$AMR - AMR Pilots Nod to Possible Deal
In a step that potentially could ease the way for a merger of American Airlines parent AMR Corp. and US Airways Group Inc., the board of American's pilots union approved an interim labor framework should the two carriers proceed with a combination to take AMR out of bankruptcy-court protection.
After three weeks of confidential negotiations overseen by AMR's creditors committee, the Allied Pilots Association board on Saturday voted 11-5 in favor of a proposed accord, the union said. Terms weren't disclosed. The proposal requires the assent of the other parties to the talks, including both carriers and US Airways' pilot union.
The APA, which represents 10,000 American pilots, has long supported the merger. Its board in April agreed to a conditional labor agreement with US Airways if the combination occurs. The deal reached Saturday puts meat on the bones of that earlier accord regarding a timetable for a follow-on labor agreement and seniority integration. It also slightly improves the economic base line, which is a cost-saving labor agreement American and its pilots concluded early in December.
AMR, which sought protection from its creditors 13 months ago, initially was determined to exit from Chapter 11 as an independent carrier and has developed a stand-alone reorganization plan based on lower costs and expectations of revenue improvements from changes to its network and fleet. But its creditors over the summer pressured AMR to look seriously at the merger, which US Airways has been pushing for months.
AMR's creditors want to weigh the alternatives to see which one will bring them the most value and build the strongest company. Having insights into pilot labor costs would help them identify synergies and costs that would result from a combination.
American and US Airways in September began conducting due diligence about the prospects for a combination. AMR and the creditors broadened the confidential talks early in December to include the two pilots' unions, as pilots are the most expensive and irreplaceable employees and combining workforces in airline mergers can be messy.
American "remains actively engaged in discussions' with the other three parties, a spokesman for the Fort Worth, Texas, company said late Saturday. If they can approve an accord, it would "assist our stakeholders, including the AMR board, in making an informed decision as to whether a merger should be pursued," he said.
The AMR board is scheduled to meet on Jan. 9 and some American pilots have expressed hope that a fully formed merger plan would be ready then for the directors' consideration. But that could be optimistic.
Negotiators for the US Airline Pilots Association, which represents 5,200 US Airways pilots, said in a message to members on Sunday that the deal the APA board approved "contains the latest APA positions and IS NOT a final agreement." The negotiators said they would continue to try to improve the language so they can bring a deal to the USAPA board and ultimately to a membership vote, which isn't required on the American side. Ratification can take several weeks.
US Airways, based in Tempe, Ariz., declined to comment.
An accord by all the parties would align pay and work rules for the combined pilot group until a new joint labor contract could be reached, which US Airways has insisted must occur within 24 months of the merger. The deal also would provide interim seniority protections until a single seniority list could be agreed voluntarily or through arbitration. The seniority list is of paramount importance to pilots as it dictates which type of airplane he or she flies, whether as a captain or first officer, his or her compensation and schedule.
In a step that potentially could ease the way for a merger of American Airlines parent AMR Corp. and US Airways Group Inc., the board of American's pilots union approved an interim labor framework should the two carriers proceed with a combination to take AMR out of bankruptcy-court protection.
After three weeks of confidential negotiations overseen by AMR's creditors committee, the Allied Pilots Association board on Saturday voted 11-5 in favor of a proposed accord, the union said. Terms weren't disclosed. The proposal requires the assent of the other parties to the talks, including both carriers and US Airways' pilot union.
The APA, which represents 10,000 American pilots, has long supported the merger. Its board in April agreed to a conditional labor agreement with US Airways if the combination occurs. The deal reached Saturday puts meat on the bones of that earlier accord regarding a timetable for a follow-on labor agreement and seniority integration. It also slightly improves the economic base line, which is a cost-saving labor agreement American and its pilots concluded early in December.
AMR, which sought protection from its creditors 13 months ago, initially was determined to exit from Chapter 11 as an independent carrier and has developed a stand-alone reorganization plan based on lower costs and expectations of revenue improvements from changes to its network and fleet. But its creditors over the summer pressured AMR to look seriously at the merger, which US Airways has been pushing for months.
AMR's creditors want to weigh the alternatives to see which one will bring them the most value and build the strongest company. Having insights into pilot labor costs would help them identify synergies and costs that would result from a combination.
American and US Airways in September began conducting due diligence about the prospects for a combination. AMR and the creditors broadened the confidential talks early in December to include the two pilots' unions, as pilots are the most expensive and irreplaceable employees and combining workforces in airline mergers can be messy.
American "remains actively engaged in discussions' with the other three parties, a spokesman for the Fort Worth, Texas, company said late Saturday. If they can approve an accord, it would "assist our stakeholders, including the AMR board, in making an informed decision as to whether a merger should be pursued," he said.
The AMR board is scheduled to meet on Jan. 9 and some American pilots have expressed hope that a fully formed merger plan would be ready then for the directors' consideration. But that could be optimistic.
Negotiators for the US Airline Pilots Association, which represents 5,200 US Airways pilots, said in a message to members on Sunday that the deal the APA board approved "contains the latest APA positions and IS NOT a final agreement." The negotiators said they would continue to try to improve the language so they can bring a deal to the USAPA board and ultimately to a membership vote, which isn't required on the American side. Ratification can take several weeks.
US Airways, based in Tempe, Ariz., declined to comment.
An accord by all the parties would align pay and work rules for the combined pilot group until a new joint labor contract could be reached, which US Airways has insisted must occur within 24 months of the merger. The deal also would provide interim seniority protections until a single seniority list could be agreed voluntarily or through arbitration. The seniority list is of paramount importance to pilots as it dictates which type of airplane he or she flies, whether as a captain or first officer, his or her compensation and schedule.
