US Airways CEO Douglas Parker and the leaders of three American Airlines labor unions said Friday they have reached collective bargaining agreements that would govern 55,000 American employees in a merger between US Airways and American.
The agreements signify the unions will cooperate with US Airways management in a proposed hostile takeover of American, whose parent AMR Corp. filed a Chapter 11 bankruptcy reorganization petition Nov. 29.
Representatives of the Transport Workers Union, the Allied Pilots Association and the Association of Professional Flight Attendants occupy three of the nine seats on the committee of unsecured creditors in AMR's bankruptcy case.
The three unions issued a joint statement Friday.
"On behalf of nearly 55,000 American Airlines front-line employees - including the 17,000 members of the Association of Professional Flight Attendants, the 10,000 members of the Allied Pilots Association and the 26,000 members of the Transport Workers Union - we are pleased to confirm our support of a possible merger between our airline and US Airways," the unions said. "We have reached agreements on term sheets for collective bargaining agreements that would govern the American Airlines employees of the merged airline with US Airways.
"This significant step represents our shared recognition that a merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process and restore American Airlines to a preeminent position in the airline industry."
In an email to US Airways employees on Friday, Parker outlined what the agreements have accomplished and the considerable roadblocks ahead.
"First of all, today's news does not mean we have agreed to merge with American Airlines," Parker said. "It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get an actual merger, many more things must happen including gaining the support of AMR's creditors, its management team and its board of directors. But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen."
In his email, Parker said the merger would create the nation's largest airline and a worthy competitor for top-ranked United Airlines and second-ranked Delta Air Lines.
Parker said the merger would preserve 6,200 of the 13,000 union jobs that AMR proposes to cut, provide better pay and benefits, and improve services.
TWU members in Tulsa said a merger is far from certain, but it presents options for the unions.
"All our members think we would be better off by merging with US Airways," said Rick Mullings, spokesman for TWU Local 514 in Tulsa. "US Airways could be the light at the end of the tunnel for our members. We know where we're going with American Airlines."
John Hewitt, Local 514's chairman of maintenance, said union officials examined the numbers for each carrier.
"We looked at the merger from an economic standpoint - would it be a viable company?" Hewitt said. "It looks like it would possibly be a good fit."
On Feb. 1, American presented contract term sheets to the three unions outlining the company's strategy for emerging from bankruptcy.
American said it needs to cut 14,000 union and nonunion workers from the payroll, including 2,100 mechanics at its Tulsa Maintenance & Engineering Center, reduce overall costs by $2 billion a year - including $1.25 billion a year in labor costs - and overhaul collective bargaining agreements to increase worker productivity.
On Monday, lawyers for AMR will begin stating their case in bankruptcy court for rejecting collective bargaining agreements with its three unions.
American's business plan envisions annual revenue increases of $1 billion through greater cooperation with domestic and international airlines as well as enhanced services for passengers.
Over the past four months, American CEO Thomas Horton has rejected merger proposals, saying the airline would be stronger and leaner by emerging from bankruptcy as a stand-alone carrier.
American issued a statement Friday that said the bankruptcy court has granted American the exclusive right to create its reorganization plan at least until Sept. 28.
"We are making substantial progress in our efforts to return American to industry leadership, profitability and growth and maximize its value for all of its stakeholders," the company said. "Our immediate next step is to pursue vital modifications to our collective bargaining agreements through the (bankruptcy code Section) 1113 process that begins on Monday. ...
"We believe statements of nonbinding support from union leaders for alternative proposals are no coincidence given the timing of the 1113 process. These statements do not in any way alter the company's commitment to pursue our business plan or our focus on moving steadily through the court-supervised restructuring process to create a profitable, growing industry leader."
Profiles of American Airlines and US Airways
• Corporate offices: Fort Worth
• Employees: 65,000
• Aircraft: 610
• Total daily flights: 3,300
• Total destinations: 260
• Total countries served: 50
• Hub airports: Dallas-Fort Worth International, Chicago O’Hare International, Miami International
• Aircraft fleet: 47 Boeing 777-223ER, 58 Boeing 767-323ER, 15 Boeing 767-223ER, 124 Boeing 757-223, 163 Boeing 737-823, 203 MD-80
• Global airline alliance: Oneworld
Source: AMR Corp.
• Corporate offices: Tempe, Ariz.
• Employees: 32,241
• Aircraft: 340
• Total daily flights: 3,208
• Total destinations: 203
• Total countries served: 28
• Hub airports: Charlotte/Douglas (N.C.) International, Philadelphia International, Phoenix/Sky Harbor International
• Aircraft fleet: 93 Airbus 319, 72 Airbus 320, 63 Airbus A321, 7 Airbus A330-200, 9 Airbus A330-300, 7 Boeing 737-300, 40 Boeing 737-400, 24 Boeing 757-200, 10 Boeing
767-200ER, 15 Embraer 190
• Global airline alliance: Star Alliance
Source: US Airways Group Inc.
D.R. Stewart 918-581-8451
Original Print Headline: AA unions, US Airways reach pacts
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