Sunday, December 4, 2011

American Airlines Files For Bankruptcy; Will Renegotiate Labor Contracts and May Merge with U. S. Airways

How Will This Affect Passengers Today? – Look for New Fees Tomorrow

When a company files for bankruptcy one of the many advantages (what, you didn’t know that filing for bankruptcy was a positive thing for a business; where have you been?) is that it can unilaterally abrogate its labor contracts.  So the filing of bankruptcy by American Airlines will immediately initiate the end of existing labor contracts and the negotiation of contracts much more favorable to the company.

AMR sought bankruptcy court protection so that it could restructure its labor costs, airport agreements and airplane leases to bring them in line with the rest of the major carriers. United, Northwestern, U.S. Airways and Delta airlines used bankruptcy as a means to reduce their costs.

The future cannot be forecast with certainty, but the obvious conclusion of all of this is a merger between American and U. S. Airways.  Here is the result of that

U.S. Airways would be the likely suitor, eager to stay competitive with the mega airlines formed by United-Continental and Delta-Northwestern. If U.S. Airways moves to merge with American after the bankruptcy, that would leave three domestic network carriers controlling about 60 percent of the market, 

Let’s see, what would happen if three airlines controlled 60% of the market and up to 90% of the flights are any given airport?

  1. A $20.00 per person fee for sitting.  That’s right, your ticket would allow you to board the plane, but you would have to pay extra to actually have a seat on the plane.

  1. A $15.00 fee for each piece of luggage you don’t have.  Airlines are losing billions by people not checking bags, so this new fees would charge for each bag that a passenger does not have.

  1. A $2.00 charge for using that white airsick bag.  And unless 50% of the passengers paid the fee, the plane would be directed to fly through turbulence until 75% of the passengers had purchased an airsick bag, or 25% had vomited on their seat mate.

  1. A departure fee of $25.00 to allow a passenger to exit the plane.  This fee would be optional, and those who declined to pay the fee would have to wait until everyone else is off, clean up the cabin and then exit via the emergency chute.

So look for another advance in passenger service, coming soon to a ramp near you.

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