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AA Update – Merger Possible

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FORT WORTH (CBSDFW.COM) – The American Airlines’ pilots union approved a plan that could ultimately lead to a merger between American and US Airways inside bankruptcy.

The Allied Pilots Association board of directors passed the memo of understanding by an 11-5 vote during a special meeting this morning.

Now, it’s up to American Airlines management, the pilots and management of US Airways to approve the agreement as well.

The memo of understanding sets up temporary wages and work conditions including seniority if the two airlines merge.

The Allied Pilots have said the creditors want a framework in place to see if a merger is possible while American is still in bankruptcy.
Without all four parties approving the memo of understanding, the Allied Pilots say a merger now is unlikely.

If that’s the case, American would likely emerge as an independent airline first, and would then consider a merger with US Airways or another airline.

American Airlines executives have said they’d prefer to exit bankruptcy as a stand alone carrier first.

US Airways executives have said all along they want to merge with American Airlines quickly.

For months now, the two airlines have been exchanging confidential financial information as part of a non-disclosure agreement.

Some members of the Allied Pilots say they believe their union is rushing this through at the expense of their seniority. They favor American leaving bankruptcy first, then negotiating a seniority agreement with pilots of another airline before there’s a merger.

The Allied Pilots rejects that, and says a merger now is the right path.
It’s widely reported that the American Airlines board of directors will meet January 9th to consider a merger.

It will now be up to American management, pilots and management at US Airways to approve the memo of understanding before then.

Just Friday, the Allied Pilots accused American’s management of dragging its feet on the merger talks.

An American spokesman pointed out Friday that along with the unsecured creditors committee, the airline invited the pilots and other unions into merger talks.

“American Airlines 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’s proposal for this framework, approved this morning by its Board of Directors, is now subject to review and approval by American, US Airways and USAPA, which represents the US Airways pilots. If agreed upon, a memorandum of understanding will assist our stakeholders, including the AMR Board, in making an informed decision as to whether a merger should be pursued. This step comes as a result of American, in collaboration with the creditors committee, inviting the unions to take part in these discussions to better evaluate the costs of operational and pilot seniority integration. We remain committed in our efforts to secure the best outcome for our financial stakeholders, our people and our customers.” — Missy Cousino, American Airlines spokeswoman

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