American, US Airways unions, bondholders respond to merger agreement

By Caroline Salls

Pittsburgh, Feb. 14 - Several American Airlines and US Airways Group unions and creditor groups expressed their support for the airlines' proposed merger agreement, while the International Association of Machinists and Aerospace Workers said it cannot support the merger until after contracts are renewed for its US Airways members.

International Association of Machinists and Aerospace Workers (IAM) district 141 president Rich Delaney said, "IAM members at US Airways need and deserve contracts now.

"The machinists union will not allow US Airways to stall our members' contract negotiations while it devotes its attention to merging with American Airlines. The IAM is prepared to support this merger only if it provides real value to employees," he added.

IAM district 142 president Tom Higginbotham said, "The IAM has been in negotiations with US Airways to amend existing contracts for approximately two years. US Airways, however, is more concerned with courting American Airlines than negotiating with its own employees."

The IAM said the merger still faces many obstacles, including shareholder and regulatory approval.

Attendants support merger

"The merger between US Airways and American Airlines holds great opportunities for flight attendants. We will raise the bar for our profession and we look forward to working as key partners," US Airways flight attendants, represented by the Association of Flight Attendants-CWA, said in a news release.

"As full partners in the world's largest airline, we expect meaningful participation in its benefits. We look forward to working with our colleagues at American in improving wages, benefits, work rules and retirement security for all flight attendants at the new American."

Meanwhile, the union representing American Airlines' flight attendants, the Association of Professional Flight Attendants, said it "enthusiastically welcomed today's announcement that American Airlines and US Airways have agreed to a merger."

Five unions respond

In a separate release, leaders from five major unions representing more than 60,000 American Airlines and US Airways employees responded to the merger announcement.

The five unions represented in the release include the Association of Professional Flight Attendants (APFA), Association of Flight Attendants-Communications Workers of America, AFL-CIO (AFA), the Allied Pilots Association (APA), the US Airline Pilots Association (USAPA) and the Transport Workers Union, AFL-CIO (TWU).

"It's been a long tough road, but the result is well worth it," APFA president Laura Glading said in the five-union release. "Today's announcement proves that everyone benefits when labor has a seat at the table.

APA president Keith Wilson said in the release, "We recognized the value of merging at the very beginning and worked for the past year to bring this deal to fruition.

"Employees of the new American Airlines will enjoy competitive compensation and benefits, and will be part of a stronger airline which will create greater opportunities over the long term," he added.

TWU international president James C. Little said, "We are pleased that today American Airlines and US Airways have reached a positive step toward building a stronger, more secure and more competitive airline.

"Much more work needs to take place before all of the parts that will make up a New American Airlines are assembled, but the airline we're building should be better than the old American and US Airways."

Bondholder group pleased

An informal committee representing bondholders of American parent AMR Corp. said in a separate release that it was pleased that the airlines have agreed to combine in a transaction that will result in significant value for stakeholders of both companies, including AMR bondholders.

"This merger is the best outcome for AMR's restructuring, providing AMR stakeholders with enhanced recoveries," the committee said.

"We are pleased that the ad hoc committee, along with certain other large bondholders, have been able to reach an agreement with AMR regarding a fair and appropriate allocation of value among AMR stakeholders and believe that such agreement will avoid significant litigation that might otherwise jeopardize consummation of the merger."

PBGC director 'glad'

Pension Benefit Guaranty Corp. director Josh Gotbaum also released a statement on the merger agreement.

"From the beginning, PBGC worked long and hard to ensure that the employees of American have both jobs and pensions, and we're glad that's going to happen," Gotbaum said.

US Airways is an airline operator based in Tempe, Ariz.

AMR Corp., the Fort Worth, Texas-based parent of American Airlines, filed for bankruptcy on Nov. 29, 2011 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 11-15463.

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