Air- American pilots OK memorandum on seniority should three be a merger with US Airways- Star Telegram

Posted: January 3, 2013 in Uncategorized

December 29, 2012

American Airlines’ pilots union on Saturday approved a document covering such issues as seniority rules should their carrier merge with US Airways.

It passed by an 11-5 vote by its board of directors, the Allied Pilots Association said without disclosing any details of the confidential memorandum of understanding.

The move by the APA, which represents Fort Worth-based American’s 8,000 active pilots. is meaningless unless its union counterpart at US Airways and the management of the two carriers agree to the same document.

No details of the memorandum have been made public. The APA and the union representing US Airways pilots have signed nondisclosure agreements so they could take part in possible merger discussions.

Ed Stewart, a US Airways spokesman, told Bloomberg News in an email that the airline cannot comment because of a non- disclosure agreement. American Airlines spokesman Mike Trevino said by email that the company “remains actively engaged in discussions with US Airways, APA and USAPA to develop a framework for the terms of employment for pilots in the event of a merger.”

The APA said in a statement that if all parties — the two airlines and their respective unions — approve the memorandum, it would serve as a merger framework. If the two carriers do not join up, then the document is “null and void,” the union statement added.

The accord takes the carriers closer to a possible merger by minimizing the risk of labor objections and easing the two pilot groups toward a joint contract that would align pay and work rules. AMR, which has been in bankruptcy since 2011, has a board meeting set for Jan. 9 to decide whether to go ahead with a merger.

A combination of American, the third-biggest U.S. carrier, and No. 5 US Airways would surpass United Continental Holdings Inc. as the world’s biggest, based on passenger traffic.

US Airways has proposed to American’s creditors that the merged airline would retain the American name and continue to be based in Fort Worth, but be run by US Airways’ top executive, Doug Parker.

On Dec. 7, CEO Tom Horton of American’s owner, AMR Corp., said it would “soon” make a decision on whether to combine with Tempe, Ariz.-based US Airways. He made the statement shortly after the pilots — the last holdout union — had ratified a new, cost-cutting contract with American.

“While we are confident the new American will be very strong, we are evaluating whether such a combination could create value for our owners and a positive outcome for our people and our customers,” Horton said in a letter sent to employees three weeks ago. “We expect to have a conclusion on this soon.”

The six-year agreement with its pilots provides American with $315 million in annual savings and gives the union 13.5 percent of the equity in the reorganized company issued to unsecured creditors, according to court papers.

On Dec. 19, AMR won court approval for the pilots contract and a six-week extension for filing its bankruptcy reorganization plan. American’s exclusive right to file a plan in court was extended until March 11, blocking competing plans from being proposed.


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