United and Continental Talking....

[CAL EWR B737]

One additional thought. In less than three weeks who will be the President of ALPA? CAL will not get any special treatment and conversely we are no longer the red head step child of the airline industry. We will get a fair integration no better or worse than any other ALPA carrier

 

[MSNFlier]

NWA's blocking rights, mergers, etc...

Unfortunately, yes, I am an attorney. This post is not intended in any way as "flame bait" or to be otherwise disrespectful of any board member's interests. As a private pilot who follows airline issues because I have always wished my office was a cockpit instead of a desk with a tiny window, I tremendously respect the sacrifices commercial pilots make to bring me home safely - every time. What has happened to rank-and-file airline workers' pay over the past five years has been nothing short of scandalous while bigwigs walk away with millions.

I do not condone the bretherens' work to make that happen.

While I understand NWA has certain power to block a CAL merger, UAL and CAL are paying very smart lawyers top dollar to figure out creative ways to thwart NWA's rights. I don't have much experience in BK law, but I know one thing: money absolutely talks to shareholders and creditors of bankrupt entities. From what I've read, NWA's long-term viability is in serious question and if I'm a creditor (secured or not), I want to make sure I get paid, plain and simple.

One way to make sure I get paid is for NWA to survive BK and thrive with me as a shareholder.

Another way is to sell my vote on the NWA creditors committee for a one-off payment (cash or shares) from the new UAL/CAL entity. The committees could make life so miserable for NWA management they could conceivably force NWA to give up NWA's blocking power in return for a payment of some kind (cash infusion, stake in the new airline - not a merger). Not sure if it's possible, but there are no more shark-infested waters than those around a bankrupt business. Big-time BKs are one of the most intense and financially high stakes area of law and you must expect the unexpected.

Now, about that Air Tran's proposal to "merge" with Midwest? Disaster for us good old Wisconsin boys. I want to see Midwest stay independent. Glad they never had to go BK or for sure they'd be gobbled up by now.

Fly safe,

 

[CAL EWR B737]

Most important part of ALPA merger policy other than guaranteeing a seniority arbitration:


5. The merger representatives shall carefully weigh all the equities inherent in their merger
situation. In joint session, the merger representatives should attempt to match equities to
various methods of integration until a fair and equitable agreement is reached, keeping in
mind the following goals, in no particular order:
a. Preserve jobs.
b. Avoid windfalls to either group at the expense of the other.
c. Maintain or improve pre-merger pay and standard of living.
d. Maintain or improve pre-merger pilot status.
e. Minimize detrimental changes to career expectations.

 

[XJTAv8r]

Unfortunately, yes, I am an attorney. This post is not intended in any way as "flame bait" or to be otherwise disrespectful of any board member's interests. As a private pilot who follows airline issues because I have always wished my office was a cockpit instead of a desk with a tiny window, I tremendously respect the sacrifices commercial pilots make to bring me home safely - every time. What has happened to rank-and-file airline workers' pay over the past five years has been nothing short of scandalous while bigwigs walk away with millions.

I do not condone the bretherens' work to make that happen.

While I understand NWA has certain power to block a CAL merger, UAL and CAL are paying very smart lawyers top dollar to figure out creative ways to thwart NWA's rights. I don't have much experience in BK law, but I know one thing: money absolutely talks to shareholders and creditors of bankrupt entities. From what I've read, NWA's long-term viability is in serious question and if I'm a creditor (secured or not), I want to make sure I get paid, plain and simple.

One way to make sure I get paid is for NWA to survive BK and thrive with me as a shareholder.

Another way is to sell my vote on the NWA creditors committee for a one-off payment (cash or shares) from the new UAL/CAL entity. The committees could make life so miserable for NWA management they could conceivably force NWA them to give up NWA's blocking power in return for a payment of some kind (cash infusion, stake in the new airline - not a merger). Not sure if it's possible, but there are no more shark-infested waters than those around a bankrupt business. Big-time BKs are one of the most intense and financially high stakes area of law and you must expect the unexpected.

Now, about that Air Tran's proposal to "merge" with Midwest? Disaster for us good old Wisconsin boys. I want to see Midwest stay independent. Glad they never had to go BK or for sure they'd be gobbled up by now.

Fly safe,

Isn't "bankruptcy attorney" the best paying job in the airline industry (other than CEO)? :laugh:

 

[Andy]

Do yourself a favor chill out negotiating merged lists on this forum will serve no purpose other than to give you an ulcer or worse a coronary.

... just make sure not to quote me in any merger committee meetings. I do NOT represent the UAL pilots.

 

[Andy]

More on the Northwest 'golden share' (from usaviation.com):

Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.


(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

With Northwest filing chapter 11, it appears that they have lost their golden share. (Ch 11 = reorganization)

 

[Occam's Razor]

Andy,

RE: "With Northwest filing chapter 11, it appears that they have lost their golden share. (Ch 11 = reorganization)"

I don't think Chapter 11 is listed as one of the triggers. Reorganization is...but NWA is not reorganized, nor have they indicated when they will be.

 

[Andy]

A reorganization is what chap 11 is all about.

http://www.sec.gov/investor/pubs/bankrupt.htm

http://en.wikipedia.org/wiki/Chapter_11

http://www.extension.umn.edu/distribution/businessmanagement/DF7296.html

 

[densoo]

Yes that is pretty much it in a nutshell. I can tell you we have one of the best merger counsel Dan Katz and our merger committee is very sharp. Our merger chairman is now the US air pilot neutral in the US/AWA merger. Our vice chairman was the pilot neutral for Polar in the recent Atlas/Polar merger. They are well versed on ALPA merger policy.

If and when we go to an seniority arbitration you will be well represented and I believe our career expectations are as good or better then anyone in the business today. Do yourself a favor chill out negotiating merged lists on this forum will serve no purpose other than to give you an ulcer or worse a coronary.

Your merger committee is well prepared relax.

Well, OK then.

 

[COpilot]

Most important part of ALPA merger policy other than guaranteeing a seniority arbitration:


5. The merger representatives shall carefully weigh all the equities inherent in their merger
situation. In joint session, the merger representatives should attempt to match equities to
various methods of integration until a fair and equitable agreement is reached, keeping in
mind the following goals, in no particular order:
a. Preserve jobs.
b. Avoid windfalls to either group at the expense of the other.
c. Maintain or improve pre-merger pay and standard of living.
d. Maintain or improve pre-merger pilot status.


e. Minimize detrimental changes to career expectations.

Look I think we are getting way ahead of ourselves, but since we are, here's my two cents.

This is going to be easy when following the rules above, regardless of who is running ALPA...

With the location of the current crew bases, and the way the fleets are set up I can see a simple (relative term) set of fences and bid freezes set up for a few years ('ala NWA/REP).

After which a merged list with seat protections and percentage placements top to bottom would prevent windfalls and major disruptions.

If your in the top 5% before and you come out 3-8% post, if your 85% before and you come out 80-90% post; then with overall fleet increase your in the same position. Heck I'm 40% CA EWR now, I can't believe that enough UA staff will, or wants to come to EWR to move me down, RIGHT?

 

[Tejas-Jet]

Yes that is pretty much it in a nutshell. I can tell you we have one of the best merger counsel Dan Katz and our merger committee is very sharp. Our merger chairman is now the US air pilot neutral in the US/AWA merger. Our vice chairman was the pilot neutral for Polar in the recent Atlas/Polar merger. They are well versed on ALPA merger policy.

...and isn't Dan Katz the attorney representing the US Air pilots in the U/AWA seniority arbitration? If the CAL guys already have Dan Katz, then the UAL guys are already behind...

...maybe another "Summer of Love" might be in order?

Tejas

 

[CAL EWR B737]

Look I think we are getting way ahead of ourselves, but since we are, here's my two cents.

This is going to be easy when following the rules above, regardless of who is running ALPA...


If your in the top 5% before and you come out 3-8% post, if your 85% before and you come out 80-90% post; then with overall fleet increase your in the same position. Heck I'm 40% CA EWR now, I can't believe that enough UA staff will, or wants to come to EWR to move me down, RIGHT?

You are correct it doesn't matter who is the President of ALPA. I am just tired of hearing so many pilots saying we (CAL) will get screwed because were are CAL. Those days are long gone. How many times have you heard "I was on a United jumpseat and they said they are going to kill us in a merger integration" etc etc.

The only reason I mentioned the President in the post above is he will definitely make sure CAL's rights are protected as he will for all ALPA carriers. I'm sick of the beaten wife syndrome some of our pilots still exhibit. This isn't the CAL of ten or twenty years ago.

Pilots don't have two cents in a merger outcome only the arbitrator following ALPA merger policy based on the criteria listed above.

Hey I am about 40% in EWR you must be close to an 4/87 hire?

 

[CAL EWR B737]

...and isn't Dan Katz the attorney representing the US Air pilots in the U/AWA seniority arbitration? If the CAL guys already have Dan Katz, then the UAL guys are already behind...

...maybe another "Summer of Love" might be in order?

Tejas

Yes that is correct. We have retained Dan Katz ever since we had our first union the IACP. We have Katz for all mergers with the exception a merger involving USAIRWAYS.

 

[MSNFlier]

Apologies to Occam, I think Andy may be right...

Believe it or not, enormous amounts of money sometimes hinge on a comma! Let's go to the tape (emphasis in bold, added):

Section 4: Master Alliance Agreement

iii Additional Termination Rights

(a) In the event of a NW Change of Control, each of CO and NW shall have the right to terminate the Master Alliance Agreement on 6 months' prior written notice, without liability or penalty to the other party.

(d) For purposes of this term sheet, a "Change of Control" with respect to either NW or CO shall mean any merger, reorganization, share exchange, consolidation, business combination, recapitalization, liquidation, dissolution or similar transaction involving NW or CO, or any sale or disposition of all or substantially all of NW's or CO's airline assets on a consolidated basis, involving, or the acquisition of beneficial ownership of 25% or more of the equity securities or voting power of NW or CO by, a third-party air carrier or carriers with annual passenger revenues in any such carrier's most recently completed fiscal year in excess of $1 billion, or an affiliate of any such third-party air carrier(s), or the execution of definitive agreements in respect of any such transaction.

OK, again I'm not a BK attorney - it doesn't matter what I do for a job - the King's English controls here. If Andy's quote is correct, UAL/CAL' lawyers may be betting the bold wording above is operative here, and the second section after "...CO, or any sale...," is not relevant because when a company goes Ch. 11 it does cede control of the company to the debtor-in-possession (DIP) lender, creditors' committees and the bankruptcy court (thus one of the things evidencing a Change of Control...is...reorganization...).

But, since banks, Boeing, Airbus, GE, P&W, etc., etc., don't want to run the airline themselves they let management continue to do so, under their watchful eyes and that of the bankruptcy court judge. Recall the recent news about DL's current management saying their "plan" is better than a US Air/DL merger? And Parker saying US Air's proposal was better? That wasn't about convincing anyone but DL's creditors option A or B was better - because the creditors control the airline, subject to the BK judge's approval.

NWA might be out of luck. UAL/CAL would not go to the trouble of having their respective CEOs meet without doing lots of legal homework first. You can be fairly certain the lawyers have developed a strategy or contingencies for hosing NWA's power to stop a deal. UAL and CAL might be able to weaken or wipe out NWA's leverage by showing that its power to meddle in CAL's plans evaporated when they filed BK. Maybe so much so that UAL/CAL might be able to buy NWA now too, but for way less because NWA is in bankruptcy and, short of liquidation, it won't be worth less than it is now.

One question...how much of NWA's revenues come from their code-share with CO? If it's a significant number (say 15-20%), might that call into question NWA's survival through/after BK without CO? If so, NWA's possibly dim long-term prospects might make it a very attractive target for a low-ball offer because NWA's creditors would be very skittish about whether they'll get paid by NWA at all.

Remember, there are no more shark-infested waters than those around a bankrupt company. Expect the unexpected. NWA might be in an awful bind here.

 

[Occam's Razor]

Thanks, counselor!

I wonder if any of the other SEC filings NWA has made regarding the Agreement have any bearing?