Representing the Flight Attendants
of American Airlines

Representing the Flight Attendants of American Airlines

5.17.12 – (LAA) – Live Tweets from Bankruptcy Court

APFA Live Tweets From Bankruptcy Court – Day 2 – May 17, 2012

This is Leslie Mayo, National Communications Coordinator, with a Bankruptcy Hotline update for May 17, 2012.

Below is today’s APFA Twitter feed from the 1113 hearing in Bankruptcy Court of the Southern District of New York. The feed reads from the bottom up. Some tweets are longer and are followed by a link. Click on the link to read the Tweet in its entirety. The time associated with each Tweet is actually four hours ahead of Eastern Daylight Time.

Today was day two of APFA’s day in court to present witnesses and testimony in defense of AA’s efforts to abrogate our contract. Our portion of the hearing should conclude by tomorrow afternoon, May 18th.

Please note this is not an official transcript of the hearing by any means. It is simply a summary of the testimony and should not be construed as anything but an unofficial summary of the court proceedings.

People involved in today’s proceedings:
Rob Clayman, APFA Attorney
Adam Condrick from The Segal Group (Actuaries/Benefits – employed by APFA)
Dan Akins, APFA’s Airline Analyst and Financial Expert

APFAunity Hearing finished for the day. Did anyone find my glasses? Back tomorrow at 10am I believe. APFA has one more witness then TWU is up. 11:32 PM May 17th from web

APFAunity Rob asking 3 more follow-up questions on confidential documents in a public setting. A little challenging. 11:00 PM May 17th from Tweetbot for iOS

APFAunity Redirect by Rob Clayman. Judge has interrupted “in the interest of compassion” it’s time for Dan Akins to be released. 10:58 PM May 17th from Tweetbot for iOS

APFAunity One of the Creditor’s Committee members just asked Dan Akins several questions about AA’s Standalone Plan. Dan answered beautifully!! 10:54 PM May 17th from Tweetbot for iOS

APFAunity Great article from Terry Maxon re: Dan Akins’ testimony. http://t.co/M9HqoDQl 10:28 PM May 17th from web

EricTorbenson Among the things I never thought I’d see: airline buying an oil refinery and now a white flag flying at Centreport. And more to come #AMR 12:06 AM May 12th from Twitter for BlackBerryÆ retweeted by APFAunity

APFAunity Dan was asked to leave while the company argues about a document they want to put into evidence. Judge weighing the argument. 9:53 PM May 17th from web

APFAunity Every question Dan answers is followed by another immediate question despite Dan’s response. Like a round of bullets. Dan remains steadfast. 9:49 PM May 17th from web

APFAunity Even the judge asked Company Counsel to slow down. Serious fast talker. Impossible to keep up on a keyboard! 9:31 PM May 17th from web

APFAunity Dan confirmed they are too aggressive. Company attorney is asking all kinds of random questions to Dan irrelevant to his previous testimony 9:24 PM May 17th from web

APFAunity Asking about the criticisms of AA’s business plan. You said they are too aggressive. 9:22 PM May 17th from web

APFAunity Confidential portion of hearing is over. Cross examination of Dan Akins (APFA’s Finance Expert) is continuing. 9:20 PM May 17th from web

APFAunity Clarification: question of highest paid FAs excludes all but majors airlines. 8:34 PM May 17th from Tweetbot for iOS

APFAunity Rob Clayman rests on public testimony of Dan Akins. Clayman will now be questioning Dan on confidential information. I have to leave. 8:26 PM May 17th from web

APFAunity Rob Clayman is clarifying data that the company oversimplified during cross and took out of context when trying (cont) http://t.co/I3Qh2D3z 8:23 PM May 17th from TwitLonger Beta

APFAunity Redirect from Rob Clayman just begun. Should be short. 8:20 PM May 17th from web

APFAunity Cross continues. Company continues to attempt to diminish Dan Akins’ credibility. Not successful. 8:11 PM May 17th from TwitLonger Beta

APFAunity Judge understands that the 2003 concessions are historically relevant but when we get into the statistical analysis of it, … not relevant 8:10 PM May 17th from web

APFAunity Break time 7:53 PM May 17th from web

APFAunity Cross examination is painful. Growing very sleepy. 7:40 PM May 17th from web

APFAunity Correction. DA says “Yes” we are 2nd highest paid payscale wise (excluding benefits into consideration) to Continental. 7:37 PM May 17th from web

APFAunity CC asks whether AA’s highest pay rates are higher than everyone’s aside from Continental? DA: “No.” (taken out of context naturally) 7:34 PM May 17th from web

APFAunity Company att’y taking payscales and comparing with other majors. Not in relation to total compensation just pay rates. 7:33 PM May 17th from web

APFAunity Company Counsel (CC): You are aware that the AA FAs highest wage rate is higher than any other airline with the (cont) http://t.co/WuxarMsD 7:19 PM May 17th from TwitLonger Beta

APFAunity Cross examination begins Company’s attorney – “it’s true isn’t it that a percentage of the overall ask at US (cont) http://t.co/VZjImewK 7:17 PM May 17th from TwitLonger Beta

APFAunity The impact of the Term Sheet plus the RPA = there are also factors including the amt. FAs are behind (10%) plus (cont) http://t.co/96fcRK67 7:05 PM May 17th from TwitLonger Beta

APFAunity That is a 16% wage cut. 7:03 PM May 17th from web

APFAunity Total impact of benefit changes means that instead of the $45,000 gross pay AA says FAs make, it will be reduced to $37,000 gross pay. 7:02 PM May 17th from web

APFAunity VERY LONG TWEET: We have a very high growth risk in the Standalone Business Plan. I have never seen a (cont) http://t.co/ApZ7rxD1 6:56 PM May 17th from TwitLonger Beta

APFAunity The standalone plan will not be able to compete with United and Delta. This is a structure issue. It doesn’t fix (cont) http://t.co/kpJSLQ39 6:32 PM May 17th from TwitLonger Beta

APFAunity True consolidation allows the carriers to enjoy synergies they wouldn’t have had that allow higher revenues, (cont) http://t.co/WUueNDs6 6:31 PM May 17th from TwitLonger Beta

APFAunity Wall Street analysts have reviewed AA’s business plan negatively. I haven’t seen a single analyst who supports (cont) http://t.co/HKJELA5F 6:29 PM May 17th from TwitLonger Beta

APFAunity United’s presence in SFO is much stronger. RC: other than JetBlue, is there any other airline that would provide (cont) http://t.co/2JZkizHq 6:27 PM May 17th from TwitLonger Beta

APFAunity RC: What is ur view of AA’s plan in LA? DA: LA is more than just LAX. there are 5 airports for local and int’l (cont) http://t.co/jTK5w213 6:26 PM May 17th from TwitLonger Beta

APFAunity RE: cornerstone and AA’s plans for Chicago? Dan: among Dallas and Miami, Chicago isn’t as amiable to AA’s plan (cont) http://t.co/LTXnPJSe 6:24 PM May 17th from TwitLonger Beta

APFAunity But codesharing isn’t as competitive to having your own feed. RC is asking Dan Akins about possible codesharing (cont) http://t.co/tsEbyHkD 6:22 PM May 17th from TwitLonger Beta

APFAunity Codesharing is what airlines should do. JFK is slot restricted. Codesharing is a 2nd best solution 6:20 PM May 17th from web

APFAunity feed seats to JFK. 6:20 PM May 17th from web

APFAunity It’s not necessarily the size of your airline – it’s the feed, how many flights you fly to those cities, how many seats… AA has far less 6:19 PM May 17th from web

APFAunity Not enough market share. United has a stronger feed into JFK 6:17 PM May 17th from web

APFAunity AA doesn’t have enough feed into JFK to flourish as they state they want to in their business plan. It depends on Codeshare. 6:17 PM May 17th from web

APFAunity The 2nd largest player in Dallas is Southwest. Delta was but pulled out sometime after its bankruptcy. JFK’s market is different – … 6:17 PM May 17th from web

APFAunity Are there cornerstone markets that will experience some success? DA: Yes – Miami, DFW – the ones that are currently experiencing success 6:15 PM May 17th from web

APFAunity Court’s back in session. RC is asking Dan Akins about the cornerstone strategy which is part of the standalone plan. 6:15 PM May 17th from web

APFAunity <A moment of silence for Donna Summer please> 6:14 PM May 17th from web

APFAunity Places everybody 6:04 PM May 17th from web

APFAunity Lunch break – back around 2:00 4:29 PM May 17th from web

APFAunity RC: Do you believe the other airlines will compete with AA’s efforts to upgrade? DA: These upgrades are AA (cont) http://t.co/Gn4T9q1g 4:25 PM May 17th from TwitLonger Beta

APFAunity AA’s plan includes onboard entertainment systems. Handheld games, seat pitch, first and biz includes lie-flat (cont) http://t.co/JkHklKyo 4:24 PM May 17th from TwitLonger Beta

APFAunity AA’s plans’ assumption of no competitor response when it’s trying to recapture high-value customers. United and (cont) http://t.co/1i4y5lQ0 4:22 PM May 17th from TwitLonger Beta

APFAunity Code sharing is when you don’t serve certain markets. AA uses sharing because of its lack of feed into AA (cont) http://t.co/lK6kXyj5 4:18 PM May 17th from TwitLonger Beta

APFAunity AA demand is closely correlated with the Gross Domestic Product GDP. There is a disconnect there. Germany may (cont) http://t.co/4S7kZw8h 4:12 PM May 17th from TwitLonger Beta

APFAunity Dan is asked to explain “city pairs.” What if a route included a connection through Chicago? That would be an (cont) http://t.co/9NFXieAy 4:11 PM May 17th from TwitLonger Beta

APFAunity I don’t think AA’s idea that other carriers are going to allow it to execute its plan is realistic. The other (cont) http://t.co/WkuHRaG6 4:05 PM May 17th from TwitLonger Beta

APFAunity AA’s view of fuel is unrealistic. The way AA business plan is laid out is not what other airlines apply when planning their fuel consumption 4:05 PM May 17th from web

APFAunity The other airlines are not going to sit idly by. They will compete. 4:04 PM May 17th from web

APFAunity AA is attempting to (with Scope relaxation) expand and plans on the other airlines not responding. 4:03 PM May 17th from web

APFAunity We are one step away to final maturity in the airline business. Today there are 2 large companies and 2 smaller (cont) http://t.co/e8KbjeHz 4:00 PM May 17th from TwitLonger Beta

APFAunity the lack of a competitive network – where AA has strength in 2 cities they perform much better, when they don’t they’re much worse. 3:58 PM May 17th from web

APFAunity Laptop died. Having to use same outlet as company attorney. We both have issues sharing the power. For now, I’ve got it. 3:48 PM May 17th from web

APFAunity When other carriers outsource maintenance (which they do), their accounting considers maintenance outside of their labor cost. 3:40 PM May 17th from web

APFAunity AA insources its maintenance costs. AA is unique. With this, AA’s labor cost includes maintenance. 3:40 PM May 17th from web

APFAunity labor cost is one component of the total operating cost (minus its fuel) at no point since ’03 has AA had higher mainline costs 3:37 PM May 17th from web

APFAunity DA: Very limited. Last raise FAs had was in ’08. The Network story is much more compelling 3:33 PM May 17th from web

APFAunity AA’s relative position has worsened. RC: What effect has AA’s labor cost had on AA’s poor performance from ’08 – ’11. 3:33 PM May 17th from web

APFAunity United merger not yet complete 3:31 PM May 17th from web

APFAunity American has lost its high-value customers because of its (lack of a broad) network. Delta is finished with their merge. Making 2billion yr. 3:31 PM May 17th from web

APFAunity then alaska airlines and frontier who were more restricted in their network. Currently, airlines are fairly healthy. 3:25 PM May 17th from web

APFAunity Economic collapse combined with a fundamental restructuring. The industry before 2008 had 6 network carriers 3:24 PM May 17th from web

APFAunity RC What has changed in the last five years? 3:23 PM May 17th from web

APFAunity city pairings. The abilities for biz customers to ride the local airline to more cities nonstop than competitor airlines. 3:22 PM May 17th from web

APFAunity If you look at United and Delta’s networks, there are a number of items you can look at – density (attracts business customers), scale and 3:21 PM May 17th from web

APFAunity United and Delta are 50% larger than AA. For seven years, AA was the largest carrier. Then Delta and NW merged – became #2. 3:21 PM May 17th from web

APFAunity My conclusion is that unlike the other carriers who filed ch. 13, the industry had changed rapidly for AA and its competitors had grown 3:20 PM May 17th from web

APFAunity Dan assessed AA’s financials prior to ch. 13 filing from SEC filings and DOT filings. Most of it is public. 3:19 PM May 17th from web

APFAunity The context of the industry is very important to decide if the plan is achievable. 3:18 PM May 17th from web

APFAunity Dan reviewed the business plan as it related to the ask of $230 million and its viability. What they were attempting to achieve 3:18 PM May 17th from web

APFAunity GDP drivers, capacity and fuel price are the primary components of AA’s business plan – Dan knew this from past experience with AA 3:17 PM May 17th from web

APFAunity Dan evaluated our contract costs, creditors committee, US Airways Term Sheet. On Feb. 3, Dan received AA’s business plan in an excel file. 3:16 PM May 17th from web

APFAunity reviewing his many airline bankruptcy associations. Qualified as an airline expert in economics and analysis. No objections 3:15 PM May 17th from web

APFAunity advisor to Sun Country airline on an Unsecured Creditors Committee 3:13 PM May 17th from web

APFAunity air transportation and railwork consulting. clients include Boeing, McDonnell Douglas, JAX airport, Skychef, several labor unions, 3:12 PM May 17th from web

APFAunity Akins and Associates is a small consulting firm – transportation consulting 3:11 PM May 17th from web

APFAunity Dan Akins is up. He owns his own firm “Akins and Associates” 3:11 PM May 17th from web

APFAunity Adam Consinger is finished testifying. Dan Akins is up next. 3:07 PM May 17th from web

APFAunity This followed objection by APFA attorney when Company counsel asked what the outcome of other 1113 airline bankruptcies was. Judge sustained 3:05 PM May 17th from web

APFAunity Company cross examining – asking him if he is aware of the outcome of any other airline 1113 filings? Adam replied “No.” 3:03 PM May 17th from web

APFAunity Adam Condrick from the Segal Group is on the stand testifying about benefits, our pension. way beyond my pay grade but I’ll try to interpret 3:00 PM May 17th from web

APFAunity Good morning. Court is expected to start at 10:30 a.m. Eastern Time. 1:39 PM May 17th from web

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