Will SWA and AT truly merge?

[FDJ2]

I found this on AIRLINE BIZ blog. Its pretty interesting.

• The merging companies are AirTran and Guadalupe Holdings Corp., a Nevada corporation and wholly owned subsidiary of Southwest Airlines. Guadalupe will be merged into AirTran, which will then become a wholly owned subsidiary of Southwest Airlines.

• After the merger closes, AirTran will be merged into a new limited liability company set up as a Texas company, LLC Sub, which will become a wholly owned subsidiary of Southwest.

I think Southwest will control Airtran as a wholly owned subsidiary and will mold them into a Southwest operational model. If the model becomes more profitable, over time, Airtran's 717s will be refleeted with the 737-800 to simplify operations and gain additional cost efficiencies. If the model is profitable, and refleeting is completed, then and only then would the Airtran operation be merged into Southwest.

I'm curious what impact this could have on SLI, or if it's even required for that matter.

When DAL purchased NWA, NWA became a wholly owned subsidiary of DAL until a single operating certificate was achieved.

 

[FDJ2]

I will bet that SWA does not care much about your contract.

I'll bet that SWA does care about the AAI PWA, since they'll have to honor it.

Wonder what the Affiliates and Successors language says on the AAI TA.

 

[tomgoodman]

When DAL purchased NWA, NWA became a wholly owned subsidiary of DAL until a single operating certificate was achieved.

As I recall, the temporary holding company DAL formed for this purpose was called "Newco".

 

[FDJ2]

SWAPA's contract could force the merger. AI's wont. You are being PURCHASED. A labor contract can not force a aquiring company to merge them with another company they own. You could be operated as a wholly owned subsidiary till the cows come home. As long as SWA operates you as Airtran your still Airtran. Unless SWAPA enacts it 24 month maximum fence clause of course.

Congratulations, you know far less than you realize and now we all know it.

 

[roughneck]

I'll bet that SWA does care about the AAI PWA, since they'll have to honor it.

GH will be the responsible party not SWA.

 

[FDJ2]

According to an article in Bloomberg, Guadalupe Holdings was created specifically for this acquisition (named after the room where meetings were held). GH will then be merged with AirTran, leaving AT as a wholly owned subsidiary of SWA. This raises the following questions: why was GH created? Was GH created to facilitate this acquisition? After all, this looks like it is not a merger. Thoughts?

Because SWA's can't operationally merge the two airlines until such time as they have a single operationg certificate. Just my guess.

 

[roughneck]

Because SWA's can't operationally merge the two airlines until such time as they have a single operationg certificate.

It gives SWA options.

 

[PapaWoody]

My favorite thing about FDJ2 is that just because he has been through a merger, he seems to think he knows everything about every merger/acquisition scenario that ever will happen, including this one. That's like saying just because I've been through a thunderstorm, I know everything about every weather phenomena that will ever happen. I'm pretty sure that's not the case. Just my two cents.

Fraternally,
PapaW

 

[FDJ2]

GH will be the responsible party not SWA.

Again, depends on the language in the PWA's of both airlines. I'll bet that the language in the AAI TA will be binding on SWA regardless. I'll bet that the AAI negotiators, covered these possibilities in their TA. If I were an AAI pilot it would certainly be a question I would be asking my reps at this time.

 

[Quiet Flight]

No one on this thread know all the laws that will pertain to this integration of seniority lists. Seniority issues also exist for other work groups like the Flight Attendants which will have some effect on the pilots and vica versa.

The point that was wise to present is that there is the impression that AT pilots want arbitration which means they already feel that they will benefit more from that than a workable solution with SWA pilots. If that is the case then we can assume that AT pilots will open with relative seniority as their idea of fair which is unreasonable. SWA should then start off the process with a staple to the bottom which is also unreasonable. Then let arbitration meet in the middle where SWA pilots will experience large relative seniority gains. DOH is the only fair integration in this type of merging of senioritys.

To under estimate the power that SWA has over AT with this acquisition is not being prepared to obtain what is best for you and your family. Don't think for a moment that SWA would not challenge any employees contract in court that could last for many years. Don't underestimate that SWA could slowly dismantle AT while growing their airline organically. There are absolutely no laws that keep them from doing just that.

As much as low amount of posts makes some labeled as trolls, once again it is only because the honest message does not agree with what you think or hope for.

The message I am sharing is you better think about this with a clear mind of the potentials, or you could find yourself further falling down the food chain.

SWA has been, and will be, the 800 lb gorilla in this bewildering industry.

AAAHHHHH!!! All of your logical thinking and sound reasoning make my ears hurt! Make it stop!! I want wild predictions from pilots with zero business experience. Guys who equate flying an airplane with running a company of any size. And armchair lawyers who "saw something on the web". Oh and McCaskill - Bond experts who were able to squeeze all 3 years of law school in since Sept. 27th. And let's not forget the guys who are "certain" they KNOW what each possible arbitrator will come up with and in some cases what any and all federal judges will decree!!! This is no place for rational thought Sy-Bill!!!!

 

[luv2fly]

Again, depends on the language in the PWA's of both airlines. I'll bet that the language in the AAI TA will be binding on SWA regardless. I'll bet that the AAI negotiators, covered these possibilities in their TA. If I were an AAI pilot it would certainly be a question I would be asking my reps at this time.

Just curious what is a PWA?

 

[luv2fly]

FDJ2, why do you think SWA has anything to do with the Guadalupe purchase of AAI? They are separate corps. It is not a merger until SWA buys AAI, when GH buys AAI it just changes who owns AirTran Holdings.

 

[FDJ2]

My favorite thing about FDJ2 is that just because he has been through a merger, he seems to think he knows everything about every merger/acquisition scenario that ever will happen, including this one. That's like saying just because I've been through a thunderstorm, I know everything about every weather phenomena that will ever happen. I'm pretty sure that's not the case. Just my two cents.

Fraternally,
PapaW

I certainly don't know everything about every merger, but I did know enough to recognize that the stunt attempted with Frontier had no basis in law and I do know that the folks pontificating that the nature of the transaction is somewhat relevant (who acquired who) to an SLI are just plain ignorant. I also know that the AAI pilots have good representation and access to more experience on mergers and acquisitions than most could ever shake a stick at and that the AAI pilots just recently concluded a TA, which I would presume, don't know because I haven't read it, would protect their rights to a fair and equitable seniority integration, with or without Guadaloupe. But you keep on believing whatever get's you through the night.

 

[FDJ2]

Just curious what is a PWA?

Pilot Working Agreement aka Collective Bargaining Agreement.

 

[luv2fly]

Pilot Working Agreement aka Collective Bargaining Agreement.

Thanks, never heard a CBA called a PWA.

 

[FDJ2]

FDJ2, why do you think SWA has anything to do with the Guadalupe purchase of AAI? They are separate corps. It is not a merger until SWA buys AAI, when GH buys AAI it just changes who owns AirTran Holdings.

First Post from Plane Biz

The merging companies are AirTran and Guadalupe Holdings Corp., a Nevada corporation and wholly owned subsidiary of Southwest Airlines. Guadalupe will be merged into AirTran, which will then become a wholly owned subsidiary of Southwest Airlines.

You're right it's not a merger until they operate under the same certificate.

Delta had to make NWA a wholly owned subsidiary between the date of corporate closure and single operating certificate. DAL was also obligated to integrate the two pilot groups due to the language in the collective bargaining agreements. Common language in most mainline ALPA contracts.

As an ALPA pilot group, the Airtran Pilots I would assume, again I haven't read their TA, have negotiated the appropriate protections.

 

[FDJ2]

Thanks, never heard a CBA called a PWA.

We often refer to "PWA sections" etc in our "pilot agreement", which is actually a "collective bargaining agreement". It helps muddy the waters.

 

[PapaWoody]

It seems to me, FDJ2, that since the AAI TA was completed after the Date of Constructive Notice (Sep 27) that it will not have any bearing whatsoever on the proceedings. I could be wrong, but don't think I am. So, the only merger/acquisition provisions that will come into play on their side are the ones in their current CBA. I would have thought that such a savvy meteorologist as yourself would have known that.

Fraternally,
PapaW

 

[FlyinGuy]

I was just thinking the same thing as Pappa. That would be like SWAPA making an addendum to their contract that would benefit SWA pilots. September 27th is the day that the earth stood still. At least the small earth that pertains to SWA and AT.

The only leg up that SWAPA has is that they can release the company from some of the binding provisions in the contract. i.e. time restrictions.

 

[RIDETHELIGHTING]

Our scope section was Ta months ago, back in June I think.