US Airways Files For American Airlines Merger; Unions On Board
DALLAS (CBSDFW.COM) - US Airways officially announced Friday morning that it wants to merge with Fort Worth-based American Airlines. While it has not made a takeover bid for American, it has struck a collective bargaining agreement with the airline's three main unions -- the Allied Pilots Association, the Transport Workers Union and the Association of Professional Flight Attendants.
On Friday morning, those three unions -- which includes American's pilots, mechanics and flight attendants -- released a joint statement in support of a takeover of American Airlines by rival US Airways. The three unions make up 55,000 of American's 73,000 employees.
Also on Friday morning, after reaching an agreement with the unions, US Airways filed notice with the SEC that it intends to take over American.
The president of American's flight attendants' union recorded this announcement to its members Friday:
Friday morning, American's pilots' union explained to its members why it supports a merger.
According to the pilots' union, the merged airline would still be called American Airlines. It would also continue to be based in Fort Worth. US Airways is based in Phoenix.
As CBS 11 News first reported on Thursday night, US Air made an offer to American's pilots union that includes paying them the same scale as Delta Airlines pilots plus three percent, freezing the pensions and guaranteeing their seniority for seven years. American's unions have lost all confidence with their company's current leadership after the airline asked a bankruptcy judge to throw out the unions' existing contracts. That hearing will take place Monday in bankruptcy court.
In a letter to US Airways employees Friday, airline CEO Doug Parker said:
"First of all, today's news does not mean we have agreed to merge with American Airlines. 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 to an actual merger, many more things must happen, including gaining the support of AMR's creditors, its management team and its Board of Directors." (Click here to read Parker's entire letter.)
As CBS 11 News has reported, a bankruptcy judge has ruled that only American Airlines can present a business plan for reorganization through late September. American Airlines CEO Tom Horton has said all along that the airline wants to emerge from bankruptcy alone, then consider whether a merger is a good step.
American Airlines has proposed slashing 14,000 jobs.
But the US Airways CEO said in his letter, "After studying American Airlines' current state and their future plans, we have concluded that a merger with American, while they are undergoing their bankruptcy restructuring, represents a unique opportunity that we should not ignore. ... Our merger contemplates saving at least 6,200 of these positions. For the US Airways team, the agreements we have reached with the unions representing employees at American would also provide enhancements to the compensation and benefits currently in place here."
American issued the following statement at 11 a.m. Friday:
"American Airlines is moving steadily through the Court supervised restructuring process and the Court has granted American the exclusive right to create its plan of reorganization at least until September 28, 2012. 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. Our immediate next step is to pursue vital modifications to our collective bargaining agreements through the 1113 process that begins on Monday, April 23rd. We believe statements of non-binding 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. For American's outstanding employees and loyal customers, business continues on track, as we continue to provide the safe, reliable travel experience our customers expect."
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