Notwithstanding US Airways estimates that a merger with bankrupt American Airlines would create at least $1.2 billion in new value for the combined companies, American continues to pursue its own path toward restructuring, arguing last week in bankruptcy court that it needs to void the contracts of its three main employee unions. Meanwhile, some 700 flight attendants, fleet service workers and mechanics gathered in New York City on April 23 to protest what the Transport Workers Union (TWU) characterized as “an abhorrent request” to “abrogate their collective bargaining agreements.”
While arguing in court against AMR’s efforts to terminate its contract, Allied Pilots Association general counsel Ed James criticized management’s refusal to consider consolidation before emerging from Chapter 11. “Every analyst says consolidation has to occur,” said James.
For its part, the TWU raised the point that US Airways would keep intact TWU members’ skill level premiums and pay grades, as opposed to American’s plan to relegate employees to lower paying classifications. It also applauded US Airways’ plan to continue operations at many of the cities American wants to close.
US Airways has signed agreements with the three unions, including the Association of Professional Flight Attendants, to work collaboratively toward new collective bargaining agreements should the two airlines merge.
In a letter to employees, US Airways CEO Doug Parker emphasized 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.”