Delta commences cash tender offers; American Airlines staff reject tentative agreements
The AMEX Airline Index (-1.2%) was down for another day as a result, despite oil prices (-2.1%) falling again, to USD71.63.
Delta Air Lines commences cash tender offers
Delta Air Lines (+0.7%) rose marginally, after commencing cash tender offers to purchase certain specified series of outstanding Pass Through Certificates and its 11-3/4% Senior Second Lien Notes due 2015. The tender offers consist of separate offers as follows:
- The Any and All Offers consist of offers to purchase three series of Northwest Airlines Pass Through Certificates as listed in the table below;
- The Dutch Auction Offers consist of offers to purchase, under certain conditions, Delta Pass Through Certificates Series 2007-1C and Delta's 11-3/4% Senior Second Lien Notes due 2015, using a modified "Dutch Auction" procedure.
See related CAPA Profile: Privatisation & Ownership
American Airlines staff reject tentative labour agreements
American Airlines (-3.1%) dropped after the US' Transport Workers Union announced the day before that the American Arbitration Association accomplished the ballot count for tentative agreements for American Airlines mechanics, stock clerks and technical specialists. The results were:
- Mechanic and related: The workers rejected the 05-May-2010 tentative agreement with 6,074 voting in favour of rejecting the agreement while 3,371 voted in favour of the agreement;
- Stores: The workers rejected the tentative agreement 384 to 332;
- Technical specialists: Accepted the tentative agreement 60 to 18.
American Airlines has been in negotiations with unions for a number of years. The carrier restructured in 2003 with the assistance of labour groups, which made concessions to keep the airline operating. As a result, it was able to reorganise out of bankruptcy, unlike competitors, which were reorganised under court protection. American now believes its labour costs are higher than its rivals, which were able to receive deeper cuts from their staff during bankruptcy protection.
See related CAPA Profile: Industrial Relations
North & South America selected airlines daily share price movements (% change): 25-Aug-2010