10.06.12 – (LAA) – AA State of Affairs as of October 6, 2012


AA State of Affairs – October 6, 2012  

I have heard from many of you over the past few weeks during what can easily be described as a new low point in American Airlines history. I know it isn’t easy to sit back and watch our company appear to fall apart at the seams and feel powerless to do anything. Some in the press have taken to comparing our situation to Eastern Airlines, but there are two factors to take into consideration before deciding to buy into that scenario: 1 – US Airways’ desire to merge with AMR; and 2 – more than $4 billion in cash reserves.

What is important to remember is that we did not get to this place because of the events of the past few months. The situation we are in today is a result of a decade of poor business decisions by management, which resulted in a weaker product and the lowest employee morale this company has ever seen.

Each of the three workgroups have chosen a path to protect themselves during this grueling chapter 11 process. We are not caught up in the worst bankruptcy in history, nor is this the cleanest or the friendliest, by any means. And no matter how you look at it, bankruptcy is no friend to labor. It is designed to allow companies to shed their debt and restructure their business plan, all while being protected from those they owe. Unfortunately, we have recently been forced to divert our energy to protection and self-preservation. Over the past decade, our brothers and sisters throughout the industry grappled with the challenges of bankruptcy and consolidation. Just as we stood by them then, they stand by us today.

Where are we in the process? Well, AA management is trying to gain support for its business plan from those who will decide its fate. They are also exchanging confidential and proprietary information with US Airways under the “Non Disclosure Agreement” (NDA), which was agreed to a little over a month ago. That is why you haven’t heard anything from either side about the merger efforts, and why you won’t for a little while longer.

Once the NDA period concludes, the action begins. The best case scenario would be if the two management teams decided to merge pre-bankruptcy exit. Since nothing in this bankruptcy has been simple, it’s quite likely that we will see AA’s management team try to make it to the Chapter 11-exit doors as a standalone company. If nothing is agreed to, US Airways may then make a bid for AMR before it exits bankruptcy, despite AA’s wishes. If they do, at that point it is out of AA management’s hands and up to the Creditors Committee and the Bankruptcy Court to decide.

No one has a bankruptcy crystal ball to predict when this nightmare will end. The true victims in this scenario, as all of you know, are AA’s employees and customers. The longer management drags its heels making decisions that are not in the best interest of our company, the worse the situation gets. But it can’t last forever, nor will it.

Please take care of yourselves and each other. Follow the APFA Hotline for the latest information. Take a moment to sign the petition to the AMR Board encouraging them to support a merger with US Airways. Know that it has never been more important than it is today to remind this management team exactly where you stand.

In Unity,
Laura Glading
APFA President
817.540.0108 x8101


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