CHARLOTTE, N.C. ( TheStreet) -- Shares in US Airways ( LCC) rose 16% Thursday after TheStreet reported that the carrier has been successfully gathering union support for its bid for bankrupt AMR ( AMMRQ.PK). Shares rose steadily after the story was reported shortly after noon, and continued to rise after it was reported by other outlets.
Volume was 31 million, nearly four times the average daily volume over the past four months. Year-to-date, US Airways shares are up 82%. The carrier has managed to win qualified backing for its takeover bid from four AMR unions, the Transport Workers, the Allied Pilots Association, the Association of Professional Flight Attendants and the Association of Flight Attendants, which represents flight attendants at American Eagle, according to people with knowledge of those discussions. "The unions are working together," said a person familiar with the agreement. "They are open to a merger, not circling the wagons against one." Another person said the APA is part of the group backing the US Airways bid, a point that was not initially clear. In a note issued Thursday, Maxim Group analyst Ray Neidl discussed the story and said: "Our take is that US Airways cannot offer too much
as incentive to the unions since we believe all of the cost cutting in the AMR plan is needed for the carrier to be competitive; however, AMR unions may be more willing to work with a new management. "We put a high probability that an eventual merger will happen," Neidl wrote. "A combination of the two carriers would be positive for both of them and the industry in our opinion." Meanwhile, AMR was on the offensive against a takeover bid on Thursday, as it released first-quarter earnings that showed its first-quarter passenger revenue per available seat mile rose 10.3%, ahead of both US Airways at 8.4% and United Continental ( UAL) at 5.2%. Delta ( DAL) PRASM rose 13.5%, the carrier said.
In a message to employees discussing the first-quarter results, AMR CEO Tom Horton wrote, "there continues to be much takeover speculation in the press, fueled by those who seek to serve their own agendas, including the circulation of misleading information. "Naturally, there are many who do not want American to succeed," Horton said. "I believe the best way for us to achieve the best outcome for our company, our people and our stakeholders is to proceed quickly with our restructuring to create a successful, growing and profitable company." -- Written by Ted Reed in Charlotte, N.C. >To contact the writer of this article, click here: Ted Reed >To follow the writer on Twitter, go to http://twitter.com/tedreednc.