CHARLOTTE, N.C. -- (
) -- A tentative contract deal between
and its pilots removes an impediment to a possible merger with
, said a leading airline analyst.
AMR and the Allied Pilots Association reached an agreement in principle on Friday. The union said it provides "an industry standard contract while enabling American Airlines to complete a successful restructuring and compete on a level playing field with its network-carrier peers." Pilots have yet to vote on the deal.
In a note issued Tuesday, J.P. Morgan analyst Jamie Baker wrote that investors have asked whether the deal represents "labor détente, thereby diminishing the prospects for consolidation." He said the opposite is true.
"A stand-alone plan inclusive of a pilot contract is a must-have for AMR's unsecured creditors committee, in our view, so that it may be compared to the merits of a merger," Baker wrote. "Quite frankly, two plans are expected to come under consideration, and the lack of a completed stand-alone plan threatened to weigh down the process."
Baker said he believes that creditors will likely have the opportunity to review competing plans by early next year. American has until Jan. 28 to file its restructuring plan with the bankruptcy court after Judge Sean Lane last week granted a request, backed by the unsecured creditors committee, to extend the filing period by one month.
-- Written by Ted Reed in Charlotte, N.C.
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