AMR Unions Said Prepared to Back US Airways Takeover Offer
By Zachary R. Mider, Jeffrey McCracken and Mary Schlangenstein - Apr 19, 2012 1:09 PM CT
American Airlines’ three largest unions have agreed to support a possible takeover offer from
US Airways Group Inc. (LCC) rather than remain independent, three people familiar with the matter said.
The groups plan to say that they believe they can reach better terms with
US Airways than what they expect if American parent
AMR Corp. (AAMRQ) exits bankruptcy by itself, according to the people, who asked not to be identified because the talks are private.
AMR Unions Said Prepared to Support US Airways Takeover
The labor consensus has emerged as
Fort Worth, Texas-based American prepares to ask a federal
bankruptcy court on April 23 for permission to void existing union contracts and impose new terms in its quest to cut 13,000 union jobs. A ruling on the request may not occur until early June.
US Airways has confirmed hiring advisers to assess a bid for American, the third-largest U.S. airline, and has discussed a takeover plan with some creditors and their advisers, people familiar with the matter said in March.
American’s plan to chop $1.25 billion from labor spending has aggravated labor tensions predating its Nov. 29 bankruptcy filing. The
Allied Pilots Association, Association of Professional Flight Attendants and Transport Workers Union represent about 48,000 employees at the airline, whose workforce numbered about 73,800 when the job cuts were announced in February.
US Airways Shares
US Airways extended earlier gains, rising 7.9 percent to $8.85 at 2:02 p.m. in New York. The shares of the fifth-biggest U.S. airline rose 62 percent this year through yesterday.
Tom Hoban, a spokesman for the APA, declined to comment today when asked whether the union would back an offer by Tempe, Arizona-based US Airways. Calls to the flight attendants and to the TWU weren’t immediately returned.
The three unions said in an April 13 statement that they “must exercise due diligence and examine every possibility” to protect the jobs and retirement plans of members. The groups urged elected officials who spoke out against a possible merger bid to “withhold judgment about any industry consolidation that could involve our airline until all of the facts become known.”
Todd Lehmacher, a US Airways spokesman, declined to comment. American’s
Bruce Hicks said the company wasn’t elaborating on a letter to employees earlier today in which Chief Executive Officer
Tom Horton said “misleading information” may be circulating about the airline’s future.
“There continues to be much takeover speculation in the press fueled by those who seek to serve their own agendas,” Horton said. “I expect this to continue and to escalate. Naturally, there are many who do not want American to succeed.”
While American will seek court approval to reject existing contracts, it remains in talks with the TWU to reach a consensual agreement on concessions. It also has been meeting with the APA, while discussions with the flight attendants have been suspended.
To contact the reporters on this story: Zachary R. Mider in
New York at
[email protected]; Jeffrey McCracken in New York at
[email protected]; Mary Schlangenstein in Dallas at
[email protected]
