American Airlines announced they have reached a tentative agreement with the TWU Mechanic and Related and Stores workgroups.
Bruce Hicks, spokesperson for American Airlines, said the agreements will mean cost savings for the airline, which is currently working through bankruptcy.
"We reached agreements that address the needs of our people and still allow us to achieve the cost savings necessary for our company to compete and succeed," Hicks said in a press release. "As with APA, we were able to reduce the amount of targeted cost savings for these two TWU workgroups, in this case by about $35 million annually. Through this reduction, and a reallocation of profit sharing, we were able to provide additional pay raises, an adjustment to industry pay rates after three years, and changes in active medical benefits."
The agreements come as the CEO of American Airlines and AMR Corp, Thomas Horton, sent a letter mentioning a possible merger with US Airways.
US Airways has been pushing hard for a merger with American almost since the day that American and AMR filed for bankruptcy protection in November. Horton has taken a slower approach, saying he preferred to wait until after AMR emerges from bankruptcy protection before considering a merger.
But Horton said that due to improvements in revenue and progress on cost-cutting labor deals, it now makes sense to consider options such as a merger. He said AMR and its creditors will reach out to "interested parties."