US Air Courts American's Unions
American Airlines' major unions are trying to steer the bankrupt company toward a merger with US Airways. The unions said Friday they're reached a deal with US Airways over the structure of such a merger, one that protects some jobs and creates an airline capable of competing with United, which recently merged with Continental, and Delta, which bought Northwest. The unions think American's plan to emerge from bankruptcy relies too much on shedding labor costs by eliminating 13,000 jobs and tearing up existing union contracts. "American Airlines has a revenue problem that's much bigger than their cost problem, but they're just going after labor costs," Allied Pilots Association spokesman Scott Shankland told Bloomberg.
US Air and the American unions say they've reached a deal on labor issues that would become effective in the merger. All aircraft and hubs would be retained but there would still be 6,200 job losses, or about 12 percent of the workforce. The union has three seats of nine on a committee that advises the bankruptcy court in its dealings with American. For a merger to occur, that committee would first have to convince the court to review American's exclusive right to shape its reorganization plan. The unions and US Air have to convince creditors, management and American's board of directors that the merger is the right way to go. Against those odds, US Airways CEO Doug Parker said the support of the unions is nevertheless a good start. "But this is obviously an important first step along that path, and we are hopeful we can all work together to make this happen," Parker wrote in a letter to US Air employees.