WFAA reporter Jason Whitely is in New York City this week to cover the American Airlines bankruptcy hearing. He is live tweeting from the courtroom from his Twitter account, @JasonWhitely. We are compiling his tweets into this ongoing blog.
5:51p Court is adjourned until 9:30 a.m. CDT on Thursday. "This has become a marathon, not a sprint," Judge Lane said. Attorneys for American Airlines flight attendants say they will wrap up their case on Friday, when the Transport Workers Union will begin testimony that is expected to be complete on Monday or Tuesday, when rebuttals will begin.
5:12p American Airlines is proposing $230 million in annual cuts to flight attendants; US Airways is proposing a $153 million annual reduction. The flight attendants' lead negotiator, Ann Loew, is on the stand now. She said American's cuts over a six-year period were beyond palatable. Now American is beginning cross-examination.
4:35p American Airlines lawyers are beginning cross-examination of the AFPA's Laura Glading. American points out (as it did with pilots) that any agreement the flight attendants have with potential merger candidate US Airways is essentially just an agreement to agree.
4:20p Laura Glading of the Association of Professional Flight Attendants is testifying. She says the last time American Airlines hired a flight attendant was in the year 2000. She said her union agreed to deep cuts in 2003 because the company needed it and believed in the airline's business plan at that time. She said the APFA is not confident about American's reorganization plan this time around. "You always want things to be successful. To work out. But I don't believe this can," she told the court.
3:40p On the subject of layoffs: 5,500 American Airlines jobs are already gone as a result of the bankruptcy petition. That includes 2,900 Transport Workers Union positions eliminated as agreed by members in a vote on Tuesday and 2,600 additional non-union jobs to be phased out.
3:31p APFA atty: AA doesn’t have the luxury of time. There’s an urgency it now must confront. Only cure is consolidation.
3:30p APFA said if AA is exploring a merger then its current standalone business plan is nothing more than a placeholder.
3:26p “If the company’s plan doesn’t work … obviously alternatives have to be considered,” said Robert Clayman, attorney for AA flight attendants.
3:23p Attorney for flight attendants said AA’s proposed cuts on labor: “It far outstrips any other stakeholders sacrifice.”
3:22p “If AA’s cuts are imposed," APFA atty said, flight attendants would make 30% below competitive rates.
3:21p “What is on trial here is the [AA] proposal,” APFA atty Robert Clayman said. AA is asking flight attendants for $230M in cuts annually.
3:20p Glading to testify about AA's demand of $230M in concessions & how she believes fellow flight attendants will receive that.
3:13p Flight attendants told me this morning the union has a live feed of testimony, too. For more on FAs, follow @APFAUnity, too.
3:12p Flight attendants beginning their opening statements.
3:07p AA and flight attendants say they can get APFA Pres Laura Glading on & off the stand by 5p today.
3:01p AA JOB LOSSES: 12,800 union and non-union jobs to be eliminated as AA reorganizes. Most are union positions. That's why they're in court.
3p AA JOB LOSSES: Between union and non-union jobs almost 12,800 jobs are to be eliminated as AA reorganizes. That's why unions are in court.
2:31p We're in a brief break - flight attendants about to start arguments. APFA President Laura Glading testifying first.
2:26p Pilots case has taken two and a half days.
2:26p Attorneys are adding exhibits and cleaning up a few things from pilots case. Flight attendants case to begin momentarily.
2:20p "There are some weaknesses with that particular bit of testimony," Judge Lane said on Heppner. Still, testimony is allowed in as evidence.
2:18p Judge on Heppner: "He's not able to put intellectual heft behind it which discounts his opinion."
2:17p Judge on Heppner: "He doesn't appear to take ownership of that anaylsis and that's what troubles me."
2:15p Judge on Heppner: "Is he an expert to talk about the utilization rates to the value of the [retiree medical benefits] plan design?"
2:13p AA atty on Heppner: "He just knows what his computer tells him." Airline said pilot's expert doesn’t know details of what he testified.
2:07p Testimony from Chris Heppner is complete. Judge to now hear from each side whether his testimony can be considered as an "expert."
2:02p Judge Sean Lane is impressive. He listens to all the testimony and sometimes follows up attorney with his own questions. No jury. He's it.
1:15p Court back in session. Direct examination of Chris Heppner resuming. Heppner is one of the experts pilots called to discuss medical benefits (especially for retirees) that AA has offered.
10:33a AA says larger regional jets create jobs, fly add'l passengers to 5 big hubs. Regional feed today provides 10% of AA traffic, airline says.
10:31a Cross-examination of APA's Jim Eaton drilling down on AA wanting to fly regional jets. Mainline pilots argue it outsources their jobs.
10:30a Judge taking a brief break at request of AA attorneys.
9:45a Rebuttals by American Airlines and its three unions will now happen on May 25 and then on May 29. Case is going slower than expected.
9:43a The unions case will finish by next Wednesday, May 23, judge said. TWU to present Friday or Monday. Next wk is most likely.
9:37a APFA (flight attendants) President Laura Glading said she expects to testify this afternoon when pilots complete their case.
9:30a Judge Lane taking a long lunch today so he can hold another hearing via conference call. But he said we're staying late for APFA testimony.
9:26a Cross-examination of APA's Jim Eaton is under way. Currently discussing pilot outsourcing to regional jets.
9:25a After Heppner and whether the judge allows him to testify, the pilot's case is complete. Flight attendants will start this afternoon.
9:24a Pilots have 2 witnesses left. Jim Eaton testifying on valuations this AM. AA will argue against Chris Heppner as an expert.
9:19a Judge is in the courtroom. Court is in session.
9:15a Waiting for judge to begin. It's a thinner crowd in the overflow room today. Lots of folks have left.
9:12a The Allied Pilots Assoc. to finish its case against American Airlines canceling their contracts. Jim Eaton finishes testimony this AM.
9:03a Long line to get into U.S. Bankruptcy Court in Lower Manhattan this morning. Must be another case starting in another of the 8 courtrooms.
TUESDAY, MAY 15
12:40p UPDATE: The 5 TWU groups that accepted AA's final offer still lose 2,900 jobs. Would have been worse. AA's "final offer" offer saved 1,300.
12:30p A NEW DEAL? AA tells me it will still try reach "consensual agreements" with two TWU groups that rejected its "final offer." Talks continue.
11:15a Lawrence Rosselot testifying now for pilots. He's an AA pilot and w/ the union. Will talk about airline stats, efficiency, and work rules.
11:13a If Judge lets AA cancel contracts, these are projected job losses. #TULSA: 2,100 ALLIANCE FW: 1,200 And 1,300 others scattered.
10:02a If judge lets AA cancel TWU maintenance contracts, 4,600 jobs would be eliminated. AA says its offer would have saved almost 2,000.
9:57a AA STATEMENT: American disappointed the biggest TWU group opposed offer. AA to ask a judge to cancel their contracts.
9:54a AA STATEMENT: "We realize this was a very difficult decision for our TWU-represented employees."
9:52a AA STATEMENT: 5 TWU workgroups accepting agreements will save 1,300 jobs, get Early-Out pkg, future pay increases, & 401(k).
9:48a Cross-examination of Allison Clark is beginning. She testified to a lot of the proposals pilots made to AA.
9:46a TWU VOTE BREAKDOWN: Aircraft Maintenance and Related workers had a narrow vote as well. 56% voted NO to AA's offer: 5,307 to 4,179.
9:43a TWU VOTE BREAKDOWN: Store Clerks had a close vote opposing AA's offer. It was 51% against: 521 to 495.
9:42a TWU VOTE BREAKDOWN: 85% of Simulator Technicians voted to accept AA's offer: 53 to 9.
9:41a TWU VOTE BREAKDOWN: 84% of Maintenance Control Technicians voted to accept AA's offer: 72 to 14.
9:40a TWU VOTE BREAKDOWN: 96% of Ground School Instructors voted to accept AA's offer: 126 to 5.
9:39a TWU VOTE BREAKDOWN: 92% of dispatchers voted to accept AA's offer: 134 to 12.
9:38a TWU VOTE BREAKDOWN: 59% of Fleet Svc Clerks voted to accept AA's offer: 3,872 to 2,722.
9:30a Aircraft Maintenance and Related workers along w/ Store Clerks REJECTED American's offer.
9:14a Results of the Transport Workers Union's vote on American Airlines' last best offer is due at 9:30a Central Time - about 15-mins from now.
9:12a Gavel down. Court in session. Judge calling for next witness. Pilots calling Allison Clark -an APA employee to talk about company proposals.
9:10a Good morning from NYC Bankruptcy Court. Rain on the way. Glad I'm inside! Photographer John Lane is ducking in a subway stop on the plaza.
MONDAY, MAY 14
6:54p One of the main things we'll watch for tomorrow is the voting results of the Transport Workers Union on American Airlines' last and best contract offer. Electronic voting from the unions members ends at midnight tonight. Ground workers and mechanics will learn the final tally Tuesday morning before court resumes at 9:00 a.m. Central Time. As soon as the results are announced, we'll post it on this blog and Tweet it to followers of @jasonwhitely and @wfaachannel8.
6:15p Court recessed for the day. Both sides finished questioning Andrew Yearley. Attorneys for pilots will call Allison Clark to the stand Tuesday morning. She's the Director of Industry Analysis for the Allied Pilots Association and former senior financial analyst for AA. Clark will explain the proposals.
4:13p With an hour left in the court day, American Airlines attorney said he would not finish cross-examination of Andrew Yearley this evening. Pilots have four more witnesses to call after Yearley. Doubtful pilots will hand off to flight attendants by tomorrow. Judge taking a brief recess on that news.
3:53p Yearley conceded that American Airlines' aircraft and product offering lacks when compared to big competitors like Delta and United. Yearley went on to agree with American Airlines attorneys that adding hundreds of new aircraft and new amenities should help attract the high-value customer and reduce maintenance costs.
3:15p Direct-examination of Andrew Yearley is complete. American Airlines' attorney is beginning cross-examination.
3:14p Yearley said he doesn’t think canceling labor contracts needs to be rushed through the court right now especially as the airline sits on $5-billion in cash. Yearley pointed out that AMR CEO Tom Horton has bragged recently that the airline's recent performance [under existing labor contracts] has been the best in years.
3:03p Yearley said this 1113 hearing is not the forum to weigh the benefits of a merger. But he said AA has a network problem that it has tried to solve with its cornerstone strategy [focusing on its five major cities D/FW, Miami, New York, Chicago and Los Angeles]. "It’s never been an if but when AA consolidates," Yearley said.
2:52p Yearley suggests American Airlines' future profits while slashing labor costs is excessive. “It seems unreasonably high," Yearley said. "My personal belief is that the analysts would be shocked at this level of profitability as a future projection.”
2:29p Andrew Yearley is now testifying for AA pilots. He's a NY-based restructuring expert who’ll testify that American Airlines is asking for unnecessary cuts that are neither market-competitive
nor necessary for AMR to reorganize and emerge as a healthy, profitable airline.
2:17p Neil Roghair is done testifying.
1:17p All parties are back in the courtroom. Awaiting Judge Sean H. Lane to call court back to order. Neil Roghair faces a few more questions in cross-examination from American Airlines attorneys.
12:15p Judge taking a lunch break. American Airlines attorney has a few more questions for negotiatorhen court resumes at 1:15 Central Time.
11:59a Pilots lead negotiaor, Neil Roghair, admitted pilots gave USASirways things it refuses to give to American Airlines.
11:40a American Airline's attorney picking apart the pilots deal with USAirways saying all details including seniority and $240 million in savings have not been worked out.
10:37a Before the break, Roghair said USAirways business plan combined with American's will put it in a position to compete for corporate accounts. "What's really been driving the decline of American Airlines over the last couple years is the migration of business accounts over to [larger airlines] Delta and United," Roghair testified.
10:34a Ten minute recess.
10:31a Roghair said USAirways reached out to Allied Pilots Association. He says concessions the pilots gave to USAirways amounts to $240M. The APA has agreed to $270M in cuts to American. He just joked on the witness stand that pilots are still willing to meet with American if he can "forgo the cross-examination." Direct-examination of Roghair is complete.
10:25a Neil Roghair said the Allied Pilots Association and American Airlines remain "very far apart" on several issues including sick and medical along with the size of regional jets the airline can employ and how much and how often it can codeshare with other airlines.
9:55a American Airlines pilots union, the Allied Pilots Association, proposes two alternatives for the company to successfully reorganize. First, the APA is offering $270M in cuts. That's $10M more than American said it originally wanted, pilots argue. The airline is asking for $370M in cuts. Second, the APA said American could also merge with USAirways.
9:40a Pilots union is now calling its first witness: Neil Roghair. He's an American Airlines pilot who is also the lead negotiator for the Allied Pilots Association. Roghair is expected to say the airline is overreaching and asking for cuts seven times deeper than it asked for just before filing bankruptcy.
9:25a Pilots union says American Airlines must merge to survive. He also argues that the airline is now overreaching and that pilots are being asked to give up more than necessary for a successful reorganization.
9:18a Court began a few minutes late. Edgar James, representing American Airline's pilot union, outlining arguments first.
8:47a Four @AmericanAir pilots wearing uniforms finding seats in the courtroom on the 7th floor. Besides attorneys, union execs, they're the only visible airline presence here.
8:45a Strobes flashing, fire alarm sounding again on 6th floor of NYC bankruptcy court where the @AmericanAir hearing begins in 15-minutes.
8:36a PIC: @AmericanAir pilots arriving at NYC bankruptcy court where arguments to save contracts, job begin in 25-mins. http://ow.ly/i/CP6M
8:31a All clear, guards say, at NYC bankruptcy court where fire alarm was sounding before @AmericanAir hearing...
8:25a PIC: Fire alarm sounding in NYC bankruptcy court where @AmericanAir hearings begin in 40-mins. No one allowed in yet. http://ow.ly/i/CP1j
LIVE TWEETS from Jason Whitely:
