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December 17, 2012

Horton was "impartial about a merger" when he talked to pilots union, the company says

American Airlines chief executive Tom Horton did not dismiss a possible merger when he talked to the pilots union last week, according to a note sent to pilots on Monday afternoon.

Captain John Hale, the Fort Worth-based carrier's vice president of flight, said Horton reviewed the restructuring process of American to date and highlighted the opportunities for pilots at the new airline.

"Tom outlined the strong progress and improved performance we have achieved in restructuring and outlined all of the reasons -- from network and partners to fleet and products and services -- American is poised to be a successful, profitable and growing company that provides more opportunity for its people. For pilots this is growth and opportunity unseen for more than a decade. And,importantly, he was impartial about a merger, contrary to what you may have heard," Hale wrote in a memo to pilots on Monday.

Hale said that pilot pay would increase 50 percent by 2017 and the carrier planned to hire 1,650 new pilots as it brings new aircraft into its fleet.

American also released the powerpoint presentation that Horton gave to the union board on Thursday. Much of the information has been previously discussed publicly by Horton and other executives at American (the good stuff was redacted).

To download the presentation click here.

And keep reading for the full memo from Hale.

-Andrea Ahles 

 

FLIGHT DEPARTMENT HOTLINE
December 17, 2012

Good afternoon, this is CA John Hale with the Flight Department Hotline for Monday Dec. 17.

I imagine most of you have seen the reports on our chairman Tom Horton’s presentation to the APA board Thursday. There appears to have been some misunderstanding about what was presented so I wanted to be sure you had an opportunity to see the presentation first hand and form your own objective view.

Tom outlined the strong progress and improved performance we have achieved in restructuring and outlined all of the reasons -- from network and partners to fleet and products and services -- American is poised to be a successful, profitable and growing company that provides more opportunity for its people. For pilots this is growth and opportunity unseen for more than a decade. And,importantly, he was impartial about a merger, contrary to what you may have heard.

Much of the presentation is highly confidential, but it’s important for you to have an unfiltered look at the information, so we have posted to AAPilots a version that removes only the most competitive details. Also, you should know that this plan has been shown to and vetted by our Board of Directors, the UCC and countless advisors and expert professionals.

Tom shared a lot of great information on what's driving the projected pilot seniority progress and pay increases. At the heart are our roughly 550 aircraft on order -- which are very real, firm and financed – These aircraft will help fuel growth and the addition of a substantial number of new mainline routes, with international outpacing domestic growth by a significant margin. That will result in promotional opportunities and seniority advancement, not to mention about 1,650 new pilot jobs over the next five years or about 2,500 in total when you consider the new hires who will replace our colleagues who retire. On average, a pilot's income in 2017 is expected to be about 50 percent higher than his or her 2012 earnings.

Tom was clear that this vision does not preclude the idea of merging, either now or down the road, and that is being objectively assessed as we evaluate alternatives to achieve the greatest value for our financial stakeholders and the best outcome for our people and customers. And we also need to determine the impact of a merger on costs, and the process for integrating seniority, which is exactly why we wanted the APA involved in the discussions. As Tom shared in his Special Jetwire last week, we expect to have a conclusion on this work soon. I hope you will take some time to look over Tom's presentation.

That’s all for now. Thanks for all you do, take care of each other, and we’ll talk again soon.

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