American Airlines unveils new logo, look
American Airlines introduces new, lighter look to logo, plane bodies
By David Koenig
DALLAS — American Airlines is getting a new look.
The airline showed off the first plane bearing a new logo and paint job at Dallas–Fort Worth International Airport on Thursday.
The familiar red, white and blue stripes along the side of the fuselage are gone, replaced by a new logo and “American” in large letters on the silver body. Red and blue horizontal bars are emblazoned on the tail.
“We thought it was time to update the look — it’s been 40 years,” Thomas Horton, CEO of American’s parent, AMR Corp., said in an interview.
The new livery was painted on a Boeing 777-300 that was flown into Fort Worth, Texas, overnight and was to be shown to the public later Thursday. The plane goes into service Jan. 31.
American expects about one-third of its fleet, or roughly 200 planes, will sport the new look by the end of the year with the rest to be repainted within five years. The makeover will extend to airport signs, self-help kiosks and American’s website.
American declined to say how much the “rebranding” campaign will cost.
Horton said planning for the redesign began in the summer of 2011, when American announced it would buy hundreds of new planes from Boeing and Airbus, many of which will be made of composite material that can’t easily be painted in American’s traditional polished-aluminum look.
That means American was thinking of a makeover even before it filed for bankruptcy protection in November 2011. Horton said bankruptcy creditors were kept informed about the redesign. The desire to cut costs didn’t derail the effort.
“We’re very much coming to the end of the restructuring, and really all the cost-reduction initiatives have been bolted down,” Horton said. “We really are at that moment now to turn the page and set the course for a new American.”
Under pressure from creditors, AMR is studying whether to embrace a merger with US Airways or remain on its own. A decision is expected soon, and Horton said the redesign doesn’t tilt the company toward either outcome.
Horton said AMR did not tell US Airways in advance about the new livery — “That wouldn’t have been appropriate; they’re a competitor” — but he gave US Airways Group Inc. CEO Doug Parker a courtesy heads-up on Wednesday night.
US Airways praised the “compelling result” of the redesign, as spokesman Ed Stewart put it.
The pilots’ union at American, which has long fought with AMR and wants company management replaced, was less enthusiastic.
“A new paint job is fine but it does not fix American’s network deficiencies and toxic culture,” said Dennis Tajer, a spokesman for the Allied Pilots Association. His and other unions at American support a merger that would put US Airways executives in charge of the combined airline.
Update: Feb. 14, 2013
The new American Airlines- Creating at Giant- the story in video and photos
Video: Creating American Airlines New Look, Logo
Growth of American Airlines
The American Airlines headquarters was relocated to Fort Worth, Texas from New York City in July and August of 1979.
American today has 5 major cornerstone markets: New York, Los Angeles, Dallas/Fort Worth, Chicago O’Hare, and Miami. In the past it also had Nashville, Raleigh-Durham, San Jose and San Juan as hubs.
June 6, 1985
American Airlines Plans Nashville Hub
By Gary Washburn
American Airlines will develop a hub in Nashville to serve as a base of operations for expanded service in the eastern half of the United States, the airline announced Wednesday.
American’s current hubs, in Chicago and Dallas-Ft. Worth, primarily serve east-west routes, said Thomas Plaskett, the airline’s senior vice president of marketing, and the expanded Nashville operation “will let us compete for a substantial amount of airline traffic that flows north and south in the eastern half of the country.”
The move will allow American to invade markets now served primarily by three other airlines: Delta, Eastern and Piedmont.
American plans to spend more than $115 million to expand its current facilities at Nashville Metropolitan Airport, permitting a gradual increase in the number of daily flights and cities served to 135 and 60, respectively. Currently, American operates 15 flights a day to 19 destinations from the Tennessee airport.
Plaskett said the airline will spend about $1.5 million initially, permitting it to open a 9-gate “mini-hub” operation by next spring with 50 to 60 flights a day to 20 to 25 nonstop destinations.
The major part of the $115 million will be spent to build a 15-gate concourse, which is scheduled for completion by late 1987. The number of daily flights is expected to rise to between 75 and 85 by that time, increasing to 135 by 1990. The concourse will be designed so it can be expanded, Plaskett said.
Critical to development of the hub is construction of a 10,000-foot runway at the Nashville airport. Application has been made for $50 million in federal funds for that project, and Plaskett said he anticipates no problems. Plaskett said the Chicago and Dallas-Ft. Worth hubs will not be affected by the Nashville expansion.
He added that American still intends to develop Denver as a hub for north-south routes in the western half of the country. However, airline officials decided to proceed with Nashville first because of plans to build a new airport in Denver.
As part of the Nashville development, American said it will establish a feeder traffic system with formation of a new American Eagle commuter airline partnership.
American Eagle is a marketing program under which commuter airline partners take on the corporate identity of an eagle and operate out of American`s hub terminals. Schedules are coordinated with those of the big airline.
The American expansion is expected to create 1,300 jobs in Nashville, airline executives said.
Plaskett said that Nashville was chosen because of its “excellent geographical location,”strong economy, good work force, popularity for meetings and conventions, strength as a vacation and travel center and its “far-sighted and aggressive airport authority.”
American has been serving the city since 1936.
Also on Wednesday, American announced that May traffic was the strongest in the company`s history, passing the 4 billion mark in revenue passenger miles for the first time in history. (A revenue passenger mile is one paying passenger flown one mile.) Traffic jumped 34.5 percent, to 4.1 billion revenue passenger miles from 3 billion in May, 1984.
October 05, 1988
American Airlines Selects San Jose Airport for Hub
Robert. E. Dallos
Los Anegeles Times
NEW YORK — American Airlines said Tuesday that it will establish a West Coast hub at the San Jose airport. The hub, in which American will invest about $50 million, will open Dec. 2.
At the start, American will operate 86 flights from the hub daily to 19 cities. When it is fully operational in 1991, American and its commuter airline, American Eagle, will operate 175 flights a day from San Jose to 52 cities. By that time, the airline expects to employ 2,300 people at San Jose, including flight crews.
At present, American operates 59 flights a day from San Jose and employs 250 people there.
American will board more than 1.1 million passengers at San Jose this year and that the number will rise to 2.6 million by 1991, according to Joseph J. D’Ambrosio, the airline’s Western division vice president.
American already operates five hubs, in Dallas/Ft. Worth, Chicago, Nashville, Tenn., Raleigh/Durham, N.C., and San Juan, Puerto Rico.
The new hub will allow American to facilitate the connection of its mainly East-West route system with its newly acquired routes up and down the West Coast. Until the carrier acquired AirCal last year, most of its flights were from New York, Chicago and Dallas/Ft. Worth to the West Coast. But the new West Coast network stretches from the Canadian border to the Mexican border.
It had been reported earlier that American was planning to establish a hub in Northern California, with San Jose and San Francisco as the leading candidates.
A hub is an airport at which a large number of an airline’s flights land and take off within a short period–usually 15 to 25 minutes. This kind of scheduling gives travelers quicker access to connections with flights to a much greater variety of destinations than would be possible without a hub operation.
Hubs also are money-savers for the airlines because they are able to concentrate their resources and operate with fewer aircraft.
July 2, 1985
American Airlines Creates Hub at Raleigh-Durham
MORRISVILLE, N.C.- American Airlines said Tuesday it will spend more than $60 million to create a new regional hub at Raleigh-Durham Airport that is expected to involve 175 flights a day to 53 cities.
The airline said at a news conference a new terminal to accommodate the hub operation should be completed by July 1987. When in full operation, the hub for north-south routes will create 1,275 jobs.
The airline currently has 4 flights a day here and 15 employees.
Michael W. Gunn, American vice president of passenger sales and advertising, said the change would ”improve the economy for the area because more companies will want to locate here.
The airline operates eest-west hubs in Dallas-Fort Worth and Chicago and recently announced plans for a north-south hub in Nashville.
September 8, 1988
American Airlines Focuses On San Juan
Dallas Morning News
FORT WORTH, Texas — With its chief rivals in the Caribbean faltering, American Airlines Inc. is broadening its already ambitious plans to dominate air travel in the region through its hub in San Juan, Puerto Rico.
The Fort Worth-based airline announced this week that it would invest up to $100 million in the next three years to triple the size of its hub at Luis Munoz Marin International Airport in San Juan.
Among the airline`s plans: increasing its terminal space from 320,000 to 900,000 square feet; doubling its number of gates from 10 to 20, including nine capable of handling wide-body aircraft; increasing its San Juan work force to 1,000 employees from 500 employees , and more than doubling the number of daily departures.
The expansion plans come amid a steady increase in American’s activities in the region since it opened its San Juan hub in late 1986. Besides steady increases in flights and passenger boardings, the airline completed a $45 million terminal makeover last year and now is building a $6.25 million reservations center in San Juan.
“We think this is a good time to continue to expand our market share in an area that has been very profitable for us,” said Michael Durham, American`s vice president for financial analysis and planning.
The importance of the Caribbean to American was illustrated by the presence of the airline’s chairman and president, Robert L. Crandall, at the news conference in San Juan where the expansion was announced earlier this week.
“American’s San Juan hub … has been a resounding success, and has helped make San Juan a major connecting point for traffic between the U.S. and the Caribbean,” Crandall said at the news conference.
American’s expansion plans have been aided by the troubles experienced by its chief rivals in the area, Pan American World Airways Inc. and Eastern Airlines Inc. Both carriers, which hold about 90 percent of the routes in the region, have been bogged down by labor strife and financial headaches.
Although Eastern recently has shrunk its Caribbean operations slightly, the Miami-based airline says it has no intention of allowing American a free hand in the Caribbean. As proof of commitment, Eastern points to its new $36 million terminal in San Juan — built from scratch, unlike American’s terminal.
As for Pan Am, the cash-poor airline has said it is willing to sell off parts of its operations, including its extensive South American route system. Pan Am has offered the routes to American, which has expressed interest, but there are no serious talks under way at present, an American spokesman said.
Buying Pan Am`s Latin American routes would dovetail nicely with American’s plans for its San Juan hub.
December 20, 1989
American Air To Buy Eastern Airlines’ Latin Routes
By Carol Jouzaitis
The Chicago Tribune
American Airlines, adding a Latin flavor to its growing overseas presence, said Tuesday it agreed to buy Eastern Airlines’ Central and South American routes and other assets for $471 million.
The deal with Eastern’s parent company, Texas Air Corp., gives American, the nation’s largest carrier, routes to 20 cities in 15 Latin American countries.
In addition, American agreed to purchase the Miami-London route from Continental Airlines, Eastern`s sister carrier, along with Eastern`s routes to Toronto from Miami and Tampa.
American would also acquire landing slots at O`Hare International Airport as well as at airports in Washington and New York, and airport facilities in San Juan, Puerto Rico.
The sale is subject to approval from the government and federal bankruptcy court, where Eastern is in Chapter 11 reorganization.
Eastern would continue flying the routes until the sale is completed, which is expected to take about six months, Eastern officials said.
The deal underscores the increasing strength of the nation’s biggest carriers and their ability to pick up valuable assets from struggling carriers such as Eastern and Trans World Airlines, which are selling parts of their operations to raise money.
Only a day earlier, American said it would pay $195 million for TWA’s Chicago-London route and airport facilities at O’Hare.
As part of the Eastern deal, Texas Air Corp. agreed to drop a $1 billion antitrust lawsuit against American’s computer reservations system, Sabre.
While expanding its Miami hub, American is continuing to build its sizable trans-Atlantic network and service to the Orient.
The Eastern deal “will allow our company to continue building our international network,” said American Chairman Robert Crandall. “It will make the United States a stronger competitor in Central and South America by linking that region to American’s extensive route system.”
The sale means a significant cutback for Eastern in Miami, its longtime home base. Eastern is expected to focus on Atlanta as its major hub.
Eastern’s retrenchment in Florida would be a shot in the arm to another troubled carrier, Pan American World Airways, which has been expanding in Miami.
Eastern officials told creditors Monday the carrier planned to emerge from bankruptcy at about two-thirds its prestrike capacity. The airline filed for bankruptcy in March, shortly after its machinists union went on strike.
American faces an uphill battle rebuilding Eastern’s Latin American division.
Kevin Murphy, analyst with Morgan Stanley & Co. in New York, noted that Eastern’s Latin American operation has been losing money for years and lost a lot of customer good will during the strike.
“American is spending close to $500 million on something that isn’t making any money,” Murphy said. “It probably won’t see a return on its investment until 1990.”
Charles Bryan, head of Eastern’s striking machinists, said his union would oppose the sale.
“The dismantling of Eastern is an absolute atrocity,” Bryan said.
“There are tremendous antitrust problems, and the Justice Department should be outraged.”
Analyst Murphy said he didn`t expect the deal to raise significant antitrust concerns in Washington.
“There could be some problems with market share concentration in Miami and San Juan. But American could deal with those by selling some gates in those cities,” Murphy said.
October 23, 1990
American Airlines Plans $100 Million Expansion at San Juan Hub
NEW YORK- American Airlines will soon begin a 4-year, $100 million expansion of its hub in San Juan, Puerto Rico, company chairman Robert Crandall said Tuesday.
American plans to add 10 gates for a total of 25 at Luis Munos Marin International Airport and a customs facility capable of processing 5,000 passengers an hour, Crandall said.
The company is making the expansion despite the uncertainty of its overall performance this year due to higher jet fuel prices and a looming recession.
“Even in the worst of times, there are opportunities to be found out there,” Crandall said at a news conference.
“The Caribbean has been strong for us in good and bad times,” he said.
American’s third-quarter profit fell 52.1 percent, the company said last week. Unless fuel prices decrease significantly, Crandall warned then, a fourth-quarter loss was almost assured and could be large enough to wipe out the company’s $175.5 million profit in the first three quarters.
But American’s vice president for the Caribbean, Peter Dolara, said air traffic in that region will likely remain strong even if it slows in the continental United States.
The demand for air travel is less elastic in the Caribbean because a large share of passengers live in the region and are flying to visit friends and relatives on other islands, Dolara said. Few of them have other travel options besides flying, he said.
In addition, continental U.S. passengers who vacation in Europe typically turn to the Caribbean as a less costly alternative during a recession, Dolara said.
Lee Howard, chief executive officer of Airline Economics Inc., said American is one of the few carriers that can make a substantial capital commitment, such as the San Juan expansion, in a recession and fuel crisis. “American will emerge probably a relatively stronger carrier because some of the weaker ones will have gone by the wayside in the same time frame,” Howard said.
United Airlines also announced a major capital commitment Tuesday, saying it would spend $400 million to purchase most of Pan Am’s routes between the United States and London.
American began service in 1986 to the Caribbean and the region now accounts for about 12 percent of its routes and slightly more than 12 percent of its revenues, Crandall said.
When new route additions are completed in December, American will have 58 daily flights to 26 destinations from San Juan. American Eagle, its regional affiliate, will have 68 daily flights to 15 destinations.
The airline eventually may operate 200 flights daily in San Juan, Crandall said.
The airline’s plans for San Juan include a new concourse, baggage handling system and expanded ticketing areas. Its terminal area will total more than 1 million square feet when the expansion is done, up from 260,000 square feet. American will also help pay for a roadway expansion and new control tower at the airport.
American also plans smaller capital improvements at St. Thomas, Santo Domingo, St. Croix, St. Maarten, Puerto Plata, Montego Bay and Kingston.
February 06, 1993
American Air May Retire Planes and Hubs
By Agis Salpukas
The New York Times
American Airlines is considering a retreat from its strategy of having major operations in all parts of the nation and may cut the number of its hubs and retire several planes, top executives of the airline said yesterday.
Michael J. Durham, the company’s senior vice president of finance and chief financial officer for the airline, said yesterday at a transportation industry conference sponsored by Lehman Brothers in New York that the airline was considering closing or cutting back two money-losing hubs, one serving Raleigh and Durham, N.C., and the other at San Jose, Calif.
May Return Airbuses
The hub at Raleigh-Durham was opened only five years ago and has a large new terminal with 25 gates. It cost American about $120 million to set up. San Jose was opened four years ago at a cost of $50 million and has 15 gates. Both were opened with fanfare at a time when most airlines were pushing to expand as quickly as possible.
Robert L. Crandall, the chairman, said the airline would decide by spring whether to return 25 A300′s to Airbus Industrie. He also said American would not renew any leases on its Boeing 727′s, which still make up a large part of its fleet.
The airline has 124 newer 727-200′s and 16 older 727-100′s. The entire fleet of the older planes, all of which are leased, will be retired by the end of this year, Mr. Crandall said.
He said the 124 Boeing 727-200′s would be reduced to 67 by the end of 1996, and the retirement of 59 DC-10′s, which make up a large part of American’s wide-body fleet, would be speeded up.
Fewer Choices for Travelers
Closing the Raleigh-Durham hub would be a major setback for the airline in its attempt to build a strong presence in the South and compete with Delta Air Lines and USAir.
It would also be a major blow to Raleigh and Durham, which had touted the presence of American as a major selling point to attract new industry.
Closing Raleigh-Durham would also give fliers fewer choices in an area dominated by Delta and USAir. As regional carriers were absorbed by the larger airlines or went bankrupt in the 1980′s, consumers in many medium-size cities have found their choices dwindling to one or two carriers.
As a result, fares on routes from such cities to hubs like Atlanta and Pittsburgh have tended to go up much more than on major routes where fliers can choose from three or four airlines.
American’s strategy has been to flood markets with flights to pre-empt other carriers from moving in, to hire new workers at low wages, and to replace old planes with new fuel-efficient aircraft that use two crew members in the cockpit instead of three.
The strategy worked as long as the number of fliers grew each year, but it has become a huge drain during a time of low traffic and while a large number of new planes are being delivered and put into service.
January 31, 1995
American Airlines to reduce hub in Nashville
The New York Times
American Airlines said yesterday that it would reduce the size of its Nashville hub, cutting about 200 jobs in an effort to make it profitable. American said it would try to find the affected employees work elsewhere within the airline. American and its commuter carrier, American Eagle, employ about 1,650 ground personnel in Nashville. Shares in American’s parent, the AMR Corporation, fell $1.375, to $57, on the New York Stock Exchange yesterday.
January 26, 1995
American Airlines to eliminate Raleigh-Durham International Airport hub
By Leslie Deak
American Airlines is taking a one-way flight away from Durham.
The airline announced Tuesday that it will eliminate its hub at the Raleigh-Durham International Airport due to increased competition and unprofitable flights. Starting June 15, American will provide only seven flights out of RDU each day.
Midway Airlines, a Chicago-based company, will begin service from RDU by March 2, and will gradually expand to make up for the loss of American flights.
American has been planning to dismantle its hub since the fall of 1993, when the company began evaluating the revenues it generated at the RDU hub, said Tim Smith, a spokesperson for American. “We wanted to weed out unprofitable flights and, in the process, make the hub more profitable,” Smith said.
Increased competition from other airlines with southeastern hubs have hurt American’s business. Competitors’ hubs in Charlotte, Atlanta and Greensboro reduced American’s traffic from RDU.
This competition has pushed East Coast fares to among the lowest in the nation, Smith said. American could not afford to offer fares low enough to draw customers from competing airlines with other southeastern hubs, he said.
“Hubs have not only local traffic, but travelers from other cities stopping to make a connection,” Smith said. “What we saw [at RDU] was that the connecting traffic was dwindling. The Triangle area has provided a larger and larger percentage of the passengers coming in and out of the hub.”
Continental Airlines’ gradual service increases at the Greensboro airport also dealt major blows to American. Continental first increased its daily service out of Greensboro from three flights to 19 in October 1993, said Katherine Birdsong, marketing manager at Continental. Continental now offers 74 daily flights from Greensboro, and will increase this number to 100 on March 1, when Greensboro will be designated an official Continental hub.
“Customers started driving from all over North Carolina, and even Virginia, to take advantage of lower fares and nonstop service,” Birdsong said.
Continental made the move to Greensboro after noticing the area was underserved. “The competition and balance of airfares made it a better market for the customers,” Birdsong said.
In place of the more than 100 daily flights out of RDU offered by American in recent years, Midway is scheduled to offer 22 daily flights by March 2, increasing to 42 by June and reaching a total of 60 by December.
In addition, Midway will sublease seven gates in RDU’s Terminal C from American.
“This is a win-win situation for the community and the airlines,” Smith said. “Midway will continue service much like American’s, and American will have a source of revenue for the gates [at RDU].”
Midway has also announced plans to allow customers to earn and receive frequent-flier mileage under American’s AAdvantage program.
Nonetheless, the Triangle area will feel the pinch of American’s move in May when the company begins to eliminate about 500 of its 870 employees at RDU.
“One of my best friends is out of a job,” said Wendy Earle, a first-year Divinity student.
American officials say they will attempt to find positions elsewhere in the company for the affected employees. Some local workers may also find work with Midway, which plans to supplement a staff of nearly 300 people being transferred from Chicago with local workers.
Many University students planning to fly out of RDU will also be affected by the change in service.
Trinity junior Korland Simmons said he was very satisfied with American’s service. “It’s usually how I get home,” he said, adding that he is disappointed that he no longer will have access to a nonstop flight to Little Rock, Ark.
Others said they noticed that American has been struggling. “The last time I flew American [to Orlando], the plane was three-quarters empty, and that was the Sunday before Christmas,” said Trinity freshman Adrian Sisser.
Others chose not to use American because of the cost, even if competing airlines’ flights were less convenient.
“I usually fly USAir,” said Trinity freshman Lino Marrero, who flies to Ft. Lauderdale, Fla. to get home. “It stops in Charlotte and Atlanta, but that’s still cheaper than flying American nonstop.”
When the downsizing is complete, American will offer flights only to its major hubs in Dallas-Fort Worth, Chicago and Miami, in addition to a nonstop flight to London. Midway will begin offering flights to New York, Washington, Newark, Chicago, Tampa, Orlando and West Palm Beach, Fla., on March 2. These are all cities previously served by American.
Former Terminal C American Airlines hub at Raleigh-Durham International Airport was demolished and replaced by the new larger Terminal 2 complex
January 10, 2001
TWA to be bought by American Airlines
AMR also to acquire $1.5B of US Airways assets, 49 percent stake in DC Air
By Staff Writers Tom Johnson and Kim Khan
NEW YORK (CNNfn) – American Airlines parent AMR Corp. unveiled several widely-expected acquisitions Wednesday, including an agreement to purchase most of the financially troubled Trans World Airlines Inc. assets for about $500 million cash. TWA, one of the oldest carriers in the United States, filed for bankruptcy as part of the arrangement.
In separate arrangements, AMR also agreed to acquire certain assets from US Airways for approximately $1.2 billion, and to purchase a 49 percent stake in the start-up DC Air for approximately $82 million.
Indeed, the TWA transaction will provide American with a critical new connection hub in St. Louis, significantly bolstering its position as an east/west carrier.
January 10, 2003
American-TWA merger deemed right move, but 9-11 changed things
ST. LOUIS — Optimism soared as high as 747s above Lambert Airport two years ago when American Airlines completed its buyout of bankrupt Trans World Airlines, saving thousands of jobs and retaining the St. Louis airport as a vital hub.
Two-and-a-half years later, half of those TWA workers have lost their jobs. As of November, American will cut the number of departures out of St. Louis by more than half, to 207 from 417, the company announced this week. Nonstop service will be axed to 27 destinations. Smaller planes will be used. And some believe the scaling back isn’t finished yet.
It’s not that Fort Worth, Texas-based American made a mistake in purchasing debt-ridden TWA, experts say. Nor, they say, has the airline betrayed its adopted community.
Simply put, fate — and the terrorists — intervened.
“In a very real sense, the terrorists won,” said Michael Boyd, president of the Evergreen, Colo.-based Boyd Group, an aviation consulting firm. “Victim: St. Louis.”
“Nine-11 and the inept aftermath of it basically reduced the air transportation system in revenues by 20 percent. That changed everything.”
American executive vice president for marketing Dan Garton said the Sept. 11, 2001, terrorist attacks were only part of the problem.
“We’ve had a war, terrorist threats and a SARs epidemic,” Garton said. “No one could have predicted this turn of events.”
Still, for some in St. Louis, there was a sense of betrayal.
Mike McDermott was laid off in July after 28 years as a flight attendant, first for TWA, then for American.
“Three years ago I told everybody we needed our seniority or the merger was going to be disastrous,” McDermott said. “There is no question we were all lied to. The idea of two great airlines, one great future, was nothing but a farce. It was a way to get the politicians on their side in order to get the merger approved.”
About 1,500 jobs will be lost when the latest cuts take effect Nov. 1. Many of those workers are former TWA employees who went to the bottom of American’s seniority ranks with the merger. Of the 20,000 or so TWA employees at the time of the merger, about 10,000 will still be with American after the latest cuts, an American spokesman said.
McDermott, a former union leader, questioned those numbers.
“If there are 5,000 overall TWA employees who are continuing to work, I’d be surprised,” he said. “They got rid of 80 percent of the pilots and 100 percent of the flight attendants. Every flight attendant who worked for TWA is laid off.”
Meanwhile, about 500 more workers will be laid off Sept. 15 when American closes a reservations office in St. Louis.
This week’s news was the latest in a long line of gloomy developments for the aviation industry here.
TWA, based in St. Louis, struggled for more than a decade to stay afloat despite losing money year after year after year. The downtrodden but proud airline was about to go under for good, filing for bankruptcy in January 2001, when American announced plans to purchase its assets.
Three months later, top executives from both airlines gathered with employees in an emotional merger ceremony in a hangar at Lambert. TWA and American jets stood nose-to-nose on an adjacent runway. Many longtime TWA employees cried — tears that were, in part, sadness at the loss of TWA, but mostly, happiness that they could keep doing their jobs for a profitable, vibrant company like American.
“The purchase of those assets from TWA was a brilliant stroke of strategy for American Airlines,” Boyd said. “It was a good move then. Having Chicago, Dallas and St. Louis as mid-continent connecting hubs, they could dominate the business.”
“Just take a minute and go back to that time,” he said. “Our operations in other hubs were essentially at capacity. We had demand we couldn’t meet. We needed another way to take people east and west. We were making money on almost all of our flights, and we were facing a United-US Air merger.
“Now, the world is completely topsy-turvy.”
Some Missouri politicians wonder why American has singled out St. Louis and former TWA workers to take the brunt of the cutbacks. Even as Lambert flights are cut in half, American is growing operations at the Chicago O’Hare and Dallas-Fort Worth hubs.
“In two short years, a promising acquisition has turned into a string of broken promises,” Sen. Kit Bond, R-Mo., said.
U.S. Rep. Kenny Hulshof, R-Mo., said American executives told St. Louis area congressmen during the merger talks that job losses “would not fall disproportionately on TWA employees. Those statements were false.”
But analyst Juli Niemann of RT Jones in St. Louis said American should be praised, not scorned.
“Basically, American gave them (laid-off employees) three years they wouldn’t have had,” she said.
May 10, 2010
End of TWA in 2001 hurt hub in St. Louis as American Airlines focused on bigger airports
By Robert Schoenberger
The Plain Dealer
At one time St. Louis was a key link in U.S. air travel, Trans World Airline’s main U.S. hub that shuttled millions of travelers each year between the East and West coasts.
But as TWA’s financial health declined, things looked grim for St. Louis, until American Airlines decided to buy the carrier’s assets out of bankruptcy.
The plan was to keep the St. Louis hub alive while easing congestion at American’s hubs in Dallas and Chicago. The “Gateway to the West” would continue to have direct flights to most of the country.
The 2001 deal sounded like salvation for the Lambert St. Louis International Airport.
Only it didn’t work out that way.
American Airlines has steadily cut flights in St. Louis, focusing instead on its bigger hubs. Passenger traffic has fallen by more than 50 percent and two of the airport’s concourses are set to close this year.
With United and Continental airlines planning to merge, Cleveland Hopkins International Airport would look a lot like St. Louis, the smallest hub in a big airline merger. Bigger hubs in Chicago and Newark, N.J., are likely to get more of the traffic.
Experts are optimistic that Cleveland will remain important as Continental and United combine, saying Hopkins could help the airline serve cities that would be too expensive to fly to from Chicago or Newark.
Still, analysts thought keeping St. Louis as a hub made a lot of sense, too, helping American Airlines deal with overcrowding at O’Hare.
In 2001, American’s plans for St. Louis were simple. Building on TWA’s hub there, it was going to shift traffic to St. Louis from hubs at O’Hare in Chicago and DFW in Dallas. The move would alleviate congestion and expensive gate fees in those airports while still providing a central switching point for passengers flying cross-country, American spokeswoman Mary Frances Fagan said.
Then, six months after American bought TWA’s assets as part of a complex $4.2 billion deal, terrorists flew planes into buildings in New York and Washington. Air travel plummeted, forcing airlines to re-evaluate their strategies.
“Traffic dropped substantially in the aftermath of 9/11 and we additionally saw a decline in the economy,” Fagan said.
William Swelbar, a research engineer who studies airlines at the Massachusetts Institute of Technology, said instead of funneling air traffic through three central hubs, it became cheaper for American to focus on its two bigger airports.
“The economics of the industry changed forever” following the attacks, Swelbar said.
That was not always the case. A decade ago, the St. Louis airport boasted more than 500 daily flights on TWA. Now it has fewer than 50 daily flights on American, a number expected to fall even lower by this summer.
Last year, 6 million people flew out of Lambert airport, less than half of the nearly 15 million who came through the airport in 1999.
In 2003, Fagan said it was clear that American wouldn’t need St. Louis to relieve pressure from O’Hare, and the airline cut more than 200 of its more than 500 daily flights from the airport.
Last year, after two partner airlines that had been bringing American passengers to St. Louis either went out of business or canceled flights, American further cut back its flights and revoked St. Louis’ hub status.
Richard C.D. Fleming, president and chief executive of the St. Louis Regional Chamber and Growth Association, said St. Louis lost its biggest ally within American in 2003 when the airline’s chief executive Don Carty resigned during labor disputes with American’s unions.
“The CEO who made the merger happen hit a big-time bump in the road and was gone,” Fleming said, adding that with Carty’s departure, the vision of St. Louis as a central hub went away.
Fleming’s biggest concern as the hub decline was economic development.
“For headquarter companies, air service is important, so we pay attention to it,” he said. Business travelers like direct flights, he said. Taking connecting flights can make trips last longer, keeping workers in the air instead of at work.
If a merged Continental/United eventually cuts back on air service in Cleveland, Fleming said other carriers will step up service to key business destinations. That’s what has happened in the past decade in St. Louis. Much of the traffic that went away, he said, was pass-through traffic, passengers that simply changed planes in the city.
The decision to stop using St. Louis as a hub disappointed political leaders who had been instrumental in making the American/TWA deal happen. Sen. Christopher “Kit” Bond, R-Mo., fought against legislation that would have prevented airline mergers and lobbied the Justice Department to approve the merger.
Other members of Missouri’s congressional delegation also pitched in, said Steve Taylor, spokesman for Rep. Todd Akin, R-St. Louis. Akin was on stage in St. Louis when the airlines announced their merger and promised to keep the St. Louis hub active.
“There were a lot of concerns at the time about keeping the hub,” Taylor said. “Obviously, not all of that was unfounded.”
He added that people in Cleveland should be concerned. While Continental has promised that it will keep a hub here, the aviation world can change quickly.
John La Costa, an aviation analyst with the Dallas-based La Costa Consulting group, said he believes Cleveland is in a much better position to keep its hub than St. Louis was in 2001.
In St. Louis, as American pulled back, several low-cost carriers either expanded or moved into the market. Southwest Airlines has become the largest company in the market while Frontier and AirTran have grown, he said.
“Their costs for operations are a lot lower than American’s, so American just can’t compete” on price, La Costa said.
In Cleveland, Southwest is already established, and several other low-cost carriers either serve Hopkins or the nearby Akron-Canton airport. La Costa said the Cleveland market has already experienced the price declines that come from low-cost carriers, so a merged United/Continental is unlikely to see a rapid shift in airfares here.
MIT’s Swelbar said Cleveland could be valuable to United/Continental for other reasons. While congestion at O’Hare has eased since 2001, it still exists. More importantly, because of the gate costs at O’Hare, it’s very difficult for airlines to make money there on smaller planes from mid-sized to small cities.
“Cleveland allows Continental and United to stay in those critical secondary and tertiary markets that are better served from Cleveland than using more valuable space in Newark and Chicago,” Swelbar said.
Swelbar said the Continental/United will make future hub decisions based on the economy and traffic patterns. Today, the odds of maintaining a hub here look good, but another geo-political disaster or a big increase in fuel costs could change that, he said.
May 27, 2008
American Airlines slashes San Juan hub
By Trebor Banstetter
AMR Corp., parent of American Airlines, announced Tuesday it would cut flights at Chicago O’Hare, Boston, and San Juan, in the first specifics it’s disclosed since announcing last week that it would pare flights in the face of staggering fuel costs.
American said it would eliminate its Chicago-Buenos Aires service Sept. 3, Chicago-Honolulu flights Jan. 5, and Boston-San Diego flights Sept. 3. The airline also announced it would slash the size of its San Juan, Puerto Rico, hub and retire the company’s Saab 340 turbo-props.
“In the coming weeks, AMR will continue to make additional schedule reductions in other markets,” the company said in a release.
AMR said last week it would cut seating capacity on American Airlines 11-12 percent in the fourth quarter, compared to last year’s levels. Capacity at American Eagle will decline 10-11 percent.
Monday, officials with American Eagle, American’s regional partner, told employees that San Juan will see some significant reductions.
“Fuel prices have risen so quickly and show no signs of falling, the economy is far from strong, and airline industry losses are mounting,” Peter Bowler, Eagle’s chief executive, told employees in a memo. “I believe the crisis in the airline business is real, and the steps American is taking to reduce its schedule and the schedule it is asking us to fly on its behalf are necessary.”
American will reduce its San Juan schedule on Sept. 3, Bowler said. Eagle also will cut its San Juan departures, to 35 from a planned 55.
Eagle will eliminate two destinations – Samana in the Dominican Republic, and Aruba. Both of those destinations will continue to be served by American from Miami. Eagle will reduce the number of daily departures from San Juan to other cities as well, Bowler said.
In eliminating its Saab 340s, Eagle will move about half of its ATR-72 turbo-props to Dallas/Fort Worth Airport from San Juan, to replace flying done by the Saabs. The ATRs are more fuel-efficient, according to Eagle officials, and have more seats.
Retiring the Saabs also will save training and maintenance costs. Eagle has 35 Saabs and 39 ATRs.
Company officials said it was too early to know how many jobs will be affected. But officials with the Air Line Pilots Association, which represents Eagle pilots, said the Saab retirements alone could cost up to 230 pilot jobs.
Union officials urged the airline to preserve as many jobs as possible.
“Today’s difficult environment offers our management team a unique opportunity to protect the employees who built the world’s greatest regional airline,” said Herb Mark, who heads the union’s Eagle chapter.
Gerard Arpey, chief executive of AMR, said May 21 that the airline would shed thousands of jobs later this year as it cuts back. He said the current level of operations at today’s fuel prices would be unsustainable.
September 24, 2010
American Airlines and American Eagle to cut flights at San Juan hub
By Terry Maxon
The Dallas Morning News
American Airlines Inc. and American Eagle are making more cuts in San Juan, Puerto Rico, as American refocuses its efforts on its five largest cities.
The reductions coming April 6 will leave the carriers with a combined 41 daily flights, down from 58 at present, as they pull back their once-huge Caribbean operations.
Earlier this year, American executives said they would focus on Dallas/Fort Worth, Chicago, New York, Miami and Los Angeles as they try to get parent AMR Corp. back to profitability.
American spokeswoman Martha Pantín said Friday’s announcement was “consistent with our strategy to focus our resources on our five cornerstone markets.”
“We expect to reallocate the capacity from San Juan throughout the network,” Pantín said. “We don’t anticipate that these changes will affect our overall network capacity of either American or American Eagle.”
With the changes next April, American will operate 18 daily departures, down from 25. It is discontinuing flights from San Juan to Boston, Philadelphia, Tampa, Baltimore, Washington Dulles and Santo Domingo, Dominican Republic. But it will add a flight to both Miami and New York.
American Eagle will go from 33 daily departures to 23. It will discontinue service to Anguilla, La Romana and Puerto Plata, Dominican Republic; Port of Spain, Trinidad; Port-au-Prince, Haiti; and Nevis.
Pantín said the company has no estimate of the number of employees that might be affected by the schedule changes.
“We regret that these changes will affect AA and Eagle employees in San Juan,” she said. “We are currently working to determine the exact number of positions impacted, but will do everything possible to offer affected employees the opportunity to relocate or bid for vacancies elsewhere in the company.”
American launched its Caribbean service in 1971 when it bought Trans Caribbean Airlines. It opened a connecting hub in San Juan in 1986, growing it by 2001 to 135 flights operated by American and American Eagle.
San Juan was the last remaining hub of the four domestic hubs American launched in the 1980s. Hubs in Nashville; Raleigh-Durham, N.C.; and San Jose, Calif., were dismantled previously.
American Airlines sent layoff warning notices
American Airlines sent layoff warning notices to more than 11,000 employees although a spokesman said the company expected job losses to be closer to 4,400.
October 12, 2012
When flying was FUN! TWA’s elegant but unused flight terminal at JFK offers glimpse into a more glamorous world
By Daily Mail Reporter
The now closed TWA Terminal at JFK International Airport in New York City, opened to visitors over the weekend who caught a glimpse of a world gone by. The flight center was designed by architect Eero Saarinen, the Finnish-American designer known for his love of curves, and opened in 1962 for the now defunct Trans World Airlines (TWA).
The futuristic building is now a historic landmark and has undergone a $20 million renovation. The $20 million project was funded by The Port Authority of New York and New Jersey.
Future plans for the structure could include adapting the space into a boutique airport hotel, in addition to using it to host an exhibit celebrating the terminal’s history at JFK airport, known as Idlewild Airport at the time the terminal opened.
January 10, 2013
American Airlines commuter partner to end service at San Juan airport
By Terry Maxon
The Dallas Morning News
Executive Airlines Inc., flying as American Eagle, will end its service out of San Juan, Puerto Rico, April 1 as the commuter partner of American Airlines Inc. grounds its fleet of turboprop aircraft.
American spokeswoman Martha Pantin said that all of the ATR-72 aircraft operated by Executive Airlines are being returned to their lessors, a decision tied to the bankruptcy case involving American, Executive and parent AMR Corp.
“The return of the ATR aircraft will result in the removal of all Executive Airlines flight operations in San Juan beyond April 1, 2013,” Pantin said. “American is still evaluating several replacement solutions to continue providing service to the region.”
She said that with the exception of Tortola and Dominica, all Executive Airlines destinations out of San Juan will still be served from American’s Miami hub.
On Wednesday, the website Airlineroute.net reported the San Juan cutbacks, with Executive Airlines ending four daily flights to Tortola and two flights each to Punta Cana and Santo Domingo in the Dominican Republic, and to St. Croix and St. Thomas, Virgin Islands.
Executive will also end its one daily flight to Dominica; St. Kitts; Antigua; Martinique; and Santiago, Dominican Republic.
With Executive Airlines, American has historically dominated the San Juan market. It established a connecting hub at Luis Muñoz Marin International Airport in 1986, part of the carrier’s rapid expansion in the 1980s.
San Juan-based Executive Air Charter Inc. contracted with American to feed passengers through the hub under the American Eagle brand. In 1989, American bought the carrier and renamed it Executive Airlines.
American added hubs at Nashville, Tenn., in 1986; at Raleigh-Durham, N.C., in 1987; and at San Jose, Calif., in 1988. Operations at the other three hubs were scaled back in the 1990s and no longer operate as connecting hubs. American downgraded San Juan from hub status several years ago.
Meanwhile, rival JetBlue Airways Corp. has supplanted American as the largest operator in San Juan.
In 2010, American carried 32.2 percent of San Juan’s passengers, compared with 18 percent for JetBlue, according to the Bureau of Transportation Statistics. But JetBlue, which has rapidly expanded its service to Puerto Rico from New York and Boston, passed American in passengers by early 2012.
For the 12 months that ended Sept. 30, JetBlue carried 30.7 percent of that airport’s passengers; American dropped to 23.6 percent.
January 25, 2013
US Air, American Airlines deal could come in next two weeks
US Airways Group Inc and American Airlines parent AMR Corp are in the final stages of negotiating a merger, with the final price and management structure still to be resolved, four people familiar with the matter said. The two airlines, as well as AMR’s creditors and its bondholders, have focused their efforts in recent weeks on reaching a merger agreement, and a deal could come in the next two weeks, the people said on Friday.
AMR’s board, which has not made a final decision and still considers its own restructuring plan as a viable one to revive the airline, plans to meet on January 28 and January 29 to discuss the latest developments in the negotiations, the people said.
A combined American-US Airways would give American the scale to match bigger rivals that are upgrading service and expanding international routes. The merged company would have revenue of $38.69 billion based on 2012 figures, in front of United Continental which had revenue of $37.15 billion last year.
The new American would have a solid presence on the important U.S. East and West coasts and on North Atlantic routes, given American’s revenue-sharing joint venture with British Airways and Iberia.
American has hubs in New York, Miami, Chicago, Los Angeles and Dallas/Fort Worth, while US Airways has key operations in Phoenix, Philadelphia and Charlotte, North Carolina.
January 16, 2013
American Airlines, US Airways pilots OK deal on working conditions ahead of merger
By Ely Portillo
The Charlotte Observer
Details of a potential merger agreement between pilots at US Airways and American Airlines were released Tuesday, as speculation continued about when the carriers are likely to announce a tie-up.
The memorandum of understanding between the Charlotte-based US Airline Pilots Association and the Fort Worth, Tex.-based Allied Pilots Association was approved by union leaders over the past three weeks. US Airways pilots will begin voting on the memorandum this Friday, a spokesman for the union said. The voting is expected to wrap up by Feb. 8.
American Airlines is also expected to report its financial results on Wednesday, and will likely reveal more details about the machinations and negotiations behind the potential merger. The company has been in Chapter 11 bankruptcy protection since November 2011.
Details of the memorandum of understanding had been withheld from pilots before Tuesday, due to non-disclosure agreements the unions signed as part of negotiations. The terms of the agreements are crucial, because they will set the work rules and groundwork for integrating the 16,000 or so pilots from the two companies.
“The US Airline Pilots Association (USAPA) and Allied Pilots Association (APA) share the goal of achieving the best possible contract for our memberships, and the increasing possibility of a US Airways-American Airlines merger has brought us together to work for that common cause,” the unions said in a joint message to pilots Tuesday.
US Airways pilots offer a glimpse of what can happen when a merger doesn’t go smoothly. Though represented by the same union, the pilots are effectively split into two groups stemming from the 2005 merger between US Airways and America West. The groups were never able to reach agreement on a combined seniority list or a single contract, and still work under separate contracts with different work rules and pay rates.
The memorandum details released Tuesday show:
• In the event of a merger, all pilots would start with the APA’s current collective bargaining agreement as their base, and the pilots will see a total of $522 million in contractual improvements such as raises over the next six years.
• American pilots will continue flying current American planes and those on order, and US Airways pilots will continue flying US Airways planes. American pilots will keep flying all of their lucrative trans-Pacific routes, and US Airways pilots will fly all Boston-LaGuardia-D.C. shuttle routes, as well as existing Phoenix to Hawaii routes.
• Pilots’ pay and current flying time (known as block hours) are protected to prevent the merged airline from “drawing down either operation at the expense of the other.”
• Seniority integration between the pilot groups will proceed according to the terms of the McCaskill-Bond Amendment, a process for integrating work groups instituted in 2008. Seniority has been the major bone of contention between former America West and US Airways pilots, and is a vital issue to pilots because it typically determines what planes and routes a pilot flies.
The memorandum still requires the approval of both companies’ boards and the bankruptcy court.
A merger could already be a done deal by the time the US Airways’ pilot voting wraps up in February. In a note to clients Tuesday morning, J.P. Morgan analyst Jamie Baker said a merger “may be imminent,” and that “clarity (on the merger situation) is anticipated in the near term.”
Tom Horton, chief executive of American’s parent company AMR Corp., said earlier this year that he anticipates a merger decision in a matter of weeks. The FortWorth Star-Telegram contributed.
Terms of a joint pilot contract in a merger between American Airlines and US Airways, as described in Memorandum of Understanding
Duration: Six years
Pay: 31 to 39 percent wage increases over six years
Active pilots: $750 deductible medical plan
Pension: 14 percent contribution to 401(k) plan
Sources: American Airlines, US Airways
American Airlines and US Airways merger: Which hubs will survive?
Dallas/Fort Worth International Airport is the airline’s largest hub, with American Airlinas and American Eagle
Miami International Airport is American’s 2nd largest hub and its gateway to the Southern Hemisphere, with more than 9,000 employees and 300 flights.
Charlotte/Douglas International Airport is the airline’s largest hub, with US Airways and US Airways Express
Philadelphia International Airport is US Airways’ 2nd largest hub
American Airlines hubs
Dallas/Fort Worth International Airport
John F. Kennedy International Airport (New York City)
Los Angeles International Airport
Miami International Airport
Chicago O’Hare International Airport
US Airways hubs
Charlotte/Douglas International Airport
Philadelphia International Airport
Phoenix Sky Harbor International Airport
Pittsburgh and Baltimore-Washington hubs were closed
Pittsburgh opened a new large airport terminal and concourse complex in 1993 and was the former headquarters of USAir (later US Airways). By the late 1990s US Airways began concentrating on expanding at Philadelphia International Airport and Charlotte/Douglas International Airport.
US Airways brief facts
Total Daily Flights: 3,028 daily departures (1,210 US Airways Mainline 1,818 US Airways Express)
Total Destinations: 198 (154 domestic, 44 international)
Total Countries/Territories Served: 28
Flight Attendants: 6,721
Maintenance and Related: 3,514
Fleet Service: 5,726
Airport Ticket/Gate: 5,049
Daily Flights: 609 (255 US Airways Mainline, 354 US Airways Express) Employees: 7,182
Non-stop destinations: 133 (108 Domestic, 25 International)
Daily Flights: 437 (145 US Airways Mainline, 292 US Airways Express) Employees: 6,366 Non-stop destinations: 113 (86 Domestic, 27 International)
Daily Flights: 259 (174 US Airways Mainline, 85 US Airways Express) Employees: 9,147
Non-stop destinations: 75 (65 Domestic, 10 International)
FocusCity: Washington, D.C.
Daily Flights: 220 (55 US Airways Mainline, 165 US Airways Express) Employees: 1,274
Non-stop destinations: 69 (68 Domestic, 1 International)
January 31, 2013
Charlotte hub’s future
By Ely Portillo
The Charlotte Observer
A merger would leave Charlotte as the second-largest hub in the nation’s biggest airline, with more than 600 flights a day operated by the new American Airlines. The city would be second only to Dallas/Fort Worth, which has more than 750 daily American Airlines flights.
Having a major airport hub brings Charlotte hundreds more flights a day than a city its size would otherwise have, including direct flights to 142 destinations. Companies such as Electrolux and Chiquita Brands have cited the busy hub as motivation to relocate headquarters to Charlotte in recent years.
Parker has said that Charlotte Douglas would see the number of daily flights increase after a merger, possibly to more than 700. Charlotte aviation director Jerry Orr has said being a hub for a bigger airline with more international routes would help the city expand air service. City leaders and the business community haven’t publicly expressed concern. And many analysts think Charlotte’s hub status is safe. But not everyone is so optimistic.
“It seems like the talk is extra rosy,” said Adie Tomer, a researcher for the Brookings Institution who’s studied aviation patterns. He points to other cities that have seen drastic cuts after a merger, such as Pittsburgh (former US Airways hub), St. Louis (former TWA/American hub) and Cincinnati (former Delta hub). “The talk was consistently rosy there, too,” Tomer said.
Tomer said Charlotte is the only major airport where a majority of passengers aren’t local. In fact, he said, Charlotte Douglas has the highest percentage of connecting traffic of any major hub.
“That in general puts up warning lights for us,” Tomer said. Since US Airways operates about 90 percent of the daily flights, any shift of traffic to other hubs could have an outsize impact at Charlotte Douglas.
Hub airports rely on a mix of connecting passengers and local passengers. The most recent available numbers, from the third quarter of 2012, show that about 23 percent of travelers at Charlotte Douglas were local, meaning they started or ended their trips here. The rest, just more than 77 percent, were connecting traffic, dashing through the airport from one plane to another.
Still, analysts say the merged American Airlines would need a Southeast hub to counter Delta’s at Atlanta. Miami is too far south and Philadelphia is too far north, leaving Charlotte as the ideal connecting hub for the Southeast, the thinking goes. And with the lowest cost per passenger of any major hub, Charlotte is widely viewed as an efficient and profitable airport.
US Airways’ leases on gates and other airport facilities run through 2016, officials at Charlotte Douglas said.
Federal data show US Airways and American have little overlap on the major routes to and from Charlotte. The only routes in which US Airways is the highest-priced carrier and American is the lowest-priced carrier are Charlotte-New York and Chicago-Charlotte. On the majority of routes, Delta or AirTran offer the lowest-priced alternative (and thus major competition) to US Airways.
Still, even if US Airways keeps most of its flights at Charlotte Douglas, international service could be at risk. If it makes more sense to connect European passengers through Philadelphia or Caribbean fliers through Miami in the new route structures, some flights could shift there, analysts say. Foreign carriers that are partners with US Airways in the Star Alliance, Lufthansa and Air Canada, also might choose not to fly to Charlotte anymore, since the new American Airlines would stay in the oneworld alliance. Lufthansa flies direct from Charlotte to Munich.
Negotiating Committee Overview of the MOU
- The document replaces the conditional labor agreement (CLA) negotiated with US Airways management in April 2012 and serves as a Merger Transition Agreement.
- The MOU starts with the APA 2012 Collective Bargaining Agreement (CBA) as the baseline contract for all pilots, and allows APA to make $522 million in contractual improvements ($87 million per year over six years).
- USAPA pilots will be covered under the modified APA 2012 CBA on the Effective Date, which will be the date the Plan of Reorganization is approved by the bankruptcy court.
- A timeline is established for negotiating a Joint Collective Bargaining Agreement (JCBA) with USAPA participation until such time as one union is certified by the National Mediation Board (NMB) to be the collective bargaining representative of the combined pilot craft or class, at which time the duly-certified representative shall have the exclusive authority to negotiate the JCBA on behalf of the pilots.
- For USAPA, the JBCA will be a new contract. For APA, the JCBA will be an amendment to our current contract.
- APA must file a single-carrier petition with the NMB within four months of the Effective Date of the MOU.
- Provisions and procedures are established for a Seniority List Integration process in accordance with McCaskill-Bond.
- The MOU provides initial flying protections until fence provisions are established as part of the Seniority List Integration process.
- Minimum block hour floors are established at US and AA to prevent the new company from drawing down either operation at the expense of the other. Pay protection is provided for pilots subject to displacements (subject to contract modification and valuation phase).
- If either US Airways or American Airlines is hiring, furloughed pilots on either side may volunteer to fly for the other operation. Furlough protection will be provided to all pilots at both operations, who are senior to the most junior active pilot on the Effective Date.
- Carried over from the Conditional Labor Agreement are provisions that transition our vacation accruals and daily values to the America West structure (daily value of 3:40), as well as the provision that flights over 16:00 hours will be manned by two captains and two first officers. Similar to the CLA, the MOU has no provision for profit-sharing.
- The APA 2012 CBA Section 1 will preserve the limit for regional feed aircraft of 76 seats and 86,000 lbs and will grandfather seventy-six aircraft which are below 86,000 lbs but currently flying with more than 76 seats. Total regional operations will be limited to 75% of the mainline narrow-body fleet count and large regional aircraft (66-76 seats plus grandfathered) will be limited to 40% of the mainline narrow-body fleet count in 2016 and thereafter. Domestic code-sharing will be limited to 15% (down from 50% in our current contract). The international baseline will be updated to include international hours flown by US Airways.
- The MOU also requires the new company to uphold the arbitration decision outlined in LOA 12-05 that will address the elimination of Supplement CC and the drawdown of the STL pilot base.