Reuters: Bankruptcy News: UPDATE 2-AMR unions, in deal with US Airways, want merger talks

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UPDATE 2-AMR unions, in deal with US Airways, want merger talks Apr 20th 2012, 15:07 Fri Apr 20, 2012 11:07am EDT * American Airlines unions want merger talks with US Airways * Unions say they have reached deal with US Airways * Unions say a merger would save jobs * American Airlines has shunned merger talks By Kyle Peterson and Karen Jacobs April 20 (Reuters) - The three main unions at bankrupt American Airlines said they have reached a tentative deal with US Airways Group intended to put pressure on a reluctant American to start merger talks with its rival. The unions said they support a tie-up to preserve jobs that otherwise would be lost if American's parent AMR Corp sticks to its plan to restructure as a stand-alone airline. American, the third-largest U.S. airline, so far has shunned merger interest from US Airways. "We have reached agreements on terms sheets for collective bargaining agreements that would govern the American Airlines employees of the merged airline with US Airways," the unions said on Friday in a statement provided to Reuters. "We are pleased to confirm our support of a possible merger between our airline and US Airways," said the unions, which represent American's flight attendants, pilots and ground workers. The unions said a deal with US Airways would save at least 6,200 American Airlines jobs that would have been shed under the company's stand-alone strategy. American has said it wants to cut 13,000 union jobs, or roughly 15 percent of its work force, as part of an overall plan to save $1.25 billion in annual labor costs. The company continues to pursue consensual deals on labor concessions. But, frustrated with the pace of negotiations, it has asked the U.S. bankruptcy court in Manhattan for permission to void labor contracts. A hearing on the matter is set for next week. The airline said on Wednesday it intended to cut another 1,200 non-unions jobs to reach its 15 percent goal. Pilots at American Airlines are represented by the Allied Pilots Association. The flight attendants are represented by the Association of Professional Flight Attendants. The Transport Workers Union represents seven groups of ground workers at American. An AMR spokesman declined immediate comment on Friday's joint union statement, but the company has tried for months to blunt merger speculation involving the company. US Airways has hired advisers to explore merger options with AMR, but the company has not issued a merger proposal. In a statement on Thursday, AMR Chief Executive Tom Horton said the merger talk is "fueled by those who seek to serve their own agendas, including the circulation of misleading information." A company spokesman said separately on Thursday that AMR is "intensely focused on successfully reorganizing to restore American Airlines to industry leadership." A spokeswoman for US Airways did not immediately respond to requests for comment. 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. The creditors committee, which has nine members, including the three unions, gets a say in how AMR restructures. For now, AMR has the right to reorganize without intrusion from outside parties. That right extends to September, but creditors could ask the judge to revoke it. In March, US Airways gave a presentation to members of AMR's creditors committee 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. Link this Share this Digg this Email Reprints

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