Deal With AA Unions Could Open Door To US Air Merger
FORT WORTH (CBSDFW.COM) - The major unions for Fort Worth-based American Airlines have decided to back US Airways hostile takeover of the airline.
On Friday US Airways made a filing with the U.S. Securities and Exchange Commission (SEC) to begin the process of an American Airlines takeover. While American has not agreed to a merger, three unions representing pilots and other workers have.
Representatives from the Allied Pilots Association (APA), Transport Workers Union (TWU) and Association of Professional Flight Attendants (APFA) say they all have struck deals with US Airways to preserve jobs and give the company the best chance at future growth.
US Airways chairman and CEO Doug Parker said a merger could save some 6,200 jobs at American.
There were some very specific terms offered to the Allied Pilots Association (APA) to get their agreement -- including the new company's name and location.
"We believe that the merged airline, the new American Airlines if you will, that would emerge from this process would also be headquartered here in North Texas," said AA pilot and APA Treasurer Scott Shankland. "It was a priority for us to preserve the American Airlines entity and to keep the headquarters here."
On Monday, American and its parent, AMR Corp., all currently operating under bankruptcy protection, are set to go to court to seek permission to throw out existing contracts and impose new terms that will cut 13,000 union jobs and reduce labor spending by more than $1 billion a year.
But company leaders won't be the only ones attending the bankruptcy hearing.
"Our teams of lawyers, backed by investment bankers and economists and other advisers, are preparing to be in New York next week when American goes into court," said TWU spokesman Jamie Horwitz. "We will have a very large rally, the Transport Workers Union and the Flight Attendants [Union], outside the court. They'll be holding signs saying, 'jobs, jobs, jobs.'"
Former American CEO Robert Crandall spoke exclusively with KRLD NewsRadio 1080 and said that while US Airways may have made deals with the unions at American, they haven't done that with their own unions.
"The unions at US Air itself have not been able to agree with one another, and with the management at US Air, about what the labor contracts at US Air should say. I must say that that's a vastly complicating aspect of trying to put the two companies together," Crandall said.
However, Crandall said he believes the merger is a good idea in the long run, because the combined US Air/AA company would be able to compete with the large-scale business services provided by both United and Delta Airlines.
"It may very well be that putting these two together, in one way or another, makes some sense. Whether this is the right way to do it, I think at this juncture, is open to discussion."
Crandall also reminded that he unions at American Airlines aren't the only ones that would have to be considered in a merger.
"All the pilots, both AMR pilots, the America West pilots and the US Air pilots, which are three separate groups of pilots, would have to come together somehow and agree, along with the management of the combined company, on a single contract."
America West pilots are involved because that airline bought the bankrupt US Airways in 2005. It kept the US Airways name.
The three major American Airlines unions represent more than 50,000 workers.
Regardless of any union agreements, AMR has vehemently denied interest in a merger and has said from the beginning that it wants to come out of bankruptcy as a standalone carrier.
American is the nation's third-largest airline. US Airways is the nation's fifth-largest airline.
