By now you are well aware that the Unsecured Creditors’ Committee (UCC) and AMR jointly requested a 30-day extension in AMR management's exclusivity period, to Jan. 28, 2013. United States Bankruptcy Judge Sean Lane has scheduled a hearing for Oct. 30 to consider the joint motion.
As we noted in the Friday, Oct. 19 edition of the APA News Digest, your APA leadership understands the concerns many of you have voiced about this potential extension. Rest assured we share your frustration with what seems like an interminable process. By our very nature, training and experience, pilots don’t like delay and uncertainty. We become exasperated when things drag on outside our control. Yet continued uncertainty has become the norm for us while AMR undergoes restructuring. Whether we like it or not, that’s the world we live in right now. The stakes are high in Chapter 11 bankruptcy, and the outcome of AMR’s restructuring is yet to be determined.
This prospective 30-day extension is not necessarily something that AMR management sought, but they may have been compelled to agree to it by the creditors that make up the UCC. Remember, since AMR filed bankruptcy nearly a year ago, Chairman and CEO Tom Horton has repeatedly emphasized the need to expedite restructuring and get the corporation through the “exit doors” as quickly as possible. In all likelihood, one of the main reasons for this sense of urgency is senior management’s desire to retain control. Our advisers believe that prolonging the restructuring process increases the likelihood of a change of control.
With that in mind, the most obvious beneficiary of an extension to the exclusivity period would be US Airways management and their plan to create a successor company similar in scale to Delta and United. If ongoing merger protocol discussions between US Airways and AMR don’t prove productive, our advisers have indicated that US Airways management will most likely pursue an alternate strategy that wouldn’t involve securing AMR management’s consent. While it’s pointless to speculate about the AMR-US Airways merger protocol discussions, it’s probably safe to assume that AMR management is aggressively protecting their stand-alone plan and ability to retain control. In your APA leadership’s estimation, if US Airways management needs a few more weeks to make a deal that results in a reinvigorated American Airlines, that would be time well spent.
In the face of continued uncertainty, your APA leadership’s priorities remain unchanged: an industry-standard contract and an American Airlines that will sustain us for the balance of our careers.