AirTran Airways MEC authorizes Strike Vote!

[dicko]

No, all bets are not off. Our contract has asset sale protections beginning at 30%.

30.0 % would be approximately 82.0 % of AAI's 737-700. I'm sure it's not that simple, but I'm just saying.

Pilot math ... I admit.

 

[PCL_128]

30.0 % would be approximately 82.0 % of AAI's 737-700. I'm sure it's not that simple, but I'm just saying.

Pilot math ... I admit.

This is an incredibly profitable company. Nobody is going to sell it off piecemeal. AirTran is worth far more than the sum of its parts.

I don't think SWA is even the slightest bit interested in purchasing all or portions of AirTran, anyway. Everyone at this company that is praying for some white knight to come save us is dreaming. We'll have to fight and improve this place all on our own. No merger is going to save us.

 

[GuppyWN]

PCL,

Since I'm already 2 posts in on this thread I might as well be "all in."

Mind explaining WHY a company has to be broke to be sold? A profitable company and profitable company could make a profitable powerhouse.

Look at the route maps and you'll see very little overlap.

I'm just sayin' cause it's gonna happen. It's just a matter of time.

Gup

 

[maxblast72]

This is an incredibly profitable company. Nobody is going to sell it off piecemeal. AirTran is worth far more than the sum of its parts.

The 10 or so analysts that project Airtran earnings are currently averaging a $85 million net profit in 2010 and a $100 million profit for Airtran in 2011 (with an implication of a healthy 6-8% operating margin to obtain these results).

Barring Israel and Iran igniting another Gulf War causing Jet A going back up to $4/gallon, I think Airtran will be just fine on their own. Even if Jet A does spike, Airtran has a decent fuel hedge portfolio currently with about 45% of 2010 fuel hedged with protections starting when oil goes above $75 or so. This hedge portfolio would give Airtran alot more time to react to higher energy costs than Airtran had back in 2008.

 

[PCL_128]

Mind explaining WHY a company has to be broke to be sold? A profitable company and profitable company could make a profitable powerhouse.

I agree, but I don't think your management is at all interested in such a merger. SWA management wants to be in control, and when you purchase a very profitable company, you lose a measure of control. We would put up one hell of a fight for the seniority integration, and you can bet that members of our management team would put up one hell of a fight to hold on to their cushy jobs, too.

I'm just sayin' cause it's gonna happen. It's just a matter of time.

I don't buy it.

 

[maxblast72]

I agree, but I don't think your management is at all interested in such a merger. SWA management wants to be in control, and when you purchase a very profitable company, you lose a measure of control. We would put up one hell of a fight for the seniority integration, and you can bet that members of our management team would put up one hell of a fight to hold on to their cushy jobs, too.

Got to disagree with you on some of that. If the business case makes alot of sense to Gary Kelly, I think he will pull the trigger on the deal and make sure SWAPA is onboard with what he is trying to. If the combined company would be a profitable domestic powerhouse, I think would be enough money to go around to keep everyone on both sides happy.

With respect to our management, if Gary would offer AAI shareholders around $10/share, Fornaro could cash out with about $10 million in his hands (he controls around 900,000 shares currently). Do you really think Fornaro would take a risk of another fuel spike or labor problems or take the guaranteed $10 million golden parachute? My bet is if Fornaro is offered a good price for AAI, Fornaro pulls the cord on his golden parachute.

 

[PCL_128]

My bet is if Fornaro is offered a good price for AAI, Fornaro pulls the cord on his golden parachute.

I don't think so. Our management is not well-respected in the industry, so they basically have nowhere to go but down if they have to leave AirTran. Bob would never get another CEO spot unless he went down to a much smaller company. The other execs would have even fewer opportunities. Only SK has any respect in the industry, and he's at the end of his career. The rest of them would make some good money at the initial sale, but then it would be all downhill for them after that. People in these positions are in it far more for the ego than the money, and they won't allow their egos to get severely bruised, even if the money is very good. Unless Bob was able to secure himself the position of President of the combined company, with Gary staying at CEO, I just don't see it happening.

When dealing with airline management, always think ego, not money.

 

[Lear70]

In that case you need a first grade math lesson. Or you don't work at AAI.

$137 9th year CA at AAI
$137 9th year F/O at SWA

AAI add 10.5% B Fund contribution on top of that.

SWA add 9.3% 401(k) contribution plus profit sharing that has averaged 10% per year over the last 5 years.

AAI 70 hour guarantee.
SWA 78 hour guarantee (lineholders), 79 hour guarantee Reserves.

When you look at SWA average TFP, they make about 15-20% more than their actual block hours.

So yeah, his math is right when you crunch the actual take-home pay and retirement additions.

 

[no1pilot2000]

SWA and AirTran are both great airlines. In the end, I hope that AirTran's management and it's pilot group can hammer out a contract that makes people on both sides of the table content, if not happy. Good luck to all.

 

[maxblast72]

I don't think so. Our management is not well-respected in the industry, so they basically have nowhere to go but down if they have to leave AirTran. Bob would never get another CEO spot unless he went down to a much smaller company. The other execs would have even fewer opportunities. Only SK has any respect in the industry, and he's at the end of his career. The rest of them would make some good money at the initial sale, but then it would be all downhill for them after that. People in these positions are in it far more for the ego than the money, and they won't allow their egos to get severely bruised, even if the money is very good. Unless Bob was able to secure himself the position of President of the combined company, with Gary staying at CEO, I just don't see it happening.

When dealing with airline management, always think ego, not money.

The only people that matter are Fornaro and the Board of Directors. If Gary offers the AAI shareholders a significant payout, it the responsibility of the Board of Directors and Fornaro to determine if it is in the best interest of the shareholders to accept the offer. If they stonewall an good offer from Gary and then AAI's stock prices tanks later, wouldn't Fornaro and the board be open to shareholder lawsuits?

I agree our managment has control and ego issues but at the end of the day, I don't think they want to open themselves up to lawsuits.

Who knows, maybe Gary's hand will get forced if someone else comes in and makes a bid for Airtran? A double dip recession may force the next round of airline consolidations. At the end of the day, while we may be very profitable, we are still a small fish in a big pond. I do agree with though in one aspect, Airtran loses less control of the situation since Airtran is very profitable. Midwest, led by Hoeksma, absolutely lost all control due to the poor financial performance of Midwest over the past couple of years.

I still believe we as a pilot group are pretty much along for the ride. I do feel better with Airtran being profitable and being represented by a bigger union with more resources in the case of a potential merger. I think the NPA had a big chance of getting rolled by SWAPA or any other merging airline's union.

 

[PCL_128]

If they stonewall an good offer from Gary and then AAI's stock prices tanks later, wouldn't Fornaro and the board be open to shareholder lawsuits?

Boards have an incredibly wide range of reasonability in which to deal on these matters. If they have even a sliver of an arguable basis for not accepting an offer, then they'll be fine. They just have to come up with an argument for why the shareholders would be better off in the long run with an independent company. Unless SWA makes an irresponsibly big offer, which would be completely out of character, Bob could easily come up with a justification for not merging. Lawsuits aren't really an issue.

As for the Board of Directors, they are all puppets. The idea of independent boards in America is a sham. The Board members are all hand-picked, and they're all buddies of the management team. The idea that they would order Fornaro to do something that he doesn't want to do is just not reality.

 

[Eagle757shark]

And I thought the healthcare debate in DC was crazy. Why doesn't SWA just buy Air Tran and get it overwith!?

Because Southwest IS NOT interested in buying AirTran! Pilots for some reason think that these two companies would make a good fit. These two companies may merge, but it will not be with each other.

 

[maxblast72]

Boards have an incredibly wide range of reasonability in which to deal on these matters. If they have even a sliver of an arguable basis for not accepting an offer, then they'll be fine. They just have to come up with an argument for why the shareholders would be better off in the long run with an independent company. Unless SWA makes an irresponsibly big offer, which would be completely out of character, Bob could easily come up with a justification for not merging. Lawsuits aren't really an issue.

As for the Board of Directors, they are all puppets. The idea of independent boards in America is a sham. The Board members are all hand-picked, and they're all buddies of the management team. The idea that they would order Fornaro to do something that he doesn't want to do is just not reality.

Good points. What did you think of Hoeksma refusing to deal with Leonard back in 2006-2007? Do you think Hoeksma realized that the final price for Midwest would climb so high (over $400 million)? In the end, the Northwest/TPG deal was finalized to the benefit of the MEH shareholder and detriment of the Midwest employees. I think it is very important to study history to make sure past mistakes are prevented in the future as much as possible.

 

[XRMEFLYER]

$55 an hour raise....Staple me, PLEASE!!!!!

 

[DonVerita]

$55 an hour raise....Staple me, PLEASE!!!!!

You should think about the whole picture of what a staple would do besides just the hourly increase.

Think about this for a moment: If you accept a staple, you are now artificially put at a lower seniority point. If there is a furlough, guess who gets the street first? You. Because YOU put $ in front of rational thought and strategic planning.

How much $ will you be getting on the street when you could have still been on property with DOH or some other fair integration mechanism?