US Air To Gobble Up AA?

It has been rumored for sometime that AMR,  the parent of American Airlines has been in the eye of the managers at US Airways.   In order for this deal to work, the management at USAir will need help from the major unions at American.  If the three big unions at AA didn’t agree and fought with AA management to prevent the takeover it would be a deal breaker.  Pilots, Mechanics and Flight Attendants are the three unions that can be game changers in any merge, takeover or bankruptcy in the airline business.  The mechanics effectively ended Eastern Airlines after their bankruptcy deal.

Rumors have been circulating for a while about AMR hiding assets and profits overseas.  One of the foreign stocks owned by AA recently disappeared from listings.  A move thought to prevent the publication of information about AMR’s true financial situation.

Unions are very sensitive to the tactic used at Eastern, Continental and United to generate sudden profits after bankruptcy and eight figure bonuses to senior management and board members.  MSNBC reported that the director of the PBGC (Pension Benefit Guaranty Corporation)  told the senior managers at AMR and the courts that the PBGC will fight any attempt to turn over the pension liability of AMR to the PBGC and further that the PBGC would use it’s reach as a US Government entity to seize assets overseas.  It is thought this is the reason that AMR came back to the unions and offered a “freeze”.

It is well published that AMR has retained some very expensive bankruptcy attorneys.  Rumors of Rothchilds and Bain & Company (Mitt Romney’s former home) using offshore asset moves and profit holding to bleed AMR of cash in the US are running rampant.  Without the filings of the foreign stocks it gets tougher to prove for the three big labor unions at American Airlines.  That must be why those law firms can charge $14 Million a month.

US Airways as a suitor has been a rumor for a while too, but one has to wonder why?  They still can’t get the US Air and America West pilots to play nice together, so how do they expect American pilots want to join into that hornets nest.  Well it appears the answer is US Airways management doesn’t care.  If they can run an airline with two pilots groups, why not three.

Some quick research might shed some light on why US Air is looking so closely at AA.  First if AMR was hiding all that money overseas, wouldn’t you want it?  This leads to a whole different discussion of shareholder lawsuits and fiduciary liability I’ll save for another day. Personally if I had friends with a billion cash, I would want to work a deal on AMR.

Second, AMR effectively bought out all of the production remaining for the next five years of both Airbus and Boeing with the highly publicized “Biggest Aircraft Order Ever”.  US Airways would have control over all of those aircraft deliveries.  What they don’t need, they could sell at a profit.  Finally the icing on the cake.  An analysis of the age of US Airways pilots indicates that US Airways is aboutt 24 months from the beginning of an internal meltdown due to the lack of pilots and they know it.

Four years ago the airline industry saw a major problem.  Air Traffic Controllers and Pilots were about to hit their mandatory retirement age in big numbers.  The government can use the military to train Air Traffic Controllers and get replacements in about 24 months.  In fact they have hired people with zero experience right off the street this year.  You can’t do that with pilots.  To become an airline ready pilot under the current rules, you are looking at something close to the cost of an off shore medical school.  Who wants to spend that kind of money to start out at $24,000 a year?  Also pilots take time to build.  The airlines say a good Captain takes four to five years after starting at the airline to be at the level they really want.

Congress gave the airlines a five year reprieve to fix the problem by extending the retirement age from 60 to 65 for airline pilots.  Next September, that five years is over and the retirement wave begins.  US Airways has one of the highest average ages for pilots and will see one of the largest exits of pilots over the next 7 years according to data from the Airline Pilots Association.

US Air needs pilots and American has them.  So now the question is will American Pilots want to work for US Air?  Given what AMR management is offering the pilots at American it won’t take much to convince them that US Air is offering a better deal.  Rumors are flying today that the deal is accepted by Americans Pilots and Mechanics.  Last weeks vocal protests which were “leaked” by American Airlines VP Flight John Hale stating “There is no benefit” of going with a US Air deal must make one pause to say “Me thinks Mr. Hale doth protest too much.”  Is Mr. Hale just trying to keep his high paying management job with AMR?

Today, rumors are flying of secret meetings of the Pilots Union and Mechanics Union from American and US Air, and  letters of agreement being signed.  Maybe Mr. Hale knew last week about this and is trying to get his troops to rebel.  Either way it is clear that AMR management has  a lot on their plate, and trying to protect the assets overseas and their big bonuses is getting tougher every day, after all you can’t fly planes without pilots to fly them or mechanics to fix them.


  1. And you cannot carry passengers with out flight attendants..why is this overlooked so much!

  2. it takes no time to get new flight attendants, its a high school drop out type work. The airline would be done a favor if they left.

  3. You can train anyone off the street to be a Flight Attendant in about 3 weeks. The whole group is overlooked because they are easily replaced.

  4. It will soon take 2 years to train a pilot to meet the new mins. It still…and will likely continue to take just 4 weeks to train a flight attendant. Pilots are a much more valuable commodity than flight attendants.

  5. Because it takes exactly 1 week to train a flight attendant. No prior experience or education required. Not a big issue for management.

  6. Because flight attendants don’t take long to train and can be rapidly replaced if need be.

  7. Is this the garbage that passes as journalism these days? Overly dramatic about issues that are obviously misunderstood by the author. Garbage in equals garbage out.

  8. Any un-emotional information to help everyone understand is appreciated, we look forward to hearing from you….

  9. Everyone dumps on the flight attendants until something happens in flight that requires them to use their skills and talents. Oh and by the way, most of the flight attendants at American are pretty well educated! Of course there are exceptions but in response to the training most jobs experience is crucial. So maybe the training period is 6 weeks but in the end if your faced with a real emergency, inexperienced flight attendants don’t cut it!

  10. I dont know of any flight attendant training that is only 1 week long….6 weeks min is the norm with recurrent training every year….most flight attendants have a college degree….next time you have a heart attack you go ahead and call the cockpit for help with that.

  11. LOL, Yeah, it won’t be so easy to train new f/as if the current ones don’t quit. We don’t quit so easily. We also have other careers. All the customer wants is a groveling immature, insecure, submissive young babe that they can boss around. LOL, those days are over. Existing crew members are here to keep your asses in line. LMFAO! Deal with it.

  12. This retired flight engineer (35 years)sides with the women in the back that have been providing protection for “OUR BACKS” on the flight deck for decades…
    They have been our eye’s and ears for an ongoing period of time and provide a added layer of security and peace of mind that result in a more dedicated mind set for those of us that need our full situation awareness to our flight navigation and monitoring abilities!

  13. An Update as of April 20th. The Three major unions at American Airlines announced support for a takeover/merger of American Airlines by US Airways. What was rumor has become the story of the week for the airline business.

  14. If AA thinks its rank and file is unhappy now just wait if they are successful at dismantling our contracts in court. What is it that AA’s mngmt doesn’t get? They should buy out the older crew and start anew with people that haven’ t been subjected to AA’s stellar mngmt tactics!!! The people that have been around are just tired of it!

  15. A great big THANK YOU to Lee Hamilton III, I loved flying with our Flt engineers….it isnt called a crew for nothing baby!

  16. Who would you have rather had as a flight attendant if you had been a passenger on the “shoe bomber” flight?? A young hot babe, or the experienced f/a that had the presence of mind to thwart Richard Reid’s plan to blow the airplane up. She essentially saved everyone’s life that day. I’m going to go with the latter. Go to a strip club if you need to fantasize about young girls. And guess what, they won’t be interested in you either

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