* AMR plans to emrge from Chapter 11 a stand-alone company
* Union letter to AMR to run in Wall St Journal, elsewhere
By Kyle Peterson
May 3 Three labor unions at American Airlines
are appealing directly to the company's board of directors to
support a merger with rival carrier US Airways Group, a
step that managers at carrier's parent, AMR Corp,
have so far resisted.
In a letter addressed to the board and signed by leaders of
unions representing 55,000 flight attendants, pilots and ground
workers, the unions say a merger plan offered by US Airways will
save jobs, boost revenue and shore up the combined network of
the two airlines.
AMR, based in Fort Worth, Texas, which filed for Chapter 11
bankruptcy in November citing a need to cut labor costs, has
said it is committed to emerging from Chapter 11 as a
"Under the plan put forth by US Airways management, a merger
now between American Airlines and US Airways would result in a
rejuvenated American Airlines," according to the letter, signed
by leaders of the Allied Pilots Association (APA), the Transport
Workers Union (TWU) and the Association of Professional Flight
The text of the letter was set to appear on Friday in ads
published in the Wall Street Journal, the Dallas Morning News
and the Fort Worth Star-Telegram, a TWU spokesman said.
US Airways has not submitted a formal merger proposal to
AMR, which has the exclusive right in bankruptcy court to
reorganize without interference from outsiders.
US Airways, however, has struck a labor deal with AMR's
unions, which are members of AMR's creditors committee and
therefore have a say in the restructuring.
"An American Airlines-US Airways merger would be mutually
beneficial by filling the gaps in each carrier's network and
boosting overall revenue," the letter said.
US Airways declined comment on labor's outreach to
American said the manoeuvre changes nothing, that the
airline will continue on its restructuring path that includes a
proposal to abrogate union contracts.
"It should be easy for anyone to understand the agendas of
other interested parties and their sense of urgency to advance
them, and their actions continue to demonstrate that. We don't
need to address them again," spokesman Bruce Hicks said in an
Hicks noted that American executives have said the carrier's
restructuring will be disciplined and dictated by facts,
including whether the company chooses consolidation down the
"This is the charge of the board of directors and the
leadership team to be done in close collaboration with the
creditors committee," Hicks said.
US Airways has said a merger with AMR would generate at
least $1.2 billion a year beyond the benefits that could be
passed to employees of the combined carrier.
AMR, however, insists its stand-alone plan would create $3
billion in financial improvements by 2017. To achieve this goal,
the company says, it must slash labor costs by $1.25 billion a
AMR has been locked for years in fruitless negotiations with
its unions on concessions it says it needs to survive. The
company has asked its bankruptcy court for permission to void
the contracts it has with unions that are not willing make
Spokesmen for the TWU and the APFA confirmed their unions
have talked with their counterparts at US Airways to lay the
foundation for joint contracts in the event of a merger.
James Ray, spokesman for US Airline Pilots Association,
which represents the pilots at US Airways, said members are
working with the APA on a joint contract.
US Airways, formed from a 2005 merger with America West
Airlines, still has not integrated its pilots' and flight
attendants' work groups.
American Airlines is the third-largest U.S. airline behind
United Airlines and Delta Air Lines, both of
which have already restructured in bankruptcy.
Separately, American is challenging a decision by federal
mediators to allow a union representation election for about
10,000 non-union airport agents and other passenger service
The airline said in a suit this week in Texas that the
National Mediation Board (NMB) applied an outdated standard for
gauging the level of worker support needed to hold a union
The NMB could not immediately be reached for comment.
The suit is not part of American's bankruptcy case.