Leaders of the pilots union at Fort Worth based American Airlines have now approved a framework for a labor agreement if the airline merges with US Airways.
On the morning of Saturday, December 29, the Allied Pilots Association Board of Directors voted 11 to 5 to approve what's called a "memo of understanding."
The memo outlines temporary wages and work conditions if the two airlines merge. It also addresses seniority and other issues. Now American gets to look at it along with the pilots and the management at US Airways.
Unless all four parties agree to it, the Allied Pilots Association says a merger appears unlikely before American emerges from bankruptcy. The pilots union cannot talk about specifics but said it wanted to have something done before AMR's Board of Directors meets a week from Wednesday.
Merger talks continue between the two airlines, and American Airlines is expected to emerge from bankruptcy in just months.
On Saturday, American Airlines released this statement:
“American Airlines remains actively engaged in discussions with US Airways, APA and USAPA to develop a framework for the terms of employment for pilots in the event of a merger. The APA’s proposal for this framework, approved this morning by its Board of Directors, is now subject to review and approval by American, US Airways and USAPA, which represents the US Airways pilots. If agreed upon, a memorandum of understanding will assist our stakeholders, including the AMR Board, in making an informed decision as to whether a merger should be pursued. This step comes as a result of American, in collaboration with the creditors committee, inviting the unions to take part in these discussions to better evaluate the costs of operational and pilot seniority integration. We remain committed in our efforts to secure the best outcome for our financial stakeholders, our people and our customers.” Mike Trevino, AMR spokesman
The board of directors of American's parent company, AMR Corp., has scheduled a meeting Jan. 9 and could vote on a merger then, NBC 5 has learned.
People involved in the process stressed that many difficult details still must be ironed out before a merger vote can take place.
Company officials did not want to be quoted by name because of the sensitivity of the ongoing discussions.
The judge in charge of American's bankruptcy and the influential committee of creditors also would have to sign off on a deal.
American's three major unions -- representing pilots, flight attendants, and ground workers -- have already signed new labor agreements with the bankrupt airline. The talks now under way essentially involve new contracts with a merged company.
Combining workforces is full of potential pitfalls for each company. US Airways has not successfully combined labor groups since it merged with America West seven years ago. A merger with American could allow it to solve its current labor issues all at once -- or merely add to their complexity.
A merger would likely mean thousands of American employees would be pushed lower on the seniority list, but the value of a new deal could be a huge incentive. American pilots, for example, could add $100 million per year to their overall compensation, union insiders say.
It's unclear who would lead a combined airline. But analysts say a merger would likely push out American's top executive, Tom Horton, who has led the airline since it declared bankruptcy last November.
US Airways' executives have said if they win control, they would use American's brand name and keep its headquarters in Fort Worth.