AMR Unions Have Tentative Contracts With US Airways

CHARLOTTE, N.C. ( TheStreet) -- The three largest unions at AMR ( AAMRQ.PK) have not only announced their support for a merger with US Airways ( LCC), but have also reached tentative contract agreements with the Tempe, Arizona-based carrier.

Most importantly, the contracts would preserve 6,200 of the 13,000 jobs that AMR has said it must eliminate and "would provide competitive, industry-standard compensation and benefits, as well as improved job security and advancement opportunities for all employees of the combined airline," said US Airways CEO Doug Parker, in a message to employees released Friday morning.

Parker said all of the two airlines' existing hubs would be preserved. Of those, Dallas and Charlotte are the two largest. "Our intention would be to put our two complementary networks together, maintaining both airlines' existing hubs and aircraft, and create an airline that could compete successfully with United ( UAL) Delta ( DAL), and other carriers within our industry."

In a joint statement, the Allied Pilots Association, the Association of Professional Flight Attendants and the Transport Workers Union, said: "This significant step represents our shared recognition that a merger between American Airlines and US Airways is the best strategy and fastest option to complete the restructuring of American Airlines, enabling it to exit the Chapter 11 bankruptcy process and restore American Airlines to a preeminent position in the airline industry."

The three unions represent nearly 55,000 American employees, including 26,000 mechanics and fleet service and related workers, 17,000 flight attendants and 10,000 pilots.

Parker wrote: "Today's news does not mean we have agreed to merge with American Airlines. It only means we have reached agreements with these three unions on what their collective bargaining agreements would look like after a merger, and that they would like to work with us to make a merger a reality.

"To get to an actual merger, many more things must happen including gaining the support of AMR's creditors, its management team and its board of directors," he said. "But this is obviously an important first step along that path and we are hopeful we can all work together to make this happen."

AMR is scheduled to go into bankruptcy court on Monday to abrogate its union contracts. The unions say that a deal with US Airways would mean "avoiding a lengthy and contentious 1113 process (so that) the new carrier would be able to emerge from bankruptcy more quickly."

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

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