US Airways Takes “First Step” Toward Merger with American Airlines

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US Airways has confirmed its pursuit of a merger with American Airlines. (Photo: US Airways)
April 20, 2012, 11:00 AM

US Airways has signed agreements with the three unions that represent nearly 55,000 American Airlines employees calling for all the parties to work collaboratively toward labor contracts should the two airlines merge. In a letter to his airline’s employees, US Airways CEO Doug Parker identified the unions as the Allied Pilots Association (APA), the Association of Professional Flight Attendants (APFA) and the Transport Workers Union (TWU), which represents all of American’s mechanics and fleet service workers.

Soon after the disclosure, the three unions issued a public statement announcing their support of a merger and that they have agreed to terms that would govern collective bargaining agreements at the merged airline. Parker stressed, however, that the agreements only amount to a “first step” toward pursuing a merger, and that any such move hinges on a number of still unresolved factors.

“First of all, today’s news does not mean we have agreed to merge with American Airlines,” said Parker. “It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality. To get to an actual merger, many more things must happen, including gaining the support of AMR’s creditors, its management team and its board of directors.”

Still, Parker talked of the benefits consolidation has brought to US Airways and the industry at large and called a potential merger with bankrupt American “an opportunity we should not ignore.”

Parker said a merger would save 6,200 of the 13,000 jobs slated for elimination as part of American’s restructuring plans.  

“Combining American Airlines and US Airways would create a preeminent airline with the enhanced scale and breadth required to compete more effectively and profitably,” said Parker. “Our intention would be to put our two complementary networks together, maintaining both airlines’ existing hubs and aircraft, and create an airline that could compete successfully with United, Delta and other carriers within our industry.”

 

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