Coverage of the merger between American Airlines and US Airways

AA CEO Presents Restructuring Plan to Pilots Union Board

Pilots less than thrilled with CEO's presentation of airline's plan to emerge from bankruptcy

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    NEWSLETTERS

    American Airlines pilots say their CEO is making his case for remaining an independent company, but the union still wants a merger with US Airways.

    Less than a week after pilots approved a new contract with American Airlines, the airline's CEO visited the union's board of directors.

    On Thursday morning, CEO Tom Horton paid a visit to the Allied Pilots Association directors to discuss American's plan to get out of bankruptcy and restructure.

    American Head Meets With Pilots Association

    [DFW] American Head Meets With Pilots Association
    American Airlines CEO Tom Horton meets with leaders from Allied Pilots Association.

    It was an important visit for several reasons. Symbolically, it was important because it was Horton's first visit to the APA board since he took over as CEO.

    The union said Horton shared the company's plan to emerge from bankruptcy and restructure. With the pilots now holding a major stake in the airline now that their contract approved, Horton may need their support.

    However, the pilots indicated they aren't interested in going along with what Horton presented.

    "Essentially, it was Mr. Horton's vision for the standalone plan, for which he's an advocate," APA spokesman Tom Hoban said. "It's not something we're on board with; we don't believe that standalone will fix American's systemic problems."

    Horton told reporters outside the APA that he had "a good chat" with the union about the future of the airline. He also thanked the pilots for their hard work on the new labor contract.

    "We were talking about the bright future that American Airlines has before it on the other side of restructuring, and our pilots are big stakeholders in the future of this company, so it was a good meet," Horton said.

    The remarks are some of the first on-camera comments he has made since American Airlines filed for bankruptcy in November 2011.

    Horton only answered one other question before staff members jumped in to say he had to run to another meeting.

    "I think the meeting should really be between us and the folks in the room -- a lot of give and take, a lot of good discussion about the future of the company," he said. "And, of course, pilots do have a big stake in the future -- of course they have a lot of questions and are certainly entitled to ask them."

    Pilots now own 14 percent of the company after the approval of their contract on Dec. 7.

    While Horton did not elaborate on what was discussed, the pilots union did. Hoban said that Horton made a 90-minute presentation outlining American's standalone plan to emerge from bankruptcy. In other words, the company would like to leave bankruptcy as a single airline and discuss a merger after bankruptcy. There was a question-and-answer period following the presentation.

    Hoban said the plan calls for outsourcing pilots jobs and more code-sharing, something the pilots don't want.

    "We simply want a leadership team that's going to be in place that wants to run an airline, not a virtual travel agency," he said.

    The pilots want to reach a merger deal with US Airways before American emerges from bankruptcy sometime next year.

    "Really, the next step is crafting this short-term agreement with all four parties that will get us to the next step to conduct a merger while in bankruptcy; that's really what is on our plate in the near term," Hoban said.

    The four parties are the APA, American management, US Airways management and the Phoenix-based airline's pilots union.

    US Airways CEO Doug Parker and President Scott Kirby will make a merger presentation to the APA board sometime next week in Fort Worth.

    Hoban said that while it would be unprecedented for a merger to reached while a company is still in bankruptcy, the pilots and other union groups believe it's the best way to move forward. They also want to move forward without current American Airlines leaders, including Horton.

    Both sides said the meeting was respectful despite those calls for the ouster of Horton and others.

    Hoban said the pilots would like to have an interim agreement in place on a merger by the end of January.

    American spokesman Mike Trevino said in an emailed statement that AMR Corp. used Thursday's meeting to thank union leaders for supporting the contract that pilots ratified. He said Horton and other company officials also went to "discuss the next steps in our evaluation of strategic alternatives and exchange information and thoughts about how to continue the positive momentum we are creating for our people and our customers."

    American is the nation's third-biggest airline, and US Airways is fifth-biggest. Combined, they would be about the same size as industry leader United Airlines.

    There is no guarantee that the current talks will produce a deal. Either airline could try to force a merger or acquisition of the other, or both could decide to remain independent.


    American Airlines Merger:
    Complete coverage of the merger between American Airlines and US Airways into the newly-formed Fort Worth-based company, American Airlines Group (AAL). Click here for more.