Unions at American Airlines, US Airways OK merger contingencies
BY D.R. STEWART World Staff Writer
Saturday, January 05, 2013
1/05/13 at 8:18 AM
See previous stories about American Airlines and its Tulsa operations.
Two of bankrupt American Airlines' three unions and US Airways' pilots union have signed memorandums of understanding that detail working conditions if the two carriers merge, union and company executives said.
The US Airline Pilots Association, which represents about 5,000 US Airways pilots, signed the MOU on Friday, company executives said. American's Association of Professional Flight Attendants signed it Thursday, and the Allied Pilots Association signed theirs a week ago, union officials said.
American parent AMR Corp. and US Airways signed non-disclosure agreements in August under which the two carriers may exchange confidential financial information that could help the companies determine if a merger is feasible.
In a joint statement by Fort Worth-based American and US Airways on Friday, the companies said they have reached a pilots agreement with the assistance of the committee counsel for the Unsecured Creditors Committee in AMR's bankruptcy case.
"American Airlines and US Airways ... are pleased that they have completed discussions with ... (American's) Allied Pilots Association and US Airline Pilots Association intended to develop a framework for the terms of employment for pilots, as well as a process for pilot integration, in the event of a merger between AA and US (Airways) during (bankruptcy) restructuring," the companies said. "This memorandum of understanding was approved by the Allied Pilots Association's board of directors and by USAPA's board of pilot representatives.
"This memorandum of understanding will assist all of the stakeholders, including the boards of AMR and US Airways, in making an informed decision as to whether a merger should ultimately be pursued. The MOU is one of several elements to be considered before a decision on a merger can be made. Details regarding the MOU are still covered by the terms of a non-disclosure agreement so they cannot be further disclosed at this time."
The absence of MOUs signed by the aircraft mechanics' Transport Workers Union at American and the International Association of Machinists at US Airways, as well as the two flight attendants' unions at US Airways, indicate a merger announcement is not imminent, officials said.
The TWU represents more than 5,000 workers at American's Tulsa maintenance base.
John Conley, international vice president of the TWU, said Friday that union representatives have not signed or agreed to a MOU.
"We have been preoccupied with just getting through and implementing the (U.S. Bankruptcy Code, Section) 1113 process," Conley said, referring to American's rejection in bankruptcy of the three union collective bargaining agreements. "We have not met as a (union) coalition to discuss these things. We haven't had the time or the venue to sit down and have a roundtable (discussion) with one another."
Unnamed sources quoted in news reports have said a merger announcement could come as soon as Wednesday, when AMR's board of directors is scheduled to meet.
That now appears unlikely, officials said.
In a letter to American employees on Thursday, American Chairman and CEO Thomas Horton updated the merger process.
"Together with our board, and the creditors' committee, we asked our unions and those of US Airways to join the discussions underway in order to better evaluate the potential benefits, costs and risks of a potential merger," Horton said. "All parties are operating under a confidentiality agreement, and while I cannot provide any details, I can assure you we are conducting a collaborative, fact-based analysis to determine the best path forward for American. ...
"Discussions with our other unions and those of US Airways are also in progress. I have been personally involved in all deliberations regarding the overall strategic review and focused intently on creating a framework with the unions and for all our employee groups that keeps American competitive and allows us to build a successful future."
American filed for Chapter 11 bankruptcy protection in November 2011, the last major U.S. carrier to enter bankruptcy, as well as the sole major U.S. airline that has not sought a merger partner.
During the past seven years, Delta Air Lines merged with Northwest Airlines, and United Airlines combined with Continental Airlines, dropping American from No. 1 to the world's third-largest carrier.
Analysts say American lacks domestic feed in the Midwest and East Coast regions, which has led to a deterioration in its international routes - a course that could be reversed with a merger with US Airways, whose strengths are in those markets.
Tempe, Ariz.-based US Airways is about half the size of American, which was reflected in its formal merger proposal in November that suggested AMR's creditors would own 70 percent of the merged entity and US Airways shareholders the remainder, sources said.
AMR has suggested its creditors should own more of the merged company, officials said.
Original Print Headline: AA, US Airways unions OK contingencies
D.R. Stewart 918-581-8451
An American Airlines jet sits on the tarmac at the American Airlines Maintenance and Engineering Center in Tulsa. MATT BARNARD/Tulsa World