In American Airlines Merger, One CEO Had to Go
The meeting otherwise went well. Bates and union vice president Tony Chapman flew to Phoenix 10 days later for dinner with Kirby and Parker. A steakhouse dinner quickly followed with some of the union's leaders and most of US Airways management.
Steps were taken to ensure the meetings remained a secret.
Too many American pilots recognize Bates and the other union officials. So they flew US Airways.
Pilots will often fly other airlines in uniform and chat with the crew. That couldn't happen on these flights."Everybody was told to be invisible, not to talk to anyone," Bates said. When Parker and Kirby flew to Texas to make their case to the union, there was even a higher level of secrecy. They used a private jet and Bates personally made the 12-mile drive to the meeting site in the union's red Chevrolet Suburban. Union security guards were stationed around the Hilton Arlington, but when Bates pulled up at the back entrance, he recognized a reporter lurking nearby. He quickly made a U-turn and the meeting was moved to the union's headquarters. Similar meetings were being held with the flight attendant union and one that represents ground service employees and maintenance workers. Around this time, Parker sent a letter to American formally proposing a merger. US Airways would own 51% of the new airline. The offer wasn't taken seriously. On April 20, Parker publically announced that American's three unions were backing a merger. It was an audacious move. American was still in control of its bankruptcy but suddenly there was another option on the table. The unions told the court that jobs and wages didn't need to be cut. Wall Street analysts supported a merger, preferring Parker as the new CEO. Horton publically told employees "nothing changes as a result of these announcements." But privately he and other top American executives were rethinking a deal. American had originally planned to emerge from bankruptcy and talk to several airlines, including US Airways. Horton became convinced that if he waited too long, a deal might not be available to him.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV