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US Airways/American Airlines merger plans in the works

April 20, 2012, Dallas, Tx. - US Airways has struck deals with labour unions at American Airlines to win their support for a possible merger with American.


April 20, 2012
By Carey Fredericks

The unions represent more than 50,000 workers including pilots, flight attendants and ground workers at American, the nation's third-largest airline.

They said Friday that a merger with US Airways Group Inc. is the best way to fix American, which filed for bankruptcy protection in November.

The unions oppose American's plan to cut 13,000 union jobs and sharply cut labour costs to return to profitability. American is seeking to throw out contracts with the unions that govern pay, benefits and work rules, and impose its own terms on employees.

US Airways and the unions said that they have agreed on terms for collective bargaining agreements if there is a merger between the airlines. However, no such deal exists.

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Thomas Horton, CEO of American Airlines' parent company, AMR Corp., has indicated he would prefer that AMR remain independent but is open to a merger after his company emerges from bankruptcy protection.

Friday's gambit by US Airways and the American Airlines unions could complicate Horton's strategy, however.