Tag Archives: US Airways

American Airlines Group reports a record first quarter net profit of $480 million

American Airlines Group (American Airlines and US Airways) (Dallas/Fort Worth) today reported its first quarter 2014 results.

First quarter 2014 net profit was a record $480 million. This represents a $777 million improvement versus the company’s combined first quarter 2013 net loss of $297 million.

Excluding net special credits, the company reported a record first quarter net profit of $402 million. This represents a $340 million year-over-year improvement versus the company’s combined net profit of $62 million excluding net special charges in the first quarter 2013.

First quarter 2014 pretax margin excluding net special credits was 4.1 percent, a 3.6 point year-over-year improvement.

The company ended the quarter with $10.6 billion in total cash and short-term investments. Since the close of the merger, the company has used more than $542 million of cash to reduce its diluted shares outstanding by approximately 20 million.

For the first quarter 2014, American Airlines Group reported a record GAAP net profit of $480 million. This compares to a net loss of $341 million in the first quarter 2013. The company’s GAAP results for the first quarter 2013 reflect AMR Corporation prior to the merger.

The company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group. Therefore, it includes the results of US Airways Group for the full period. See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.

First quarter 2014 net profit excluding net special credits was a record $402 million. This compares to a combined non-GAAP net profit of $62 million excluding net special charges for the same period in 2013. Excluding net special credits, first quarter 2014 diluted earnings per share was $0.54.

“We are very pleased to report a record profit in our first full quarter as a merged company,” said Doug Parker, CEO of American Airlines Group. “Our team of dedicated professionals did an excellent job of taking care of our customers despite particularly difficult weather conditions throughout the quarter. We are excited for the future and expect our synergies to build as we continue to integrate our operations.”

Merger Integration

Since closing the merger on December 9, 2013, the company has made significant progress in integrating American Airlines and US Airways. Key accomplishments:

Launched the world’s largest codeshare, offering customers improved access to the company’s global network by allowing them to book flights on both airlines’ networks

Provided reciprocal benefits for airport lounge and frequent flyer elite members, including priority check-in, waiving fees for checked bags, complimentary access to preferred seats, priority security lines, early boarding and priority baggage delivery

Enabled AAdvantage® and Dividend Miles® members to earn and redeem miles when traveling across either airline’s network

Joined operations at 58 airports, including Phoenix and Miami hubs

Moved US Airways into the oneworld alliance on March 31 and to the trans-Atlantic joint venture with American, British Airways, Iberia and Finnair on April 3

Aligned award travel options, checked baggage policies and inflight services for First and Business Class customers

Announced Sabre as the new Passenger Services System for the combined company

Closed the sale of the slot divestitures required by the U.S. Department of Justice at Ronald Reagan Washington National Airport (DCA). In total, the company received $381 million in cash from the DCA sales and the sale of slots at New York’s LaGuardia (LGA) Airport, which closed in the fourth quarter 2013.

Revenue and Cost Comparisons

On a combined basis, total revenues in the first quarter were a record $10 billion, up 5.6 percent versus the first quarter 2013 on a 2.0 percent increase in total available seat miles (ASMs). Driven by a record yield of 17.03 cents, up 3.2 percent year-over-year, combined consolidated passenger revenue per ASM (PRASM) was also a record for the first quarter at 13.67 cents, up 2.9 percent versus the first quarter 2013.

Total combined operating expenses in the first quarter were $9.3 billion, down 0.3 percent over first quarter 2013. Combined first quarter mainline cost per available seat mile (CASM) was 13.50 cents, down 2.7 percent on a 2.7 percent increase in mainline ASMs versus first quarter 2013. This cost improvement was largely due to a 4.8 percent decrease in year-over-year mainline fuel prices. Excluding special charges, fuel and profit sharing, mainline CASM was up 4.0 percent compared to the first quarter 2013, at 8.96 cents. Regional CASM excluding special charges and fuel was 16.62 cents, up 5.0 percent on a 3.2 percent decrease in regional ASMs versus first quarter 2013.

Liquidity

As of March 31, 2014, American had approximately $10.6 billion in total cash and short-term investments, of which $947 million was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $750 million of the company’s unrestricted cash balance was held in Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.32 bolivars to the dollar. This includes approximately $94 million valued at 4.3 bolivars, approximately $611 million valued at 6.3 bolivars and approximately $45 million valued at 10.7 bolivars, with the rate depending on the date the company submitted its repatriation request to the Venezuelan government.

In the first quarter of 2014, the Venezuelan government announced that a newly-implemented system (SICAD I) will determine the exchange rate (which fluctuates as determined by weekly auctions and at March 31, 2014 was 10.7 bolivars to the dollar) for repatriation of cash proceeds from ticket sales after January 1, 2014, and introduced new procedures for approval of repatriation of local currency. The company is continuing to work with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency. The company is monitoring this situation closely and continues to evaluate its holdings of Venezuelan bolivars for potential impairment.

Since the merger, the company paid $542 million in tax withholdings for employees in lieu of issuing shares of common stock as compensation as permitted under the Plan of Reorganization, thereby reducing the number of shares expected to be issued under the Plan by approximately 20 million. Additionally, the company has elected to utilize the cash settlement feature for the remaining $22 million principal amount of US Airways Group 7.25% convertible notes due May 15, 2014, which will further reduce diluted shares by approximately 4 million shares.

Special Items

In the first quarter, the company recognized a combined total of $78 million in net special credits, including:

$137 million in net special credits consisting primarily of the gain on the sale of slots at Reagan National Airport offset in part by integration and merger-related expenses

$47 million in non-operating special charges due primarily to non-cash interest accretion on bankruptcy settlement obligations

$8 million in non-cash deferred income tax provision related to certain indefinite-lived intangible assets

$4 million in regional non-operating charges

Additional Integration Related Developments

Distributed $11 million to employees for baggage handling and on-time performance in the month of January; this distribution of $100 per employee is part of the company’s Triple Play program which measures on-time arrivals and baggage performance as reported in the DOT’s Air Travel Consumer Report (ATCR)

Conducted first joint Captain Leadership Training with newly promoted captains from both airlines

On April 9, Piedmont flight attendants ratified a new five-year Collective Bargaining Agreement
Opened a new Admirals Club lounge at the company’s Philadelphia (PHL) hub

Fleet/Network Developments

As part of its plan to modernize its fleet by replacing older aircraft with newer, more fuel-efficient aircraft, the company inducted 12 new Airbus A321 aircraft into service between New York’s John F. Kennedy International Airport (JFK) and Los Angeles International Airport (LAX), and JFK and San Francisco International Airport (SFO). American is now the only U.S. carrier to offer three classes of service between these key markets.

The company also took delivery of one Airbus A330-200 aircraft, five Boeing 737-800 aircraft and one Boeing 777-300 aircraft during the first quarter.

Revealed new Boeing 767-300 and 777-200ER cabin retrofits, which feature lie-flat seats with direct aisle access in Business Class

In April 2014, the company exercised its option to purchase (and thus terminated its existing lease financing arrangements) for 62 Airbus A320 family aircraft scheduled to be delivered between first quarter 2015 and third quarter 2017. In connection with this decision, the company also exercised its right to convert firm orders for 30 Airbus A320 family NEO aircraft (scheduled to be delivered in 2021 and 2022) to options to acquire such aircraft.

Top Copyright Photo: Rolf Wallner/AirlinersGallery.com. American Airlines’ Boeing 767-323 ER N346AN (msn 33085) taxies at Zurich.

American Airlines: AG Slide Show

US Airways: AG Slide Show

Bottom Copyright Photo: Jay Selman/AirlinersGallery.com. US Airways is now planning to operate the last Boeing 737 revenue flight on August 18 at the Charlotte hub. Boeing 737-4B7 N450UW (msn 24933) arrives back at CLT.

 

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US Airways trims the frequencies on some new Charlotte European routes

US Airways (Phoenix) is trimming back on four new European routes from the Charlotte hub according to the Charlotte Observer. The new routes from CLT to Barcelona, Brussels, Lisbon and Manchester were announced in October as daily flights (CLICK HERE to read the original report). However due apparent weak demand, the new flights are now being trimmed back to only four days a week.

Read the full report: CLICK HERE

Copyright Photo: Jay Selman/AirlinersGallery.com. Boeing 757-2B7 N201UU (msn 27180) arrives back at the Charlotte hub yesterday (April 20).

US Airways: AG Slide Show

 

American Airlines and US Airways issue their fleet plans

American Airlines Group (American Airlines and US Airways) (Dallas/Fort Worth) has issued its new fleet update (see below) for 2014. Overall the fleet will grow by only three aircraft this year. The Group will take delivery of 83 new mainline aircraft during 2014, namely 10 Airbus A319s, 42 A321s, three A330-200s, 20 Boeing 737-800s, two 787-8s and six 777-300s (more Airbus aircraft than Boeing aircraft). The Group expects to retire during 2014 26 McDonnell Douglas DC-9-82/83s (MD-80s), 14 Boeing 737-400s, 22 757-200s, 13 767-200s and five Airbus A320s.

The last eight Boeing 737-400s being operated by US Airways (top) are expected to be retired before the end of the third quarter (September 30).

On the regional side, the Group is significantly reducing its Embraer ERJ 140 fleet but it will also operate a large amount of inefficient 50-seat Bombardier CRJ200s (138) and Embraer ERJ 145s (118).

Here is the full report:

American Fleet Update 4.2014 (AAG)

In addition, according to Airline Route, American Airlines and US Airways will begin assigning certain routes to either American or US Airways:

Effective June 1: American Airlines routes to be operated entirely by US Airways:

Charlotte – Chicago (O’Hare)
Charlotte – Miami
Los Angeles – Phoenix

Effective July 2, the following American routes will be operated by US Airways:

Miami – Detroit
Miami – New Orleans
Miami – Raleigh
Miami – Tampa

Effective July 2, the following US Airways routes will be operated by American:

Phoenix – Detroit
Phoenix – Newark
Phoenix – Orange County
Phoenix – Seattle

Top Copyright Photo: Bruce Drum/AirlinersGallery.com. A significant milestone is approaching quickly. US Airways has had a long association with the Boeing 737 and the last 737-400 is expected to be retired before the end of September according to this fleet update. Boeing 737-4B7 N433US (msn 24555) taxies to the runway at Charlotte Douglas International Airport (CLT).

US Airways: AG Slide Show

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

Bottom Copyright Photo: Michael B. Ing/AirlinersGallery.com. American is quickly replacing the older Boeing 767-200 ERs currently being operated between New York (JFK) and Los Angeles with newer Airbus A321s. The last AA 767-200 is expected to be retired on May 7 according to ch-aviation although the type will continue with US Airways into 2015. American Airlines’ Boeing 767-223 ER N335AA (msn 22333) departs from Los Angeles bound for New York (JFK).

 

American Airlines changes its policies concerning mileage redemptions and checked bag policies

American Airlines (Dallas/Fort Worth) today announced new mileage redemption options for American Airlines AAdvantage and US Airways Dividend Miles members, as well as new checked bag policies for customers traveling across the combined network of more than 356 destinations in 56 countries. The changes, along with enhancements in First and Business Class on flights operated by US Airways, part of American Airlines Group, will provide customers a more consistent experience and an onboard product in line with or better than that of American’s competitors.

Mileage Redemption Structure

Effective today for travel starting June 1, Dividend Miles members now will be able to book last seat availability awards for flights year-round without any blackout dates. For AAdvantage members, AAnytime award travel will now be available more for than half of the year at an even lower redemption level. Previous redemption rates called for 25,000 miles one way, and the new redemptions will start at 20,000 miles one way. Redemption mileage during the remainder of the year will begin at 30,000 miles one way for last seat availability. The exceptions will fall on the busiest travel days of the year. On those days, American will offer a higher award redemption option, which will be available starting at 50,000 miles one way. Since January, when American and US Airways launched the first phase of reciprocal frequent flyer benefits, AAdvantage and Dividend Miles members have earned more than 587 million miles through travel across the new American’s combined global network. For details on award travel levels, visit aa.com/aadvantage or usairways.com/dividendmiles.

Checked Bag Policies

American has also updated its checked bag policies. For flights operated by American, these changes take place for tickets issued starting today. For flights operated by US Airways, these changes take place for tickets issued starting April 23. The changes include removing the second bag charge on flights to and from South America. Also, AAdvantage Gold members and Dividend Miles Platinum and Gold members will receive one fewer free checked bag than they do today. Customers traveling on an AAnytime award or a full-fare economy ticket (on legacy American) will no longer receive free checked bags. Lastly, Citi cardholders will continue to receive one free checked bag, and starting April 30, that same benefit will also apply to customers who have the US Airways MasterCard® with an annual fee of at least $79.

Importantly, American leads the industry in baggage exemptions for our nation’s military as the only airline to offer five free checked bags to military servicemen and women traveling on orders, and three bags to military servicemen and women on personal travel.

Inflight Enhancements

Customers in First Class on flights operated by US Airways will now enjoy an updated selection of fresh meals on most flights longer than 1,000 nautical miles, or about 2 hours 45 minutes in duration. Customers in international Business Class on flights operated by US Airways will be able to tune out or tune in to new entertainment options with new Bose® Quiet Comfort® 15 Acoustic Noise Cancelling headphones. Another feature includes Business Class on Boeing 757 and 767 aircraft which will now offer 60 movies and a greater variety of television programs, as well as audio selections on the new Samsung Galaxy Tab. Business Class on Airbus A330 aircraft now offers double the previous entertainment options, with more than 250 movies and 350 audio choices.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A319-115 N8009T (msn 5788) arrives at Charlotte.

American Airlines (current): AG Slide Show

US Airways: AG Slide Show

US Airways joins the trans-Atlantic joint venture

American Airlines (Dallas/Fort Worth), British Airways (London), Iberia (Madrid) and Finnair (Helsinki) today (April 3) celebrate a key milestone as US Airways (Phoenix) joins the airlines’ trans-Atlantic joint venture. As part of the joint business, established by American, British Airways and Iberia in October 2010, the airlines can cooperate commercially on trans-Atlantic flights. The joint venture also includes a revenue sharing agreement in which member airlines have permission to coordinate schedules and pricing on North Atlantic routes. These benefits provide customers traveling between North America and Europe increased choices and access to a more comprehensive network.

US Airways brings 28 trans-Atlantic routes to the joint business including nonstop service from the United States to 18 European destinations including Munich, Athens and Amsterdam. Philadelphia and Charlotte, N.C., will become oneworld’s largest East Coast gateways to Europe providing customers access to more than 100 destinations throughout North America with one-stop connections from these two airports. With combined operations, the joint business will serve 29 destinations in North America and 25 destinations in Europe, operating nearly 100 routes between the two regions.

US Airways also plans to implement extensive codeshare agreements with the other carriers in the coming weeks, providing easy access to the joint business’ combined global network.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A330-243 N283AY (msn 1076) rotates at the Charlotte hub.

US Airways: AG Slide Show

 

US Airways jumps from the Star Alliance to the Oneworld Alliance

Oneworld logo

US Airways (Phoenix) yesterday (March 31) as planned, completed its transition to Oneworld along with TAM Airlines (Sao Paulo) marking the biggest single-day expansion of the alliance since its launch 15 years ago.

US Airways’ regional affiliates, operating as US Airways Express, also transitioned to Oneworld, following US Airways’ recent merger with American Airlines (Dallas/Fort Worth).

With its regional affiliates, US Airways serves more than 200 destinations and 30 countries with a fleet of more than 620 aircraft. It carried 82.5 million passengers in 2013 and currently operates 3,200 departures a day. It uses the two-letter code US, but this will be changed to AA once the two airlines combine under a single operating certificate.

It has added more than 50 destinations to the oneworld map – most in its US home but also two in Canada and one each in Ireland and Mexico – along with its key hubs of Charlotte, Philadelphia, Phoenix and Washington DC’s Reagan National, expanding oneworld’s presence across the USA, particularly throughout the East Coast and across the North Atlantic.

Once the integration is completed, the new American will offer service to more than 330 destinations in more than 50 countries, carrying 190 million passengers a year on a fleet of 1,500 aircraft.

US Airways: AG Slide Show

US Airways announces its routes to be dropped from Washington’s Reagan National Airport

US Airways (Phoenix) according to Airline Route, has announced the anticipated US Airways and US Airways Express route deletions and dates from Washington’s Reagan National Airport as required by the Department of Justice (DOJ) agreement as a prerequisite for the American Airlines-US Airways merger.

May 22, 2014: San Diego

June 5: Augusta, Fayetteville, Fort Walton Beach, Jacksonville (NC), Little Rock and Omaha

June 19: Tallahassee

July 2: Islip, Minneapolis/St. Paul, Pensacola and Savannah

August 19: Detroit

Copyright Photo: Brian McDonough/AirlinersGallery.com. Airbus A321-231 N508AY (msn 3740) arrives at Washington’s Reagan National Airport (DCA).

US Airways: AG Slide Show

US Airways flight 1702 with Airbus A320 N113UW blows a tire on takeoff at Philadelphia, nose gear collapses

US Airways (Phoenix) flight US 1702 was departing the Philadelphia hub last night (March 13) headed towards Fort Lauderdale/Hollywood at 6:25 pm (1825) local time. The flight with 149 passengers and five crew members was being flown on the pictured Airbus A320-214 N113UW (msn 1141). On the takeoff roll the A320 blew a tire and the takeoff was aborted. Eyewitnesses reported the bounced at least twice. The nose wheel gear collapsed as the airliner came to a halt at the edge of the pavement. The passengers and crew members safely exited the airliner via emergency exits and chutes. The incident closed the main runway for a period of time.

Read the full report from CNN: CLICK HERE

Top Copyright Photo: Jay Seman/AirlinersGallery.com. Airbus A320-214 N113UW (msn 1141) taxies at the Charlotte hub prior to incident at Philadelphia.

US Airways: AG Slide Show

Evacuation Video:

 

 

 

US Airways to add three new routes from Philadelphia

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) have announced the addition of new regional service in June from Philadelphia International Airport (PHL) to Yeager Airport (CRW) in Charleston, West Virginia, Blue Grass Airport (LEX) in Lexington, Kentucky, and Memphis International Airport (MEM) in Memphis, Tennessee, adding three new routes to the airline’s network.

Following the launch of the new service, American Airlines and US Airways will serve 127 destinations in 25 countries from Philadelphia.

US Airways Express service between Philadelphia and Charleston will be operated once daily (except Saturday) by regional partner Piedmont Airlines with a Bombardier DHC-8 aircraft.

US Airways Express service between Philadelphia and Lexington will be operated three times per day by regional partner Air Wisconsin with a Bombardier CRJ200 aircraft.

US Airways Express service between Philadelphia and Memphis will also be operated three times per day by regional partner Air Wisconsin with a Bombardier CRJ200 aircraft.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Piedmont Airlines’ Bombardier DHC-8-102 N936HA (msn 145) approaches Washington’s Reagan National Airport for landing.

US Airways Express-Piedmont Airlines (2nd): AG Slide Show

US Airways Express-Air Wisconsin: AG Slide Show

 

US Airways flight attendants vote to join forces with American Airlines flight attendants

AFA-Association of Flight Attendants logo

US Airways Flight Attendants, represented by the Association of Flight Attendants-CWA (AFA), voted to ratify an Agreement on Bargaining and Representation between AFA and the Association of Professional Flight Attendants (APFA) along with a Negotiations Protocol Agreement with American Airlines management. The agreement establishes a joint negotiations protocol for a single contract at the New American Airlines with the assurance of improvements in one year for all 24,000 Flight Attendants.

Beginning next week, AFA and APFA will form a joint negotiating team with an equal number of representatives and professional advisors as they spend the next 60 days preparing an opening proposal based on the best of both contracts and input from all Flight Attendants at the New American. Management has agreed to meet for 150 days with an intensive schedule that averages three weeks a month in an effort to reach an agreement on a combined contract. The parties will utilize the mediation services of the National Mediation Board and other expedited bargaining methods. If an agreement cannot be reached, only the open items will be submitted to arbitration based on an economic standard that will produce improvements over the current contracts. The entire process includes timelines that lead to implementation of a new single contract no later than the first quarter of 2015.

The agreement transitions representation for the combined group to the Association of Professional Flight Attendants (APFA). The unions will jointly file a single carrier petition with the National Mediation Board in June, which will lead to certification of APFA as the representative in summer or fall. AFA will continue to work in partnership with APFA until the joint bargaining process is concluded and the new contract is implemented. Even after APFA’s certification, AFA will continue to enforce the current US Airways contract and related grievances.

American Airlines ends its bereavement fares for family members

American Airlines (Dallas/Fort Worth) has ended its policy of extending special fares to family members who must buy a ticket a last-minute flight because of a relative’s death according to the Associated Press.

The change at American now mirrors the policy at merger partner US Airways, which does not offer bereavement fares. US Airways management is now running the “new American”.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-823 N815NN (msn 33208) completes its final approach from the south into Washington’s Reagan National Airport.

American Airlines (current): AG Slide Show

 

US Airways Express/American Eagle to return to Watertown, New York

US Airways (American Airlines) (Phoenix) will resume passenger service to Watertown, New York on May 8. US Airways Express service was last operated in April 2007 from and to Pittsburgh. This time, US Airways Express (soon American Eagle) 50-seat CRJ200s will be operated to and from the Philadelphia hub with two flights a day.

Read the full report from 7 News in Watertown: CLICK HERE

Copyright Photo: Bruce Drum/AirlinersGallery.com. Bombardier CRJ200 (CL-600-2B19) N241PS (msn 7909) of PSA Airlines (2nd) taxies at the Charlotte hub.

US Airways Express-PSA Airlines: AG Slide Show

American Airlines and US Airways expand their code-share agreement

 

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) are expanding their code-share agreement to provide customers access to nearly 6,500 daily flights to more than 275 destinations in the combined global network. These additional codeshare flights are now available for booking, for travel starting February 6.

American and US Airways launched the initial phase of their code-share on January 13. This phase extends the code-share to all flights across the combined global network, except for a select few international markets due to regulatory requirements. The two airlines expect to code-share on every international flight in these markets by the end of the first quarter.

Through the code-share, each airline can sell tickets operated by the other carrier using its own code and flight number, and customers will be able to easily combine select flights operated by each airline on a single itinerary when booking travel on aa.com, usairways.com or through travel distribution channels.

Customers should continue to check in for flights and conduct business with the airline operating their flight just as they did before the launch of this code-share.

Copyright Photo: Jay Selman/AirlinersGallery.com. The first US Airways aircraft to be repainted in American Airlines’ 2013 livery is this former Star Alliance Airbus A319-112 N700UW (msn 885) arriving back at Charlotte.

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

US Airways: AG Slide Show

Mesa Air Group to expand its partnership with US Airways

Mesa Air Group, Inc. (Mesa Airlines) (Phoenix has announced it has reached an agreement with US Airways, Inc. (Phoenix) to extend the term covering its original 38 Bombardier CRJ900 aircraft currently in operation and for the addition of four CRJ900 aircraft to its current fleet of 47 aircraft under the US Airways Express contract. The term of the agreement covering the 38 aircraft was extended until 2021 and the term for the 4 additional aircraft is 8 years from their induction date. No further details of the agreement were released.

Mesa currently operates 69 aircraft with approximately 396 daily system departures to 77 cities, and recently announced an additional 30 Embraer 175 aircraft will be flying for United Airlines. Mesa operates as US Airways Express and United Express under contractual agreements with US Airways and United Airlines, respectively, and independently as go!.

Eventually the company will become a new American Eagle branded operator with the final merger of the two AOCs into one for American Airlines.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Bombardier CRJ900 (CL-600-2D24) N919FJ (msn 15019) of Mesa departs from the Charlotte hub.

US Airways Express-Mesa: AG Slide Show

American Airlines Group considers new destinations from the US Airways Charlotte hub

American Airlines‘ (Dallas/Fort Worth) new CEO (and old US Airways and America West Airlines CEO) Doug Parker stated to the Charlotte Observer and others via a conference call that they plan to add “new dots on the map” for the Charlotte hub. AA executives are now reviewing the combined route map for new opportunities. CLT is now the second largest hub (behind DFW) for the American Airlines Group.

American is also adding more seats to its planes.

Read the full report: CLICK HERE

Copyright Photo: Jay Selman/AirlinersGallery.com. The old met the new at the Charlotte hub. Allegheny Airlines became USAir, later US Airways which merged with American Airlines with US Airways management taking over the “new” American. Airbus A319-112 N700UW (msn 885) of US Airways was the first aircraft to be paint in the new American Airlines brand.

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

US Airways: AG Slide Show

US Airways puts the first American Airlines painted aircraft into revenue service this morning

US Airways (American Airlines Group) (Phoenix) has painted its first aircraft in American Airlines‘ (Dallas/Fort Worth) 2013 new livery. The pictured Airbus A319-112 N700UW (msn 885), formerly painted in the Star Alliance color scheme (which US Airways is leaving), was placed into revenue service early this morning (January 30) from the Charlotte hub to New York’s La Guardia Airport as flight US 2060.

American Airlines 2013 logo

US Airways issued this statement:

American Airlines today (January 30) entered into service the first legacy US Airways aircraft, an Airbus A319, painted in the American Airlines livery. The newly dressed plane, tail number N700UW, debuted its freshly painted fuselage with service from Charlotte to New York’s LaGuardia Airport on flight 2060.

The Airbus A319 recently spent 13 days receiving its makeover. In anticipation of the new coat of paint, the existing paint was gently removed, the aircraft sanded and washed. Following the metallurgical exfoliation, the seams were sealed, the aircraft masked and 80 gallons of specially chosen paint applied to the exterior. A final detailing was completed to ensure the highest shine before sending the plane out the door and back to work.

This past December, following the close of the merger with US Airways, a survey was launched allowing employees from both airlines to vote whether to change or to maintain American’s current livery. InJanuary 2014 the voting results were announced to keep the new flag tail livery.

The airline will be adding the new look to its entire fleet of aircraft over the next few years. Approximately 640 aircraft are in line to receive the makeover, with newly arriving legacy American Airlines aircraft already outfitted in the new colors and US Airways aircraft delivered in the new colors beginning this June.  By the end of second quarter 2014 American Airlines anticipates that more than 275 mainline and regional aircraft will have been painted in the new livery.

Top Copyright Photo: Jay Selman/AirlinersGallery.com. History was recorded early this morning at Charlotte (CLT) by Jay Selman. All US Airways aircraft repainted in American’s colors will have a special “Operated by US Airways” inscription by the front door until the two AOCs are merged into one operating certificate.

Bottom Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A319-112 N700UW  returns to Charlotte today after completing its round trip to and from New York.

US Airways: AG Slide Show

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

American Airlines Group reports its combined fourth quarter and full year financial results

American Airlines Group Inc. (American Airlines and US Airways) (Dallas/Fort Worth) today reported fourth quarter and full year 2013 results.

  • As the result of the merger which closed on Dec. 9, 2013, US Airways Group became a subsidiary of AMR Corporation which changed its name to American Airlines Group Inc. (AAG)
  • Fourth quarter 2013 combined net profit was $436 million on a non-GAAP basis excluding net special charges. This represents a $478 million improvement versus the company’s combined fourth quarter 2012 non-GAAP net loss of $42 million excluding net special credits
  • 2013 combined net profit was $1.9 billion on a non-GAAP basis excluding net special charges, a $1.5 billion improvement versus the company’s combined 2012 non-GAAP net profit of $407 million excluding net special charges
  • The company ended the year with $10.3 billion in total cash and investments. Since the merger, the company has used more than $300 million of cash to reduce its diluted shares outstanding by approximately 14 million

For the fourth quarter 2013, AAG reported a GAAP net loss of $2.0 billion, which includes $2.4 billion of net special charges. This compares to a net profit of $262 million, which includes $350 million of net special credits in the fourth quarter 2012. AAG’s GAAP financial results include the results for US Airways only for the period from the completion of the merger on Dec. 9, 2013 through Dec. 31, 2013.

For full year 2013, GAAP net loss was $1.8 billion, which includes $3.1 billion of net special charges. This compares to a full year 2012 net loss of $1.9 billion, which includes $1.7 billion of net special charges.

The company believes it is more meaningful to compare year-over-year results for American Airlines and US Airways on a combined basis, which is a non-GAAP formulation that combines the results for AMR Corporation and US Airways Group. Therefore, it includes the results of US Airways Group for the full period (not just the period since the merger closed). See the accompanying notes in the Financial Tables section of this press release for further explanation of this presentation, including a reconciliation of GAAP to non-GAAP financial information.

Fourth quarter 2013 combined net profit was $436 million on a non-GAAP basis excluding net special charges. This compares to a combined non-GAAP net loss of $42 million excluding net special credits for the same period in 2012. Based on a diluted share count of 742 million, fourth quarter 2013 diluted earnings per share was $0.59 on a non-GAAP basis.

For 2013, the company’s combined net profit was $1.9 billion on a non-GAAP basis excluding net special charges. This represents a $1.5 billion improvement over the company’s combined 2012 non-GAAP net profit of $407 million excluding net special charges.

“The early returns on our merger are very positive,” said Doug Parker, CEO of American Airlines Group Inc. “Our teams are working well together and our customers are already beginning to see the benefits of our combined network. We have much work ahead, but believe we are on our way to restoring American as the greatest airline in the world. These financial results are evidence of the strong foundation we have in place and we anticipate improving upon these results as we further integrate our operations in 2014.”

Merger Integration 

Since closing the merger on December 9, 2013, the company has made significant progress in integrating American Airlines and US Airways. Key accomplishments include:

  • Launched the first phase of codesharing which offers customers improved access to the company’s global network by allowing them to book select flights on both airlines’ networks
  • Provided reciprocal benefits for Club members and Elite members, including priority check-in, waiver of fees for checked bags, complimentary access to preferred seats, priority security, early boarding and priority baggage delivery
  • Allowed AAdvantage® and Dividend Miles members to earn and redeem miles when traveling across either airline’s network
  • Trained more than 85,000 customer-facing employees

Revenue and Cost Comparisons

On a combined basis, total revenues in the fourth quarter were $10.0 billion, up 8.7 percent versus the fourth quarter 2012 on a 3.4 percent increase in total available seat miles (ASMs). Fourth quarter combined consolidated passenger revenue per ASM (PRASM) was 13.64 cents, up 5.0 percent versus the fourth quarter 2012, driven by a 5.3 percent increase in yield.

Strong demand and high load factors led to 2013 total combined revenues of $40.4 billion, which were up 4.7 percent versus 2012. Full year combined consolidated PRASM was 13.67 cents, up 2.6 percent versus 2012.

Total combined operating expenses in the fourth quarter were $9.7 billion, up 7.0 percent over fourth quarter 2012. Combined fourth quarter mainline cost per available seat mile (CASM) was 14.17 cents, up 4.2 percent on a 3.6 percent increase in mainline ASMs versus fourth quarter 2012. Excluding special charges, fuel and profit sharing, mainline CASM was flat compared to the fourth quarter 2012, at8.49 cents. Regional CASM excluding special charges and fuel was 15.73 cents, up 1.8 percent on a 1.6 percent increase in regional ASMs versus fourth quarter 2012.

For the full year 2013, total combined operating expenses were $37.8 billion, up 0.6 percent versus 2012. Excluding special charges, fuel and profit sharing, combined mainline CASM decreased 3.1 percent to 8.37 cents versus 2012. Regional CASM excluding special credits and fuel increased 1.1 percent to 15.38 cents versus 2012.

Liquidity and Financing Transactions

As of December 31, 2013, American had $10.3 billion in total cash and investments, of which $1.0 billion was restricted. The company also has an undrawn revolving credit facility of $1.0 billion. Approximately $710 million of this unrestricted cash balance was held as Venezuelan bolivars, valued at the weighted average applicable exchange rate of 6.04 bolivars to the dollar. The period of time to exchange those funds into dollars and repatriate them has been increasing and is presently more than a year. On January 24, 2014, the Venezuelan government announced that a newly-implemented system will determine the exchange rate (currently 11.36 to the dollar) for repatriation of income from future ticket sales, and introduced new procedures for approval of repatriation of local currency. American is working with Venezuelan authorities regarding the timing and exchange rate applicable to the repatriation of funds held in local currency.

During the fourth quarter, the company elected to pay approximately $300 million in tax withholdings for employees under the Plan of Reorganization in lieu of issuing shares of common stock, thereby reducing the number of shares issued under the Plan by approximately 13 million. On January 9, 2014, the first distribution date, the company paid approximately $23 million in additional employee tax withholdings in lieu of issuing approximately 1 million shares of common stock. The company may make a similar election on future distribution dates as both a service to our team members and an indication of our confidence in the value of our common stock.

Additional balance sheet and liquidity detail will be included in the company’s Form 10-K to be filed in February.

During the fourth quarter, the company engaged in these additional financing transactions:

  • Completed the American Airlines offering of the Series 2013-2B EETC in aggregate face amount of $512 million and the Series 2013-2C EETC in aggregate face amount of $256 million
  • Amended the American Airlines term loan facility and the revolving credit facility to lower the applicable LIBOR margins to 3.0% for both offerings. As part of this amendment, the LIBOR floor with respect to the term loan facility was reduced from 1.0% to 0.75%
  • Utilized the floating rate debt market to refinance eight US Airways aircraft (six A321s and two A320s) at significantly reduced rates
  • Financed two US Airways spare engine deliveries with a floating rate debt facility originated in 2012 while negotiating an interest rate reduction for the entire facility
  • On Jan. 16, 2014 the company also amended the US Airways term loan facility, to lower the applicable LIBOR margin from 3.0% to 2.75% for Tranche B1. In addition, the LIBOR floor was reduced from 1.0% to 0.75% on both the Tranche B1 and Tranche B2 loans

Special Charges

In the fourth quarter, the company recognized a combined total of $2.4 billion in net special charges, including:

  • $2.2 billion in net reorganization charges consisting primarily of a deemed claim to employees, professional fees and estimated allowed claim amounts
  • $497 million in operating expense net special charges primarily related to the pilot memorandum of understanding that became effective upon merger close, merger related costs and professional fees and a charge related to the pilot long-term disability obligation
  • $324 million in non-cash income tax benefits primarily related to gains recorded in Other Comprehensive Income, offset in part by a charge related to deferred tax liabilities on indefinite lived assets
  • $31 million in operating revenue net special credits related to a change in accounting method resulting from the modification of the company’s AAdvantage® miles agreement with Citibank
  • $21 million in non-operating net special charges primarily related to interest charges to recognize post-petition interest expense on unsecured obligations

Notable Accomplishments

Additional Integration Related

  • On December 9, 2013, US Airways Group became a subsidiary of AMR Corporation which changed its name to American Airlines Group Inc. The company’s common stock began trading on the NASDAQ Global Select Market under the ticker “AAL”. Union presidents and more than 1,000 of the company’s employees joined American’s senior management team for the televised NASDAQ opening bell ceremony
  • Announced the new leadership team through the Managing Director level
  • Co-located our revenue management team to ensure the company is executing pricing and revenue management strategies as one organization
  • Took the unprecedented step of asking team members to vote to select the aircraft livery of the merged carrier. More than 60,000 team members participated

Fleet/Network

  • Continued to modernize its fleet with new, fuel-efficient aircraft. The company inducted thirteen Airbus A320 family aircraft, two A330-200 aircraft, five Boeing 737-800 and one Boeing 777-300 aircraft into its fleet
  • Signed agreements with Bombardier Inc. and Embraer S.A. to purchase 90 new 76-seat regional jets that will replace smaller, less efficient 50-seat regional aircraft scheduled for retirement
  • Began nonstop service between its largest hub at Dallas/Fort Worth and Bogota, Colombia and Roatan, Honduras and announced proposed new service between Dallas/Fort Worth and Hong Kong and Shanghai
  • Began nonstop service between its Miami hub and Curitiba and Porto Alegre, Brazil
  • Expanded the company’s international reach from its hub at Charlotte, North Carolina with the announcement of new, seasonal summer service to Barcelona, Spain; Brussels, Belgium; Lisbon, Portugal and Manchester, England
  • Announced the company will begin service to Edinburgh, Scotland from its Philadelphia hub this summer
  • Held the grand opening of an expanded Terminal F in PHL, the exclusive home of US Airways Express. The airport project which was managed by the company, quadrupled the facilities central area to 37,000 square feet and added 20 new food, beverage and retail outlets for our customers

Copyright Photo: Bruce Drum/AirlinersGallery.com. American’s Boeing 767-323 ER N388AA (msn 27448) arrives at the Miami hub.

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

US Airways: AG Slide Show

US Airways to close the Pittsburgh Operations Center, 600 jobs impacted

US Airways (Phoenix) as a result of the merger with American Airlines (Dallas/Fort Worth), will close its flight operations center located in Moon, Pennsylvania near Pittsburgh International Airport (PIT). All flight operations will be consolidated at American Airlines’ facility near Dallas-Fort Worth International Airport according to the Pittsburgh Post-Gazette. 600 jobs will be impacted. The new facility opened in November 2008.

Read the full story: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. All new US Airways deliveries will now be painted in American Airlines colors. Airbus A321-231 N559UW (msn 5292) approaches the runway at Los Angeles International Airport.

US Airways: AG Slide Show

American and US Airways announce the routes it will drop from Washington Reagan National and New York LaGuardia

American Airlines Group Inc. (American Airlines and US Airways) (Dallas/Fort Worth) has announced the planned network adjustments resulting from the required divestiture of slots and related assets at Washington Reagan National Airport (DCA) and New York LaGuardia Airport (LGA). The divestitures, which enabled American Airlines and US Airways to complete their merger, were mandated by the previously announced settlements with the U.S. Department of Justice (DOJ), the States ofArizona, Florida, Michigan, Tennessee, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia.

Washington Reagan National Airport (DCA)

As a result of the 52 slot pair divestitures at DCA required by the DOJ, American will no longer operate year-round, daily nonstop service to 17 destinations from DCA.  Customers in these communities will still have access to DCA, which remains a key hub for American, through connecting flights from one or more of the airline’s other eight hubs.

Communities no longer receiving year-round, daily service include:

Augusta, Ga.Detroit, Mich.Fayetteville, N.C.Fort Walton Beach, Fla.Islip, N.Y.

Jacksonville, N.C.

Little Rock, Ark.Minneapolis, Minn.MontrealMyrtle Beach, S.C.Nassau, Bahamas

Omaha, Neb.

Pensacola, Fla.San Diego, Calif.Savannah, Ga.Tallahassee, Fla.Wilmington, N.C.

Effective dates for the changes at DCA will be announced after the sale of slots and related assets is finalized in the coming weeks. American is currently working through the DOJ-approved divestiture process which includes transition agreements with acquiring airlines to minimize the disruption to customers.

Customers in Washington, D.C., and on the West Coast will benefit from other schedule changes, as American will soon add a second daily nonstop frequency between DCA and Los Angeles by shifting US Airways’ current San Diego flight to Los Angeles.

In addition, American will adjust its service to Fort Myers, Florida, moving from year-round service to a seasonal schedule.

New York LaGuardia (LGA)

As a result of the DOJ-required 17 slot pair divestitures at LGA, American will no longer operate nonstop service to Atlanta, Cleveland and Minneapolis/St. Paul. However, changes to the schedule made possible by the combined network of American and US Airways will provide opportunities for new service to 10 communities.  New service from LGA includes:

Charlottesville, Va. Little Rock, Ark. Roanoke, Va.
Dayton, Ohio Louisville, Ky. Wilmington, N.C.
Greensboro, N.C. Norfolk, Va.
Knoxville, Tenn. Richmond, Va.

Customers can begin booking tickets for these new routes Sunday, January 26 for travel beginning April 1.

In December 2013, American and US Airways finalized the DOJ-approved sale of slots and related assets at LGA with agreements that allow the appropriate time for American and the acquiring airlines to transition their operations and minimize the disruption to customers.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-823 N936NN (msn 31176) approaches the runway at Washington’s Reagan National Airport (DCA).

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

US Airways: AG Slide Show

American Airlines and US Airways are set to start the first phase of their codeshare agreement

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) (American Airlines Group) today are now offering customers improved access to the combined company’s global network through the first phase of a codeshare. Beginning today, customers can book flights on both airlines’ networks through the codeshare for travel starting on January 23.

Through the codeshare, each airline will sell tickets operated by the other carrier using its own code and flight number, and customers will be able to easily combine select flights operated by each airline on a single itinerary when booking travel on aa.com, usairways.com, or through other travel distribution channels. In addition, customers connecting on codeshare flights can seamlessly transfer bags when traveling on an itinerary that includes flights operated by both carriers. Launched in a phased approach, the codeshare seeks to provide a smooth travel experience while American and US Airways continue to operate as separate airlines during the merger integration.

The first phase of the codeshare will cover only select American and US Airways flights and includes placing:

  • The US Airways code on most American-operated flights between American’s hubs in Chicago,Dallas/Fort Worth, Los Angeles, Miami and New York (JFK), and US Airways hubs in Charlotte,Philadelphia, Phoenix and Washington, D.C. (DCA).
  • The American code on most US Airways-operated flights between US Airways’ hubs in Charlotte,Philadelphia, Phoenix and Washington, D.C. (DCA), and American’s hubs in Chicago, Dallas/Fort Worth, Los Angeles, Miami and New York (JFK).
  • The American code on US Airways’ East Coast Shuttle service, which includes flights betweenBoston, New York (LGA) and Washington, D.C. (DCA).
  • The US Airways code on select American domestic flights from Chicago and Dallas/Fort Worth, providing US Airways customers immediate access to small- and medium-size destinations currently served by American but not US Airways.
  • The American and US Airways code on select international flights operated by the other carrier.

The two airlines are expected to extend the codeshare to include all flights within the combined network in the coming weeks. Customers should continue to check in for flights and conduct business with the airline operating their flight just as they did before the launch of this codeshare.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 767-323 ER WL N378AN (msn 25447) with Blended Winglets approaches the runway at Los Angeles International Airport (LAX).

American Airlines (current): AG Slide Show

American Airlines (historic): AG Slide Show

US Airways: AG Slide Show

Bottom Copyright Photo: Keith Burton/AirlinersGallery.com. The “new American” will operate a mixed long-range fleet of both Airbus and Boeing aircraft. US Airways’ Airbus A330-323X N274AY (msn 342) completes its final approach into London (Heathrow).

American and US Airways start to align customer benefits, gates and counters

American Airlines Group Inc. (Dallas/Fort Worth) today will begin to align customer benefits, creating a more consistent experience for those traveling on flights operated by American Airlines (Dallas/Fort Worth) and US Airways (Phoenix). This is the first of many actions the airlines will take over the coming months as part of the integration process.

The benefits customers traveling on both airlines will begin to experience today include:

  • AAdvantage and Dividend Miles members can earn and redeem miles when traveling across either airline’s network. All travel on eligible tickets on both airlines will count toward qualification for elite status in the customer’s program of choice.
  • Elite members of each airline can enjoy select reciprocal benefits of both the AAdvantage and Dividend Miles programs, including First and Business Class check-in, priority security and priority boarding, complimentary access to Preferred Seats, priority baggage delivery, and checked bags at no charge, consistent with the current baggage policies for each carrier.
  • Members of the American Admirals Club or US Airways Club will have reciprocal club benefits, providing them access to the 35 Admirals Clubs and 19 US Airways Clubs. In addition, American AAdvantage Citi Executive cardholders will have access to US Airways Clubs.
  • Airport and Web check-in timeframes will be aligned for both US Airways and American.
  • Boarding announcements will align to accommodate elites of both carriers.
  • Airport ticket counters and gates at New York’s John F. Kennedy Airport are now co-located.

Employees at American and US Airways have undergone joint training in preparation for changes effective today. As American Airlines Group Inc. works to fully integrate operations, employees of both airlines will be armed with the tools, information and resources needed to deliver a superior level of service to the combined carrier’s loyal flyers.

Additional customer benefits will roll out as both airlines continue to combine operations. While full alignment will take time, customers can expect the following benefits in the coming months:

  • A codeshare agreement to provide easy access to each airline’s global network. The first phase of the codeshare is expected to be available in the coming weeks.
  • US Airways’ exit from the Star Alliance on March 30, 2014 and entry into the oneworld® alliance onMarch 31, 2014.
  • Co-location of additional ticket counters and gates in key markets, including Miami and Phoenix, as well as other domestic and international stations is expected to completed by the end of the first quarter.
  • Alignment of select frequent flyer program policies, including upgrades.

As American and US Airways work through the integration process, the two airlines will continue to operate separately, with individual loyalty programs, reservations systems and websites. Customers should continue to check in for flights and conduct business with the airline operating their flight just as they did before the close of the merger.

Top Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-223 ER N774AN (msn 29581) approaches the runway at Los Angeles International Airport.

American Airlines: AG Slide Show

US Airways: AG Slide Show

Bottom Copyright Photo: Tony Storck/AirlinersGallery.com. The US Airways special schemes will remain, albeit soon with American Airlines titles. A319-132 N822AW (msn 1410) in the Nevada – Battle Born lands at Baltimore/Washington (BWI).

American Airlines employees vote to keep the new flag tail design

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) (American Airlines Group) employees have voted to keep the new 2013 (Horton) livery. CEO Doug Parker made the announcement. 52 percent of the employees voted to keep the new look rather than a more traditional AA on the tail.

Our own WAN unofficial public poll showed a higher margin – 57 percent approving of the new design with 43 percent picking the more traditional AA tail. Therefore the new tail is probably more popular with the general public than with the employees.

See the results of our poll: CLICK HERE

The repainting of the US Airways and US Airways Express aircraft into American colors will now begin.

The first new legacy logo jet will be for TWA. In our on-going poll for which TWA livery should be painted on the retrojet, our readers favor the last (1995) livery by around 35 percent. However the 1962 (red arrow, twin globes) livery (27 percent) and 1980 livery (twin stripes, bold titles) (24 percent) are running close behind.

Have you voted? CLICK HERE

Copyright Photo: TMK Photography/AirlinersGallery.com.

American Airlines: AG Slide Show

American Airlines switches to the larger Airbus A350-900

American Airlines (Dallas/Fort Worth) under the new (old US Airways) management led by CEO Doug Parker, has revised the US Airways (Phoenix) pending order for 22 new Airbus A350s. The order, which was originally placed for 18 A350-800s and four A350-900s, will now be 22 of the larger A350-900s for American Airlines according to a filing and the Dallas News. The aircraft will begin to arrive in 2017.

Read the full article: CLICK HERE

Copyright Photo: Eurospot/AirlinersGallery.com. Airbus A350-941 F-WXWB (msn 001) climbs away from Toulouse on a test flight.

American Airlines: AG Slide Show

US Airways: AG Slide Show

American’s new CEO Doug Parker puts the AA livery to an employee vote, there will be a TWA retrojet

American Airlines 2013 logo

American Airlines‘ (Dallas/Fort Worth) new 2013 livery was approved by out-going CEO Tom Horton as we have previously reported. Incoming CEO (and US Airways boss) Doug Parker is now putting the question of keeping this design or adopting a more traditional AA tail to an employee vote (all American and US Airways employees). One question is certain, either way, the fuselage will be painted because of the Airbus fleet and the newer Boeing aircraft like the 787.

Nearly 620 US Airways and US Airways Express aircraft now need to be repainted, let alone the remaining AA aircraft.There are now over 200 AA aircraft already repainted in the 2013 Horton design which features the large American flag on the tail. The new flight symbol logo (above) is everywhere now. However many employees miss the traditional AA on the tail (see below).

American AA logo

Doug has sent this message below to his expanded group of employees and is asking them to vote on two choices: silver paint with the new American flag on the tail or silver paint with the traditional AA on tail. Which do you like best? Please see our unofficial poll below for the readers of WAN (yes, AA-US employees can vote too in our poll).

Doug has also announced there will a TWA legacy retrojet (which color scheme?) to honor the proud employees of that once great airline. All of the heritage US Airways aircraft (including Allegheny, America West, Piedmont and PSA) will be retained in the new American along with one US Airways 2005 liveried aircraft and an American 1968 liveried aircraft. We have also included a TWA legacy poll below with all of the TWA color schemes and the years introduced. Which TWA design would you like to see?

Here is Doug’s full message to the employees:

American Livery Vote #1

American Livery Vote #2

American Livery Poll: Unless you are an AA-US employee, your opinion will not be heard. However you can give your opinion here. Vote for your favorite design.

TWA RetroJet Livery Poll:

American Airlines: AG Slide Show

TWA: AG Slide Show

US Airways: AG Slide Show

TWA main liveries over the years (there were other minor variations but this is the main ones with the most recent at the top going back in time):

TWA 1995 (the last color scheme for TWA and the most stylistic):

Copyright Photo: Roy Lock/AirlinersGallery.com.

TWA 1979 (included the tapered two traditional red stripes and the solid red TRANS WORLD fuselage titles:

Copyright Photo: Rolf Wallner/AirlinersGallery.com.

TWA 1974 (basically the same as the later 1980 updated look, except with the harder-to-read red outline fuselage titles):

Copyright Photo: Bruce Drum/AirlinersGallery.com.

TWA 1962 (the classic early jet age “red arrow” and “twin globes” scheme, aircraft were called “StarStream …) (prior to this, early jet aircraft had a simple red TWA on the tail):

Copyright Photo: Bruce Drum/AirlinersGallery.com.

TWA 1952 (basically the 1945 with a white top, white was added to keep the aircraft cooler in flight, here is the the classic red and white “twin stripes” color scheme of the prop era):

Copyright Photo: Jacques Guillem Collection/AirlinersGallery.com.

TWA 1945: (after World War II aircraft wore this simple bare metal design with twin red stripes and red TWA titles):

Copyright Photo: Bruce Drum/AirlinersGallery.com.

TWA 1938 (“The Lindbergh Line” was pretty basic – only two tail stripes and red titles with a simple logo on a bare metal fuselage):

Copyright Photo: Bruce Drum/AirlinersGallery.com.

Qatar Airways expands its code-share agreement with US Airways, will launch a new route from Philadelphia to Doha on April 2

Qatar Airways (Doha) today announced the expansion of a code-share agreement with US Airways (Phoenix) for flights via Philadelphia International Airport (PHL). The agreement will provide millions of Americans the opportunity to fly internationally with Qatar Airways out of PHL using the seamless connection service on select code-share flights operated by US Airways.

Qatar Airways will launch daily nonstop service from Philadelphia to Doha, Qatar on April 2, 2014.

The partnership will further expand the opportunities of U.S. travelers flying internationally who want to use Qatar Airways’ growing list of destinations. Connections to PHL through US Airways are available from the following cities:

  • Los Angeles, CA (LAX)
  • San Francisco, CA (SFO)
  • Chicago, IL (ORD)
  • Boston, MA (BOS)
  • Miami, FL (MIA)
  • Tampa, FL (TPA)
  • Fort Lauderdale, FL (FLL)
  • Palm Beach, FL (PBI)
  • Fort Myers, FL (RSW)
  • Las Vegas, NV (LAS)
  • Phoenix, AZ (PHX)
  • Charlotte, NC (CLT)
  • Raleigh-Durham, NC (RDU)

Qatar Airways and US Airways’ code-share and frequent flyer partnership, which launched in 2009, focused on flights between Doha and the United States and Europe, as well as connecting flights from select European gateways to Doha.  The code-share agreement will provide customers the convenience of a single combined ticket for Qatar Airways and US Airways operated connections, and will include the benefits of one-stop check-in and automatic baggage transfer.  In addition, the airlines’ frequent flyer program members may earn miles or points while traveling on all flights of the other carrier and may redeem award tickets as well.

Qatar Airways joined the oneworld® alliance on October 30, 2013 and US Airways will become a member on March 31, 2014.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Boeing 777-2DZ LR (Longer Range) A7-BBA (msn 36012) arrives in London (Heathrow).

Qatar Airways: AG Slide Show

US Airways will leave the Star Alliance on March 30 and join oneworld the following day

US Airways (Phoenix) will join oneworld® on March 31, 2014, following completion of its merger with alliance founding member American Airlines (Dallas/Fort Worth).  All its regional affiliates, operating under the US Airways Express brand, will also transition to oneworld at the same time.

 Star Alliance logo

The entry into oneworld on March 31, 2014 will follow immediately upon their exit from the Star Alliance with the final flights on March 30, 2014.  

Oneworld logo

Copyright Photo: Nick Dean/AirlinersGallery.com. The Boeing 757-200s and Airbus A319s currently in the Star Alliance color scheme are expected to receive the oneworld version shortly. Boeing 757-2B7 N936UW (msn 27244) arrives at Seattle-Tacoma International Airport (SEA).

US Airways: AG Slide Show

Logojets Slide Show: AG Slide Show

 

AMR Corporation and the US Airways Group come together as the American Airlines Group

AMR Corporation (Dallas/Fort Worth) and US Airways Group, Inc. (Phoenix) today announced the completion of their merger to officially form American Airlines Group Inc. (NASDAQ: AAL) and begin building the new American Airlines (Dallas/Fort Worth).

According to the new airline group, “The new American has a robust global network with nearly 6,700 daily flights to more than 330 destinations in more than 50 countries and more than 100,000 employees worldwide.  The combined airline has the scale, breadth and capabilities to compete more effectively and profitably in the global marketplace. Customers will soon enjoy access to more benefits and increased service across the combined company’s larger worldwide network and through an enhanced oneworld® Alliance. US Airways will exit Star Alliance on March 30, 2014 and will immediately enteroneworld on March 31, 2014. With an expanded global network and a strong financial foundation, American will deliver significant benefits to consumers, communities, employees and stakeholders.”

Although American and US Airways have come together as one company, the process to achieve a Single Operating Certificate is expected to take approximately 18 to 24 months. In the meantime, customers should continue to do business with the airline from which travel was purchased just as they did before the merger.  In short, it is “business as usual.”  The airlines’ separate websites, aa.com and usairways.com, as well as the two airlines’ reservations systems and loyalty programs, will continue to operate separately until further in the integration process.

Customer benefits of the transaction to be rolled out over time include:

  • A codeshare agreement between American and US Airways, creating more convenient access to the combined company’s global network
  • More choices and connectivity, with nine hub airports across the U.S.
  • Global access to a stronger oneworld alliance – including joint businesses with British Airways, Iberia and Finnair across the Atlantic and with Japan Airlines and Qantas across the Pacific – creating more options for travel and benefits both domestically and internationally
  • Reciprocal American Admirals Club and US Airways Club benefits and reciprocal elite recognition
  • Upgrade reciprocity
  • Consolidation of loyalty programs and expanded opportunities to earn and redeem miles across the combined network
  • Full integration of policies, websites, kiosks and customer-facing technology to ensure a consistent worldwide travel experience
  • Co-location of ticket counters and gates in key markets
  • With firm orders for more than 600 new mainline aircraft, American will have one of the most modern and efficient fleets in the industry, and a solid foundation for continued investment in technology, products, and services

Customers will begin to see enhancements to their experience in early January, including the ability to earn and redeem miles when traveling on either American Airlines or US Airways, reciprocal American Admirals Club and US Airways Club benefits, and reciprocal elite recognition.  The combined airline expects to share more details around these key customer benefits early next year.

As the integration process is underway, American’s new Find Your Way site, aa.com/findyourway, will connect customers to key information throughout the merger integration process.  Additionally, customers should visit aa.com and usairways.com, which will continue to be regularly updated with news on any fee, policy and procedure changes.

Employees of the new American will benefit from being part of a company with a more competitive and stronger financial foundation, which will create greater career opportunities over the long term.  The completed merger also provides the path to improved compensation and benefits for employees.

Alignment of pay, benefits, work rules and other guidelines for employees of both airlines will be phased in over time so that all changes can be carefully considered.  Represented employees will continue to work under their respective Collective Bargaining Agreements, with the modifications provided under the negotiated Memoranda of Understanding for certain groups.  American’s non-represented Agents, Representatives and Planners will operate under their current terms and conditions of employment with merger-related adjustments.

The combination is expected to deliver enhanced value to American Airlines’ stakeholders and US Airways’ investors.  The transaction is expected to generate more than $1 billion in annual net synergies by 2015.

The common and preferred stock of American Airlines Group will trade on the NASDAQ Global Select Market under the symbols “AAL” and “AALCP,” respectively.

Rothschild is serving as financial advisor to American Airlines, and Weil, Gotshal & Manges LLP, Jones Day, Paul Hastings, Debevoise & Plimpton LLP and K&L Gates LLP are serving as legal counsel.  Barclays and Millstein & Co. are serving as financial advisors to US Airways, and Latham & Watkins LLP, O’Melveny & Myers LLP, Dechert LLP and Cadwalader, Wickersham & Taft LLP are serving as legal counsel to US Airways. Moelis & Company and Mesirow Financial are serving as financial advisors to the Unsecured Creditors Committee. Skadden, Arps, Slate, Meagher & Flom LLP and Togut, Segal & Segal LLP are serving as the Unsecured Creditors Committee’s legal counsel.

Copyright Photo: Brian Peters/AirlinersGallery.com. Repainted with the new tail markings, Boeing 777-223 ER N791AN (msn 30254) departs from the DFW Hub in the “new look” AA Oneworld livery. N791AN is the first American aircraft to appear in the updated Oneworld color scheme.

Video: A “Thank You” from outgoing CEO Tom Horton of the American Airlines:

American Airlines: AG Slide Show

The IAM declines to celebrate the “new” American Airlines opening bell ceremony

US Airways (Phoenix) as we mentioned yesterday, it is still technically two separate airlines – East and West operating under the US Airways name with separate contracts, crews and assigned aircraft. As the US Airways management led by CEO Doug Parker gets ready to take over the “new” merged American Airlines (Dallas/Fort Worth), the International Association of Machinists and Aerospace Workers (IAM) has reminded US Airways management that not all is well in the current US Airways, let alone a new larger airline. The IAM today issued this statement:

The International Association of Machinists and Aerospace Workers (IAM) today announced it declined management’s invitation to participate in the “new” American Airlines’ opening bell ceremony in New York City celebrating the carrier’s first day of stock trading on the NASDAQ.

“Make no mistake, this airline has ignored and disrespected IAM members at US Airways by its shameless refusal to settle a fair contract,” said IAM District 142 President Tom Higginbotham. “To stand there with American’s management and pretend there are no labor problems and celebrate ‘one airline’ would be an outright lie.”

IAM members at US Airways have been in contract negotiations for almost three years. The carrier’s management, headed by Doug Parker, who will assume the reins at the “new” American, has refused to settle new accords with IAM members at pre-merger US Airways. Earlier this year, the IAM requested a release from contract talks from the National Mediation Board (NMB), a federal agency, which, if granted, could lead to a strike.

“This is a merger in name only,” said IAM District 141 President Rich Delaney. “As long as this management team refuses to settle a fair contract, approximately 32,000 employees will remain separated and the merger’s synergies will not be realized.”

The IAM and Transport Workers Union (TWU) formed an alliance earlier this year, the TWU-IAM Employee Association, to jointly represent mechanic & related, fleet service and stockroom employees at the new airline. The agreement stipulates the TWU-IAM Association will request a single carrier determination from the NMB, a pre-requisite to integrating unionized workforces. This request will only occur once contracts are settled for IAM-represented workers at pre-merger US Airways. Workforce integration will be delayed for approximately 32,000 workers at the carrier, by far the largest percentage of the combined workforce, until the airline settles agreements with the IAM.

The IAM represents approximately 14,000 mechanic and related, fleet service, maintenance training specialist and stockroom employees at US Airways.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. US Airways’ Airbus A321-231 N552UW (msn 4957) with the “7000th Airbus” sticker by the L1 front door arrives at Los Angeles.

US Airways: AG Slide Show

American Airlines: AG Slide Show

The new American Airlines faces many challenges in the coming months

American Airlines (Dallas/Fort Worth) new incoming CEO, Doug Parker of US Airways (Phoenix), is facing his biggest professional challenges of his airline career as the merger of American Airlines and US Airways moves to the final stages. For Doug, he is actually returning to AA. Doug was at the old American Airlines from 1986 to 1991 where he served under former CEO Robert Crandall.

This article by the Star-Telegram outlines the challenges Doug is now facing at the new AA as he prepares to take the leadership role in the day-to-day operations. The new world’s largest airline is facing many challenges as it integrates again two airlines. Critics will argue that Doug has failed to fully integrate America West Airlines (Phoenix) with the old US Airways (Washington). Today the current US Airways still operates as two airlines with East and West divisions with separate contracts, crews and aircraft. Now Doug will have to integrate three airlines into one.

The good news is Parker has already negotiated conditional labor agreements with AA’s three largest unions.

Read the full article: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. Doug is probably going to have to accept the new American look due to the already large number of repainted AA aircraft and the on-going “new look” advertising campaign. This effort by the current AA management has probably already settled the decision on what AA will look like going forward even though this livery is not Doug’s design. It will always be known as out-going CEO Tom Horton’s livery. American’s Boeing 737-823 WL N973AN (msn 29548) climbs away from the runway at Los Angeles International Airport in the new look.

American Airlines: AG Slide Show

US Airways: AG Slide Show

Southwest and Virgin America interested in buying AA-US slots at New York LaGuardia

Southwest Airlines (Dallas) and Virgin America (San Francisco) are interested in buying the slots at New York (LaGuardia) that American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) have agreed to give up with the DOJ for the merger approval according to Reuters.

Read the full report: CLICK HERE

Copyright Photo: Ken Petersen/AirlinersGallery.com. Southwest Airlines’ Boeing 737-7H4 WL N216WR (msn 32488) with “Free Bags Fly Here” extra markings departs from Raleigh-Durham International Airport (RDU).

Southwest Airlines: AG Slide Show

Virgin America: AG Slide Show

AMR proposes to exit Chapter 11 and merge with the US Airways Group on December 9

AMR Corporation (American Airlines) (Dallas/Fort Worth) today issued this statement:

Today, the U.S. Bankruptcy Court for the Southern District of New York approved the settlement of the lawsuit reached with the U.S. Department of Justice (DOJ) and certain states relating to the merger of AMR Corporation and US Airways Group, Inc. (US Airways). The court also ruled that the merger may be consummated despite the pendency of a private antitrust lawsuit. As a result of the Court’s rulings, AMR Corporation, the parent company of American Airlines, Inc., today filed with the U.S. Bankruptcy Court for the Southern District of New York a notice that the proposed effective date of the Plan of Reorganization will be December 9, 2013.

Consummation of AMR’s Plan of Reorganization and the merger of US Airways Group, Inc. with and into a subsidiary of AMR Corporation is planned to be completed prior to the securities markets opening on December 9, 2013. Assuming this expected schedule, the last day of trading of all outstanding securities of AMR, including the common stock trading under the symbol “AAMRQ,” and the common stock of US Airways Group, Inc. (Phoenix) will be December 6, 2013.

Upon the anticipated closing of the merger on December 9, 2013, AMR Corporation will be renamed American Airlines Group Inc., with its common stock to be listed and traded on the NASDAQ Global Select Market under the symbol “AAL” and its preferred stock to be listed and traded on the NASDAQ Global Select Market under the symbol “AALCP.”

At the time the Plan of Reorganization becomes effective and the merger closes, each outstanding share of US Airways Group, Inc. common stock will be converted into one share of American Airlines Group Inc. common stock and substantially all pre-Chapter 11 unsecured claims against and outstanding equity securities of AMR Corporation will be satisfied by  American Airlines Group Inc. common stock or preferred stock in accordance with the Plan of Reorganization.

This merger will create the world’s largest airline. It will be the end of US Airways as a stand alone company (operating initially under the American Airlines Group until the merger is finally implemented). The top management of US Airways will essentially take over the new American Airlines.

Copyright Photo: Michael B. Ing/AirlinersGallery.com. American’s Boeing 737-823 N922NN (msn 29523) soars away from Los Angeles International Airport.

American Airlines: AG Slide Show

US Airways: AG Slide Show

AMR asks the bankruptcy court to approve the DOJ agreement leading to a merger with US Airways Group

AMR Corporation (American Airlines) (Dallas/Fort Worth) has asked the bankruptcy court to approve the settlement agreement with the Department of Justice (DOJ) permitting it to merge with the US Airways Group (US Airways) (Phoenix) according to this report by Reuters. One group of consumers opposed the merger, otherwise no one is objecting to DOJ settlement according to the AMR lawyers.

Bankruptcy Court Judge Sean Lane said he would offer a ruling in 24 to 36 hours.

If approved, the new merged group would become the American Airlines Group.

Read the full report: CLICK HERE

Copyright Photo: Michael B. Ing/AirlinersGallery.com. The rapid repainting of the American fleet in the new 2013 look has likely hit the “tipping point” that incoming CEO Parker is now unlikely to change due to the delay in getting the merger approval. This livery will probably remain as the color scheme of the “new American” once the merger is completed. The new American is really America West Airlines (due to the ongoing management) doing business soon as American Airlines (formerly US Airways). Boeing 777-223 ER N770AN (msn 29578) climbs away from Los Angeles.

American Airlines: AG Slide Show

US Airways: AG Slide Show

Planely Speaking: Growing Pains: Will the Merger Result in Higher Fares and Reduced Service?

Planely Speaking

Guest Editor Aaron Newman
Aaron Newman (small)

Growing Pains: Will the Merger Result in Higher Fares and Reduced Service?

By Aaron Newman

As I wrote in my previous article, The Department of Justice (DOJ) filed suit in August to stop the proposed merger of American and U.S. Airways on antitrust grounds. The DOJ said the merger, which will create the world’s largest airline, would lead to higher fares for customers and less competition – reducing service to small and medium sized cities. In their suit against the merging airlines, The DOJ claimed the following; “the merger between US Airways and American would likely substantially lessen competition, and tend to create a monopoly, in violation of Section 7 of the Clayton Act.” Will this merger actually create a monopoly or oligopoly resulting in higher fares? Will the travelling public be left to cope with a reduction in service?

Higher Fares?   

With last week’s merger  announcement (see this report by Reuters) the US Airways and American Airlines merger has resulted in four airlines; the new American Airlines, United, Delta and Southwest to control nearly 90 percent of the domestic airline market according to this report by NBC News. Some argue that because of supply and demand, together with rising fuel prices the average cost of fares will potentially rise once the merger is fully implemented. The DOJ initially claimed that rising fares will not be alleviated by new carriers or low-cost carriers.  “Low-cost carriers are not likely to replace the flights that would be cut after a merger between American and US Airway, and the ones that are left will cost more.”

US Airways effectively competes for travelers today by offering discounts of up to 40 percent for connecting flights on other airlines’ nonstop routes with Advantage Fares. Some industry analysts claim once this merger is completed, the combined airline’s pricing structure will look more like the existing American, Delta and United. As a result, the popular Advantage Fares program will likely be eliminated, resulting in higher prices and less services for consumers.

Most analysts, myself included, praise this marriage as the potential end of major financial turbulence for the largest U.S. airlines.  The American-US Airways merger is the latest wave of consolidation that will help return the industry to continued profitability. This report by Reuters explains that with a new, merged airline the public may lose some service, but in the long run we’ll benefit by a stronger, more profitable airline. It shouldn’t surprise if fares went up slightly based on a variety of pricing influences including demand, capacity, and competition. However, the public will benefit more from a stronger merged airline, than the slight fare difference from two stand-alone airlines. Unions at AMR (American’s parent company) and US Airways share this view. The unions have expressed confidence that this deal could reverse years of decline at once-great American, and lift US Airways workers from their below average compensation. “We have the opportunity to transform American into an industry powerhouse.”

US Domestic Airfares Graph

Reduced Service? 

Bill Baer, head of the Justice Department Antitrust Division, said in a statement prior to the agreement of this merger that with the end of competition between US Airways and American, the industry will be deprived of a healthy competitive environment. “Both airlines have stated they can succeed on a standalone basis, and consumers deserve the benefit of that continuing competitive dynamic,” Baer said.

American-US Airways Hubs

“The new American will fly all the routes to all the markets we currently serve,” US Airways Chief Executive Doug Parker told Congress in June. “Where appropriate, we expect to increase such service.” Doug Parker may be a little optimistic with this statement; I project that some cities will lose some routes as the new American will experience growing pains combining nine domestic hubs. Major restructuring will not occur until 2016-2017as part of the DOJ agreement was to maintain all hubs for three years. I do not foresee a situation like Pittsburgh or Memphis, but there will be restructuring in order to grow appropriately.  The two hubs that will see the majority of change will be New York JFK and Los Angeles. With the proximity to Philadelphia, slot restrictions, and tough international competition, New York JFK’s potential is limited. I foresee Philadelphia and Charlotte as the primary east coast domestic hubs. Same scenario applies to LAX; tough competition and limited growth opportunities make Phoenix the smartest choice for a west coast domestic hub. These two cities will obviously not be hurt by a reduction in service from American Airlines.

My Take

This merger will benefit the new airline, customers, and the industry as a whole. The airline industry is currently on a path to sustained profits, and a stronger merged American Airlines will produce similar results. Profitable airlines benefit customers, employees, shareholders and the cities the airlines serve.  Delta Airlines is producing record profits, and United Airlines is near completion of the largest merger to date, American Airlines needed this merger to be a viable competitor to its two larger competitors.

Consumers have benefited from intense price competition in the past; such pricing is not sustainable as past bankruptcies have shown. Going forward, the airlines will likely shift the focus of their competition to service and product offering instead of intense price wars (i.e. industry’s onboard improvements). The combination of American Airlines and US Airways creates a better network than either airline could build on its own. American’s extensive operations throughout the central U.S. from its Chicago and Dallas hubs provide critical coverage where US Airways is undersized. US Airways’ operation in the Northeast does the same for American.  New entrants will find their way into any markets that become underserved by this merger. Spirit Airlines has recently found ways to succeed in fortress hubs (i.e. Dallas and Detroit), and JetBlue has an expansive network that will compete in the northeastern US. These ultra-low cost carriers will find opportunities to fill any void that a merger leaves behind. If legacy airlines let fares climb, then smaller competitors (Spirit, Allegiant, Frontier, and JetBlue) will come in and thrive.

Top Copyright Photo: Eddie Maloney/AirlinersGallery.com.

Bottom Copyright Photo: Brian McDonough/AirlinersGallery.com.

US Airways to operate seasonal Philadelphia-Edinburgh flights

US Airways (Phoenix) will offer new nonstop daily service from the airline’s international gateway at Philadelphia International Airport (PHL) to Scotland’s capital city of Edinburgh.  For the first time, the airline will operate flights to and from Edinburgh Airport (EDI) on 176-seat dual-class Boeing 757-200 aircraft between May 23, 2014 and October 1, 2014. 

The flight schedule is as follows:

Flight # Origin Destination Dep. Time

Arrival Time

Start Date End Date
784 PHL EDI 8:50 p.m.

8:40 a.m.*

May 23, 2014 Sept. 30, 2014
785 EDI PHL 10:50.a.m.

1:35 p.m.

May 24, 2014 Oct. 1, 2014

*Flight arrives the following day.

With the new service, US Airways will operate 472 weekday departures and serve 118 destinations in the U.S., Canada, Latin America, Mexico, Europe and the Caribbean from Philadelphia International Airport.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Boeing 757-2B7 N200UU (msn 27809) taxies to the runway at the Charlotte hub.

US Airways: AG Slide Show

The “new American” to operate under the umbrella of the American Airlines Group Inc.

AMR Corporation (Dallas/Fort Worth), whose principal operating subsidiary is American Airlines, Inc. (Dallas/Fort Worth), and US Airways Group, Inc. (Phoenix) today announced that they have applied to list the common stock of the combined company on the NASDAQ Global Select Market. Upon closing of the merger and AMR’s emergence from Chapter 11, the combined company will be renamed American Airlines Group Inc. and will use the ticker symbol “AAL.” Additionally, the common stock of both US Airways Group, Inc. and AMR Corporation will be cancelled and shareholders will receive equity interests in American Airlines Group Inc. per the terms of the Merger Agreement and Plan of Reorganization.

Copyright Photo: Ken Petersen/AirlinersGallery.com. American Airlines’ Boeing 777-323 ER N721AN (msn 31546) prepares to touch down in New York (JFK).

American Airlines: AG Slide Show

Allied Pilots Association endorses the DOJ settlement and merger of American and US Airways

Allied Pilots Association logo

The president of the Allied Pilots Association (APA), certified collective bargaining agent for the 10,000 pilots of American Airlines, issued the following statement in response to news that the Justice Department has settled its lawsuit with American Airlines and US Airways regarding the airlines’ pending merger.

“The Allied Pilots Association leadership is pleased the DOJ and the two airlines have found a mutually acceptable way to address concerns about the merger. As we have said since the lawsuit was filed, this merger is pro-competition,” said APA President Capt. Keith Wilson. “Merging with US Airways will remedy American Airlines’ longstanding network shortfalls and put American on equal footing with Delta and United. With the merger, American will offer travelers a viable alternative to Delta and United.

“Today marks the culmination of an aggressive and unconventional strategy APA began pursuing early last year. Our primary goals were to help ensure American would survive and thrive, thereby ensuring long-term career stability for our pilots. This merger will accomplish both goals.

“With the DOJ settlement, American now has the opportunity to return to a position of industry preeminence. We look forward to working with our colleagues at the US Airline Pilots Association as we shift our focus to negotiating a joint collective bargaining agreement.”

Delta welcomes the settlement agreement between the DOJ and AMR-US Airways Group

Delta Air Lines (Atlanta) issued the following statement in response to the settlement of litigation brought by the U.S. Department of Justice challenging the merger of American Airlines and US Airways.

“Delta welcomes the settlement agreement and looks forward to the opportunity to acquire slots that will be divested under the agreement, particularly at Washington-Reagan National Airport. Delta is the airline best positioned to continue competitive nonstop flights from Reagan National to small- and mid-sized cities that could otherwise see service reduced or eliminated, which should be a strong consideration in the divestiture.”

Copyright Photo: Bruce Drum/AirlinersGallery.com. Delta’s Boeing 757-232 N6713Y (msn 30777) is pictured in action at Seattle-Tacoma International Airport.

Delta Air Lines: AG Slide Show

 

American and US Airways settle with the Department of Justice giving up 52 DCA slot pairs and 17 LGA slot pairs, paving the way towards a merger

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc., (Dallas/Fort Worth) and US Airways Group, Inc. (US Airways) (Phoenix) today announced that the airlines have settled the litigation brought by the U.S. Department of Justice (DOJ), the States of Arizona, Florida, Michigan and Tennessee, the Commonwealths of Pennsylvania and Virginia, and the District of Columbia challenging the merger of AMR and US Airways. The companies also announced an agreement with the U.S. Department of Transportation (DOT) related to small community service from Washington Reagan National Airport (DCA).

Tom Horton, chairman, president and CEO of AMR, and incoming chairman of the board of the combined company, said, “This is an important day for our customers, our people and our financial stakeholders. This agreement allows us to take the final steps in creating the new American Airlines. With a renewed spirit, we are about to create the world’s leading airline that will offer, along with our oneworld® partners, a comprehensive global network and service by the best people in the business. There is much more work ahead of us but we’re energized by the challenge and look forward to competing vigorously in the ever-changing global marketplace.”

Doug Parker, chairman and CEO of US Airways, and incoming CEO of the combined airline, said, “This is very good news and we are grateful to all who have made it happen. In particular, we are thankful to our employees, who throughout this process continued to believe in a better future as one airline and who voiced their support passionately and consistently. We also want to thank the elected officials in the states and communities we serve, the business leaders in our hub cities, and the thousands of customers who endorsed and supported this effort. Thank you as well to the U.S. Department of Justice, the state attorneys general and the U.S. Department of Transportation. We are pleased to have this lawsuit behind us and look forward to building the new American Airlines together.”

Under the terms of the settlement, the airlines will divest 52 slot pairs at Washington Reagan National Airport (DCA) and 17 slot pairs at New York LaGuardia Airport (LGA), as well as certain gates and related facilities to support service at those airports. The airlines also will divest two gates and related support facilities at each of Boston Logan International Airport, Chicago O’Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport. The divestitures will occur through a DOJ approved process following the completion of the merger. Despite the divestitures, the new American is still expected to generate more than $1 billion in annual net synergies beginning in 2015, as was estimated when the merger was announced in February.

After completion of the required divestitures, the combined company expects to operate 44 fewer daily departures at DCA and 12 fewer daily departures at LGA than the approximately 290 daily DCA departures and 175 daily LGA departures that American and US Airways operate today. The divestitures required by the settlement are not expected to impact total employment at the new American.

To ensure much of the service currently operated by the carriers to small- and medium-sized markets from DCA is maintained, the new American has agreed with the DOT to use all of its DCA commuter slot pairs for service to these communities. The new American intends to announce the service changes that will result from the divestitures in advance of the sale of the DCA and LGA slots, so that the airlines acquiring those slots have the opportunity to maintain service to those impacted communities.

In the settlement agreement with the state Attorneys General, the new American has agreed to maintain its hubs in Charlotte, New York (Kennedy), Los Angeles, Miami, Chicago (O’Hare), Philadelphia, and Phoenix consistent with historical operations for a period of three years.  In addition, with limited exceptions, for a period of five years, the new American will continue to provide daily scheduled service from one or more of its hubs to each plaintiff state airport that has scheduled daily service from either American or US Airways. A previous settlement agreement with the state of Texas will be amended to make it consistent with today’s settlement.

Completion of the merger remains subject to the approval of the settlements by the U.S. Bankruptcy Court, and certain other conditions. The companies now expect to complete the merger in December 2013.

Copyright Photo: Andi Hiltl/AirlinersGallery.com. American Airlines’ Boeing 767-323 ER N376AN (msn 25445) touches down in Zurich.

American Airlines: AG Slide Show

US Airways: AG Slide Show

US Airways joins the PED airline list

US Airways (Phoenix) customers as of yesterday (November 7) can now use certain portable electronic devices (PEDs), including e-books, tablets and smartphones, during taxi, takeoff and landing while in “airplane mode” – a departure from the previous Federal Aviation Administration (FAA) restriction on use below 10,000 feet.  Customers on US Airways domestic mainline flights will now be permitted to use small PEDs during all phases of flight.

In approving the use of PEDs, the FAA ensured that all US Airways mainline aircraft are equipped to safely handle implementation of the new recommendations.  US Airways continues to work with all partner airlines operating as US Airways Express to ensure timely implementation of their individual programs which require separate FAA approval.

Travelers should keep in mind the following details with regard to the new policy:

  • The FAA’s new recommendations regarding onboard PED use apply only to domestic flights flown by US Airways mainline aircraft.
  • Phone calls are not permitted once the main cabin door is closed or before a flight attendant makes an announcement upon arrival.
  • Customers should adhere to all crewmember safety instructions and refrain from using PEDs during pre-flight safety announcements.
  • During takeoff and landing, customers are now permitted to secure items lighter than two pounds by holding them (with the option of securing them in seatback pockets).  PEDs heavier than two pounds must be secured for taxi, takeoff and landing in an overhead bin or underneath the seat in front of them.
  • PEDs must be operated in “airplane mode” or with cellular services disabled.
  • In-flight Wi-Fi is available on most aircraft once it reaches an altitude of 10,000 feet and an onboard announcement has been made.

US Airways’ adoption of the new policy is the latest step in the company’s effort to upgrade its customers’ in-flight experience.  Earlier this year, the airline installed Gogo Wi-Fi In-flight internet on 270 Airbus A319, A320, A321 and Embraer 190 aircraft along with 58 Embraer 170 and 175 US Airways Express aircraft – outfitting 90 percent of the company’s domestic aircraft with wireless internet capabilities.  US Airways’ Airbus A319, A320 and A321 planes are equipped with Gogo’s ATG-4 (air-to-ground) technology, which strengthens the wireless internet capacity and increases the available data rate for customers.

Copyright Photo: Jay Selman/AirlinersGallery.com. Airbus A321-211 N195UW (msn 3633) arrives at the Charlotte hub.

US Airways: AG Slide Show

Reuters: DOJ asking American and US Airways to give up some DCA slots and routes for a merger agreement

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) reportedly are considering a pre-trial offer by the Department of Justice (DOJ) to give up slots at Ronald Reagan National Airport (the combined airline would control 69 percent of the DCA slots) in Washington and some other routes around the country according to this report by Reuters citing sources and the Wall Street Journal. The DOJ is focusing on over 1,000 city pairings where the combined airline would dominate. However in a deregulated marketplace where any U.S. airline can enter a market, how would the “new American” if approved, be prevented from reentering a market again in the future? DCA is slot controlled but most of the airports on the DOJ list are “free entry” airports.

Read the full report: CLICK HERE

Copyright Photo: Brian McDonough/AirlinersGallery.com. American’s Boeing 737-823 N968AN (msn 30095) completes its approach from the south into Washington’s slot-controlled Reagan National Airport.

Have you seen the “new look” AirlinersGallery.com photo library website?

American Airlines: AG Slide Show

US Airways: AG Slide Show

American Airlines and US Airways consider a settlement agreement with the DOJ

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) are now considering a settlement agreement with the Department of Justice (DOJ) according to this report by Reuters. The reported deal would involve giving up an unspecified number of Washington Reagan National Airport slots. The trial to block the proposed merger is due to start on November 25.

Read the full report: CLICK HERE

Copyright Photo: Brian McDonough/AirlinersGallery.com. The battle and approval of the merger has always been about the “fortress” number of Reagan National slots. American’s Boeing 737-823 N924NN (man 33486) banks on the river approach into Washington’s downtown Reagan National Airport.

American Airlines: AG Slide Show

US Airways: AG Slide Show

US Airways Group reports a 3Q GAAP net profit of $216 million

US Airways Group, Inc. (US Airways) (Phoenix) today reported its third quarter 2013 financial results. For the third quarter 2013, pretax profit excluding net special items was a record $367 million, a $174 million, or 90%, year-over-year improvement.

On a GAAP basis, the Company reported a third quarter pretax profit of $336 million, up from $246 million in 2012. The GAAP net profit for the third quarter 2013 was $216 million, or $1.04 per diluted share versus a GAAP net profit of $245 million, or $1.24 per diluted share, for the same period in 2012. The Company’s 2013 third quarter results include a provision for income tax of $120 million, comprised principally of non-cash federal income tax expense, while the 2012 provision for income tax was only $1 million.

US Airways’ Chairman and CEO Doug Parker said, “We are extremely pleased to report a record pretax profit in the third quarter. These tremendous results are a testament to our 32,000 team members and their dedication to our millions of customers.

Revenue and Cost Comparisons

Total revenues in the third quarter were a record $3.9 billion, up 9.1 percent versus the third quarter 2012 on a 4.1 percent increase in total available seat miles (ASMs). Total revenue per ASM was a record 15.97 cents, up 4.9 percent versus the same period last year driven by a 4.4 percent increase in passenger yield and a record load factor of 85.5 percent.

Total operating expenses in the third quarter were $3.4 billion, up 5.0 percent over the same period last year on a 4.1 percent increase in ASMs. Mainline cost per available seat mile (CASM) was 12.94 cents, up 1.9 percent. Excluding special items, fuel and profit sharing, mainline CASM was 8.08 cents, up 1.7 percent versus the same period last year. Express CASM excluding special items and fuel was 14.36 cents, up 2.8 percent on a 0.4 percent decrease in ASMs.

Liquidity

During the third quarter, the Company repaid in full the prepaid miles loan issued in connection with its Barclays affinity credit card program at its face amount of $200 million. As of September 30, 2013, the Company had $3.9 billion in total cash and investments, of which $350 million was restricted. This is up $1.1 billion from the Company’s third quarter 2012 total cash and investments balance of $2.8 billion, of which $347 million was restricted.

Special Items

The Company recognized approximately $31 million of net special items before taxes in the third quarter. Mainline operating special items totaled $40 million and consisted primarily of merger related costs. Express operating special items consisted of a $14 million credit resulting from a favorable arbitration ruling related to a vendor contract. The Company also recognized approximately $5 million in nonoperating special items primarily related to non-cash write offs of debt discount associated with conversions of our 7.25% convertible senior notes. The net tax effect of these special items was approximately $6 million.

Notable Accomplishments

  • As part of the Company’s fleet renewal program, the Company took delivery of five new A321 aircraft and one new A330-200 aircraft. These aircraft replaced 737-400 aircraft.
  • Standard & Poor’s (S&P) raised the Company’s credit rating by one notch from “B-” to “B.” S&P cited the Company’s improved financial results and strong cash position as part of its upgrade.
  • As part of the Company’s operational incentive program, employees have earned approximately $10 million in year-to-date operational incentive payouts.
  • Pilots at PSA Airlines, a wholly-owned subsidiary of US Airways, represented by the Air Line Pilots Association (ALPA), ratified a Letter of Agreement that amends their existing collective bargaining agreement originally reached with the airline on March 27, 2013.
  • Introduced US Airways’ Track Your Bag, a free service allowing customers with a smartphone, tablet or laptop connected to the internet access to real-time information on the status of their checked luggage. Customers can check when their luggage is loaded and offloaded on their flight.
  • Announced agreement with Bags VIP delivery service that allows customers to schedule luggage delivery directly to their home, hotel or business. Travelers can schedule and pay for Bags VIP delivery up to one hour prior to their scheduled departure by visiting maketraveleasier.com/usairways.
  • US Airways’ Education Foundation awarded $270,000 in educational grants to 21 nonprofit organizations in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C. as part of its 2013 Community Education Grant Program.
  • In partnership with the American Cancer Society’s Making Strides Against Breast Cancer (MSABC), the Company has launched its second annual “BE PINK” campaign. As part of the campaign, thousands of employees have purchased and are wearing pink uniform items in October, which is National Breast Cancer Awareness Month. Proceeds from the sale of uniform items are donated to the American Cancer Society. In addition, employees will show their support of breast cancer programs through the sponsorship of MSABC walks in the airline’s hub cities of Charlotte, N.C., Philadelphia, Phoenix and Washington, D.C.
  • As part of the Company’s “Hope Takes Flight” campaign, which benefits United Way, US Airways’ employees raised more than $1.4 million. Money raised will go to support the communities in which US Airways’ employees live and work.

Copyright Photo: Bruce Drum/AirlinersGallery.com. The new Airbus A321s are gradually replacing the older Boeing 737-400s which should be gone by the end of 2014. This phase out will end the company’s long relationship with the Boeing 737. Boeing 737-4B7 N434US (msn 24556) climbs away from runway 27R at Fort Lauderdale-Hollywood International Airport.

US Airways: AG Slide Show

US Airways to launch four new international routes from Charlotte in the spring

US Airways (Phoenix) will launch new nonstop service between its largest hub at Charlotte, North Carolina and Barcelona, Spain; Brussels, Belgium; Lisbon, Portugal and Manchester, England this spring.  The four flights from Charlotte supplement the airline’s current service to these destinations from its international gateway at Philadelphia International Airport. Service to Barcelona, Lisbon and Manchester will begin on May 22, 2014.  Service to Brussels will launch on June 5, 2014. The new flights bring the number of international destinations US Airways serves from Charlotte to 38 – ten cities in Europe and 28 in Canada, Mexico, Latin America, South America and the Caribbean.  US Airways now serves 145 airports in 28 countries from Charlotte.

The flight schedules are as follows:

From Charlotte (CLT) to: Departure Arrival Aircraft Type First Day of Service Last day of service
Barcelona (BCN) 6:35 p.m. 9:10 a.m. Airbus A330-200 with Envoy Suite May 22, 2014 Oct. 24, 2014
Lisbon (LIS) 8:25 p.m. 9:20 a.m. Boeing 757 May 22, 2014 Sept. 28, 2014
Manchester(MAN) 8:35 p.m. 9:30 a.m. Boeing 757 May 22, 2014 Sept. 28, 2014
Brussels (BRU) 4:30 p.m. 7:00 a.m. Boeing 767 June 5, 2014 Sept. 1, 2014
To Charlotte(CLT) from: Departure Arrival Aircraft Type First Day of Service Last day of service
Barcelona (BCN) 2:30 p.m. 6:15 p.m. Airbus A330-200 with Envoy Suite May 23, 2014 Oct. 25, 2014
Lisbon (LIS) 11:20 a.m. 3:15 p.m. Boeing 757 May 23, 2014 Sept. 29, 2014
Manchester (MAN) 2:25 p.m. 6:20 p.m. Boeing 757 May 23, 2014 Sept. 29, 2014
Brussels (BRU) 10:15 a.m. 1:45 p.m. Boeing 767 June 6, 2014 Sept. 2, 2014

Customers traveling between Charlotte and Barcelona in Envoy, US Airways international business class, will experience the Envoy Suite, which is featured on all of the airline’s Airbus A330 aircraft. The Envoy Suite features an adjustable seat that reclines into a fully flat bed, personal in-flight entertainment and a standard 110-volt universal power outlet so customers can work, play or relax.

Copyright Photo: Bruce Drum/AirlinersGallery.com. Airbus A330-243 N279AY (msn 1011) climbs away from the runway at the Charlotte-Douglas International Airport (CLT) hub.

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US Airways: AG Slide Show

AMR reports a third quarter net profit of $420 million, excluding reorganization and special items

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc., (Dallas/Fort Worth) reported results for the third quarter ended September 30, 2013. Key highlights include:

  • Net profit of $530 million, excluding reorganization and special items, a $420 million improvement year-over-year; on that basis, it is the most profitable quarter in company history
  • Revenue of $6.8 billion, up 6.2 percent year-over-year; the highest quarterly revenue total in company history
  • Consolidated unit costs, excluding fuel and special items, improved 5.0 percent year-over-year, marking the fourth consecutive quarter of unit cost reduction
  • AMR ended the third quarter with approximately $7.7 billion in cash and short-term investments, including restricted cash, compared to a balance of approximately $5.1 billion at the end of the third quarter of 2012
  • American continued its fleet renewal, taking delivery of ten fuel-efficient Airbus A319s, eight Boeing 737-800s, and one Boeing 777-300 ER in the quarter, while also placing into service four Embraer ERJ 175s operated by one of its affiliated regional carriers
  • American and US Airways Group are vigorously defending the lawsuit filed by the Department of Justice seeking to enjoin their planned merger and continue to move forward with developing a merger integration plan
  • American accrued $59 million in employee profit sharing in the quarter, and has accrued a total of $65 million for employee profit sharing this year. The anticipated distribution would be the first profit sharing payout in thirteen years

“We are pleased to report our highest quarterly net profit in American’s history, excluding reorganization and special items, thanks to the hard work of the entire American team,” said Tom Horton, AMR’s chairman, president and CEO. “Continued execution on our product, network and alliance strategy, combined with cost efficiencies from restructuring and fleet renewal, creates strong momentum towards our planned merger with US Airways. And we are especially pleased to set aside $59 million this quarter in expectation of making our first profit-sharing payout since 2001 to our people who have done so much to put American back on top.”

In the third quarter of 2013, GAAP net profit was $289 million, a $527 million improvement compared to the prior-year period. Excluding reorganization and special items, the third quarter 2013 net profit was $530 million. This is a $420 million improvement compared to the prior-year period. In the quarter, AMR had $241 million of reorganization and special items, which are detailed below.

Financial Progress

AMR continued to drive profitability and significant margin expansion in the third quarter, achieving a pre-tax margin of 7.8 percent, excluding reorganization and special items, an improvement of 6.1 points over the prior-year period, and a GAAP pre-tax margin of 4.2 percent, an improvement of 7.9 points compared to the third quarter of 2012.

On a trailing twelve month basis, the third quarter marked AMR’s seventh consecutive quarter of improved pre-tax margins.  This margin expansion is driven by the realization of restructuring efforts to improve the operational and financial performance of the company, and AMR expects to realize additional improvements as the company continues to implement new terms reached with certain vendors and suppliers. AMR also expects results going forward to be bolstered as it competes more effectively by better matching aircraft size with demand through the continued deployment of the new Airbus A319 narrowbodies and the new two-class large regional jets, both of which started entering into service in the third quarter.

“As we continue to deliver substantial margin expansion and record results, we are positioning the company for long-term success,” said Bella Goren, AMR’s chief financial officer. “In addition, our financing activities have significantly enhanced our liquidity, and are enabling us to pay down high-interest debt and efficiently fund our impending emergence from the restructuring process.”

In the third quarter of 2013, AMR strengthened its liquidity and reduced its effective interest rates through several key transactions. AMR completed a private offering of $1.4 billion of enhanced equipment trust certificates with a coupon of 4.95 percent. The proceeds from this offering were used to pay off in full three prior aircraft financings with coupons of 8.625 percent, 10.375 percent, and 13 percent. The third quarter also marked the closing of an $850 million term loan, secured by American’s South American slots, gates, and routes, incremental to the $1.05 billion term loan secured by the same collateral that closed in the second quarter.

Revenue Performance

For the third quarter of 2013, AMR reported record consolidated revenue of approximately $6.8 billion, up 6.2 percent versus the same period last year. Consolidated passenger revenue was approximately $6.0 billion, an increase of 6.4 percent – and the highest quarterly passenger revenue in company history. Mainline and regional passenger revenue and cargo revenue each increased year-over-year as total operating revenue in the third quarter of 2013 was approximately $399 million higher than the third quarter of 2012.

“American’s solid revenue momentum continued in the third quarter, with especially strong performance at our domestic hubs, and in the Atlantic and Caribbean regions,” said Virasb Vahidi, American’s chief commercial officer. “We’re particularly pleased with our strength across the Atlantic, reflecting the success of our joint business with British Airways, Iberia and Finnair.

Through this partnership, we offer our customers more New York-London travel options than any other alliance, with 17 daily nonstop flights from New York area airports. This is yet another example of putting the customer at the center of everything we do.”

Consolidated passenger revenue per available seat mile (unit revenue) increased 3.4 percent versus the same quarter last year, to an all-time record for any quarter of 13.79 cents per available seat mile (ASM). Mainline unit revenue at American increased 4.0 percent versus the prior-year period, reaching an all-time record for any quarter of 13.11 cents per ASM.

The company’s unit revenue performance was driven by record passenger yield, or revenue per passenger mile, of 16.36 cents per mile, a 4.0 percent year-over-year improvement, and strong mainline and consolidated load factors, or percentage of seats filled, of 85.0 percent and 84.3 percent, respectively.

Operating Expense

For the third quarter, AMR’s consolidated operating expenses decreased $248 million, or 3.9 percent, versus the same period in 2012. Mainline and consolidated cost per available seat mile (unit cost) in the third quarter decreased 7.4 percent and 6.6 percent, respectively.

Excluding special items, AMR’s consolidated operating expenses decreased $52 million, or 0.8 percent, year-over-year.

Fuel expense in the third quarter increased $40 million year-over-year on a 2.9 percent increase in ASMs. Taking into account the impact of fuel hedging, AMR paid $3.04 per gallon for jet fuel in the third quarter of 2013 versus $3.12 per gallon in the third quarter of 2012, a 2.6 percent decrease.

Excluding fuel and special items, mainline and consolidated unit costs in the third quarter of 2013 decreased 5.4 percent and 5.0 percent year-over-year, respectively, primarily driven by the company’s restructuring efforts. This was the fourth consecutive quarter of non-fuel unit cost reduction.

In addition, AMR achieved an operating profit of $713 million and an operating margin of approximately 10.4 percent, an improvement of approximately $451 million and 6.3 points, respectively, over the prior-year period, excluding special items in both periods. On a GAAP basis, AMR realized an operating profit of $698 million and an operating margin of approximately 10.2 percent, an improvement of approximately $647 million and 9.4 points, respectively, over the prior-year period.

An unaudited summary of third quarter 2013 results, including reconciliations of non-GAAP to GAAP financial measures, is available in the tables at the back of this press release.

Cash Position

The company ended the third quarter with approximately $7.7 billion in cash and short-term investments, including a restricted cash balance of $935 million, compared to a balance of approximately $5.1 billion in cash and short-term investments, including a restricted cash balance of approximately $847 million, at the end of the third quarter of 2012. The increase was generated by operating activities and by financing initiatives in 2013.

Fleet Renewal and Transformation

In the third quarter, American made significant progress on its fleet renewal program, adding new, efficient and more comfortable aircraft.

  • The newest member of America’s fleet – the Airbus 319 – went into service in September, flying from Dallas/Fort Worth to Charlotte, Cleveland, Memphis and Wichita. These modern and fuel-efficient aircraft represent an important milestone in the company’s journey to transform the travel experience for its customers. American took delivery of ten A319s in the third quarter.
  • The company launched its first service with the 76-seat Embraer ERJ 175 operated by one of its affiliated regional carriers. This large regional aircraft in a two-class cabin configuration allows the company to better match supply and demand with the right amount of schedule frequency.
  • American also took delivery of eight Boeing 737-800s and one Boeing 777-300ER.

In the fourth quarter, American expects to take delivery of its first five Airbus A321 trans-con aircraft – specially configured with fully lie-flat First and Business Class seats. These aircraft are anticipated to enter service in January 2014.

Through the third quarter, American has taken delivery of 43 out of the 59 new mainline aircraft slated for delivery in 2013, including seven Boeing 777-300 ERs.

Pending Merger with US Airways Group

  • In the third quarter, American and US Airways Group continued preparing for their planned merger announced on Feb. 14, 2013.
  • On Aug. 13, the Antitrust Division of the Department of Justice (DOJ) and certain states filed a lawsuit to enjoin the merger.
  • American and US Airways Group are vigorously defending the lawsuit. The trial is scheduled to begin Nov. 25. The company is confident that the merger would provide significant customer benefits and enhance competition in the airline industry.
  • On Oct. 1, American and US Airways Group announced they reached an agreement with the Texas Attorney General to support the proposed merger of American and US Airways Group.
  • American and US Airways Group continue to move forward with developing a merger integration plan designed to ensure a positive outcome for their customers, employees and stakeholders.

The merger is conditioned on the satisfactory resolution of the pending antitrust litigation with the DOJ and other customary closing conditions.

Operational Performance

American ran a solid operation during the busy summer travel season, achieving an on-time arrival rate of 79.5 percent, its best third quarter performance since 2010. American’s improved operational results for the quarter also include a completion factor of 99.0 percent, its best since 2010.

Recent Business Highlights

American has a strong commitment to its customers, its people, and the communities it serves. Recent American highlights include:

  • Launching new codeshare agreements with Bogota-based LAN Colombia and Sao Paulo-based TAM Airlines, which will add new service to key destinations and increase American’s network connectivity in the Latin American region, further strengthening American’s relationship with LATAM Airlines Group
  • Strengthening its global presence to best meet customer demand by announcing that American will launch its first-ever nonstop service from Dallas/Fort Worth International Airport (DFW) to Hong Kong International Airport (HKG) and Shanghai Pudong International Airport (PVG) next year
  • Opening its Flagship Check-In for premium customers at Chicago’s O’Hare airport, making it American’s fourth airport to offer this enhanced customer experience
  • Announcing plans to hire 1,500 new pilots over the next five years. The company has offered to recall all of its furloughed pilots and will begin the new recruiting later this fall.  This is in addition to the hiring and training underway for 1,500 new flight attendants and the more than 1,200 Premium Services Representatives, Airport Agents and Reservations Agents who have joined the American team this year

Restructuring Progress

On Sept.12, the U.S. Bankruptcy Court for the Southern District of New York stated that it would enter an order confirming American’s Plan of Reorganization (the Plan). The next steps the company seeks to take are to achieve antitrust clearance and consummate the Plan and the company’s pending merger with US Airways Group.

The effective date of the Plan and American’s emergence from restructuring are expected to occur simultaneously with the closing of the merger with US Airways Group.

Reorganization and Special Items

AMR’s third quarter 2013 results include the impact of $241 million in reorganization and special items.

  • Of that amount, AMR recognized a $151 million loss in reorganization items resulting from the filing of voluntary petitions for reorganization under Chapter 11 by certain of its direct and indirect U.S. subsidiaries on Nov. 29, 2011. These items primarily consist of professional fees, as well as allowed and estimated allowed claim amounts.
  • In conjunction with the repayment of the existing financings, the company incurred cash charges of $19 million, included in interest expense, and a charge of $54 million, included in Miscellaneous, net, related to the premium on tender for the existing financings and to the write-off of unamortized issuance costs.
  • The company’s results for the third quarter also include special charges and merger-related expenses of $15 million.

Capacity Guidance

AMR estimates consolidated capacity in the fourth quarter of 2013 to be up approximately 3.5 percent versus the fourth quarter of 2012, primarily driven by the combination of an estimated 1.5 percent year-over-year increase in the average stage length per operation flown, and by new or increased capacity into South Korea, Mexico and Central and South America.

For the full year 2013, consolidated capacity is estimated to increase approximately 1.5 percent versus the prior year.

Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 777-223 ER N778AN (msn 29587) arrives at London (Heathrow).

American Airlines: AG Slide Show

Planely Speaking: All Slotted Up: The new American Airlines and DCA

Planely Speaking

Guest Editor Aaron Newman
Aaron Newman (small)

All Slotted Up: The new American Airlines and DCA

By Aaron Newman

By now we’ve all heard of the Justice Departments lawsuit filed on Aug. 13 to stop the $11 billion deal between US Airways Group (US Airways) and AMR Corporation (American Airlines). The DOJ argues the merger would violate antitrust laws because it will lead to higher airfares, less competition on high profile routes and therefore higher costs to the traveling public. In November, a judge will hear the case without a jury and decide whether the merger should go forward. With just under two months before the November 25th antitrust case involving American Airlines and U.S. Airways, I will be spending the next 2-3 months dissecting three topics in depth likely to be crucial topics in the courtroom.

A hot topic in talks between the Justice Department and the corporations is whether the airlines will agree to sell slots; takeoff and landing rights, to reduce their dominance at Reagan National Airport outside Washington, D.C. Airlines must possess slots which give them rights to one takeoff or landing per day.  Three miles south of downtown Washington D.C., DCA is the preferred airport in the D.C. beltway. The airport provides easy transit points for politicians and professionals looking to be downtown within minutes. The only problem…the airport is slot restricted in an effort to direct passengers to the suburban and more distant Dulles International Airport (IAD).

DCA-IAD Regional Map

Source: Nationalrealitybiz.com

DCA is one of a few airports in the nation where regulations limit the number of flights. Slots at DCA are particularly valuable for airlines, since many people will pay a premium to fly from convenient DCA instead of more distant Dulles or BWI.  For example, JetBlue recently leased 8 daily round trips from US Airways at a cost of $40 million, used for increased frequencies to Boston. U.S. Airways currently claims DCA as its fourth largest hub and provides nonstop service to 71 airports from Reagan National, and faces no nonstop competitors on 55 of those routes (as of July 2013). Doug Parker, CEO of U.S. Airways and post-merger American, says DCA will remain a critical east coast hub for the new airline. Post-merger, US Airways will lessen capacity to existing American Airlines destinations. This will allow US Airways to expand its hub operations at Reagan, adding new small city destinations in the eastern half of the United States, a strong argument in the airlines attempt to retain all 68% of its slots.

Source: U.S. Department of Transportation

With U.S. Airways already claiming 56% of slots at DCA, the new airline will claim 68% post-merger, it’s anticipated by industry insiders that the new American will be forced to concede slots in order to satisfy the courts and complete a merger. United and Continental had to lease slots at Newark Liberty to Southwest in order to complete their 2010 merger, according to this report by Business Travel News. One argument against divesting slots at DCA is that many are used for small regional cities throughout the East Coast. US Airways surprisingly only carries 35% of all passengers at DCA despite holding 56% slots. This is due to the fact that many of the flights are used for smaller cities on turboprops and regional jets. CEO of U.S. Airways, Doug Parker has been arguing that if his airline has to divest slots, other airlines will simply use them to fly to large hub cities. Some members of Congress have even sent a letter asking for US Airways/American to keep its slots so their own constituencies can keep their flights.

DCA Route Map

In this report by Reuters, it gives detail of a recent attempt by JetBlue management and CEO, David Berger to persuade lawmakers to take away a portion of DCA slots in the name of anti-competitiveness. Berger suggests that the new American should not exceed the current 55% threshold at DCA. “JetBlue believes that the merger, absent meaningful action by the Department of Justice, will make an unbalanced competitive situation at Ronald Reagan Washington National Airport (DCA) even worse,” Robert Land, JetBlue’s senior vice president stated in a recent letter to Senator Charles Schumer (D-New York).

My Take

It’s unlikely that the new American will escape the trial without conceding slots at DCA. I suspect the new American will retain between 55 and 59 percent of slots at DCA. This will result in some regional cities losing service, cities like Huntsville AL, Bangor ME, and White Plains, NY. It’s probably important to note that the combined American will hold roughly a 49% market share at Reagan National, US Airways today only holds a 35%   market share despite holding 56% of the slots. Regional flights are made possible because US Airways has such a large slot allotment at Reagan. The US Airways operation at DCA is a secondary connecting airport because of the frequency enabled by the slot holdings. If the new airline were forced to divest a larger percentage of slots the hub operation would begin to look different than it does today – the economics of regional flights make it unworkable.

The bigger question is how the remaining 8-12 percent of slots be divided among other airlines? This will be an interesting development going forward.  I agree with Parker that large hub cities will be the winners in this case. Cities like Newark NJ, Atlanta GA, Chicago IL Midway, etc. In conclusion, there are currently four major slot restricted airports in the U.S.; New York JFK, La Guardia (LGA), Newark (EWR), and Washington Reagan (DCA). Two different airlines have a market share that is greater than the important 49% number; Delta at La Guardia and United at Newark. Both of those market conditions were granted approval by the DOJ without going to trial. So, why is this merger and DCA suddenly being treated differently?

Top Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com.

American Airlines: AG Slide Show

US Airways: AG Slide Show

Bottom Copyright Photo: Marcelo F. De Biasi/AirlinersGallery.com.

American Airlines’ flight attendants call for the State of Florida to drop out of the DOJ lawsuit

American Airlines‘ (Dallas/Fort Worth) flight attendants, represented by the APFA, are putting political pressure on those states which are joining with the U.S. Department of Justice (DOJ) to oppose the American-US Airways (Phoenix) merger. APFA is particularly focusing on Attorney General Pam Bondi from the State of Florida. American has a large international hub at Miami International Airport. The union issued this statement:

In the wake of Tuesday’s announcement by Texas Attorney General Greg Abbott that he would withdraw from the lawsuit to block the merger of American Airlines and US Airways, the flight attendants at American are calling on Pam Bondi and attorneys general from five other states to do the same.

“Florida, particularly South Florida, is home to about 2,500 American flight attendants that are in need of good wages and long term job security, but General Bondi is standing in the way of that,” said APFA President Laura Glading. “Pam Bondi’s participation in the Justice Department’s antitrust lawsuit demonstrates a lack of understanding of what the merger means for her constituents. Everyone – business travelers, tourists, and airline employees – stand to benefit from the new American. We were able to explain that to General Abbott in Texas and we’d like to do the same in Florida.”

Unable to compete with United and Delta, which had recently merged with Continental and Northwest, respectively, American Airlines was forced into Chapter 11 bankruptcy in November of 2011. It is clear that in order for American to be competitive, it needs to merge with US Airways. The merger plan has had the strong support of employees at both companies since its inception. Unfortunately, the US Department of Justice and attorneys general from seven states and the District of Columbia filed an eleventh-hour lawsuit to block the merger in August of this year.

The new American Airlines will offer consumers more destinations and a better product. It will also give flyers a third choice – in addition to Delta and United – for their travel needs. Finally, the merger will provide much-needed job security for approximately 100,000 employees nationwide, 11,650 of whom live in Florida.

Last week, members of Florida’s congressional delegation sent a letter to General Bondi urging her to support the merger. The letter was authored by Rep. Alcee Hastings and signed by Reps. Debbie Wasserman Schultz, Ted Deutch, Lois Frankle, Frederica Wilson, Joe Garcia, and Patrick E. Murphy.

Copyright Photo: Brian McDonough/AirlinersGallery.com. Boeing 737-823 N965AN (msn 29544) of American arrives in deadlocked Washington (Reagan National).

American Airlines: AG Slide Show

US Airways: AG Slide Show

The State of Texas now supports the American-US Airways merger

American Airlines (Dallas/Fort Worth) and US Airways (Phoenix) received good news in its efforts to merge. The State of Texas has dropped out of the group opposing the merger along with the U.S. Department of Justice (DOJ). Texas now supports the merger and issued this statement:

Texas Attorney General Greg Abbott, AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc., and US Airways Group, Inc. (Phoenix) have announced they have reached an agreement for the Texas Attorney General to support the proposed merger of American and US Airways.

Under the terms of the agreement, the new American Airlines will maintain scheduled daily service to more than twenty airports in Texas. In addition, the agreement provides that Dallas/Fort Worth International Airport be maintained as a large hub airport for the combined airline and that the new American will maintain its headquarters in the Dallas/Fort Worth area.

The State of Texas had previously joined the U.S. Department of Justice (“DOJ”) as co-plaintiff in its pending suit to block the merger of American Airlines and US Airways. With today’s agreement, the Texas Attorney General has agreed to withdraw his participation in the DOJ’s lawsuit.

“I’m pleased we were able to find common ground and gain the carefully considered support of the Attorney General in our home state,” said Tom Horton, chairman, president and CEO of AMR. “This is an important step forward for American Airlines, for Texas, and for our customers and people of both American and US Airways. Texas has long played a lead role in our company’s history, and this agreement is assurance of our commitment to maintain and enhance the outstanding levels of service and connectivity that the new American will provide to the citizens of Texas. This merger will enhance job security and career opportunities for our combined Texas based employee base of nearly 25,000. The combined airline will fly more people and more goods to more places while providing more competition to benefit customers in the U.S. and abroad. We thank Attorney General Abbott for his partnership in finding a solution and also thank the people of American and US Airways for their continued support of the merger.”

Doug Parker, chairman and CEO of US Airways, said the following: “We are grateful to have the support of Attorney General Abbott. In addition, the support for the merger from the employees of American Airlines and US Airways has been overwhelming. This combination makes sense for our customers, employees and the communities we serve. We are dedicated to completing this merger on behalf of all of them.”

Texas airports included in the agreement include:

  • Abilene Regional Airport
  • Austin-Bergstrom International Airport
  • Brownsville/South Padre Island International Airport
  • Corpus Christi International Airport
  • Dallas/Fort Worth International Airport
  • East Texas Regional Airport
  • Easterwood Airport
  • El Paso International Airport
  • Houston William P. Hobby Airport
  • Houston George Bush Intercontinental Airport
  • Jack Brooks Regional Airport
  • Killeen-Fort Hood Regional Airport
  • Laredo International Airport
  • Lubbock Preston Smith International Airport
  • McAllen-Miller International Airport
  • Midland International Airport
  • Rick Husband Amarillo International Airport
  • San Angelo Regional Airport
  • San Antonio International Airport
  • Tyler Pounds Regional Airport
  • Waco Regional Airport
  • Wichita Falls Regional Airport

In other news, the DOJ lost its bid to delay the trial in its lawsuit to stop the merger. Many of the DOJ’s attorneys and staff were put on furlough due the government shutdown.

The “airline trial of the century” will proceed as scheduled in late November.

Copyright Photo: Eddie Maloney/AirlinersGallery.com. American’s Boeing 737-823 WL N938NN (msn 33490) lands in Las Vegas.

American Airlines: AG Slide Show

US Airways: AG Slide Show

PSA Airlines’ pilots ratify a new contract, airline to receive 30 large regional jets

PSA Airlines’ (2nd) (US Airways Express) (Dayton) pilots, represented by the Air Line Pilots Association, Int’l (ALPA), have ratified tentative agreements reached with the managements of PSA Airlines and its parent company, US Airways Group Inc. (Phoenix), that guarantee the placement of 30 large regional jets at PSA. With 85.99 percent of eligible pilots casting their ballots, 61 percent voted in favor of the agreements.

The agreements are contingent on the merger of US Airways Group and AMR Corporation by December 31, 2015.

The agreements include a commitment by US Airways Group to place a minimum of 30 large regional jets on the PSA operating certificate. PSA pilots will also be granted seniority-based interviews and guaranteed additional job offers at US Airways. In exchange, PSA pilots agreed to pay adjustments, changes to medical premiums, and an extension of their contract to 2023. Coming six months to the day after the pilots ratified a new contract, the agreements also provide PSA pilots with greater job security at PSA, furlough protections, and opportunities for first officers to upgrade to captain positions more quickly.

Copyright Photo: Jay Selman/Airlinersgallery.com. PSA currently operates 35 smaller Bombardier CRJ200s and 14 of the pictured CRJ700 (CL-600-2C10). N702PS (msn 10135) departs from the Charlotte hub.

US Airways Express-PSA Airlines: AG Slide Show

The DOJ objects to handing over its merger analysis documents to American Airlines-US Airways

The U.S. Department of Justice (DOJ) (Washington) has asked the special master handling discovery disputes to limit the number of documents it must turn over to American Airlines (Dallas/Fort Worth) and US Airways (Phoenix). The DOJ is suing both carriers to block their effort to merge. All parties are currently in the discovery phase. According to this report by Reuters, the DOJ objects to the airlines’ request to turn over all confidential internal documents relating to all previous airline merger requests in the past 10 years.

Read the full report: CLICK HERE

Copyright Photo: Marcelo F. De Biasi/Airlinersgallery.com. Boeing 737-823 N804NN (msn 29567) lands at Washington’s Reagan National Airport, across the Potomac River from the contentious and gridlocked District of Columbia.

American Airlines: AG Slide Show

US Airways: AG Slide Show

AMR and US Airways Group extend their merger agreement

AMR Corporation (Dallas/Fort Worth), the parent company of American Airlines, Inc., (Dallas/Fort Worth) and US Airways Group, Inc. (Phoenix), the parent of US Airways (Phoenix), have each agreed to extend the outside date at which either party may terminate the previously announced Agreement and Plan of Merger (the Merger Agreement), in light of the trial schedule surrounding litigation with U.S. Department of Justice (DOJ).

In a joint statement, Tom Horton, chairman, president and CEO of AMR, and Doug Parker, chairman and CEO of US Airways, said, “The Boards and management teams of AMR and US Airways remain committed to completing this combination to create the new American, and the extension of this outside date is a reflection of this commitment. Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees.”

The amended Merger Agreement extends the date on which either AMR or US Airways may terminate the Merger Agreement from December 17, 2013 to the later of January 18, 2014, or, if the Court enters an order on or before January 17, 2014 in favor of American and US Airways, on the 15th day following the entry of such order.  In the event of an unfavorable ruling by the Court, AMR or US Airways may terminate the merger agreement five days after the Court enters a final, but appealable, order permanently enjoining the merger.

Top Copyright Photo: Brian McDonough/AirlinersGallery.com. American’s Boeing 737-823 N925NN (msn 31169) prepares to touch down at Washington’s Reagan National Airport.

American Airlines: AG Slide Show

US Airways: AG Slide Show

Bottom Copyright Photo: Jay Selman/AirlinersGallery.com. US Airways’ Embraer ERJ 190-100 IGW N961UW (msn 19000183) taxies to the runway at the Charlotte hub.

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