American Eagle might be "set free"

[catIIIc]

It is interesting to note that about 5-6 months ago there was a newspaper article that implied AMR was thinking of selling AE based on some quote by the CFo that was probably taken out of context. The next day AE mgmt sent out mass emails, postings on the company web site, crew lounges, etc stating that this wasnt the view the company intended to portray and they had no plans to sell AE. Fast forward to today, and we have quotes taken from an earnings conference call with the CEO saying:


If AE was spun off, it could be as a way to get around the APA scope clause to fly bigger a/c without restrictions. I would guess that if APA isnt willing to flex on scope, then AE will be spun off and fly bigger a/c while the AA MD80 fleet is reduced. Either way, AMR wants AE to fly bigger planes for cheap rates. The only thing APA can do it decide if they will allow scope changes and get some pay raise in return, or have the company do it anyway by spinning AE off.

How would being sold off allow you to get around APA's Scope? Yeah you would be able to bid for other airlines flying but the Scope Clause would still be in effect.

 

[Flyby1206]

[/b]

How would being sold off allow you to get around APA's Scope? Yeah you would be able to bid for other airlines flying but the Scope Clause would still be in effect.

AE wouldnt be associated with AMR and would create their own branded flying with larger a/c. At that point AE would just be another airline based in DFW who would probably have a strong code-sharing agreement with AA. I know it sounds a lot like Indy Air, Expressjet, etc. I am not saying its a good plan, but this is just an idea of how things could turn out if they really spun off AE.

 

[FO 4 Life]

AE wouldnt be associated with AMR and would create their own branded flying with larger a/c. At that point AE would just be another airline based in DFW who would probably have a strong code-sharing agreement with AA. I know it sounds a lot like Indy Air, Expressjet, etc. I am not saying its a good plan, but this is just an idea of how things could turn out if they really spun off AE.

If you feed AA, as I'm sure you would in a spinoff like you do now, scope would indeed apply. It would have to be a separate company/certificate altogether. Go Jets was formed to specifically get around AA scope. CHQ bought Shuttle America for the certificate to put bigger a/c on it since they were violating AA scope. You could do it since Executive still has there own certificate, but that's the only way.

 

[eaglefly]

Section or not, the contract would not ncessarily be bnding upon a new owner. It depends upon how the "spin-off" is done, whether through an asset sale, or corporate transfer of ownership (the latter may or may not result in the existing contract being binding upon a new owner). AE employees covered by CBAs would end up back in negotiations on a new contract.

Have to disagree (especially since you're no expert).

The language in the Job security/Successorship section of our contract is not optional, it is "binding"

 

[CitationUltra]

Have to disagree (especially since you're no expert).

The language in the Job security/Successorship section of our contract is not optional, it is "binding"

Actually, I am an expert. Obviously, you're not. The language of the existing contract binding the two parties, e.g., AMR and the pilot's through their CBA, does not bind an entity not a party to the agreement. Whether or not the provisions of the agreement can be imposed upon or enforced against a third party, depends entirely on the manner in which the company's assets are sold and conveyed.

 

[eaglefly]

Actually, I am an expert. Obviously, you're not. The language of the existing contract binding the two parties, e.g., AMR and the pilot's through their CBA, does not bind an entity not a party to the agreement. Whether or not the provisions of the agreement can be imposed upon or enforced against a third party, depends entirely on the manner in which the company's assets are sold and conveyed.

Crapola.

Among the notable paragraphs in our SUCCESSORSHIP section are these :

2. In the event the company sells or transfers all or part of the operations covered by this agreement, the company will as a condition of such sale or transfer, require that this agreement be made binding on the purchaser or transferee of such operations, except that with regard to section 30, Duration, the method of amendment to said agreement will, at the next "amendment round" (as defined in section 30, Duration, paragraph C.1.) be provided as in Section 6 of the Railway Labor Act, as amended.

3. In the event the company sells or transfers all or part of the operations covered by this agreement, the company will furnish to such purchaser or transferee, and to the MEC Chairman, prior to the sale or transfer of all or part of the operations, a document notifying the purchaser or transferee that this agreement specifies that it is to be binding on the purchaser or transferee.

If you paid for your knowledge of the Eagle Scope and/or successorship situation, try and get your money back.

You were ripped off.

My advice is concentrate more on your Citation and less on Eagle issues.

 

[CitationUltra]

Crapola.

Among the notable paragraphs in our SUCCESSORSHIP section are these :

2. In the event the company sells or transfers all or part of the operations covered by this agreement, the company will as a condition of such sale or transfer, require that this agreement be made binding on the purchaser or transferee of such operations, except that with regard to section 30, Duration, the method of amendment to said agreement will, at the next "amendment round" (as defined in section 30, Duration, paragraph C.1.) be provided as in Section 6 of the Railway Labor Act, as amended.

3. In the event the company sells or transfers all or part of the operations covered by this agreement, the company will furnish to such purchaser or transferee, and to the MEC Chairman, prior to the sale or transfer of all or part of the operations, a document notifying the purchaser or transferee that this agreement specifies that it is to be binding on the purchaser or transferee.

If you paid for your knowledge of the Eagle Scope and/or successorship situation, try and get your money back.

You were ripped off.

My advice is concentrate more on your Citation and less on Eagle issues.

What I am trying to get across to you, that you seem too dense to acquire is that the language of your "contract" is not binding upon a third party, in the event of a sale of the company, despite your seeming reliance on it. The simple act of furnishing a copy of the contract to the new owner in no way binds them to it, depending on the method of the sale and transfer. The language is there to placate people of your obvious limitations of knowledge and understanding.

 

[bluesideup1]

Citation You are by no means an expert. The dribble you spilled only lives in la-la land. In the real world where there are only two ways to get around a contract that has a successorship clause in it. So unless AMR decides to go into bankruptcy and/or has a judge toss out the contract (TWA). Than any prior contract will remain in effect or the sale of the company cannot go through.

If you want examples even US Air which was in bankruptcy when they were bought by America West was able to keep its contract. So was Air cal and Reno when AA bought them. So did PSA when US Air bought them. When Continental Express became express jet there contract went with them.

Ask me how I know this. No maybe I will just tell you. I was involved in the process of acquiring 2 different Unionized airlines and combining them into a third airline then about 10 years later taking all four of those airlines and merging them together into one airline. BTW they all had different contracts and none of them could just be thrown out because they were being bought.

So unless you are one of the company lawyers that I was dealing with through this whole process (this is the kind of misinformation and fear mongering they love) then I will chalk it up to you just getting your information from the wrong place.

Otherwise cite me just one example of a contract being thrown out just because they were being bought/sold.

 

[bluesideup1]

AE wouldnt be associated with AMR and would create their own branded flying with larger a/c. At that point AE would just be another airline based in DFW who would probably have a strong code-sharing agreement with AA. I know it sounds a lot like Indy Air, Expressjet, etc. I am not saying its a good plan, but this is just an idea of how things could turn out if they really spun off AE.

You are correct that AE would be allowed to get larger A/C if they were spun off (B747 if they want) but AE could not be used on any type of codeshare/feed for AA with those larger aircraft. It would violate AA contract with AMR. Why do you think that they just didn't get CHQ or TSA to do it when they farmed the flying out to them?

 

[eaglefly]

What I am trying to get across to you, that you seem too dense to acquire is that the language of your "contract" is not binding upon a third party, in the event of a sale of the company, despite your seeming reliance on it. The simple act of furnishing a copy of the contract to the new owner in no way binds them to it, depending on the method of the sale and transfer. The language is there to placate people of your obvious limitations of knowledge and understanding.

I see you've penned the sequel to "Crapola"

I'll call it "Crapola II : Drunken Crapola".

Like most sequels, the second is usually never as good as the original. In your case, the original went straight to video where it continues to gather dust.

The first paragraph does the binding. The second does the informing PRIOR to any transaction.

Fleabag Bros. Law school trained you poorly.

 

[siucavflight]

Citation you have no idea what you are talking about. The only way a new owner could get around the contract is if AMR went bankrupt and then sold the company off.

 

[arthompson]

or if Eagle filled for BK and was then sold (not likely)

 

[siucavflight]

or if Eagle filled for BK and was then sold (not likely)

Yes, but like you say not likely, a bankrupt airline would sell for a lot less.

 

[CitationUltra]

Or a sale and transfer of assets, structured in such a way as to effectively abbrogate certain contracts binding only upon the signatories.

 

[arthompson]

I agree with you entirely. I was just pointing out that there is a scenario available that could cause it. If there are any senior ZW pilots on here, did the contract follow you intact when UA bought the company or in the transition from UA to CJT?

 

[siucavflight]

Or a sale and transfer of assets, structured in such a way as to effectively abbrogate certain contracts binding only upon the signatories.

It is not binding only to those that signed it. What they signed says that the contract must be sent over to any new owner. Meaning that they can not sell the airline to a new owner unless the new owner signs onto the contract as well. Sorry citation you are wrong. I am sure you are still a nice guy, but you are wrong, it is ok to admit it!

 

[arthompson]

Citation: The scenario you describe became illegal after Lorenzo used it effectivley<sp?>.

 

[Flyby1206]

You are correct that AE would be allowed to get larger A/C if they were spun off (B747 if they want) but AE could not be used on any type of codeshare/feed for AA with those larger aircraft. It would violate AA contract with AMR. Why do you think that they just didn't get CHQ or TSA to do it when they farmed the flying out to them?

I was just curious if this would be feasible since AA codeshares with Alaska on many west coast routes and they fly 737s. In essence AE would join the "oneworld alliance" and be a traditional carrier like the rest.

 

[bluesideup1]

I was just curious if this would be feasible since AA codeshares with Alaska on many west coast routes and they fly 737s. In essence AE would join the "oneworld alliance" and be a traditional carrier like the rest.

It would be incredibly difficult to get Eagle on the oneword alliance and not run a foul of AA scope clause. The last time I checked the only way to get on oneworld alliance is to be foreign carrier and they only codeshare on destinations not served by AA. (oneworld members British Air, Cathay, Finnair, Iberia, Jal, LAN, Malev, Qantas, Royal Jordanian).

Now AMR may sell some seats on Alaska (much like they did on Skywest in LAX) but it is not really a true codeshare agreement in which they provide a feeder service for AA.

My point is if someone is telling you that if Eagle was spun off and they could get larger aircraft then turn around and feed AA they would be lying. Just look at ASA who was sold off and no longer owned by Delta but are still bound by the Delta pilots scope clause. Same goes with Expressjet they cannot get larger A/C and turn around and sell their service to Continental for feed.

The only way that Eagle would want to get larger A/C is to either find a company that would allow these A/C to be used for feed or just buy them and start doing your own lift via point to point or hub and spoke (just like Independence Air did).

 

[spacecadet1]

I told you about this before the recent talk from Horton. This WILL happen. But the devil is in the details. Will AMR shop fora cheaper provider? Mesa comes to mind; J.O. was seen at Centerport recently.