Star-Telegram editorial board meeting with US Airways, Allied

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					Star-Telegram editorial board meeting with US Airways, Allied Pilots Association,
Association of Professional Flight Attendants and the Transport Workers Union

Part Two

ST: It just sounds like you completely lost faith in the management at American. I’m
wondering if I’m hearing that right.

Little: We can’t be business as usual. It’s not losing faith in the individuals. I mean even
Gerard Arpey, if he was in the leadership position today, if he showed me a business plan
and the business plan doesn’t change the model and the model is not working, do you
continue the model? That’s what I was saying about digging the hole, I mean do you
continue doing something or do you try to say wait a minute there is a better way of
doing it? Maybe we have to…There’s a point and time…Gerard Arpey said to me one
time and this was a discussion we had about TWA. And he said he was totally against it.
He believed we should grow from within and we should be buying anyone else. He
thought TWA was a bad move and so forth and so on. And he also didn’t want to buy
Northwest among other things. But the one thing he did say that he didn’t agree with Don
Carty on, was the way… that’s where really labor relations changed when we had the
Don Carty debacle. It never came full circle after that because I think the employees felt
they were let down. They were giving…they were basically given a 3 for a 5. They
started to believe in the company. Hey we saved the company from bankruptcy at that
point in 03 and it was going to change the way we were doing business but they didn’t
see business being changed. If you look at American’s model, it hasn’t changed. That’s
why I think that all the opportunities they had available they didn’t act on. There are not
too many merger capabilities available and I go back to what it was…If you take a look
at Delta, Delta is not a good thing for American. I agree with Laura 100 percent. I think
over time you’re going to see American shrink and Delta will sell pieces of that off. The
only reason why Delta would be is to knock somebody else out of the market. That’s not
what this plan does. It doesn’t knock somebody out of the market. It actually puts
American in a growth model. And even if it’s the status quo, it’s the status quo of
competitiveness that we don’t have today. And I think that’s…it’s not saying
management is bad and Tom Horton is a bad guy and he can’t run the company. Just
saying there’s a better way of doing it. And if we don’t seek this opportunity now, I don’t
think American will recover. So in the long haul that is what I’m concerned about and I
think Scott and Dave Bates feel the same way, it’s the long haul.

ST: Who reached out to who first?

Little: It was each differently, I think it was all different. Like I’ve said, I reached out to
Doug and asked him, are you guys serious or is this a joke, because we do represent
people on the property so I felt I could reach out to Doug. I wasn’t doing something
behind American’s back. We have employees on the property of US Airways and so
when I saw the model. I was like “woah” this makes too much sense.

ST: What about the pilots?
Scott: Back in March, we had our experts if you will, our restructuring experts, the
Lazard Group, came in and gave us a briefing, essentially, you know, raised serious
concerns about the standalone plan that AMR was touting, and that we were faced with
the possibility that AMR would not emerge successfully from bankruptcy and even if
they did, they would uh, we would be facing a second round probably within a couple
years, so we began looking for alternatives and it was actually our consulting groups and
our negotiating teams in New York that were first able to contact the US Air counterparts
and this fledgling idea of forging a partnership to try to create a better future for
everybody, both for the US Airways employees and airline and AMR, came about. We
started pursuing that.

ST: You all did this independently of each other?

Little: Collectively we started talking later.

Shankland: It was very early on that we started talking to each other.

Glading: Then Dave, Jim and I started talking, saying what do you want to do, what do
you want to do.

Shankland: I’d like to add, back to your earlier question, it’s not about the personalities. I
mean, Doug’s cute and all…

Parker: Thanks, Scott

Shankland: …and Scott Kirby, he’s an Air Force Academy grad. He’s got that going for
him but it’s really not about personality.

Glading: What about Elise. What’s not to like about Elise?

Eberwein: Hello. I’m right here. Is it cause I’m a girl, is that’s why?

[laughter around the table]

Shankland: But it’s not about the personalities and our group in particular is very
analytical and we really wanted to study the business plans and what the future was. It’s
more about the vision. It’s more about the vision of the future that these guys have
brought to the table for us. And it’s a vision…I tell our pilots all the time when I’ve been
out holding domicile meetings and stuff. I say for the first time, and I’m just a youngster,
I’ve only been with the company twenty years, but for the first time in a long time, I’m
optimistic about the future. I truly am optimistic about the future of American Airlines. I
believe that this airline, as a result of what could be this merger, the resulting airline, will
rise again to be the no.1 airline in the world.
ST: But how much of what you’ve gotten from US Airways in your conditional labor
agreements have you, the pilots, then used at the negotiating table with American to try to
get a better deal with American?

Parker: Yeah, Scott.

Scott: But the presumption is that…

Eberwein: don’t use us like that, Scott.

Parker: Get the big light! (laughter around the table)

Shankland: The presumption that the US Air pursuit of the business plan and vision for
the future for the airline was a ploy to generate negotiating leverage is incorrect. Now,
has it generated some negotiating leverage, certainly. It is also brought AMR to force
them to look at some potential scenarios coming out of the backside of bankruptcy as
well. But we’re really operating on two different tracks and I’ve always maintained it’s
not an either or scenario, it’s an and. All of the labor groups we have to live with, under
the management and under the leadership of AMR right now. I mean it’s just the reality
of the bankruptcy procedure that we’re in. So, we still have to deal with them, we still are
under their command and authority. But we’re all jointly partners driving towards this
ultimate goal and getting to this merger and getting to what we think will be the best
possible future for not just our employee groups, our individual employee groups, but the
airline as a whole.

ST: so is the APA board not going to send out the last AMR offer to pilots to vote on?
(Note: the APA board did vote 11-5 to not send out the latest offer, however, with the
judge’s delay on the ruling, the board is reconsidering the offer this week.)

Shankland: I have no idea. That meeting started today. Ask me at the end of the week. I’ll
have a much better idea.

Parker: You guys didn’t ask but that’s why Dave (Bates) is not here by the way.

ST: Day one of the new airline, would there be members of your unions that are at work
today that would not be at work on that day?

Glading: Not in mine.

Shankland: Nope.

ST: What about TWU with the Alliance facility?

Little: That we have no way of controlling at this point. They will be reduced there.
ST: Originally American said they hoped to have Alliance closed by the end of the year.
Now there are rumors that American may need to keep Alliance open longer because it
has chosen to replace the seats in its older 767s and 777 aircraft.

Little: Right, they are talking about some mods.

ST: So will Alliance be open longer?

Little: Well, we still have a joint partnership with TAESL, that’s where we do a lot of the
engine work. That still stays in place so we will have a small cadre of people there. I also
heard rumors that there’s also some other repair stations that are looking to perhaps make
a purchase at Alliance but American has to use that for mods. Those mods have to be
done and they have to be done in a timely matter. And right now AFW is structured to do
those mods. So there’s two things when you talk about overhaul. We have two major
bases at American, one is at Tulsa which we’ve had since the 1940s and Alliance, which
we picked up I think around late 80s. As I see it right now, if we don’t do something, we
would end up losing most of our overhaul, a lot more severe than what US Airways does
because American is looking to subcontract some of the larger components, older
components, but also a lot of the heavy-body work will go to China, will go to Singapore,
it will be moved out. US Airways, they do use outside entities, but it makes a lot of sense.
One of my discussions with the COO of US Airways and we talked about some of the
things we can do differently, they are very open-minded. The one thing that Robert Isom
said to me was “hmm, that’s interesting. We’ve had a success story bringing work back
to the reservations.” He said, “Bringing it back, you know, we got a lot of good press on
it. It was the right thing to do, I believe having American jobs in America. And anything
we can try to do to change that,” of course the devil’s in the details. And that’s why
they’re going to look at the details. That’s where I see the promise because if we don’t do
anything, we’re going to be like those other carriers, a lot of the carriers, and see more
and more being work farmed out. And the fallacy of our system, the FAA, is that we
don’t record when equipment comes back to the U.S. and we have to make modifications
because there is something wrong. We don’t record whether the cannon plug, plugging
into each other and there is a pin missing and somewhere down in South America they
use aluminum foil to make that connection. It comes back to the U.S. and we change it
out and we replace the harness. Those aren’t documented, only from the harness going
forward. So the numbers are all skewed. But I believe that US Airways is open-minded. I
can see a growth. I can see that changing. Maybe not 100 percent, maybe it will never be
100 percent because in that business you have upsides and downsides and you have to
have those abilities to use some outside entities.

ST: US Airways does outsource much of your maintenance currently, correct?

Parker: About half.

Little: Over fifty percent.

ST: That would not be the plan with American?
Parker: Well we would still maintain what we have. What it does is allows us the ability
to bring, to not outsource as much as American was going to outsource.

Little: and to bring more work in house.

Parker: And in response to your question, while TWU would lose some employees, a lot
fewer under our plan than under American’s plan, about 6,000.

ST: So you wouldn’t be looking to outsource as much of the American work as you
currently do with the US Airways work?

Parker: Exactly.

ST: Why?

Parker: Because we already have some out and we would use this opportunity to not.
Again as part of the agreement with Jim [Little], and with Jim’s union which is what they
wanted which was more jobs put back. So we agreed to it.

Little: And there is some equipment that US Airways has today that we know what the
727s that we can do that work in Tulsa, it doesn’t require retooling. We were set up for it.
There are things that we can do that make it real easy through the transition. But like I
said before, in fairness, US Airways doesn’t have the value of looking at American
Airlines’ financials in great detail so they can dig down and see what makes sense.

ST: Would you reconsider Alliance once you get a chance to look at American’s books?

Parker: Oh, I don’t know. Again, this is much more about this is what works out best for
the TWU and trying to figure out what’s best for the TWU in terms of us. Again to be
clear, and I think it’s clear, but I want to make sure it’s clear. While these guys are all
signed up and say they’re supporting this plan, nobody should ignore the fact that they
are all making huge concessions, even in our plan. Our plan is a lot better than the stand
alone but it’s still worse than all the people they represent are doing now. And in Jim’s
case it’s fewer jobs, in Laura and Scott’s case it’s slower pay, and they’ve chosen
different ways to get that value and we just simply, having had that value taken away
from them in the American process, we’ve come to agreements where we give them a
substantial amount of it back but not all of it. So all of these labor groups and all of these
employees of American are giving a lot up to get to this place.

ST: What about work rule changes? In the pilots’ case that included a lot of work rule
changes, what about in yours?

Parker: Help me Scott, in most of these cases….Again the way we did this in most cases,
was we went through and we…the way we did it is, we went through and said okay, this
is what you have in the 1113 motions, let’s negotiate what we can add back. So Scott
what were you saying?

Shankland: Certainly in the case of work rules and productivity, in both plans including
the CLA with US Air, were… the pilots at American are brought more into line with the
industry average. That’s basically what the benchmark was and pretty much everything
we looked at was what can we do competitively, where do we need to improve
competitively and those adjustments were made. But Doug’s exactly right, no matter how
you slice it this is a concessionary deal. It’s a concessionary deal but what entices us
about this is this is a concessionary deal with a future and that’s where we have concerns
with the stand alone plan. We don’t have that confidence in the future.

Parker: And let me if I can because I’m the only one who didn’t comment on the
personality point. For whatever reason, some are drawn to making this personal when it’s
not. And I think a couple weeks ago I made that clear. What this is about is its about a
model that’s better. And choosing a model that’s better. And there are differences on
which model is better, a difference in opinions on which model is better. This is not about
we think we’re better running airlines than somebody else.

ST: What do you mean the model, the stand alone versus…

Parker: versus the two merged airlines…

ST: the two networks put together?

Parker: Exactly.

ST: Is that what you’re saying?

Parker: Precisely. What I think is this. American Airlines on its own now has a network
disadvantage to United and Delta that bankruptcy cannot fix. That standalone growth
cannot fix. That can only be fixed one way and that’s through a merger with US Airways.
But the good news is it can be fixed. And it can be fixed like that. You put the two
networks together they can compete actually be stronger, and have stronger networks
than United and Delta, just by putting them together. And that is the difference in the
models. That creates so much value that you can pay people more. It creates so much
value (ST begins to say something), let me finish this, that you can, that you can give
more value to the creditors of American Airlines. You can create so much value that the
shareholders of US Airways are better. So you can create value for everyone and build
that. That’s the difference in the model. And than you can ask yourself, which was your
first question, why don’t you just do it later. And to that I would argue, one Laura’s point,
that it might not happen, but two you gotta want the people that think that’s a good idea
to do it. And the fact of the matter is this idea we know works. I’m not certain why the
American Airlines’ team doesn’t see what we see and what seemingly everyone else
seems to see, but they don’t. So it’s really hard to imagine how indeed that team would
run the new airline because you don’t want to have someone who didn’t think it was a
good idea behind it. So this is about ideas, not about people. I’ve worked with these guys.
They’re friends of mine. This is nothing personal at all. This is about a different idea for
what works. I know it’s what works for US Airways which is what I care about but it also
has to be what works for American Airlines. And that’s what this is about. And these
guys have come here independently come to the same conclusion as has virtually
everyone else that has studied it. And anyone who takes the time to understand it comes
to the same conclusion. So that’s what its about. It’s about a difference in opinion of
what’s the best model going forward. And we think this is the best one.

ST: You are going to inherit $10 billion in pension liabilities almost immediately. What
is your plan to deal with that?

Parker: Yeah. I think my understanding is what American has said since they’ve agreed
to freeze and not terminate those plans that’s going to put enough debt on the balance
sheet that they need to have some equity to so their balance sheet ratios look good
enough. The reality is there is enough…the funding requirements while it is a huge
liability, the funding requirements certainly in the next few years are not very large. So
it’s not so much a cash flow issue as it is “gee if I’m going to have that big of a debt I
should have so more equity.” That’s my understanding of what they said. We look at the
combined balance sheets of the company, combined and the combined earnings capacity
and are not certain it needs any new cash. Not certain it doesn’t. But it sure isn’t apparent
that it needs some. So that’s a high class problem. If it does we know that we have all
sorts of people who are telling us they would like to be investors so I don’t think we’ll be
hard pressed to find anyone, to find qualified investors who want to be part of this. The
hard question is going to be if we want to do it or not.

ST: So is one of those investors TPG?

Parker: There’s all sorts of investors.

ST: Including TPG?

Parker: I can’t speak for those investors who have come to us. You can ask them.

ST: Why didn’t you wait for Section 1113 process to go through before coming forward
with your merger idea? Explain the timing behind your proposal. Are you trying to play
the spoiler?

Parker: I think you know we went through a somewhat similar process with Delta back in
2007. And we learned a few things about that process. One, we think we came to late.
The bankruptcy process is a really formal complex process. It takes on its own rhythm.
And what we found is by coming in as late as we did, we really were spoilers then
because they were getting ready to come out and all of a sudden ‘what’s this.’ It just
came in and all sorts of deals had been cut and everyone was thinking ‘okay, here we go.’
And here comes this better offer, better offer in terms of value over the table. Everyone
was ready to get out. So we didn’t want to be too late again. And more importantly what
we learned in that process, we came in late and we didn’t have the employees of delta
behind the idea and that hurt us. And what we learned is just having value, and indeed,
we had the most value in that transaction. But just having value didn’t win the day. You
need to have partners on your side. So A.) you’re right, both those things led us to believe
that it was better to start working sooner and the place to start working was with labor.

ST: You say every one who has studied this sees the value in combining the two carriers.
Have you taken your ideas to Tom Horton and talked to him about incorporating the idea
with his restructuring plan?

Parker: Look. We had early conversations shortly thereafter and it was quite clear that
American and Tom’s expressed view was, we’re always happy to talk but you need to
understand we are singularly focused on getting in and out. Which we completely respect
and then public comments after that meeting made it quite clear that their objective and
their standard objective was being singularly focused on getting in and out. So we came
to the conclusion that – this is now clear now by their public comments – we needed to
do this by working with others instead of working with the management team because
they were focused on stand alone emergence and stand alone emergence entirely.

ST: You say you respect that but I’m surprised you do if you say anyone who studies it
knows that standalone won’t work.

Parker: Look, it’s their opinion and it’s their airline so of course we respect it.

ST: You’ve been in this position you’ve taken companies through bankruptcy and

Parker: I have never been in bankruptcy.

ST: Oh, so you came after the US Airways bankruptcy?

Parker: I was at America West and we bought US Airways out of bankruptcy through a
merger much like we’re trying to do here.

ST: So you didn’t take them into it, you bought them out of it.

Parker: That’s correct. I’ve never had a company in bankruptcy.

ST: Why do you think they’re resisting this so much. Why are they resisting doing a
merger if the economics are obvious as you say?

Parker: I don’t know.

Little: I think it’s control.
ST: I’m not surprised they’d want to keep control. But if you are correct in your
assessment, surely the creditors would see it the same way. It’s different if it’s a 50/50
but a lot of the analysts quoted in media reports say that a merger would create more
value. What’s to keep Horton from just fighting this all the way?

Glading: There’s a chance of them still staying in control.

ST: But if his goal is to stay in control and the stand alone plan doesn’t work as you say,
doesn’t he have to come up with something else?

Glading: In bankruptcy.

Little: Don’t forget the agreements we have is with US Airways, those agreements are
gone if Tom Horton takes control. We don’t’ have those. I don’t have that agreement
with Doug Parker and his staff. The pilots don’t have that term sheet with US Airways.
All the things that Tom is saying worse case scenario is going to happen, is going to
happen. And the only thing I see is there’s no plan other than on their terms but the
employees are going to suffer more. And if you get down into the weeds where American
is talking about as you mentioned about the pension plans and they’re showing gloom
and doom in 2017, those are all predicated on worst fear factor that the government is not
going to allow the change in vesting in the plan and when we brought that question
directly to them, they said well, we’re not factoring that in. Well, it should be factored in
because it’s something that’s a reality. The government does have to do something back
in 2017. So there’s a lot of pieces. Right now, I have a term sheet with US Airways, I
have five concessional, consensual agreements already on the property. I have two that
hopefully won’t be, but I believe it will be abrogated by the judge. If those two are
rejected, then we don’t have contracts. But I do have five that agreed to a consensual
agreement. Those five, even though they reached a consensual agreement and there are
some plus sides from what they filed with the bankruptcy court back on March 22. I have
upsides that US Airways has no clue because we’re going down, like everyone else,
we’re going down two tracks. And I think even Doug Parker said you know, he
understands that we have to represent our members to the best of our ability. And that’s
what we’re doing. So I’ve got two tracks, but US Airways still to this day doesn’t know
what we’ve agreed to prior to bankruptcy, prior to the judge making his decision. The
other two agreements are going to be abrogated but at the end of the day even the ones
that have reached a consensual agreement, still like the US Airways one. I’ve had
conference calls with our presidents, I’ve explained the whole thing to them and said this
is what we have. When can we make US Airways happen, that’s the question I get all the
time. In fact, just with the last meeting I had with them, the same question came up. Is
this US Airways real, can it happen.

ST: When Horton was here, he answered the question is this business as usual with the
answer that his labor contracts were going to change, our labor costs are going to go
down and my plan will work.

Little: My question to Tom is…
ST: Is that what you were told? That’s what it seems like they’re changing.

Glading: Well, I mean that’s one…

ST: The idea seems to be if American changes its labor contracts, that stand alone plan
will work.

Little: But if people work for nothing, right, if there were zero labor costs, they would
still have a plan that I don’t believe at the end of the day is going to get them to where
they need…you still have to go back to basics.

Glading: Their shortfall on revenue is so far at ways what it is in labor costs. So what he
wants to do at least in our case, okay, so we don’t have two tracks going because the
company has asked from us an 1113 term sheet that would put us 30 percent below
anyone in the industry. Nobody is going to vote for that. I’m not going to send it out. I’ve
said it in court, I’ll say it again, nobody is going to vote to put themselves on the street
2,300 furloughs, they’re really really horrible cuts in pay. I mean the company says no
cuts in pay. They take away incentives, international pay, it will be 17 percent pay cuts
when you consider all the different things that they’re doing. That would be on top of the
33 percent we took in 2003. People can’t afford it, they’re not going to vote for it.
Company hasn’t moved off that. I would sign off on a contract. I would send something
out to the membership if the company agreed to open their books to US Air. Because we
need this to happen in bankruptcy. And that’s better for the labor unions obviously, much
better for the labor unions, but I think it’s better for everyone on the whole because I
think if Tom Horton gets out of bankruptcy and does exactly what we think he’ll do and
that is try to buy US Air himself, it’s a very very risky proposition and then you’ve got all
of these labor groups with very very difficult concessionary agreements, what kind of
airline are you going to run with employees like that.

Little: and where’s moral going to be?

Glading: Yeah, God knows. It will be horrible.

Parker: So part of your question of don’t they need to come up with something. I think
what you’re hearing is there’s a concern that AMR can use process to drive their control
of the process to simply get themselves out and they do. They’re managing the company.
The bankruptcy process gives a lot of leeway to the debtor to exclusivity and things like
this. So there is a concern that they don’t need to actually have the best plan, they will
just drive process. Which again bringing this whole circle gets back to your first question,
why are we here. We like talking about substance and we want people to know because I
believe that overtime the plan with the most substance will overwhelm process, if indeed
you have a plan that is that much more substantive and in this case we do. So we just
want everybody to know how substantive it is and we will use that I hope to overwhelm a
process that is slanted against us.
ST: But are there only two plans? Is it just yours and American’s?

Parker: I don’t know. There may be others out there. Those are the only two I know of.
But we welcome any other plans. I don’t know what those are, again, but we would love
a process that is open to any and all parties as to what’s best for the creditors and for
American Airlines.

ST: The three of you sit on the creditors committee and it is the creditors committee that
can ask the judge to end the exclusivity period for American before Sept. 28. So what are
you talking about in those meetings.

Glading: It’s all confidential. Unfortunately.

ST: Does the merger protocol that American and the creditors committee agreed to
change the exclusivity period?

Glading: No. The protocol agreement is there to ask American to start the process of
considering other alternatives.

Little: I think that will change. I think the chances of something happening in this process
are probably better now than if you’d ask me that two weeks ago.

Glading: And you have to remember American can’t emerge from bankruptcy…well,
nobody has ever emerged from bankruptcy without labor union agreements, labor
contracts because that’s such a big piece of their business plan. Because how do you
know with those costs and labor unrest and everything else, why would you support a
plan that gets you out and you have know idea what the costs are. Because even if the
contracts are abrogated in the 1113 and I’m very hopeful that ours won’t be but if they
are, all we do is go back to the table and continue to negotiate and it makes everyone
much more angry. If they don’t move off the 230 ask, I can’t say that we can get to a deal
because I can’t send it out. I’m not going to send something out that is going to be
rejected. What good is that going to do anyone? It’s just going to anger the flight
attendants even worse than they’re already angered. So American is really, I think in a
lose-lose because whatever happens on June 22, they’ve got to get deals before they can
prop up their plan and have other people bid so they’ve got to do something.

ST: What about the bondholders, Doug. What kind of reception have you been getting
from them.

Parker: Well, first back to the creditors committee, there are representatives of
bondholders, representatives and indentured trustees, I think that’s the correct term. They
don’t actually own anything. They are trustees for people who do own bonds. They have
been careful not to engage with us because they want to see the 1113 process play out so
we haven’t had much engagement with the actual creditors committee. We have had
some engagement with a number of actual bondholders and some of them quite large and
when we walk them through the presentation, they seem quite anxious to get engaged.
But let me be clear ,we need to wait for that, we need to get through the 1113 and engage
with the right people on the ad hoc committees, the indentured trustees, all those people.
We’re just really confident that once that comes about because they care about one thing,
which is how many cents on the dollar am I getting back on the debt that was defaulted
on. And that I’m really confident we have a plan that will be able to deliver them more
cents on the dollar than American’s stand alone plan can, simply because of the synergies
that are created that American can’t provide stand alone.

Glading: That’s a good point because the bondholders as you know the long term health
of the company is really not their greatest interest. That’s really the employees and
maybe Boeing and HP have a much higher interest in that but the bondholders they want
the recovery, the quick recovery, they’ll take their money and put it somewhere else.

Little: They made that clear on the opening day of the 1113.

Glading: Right.

Little: When they gave their statement and their attorney spoke for them and on behalf of
the entire committee, they said they were unanimous and they haven’t changed on that.

ST: So when you say you would welcome a process that is open to all bidders. You say
you’re confident. Is that because you have the best network to combine with American’s

Parker: Exactly. No one else can create this value and to give value to the constituents.

ST: Are there anti-trust concerns?

Parker: Real extremely complimentary networks, almost no overlap. We don’t see any
regulatory concerns.

Little: I think that’s one of the good things about the plan is there’s not a lot of overlap.

Parker: It’s why it creates value. They have a big weakness up and down the East Coast.
We’re strong on the East Coast.

ST: The seniority questions that you let the unions answer, you’ve had problems with that
at US Airways for over seven years. How do you combine all of these union groups who
do not like their managers?

Parker: Because you build an airline that is the strongest airline in the world and you can
get a lot done by all of a sudden having value to share. And that’s how you do it. Because
there is just so much in it for the employees. I’m not delusional enough to think that
everyone is going to come together and we’re not going to have some issues. I know
that’s part of what happens sometimes. But what I know is we’ll have the ability to do as
much for our employees as the other airline does and because we’ll have that ability I
think that, and because we’ll have a team that is going to be committed towards at least
communicating with our employees about who we are and what we can do, I’m
optimistic we can get through those issues. I think so much of what’s happened in
management labor relations since 9/11 has been due to the fact…well, two things, one the
economics of the business required employees at airlines like the old US Airways and
American now, and United and Delta and Northwest, everyone of them to take
concessions, which is a terrible thing to ask people and has enormous impacts on the
ability to lead and to affect morale, it’s really quite difficult, so that. But then also
management, the ability to manage through that process and to at least explain well why
that exists and here are the ways out of it, at least I think these people [the unions] have
done really nice job of at least understanding where they are now and where is the best
they can get to given where they are now. Then we’ll all work together from there to get
even better and keep moving forward and trying to do all the things we can do to move
forward. But right now, it’s a matter of let’s figure out this and build the strongest airline
we can and again, it’s probably the best way of saying it but the airlines that have done
really well and where other airline employees look to and say gosh, you know, for pilots
it’s now Delta of all airlines, you know look at Delta, well it’s because Delta is now
making money. Delta is now making money because they merged with Northwest and
created an airline that has a network that is stronger than anyones except United’s who’s
now merged with Continental and created a network that is as strong as Delta’s and
they’re still going through some integration issues but once they’re done with those they
will have a network that is as big as Delta’s. And those two airlines are fighting each
other for the high yield traveler and American as much as they want to be in that world,
won’t be able to compete as well as the airlines that can fly to all those places that
American can’t fly to. But combining with US Airways, we can compete and we’ll have
three airlines that can compete for all those travelers than those two that exist today.

ST: Do you forsee closing any hubs?

Parker: No.

ST: So Charlotte and Miami both work?

Parker: Again, they are totally complimentary, what we do in Charlotte is connect all up
and down

ST: Phoenix and L.A.?

Parker: Yes. That one, to call L.A. a hub for American is a bit of a stretch. But the L.A.
operation and the Phoenix hub are complimentary.

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