April 19 At least two unions at bankrupt
American Airlines would support a potential merger with US
Airways Group and could issue a joint communication soon
pressuring airline management to consider a deal, two sources
said on T hur sday.
The sources said unions representing flight attendants and
ground workers were open to talks between the two airlines. It
was unclear if the union representing pilots also would support
merger talks, they said.
American Airlines parent AMR Corp filed for
Chapter 11 bankruptcy in November citing high labor costs. The
company on Th ursday posted a net loss of $1.7 billion for the
AMR has said repeatedly it wants to exit Chapter 11 as a
"As you know, there continues to be much takeover
speculation in the press fueled by those who seek to serve their
own agendas, including the circulation of misleading
information. I expect this to continue and to escalate," AMR
Chief Executive Tom Horton said in a statement accompanying the
airlines earnings report on Th urs day.
An AMR spokesman declined to comment beyond that statement.
Sources have said US Airways, formed in 2005 from a merger
with America West Airlines, has pitched merger proposals to
members of AMR's creditors committee, which includes labor
unions, in hopes of attracting support for a deal.
For now, AMR has the right to reorganize without intrusion
from outside parties.
"Although we put a high probability that an eventual merger
will happen, we believe that this could be aggressive timing
since AMR management has the exclusive right to reorganize
through the summer," said Ray Neidl, an airline analyst at Maxim
In March, US Airways gave a presentation to representatives
of AMR's unsecured creditors and told them that a combination of
the two airlines would create about $1.5 billion in synergies,
according to people familiar with the matter.
The briefing, which included US Airway's analysis as to how
a proposed merger would reduce costs while boosting combined
revenues, received positive response from the AMR creditors,
American has said it plans to eliminate 13,000 union jobs,
or roughly 15 percent of its work force, as part of an overall
drive to save roughly $1.25 billion in annual labor costs.
The company has asked the bankruptcy court for permission to
void the contracts. A hearing on the matter is set for next
The company said on Wednesday it intended to cut another
1,200 non-unions jobs to reach that goal.
Spokesmen for the Transport Workers Union, which represents
ground workers, and the Association of Professional Flight
Attendants declined to comment. A spokesman for the Allied
Pilots Association was not immediately reachable for comment.
A US Airways spokeswoman did not immediately return a call
seeking comment. Shares of US Airways closed up 16 percent at
$9.51 on the New York Stock Exchange.