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US Airways Rushes to Sign Contracts in Advance of Merger

Stocks in this article: AAMRQ.PK LCC

While previous deals include a side letter saying the terms of a buyout would be negotiated in event of a merger, this one sets a $40,000 payment. Also, previous deals didn't include a signing bonus, but now the delay in implementation enables the airline to offer a signing bonus that will cost less than it would have spent on earlier implementation, which in both cases would have come soon after ratification.

In a recent letter to members, AFA leaders wrote: "All available information indicates a merger with American Airlines is highly likely to be announced in the near future. This contract was negotiated to place US Airways flight attendants in the best position for a potential merger, whether it is with American or another partner, as part of industry consolidation."

"In the unlikely event this merger does not happen, the east and west flight attendants will likely continue to operate under their existing contracts indefinitely," the letter said. The contract agreement, like its two predecessors, provides significant wage and benefit improvements for the two groups of flight attendants who have been working under separate contracts that were in place before the 2005 merger of US Airways and America West.

As for the pilot's memorandum of understanding on a temporary contract that would take place in the event of a merger, voting concludes at 2 p.m. Friday. Passage is expected, even though Charlotte pilots have overwhelmingly defeated an effort to recall the three Charlotte base leaders, whose support for the MOU was lukewarm.

Some observers view securing pilot approval as a key step in concluding the preparations for a merger announcement that is now expected in mid-February, after previously being expected on various dates in January.

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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