PDA

View Full Version : MEC Newsblast...



Simon Binet
03-14-2013, 07:23 PM
The hits keep coming...

Fellow American Eagle pilots,

As you are well aware, American Airlines awarded a bid for regional flying to Republic Airlines that consisted of 53 EMB-175 aircraft to be deployed in ORD. ALPA, the AFA, and the TWU felt strongly that this award made no sense from AMR?s perspective and our interests as it tied up a few years of growth flying for which Eagle had been told that it would be eligible to bid. Certainly we understand that Eagle was not in a position to deploy ?large RJs? in 2013, but we are more than capable of bidding on and providing such feed in 2014 and subsequent years. Sadly, but not surprisingly, AMR has cast aside all of the cautionary tenets that it had promised the Court would be a part of all future decision making and entered into a multi-billion dollar agreement with Republic, the duration of which is 12 years following the delivery of each aircraft. Eagle?s unions vigorously disagreed with this problematic decision and following the filing of objections and other developments, the CPA award was reduced by six aircraft and Republic will provide somewhat cheaper feed.

You are also aware that we did not only protest this publicly, but we also made our case to the Fleet Subcommittee of the Unsecured Creditors Committee and on Tuesday, March 12th counsel for all three of Eagle?s unions made their arguments before the Bankruptcy Court. For those of you who are keeping track, this was the twenty-fifth scheduled omnibus hearing regarding the AMR bankruptcy that began in November of 2011.

Before I describe the hearing, I should note that your MEC was well aware that having our objection upheld was going to be a monumental feat because bankruptcy courts show great deference to management decision-making under the corporate and bankruptcy law?s business judgment rule. Realistically, even the reduction of the award from 53 to 47 was a sizable victory. In truth, although disappointed about the size and scope of this feed agreement with Republic, what is forefront on our minds is securing the fleet plan that was promised to Eagle should we reach the cost target laid before us at the outset of the bankruptcy process.

Not only did the Eagle pilots deliver those cost savings, but the flow-through has activated earlier and larger than forecast and the initial take rate is significantly higher than we expected. This means that Eagle stands to exceed its goals in longevity reduction, something the Eagle pilots will be able to recoup in the 2016 contract amendment round. In addition, during the bankruptcy negotiations, Eagle pilots provided the company with the best performance numbers in its history and in a number of categories, led the industry. Eagle?s workforce is stable, reliable, experienced, and has proven time and time again that it will help the company be successful so long as the pilots can share in the success.

Nonetheless, it may seem small but it was a victory when Chuck Shubert, American?s Vice President of Network Planning testified under oath that Eagle?s business plan was still intact.

Part of the company?s argument was that the CPA was in line with the current business plan going forward for American and American Eagle. During his testimony, Shubert reaffirmed that almost all of the 47 Republic aircraft will be deployed to Chicago O?Hare. He also stated that as the Republic aircraft are deployed the American Eagle planes will be moved elsewhere in the system.

In a declaration given to the court on March 11, 2013, Mr. Shubert outlined several tenets of the regional fleet strategy:
?The Debtors? regional fleet strategy is built on three key components. First, the Debtors have pursued diversification of their regional operators in order to ensure a market competitive cost for regional feed services and provide greater flexibility with respect to the Debtors? operations and fleet financing. Second, consistent with the Debtors? restructuring efforts as it relates to the Debtors? mainline fleet, the Debtors? regional business strategy aims to replace less desirable regional aircraft in order to achieve greater fleet efficiencies. Third, the Debtors have pursued larger gauge 76-seat aircraft similar to their competition, which will enable the Debtors to meet anticipated supply and demand requirements across markets.?

?In order to achieve these objectives, the Debtors determined that it would be in their interests for American to secure access to large regional jets with minimum balance sheet impact either directly from manufacturers or through third party operators. The Debtors? business plan calls for regional fleet growth both in count and gauge beginning in 2013 with a goal to acquire up to 215 large regional jets by 2018.?

?A request for proposal was also distributed to American Eagle. But, American Eagle lacks the required 76-seat regional aircraft. American Eagle also could not, as contemplated by its business plan, realistically purchase or gain access to such aircraft within the timeframe required under American?s business plan. Accordingly, American Eagle did not submit a bid for the regional airline services.?

It was presented to the court that one of the major reasons why the Court should not block this transaction was American Eagle?s failure to bid for the flying. As Mr. Shubert says, Eagle lacked the aircraft and the ability to finance them. Unfortunately, we don?t believe that Mr. Shubert was being entirely forthcoming as it is known that Eagle could have provided sufficient lift beginning in 2014.

While on the stand, Shubert was first cross examined by AFA? lawyer Tom Kennedy about how the CPA would negatively impact Eagle and its employees. It was through his line of questioning that the court heard how the Republic aircraft would replace Eagle aircraft on a one-for-one basis. In addition, Shubert stated that this CPA was still in line with the current business plan for Eagle. While not stating explicitly, he did say the Eagle?s current fleet of approximately 250 aircraft will be ?slightly lower.?

ALPA lawyers Richard Seltzer and Tom Ciantra of Cohen, Weiss, Simon, LLP, argued that the court should require the company to revisit the CPA and ensure that analysis was properly completed with regards to the impact the CPA will have on Eagle. In days prior to the hearing, ALPA learned that AMR?s Board of Directors was shown a single page slide regarding this CPA. Even the creditors committee lawyer conceded that when the presentation was made, merger discussions were going on and that ?everyone?s bandwidth was stretched thin.?

This CPA represents a long term, high dollar value deal. Mr. Seltzer argued that this should not be a deal done without the proper analysis of how it would negatively affect Eagle, and ultimately AMR shareholders who would likely own Eagle and that there was no such consideration. TWU lawyer, Sharon Levine, argued that while the 1113 negotiations were ongoing the company was actively pursuing RFPs that would further harm the membership. Essentially, the given concessions in the new collective bargaining agreement were compounded by the awarded CPA.

Unfortunately, Judge Lane made a bench decision upholding the company?s motion to grant the CPA between American and Republic and denying the objections of Eagle?s labor unions. Calling the Unions? arguments a plea to ?micro-manage? AMR and the Board of Directors? business decisions, Judge Lane felt he had no basis to second-guess the BOD?s and management?s decisions. The unfortunate truth is that the Court deemed that American?s business decision was within their rights.

We expect American to live up to its commitments to Eagle and to provide it with the promised fleet. We will continue to work tirelessly to achieve this.

On another note, we recently attended a meeting with American and Eagle management to discuss the impact of the American ? US Airways merger on the flow-through, ?824,? and ?protected pilot? agreements. American conveyed that throughout the merger, it will continue to take delivery of all of its aircraft orders and will continue to hire to staff those aircraft. American is currently recalling 50 pilots per month and expects to increase that number once they complete the recall, currently forecast to occur around August. The memorandum of understanding between American, US Airways, APA, and USAPA also codifies that any seniority merger agreement will not impede the company?s obligations to the Eagle pilots. Lastly, Eagle has recently been hitting its hiring targets. This is very good news, as hiring a sufficient number of pilots will facilitate a higher level of attrition as pilots transition to American.

Fraternally,

Dave Ryter

Beagleboy
03-14-2013, 07:33 PM
The hits keep coming...

Fellow American Eagle pilots,

As you are well aware, American Airlines awarded a bid for regional flying to Republic Airlines that consisted of 53 EMB-175 aircraft to be deployed in ORD. ALPA, the AFA, and the TWU felt strongly that this award made no sense from AMR?s perspective and our interests as it tied up a few years of growth flying for which Eagle had been told that it would be eligible to bid. Certainly we understand that Eagle was not in a position to deploy ?large RJs? in 2013, but we are more than capable of bidding on and providing such feed in 2014 and subsequent years. Sadly, but not surprisingly, AMR has cast aside all of the cautionary tenets that it had promised the Court would be a part of all future decision making and entered into a multi-billion dollar agreement with Republic, the duration of which is 12 years following the delivery of each aircraft. Eagle?s unions vigorously disagreed with this problematic decision and following the filing of objections and other developments, the CPA award was reduced by six aircraft and Republic will provide somewhat cheaper feed.

You are also aware that we did not only protest this publicly, but we also made our case to the Fleet Subcommittee of the Unsecured Creditors Committee and on Tuesday, March 12th counsel for all three of Eagle?s unions made their arguments before the Bankruptcy Court. For those of you who are keeping track, this was the twenty-fifth scheduled omnibus hearing regarding the AMR bankruptcy that began in November of 2011.

Before I describe the hearing, I should note that your MEC was well aware that having our objection upheld was going to be a monumental feat because bankruptcy courts show great deference to management decision-making under the corporate and bankruptcy law?s business judgment rule. Realistically, even the reduction of the award from 53 to 47 was a sizable victory. In truth, although disappointed about the size and scope of this feed agreement with Republic, what is forefront on our minds is securing the fleet plan that was promised to Eagle should we reach the cost target laid before us at the outset of the bankruptcy process.

Not only did the Eagle pilots deliver those cost savings, but the flow-through has activated earlier and larger than forecast and the initial take rate is significantly higher than we expected. This means that Eagle stands to exceed its goals in longevity reduction, something the Eagle pilots will be able to recoup in the 2016 contract amendment round. In addition, during the bankruptcy negotiations, Eagle pilots provided the company with the best performance numbers in its history and in a number of categories, led the industry. Eagle?s workforce is stable, reliable, experienced, and has proven time and time again that it will help the company be successful so long as the pilots can share in the success.

Nonetheless, it may seem small but it was a victory when Chuck Shubert, American?s Vice President of Network Planning testified under oath that Eagle?s business plan was still intact.

Part of the company?s argument was that the CPA was in line with the current business plan going forward for American and American Eagle. During his testimony, Shubert reaffirmed that almost all of the 47 Republic aircraft will be deployed to Chicago O?Hare. He also stated that as the Republic aircraft are deployed the American Eagle planes will be moved elsewhere in the system.

In a declaration given to the court on March 11, 2013, Mr. Shubert outlined several tenets of the regional fleet strategy:
?The Debtors? regional fleet strategy is built on three key components. First, the Debtors have pursued diversification of their regional operators in order to ensure a market competitive cost for regional feed services and provide greater flexibility with respect to the Debtors? operations and fleet financing. Second, consistent with the Debtors? restructuring efforts as it relates to the Debtors? mainline fleet, the Debtors? regional business strategy aims to replace less desirable regional aircraft in order to achieve greater fleet efficiencies. Third, the Debtors have pursued larger gauge 76-seat aircraft similar to their competition, which will enable the Debtors to meet anticipated supply and demand requirements across markets.?

?In order to achieve these objectives, the Debtors determined that it would be in their interests for American to secure access to large regional jets with minimum balance sheet impact either directly from manufacturers or through third party operators. The Debtors? business plan calls for regional fleet growth both in count and gauge beginning in 2013 with a goal to acquire up to 215 large regional jets by 2018.?

?A request for proposal was also distributed to American Eagle. But, American Eagle lacks the required 76-seat regional aircraft. American Eagle also could not, as contemplated by its business plan, realistically purchase or gain access to such aircraft within the timeframe required under American?s business plan. Accordingly, American Eagle did not submit a bid for the regional airline services.?

It was presented to the court that one of the major reasons why the Court should not block this transaction was American Eagle?s failure to bid for the flying. As Mr. Shubert says, Eagle lacked the aircraft and the ability to finance them. Unfortunately, we don?t believe that Mr. Shubert was being entirely forthcoming as it is known that Eagle could have provided sufficient lift beginning in 2014.

While on the stand, Shubert was first cross examined by AFA? lawyer Tom Kennedy about how the CPA would negatively impact Eagle and its employees. It was through his line of questioning that the court heard how the Republic aircraft would replace Eagle aircraft on a one-for-one basis. In addition, Shubert stated that this CPA was still in line with the current business plan for Eagle. While not stating explicitly, he did say the Eagle?s current fleet of approximately 250 aircraft will be ?slightly lower.?

ALPA lawyers Richard Seltzer and Tom Ciantra of Cohen, Weiss, Simon, LLP, argued that the court should require the company to revisit the CPA and ensure that analysis was properly completed with regards to the impact the CPA will have on Eagle. In days prior to the hearing, ALPA learned that AMR?s Board of Directors was shown a single page slide regarding this CPA. Even the creditors committee lawyer conceded that when the presentation was made, merger discussions were going on and that ?everyone?s bandwidth was stretched thin.?

This CPA represents a long term, high dollar value deal. Mr. Seltzer argued that this should not be a deal done without the proper analysis of how it would negatively affect Eagle, and ultimately AMR shareholders who would likely own Eagle and that there was no such consideration. TWU lawyer, Sharon Levine, argued that while the 1113 negotiations were ongoing the company was actively pursuing RFPs that would further harm the membership. Essentially, the given concessions in the new collective bargaining agreement were compounded by the awarded CPA.

Unfortunately, Judge Lane made a bench decision upholding the company?s motion to grant the CPA between American and Republic and denying the objections of Eagle?s labor unions. Calling the Unions? arguments a plea to ?micro-manage? AMR and the Board of Directors? business decisions, Judge Lane felt he had no basis to second-guess the BOD?s and management?s decisions. The unfortunate truth is that the Court deemed that American?s business decision was within their rights.

We expect American to live up to its commitments to Eagle and to provide it with the promised fleet. We will continue to work tirelessly to achieve this.

On another note, we recently attended a meeting with American and Eagle management to discuss the impact of the American ? US Airways merger on the flow-through, ?824,? and ?protected pilot? agreements. American conveyed that throughout the merger, it will continue to take delivery of all of its aircraft orders and will continue to hire to staff those aircraft. American is currently recalling 50 pilots per month and expects to increase that number once they complete the recall, currently forecast to occur around August. The memorandum of understanding between American, US Airways, APA, and USAPA also codifies that any seniority merger agreement will not impede the company?s obligations to the Eagle pilots. Lastly, Eagle has recently been hitting its hiring targets. This is very good news, as hiring a sufficient number of pilots will facilitate a higher level of attrition as pilots transition to American.

Fraternally,

Dave Ryter

If anyone thinks they'll recoup anything in 2016 with these idiots at the helm, they're fools. Whipsawing will be in full swing and the expendable aircraft that will be the ones to make way for future large RJ orders/flying are almost all operated by this carrier. Of course they'll allow you to bid for some of that flying (actually your own CURRENT flying), but you'll have to come in as the low-ball offer. Considering the "red carpet boys" penchant for rolling over, I'd not count on jack squat. You MAY have a better chance IF you usher in a complete new leadership.

ardvark
03-14-2013, 08:02 PM
cant be that bad, TG and DR and DG have seen the picture, they know what it looks like and how good it will be. Oh thats right they signed an NDA and cant say FOR WHOM IT WILL BE GOOD. Three days later they come out with he info that everyone already knew 3 days ago.

Divine Wind
03-15-2013, 08:04 AM
cant be that bad, TG and DR and DG have seen the picture, they know what it looks like and how good it will be. Oh thats right they signed an NDA and cant say FOR WHOM IT WILL BE GOOD. Three days later they come out with he info that everyone already knew 3 days ago.

As long as it doesn't affect the 824 Letter, it's all good. Besides, it's not like we've ever been kept in the dark or deceived before by our own MEC, right?

Cujo665
03-15-2013, 08:40 AM
cant be that bad, TG and DR and DG have seen the picture, they know what it looks like and how good it will be. Oh thats right they signed an NDA and cant say FOR WHOM IT WILL BE GOOD. Three days later they come out with he info that everyone already knew 3 days ago.

TG is back in training.... On the EMB, and I'm hearing with red circled CRJ pay...

ardvark
03-15-2013, 09:18 AM
why is tg in trng? he does not need to be qualified. is he going to pad his time with ot as the mec chair?
or is he going to be a new emb ioe instructor , at crj rate plus 20?

now`all we need is dr and bs in trng.

Beagleboy
03-15-2013, 09:37 AM
why is tg in trng? he does not need to be qualified. is he going to pad his time with ot as the mec chair?
or is he going to be a new emb ioe oinstructor , at crj rate plus 20?

now`all we need is dr and bs in trng.

He needs to get current for his upcoming LGA/767/FO/I slot at AA.

He delivered and soon it will be payoff time. I'm sure he's banked a lot of extra $$$ over the years of gift giving to your management.

nosefirst
03-15-2013, 09:41 AM
Nonetheless, it may seem small but it was a victory when Chuck Shubert, American?s Vice President of Network Planning testified under oath that Eagle?s business plan was still intact.


We expect American to live up to its commitments to Eagle and to provide it with the promised fleet. We will continue to work tirelessly to achieve this.

Testified under oath that the business plan is still in tact? That's great....what is Eagle's business plan?! Or was he just testifying that the business plan is still in tact, because we don't have one for Eagle? If there is no plan, you can always claim it's "in tact."

Promised fleet? What is the promised fleet ALPA? Or is it the same as the business plan? "We promised you planes. Never said what or how many, do the 'promised fleet' is still in tact too."

I'm not a drunk and keep my nose clean, so what am I paying dues for??

Beagleboy
03-15-2013, 09:55 AM
Testified under oath that the business plan is still in tact? That's great....what is Eagle's business plan?! Or was he just testifying that the business plan is still in tact, because we don't have one for Eagle? If there is no plan, you can always claim it's "in tact."

Promised fleet? What is the promised fleet ALPA? Or is it the same as the business plan? "We promised you planes. Never said what or how many, do the 'promised fleet' is still in tact too."

I'm not a drunk and keep my nose clean, so what am I paying dues for??

The planes they promised you might simply be most or all the ones you have and just keep (for now). That may BE the fleet/business plan for you inside BK and thus they can say they have met their promises. The debtor gets WIDE latitude in C11 and can define its statements accordingly.

They just did that to Lane and he ruled not unsurprisingly on RAH. This carriers fleet plan shows it as the major operator in the future of 50-seat RJ's for AA with multi-year lease terms and Parker said that will continue.

There's your business/fleet plan. You are likely to get larger replacement CRJ7/9's at some point too. How many is the question. My guess is the cheaper you're willing to do it, the more you'll retain.

nosefirst
03-15-2013, 10:17 AM
Garton screwed AE. I believe (no evidence) he helped ink the RAH deal in order to free up 47 CRJs that could then be used for outside flying, in the divestiture scenario he so desperately wanted. I don't know if he just had REALLY high hopes of a divestiture or if he was dense enough to believe it was actually going to happen with him at the helm. I've also been told that he wanted to increase our hiring numbers to something astronomical for 2013. He's pretty damned disillusioned about the company he supposedly runs. Unfortunately for him, he's gone in the not so distant future.

Of course it didn't help that the MEC bought into everything he told them.

KEITH STONE
03-15-2013, 12:42 PM
Garton screwed AE. I believe (no evidence) he helped ink the RAH deal in order to free up 47 CRJs that could then be used for outside flying, in the divestiture scenario he so desperately wanted. I don't know if he just had REALLY high hopes of a divestiture or if he was dense enough to believe it was actually going to happen with him at the helm. I've also been told that he wanted to increase our hiring numbers to something astronomical for 2013. He's pretty damned disillusioned about the company he supposedly runs. Unfortunately for him, he's gone in the not so distant future.

Of course it didn't help that the MEC bought into everything he told them.

You obviously know a lot more than Garton.

ardvark
03-15-2013, 01:32 PM
well we knew the divestiture was false, knew everything else garton said depended on a divestiture. so yeah,

Beagleboy
03-16-2013, 09:34 AM
well we knew the divestiture was false, knew everything else garton said depended on a divestiture. so yeah,

Garton had a 2 year deal to "package" Eagle and then no guarantees of running it post-divestiture, thus had a nice exit deal. Since that decision will be made by others and controlled by others IF it occurs, not surprising Garty hit the bricks.

ardvark
03-16-2013, 01:33 PM
his package deal expired june 2012 as per 10k of june 2010.