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TheStreet Open House

US Airways and American Ramp Up Merger Push as Labor Steps Up

CHARLOTTE, N.C. ( TheStreet) -- Signs of a full-court merger press emerged Thursday afternoon, as US Airways (LCC) and American (AAMRQ) pushed for an early court date, backed by most of the airlines' unions, and two labor leaders visited Pennsylvania's attorney general to challenge her opposition.

The airlines filed a motion requesting a court date of Nov. 12, in U.S. District Court for the District of Columbia, where the Justice Department has filed a suit contesting the planned merger. The DOJ has requested a court date of Feb. 10, 2014.

"We are eager to get to court so that we can make our case and explain exactly how this merger enhances competition across the US and the globe, and begin creating the new American Airlines as soon as possible," said US Airways CEO Doug Parker, in a message to employees.

Late Thursday, a coalition of six unions representing 70,000 workers at the two carriers issued a joint statement backing the request for a speedy trial. "Our members want a fair shot at competing in the market place," the unions said. "Our members have borne the brunt of the severe turbulence in the aviation industry. Justice delayed is justice denied for our members."

Meanwhile, Veda Shook, president of the Association of Flight Attendants, and Ed Mooney, vice president of the Communications Workers of America, met with Pennsylvania Attorney General Kathleen Kane, one of the six attorneys general who joined the Justice Department in its opposition to the planned merger.

"It's important to talk about why this merger is important to workers and their families," Shook said, in an interview. "The merger would obviously have a significant impact on the state of Pennsylvania. We went in to try to gain a better understanding and some background on why the state joined with the DOJ.

"US Airways has a long history in the state of Pennsylvania," Shook said. "But what ability does US Airways as a standalone have to compete with the duopoly that's been created?" Since 2007, the Justice Department has allowed mergers for the three biggest airlines -- global carriers Delta (DAL - Get Report) United (UAL - Get Report) and domestically focused Southwest (LUV - Get Report). Shook posed a rhetorical question: "You've allowed mergers for three and you're not going to let four happen?"

Shook said she and Kane, a Democrat, "had an ability to listen to each other. (Kane) knows who she is and stands up for equality and voting rights." But the two remain divided on the merger. Late Thursday, Kane spokesman Joe Peters said, "I can confirm the meeting took place (and) Attorney General Kane has not changed her stance on the merger."

In a statement issued last week, Kane explained her opposition. She said that competition would be reduced and that in Pennsylvania, "US Airways has repeatedly asked for public dollars in exchange for expanded service, but it has often failed to deliver on its promises." The airline largely abandoned Pittsburgh after a $500 million hub expansion, she said, and did not fully repay a $71 million, 2000 bond issue for a Philadelphia maintenance facility.

Although she did not change Kane's mind, Shook said she hopes to make similar visits to the attorneys general in the six other jurisdictions: Arizona, Florida, Tennessee, Texas, Virginia and the District of Columbia. She said she is working together with the Association of Professional Flight Attendants, which represents American flight attendants, and demonstrations are likely. Leaders of the two unions met Wednesday in Washington to discuss strategies to advance the merger; they also agreed that they hope to avoid competing in a union representation election if a merger occurs, APFA said in a press release.

AFA represents nearly 10,000 flight attendants at US Airways, subsidiaries Piedmont and PSA and AMR subsidiary American Eagle. CWA and the International Brotherhood of Teamsters together represent 6,500 airport and reservations agents at US Airways.

If the merger occurs, US Airways' Philadelphia hub would become the principal trans-Atlantic hub for the world's biggest airline and would likely benefit from increased service and employment.

On Monday, the Allied Pilots Association, which represents American pilots, took out an ad in the Dallas Morning News to display an open letter to Texas Attorney General Greg Abbot challenging his participation in the lawsuit. "We have to ask: Are you opposed to having a leading global carrier in Fort Worth?" the pilots said in the ad. "Considering everything at stake -- including the large number of jobs and the tax revenues they generate -- that doesn't make any sense."

The International Association of Machinists, which represents about 9,500 workers at US Airways, where it is the largest union, did not sign the joint statement. "Our position today is the same as it was when the merger was first announced: our members need a contract," IAM spokesman Joe Tiberi has said. "US Airways is not supporting our members, so our members cannot be asked to support US Airways' merger."

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

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

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