Chapter 11 per American Airlines


Putroppo:
[h=1]American loses $234 million in January[/h]By Aaron Karp | March 2, 2012T
​
Operating under Chapter 11 status has not stopped the steady flow of red ink at American Airlines (AA) parent AMR Corp.
The bankrupt company, which incurred a $2 billion net loss in 2011 (ATW Daily News, Feb. 21), reported a $234 million net loss for the month of January, according to a US Securities and Exchange Commission (SEC) filing.
Revenue generated during the month totaled $2.03 billion while costs were $2.04 billion, producing a $5 million operating loss. Net profit was affected by $170 million in reorganization charges and more than $60 million in interest expenses incurred in January.
Aircraft fuel was the airline's highest monthly expense at $704 million, followed by labor at $601 million. AA is attempting to cut $1.25 billion in annual labor expenses (ATW Daily News, March 1).



 
Ultime notizie

AMR Seeks to Reject Union Contracts in Bankruptcy Court

By David McLaughlin and Mary Schlangenstein - Mar 22, 2012 9:08 PM GMT
AMR Corp.’s American Airlines (AMR) plans to start a bankruptcy-court process for rejecting union contracts next week after failing to reach a deal to cut labor costs.

American will ask for court approval to void the contracts unless there is a “profound change” in negotiations with unions, AMR’s bankruptcy attorney Harvey Miller said at a court hearing today in Manhattan.

“We must start the process if we are going to bring these cases to a successful conclusion within a reasonable period of time,” Miller told U.S. Bankruptcy Judge Sean Lane.
The plan escalates AMR’s efforts to win lower labor costs in contract talks that began in 2006. AMR is now seeking $1.25 billion in annual labor savings, including 13,000 job cuts, as it reorganizes in bankruptcy.
“A deadline will focus the union leadership teams,” said Jeff Straebler, an independent airline analyst in Stamford, Connecticut. “It will come down to their making a choice of getting the best deal in negotiations or rolling the dice with the judge.”
AMR won court approval today to extend to Sept. 28 its control over the reorganization and retain the exclusive right to file a bankruptcy plan. Jack Butler, a lawyer for AMR’s unsecured creditors, said in court that the plan will lead to “complete conversion” of unsecured debt to equity.
Bankruptcy law permits companies in court protection to seek permission to rework contracts to help them restructure. Bargaining can continue even after the filing of a motion to void labor accords at the third-largest U.S. airline.

‘Real Threats’

American will file a motion seeking to reject collective bargaining agreements next week, Jeff Brundage, AMR’s senior vice president for human resources wrote in a letter today, saying the airline faces “mounting financial pressures and real threats in the market.”
“We are preparing for this step now because we must face our current challenges head on and can no longer afford to wait,” he wrote.
Fort Worth, Texas-based American’s stated aim has been to speed the expense cuts by winning agreements on work rules and other changes through union negotiations. That quest has proved difficult, with the labor-management discord spilling into the latest talks in a rerun of the tensions that preceded AMR’s Nov. 29 bankruptcy filing.

Standing Ready

The Transport Workers Union, whose members include baggage handlers and mechanics, prefers to reach a consensual deal with American while standing ready to “defend our members” by going to court, President Jim Little said in an e-mailed statement regarding AMR’s plan to cancel contracts in court.
“The abrogation scenario is simply not going to fly,” Tom Hoban, a spokesman for the Allied Pilots Association, said in an interview. With the two sides far apart, AMR’s plan to void the agreements is “not entirely unexpected,” he said.
The company “has no interest in achieving a constructive relationship with labor, based on trust and respect,” the Association of Professional Flight Attendants said in an e-mail update to its members. “Instead, it is perpetuating its long- standing practice of preferring contention over consensus. This is regrettable.”

Biggest Work Groups

The three unions are the biggest work groups at American, and the cancellation motion would cover contracts for pilots, flight attendants and seven work groups under the TWU.
AMR filed for Chapter 11 protection after annual losses that began in 2008, making it the last of the U.S. industry’s full-service carriers to seek to restructure in bankruptcy.
Labor was the biggest chunk of $2 billion in proposed expense cuts in the Feb. 1 plan, which would eliminate the jobs of about 18 percent of American’s 73,800 employees. Lower operating costs also will help AMR reap $1 billion more in annual revenue by 2017, Chief Executive Officer Tom Horton has said.
A takeover of AMR looms as a possibility if the carrier can’t restructure successfully on its own. US Airways Group Inc. (LCC) has confirmed its interest in a possible bid, and TPG Capital and Delta Air Lines Inc. (DAL) also are evaluating bids, people familiar with the matter have said.

Hired Advisers

“We have disclosed that we have hired advisers to investigate the American situation,” US Airways CEO Doug Parker told reporters yesterday in Phoenix. “That work continues. I suspect it will for quite some time.”
The company’s vulnerability to a takeover would increase with a successful bid to scrap labor contracts, said Straebler, the analyst.
“The unions would be open to a better deal from a third party like US Airways,” Straebler said in an interview.
AMR moved ahead yesterday with plans to reorganize its American Eagle regional unit, telling the carrier’s unions that annual spending must be trimmed by $75 million while paring as many as 600 jobs. The company didn’t detail plans for American Eagle when spelling out the savings sought at American on Feb. 1.

http://www.bloomberg.com/news/2012-...y-bankruptcy-court-bid-to-dump-contracts.html
 
Bankrupt American reports $1.7 billion 1Q net loss

By Karen Walker | April 19, 2012

American Airlines (AA) parent AMR Corp., which is restructuring via the Chapter 11 bankruptcy process (ATW Daily News, March 29), incurred a $1.66 billion net loss in the first quarter, according to a filing Thursday with the US Securities and Exchange Commission (SEC).
The loss was widened from a $436 million net deficit in the 2011 March quarter. The results include $1.4 billion in reorganization items. First-quarter revenue increased 9.1% year-over-year to $6.04 billion while expenses rose 6.3% to $6.13 billion. AA’s aircraft fuel costs heightened 17.5% to $2.17 billion.
Operating loss was $89 million, narrowed from a $232 million operating deficit in the prior-year quarter.
First-quarter consolidated passenger yield increased 7.4% year-over-year with mainline yield rising 7.3%, according to the airline.

http://atwonline.com/airline-finance-data/news/bankrupt-american-reports-17-billion-1q-net-loss-0419
 
AZ Fanatic ha detto:
...expenses rose 6.3% to $6.13 billion. AA’s aircraft fuel costs heightened 17.5% to $2.17 billion.
Operating loss was $89 million
Clicca per espandere...

Oltre un terzo delle spese riguarda il carburante... :o
Se fosse salito "solo" del 17% YOY, quel mezzo punto percentuale avrebbe permesso di raggiungere il pareggio operativo...
 
US Airways si prepara per tentare la scalata ad AA

http://www.cbsnews.com/8301-500395_162-57417634/us-airways-announces-plans-to-take-over-american/

(MoneyWatch) US Airways (LCC) has filed an 8K with the SEC to begin the process of a takeover of American Airlines, which is currently in Chapter 11 bankruptcy.
According to the SEC, Form 8-K is the 'current report' companies file with the SEC to announce major events that must be disclosed to shareholders.American Airlines has said it wants to emerge from bankruptcy as a standalone carrier. American Airlines parent AMR, which filed for bankruptcy protection on Nov. 29, 2011, is trying to slash its annual labor costs by $1.25 billion and emerge from court supervision. Next week, the struggling airline will try to convince a bankruptcy judge to let it void existing union contracts and impose new ones to secure those spending cuts.American Brat Pack: Where airline CEOs got their wings
American Airlines seeks to cancel labor contracts
AMR wants to emerge from bankruptcy quicklyA letter to employees by US Airways CEO Doug Parker reads in part:​
Today, we filed a statement (a form called an 8-K) with the Securities and Exchange Commission disclosing that we have signed agreements with the three unions that represent nearly 55,000 American Airlines employees. These unions are the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU), which represents all of American Airlines' mechanics and fleet service employees. Shortly after our disclosure, these three unions issued a public statement announcing their support of a US Airways-American Airlines merger and that they have agreed to terms that would govern collective bargaining agreements for their members at the merged airline. I want to explain to you why we have done this and what it means.

First of all, today's news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen including gaining the support of AMR's creditors, its management team and its Board of Directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen.​
The agreement with American's three labor unions and the 8K filing with the SEC are the first major steps in a potential hostile takeover bid. It is hostile in the sense that if the merger were to happen -- and that's still a big if -- it would happen without the agreement of American's leadership.Thus far, American CEO Tom Horton has resisted merger overtures and so going directly to unions is an end-run around AMR management, which would be forced out if the effort is successful.In a letter to American Airlines pilots the president of the Allied Pilots Association, Dave Bates, wrote: "The combined carrier will be branded American Airlines, based in Fort Worth Texas and headquartered at CentrePort. It will be comparable in size and scope to Delta and United."What would a US Airways-American merger mean for you?
Rumors flying of US Airways, American Airlines merger
AMR unions plan to back takeover bid by US AirwaysA joint statement issued Friday by The Transport Workers Union (TWU), the Association of Professional Flight Attendants (APFA) and the Allied Pilots Association (APA) read in part:"A merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process..."According to the labor group statement, the merger "provides the best path for all constituencies, including employees of both American Airlines and US Airways."American Airlines issued the following statement on Friday: "American Airlines is moving steadily through the Court supervised restructuring process and the Court has granted American the exclusive right to create its plan of reorganization at least until September 28, 2012. We are making substantial progress in our efforts to return American to industry leadership, profitability and growth and maximize its value for all of its stakeholders. Our immediate next step is to pursue vital modifications to our collective bargaining agreements through the 1113 process that begins on Monday, April 23rd. We believe statements of non-binding support from union leaders for alternative proposals are no coincidence given the timing of the 1113 process. These statements do not in any way alter the company's commitment to pursue our business plan or our focus on moving steadily through the court supervised restructuring process to create a profitable, growing industry leader. For American's outstanding employees and loyal customers, business continues on track, as we continue to provide the safe, reliable travel experience our customers expect."​
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intanto

American Airlines parent AMR Corp. (AAMRQ) posted second-quarter earnings of $95 million, excluding bankruptcy-related costs, as average fares rose.
Including $336 million in restructuring costs, the net loss for the three months ended June 30 was $241 million, or 72 cents a share, the Fort Worth, Texas-based airline said today in a statement. The year-earlier loss, before the carrier sought bankruptcy protection, was $286 million, or 85 cents.
“American had numerous problems on both the top line and the cost side, and it’s good to see both of those moving in the right direction,” said Fred Lowrance, an Avondale Partners LLC analyst who doesn’t rate the shares. “The results would say they are performing in line to slightly above average among the big carriers, at least in the second quarter.”
The results, including record sales of $6.45 billion, reflect the strength of American’s route network and revenue- sharing alliances with carriers outside the U.S., Chief Executive OfficerTom Horton said in a message to employees. Both are key components in American’s plan to emerge from bankruptcy on a stand-alone basis.
The third-biggest U.S. airline sought Chapter 11 protection in November after three consecutive years of losses and sitting out a round of industry consolidation that created two larger competitors. It’s preparing now to evaluate mergers and other restructuring options with the unsecured creditors committee in its bankruptcy.

Restructuring Progress

Revenue rose 5.5 percent in the quarter, AMR said, buoyed by a 6.8 percent increase in average fare per mile. Spending for jet fuel, the airline’s biggest expense, climbed 0.3 percent to $2.21 billion.
“This type of financial performance and operating performance that is so strong is unusual for companies in restructuring,” Bella Goren, American’s chief financial officer, said in an interview today. “Our improvement reflects only a fraction of our restructuring progress, with a lot more still to come.”
AMR’s 6.25 percent bonds due in October 2014 rose 1.25 cents to 66.5 cents on the dollar today, according to Trace, the bond-pricing reporting system of the Financial Industry Regulatory Authority.
American is the first major U.S. airline to release second- quarter results. The nine largest carriers, excluding American, should report combined earnings of $2.1 billion, up 62 percent from $1.3 billion a year earlier, Ray Neidl, a Maxim Group LLC analyst, said in a note yesterday.

Oil Prices

Results will be helped by declining oil prices and continued unit-revenue growth, he said.
AMR ended the quarter with $5.8 billion in cash and short- term investments, including $772 million restricted for specific uses. That compared with $5.6 billion, including $457 million in restricted cash, at the end of March.
“While there is still much to be done, we expect this momentum to build quickly as the new American re-emerges as an industry leader,” Horton said in the statement.
Passenger revenue for each seat flown a mile in American’s main jet operations rose 8.7 percent, aided by the higher fares and a 2.4 percent reduction in flight and seat capacity. Costs for each seat flown a mile, a measure of efficiency, rose 5 percent.
American reached an agreement in May with its creditors committee, which has a voice in major decisions during bankruptcy, to explore strategic options including a possible sale.
While US Airways Group Inc. has said it wants to merge with American, Horton said in a letter to employees last week that the carrier outlined its preliminary view of “multiple” options in a meeting with the committee.
US Airways, JetBlue Airways Corp., Alaska Airlines, Frontier Airlines and Virgin America Inc. were discussed, said a person familiar with the situation who asked not to be named because the talks were private.

http://www.bloomberg.com/news/2012-...quarter-profit-as-average-fares-increase.html
 
Mancano solo i piloti alla ratifica del nuovo contratto. Gli AAVV hanno firmato

E giù!

Flight attendants at American Airlines Inc. have approved the company’s “last, best and final” labor contract offer.

The Association of Professional Flight Attendants announced today on Twitter that 59.5 percent of its members voted in favor of the offer and 40.5 percent voted against it. Voting ended at 10 a.m.

“In light of last week’s announcement from the Creditors’ Committee, our bankruptcy team firmly believes we have achieved everything possible,” the APFA leadership team said in a statement.

The committee representing unsecured creditors in American’s bankruptcy late Thursday issued a statement saying that it would not support any changes of “additional economic value” to American’s unions beyond current proposals made by the airline. It also said that it had agreed to support the equity stakes and unsecured claims negotiated by American’s unions but only if each union ratifies a collective bargaining agreement.

American spokesman Bruce Hicks said the airline was “very pleased’ with the APFA vote and that the ratification of the agreement is “important step” in its restructuring.

“With ratification, our flight attendants will see many benefits that would not have been available* without a consensual agreement, including an Early Out incentive which could potentially eliminate the need for more than 2,000 furloughs, a [signing bonus], pay increases over the next five years, an equity stake in the new American and more, Hicks said.

The APFA said American’s “last, best and final offer” will take effect immediately*following approval of the bankruptcy court, which the union expects within a couple of weeks.

Now, only one of American’s labor groups — the pilots — has not ratified a contract agreement. American on Friday renewed its request to U.S. Bankruptcy Judge Sean Lane to let it toss out its existing contract with pilots, a week after they rejected a tentative agreement.

American wants to reduce its labor costs by $1.25 billion in bankruptcy reorganization. The carrier and its parent, AMR Corp., both based in Fort Worth, filed for Chapter 11 in November. The companies have until Dec. 28 to file a reorganization plan.
 
US ancora più vicina alla fusione con AA:

US Airways Moves Toward AMR Deal With Pact To Share Books

US Airways Group Inc. (LCC) moved closer to a possible merger with bankrupt American Airlines by signing a pact to swap private financial and operations data, a step already taken by potential investor British Airways.

The U.S. airlines will work “in close collaboration” with American’s unsecured creditors committee in the process, the carriers said in a statement today. The panel has a voice in major decisions during the bankruptcy, in which American has sought to restructure while keeping its independence.

Merging airline parent AMR Corp. (AAMRQ) with US Airways would catapult the combined company past United Continental Holdings Inc. (UAL) as the world’s largest airline. US Airways Chief Executive Officer Doug Parker has advocated a deal as the surest way of creating a broader route network with more hubs capable of competing with United and No. 2 Delta Air Lines Inc.

“US Airways has been going through that agreement and making sure none of the terms were showstoppers for them,” Fred Lowrance, an Avondale Partners LLC analyst, said in an interview. “My best guess is they spend the next three to seven weeks getting the data they need from AMR and putting that proposal together.”

‘Good News’

American filed for bankruptcy on Nov. 29 as it headed toward a fourth straight annual loss, and US Airways began pursuing a merger in January. The potential suitor has secured the support of American’s unions and has sought the backing of the larger airline’s creditors.

“We are pleased to be working directly with American to study a potential merger and we consider this very good news,” Parker told US Airways employees in a message. “It does not mean we are merging -- it simply means we have agreed to work together to discuss and analyze a potential merger.”
US Airways climbed 2.5 percent to $10.66 at the close in New York trading. The Tempe, Arizona-based company’s shares have more than doubled this year amid speculation of a merger with AMR.

AMR’s 6.25 percent convertible notes due in October 2014 rose 2.53 cents to 62.50 cents on the dollar today, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

US Airways isn’t American’s only strategic option. The airline said it also had signed confidentiality agreements with companies it didn’t identify.

British Airways

“This will be an objective, thorough, fact-based process,” the Fort Worth, Texas-based airline told managers in a memo today. “As part of the process, other parties have also signed confidentiality agreements, which permit for the confidential exchange of information and discussion between American and those parties.”

British Airways parent International Consolidated Airlines Group SA (IAG) is among companies that have signed an agreement, Laura Goodes, a spokeswoman, said in a telephone interview today.

IAG Chief Executive Officer Willie Walsh has previously said his company would consider buying a stake, she noted. U.S. law bars foreign ownership of a majority interest in domestic airlines.

“It probably makes sense to have British Airways at the table,” said Bob McAdoo, a Los Angeles-based analyst at Imperial Capital LLC. “They see that if American comes out a stronger carrier, that’s clearly in British Airways’ interest because they are both members of the Oneworld alliance.”

While American CEO Tom Horton initially said he wanted to emerge from bankruptcy on a stand-alone basis before considering combinations, the carrier agreed with its creditors committee in May to consider alternatives sooner.

Labor Relations

“American management would not be doing this if they had any leverage and if the creditors committee wasn’t telling them what they had to do,” Lowrance said. “This makes it clear that management is not driving this process. It is being driven by the terrible labor relations that have gotten the unsecured creditors committee pushing for alternatives to the stand-alone plan.”

American will ask its bankruptcy judge Sept. 4 to grant a revised request to throw out its existing pilots contract and impose cost cuts as the airline works to reduce industry-leading labor expenses. The pilots rejected a final labor proposal from their employer this month, and a union spokesman said the vote reflected opposition to Horton’s leadership.

‘Right Direction’

While the carrier had won concessions from its flight attendants, baggage handlers and other airport ground workers, pilots are considered a bellwether work group in labor talks because they are the airline industry’s highest-paid union employees.

The confidentiality agreement “is a step in the right direction,” said Tom Hoban, a spokesman for the Allied Pilots Association, which has supported a merger along with AMR’s other unions. “It’s going to allow US Airways to submit a competing plan of reorganization. There are 55,000 front-line employees who made it clear this is what they favor, along with a change in leadership.”

http://www.bloomberg.com/news/2012-...to-review-amr-books-amid-merger-interest.html
 
American to notify 11,000 workers of possible layoffs

American Airlines (AA) said it will notify about 11,000 employees they are in danger of being furloughed within 60 to 90 days, but added it expects just 4,000 workers receiving the notices to actually be laid off.

AA had targeted about 14,000 job cuts as part of its bankruptcy restructuring (ATW Daily News, Feb. 2). It now expects 10,000 of that total to be achieved through “early-out” programs and new labor agreements reached with unions.

The large number of notices is required by federal law, AA noted. It expects “the ultimate impact on jobs will be far less than the number of those notified,” it said in an emailed statement.

http://atwonline.com/operations-maintenance/news/american-notify-11000-workers-possible-layoffs-0919
 
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