US Airways In A Holding Pattern For American Takeover
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FORT WORTH (CBSDFW.COM) - US Airways’ announcement that it wants to pursue a merger with American Airlines sent American’s three main unions soaring.
The unions, which represent 55,000 American employees, and US Air say they’ve reached agreements on what their pay and benefits would like after a potential merger.
The president of American’s flight attendants union posted a video on You Tube Friday morning for their members.
Laura Glading of the Association of Professional Flight Attendants said, “This agreement puts flight attendants in a far better position than any proposal American Airlines management has ever made.”
The Transit Workers Union, representing American’s mechanics, and American’s pilots also favor US Air’s plan over American’s.
Howie Schack of the Allied Pilots Association says, “I think it would be better for everyone, better for the creditors, better for the towns, the employees, and the airline. It would be a better American Airlines, a new American Airlines.”
But US Air can’t make a bid for its rival just yet.
That’s because American has exclusive rights until September 28th to come up with its own plan to emerge from bankruptcy alone.
And American isn’t backing down. American’s spokesman Bruce Hicks says, “These statements do not in any way alternate the company’s commitment to alter it’s business plan.”
But Dallas attorney Randy Ray says American may now have a tougher time though leaving bankruptcy alone. “They’ve got more pressure on them.”
He says American’s creditors will have to decide if American’s plan is better or “Does the US Airways approach make a more viable business out of bankruptcy to make sure that we get paid, we being the creditors.
American has proposed eliminating 14,000 jobs.
But US Air says it will be able to save more than six thousand of them.
SMU economics professor Mike Davis, though cautions this is far from over.
He says, “US Air can promise the employees, hey, if we merge we’ll save all these jobs, and they can make that promise in good faith, but it might not happen.”
He says that’s because the airline business is so complicated.
But on Monday, the legal drama will shift to bankruptcy court in New York City.
At a hearing, American will ask a judge to throw out all of the union’s existing contracts to save money.
American’s unions will be there to to try and fight it.