© 2018 The Texas Lawbook.
By Mark Curriden
(Jan. 31) – In 2004, American Airlines was committed to blocking any changes to flight restrictions for Love Field that would allow competitor Southwest Airlines to fly to new destinations.
Even as then-Dallas Mayor Laura Miller pushed for reforms to the Wright Amendment, American executives refused to budge.
To shore up the support, American CEO Gerald Arpey enlisted the help of an American board member, NFL legendary quarterback Roger Staubach, to meet with U.S. Sen. Kay Bailey Hutchison to tell her in no uncertain terms that American would not agree to any changes to the Wright Amendment.
Arpey, Staubach and Sen. Hutchison met for a private lunch at Café Pacific in Highland Park.
“The meeting did not go as planned,” former American Airlines General Counsel Gary Kennedy writes in his new book, Twelve Years of Turbulence: The Inside Story of American Airlines’ Battle for Survival. “Arpey and Staubach opened the meeting and launched into a well-rehearsed explanation about the righteousness of American’s position. They didn’t get very far before Senator Hutchison told them she had heard quite enough.
“She then hit the pair right between the eyes with her own ‘come to Jesus’ missive,” Kennedy states. “In a tone reminiscent of a rant from a high school football coach, she told Arpey and Staubach that American needed to start playing ball and quickly figure out a sensible solution to the Love Field problem.
“If American didn’t get on board, she warned, the whole thing was going to blow up in American’s face and Congress would soon abolish Love Field restrictions altogether,” the book states. “Lunch didn’t taste so good following Hutchison’s lecture, but [Arpey] and Staubach understood the senator loud and clear. From that day forward, while American advanced its ‘no way in hell’ message to external constituencies, we quietly signaled to Mayor Miller a willingness to consider alternatives.”
This never-before-disclosed meeting is just one of dozens of extraordinary revelations in Kennedy’s new book, which officially goes on sale next week.
The Texas Lawbook and the Association of Corporate Counsel’s DFW Chapter are hosting Kennedy’s first public appearance and discussion of the book on Monday, Feb. 5, at 5 p.m. at American Airlines’ C.R. Smith Museum. (Details below)
In Twelve Years of Turbulence, Kennedy tells the behind-the-scenes story of American Airlines’ journey from Sept. 11, 2001, when two of its jets were used in the terror attacks, through the eventual bankruptcy, restructuring and merger with US Airways in 2013.
In the book, Kennedy reveals previously confidential and heated meetings with American Airlines executives, constant battles with union leaders, secret negotiations with US Airways officials and confidential – and sometimes highly contentious – conversations with the lawyers representing the airline in the bankruptcy.
But the book also tells how lawyers for American used creative legal strategies to craft and implement what most business experts agree was the most successful corporate bankruptcy and restructuring in U.S. history.
“It was an incredibly tumultuous and stressful time for American Airlines,” Kennedy told The Texas Lawbook in an exclusive interview. “You had to be there to believe some of the crazy things that happened. Every single day was an adventure.”
In the Twelve Years of Turbulence, Kennedy tells those stories – including many that some American Airlines executives and lawyers wish he had left out.
For lawyers who specialize in business bankruptcies, reorganizations, antitrust law and mergers and acquisitions, Twelve Years of Turbulence is a tale about how all the planning and strategizing in the world can quickly go horribly wrong. The book also demonstrates how lawyers can play a pivotal role in identifying and achieving solutions.
For Kennedy, the obstacles that surfaced were almost comical.
“The bad news on the financial front wasn’t the only obstacle facing American,” Kennedy writes looking back at 2003. “A host of frightening risks were spelled out in our SEC filings and read like a Stephen King novel — future terrorist attacks; overseas conflicts and war; political instability in foreign countries; infectious diseases like avian bird flu, SARS, H1N1, and Ebola; earthquakes and volcanic eruptions; and fuel shortages.
“We often joked that the only thing missing from the list was an infestation of locusts,” the book states.
Kennedy will be talking about his book on Monday, Feb. 5, at 5 p.m. at American Airlines’ C.R. Smith Museum. The CLE, which has been approved for one-hour of ethics credit, includes a panel discussion involving current American Airlines Deputy GC Bruce Wark; Weil, Gotshal & Manges partner David Gail; Yetter Coleman partner Paul Yetter; and former Dallas Morning News airlines writer Terry Maxon. For tickets, email Sally.Selio@texaslawbook.net.
Those attending will get a personally signed copy of Kennedy’s book and get to discuss the book and his tenure at American Airlines with him.
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