are traveling on mainline United Airlines flights, complete your listing on Jetnet with the ID90 tool. Forward your confirmation via email to uaoaduty@united.com as soon as possible after. This email address is not monitored on the weekends or after hours on weekdays so if your email is not sent during normal business hours, it will be converted on the next business day. In other words, during this interim travel period while United converts to a single reservations system, all FAs requiring travel on UA should obviously plan as far ahead as possible.
 
Please send detailed report to contract@apfa.org if you continue to experience problems using UA's cabinseat agreement.
 
This hotline will be updated on Friday, April 27, 2012.

Southwest flight attendants ready to fly internationally

Even though Southwest Airlines does not have any international or over-the-water flights, its flight attendants union said it is ready to fly outside of the U.S.

The Transport Workers Union, which represents Southwest flight attendants, said that the union has come to a tentative agreement with management to address international routes for destinations in Mexico and South America as well as across-the-ocean destinations such as Hawaii and Puerto Rico.

"In recent weeks, our union has given our full in our support for making Houston Hobby Airport an international gateway for our customers. Today, we’ve taken a further step in support of Southwest adding international routes by reaching a tentative agreement with management that addresses flight attendant issues on near international flights and domestic flights over water.  A similar agreement was reached by our pilots union last week.  If approved by the members of both unions, these agreements will allow Southwest Airlines to offer flights to Mexico, South America and to island destinations such as Hawaii or Puerto Rico from several Southwest cities.

"The next step is to put this TA out to our members for a ratification vote.  Just as our members supported adding 737-800 aircraft that make flights and the acquisition of AirTran Airways, we look forward to the opportunity for expansion to near international and overwater destinations for our company and our customers," the union said to its members in a message on posted to its website.

Southwest currently does not have international destinations although its subsidiary AirTran Airways does fly to Mexico and parts of the Caribbean. The Dallas-based carrier recently received its first Boeing 737-800 aircraft which will receive certification for over-the-water flying. Southwest chief executive Gary Kelly has said in the past that the 737-800 could allow the carrier to add destinations in Mexico, Canada, Alaska and Hawaii.

-Andrea Ahles

 

TWU says members will vote soon on American final offers

In a note to members sent out on Wednesday, the Transport Workers Union said its negotiators are still in Dallas working on final language in American Airlines' latest offer to the mechanics and ground workers union.

The TWU said it expects talks to continue through most of the week and then plans to announce a ratification vote schedule.

"Such a vote could take place very soon," the message said. "We cannot give exact dates until all the language is produced by AA, as it is their final offer."

Members will be allowed to vote electronically or by phone, the TWU told members, adding that it will give members information on the final offer and the Section 1113 filing that American made and will go into place if the judge rules to reject the labor contracts.

"NOTE THAT THE AA 1113 RATIFICATION VOTE HAS NOTHING TO WITH THE POSSIBLE USAIR MERGER. The issues are legally unrelated. Even a yes vote on the AA final offer will not prevent a possible merger, which still faces many hurdles unrelated to labor issues," the message said.

Keep reading for the full message.

-Andrea Ahles

 

TWU MEMBERS TO SOON VOTE ON AA FINAL OFFERS

Our negotiators are still in Dallas awaiting the final full text language on AA's last concessionary ask. We are still attempting to mitigate parts of the Company's last offer. We anticipate these talks to continue through most of this week.

If this timeline holds up, we expect to then announce a ratification vote schedule on the AA's last ask. Such a vote could take place very soon. We cannot give exact dates until all the language is produced by AA, as it is their final offer.

Once we know and announce the exact dates, we will mail all members highlighted information and voting instructions. Members will vote electronically or by phone. We will also post for review the last term sheets of the AA offers of April 4, along with an electronic PDF full text contract. It is this language that goes into place if the bargaining unit votes "yes."

We will additionally provide on-line copies of the Company's 1113 court filing, which goes into place if we vote "no" and the judge rejects the contracts. You will be given side by side comparisons so you can analyze the differences and make an informed vote.

Please take note that the judge DOES NOT write a new contract. He does not rule on any individual contract items at all. He simply grants or denies the AA motion to completely reject and cancel our contracts.

As you know bankruptcy law is very labor unfriendly, and in the vast majority of cases large corporations win their 1113 cases. This is the harsh reality of the prior court rulings.

Finally, we will soon be posting information on the USAir terms. NOTE THAT THE AA 1113 RATIFICATION VOTE HAS NOTHING TO WITH THE POSSIBLE USAIR MERGER. The issues are legally unrelated. Even a yes vote on the AA final offer will not prevent a possible merger, which still faces many hurdles unrelated to labor issues.

Let our negotiators finish their work this week. We will then get our directions from the membership --- you will soon be voting.

Schnurman: Whose vision is better for American Airlines?

This was supposed to be a pivotal week in American Airlines' bankruptcy, as the company tries to end its high-priced labor contracts. But the showdown in a New York courtroom now looks like a prelude to the main event.

The bigger question hanging over the proceedings is whether US Airways has a better vision for the future -- and the wherewithal to pull off a merger.

Answer in the affirmative, and the current contract battle seems almost beside the point. Huge changes would be coming to American headquarters in Fort Worth, starting with a new management team assembling the country's largest airline.

If US Airways is ultimately rebuffed, and that has happened more than once in the recent era of airline consolidation, American rebuilds from the ground up. It may not be No. 1 in size, but going solo could be a more valuable option.

That debate must play out eventually, as stakeholders decide where to cast their lot. It's just not going to happen for a while.

In a voluntary bankruptcy, the debtor usually has the exclusive right to develop a reorganization plan, without interference from outsiders. A vital part of American's plan calls for cutting labor costs by $1.25 billion a year, and that's the court's focus this week.

American employees may face the fallout -- deep layoffs, cuts in benefits and changes in work rules -- as soon as June, if the judge rules as scheduled.

To avoid that, the unions want US Airways to be part of the discussion, because they've thrown their support behind a US Airways merger and agreed to a framework on new contracts. Sounds like a relevant development, but so far, U.S. Bankruptcy Judge Sean Lane won't hear of it.

He said Tuesday that he even avoids some news reports, adding, "I have to decide what's in front of me" -- and not the big part of the iceberg he does not see.

There's good reason to stick to the process, because US Airways' proposal is not a slam-dunk. Key details, such as financing the merger and integrating the workforce, haven't been spelled out. Even if an offer materializes and is proposed to creditors, it's still possible that American could offer a better plan.

To read the full column that appeared in Thursday's Star-Telegram, click here.

-Andrea Ahles

Lockheed CEO Stevens announces Jan. 1 retirement; profit and sales increase

Lockheed Martin said today that its chairman and chief executive officer, Bob Stevens, 60, will retire in January after 25 years with the company.

President and Chief Operating Officer Chris Kubasik, 51, will succeed Stevens as CEO effective Jan. 1, 2013.  Subject to election by shareholders and approval by the board, Stevens will remain chairman through January 2014.

Another Lockheed executive, Marillyn A. Hewson, 58, will assume Kubasik's role as president and COO on Jan. 1. Hewson’s successor is an executive vice president of Lockheed and heads its Electronic Systems business division.

Lockheed also reported strong increases in first-quarter profits and sales.

First-quarter profit was $668 million, of $2.01 per share, compared to $530 million and $1.50 a share a year ago. sales increased to $11.3 billion from $10.6 billion in the first quarter of 2011.

Lockheed is the nation's largest defense contractor with 2011 profits of $2.7 billion on sales of $46.5 billion. Virtually all of its business is derived from sales to the U.S. and foreign governments.

Its largest operating division is Fort Worth-based Lockheed Martin Aeronautics Co., which builds F-35 and F-16 fighter jets, C-130 and C-5 cargo planes and delivered 31 percent of the parent company's sales and 41 percent of operating profits in 2011. 

About 3,700 members of the Machinists union at the west Fort Worth fighter jet plant went on strike Monday with one of the key issues being Lockheed's plan to eliminate pension plans for new hires.

Stevens received total compensation of $18.4 million in 2011, including a $1.8 million salary (unchanged since 2008), a $4.7 million annual performance bonus, $7.5 million in stock awards and $4.4 million in long term performance bonus.

- Bob Cox

 

 

 

 

 

 

 

Boeing CEO supports AMR remaining on its own

On its earning call on Wednesday, Boeing chief executive Jim McNerney voiced his support for AMR's restructuring plan and remaining a stand-alone carrier after bankruptcy.

According to TheStreet.com:

"Answering a reporter's question during Boeing's earnings call, CEO Jim McNerney said, "American is working through the process now and we support them emerging from this thing as a stronger airline."

"We've seen mergers before," McNerney added. "It's not clear that this one's going to happen, by the way, in our view."

After American emerges from bankruptcy, "If at that point a merger makes sense to the two managements of the companies, we'll support that as well," McNerney noted."

To read the full article, click here.

-Andrea Ahles