Sky Talk

With AMR's stock up, executives sell some shares

Since AMR's merger with US Airways was announced, the Fort Worth-based carrier's shares have soared over 400 percent to $6.85.

Now, a few executives are selling shares, that were likely worthless when the company entered bankruptcy, and generating some cash.

According to documents filed with the Securities and Exchange Commission, three AMR executives acquired stock options and then sold some of their existing shares over the past week.

-chief financial officer Bella Goren acquired 13,007 shares of common stock at $6.13 on May 15 and then sold 33,979 shares on May 15 and 16 at prices ranging between $6.33 and $6.88, for a total sale price of $222,028.22. It is unclear how much Goren profited from the transactions since the filing did not say how much she might have paid for some of the shares she had previously acquired.

-executive vice president Dan Garton, who also runs American Eagle, acquired 19,514 shares of common stock at $5.83 on May 14 and then on the next two days sold those shares for $120,168.03 at prices ranging from $5.91 to $6.82. His profit from the transactions was $6,401.41.

-AMR's general counsel Gary Kennedy acquired 11,112 shares on May 14 at $5.83 and then sold those shares for $68,419.39 over the next two days at prices ranging from $5.91 to $6.82. His profit from the transactions was $3,636.43.

AMR plans to complete its merger with US Airways some time in the fall, pending government regulators and US Airways shareholder approval.

-Andrea Ahles

American and US Airways want authorization for more stock as part of its merger

American Airlines' parent company, AMR Corp., and US Airways want authorization for more shares of stock than it had originally proposed as part of its merger agreement.

In documents filed with the Securities and Exchange Commission on Thursday, the carriers said it wants authorization for an additional 100 million shares of preferred stock than before.

The amendment to the merger proposal now calls for authorization of 1.75 billion shares of common stock and 200 million shares of preferred stock.

-Andrea Ahles

 

TWU, IAM agree to jointly represent mechanics and ground workers at merged American/US Airways company

The Transport Workers Union and International Association of Machinists announced on Tuesday that the two unions have agreed to jointly represent mechanics and ground workers at the new carrier once American Airlines and US Airways merge later this year.

The unions said the partnership will represent about 30,000 employees and will be called the TWU/IAM Employee Association. After the merger between American and US Airways closes, the unions said they will ask government regulators to hold a union representation election among the affected work groups.

Currently, TWU represents mechanics, store clerks and fleet services workers at American while IAM represents the same work groups at US Airways.

"This agreement allows us to use our combined strength and resources on behalf of all our members as we move forward at the new American Airlines," said TWU International president Jim Little.

Under the agreement reached this week, the unions designated which one will conduct post-merger business in a specific city. For example, in Dallas/Fort Worth where the TWU currently has more members than the IAM, the TWU will keep its union facilities in place and work with employees. In Charlotte, the IAM will do the same.

"These agreements protect our members' representation, pensions and seniority," said IAM International president Tom Buffenbarger. "Working jointly with the TWU, we will ensure both unions' members are rewarded in this merger."

The partnership does not cover aircraft dispatchers, flight crew training instructors or flight simulator engineers as the TWU represents those work groups at both carriers. It also does not include the maintenance instructors at US Airways which are represented by the IAM.

Recently, the Teamsters filed for a union representation election of US Airways' mechanics and has said it plans to file a similar application for American's mechanics as well.

-Andrea Ahles

American reopens job posting for flight attendant positions

Flight attendants wanted.

American Airlines re-opened its flight attendant job posting on Friday as it expects to add 1,500 new flight attendants this year.

The carrier had previously accepted flight attendant applications in November and over 20,000 job applicants submitted their resume in less than a week.

"Our focus remains on finding great people that can deliver the level of service our customers expect of the new American," the carrier said in a memo to employees on Friday.

It is also looking for flight attendants that speak Italian, German, Portuguese, Korean, Japanese, Mandarin Chinese, Finnish, Spanish and French.

-Andrea Ahles

American/US Airways integration team says it could take more than 18 months after merger close to get single-operating certificate

It's going to take a long time to integrate American Airlines and US Airways, executives at the two airlines told employees in a merger update.

In a letter sent to workers on Friday, US Airways chief operating officer Robert Isom and American treasurer Bev Goulet said it will likely take at least 18 months after the merger closes for the new company to receive its single-operating certificate from government regulators. 

They reiterated the merger is expected to close in the third quarter and that a new executive team will be named in late May, early June.

"Consider the numbers: Our integration will include more than 110,000 people serving 187 million customers a year flying to and from 336 destinations on more than 1,500 planes. Boil that down, and we will need to align thousands of systems, applications, procedures and policies as we implement the merger. And we want to get every one of them right," the pair wrote.

Keep reading for the full letter from Goulet and Isom.

-Andrea Ahles

 

May 10, 2013  

Fellow Employees:

We’re pleased to report the latest on our progress in planning the integration of American Airlines and US Airways. Ours is a big, complex task guided by a team of committed professionals from both airlines who have joined forces to create not just the biggest, but the best airline in the world.

Consider the numbers: Our integration will include more than 110,000 people serving 187 million customers a year flying to and from 336 destinations on more than 1,500 planes. Boil that down, and we will need to align thousands of systems, applications, procedures and policies as we implement the merger. And we want to get every one of them right.

The Integration Management Office (IMO) – the “nerve center” of our integration effort – has been firing on all cylinders since we last provided an update. As we have previously shared, there are 29 teams planning the integration of our commercial, customer-facing, operations, and corporate and staff functions for our two airlines. We’ve also created several cross-functional taskforces that will work on specific objectives. One, for example, is preparing a joint crisis response plan, while another is already focusing on obtaining a single operating certificate for the combined carrier.

This week several teams – those who have tasks that must be accomplished leading up to legal close or that otherwise will enable us to capture and deliver value to customers and employees – gathered in Dallas/Fort Worth to discuss and align objectives, set milestones, and properly sequence activities. Ultimately, we are working to create an airline that keeps our current customers happy, brings in new customers, provides a great place to work, and achieves the financial value that will make it all possible.

We know this planning process raises many more questions than answers at this time. How long will this take? What changes might affect you and when? As a guideline, we are planning toward a third-quarter transaction close. Between now and then, the leadership team for the new company will be named; this week Tom Horton and Doug Parker shared that they expect to name the senior team around the end of May or early June. And, once the merger closes, you will start to see things change as we begin to implement our integration plans. 

Following close, we anticipate it could take at least 18 months before we operate as a single carrier. In the interim, we’ll begin to extend to customers some of the benefits they’ll see from the merger, including the ability to combine flights on a single itinerary and earn and redeem frequent flyer miles across airlines. We are committed to educating our employees on those changes so that you can provide the best service to our customers. Only later in the process will we combine, for example, reservations systems and combine our operations control centers.

Our goal is to make these transitions as smooth as possible at every phase. Please watch for regular updates from us as the work of the IMO continues, and we encourage you to read each weekly edition of our joint merger newsletter Arrivals, which you can find on Jetnet or Wings, to learn more about what’s happening across both airlines.

While our integration planning teams continue their work, the biggest priority for all of our employees is to stay focused on running both airlines safely while maintaining a reliable and convenient experience for our customers.

We have a great deal of work ahead as we plan to put the new American back on top. With the best people in the industry alongside us, we know we will succeed. A big thanks to all of you for your hard work and commitment to our customers as our busy summer travel season approaches.

Sincerely, 

  Robert Isom                                  Bev Goulet

 

American agrees to pay $24.9 million to settle FAA safety claims

American Airlines has agreed to pay the Federal Aviation Administration $24.9 million to settle $162 million in safety claims made by the agency.

According to bankruptcy documents filed on Thursday, American agrees to also perform additional training of its maintenance personnel and increase its oversight of third-party maintenance providers.

"This settlement recognizes the many changes, including enhancements to our maintenance and engineering processes, increased training, inspections, and audits that have taken place at American over the past several years that address past FAA concerns," said American spokeswoman Andrea Huguely. "The safety of our people and our customers always has been – and always will be – our top priority."

After American's parent company, AMR Corp., entered bankruptcy, the FAA filed several claims with the bankruptcy court to potentially fine AMR up to $162 million as part of ongoing safety investigations.

One of the claims relates to American's MD-80 fleet which the FAA grounded in 2008 after finding improper wiring around the landing gear of the aircraft. About 3,000 flights were canceled as a result during one week in April 2008. In 2010, the FAA proposed a $24.2 million fine against American.

An FAA spokesman said the agency agreed to reduce the claim amount in the settlement because American had made several safety and compliance improvements that have an estimated value over $50 million.

American did not admit to any wrongdoing as part of the settlement, court documents said.

The settlement with the FAA requires bankruptcy court approval. A hearing is tentatively set for May 30 with objections to the settlement due to the court on May 23.

-Andrea Ahles

 

 

Bankruptcy court approves $3.25 billion in financing for AMR

AMR Corp. received a bankruptcy judge's approval to borrow up to $3.25 billion as it prepares to exit bankruptcy protection.

The Fort Worth-based carrier had asked for the financing to reorganize and repay debt. The loans, approved by U.S. bankruptcy judge Sean Lane at a hearing on Thursday, will be backed by airport gates, take-off and landing slots and routes between the U.S. and South American, according to court documents.

AMR, the parent company of American Airlines, is set to merge with US Airways later this year upon emerging from bankruptcy. The merger still needs to be approved by government anti-trust regulators and US Airways shareholders.

-Andrea Ahles

American inks new distribution deal with Amadeus

American Airlines announced it has a new distribution deal with Amadeus, a global distribution system.

Under the agreement, travel agencies that use Amadeus will be able to continue booking tickets on American through the Amadeus system. The two companies will also work on a new technology connections that will allow travel agents to book ancillary items such as Main Cabin Extra, an additional fee that gives passengers more legroom and can board the flight in the first group.

"Amadeus has shown an ability to adapt its technology to our business needs and we appreciate this spirit of partnership," said American's vice president of global sales Derek DeCross.

American has been trying to lower the booking fees it pays global distribution systems like Amadeus and Sabre. The carrier has also been working on technology for travel agents to directly connect to its reservation system, bypassing the GDSes.

-Andrea Ahles

AMR says passenger traffic dropped 1.1 percent in April

AMR Corp. said its consolidated passenger traffic declined 1.1 percent in April as the Fort Worth-based carrier increased capacity by 0.4 percent.

Its load factor dropped 1.3 percentage points to 81.6 percent. AMR said its unit revenues also decreased 2.9 percent when compared to April 2012.

Domestic traffic was 1.4 percent lower as capacity declined 1.5 percent, the parent company of American Airlines said. International traffic decreased 0.6 percent as capacity on international routes rose 3.4 percent.

-Andrea Ahles

 

Parker, Horton update American and US Airways employees on merger progress

In a letter sent to employees on Monday, American Airlines chief executive Tom Horton and US Airways chief executive Doug Parker said a new senior leadership team will be announced in June.

The two executives said several teams from the carriers will meet in Dallas/Fort Worth this week to discuss integration issues. The merger is still on track to close in the third quarter.

Keep reading for the full message.

-Andrea Ahles

 

May 6, 2013

To the American and US Airways teams:

Planning for our merger is moving along at a good pace, and we’re pleased to report great progress from the teams responsible for each phase and every detail involved in joining our two great airlines.

From the start of this journey, our Integration Management Office (IMO) has been focused exclusively on planning the path to a successful merger and the launch of the world’s premier global carrier. In this work, we expect to generate more than $1 billion in synergies and to create a secure future for employees, and will manage the process with our customers always first in mind.

At this point, 29 integration planning teams and several cross-functional task forces are at work to define the manner in which the two companies will combine our commercial, customer service, operations and corporate functions after the merger closes.  

Last month these teams gathered in Tempe to kick off this work. This coming week, a number of the teams will take part in a Planning Summit in Dallas/Fort Worth with a focus on the most pressing work that must be accomplished during the months leading up to the close of the merger, including what our customers see and hear from us on day one and how we bring our more than 100,000 employees together as one team.

One of our priorities is putting together the strongest possible leadership team for our combined airline. We are taking the right amount of time to make the most thoughtful decisions and to get it right – not to do it quickly. We go into this task confident that we have tremendous people at each airline and will only be stronger together when we make the right leadership selections. We announced our merger in mid-February and expect to announce the new senior leadership team, Doug’s direct reports, sometime late this month or in early June. We will build out the rest of the officer corps from there. We know there is much interest in this, and we will keep you informed along the way.

We also remain committed to communicating frequently and transparently. Please keep in mind that this integration planning effort is a careful and deliberative process, and we’re still in the middle of it. We have the benefit of learning from the experiences of airlines that already have merged, even as we plot our unique course. 

We still expect the merger to close in the third quarter of this year, and we will then move forward with a carefully designed, step-by-step plan that leads to the day we operate as a single carrier. That could be 18 months or more from the time the merger closes, but the date is less important than the details, which we are working very hard to get right.

The most important thing we can do to ensure a strong future for the new American is to continue to operate our respective airlines safely, and on time, and focused on our customers. Keep up the great work.

Tom

Doug