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In American Airlines Merger, One CEO Had to Go

The meeting otherwise went well. Bates and union vice president Tony Chapman flew to Phoenix 10 days later for dinner with Kirby and Parker. A steakhouse dinner quickly followed with some of the union's leaders and most of US Airways management.

Steps were taken to ensure the meetings remained a secret.

Too many American pilots recognize Bates and the other union officials. So they flew US Airways.

Pilots will often fly other airlines in uniform and chat with the crew. That couldn't happen on these flights.

"Everybody was told to be invisible, not to talk to anyone," Bates said.

When Parker and Kirby flew to Texas to make their case to the union, there was even a higher level of secrecy. They used a private jet and Bates personally made the 12-mile drive to the meeting site in the union's red Chevrolet Suburban.

Union security guards were stationed around the Hilton Arlington, but when Bates pulled up at the back entrance, he recognized a reporter lurking nearby. He quickly made a U-turn and the meeting was moved to the union's headquarters.

Similar meetings were being held with the flight attendant union and one that represents ground service employees and maintenance workers.

Around this time, Parker sent a letter to American formally proposing a merger. US Airways would own 51% of the new airline. The offer wasn't taken seriously.

On April 20, Parker publically announced that American's three unions were backing a merger.

It was an audacious move.

American was still in control of its bankruptcy but suddenly there was another option on the table. The unions told the court that jobs and wages didn't need to be cut.

Wall Street analysts supported a merger, preferring Parker as the new CEO.

Horton publically told employees "nothing changes as a result of these announcements." But privately he and other top American executives were rethinking a deal.

American had originally planned to emerge from bankruptcy and talk to several airlines, including US Airways. Horton became convinced that if he waited too long, a deal might not be available to him.
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